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How A 12th Century Mathematician Just Doomed Bernanke's Wealth Effect

Tyler Durden's picture


Leonardo Fibonacci (1170-1250) may have just stuck his 'golden-ratio-based' fork in the equity market's rally. As the following chart shows, the diminishing marginal utility of Quantitative Easing's wealth effect has followed a rather remarkable pattern... and today marks the next turning point.

Applying a Fibonacci-based 61.8% retracement level to each of the time-periods following the March 2009 lows, produces a very interesting cycle overlay on the S&P 500 rallies...


(h/t Brad Wishak at NewEdge)


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Tue, 09/25/2012 - 14:53 | 2828928 GernB
GernB's picture

Yea, but what did Leonardo Fibonacci know about mortgage backed securities.

Tue, 09/25/2012 - 14:55 | 2828941 Pladizow
Pladizow's picture

QE1= 50% up & 20% retracement

QE2 = 40% up & 20% Retracement

Twist = 30% up and 16% Retracement

QE3 = ?

Tue, 09/25/2012 - 14:57 | 2828955 GernB
GernB's picture

I'm short ES in part due to expectations of Fibonacci time and price resistance (and statistical evidence that sentiment is way overly bullish).

Tue, 09/25/2012 - 15:19 | 2829085 AnonymousCitizen
AnonymousCitizen's picture

So we got another day, right?

Woo hoo! BUY BUY BUY

Tue, 09/25/2012 - 15:35 | 2829164 economics9698
economics9698's picture

 61.8%, fuck, that’s how much the fucking Fed inflated the money supply leading up to 1929.  Buy ammo Zh’ers


Tue, 09/25/2012 - 15:55 | 2829259 hannah
hannah's picture

61.8% of .357 is .22lr so i guess you are right....!

Tue, 09/25/2012 - 16:23 | 2829366 Precious
Precious's picture

Peak QE.

Tue, 09/25/2012 - 16:32 | 2829436 Manthong
Manthong's picture

Those quaint notions don’t apply to modern finance and banking as administered by scholastics.

The Bernank knows that it’s different this time.

Tue, 09/25/2012 - 20:00 | 2830196 Boris Alatovkrap
Boris Alatovkrap's picture

Man who is failing to educate history is dooming to repetitive.

Wed, 09/26/2012 - 00:50 | 2830928 Spirit Of Truth
Spirit Of Truth's picture


"The definition of insanity is doing the same thing over and over again and expecting different results." - Albert Einstein

Tue, 09/25/2012 - 18:59 | 2830083 Peter Pan
Peter Pan's picture

QE will soon mean QUICK EXIT

Tue, 09/25/2012 - 16:24 | 2829375 Metalredneck
Metalredneck's picture

I love the new math.  Thanks.

So I guess .357=zombies, .22lr=varmints.

Tue, 09/25/2012 - 18:22 | 2829948 jimmytorpedo
jimmytorpedo's picture

...and Zombie Varmints?

Tue, 09/25/2012 - 16:31 | 2829427 yogibear
yogibear's picture

And boiled rope.

Wed, 09/26/2012 - 00:40 | 2830918 Pharming
Pharming's picture

Ummm....that really is kind of freaky.  I had to get the calculator out...

Tue, 09/25/2012 - 16:23 | 2829365 GernB
GernB's picture

I think I've conclusively proven that if you short the market enough times over enough days, eventually you'll be right :)

Tue, 09/25/2012 - 16:25 | 2829386 Treeplanter
Treeplanter's picture

More leverage, please.

Tue, 09/25/2012 - 15:35 | 2829076 SafelyGraze
SafelyGraze's picture

author michael crichton used the stimulus-frequency theme as a basis for his novel "terminal man"

"After resting for a day, [Benson] TPTB goes through "interfacing". The forty [electrodes] billion/month in his [brain] account are [activated] deposited by computer technician [Gerhard] Nank, one by one, to see which ones would stop a [seizure] global deleveraging. Each produces different results. [One] All of the electrodes stimulate[s] a [sexual pleasure] sexual pleasure.

[Gerhard] Nank realizes that the seizures are getting more frequent. [S]he explains that [Benson] TPTB is learning to initiate seizures involuntarily because the result of these seizures is a shock of pleasure, which leads to him having more frequent seizures."


Tue, 09/25/2012 - 15:56 | 2829264 ACP
ACP's picture

...we start doing that inversely...

20% up & 50% retracement

20% up & 40% retracement

and so on and so forth

Tue, 09/25/2012 - 16:48 | 2829540 dwayne elizando
dwayne elizando's picture

47.586% retracement. Then I'd bet a full retard session.

Tue, 09/25/2012 - 15:08 | 2829016 azzhatter
azzhatter's picture

Oh that Lenny, always ruining the party

Tue, 09/25/2012 - 15:57 | 2829268 CPL
CPL's picture

Law of deminishing returns for the win!


Look at the volume for the day...goddamn that's awful...they've finally painted themselves into the corner by being the entire market.


Awesome.  Now let's see who steps out of the corner first because they have the most to lose.

Tue, 09/25/2012 - 19:41 | 2830259 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

One thing that is not diminishing is the massive debt load. It is a monster consuming all of this capital and more, disgusting.

Tue, 09/25/2012 - 15:29 | 2829137 LongSoupLine
LongSoupLine's picture

Wow...great actor. Loved him in Titanic.

Tue, 09/25/2012 - 18:20 | 2829934 jimmytorpedo
jimmytorpedo's picture

Didn't Fibonacci design Venice,...

Tue, 09/25/2012 - 14:54 | 2828934 ParkAveFlasher
ParkAveFlasher's picture

Fibonacci - he worked for the postal service, right?

Tue, 09/25/2012 - 14:54 | 2828935 the not so migh...
the not so mighty maximiza's picture

Leonardo Fibonacci is now considered a terrorist by the FBI, CIA, DHS, IRS, FOMC, EBT, etc etc etc.  

Tue, 09/25/2012 - 15:02 | 2828981 Skateboarder
Skateboarder's picture

I'll place him more in conspiracy theorist category. "Finding patterns, are you? We'll see about that!"

Tue, 09/25/2012 - 15:13 | 2829057 Farside
Farside's picture

Didn't he die when the titanic sank?

Tue, 09/25/2012 - 15:24 | 2829115 NoTTD
NoTTD's picture

Don't be silly.  He was just playing as character.

Tue, 09/25/2012 - 16:37 | 2829470 GernB
GernB's picture

I think you're confusing him with Leonardo DaVinci.

Tue, 09/25/2012 - 16:42 | 2829495 Itch
Itch's picture

When the CIA catch him i dare say they will make him do the fib detector test....rimshot!

Tue, 09/25/2012 - 17:20 | 2829734 Overflow-admin
Overflow-admin's picture

They will start by burning the museums, then notice they forgot to burn the libraries (which let us some more time for our virtual libraries)...

Tue, 09/25/2012 - 14:55 | 2828940 Saucy-Jack
Saucy-Jack's picture

0, 1, 1, 2, 3, 5, 8, 13, bitchez.

Tue, 09/25/2012 - 16:07 | 2829229 Dr. Richard Head
Dr. Richard Head's picture

A nice equity market crash prior to the election.  Hmmmmmmm.....didn't we already see this movie?

September 19, 2008 - S&P shitsthe bed.

October 2008 - Hank "Tanks in the Street" Paulson

September 27, 2012 - S&P shits the bed?

October 2012 Tim "Tanks in the Street" Geithner?

Tue, 09/25/2012 - 16:08 | 2829306 Squid Vicious
Squid Vicious's picture

nothing beats 1991 when Greenspan et al pulled the economic rug out from under Bush Sr. after he refused to guarantee that $10B loan package to Israel...

Tue, 09/25/2012 - 19:29 | 2830202 knukles
knukles's picture

correction: October 2012 Tim "Yanks in the Street" Geithner?

Wed, 09/26/2012 - 07:35 | 2831203 Carnegie_IB
Carnegie_IB's picture

need to tank the market to justify more intervention to keep the dream alive....and generate more interest income for the banks. IRS Tax revenue is just not enough. 

Tue, 09/25/2012 - 18:25 | 2829962 jimmytorpedo
jimmytorpedo's picture

More like 8, 5, 3, 2 ,1, 1, bitchez all the way down, wait, I meant turtles

yeah,'s turtles

turtle bitchez I guess

Tue, 09/25/2012 - 18:42 | 2830021 Bastiat
Bastiat's picture

+1 for the turtles all the way down reference.

Tue, 09/25/2012 - 14:56 | 2828944 not fat not stupid
not fat not stupid's picture

I knew Leonardo de Pisa sir, and you are no Leonardo de Pisa.

Tue, 09/25/2012 - 14:57 | 2828951 sitenine
sitenine's picture

Since when does math have anything to do with economics?

Tue, 09/25/2012 - 15:00 | 2828964 GernB
GernB's picture

Two postmen times three animal control officers divided by two gas meter readers equals how many vendable, integrated community worker?

Tue, 09/25/2012 - 15:17 | 2829078 Piranhanoia
Piranhanoia's picture

And there's hamburger all over the highway in Mystic, CT.

Tue, 09/25/2012 - 15:23 | 2829111 GernB
GernB's picture

Now, if you're a Mr. Common Sense, you won't believe me when I tell you that I've got an envelope that'll clean your car while you're driving it home to work

Tue, 09/25/2012 - 15:04 | 2828997 Skateboarder
Skateboarder's picture

Repeated operations on anything will eventually yeild deterministic results... simple as that. There is a pattern in everything excepting the fundamental Schrodinger/Heisenberg probability.

Tue, 09/25/2012 - 16:19 | 2829352 GernB
GernB's picture

And, sometimes there are reasons for the patterns, yet people cling to their ideas about what moves markets long after it becomes clear their model of the market no longer makes sense and there must be more factors in play than are explained by their simplistic view.

Tue, 09/25/2012 - 18:55 | 2830072 zerotohero
zerotohero's picture

Hence forth it shall be known as it truly is EVILNOMICS

Tue, 09/25/2012 - 18:58 | 2830080 Boris Alatovkrap
Boris Alatovkrap's picture

How many is Jews to screw incandescent bulb?

All Jews - is global conspiracy you know!

Tue, 09/25/2012 - 19:00 | 2830086 Boris Alatovkrap
Boris Alatovkrap's picture

How many is Mormons can screw incandescent bulb?

5 mormen - 1 can screw incandescent bulb and 4 is bringing refreshings

(I don't know how is funny, but mormon friends is chuckling when Boris say it)

Tue, 09/25/2012 - 23:19 | 2830826 HappyCamper
HappyCamper's picture

Mormons think it's funny because it's an old Mormon joke with lots of truth in it and hearing an outsider tell it is even funnier.

Tue, 09/25/2012 - 23:31 | 2830837 Boris Alatovkrap
Boris Alatovkrap's picture

Please for Boris explain enigma of Mormen humors!

Wed, 09/26/2012 - 00:28 | 2830890 sitenine
Tue, 09/25/2012 - 19:02 | 2830095 Boris Alatovkrap
Boris Alatovkrap's picture

How many is banksters can screw incandescent bulb?

Only is one needed because bankers are screwing all time the worker and is efficiency master... but is bankers all competing to screw!

Tue, 09/25/2012 - 19:04 | 2830104 Boris Alatovkrap
Boris Alatovkrap's picture

How many is public sector worker to screw in light bulb?

Only one is screw, but is two pensioners for every worker.

Tue, 09/25/2012 - 19:05 | 2830112 Boris Alatovkrap
Boris Alatovkrap's picture

How many is Russian to screw incandescent bulb?

Is many in line but store is empty inventory so none.

Tue, 09/25/2012 - 19:06 | 2830119 Boris Alatovkrap
Boris Alatovkrap's picture

How many is California to screw incandescent bulb?

Three, two is screw and one is watching! (something about California is voyeur capitalistic?)

Wed, 09/26/2012 - 00:20 | 2830888 DeadFred
DeadFred's picture

Californians don't screw in light bulbs, they screw in hot tubs.

Wed, 09/26/2012 - 09:59 | 2831652 Boris Alatovkrap
Boris Alatovkrap's picture

Better for hot tub than is screw nation in basement of Fed!

Tue, 09/25/2012 - 19:09 | 2830137 Boris Alatovkrap
Boris Alatovkrap's picture

How many is Obama administration can screw incandescent bulb?

Only is need Obama hold bulb in socket. Entire Universe is revolve around Obama. Beside, all administration incapacitate with tingling down leg when is Obama raise muscelature arms!

(Boris is sarcastic, Obama is holding toothpick arms in bulb!)

Tue, 09/25/2012 - 14:58 | 2828953 Jlmadyson
Jlmadyson's picture

Math is a B and so is reality.

Boxed in and diminishing returns. Like I've said for too long now.

The time bomb is getting ever shorter.

Tue, 09/25/2012 - 15:03 | 2828984 BandGap
BandGap's picture

This reminds me of the Cricton novel The Terminal Man.

The US is self medicating, but the medication invokes an ever increasing frequency in the behavior that the medication treats, until the inevitable overload.

Tue, 09/25/2012 - 16:11 | 2829311 Sancho Ponzi
Sancho Ponzi's picture




Run-up in days     Ending Date

78 9/26/12

48 11/13/12

30 12/13/12

18 12/31/12 (Happy New Year)

11 1/11/13

7 1/18/13

4 1/22/13

2 1/24/13

We are so f&cked 1/25/13

Tue, 09/25/2012 - 14:58 | 2828960 davidsmith
davidsmith's picture

Another space-filler from ZH.  Ben never intended Qternity to create a wealth effect.  Stop paying attention to what he says.



Tue, 09/25/2012 - 17:10 | 2829675 Almost Solvent
Almost Solvent's picture

The sarc is strong in this one

Tue, 09/25/2012 - 17:52 | 2829855 Coast Watcher
Coast Watcher's picture

The snark is strong in this one.


Tue, 09/25/2012 - 14:58 | 2828961 fonzannoon
fonzannoon's picture

i've been looking at these charts all year waiting for the line to go down and yet it only seems to go up

Tue, 09/25/2012 - 15:00 | 2828968 wretch
wretch's picture

Wow.  All year?  It'll last forever, then.

Tue, 09/25/2012 - 15:03 | 2828990 LULZBank
LULZBank's picture

Yes, technically it can go on forever. Same as the principle of Half Life.

Tue, 09/25/2012 - 15:09 | 2829025 fonzannoon
fonzannoon's picture

i see what u did there

Tue, 09/25/2012 - 15:02 | 2828980 RSBriggs
RSBriggs's picture

How about 3 waves up and 5 down to below the prior lows.  Patience grasshopper.

Tue, 09/25/2012 - 16:39 | 2829476 GernB
GernB's picture

You should get some sleep. A year is a long time to go without sleep.

Tue, 09/25/2012 - 15:00 | 2828965 alien-IQ
alien-IQ's picture

That is a very cool chart. These "rallies" will eventually be measured in minutes.

Tue, 09/25/2012 - 17:42 | 2829483 GernB
GernB's picture

That's perfect, then I can give Skynet durable power of attorney and it can invest for me, since it will be the only thing fast enough to keep up with market changes.

Tue, 09/25/2012 - 19:16 | 2830161 Radical Marijuana
Radical Marijuana's picture

Yeah, I liked the chart in this article too, and also thought about how things appear to be happening faster and faster ...

For any who may be amused by these sorts fo speculations, there are lots of different videos, based on the Mayan calendar, that discuss how history as a whole is speeding up! Like from Drunvalo Melchizedek, and people who followed after him.


The Maya Of Eternal Time - 2012 part 1/14

The 14 parts, taken together about two and half hours long.

I do not know whether most of the particular points that are made there are true, and mostly I doubt that, but it is surely stimulating. There is no doubt that humanity IS changing faster and faster than ever before, and speculations about that are very interesting.

In the bigger picture, there ARE analogous discoveries: Milankovitch theory describes the collective effects of changes in the Earth's movements upon its climate:

There are many different influences, which add together!

Maybe there are analogous effects in economic systems?

2007 was the LAST "normal" year.

We are never going to return to the
kinds of "normal" times, before 2007!

Tue, 09/25/2012 - 15:01 | 2828969 realtick
realtick's picture

High Gasoline Prices Caused The Financial Crisis

Tue, 09/25/2012 - 15:01 | 2828974 alfred b.
alfred b.'s picture


       OH now I see:  at first you start with a large camel and as you're being QEed the camel gets smaller....verry interest-thing!


Tue, 09/25/2012 - 16:33 | 2829447 Redhotfill
Redhotfill's picture

Eventually all you have left of the Camel is the toe.

Tue, 09/25/2012 - 17:53 | 2829859 Coast Watcher
Coast Watcher's picture

Ah, but will it fit through the eye of a needle?

Tue, 09/25/2012 - 18:28 | 2829977 jimmytorpedo
jimmytorpedo's picture

I'm short camel toes.

Tue, 09/25/2012 - 19:01 | 2830091 Galactic Superwave
Galactic Superwave's picture

Short, I'm so sorry for you.

Tue, 09/25/2012 - 19:46 | 2830284 WillyGroper
WillyGroper's picture

+10 ;)

Tue, 09/25/2012 - 15:01 | 2828975 LULZBank
LULZBank's picture

ahhh... Stocks time continuum!

Tue, 09/25/2012 - 15:03 | 2828985 Crabshacker
Crabshacker's picture

So we have on one hand a mathematician and on the other a mathemagician...

Tue, 09/25/2012 - 15:13 | 2829011 magpie
magpie's picture

No problem, there should also be 12th century alchemists confirming the Bernank. A 13th century fiat central banker though does not agree

Tue, 09/25/2012 - 19:24 | 2830187 Radical Marijuana
Radical Marijuana's picture

mathematician VERSUS mathemagician

What a cute way to summarize the difference between ordinary calculations that stay within the laws of nature, like conservation of energy and matter, versus the economic systems based on the triumphant runaway frauds of privatized fiat money!

Central Banks, et alia, are practicing mathemagicians!

Everybody else must continue to only do mathematics.

Tue, 09/25/2012 - 15:04 | 2828986 devo
devo's picture

Habituation to QE and no headline catalysts.

Tue, 09/25/2012 - 15:04 | 2828992 PUD
PUD's picture

time to check the locks on the dumpsters

Tue, 09/25/2012 - 15:04 | 2828994 howenlink
howenlink's picture

My third-grader math student understands penny candy.

Tue, 09/25/2012 - 15:04 | 2828999 InconvenientCou...
InconvenientCounterParty's picture

These technical signals are a great opportunity for a back breaking short covering rally.

I guess you'd have to believe in conspiracies to think that was likely.


Tue, 09/25/2012 - 15:05 | 2829001 williambanzai7
williambanzai7's picture


Tue, 09/25/2012 - 15:11 | 2829039 Skateboarder
Skateboarder's picture

You just explained EVERYTHING in one picture. This is by far your best. Kudos, friend.

Tue, 09/25/2012 - 15:14 | 2829059 GernB
GernB's picture

Thanks, that clears everything right up.

Tue, 09/25/2012 - 15:42 | 2829186 Scalaris
Scalaris's picture

pmsl @  phi = square root of 1 + square root of 1 + square root of 1 + square root of 1 + ..

if phi approximately equals savings and at the same time phi equals fucked.

Tue, 09/25/2012 - 17:14 | 2829697 jumbo maverick
jumbo maverick's picture

The moron hazard vector line should be waaayyyyy longer.

Tue, 09/25/2012 - 17:20 | 2829735 SelfGov
SelfGov's picture

Nice pyramid...

Isn't that called Control Fraud?

Tue, 09/25/2012 - 19:44 | 2830280 Bastiat
Bastiat's picture

A thing of perverse beauty, WB7!

Wed, 09/26/2012 - 00:47 | 2830926 geekgrrl
geekgrrl's picture

Awesome WB7. A properly geeky public service message.  :-)

You should make a t-shirt out of it. Left side on the front, right on the back. I'd buy one. But it would have to be a black shirt.

Wed, 09/26/2012 - 00:52 | 2830931 Pharming
Pharming's picture

I feel like I'm standing...between two mirrors facing each other and my savings is way....out.......there....can't

Tue, 09/25/2012 - 15:11 | 2829032 UGrev
UGrev's picture

End game in 122 days..

Tue, 09/25/2012 - 15:11 | 2829033 Cursive
Cursive's picture

Any relation to Fibozachi?  :)

Tue, 09/25/2012 - 15:12 | 2829040 Its_the_economy...
Its_the_economy_stupid's picture

LOve the crony piramid! My friends won't underdstandFibonacci. Please post the pyramid separate so I can distribute it !

Tue, 09/25/2012 - 15:16 | 2829049 darteaus
darteaus's picture

77 x .618 = 48

Which means...............what exactly?


The jersey number of the Seahawk that caught last night's ball?

Tue, 09/25/2012 - 15:30 | 2829146 sdmjake
sdmjake's picture

That'd be the third Tuesday in November...followed by 12-21-12....

Tue, 09/25/2012 - 15:13 | 2829052 bullet
bullet's picture

1436.50 es... all price action after qe... gone...

Tue, 09/25/2012 - 16:20 | 2829359 Haager
Haager's picture

Nothing is gone, QEInfinity is still on the road. What happened today is just scare the chickens tactics, induced by banks. 

Tue, 09/25/2012 - 15:14 | 2829060 ebworthen
ebworthen's picture

Dang math.

Wish I could use FED and CONgress math with my bills.

Tue, 09/25/2012 - 15:16 | 2829071 NoTTD
NoTTD's picture

He's my favorite Italian movie director.

Tue, 09/25/2012 - 15:18 | 2829083 Dr. Engali
Dr. Engali's picture

We're going to need a faster printer.

Tue, 09/25/2012 - 15:19 | 2829086 Cranios
Cranios's picture

So if you're saying stocks will go down, does that mean you think currency will go up?

Tue, 09/25/2012 - 15:21 | 2829100 KnowIDontKnow
KnowIDontKnow's picture

Jumping the shark

Tue, 09/25/2012 - 18:30 | 2829986 jimmytorpedo
jimmytorpedo's picture

Poor Fonzie.

Why did they make him jump the shark?

Damned Illuminati!

Tue, 09/25/2012 - 15:22 | 2829105 Lewshine
Lewshine's picture

Oh, I see....You decided to use chart fundamentals to short the market? It's a good thing you didn't do that 150,000 times the charts said to do it - Prior to this time! BWHAHAHAHAHAHAHA! Charts are for markets...And we ain't that!

Tue, 09/25/2012 - 15:25 | 2829117 Quinvarius
Quinvarius's picture

You must buy this market while everyone is scared and the money supply is exploding.  Ignore squiggly lines and subjective ideas in favor of the objective brute force math of quantity.

Tue, 09/25/2012 - 15:26 | 2829122 Lewshine
Lewshine's picture

Here comes the "end of day Vwap headline drive into close Fed pump"....Right on time! Got calls?

Tue, 09/25/2012 - 15:26 | 2829126 Miss Expectations
Miss Expectations's picture

If you fold up the chart, do you get a death spiral?

Tue, 09/25/2012 - 15:33 | 2829158 XitSam
XitSam's picture

No, but you do get a picture of Alfred E. Newman throwing money out of a helicopter.

Tue, 09/25/2012 - 15:42 | 2829139 hannah
hannah's picture

How A 12th Century Mathematician my first grade math teacher Just Doomed Bernanke's Wealth Effect

there fixed it for ya...1+1 doesnt= 3

Tue, 09/25/2012 - 15:29 | 2829140 Miss Expectations
Miss Expectations's picture

And just because I love this video

Doodling in Math: Spirals, Fibonacci, and Being a Plant [1 of 3]

Tue, 09/25/2012 - 17:27 | 2829766 NotApplicable
NotApplicable's picture

That young lady is simply amazing.

Tue, 09/25/2012 - 15:30 | 2829143 PTDBDucks
PTDBDucks's picture

Yea are going to go down and all that money put in on the rebound by certain entities will be lost. Don't bet on it. You are witnessing a poker game where one player has unlimited funds. Are you able to match his infinte "all in"?

The boyz have been bidding up each other's stocks in hope that all that fabled "sideline money" will finally join the game. Having failed at that, the bearded one drains the savings and pensions and then creates trillions to throw it in the game any time he likes.

You are going to bet agains that in favour of a Fib?

Tue, 09/25/2012 - 15:37 | 2829181 UGrev
UGrev's picture

I find it ironic that "FIBonacci" never lies.. farkin maths.. 

Tue, 09/25/2012 - 15:44 | 2829215 fibonacci618
fibonacci618's picture

Herds move indeed in mysterious ways and in patterns which are much more important than trends. This time, however,

Bernanke will surely sabotage this fibo sequence by announcing tomorrow QE1,618*2,382.

Tue, 09/25/2012 - 15:44 | 2829217 q99x2
q99x2's picture

Just a hop, skip and a jump till doomsday.

Tue, 09/25/2012 - 15:51 | 2829242 Bastiat009
Bastiat009's picture

Very bright mathematicians proved that subprime lending was a great idea. Now you know how I feel about mathematicians and the inherent lack of rationality of the consumers/citizens/markets.

And that doesn't make Bernanke right by any means.

Tue, 09/25/2012 - 16:02 | 2829276 falak pema
falak pema's picture

Fibonacci made very popular the use of beads in decimals for accounting purposes. The Fibonacci board was used by Arabs, good mathematicians who knew how to count since Khawrezmian days; the guy who invented zero; and kept the accounts of Frederick II Holy Emperor, king of Sicily. Altair, his court mathematician invented the Fibonacci ledger and could provide a balance of trade and a grain storage monthly statistic to his master. Sicily was an exporter economy, very rich, the richest nation in Europe.

They didn't have financial derivatives in those days; apart from those invented by the church called papal bulls, allowing you to pilfer all who didn't bow to the church; notably the infidel and heretic.  Ironic, the 100% muslim guard  protected the Holy roman king against the catholic church with whom he was at war. 

Tue, 09/25/2012 - 16:05 | 2829294 kevinearick
kevinearick's picture

The Old Man, The Constitution, & Propulsion

Nearly all of the old men have vacated the space, for kids, so they can make the world, as they see fit…

From the perspective of the old man, life is all about the kids that comprise labor, to implement quantum change. Everyone else, government, corporate, non-profit, all the middleclass peer pressure groups, are part of the gravitron machine, which incrementally moves to maintain time for legacy capital.

From the perspective of capital, nothing changes, or, the more things change, the more they stay the same. The world stage is just high school times a thousand, with peer pressure groups pitted against each other, and all their leaders playing to fear, growing their demographic ponzi currencies in a positive feedback loop accordingly.

The point of this exercise is to show the kids how the battery is formed, loaded, and employed, not to tell them what to do with it; here’s the keys, don’t tell me, I don’t want to know…

The explicit side is simply a function that builds momentum. It loads the battery, winds the clock, ratchets the catapult, however you want to think about it. Watching the fed’s effect on VIX is the easiest way to see it. The implicit side determines current, the extent to which these kids travel through the explicit side, creating a semi-permeable, semi-conductor.


The implicit side is quantum, depending upon the amount of gravity required by the participants to implement their designs. I don’t care for the dialogue, but the question is useful; what would you do with $30T, which is as good as any other number to represent the folly of the fed’s actions.

Pick a number, say $800T, to account for the derivatives representing unpayable, unfunded, middle class entitlement, expectation liabilities, which the socialists continue to grow unabated. What is a fair and payable bid to solve that problem, and, more importantly, how can the labor family best employ it for future symbiotic growth of all families. (Yes, the robots are programmed to expunge you; get over it.)

So, you have a 3000lb car and oil…aggregate human behavior cannot be altered in real time. What does physics tell you must be done, if you can assume the old man left behind everything required? The US Navy is gutted, with nothing but position holders…

The masters of the universe, their world opinion leaders, and all their middle class followers are going to war because they have no idea how electricity works, and as you have observed, there is no point in telling them, because their false assumptions are the basis of their lives, hence the mythology, a constitution.

What kind of navy you want to build depends upon where you want to go. My suggestion is space, in another dimension, but then again my favorite character was and is Scotty. You do what you want, and don’t allow anyone’s false assumptions stop you. That is why we draw blood.


Learn to respect the machine, even though it is just a sh-show, because it is life and death to the robots, and one day, you too may fall from grace, as the vast majority of us do. You cannot pick your biological parents, but seek and you shall find. The old man does what he does for a reason.

From the perspective of a battery, what is the outcome of equality, and what is the purpose of dimensions, relative to efficient, incremental positive feedback and effective, quantum negative feedback? What is the relationship between a point, a number line, a circle, and a helix, and why does DNA operate as a double?

Take responsibility and run with it. Let the empire catch you when you are ready to hand it off. So, the university technology park is a black hole, surprise, surprise. Throw the admirals overboard, and remove family law from the ship. Check your History.

Tue, 09/25/2012 - 17:14 | 2829698 Almost Solvent
Almost Solvent's picture

I need to drop your acid

Tue, 09/25/2012 - 18:53 | 2830059 NoTTD
NoTTD's picture

This reads like the liner notes from a Donovan album. 

Tue, 09/25/2012 - 19:53 | 2830308 WillyGroper
WillyGroper's picture

The intergalactic laxative will make you shit & pee.

Tue, 09/25/2012 - 18:52 | 2830062 NoTTD
NoTTD's picture

This reads like the liner notes from a Donovan album. 

Tue, 09/25/2012 - 16:07 | 2829296 TWSceptic
TWSceptic's picture

But but but... this time it's different. Bernanke said so: "learning by doing". If we just keep experimenting surely some day we'll find the golden formula for creating sustainable growth! Why do you want to ruin the experiment ZH?

Tue, 09/25/2012 - 16:46 | 2829523 Bear
Bear's picture

No, no, no .... Bernanke is just trying to reduce unemployment ... Who voted for the FED to have a 'Dual Mandate'?

Wed, 09/26/2012 - 09:17 | 2831501 RiverRoad
RiverRoad's picture

Make that bankers unemployment.

Tue, 09/25/2012 - 16:10 | 2829314 booboo
booboo's picture

Ben is buying up all those MBS that Lewis Ranieri fathered. Mortgage Backed Securities the gift that keeps on raping and pillaging, 61.8 billion a month. How's that for a fib?

Tue, 09/25/2012 - 16:10 | 2829315 A is A
A is A's picture

Does anyone seriously understand this chart, what to conclude from it and why? I have been staring at this chart for a while now and I honestly don't get it. Can someone please explain this to me?


Tue, 09/25/2012 - 16:41 | 2829444 TWSceptic
TWSceptic's picture

It shows a diminishing effect of QE (money printing) and a projection for QE3 using Fibonacci retracement. If this has any predictability it's very bearish for stocks.

Tue, 09/25/2012 - 16:43 | 2829497 Encroaching Darkness
Encroaching Darkness's picture

Not perfectly sure, but something like this:

Ben prints money ("QE") and the markets jump higher - for a while. One way to measure the result of the QE is to see how long it takes to retrench some percentage of the gain - how long it takes to drift downward after the stimulus.

The Fibonacci series seems to be predicting (to some extent) how long it takes for the stimulus to wear off, and thereby demand more stimulus - but the series appears to be REVERSED, as in, the time grows shorter as the QE# experiment progresses. Therefore, we appear to be reaching a limit - that is, NO AMOUNT of QE will hold off a change ("market collapse") much longer.

All you experts - was that close enough?

Tue, 09/25/2012 - 17:13 | 2829693 Go Tribe
Go Tribe's picture

It's like dropping a basketball and watching it bounce. Without additional force, its bounces become sequentially smaller until it stops. 

The ruse is QE, which is not acting like a continued force but rather having no effect on fundamentals and only on raising investor sentiment.

Hence, the first bounce is huge, as people believe it will work. Next bounce is smaller as people's sentiment gets exhausted more quikly by the inexorable bad news of our economic situation. Next bounces are simply traders playing the market sentiment.

Bernanke has got a basketball jones. Increasingly, no one else does.

Tue, 09/25/2012 - 16:14 | 2829335 tradewithdave
tradewithdave's picture

Q: If we are indeed in a QEn (to infinity) framework, when exactly would the market have expressed prices in net present value thereof? 

A:  Jackson Hole




Tue, 09/25/2012 - 16:22 | 2829364 laserjock
laserjock's picture

Relative value of Fib analysts and crotch shampooers?

Tue, 09/25/2012 - 16:30 | 2829403 muppet_master
muppet_master's picture

to ZH

do you really need a 12th century or 500th century (future) mathematician to tell you that QEorganizer's ponzi scheme is nothing but a house of about corzine's? how about madoff's how about clinton's "i left you with a SURPLUS".

surplus = lewinsky's waist diameter.

besides you are NOT indicating to what price the casino will drop to...= not very insightful, OR how get there..

just ask any "technician" they will tell you AFTER the fact.

Tue, 09/25/2012 - 16:32 | 2829433 RougeUnderwriter
RougeUnderwriter's picture

Ya but what did Nostradamas say?  :-)  By the way - the Packer got screwed badly last night! I call for a congressional oversite committee to review the replacement ref officiating system before some one gets killed!


Go packers


Tue, 09/25/2012 - 18:21 | 2829939 Bastiat
Bastiat's picture

It's almost like Eric Holder was reffing.

Tue, 09/25/2012 - 16:54 | 2829565 Gamma735
Gamma735's picture

So does this mean that the Golden Ratio is no longer golden?

Tue, 09/25/2012 - 17:02 | 2829608 falak pema
falak pema's picture

it ain't provided you know when the true tipping point is...

Even if it is tipping it doesn't say how far it will dip before it trips up again. 

I'm missing something in this leap frog game. 

Tue, 09/25/2012 - 23:47 | 2830858 sablya
sablya's picture

Bad news: The Golden ratio has been found to be filled with tungsten...

Tue, 09/25/2012 - 17:17 | 2829676 FiatFapper
FiatFapper's picture

The dollar has to rally now to empower the sheeple with spending ability / belief; it's pointless re-electing the same puppet when it takes $5 to buy bread.

It's all just smoke 'n mirrirs using funny fiat money.


Tue, 09/25/2012 - 18:56 | 2830078 NoTTD
NoTTD's picture

$5?  We should be so lucky going forward. From your lips to God's ear.

Tue, 09/25/2012 - 17:13 | 2829692 Overflow-admin
Overflow-admin's picture



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