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Bill Gross Warns "Very Likely' Central Banks Will Cause 1987-Like Crash

Tyler Durden's picture


What takes other Political Journalism majors (and CTRL-C/V minors) pages and pages of verbose essays full of acronyms and meaningless gibberish to refute, Bill Gross asserts in less than 140 characters.

Needless to say, he is absolutely correct.

Because just as HFT was a latent complacency "catastrophe factor" for the market, as we warned all throughout 2009 and were proven correct on May 6, 2010, so the central banks have now taken over the role of ultimate vol backstopper (as Artemis has shown over and over), a process which will have a catastrophic outcome with absolute certainty.


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Fri, 10/19/2012 - 10:13 | 2904049 Calidreaming
Calidreaming's picture

Well then Crash this turkey already,  I dont think I can take any more of this crap

Fri, 10/19/2012 - 10:14 | 2904053 tsx500
tsx500's picture

will someone please put me outta my misery  ?!

Fri, 10/19/2012 - 10:22 | 2904078 CPL
CPL's picture

Put in your stops losses.


ALL OF YOU.  Take the protfit even if it's a penny and hang the banks for their hubris.


It's 10:20 and Google has had selling pressure equal to it's average daily volume.  Very dangerous.  Best bet though, is to not play at all.

Fri, 10/19/2012 - 10:22 | 2904093 malikai
malikai's picture

Yes, please, we cannot run your stops unless you put them in.

Fri, 10/19/2012 - 10:22 | 2904097 fonzannoon
fonzannoon's picture

I was thinking the same thing.

Fri, 10/19/2012 - 10:29 | 2904115 camaro68ss
camaro68ss's picture

let it crash so i dont have to go to work anymore.

Fri, 10/19/2012 - 10:46 | 2904180 Pladizow
Pladizow's picture

No Fed, No HFT = No Market

Fri, 10/19/2012 - 10:47 | 2904183 francis_sawyer
francis_sawyer's picture

Waddell & Reed for FED Chair...

Fri, 10/19/2012 - 11:00 | 2904204 economics9698
economics9698's picture

..3-5 years, we are at 3 years-11 months.  Could be 2014.  Keep showing up at work.

Fri, 10/19/2012 - 11:04 | 2904215 GetZeeGold
GetZeeGold's picture



Just look at our record. OK......maybe not.

Fri, 10/19/2012 - 13:29 | 2904741 Jake88
Jake88's picture

that bet could keep you working forever.

Fri, 10/19/2012 - 10:42 | 2904164 Its_the_economy...
Its_the_economy_stupid's picture

Channel-sweeping anyone?

Fri, 10/19/2012 - 11:05 | 2904219 CPL
CPL's picture

Good point.


But anyone in the reatail community still trading this slop is on crack.  The risk to it isn't company losses or any basic fundimentals anymore.  It's when the all equities are held by the bank and by proxy the government.  They will have to print the entire market now, again.


If you've been hitting the crack pipe and think the market is going to work for you and not the owners...well, put in the stop loss to save your ass.  Flying without it is like running around a whore house without a condom on.  It's just stupid.

Fri, 10/19/2012 - 10:26 | 2904106 DeadFred
DeadFred's picture

Soon is a loosely defined term, but soon. Take heart all you bears out there!

Fri, 10/19/2012 - 11:29 | 2904314 RSloane
RSloane's picture

You've been right on every call so far, so I'm going to take heart.

Fri, 10/19/2012 - 13:30 | 2904744 Mountainview
Mountainview's picture

The bond equity divergence isn't the same as in soon will be later....

Fri, 10/19/2012 - 12:35 | 2904493 LMAOLORI
LMAOLORI's picture



Put you out of your misery no way they need you as a Debt Slave :) 

Gross isn't the only one predicting a crash Mark Hulbert


Another stock crash like 1987’s is inevitable

Paul Farrell


Doomsday Cycle targets America next




Fri, 10/19/2012 - 10:16 | 2904057 GetZeeGold
GetZeeGold's picture



Well then Crash this turkey already


There's always room for more turkey.


Here....have some Jello too!

Fri, 10/19/2012 - 10:15 | 2904060 redpill
redpill's picture

twenty twenty twenty-four hours to goooo, I wanna be sedated...

Fri, 10/19/2012 - 10:18 | 2904071 GetZeeGold
GetZeeGold's picture



It's a 72 hour waiting list....and that's only if you get past the deathpanels. Yes.....they're real.....we're not making it up.

Fri, 10/19/2012 - 10:22 | 2904092 The Gooch
The Gooch's picture

"beat up the Ben, beat up the Ben, beat up the Ben with a baseball bat OH YEAH" 

Fri, 10/19/2012 - 10:39 | 2904159 GeezerGeek
GeezerGeek's picture

I hear the Yankees have a lot of unused bats for sale....

Fri, 10/19/2012 - 11:09 | 2904213 GoinFawr
Fri, 10/19/2012 - 10:23 | 2904098 CPL
CPL's picture

I don't wanna be buried in a pet cemetary...

Fri, 10/19/2012 - 10:35 | 2904138 Orly
Orly's picture

I don't want to wind up a cartoon in a cartoon graveyard.

Fri, 10/19/2012 - 10:37 | 2904151 nmewn
Fri, 10/19/2012 - 10:18 | 2904069 HelluvaEngineer
HelluvaEngineer's picture

Not when we have assholes like Potter "actively managing" everything like the VIX today.  Look at that sweet 180 U-Turn!

Fri, 10/19/2012 - 10:24 | 2904101 CPL
CPL's picture

What U turn?  RSI is in the gutter.


Momentum is 30 to 1 against.

Fri, 10/19/2012 - 10:33 | 2904132 Orly
Orly's picture

Will someone please tell the Euro...

Fri, 10/19/2012 - 10:44 | 2904174 DeadFred
DeadFred's picture

Is anyone technically competent to confirm that put volume is closing open interest? Big banks are buying them back?

Fri, 10/19/2012 - 11:23 | 2904274 CPL
CPL's picture

Just look at BATs.  It's for laymen to watch the pressure in the system against particular stocks that are the market now (AAPL, GOOG, IBM)


All the players that lost their guts in profits.


Or install Eclipse Trader (open source, free as in Speech) and the HFT/Algo model plugins.  HFT's are out of money until the next 40 billion dollar bond sale.

Fri, 10/19/2012 - 17:51 | 2905571 billsykes
billsykes's picture

market has to quadruple first, its only doubled since '08. I say enjoy and smile, take a loved one out, enjoy the moment and remember it.

Fri, 10/19/2012 - 10:13 | 2904052 fonzannoon
fonzannoon's picture

The Bill Gross who tweets is so much better than the Giant pussy I watch on TV.

Fri, 10/19/2012 - 10:18 | 2904074 Everybodys All ...
Everybodys All American's picture

I said the same thing below. lol

Fri, 10/19/2012 - 10:21 | 2904091 Unprepared
Unprepared's picture

In pussy matters, concealment is an attraction leverage.

Fri, 10/19/2012 - 10:14 | 2904055 rubearish10
rubearish10's picture

An Act of God seemes to be required.

Fri, 10/19/2012 - 10:17 | 2904068 JPM Hater001
JPM Hater001's picture

God will be right back...He's trying to get the light at the end of the tunnel back on.

It doesn't look good.

Fri, 10/19/2012 - 10:51 | 2904190 Dr. Richard Head
Dr. Richard Head's picture

That is actually a train heading right for us.

Fri, 10/19/2012 - 11:02 | 2904212 blunderdog
blunderdog's picture

God's away on business.

Fri, 10/19/2012 - 14:44 | 2905043 I did it by Occident
I did it by Occident's picture

Or God is the train.  He has a sense of humor like that.  It is to help us grow as human beings.  Life would be boring without adversity.

Fri, 10/19/2012 - 21:24 | 2905905 are we there yet
are we there yet's picture

Goldman forgot to pay the tunnel light bill.

Fri, 10/19/2012 - 10:14 | 2904058 realtick
realtick's picture

Don't Follow The Money - Follow The Rate Of Real Money

Fri, 10/19/2012 - 10:27 | 2904113 Orly
Orly's picture

Your charts are very interesting.



Fri, 10/19/2012 - 10:20 | 2904059 becky quick and...
becky quick and her beautiful mouth's picture

nothing good can come of hft. it serves absolutely no useful purpose. go to a library to the finance section and pull out some of the books written in the 80s, 90s, etc before hft took over. it's hilarious reading all of the chapters about how to discern value, etc. those books could all be one page now.

Fri, 10/19/2012 - 10:23 | 2904099 Unprepared
Unprepared's picture

Yeah, found a book called "Buffet invests like a bitch" or something like that.


Of course I haven't read it because I agree.

Fri, 10/19/2012 - 10:16 | 2904064 PUD
PUD's picture

today would be nice seeing as I have an ass load of expiring puts

Fri, 10/19/2012 - 10:19 | 2904079 JPM Hater001
JPM Hater001's picture

Yeah, today is about it for a few...

Bullish for the rest anyway.

Fri, 10/19/2012 - 10:19 | 2904067 Everybodys All ...
Everybodys All American's picture

There must be two people who clam to be Bill Gross. The one you see on tv with his CNBC brethren and the one who tweets and writes his essays seem like two very different people.

Fri, 10/19/2012 - 10:38 | 2904152 Orly
Orly's picture

The PIMCO brand is very important to him, obviously.  He has to toe the line when he is on CNBS but, reading between his lines, he says the same things without getting belligerent.

He wants to be invited back, you see...

Fri, 10/19/2012 - 10:18 | 2904076 THE DORK OF CORK
THE DORK OF CORK's picture

The crash of 87 was tha last time we could clean up this credit banking mess with fiat without too much pain.

Now there is going to be PAIN.

Fri, 10/19/2012 - 10:21 | 2904089 JPM Hater001
JPM Hater001's picture

Um, pain is something you experience when you hit your thumb with a hammer.

This is Birth.  First Child type pain.

Fri, 10/19/2012 - 10:29 | 2904117 THE DORK OF CORK
THE DORK OF CORK's picture

Hmmm child birth or Clubber Lang..............not sure about that.

Gross thinks that parasites such as himself can remain outside the ring again.......perhaps but I am not so sure this time.

I have no idea what gibberish / financial horseshit he was sprouting but twitter tweets does not really cut it in a world of real physical resourse allocation.

So many of our "leaders" or at least the people who speak for our leaders have a amazing absurdity about them..........

Fri, 10/19/2012 - 10:53 | 2904195 Orly
Orly's picture

PIMCO has done very, very well by me, thanks.

Fri, 10/19/2012 - 11:51 | 2904373 odatruf
odatruf's picture

Dork - I recently finished the book with the same title as your username. Sweet story. Is that where you took it from?

Fri, 10/19/2012 - 14:23 | 2904953 THE DORK OF CORK
THE DORK OF CORK's picture

Yes - the book portrays a mythical Cork that perhaps never existed in the world of the physical but there was a magic to the place at one time - the book captures the magic of the place , the film not so much.

We had a depression in the 80s and afterwards the credit hyperinflation took its soul away.................

Not much remains now.


Thu, 10/25/2012 - 16:32 | 2919606 odatruf
odatruf's picture

Long Orion.

Fri, 10/19/2012 - 10:35 | 2904142 Spastica Rex
Spastica Rex's picture

Some will be spared the pain. Guillotines are quick.

Fri, 10/19/2012 - 11:39 | 2904343 Wile-E-Coyote
Wile-E-Coyote's picture

I was at the birth of my first child, the wife had the lot epidural, gas and air etc, she still shouted the place down. At one point she started swearing at me!!  What the hell did I do I was just standing there.

Fri, 10/19/2012 - 11:54 | 2904377 viahj
viahj's picture

you didn't do nothing, it was the mail man.  jk

Fri, 10/19/2012 - 10:20 | 2904080 Doubleguns
Doubleguns's picture

Time for more VIX.

Fri, 10/19/2012 - 10:25 | 2904103 fonzannoon
fonzannoon's picture

The Vix is an asshole.

Fri, 10/19/2012 - 10:36 | 2904143 LouisDega
LouisDega's picture

Fuck Vix. I like Ludens. 

Fri, 10/19/2012 - 10:21 | 2904085 Shizzmoney
Shizzmoney's picture

They can't crash the turkey; they have too much invested in it.

So the turkey will immolate itself for them this time.  Which is far worse.

Fri, 10/19/2012 - 10:21 | 2904087 youngman
youngman's picture

I hope people are not making investment decisions because of a that what we have become now

Fri, 10/19/2012 - 10:21 | 2904090 fuu
fuu's picture

I feel bad for you folks trading for a living. That cannot be a fun way to spend your days right now.

Fri, 10/19/2012 - 10:23 | 2904094 ekm
ekm's picture

Do I have to repeat it again?

Same as with Lehman or 1987, or MFG, the Fed was forced to cause the crash.


There is one and one only explanation:

Money is Infinite and Stocks are Finite. There is a limit as to how far the Fed/Gov would like to OWN the stock market.


As in 1987, or 2008 or MFG, they had to engineer a crash. Period. It's simple. Infinite vs Finite. Easy, easy to understand.


Fri, 10/19/2012 - 10:25 | 2904107 insanelysane
insanelysane's picture

Because when you have a crash, things get "hectic" and it is really difficult (not) to determine who actually owns what.

Fri, 10/19/2012 - 10:30 | 2904119 ekm
ekm's picture

I'd say it's quite easy. Gov - Fed - Primary Deales are practially ONE ENTITY.

Only this entity has access to UNLIMITED FUNDS.

Fri, 10/19/2012 - 10:37 | 2904149 Beam Me Up Scotty
Beam Me Up Scotty's picture

Kind of like gold and silver.  Infinite dollars chasing finite amounts of gold and silver.

Fri, 10/19/2012 - 10:23 | 2904096 Marley
Marley's picture

This just in......the SUN will come up in the morning.

Stay tune for further news.

Fri, 10/19/2012 - 10:23 | 2904102 Inthemix96
Inthemix96's picture

In the past couple of hundered years we seem to arrive at the same junction time and time again.

As Mr Gross notes, and as most of us on here know, lets try something a bit more new, a little more novel.  Lets get this crash over and done with, and then we can try a new and improved model.  No more central banks, no more central government, no more interest bearing fractional reserve lending.

Lets all go to a system of outright value.  You are worth what your labour gives you.  I care not how we value this system as long as every man has a fair value for a fair days wage.  But we stop the leeches of the monied class gambling on what a man is worth.  If we can keep predators away from the rest of us I cannot for the life of me see how we cant make a better place for all of us.

And I read this during the week that Mr geithner has an IQ in the 77-79 range.  Speaks for itself?  No?

Fri, 10/19/2012 - 12:09 | 2904416 Freegold
Freegold's picture

The system you describe is called Freegold. Separation of medium of exchange and store of value. It will emerge bc the reallly really wealthy savers have chosen gold long time ago. What the politicians and bankers do or not do doesn´t matter. It´s a matter of time only.

Gold lies very still in the hands of their owners. The stock to flow is about 60 years supply. Could it be that they value it much more than the official price? :)

Fri, 10/19/2012 - 10:25 | 2904108 AldoHux_IV
AldoHux_IV's picture

I remember my first tweet bashing central banks.

Fri, 10/19/2012 - 10:27 | 2904110 Lost Wages
Lost Wages's picture

I only want there to be a crash if there is no coming back. This civilization was retarded.

Fri, 10/19/2012 - 10:28 | 2904114 thepigman
thepigman's picture

Gross is right. This pig of a jacked up QE market should be selling at

about an 8 multiple.

Fri, 10/19/2012 - 10:29 | 2904118 PaperBear
PaperBear's picture

Another October crash just like 1929, just like 1907, just like the 700 billion dollars bail out in 2008.

Fri, 10/19/2012 - 10:34 | 2904134 Catullus
Catullus's picture

And those puts are called "Interest Rate Swaps" and "FX Swaps". In the event the USD appreciates or interest rates go up, cash will begin spewing from every crack from the major affiliate derivative underwriter banks of the Fed.

So here are the scenarios:

(1) muddle through. USG continues cash flow deficit. Issues more debt month after month. Fed continues to buy up USTs. Inflation.

(2) debt market hiccup (defaults, downgrades, fed UST purchasing pause). Rates increase. IR Swaps begin spewing cash. Inflation

(3) other currencies shit themselves. USD appreciates. FX swaps begin spewing cash. Inflation.

You know the Fed is backstopping all derivatives. What do you do? Leverage up to your eyeballs. Use UST as collateral. Buy the put protection. The only way you lose is getting on the train too late.

The Fed is in a coffin corner.

Fri, 10/19/2012 - 10:35 | 2904145 lostcause
lostcause's picture

 The key is not to time the crash, but be prepared when it does happen.

Fri, 10/19/2012 - 10:36 | 2904147 linrom
linrom's picture

Smartest comment of the year!

Fri, 10/19/2012 - 10:39 | 2904157 JSD
JSD's picture


Fri, 10/19/2012 - 10:42 | 2904168 falak pema
falak pema's picture

money velocity depression

Fri, 10/19/2012 - 10:42 | 2904162 kralizec
kralizec's picture

What date do we put to this demise?  Just curious...

Fri, 10/19/2012 - 10:48 | 2904184 Inthemix96
Inthemix96's picture

Oh, and as a foot note, this also means you Mr Gross.

You get paid on what you are capable of earning.  And after the monied class and the rentier class are done away with, lets find out what Mr Gross is capable of producing worth a bit of "value".

Never mind fucking about with peoples lives and futures.  Lets see a world without HFT, CDO's, SIV's, ZIRP, and all the other bollcoks which strip the whole of the 99% down to skin and bones so the rentiers and the monied can live life on the hog.

There is a word for you're lot Mr Gross, you are what we call "parasites".

And you're days are numbered.

Fri, 10/19/2012 - 10:49 | 2904185 LiesAreTheOnlyTruth
LiesAreTheOnlyTruth's picture

There can be NO CRASH.  The Fed has "off balance" sheet ability to buy the entire market if necessary.  "Other market operations" in the charter allows them to keystroke all stocks into their possession.  Then, with that money chasing a smaller availability of shares (assuming the Fed owns just 70% of the market float) ... you'll see the market rocket to new highs.

HOW can they lose?  They can not!  I welcome anyone who thinks this strategy can not work.

1) Tighten supply of stocks/securities

2) Print/create money to do so and cause inflation

3) Upward pressure on prices comes from inflation and lower supply

4) Fed spends a decade getting out at a profit

5) Side effect is higher housing, gas, groceries, etc. -> that is NOT the Fed's concern

Fri, 10/19/2012 - 13:28 | 2904738 syntaxterror
syntaxterror's picture

Insane, but true nonetheless...

Fri, 10/19/2012 - 21:18 | 2905896 are we there yet
are we there yet's picture

The FED with unlimited power to lie, cheat, steal, punish, print, preach, and smile, ultimately only manipulate of the real economy that makes things of real value.  Corporate lawyers, bankers, and politicians do not solve problems, they either create them or make them worse. You can bank on it (pun)

Fri, 10/19/2012 - 10:52 | 2904186 tooriskytoinvest
tooriskytoinvest's picture

Things suddenly getting so scary:

Today is the 25th anniversary of the 1987 “crash”

Existing-home sales drop

Earnings Season Has Just Begun: Crucial Earning Reports Coming In WEAK!!! IBM, Intel, Google, Microsoft And McDonald All Came In Worse Than Expected!!! The Market Sell-Off Is Accelerating!!

Fri, 10/19/2012 - 10:57 | 2904199 Orly
Orly's picture

Again, will someone please tell the Euro?

Fri, 10/19/2012 - 10:56 | 2904194 Quinvarius
Quinvarius's picture

The bears are going apeshit

Cumulative inflationary effect of 3 QEs, a QE lite, and 2 twists are going to push the market up and out of this 12 year trading range like a Saturn 5 rocket.

Or you can side with Bill Gross's opinion that it is still possible to have a banking panic when the banks get 0% money and don't have to even use real accounting.  No banking panic, no market selloff. 

Fri, 10/19/2012 - 13:34 | 2904763 syntaxterror
syntaxterror's picture

Unless there's a flash crash, right?

Fri, 10/19/2012 - 10:55 | 2904196 insanelysane
insanelysane's picture

Bloomberg switched off of their Goldman suck fest.  They went to an analyst they seemed to think was going to speak of skittle shitting unicorns but instead said that the Fed, ECB, BOJ, and BOE are all pumping money into circulation and physical assets are the place to be.  They promptly cut him off and went to commercial.  Must have gotten a call from Ben.

Fri, 10/19/2012 - 11:00 | 2904207 Quinvarius
Quinvarius's picture

Any suggestion of a bear market is a nonsensical as someone saying the coming rally has anything to do with present earnings.  It is all about the money.

Fri, 10/19/2012 - 11:12 | 2904220 virgilcaine
virgilcaine's picture

Cue epic fed fail...part deux. 1987 was a cakewalk.. down 20% in a day and up every Yr for the NEXT 13 yrs.  This will be much worse than "1987" believe ol virgil. This thing is big, it's global. its high speed and levareged and it's coming down hard.

Fri, 10/19/2012 - 11:48 | 2904361 MrBoompi
MrBoompi's picture

Every time I think I should cash out of my stocks and sit on the sidelines for a while, the market goes up.  I must be one of those proverbial muppets.

Fri, 10/19/2012 - 11:56 | 2904385 jjsilver
jjsilver's picture

The only way another crrash like 29,87, 98 and 08 that the fed made happen, is when they are ready to make it happen

Fri, 10/19/2012 - 12:07 | 2904413 Grand Supercycle
Grand Supercycle's picture


As mentioned Oct 15 - days before the premature earnings sell off - GOOGLE daily / weekly / monthly charts are overextended & significant correction expected.

Fri, 10/19/2012 - 12:16 | 2904431 EconoIdiot
EconoIdiot's picture

I don't understand why everyone gets so excited about the possibility of a "crash" when they have unlimited QE. 

Fri, 10/19/2012 - 12:25 | 2904463 jjsilver
jjsilver's picture

Exactly, they could buy up the entire market cap, probably already have a good chunk through Black Rock. Like I said it will happen when they want it to happen.

Fri, 10/19/2012 - 12:45 | 2904533 Haager
Haager's picture

Good call, mr. Gross, the herd has followed. I bet there's an elephant looking for cheap food, before this playing field called market gets up again, turning the tables. Until the next time, when the ring Stocks->MBS->Money->Stocks will shift.


Fri, 10/19/2012 - 13:42 | 2904761 WhiteNight123129
WhiteNight123129's picture

Bill you are wrong, the only crash that can happen is on the currency as long as the Fed is printing, the risk is not that stock plunge, but that the currency does, long commodities short pricey stocks as insurance....

And short the US treasury junk bonds of evidently, the bubble of the ages...

This time Bill you are the one in the frying pan. In 1981 it was the commodities and Gold bug who were in the frying pan, in 2000 stocks, in 2007 it was stocks and junk bond holders while the Treasuries guy like you Bill Gross were having a party.

You are next for Dinner Bill....


Fri, 10/19/2012 - 14:13 | 2904919 chistletoe
chistletoe's picture



this time its different ....


I'm serious.  History never repeats (but sometimes it rhymes.)

I'm looking for "death by a thousand paper cuts" ....

Wall Street has never deserved anything finer .....

Fri, 10/19/2012 - 18:03 | 2905609 DowTheorist
DowTheorist's picture

In an crash anniversary like today, it is good to remember what the Dow Theory accomplished for its followers: They were spared



Fri, 10/19/2012 - 21:37 | 2905915 are we there yet
are we there yet's picture

'showed that portfolio insurance puts were dangerous', is Bill Gross talking about the banks High Frequency Fornication of us all?

Wed, 10/24/2012 - 11:36 | 2915840 GilgalMarkets
GilgalMarkets's picture

The DOW JONES is on historic highs... and real economy very crappy. The spread thanks to Mr. Bernanke.... soon or later reality is going to met with this fictional market.


When U.S. Note crash... will be the end of all

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