• Sprott Money
    05/05/2016 - 06:02
    Why is a Deutsche Bank mouthpiece suggesting “negative retail deposit rates or perhaps wealth taxes”? The answer is to (supposedly) stimulate our economies.

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

 

http://thespiritoftruth.blogspot.com/2012/09/mans-seasonal-insanity.html

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,....no wait, I meant turtles

yeah,..it'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)

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