If The Market's Disconnect With Economic Reality is Over, Watch Out Below

Tyler Durden's picture

As market participants ponder the disappointing post-QEtc. performance on their 'Bernanke/Draghi-Put'-floored equities, perhaps these three charts will help in comprehending just how much hope there is in the world's equity markets. The disconnect from macro-fundamental is not unique, but has had significant and extremely rapid repercussions in the past. It seems, however, that just like AAPL, everyone believes everyone else to be the greater fool - and this time is different.


Germany's DAX 'disconnected' from economic reality in 2007 (to the euphoric side) and in 2011 (to the dysphoric side). It seems once again that hope has taken over...


The S&P 500 also exhibits the same disconnect - though even more significantly...


This happened before in the US...


That didn't end so well either...


Charts: Bloomberg

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Desert Irish's picture

Reality is merely an illusion, albeit a very persistent one - Albert Einstien



Precious's picture

"Einstein was overrated."  - M.E.

Row Well Number 41's picture

"Reality is that which continues to exist, even after you stop believing in it."  Philip K Dick

I repeat that to myself whenever I doubt what is coming.


Precious's picture

"Reality is overrated." - M.E.

Row Well Number 41's picture

Most of the western world believes that, and so watches 500 channels of non reality reality TV instead.  That way lies Dancing With the Stars. 

Ignore reality at your own risk.


tom a taxpayer's picture

This conversation is getting kind of ontological….kind of epistemological...kind of metaphysical. Newton put the "physical" in metaphysical.


And where is Samuel Johnson and his Dictionary when you need him?



stocktivity's picture

"Bernanke is overrated"  -  Romney

falak pema's picture

Benanke is hugely over printed! thats the reality! 

logicalman's picture

I think he was under rated - only time will tell, but everything that's been thrown at his theories so far has only shown how powerful his insights were

vast-dom's picture

"Reality Is What You Can Get Away With"

Robert Anton Wilson



falak pema's picture

you can fool some people...but, history is a bitch and the good gets interred with the bones, while the evil lives on after.

So let it be with NWO US oligarchs...

ACP's picture

"Inflation is merely an illusion, albeit a very persistent one." - Ben Bernanke

HD's picture

This deserves more green arrows.

Desert Irish's picture

Yes it does ....well played sir

ptoemmes's picture

"The market is merely an illusion, albeit a very manipulated one." - Houdini

doggings's picture

well played indeed, although you are technically incorrect as.. 

"There is no evidence of inflation"   

Incubus's picture

debt is an illusion, too.


How valid is a debt when the impoverished, due to ignorance, have agreed to spend their lives away for the sake of enrichment for the clever weasels who designed the systems that we all must reside in?

As long as food makes it to tables, the illusion can continue.  Once the food stops, these systems managers better be prepared to reset the game if they wish to keep their heads.


Debt is a tool of control, as is credit and money.

tawse57's picture

The markets long ago disconnect

ed with economic reality. We are repeating the 1930s and the long march to war.

Rainman's picture

High Command is giving Oblamea the push out the door and summoning the red team...right on schedule. How ya like them gas prices ?

Totentänzerlied's picture

Can't tell you how many times I've heard "Gas prices aren't Obama's fault <somewhat true>, it's all the oil companies' fault <arguable>! Obama just needs to do more to fight the oil companies <hilariously deluded>".

There is always, always, always an excuse. Blame Bush.

Spastica Rex's picture

Blame Obama.

Blame Bush is so 2006.

stocktivity's picture

"You can observe a lot by just watching" - Yogi Berra

FinalCollapse's picture

It will end very badly. The clowns destroyed the pricing mechanism via their put/flooring and disconnected the capital markets from reality. In consequence they turned the capital markets into Ponzi scheme. They trade this Ponzi between themselves always finding the greater fool until the music stops. This can go for very long time but something tells me that either this year or more likely in 2013 the music will stop.

Don't cry for fools.

grid-b-gone's picture

They stop the music when they've found the last greater fool and then continue to profit on the downside.

For those who see both sides of the trade, every direction is progress. 


Jason T's picture

1987 style flash crash this cracked up market.   Still long SH

Supernova Born's picture

When lost, start running. When it gets dark, run faster.

-Ben Bernanke

Totentänzerlied's picture

You can run, but you can't run as fast I can print.

-The Bernank

grid-b-gone's picture

You don't have to print the most. You just have to print more than the central bank that is printing the least.

                                     - The Governors

Incubus's picture

jokes on you, old timer.


Who actually prints anymore when they can just press a few keys and have instant credit/money?

Rathmullan's picture

You can't blame the pastrami munchin coke heads in manhattan for being dilutional. Virtually all of the fiscal and monetary stimulus ended up in their laps. They soon will figure out that that's all the further the stimulus got (main street has) and that it's come to an end.

lotsoffun's picture

that is not very nice.  we know who likes pastrami.  are you a racist?

and most of all - the pastrami guys like corned beef too.  and - they like bennie.  because bennie works for THEM.  and they own the FED.  and guess what.  QE ain't over.  and neither are the bonuses.  infact - the BEST bonus is going to be when the clear all the chips off the stock market table, because they make the lie 'QE is over - and all you suckers with your 401k's that thought it was time to get in, and everything was fixed, and well, hell, why not, watch their assets go from their pockets to pastrami pockets'.

it's going to be a lot of fun, because, this time, it's going to be bigger and better than they ever swept the tables before.


20-20 Hindsight's picture

"...dilutional"... excellent pun intended here, I'm sure. :-)

buzzsaw99's picture

Don't worry about Pandit, he got plenty.

TheSilverJournal's picture

Yeah yeah yeah....stocks are bad....but....dollars are worse!!!

It seems like someone is forgetting that when you sell something, that inherintly means buying something else. So why sell a bad thing in exchange for something that's worse?

I don't put stocks being propped up due to hopes in the stock market, I put the reason for stocks being propped up due to despair in the bond market.

MedicalQuack's picture

Totally disconnected and in my little area of healthcare, really bad.  GOP House and Senate send letters to HHS wanting to cut the medical record stimulus for doctor and hospitals...so digitally illiterate.  Further more the plan to change Medicare to a voucher system...well let's see..we have about 12 years or so involved right now in getting Social Security out of Cobol...so think the voucher system would fly?  No, and we don't have enough engineers to restructure something tha large and would probably have to outsource to both India and China..so there that fantasy platform...lol. It's rediculous and why the democrats don't call them on this is beyond me.  It reality and logic.


Again worth repeating watch that documentary on the Quants of Wall Street and see the fictious math and formulas that are used as the quant talk and we never get to hear this otherwise.  The quant say that there's way too much math in the financial world that CEOs have no clue about their business model at all...and yup we saw that with Jamie Dimon.  The rich pay the quants very well for this.


We are under the Attack of the Killer Algorithms and all are sleeping at the wheel with straight emotional BS at times that does nothing. 



spanish inquisition's picture

Just got on, I have a theory and do not know if it  has already been proposed.

Anyone else think algos were headfaked by the news of the crash anniversary. They just read crash and started selling?

DeadFred's picture

You have an interesting point but it's likely too simple. They might read the bulk of the crash articles and be fooled about market sentiment. One would think the programmers wouldn't leave their 'children' open to such a problem but that is one type of problem this system is vulnerable to. "Oops, I shudda put in some code to sort fact from fiction!" Question is how do they get the algos to exclude some types of unreality and still get them to believe the BLS data? The machines may not be smart enough for that yet.

Bastiat's picture

Jokingly said to someone last week:  look at the Wall St. prez. campaign contributions -- the street is long Romney --  watch out.

logicalman's picture

If Romney gets in, I want to move to Mars

Fox-Scully's picture

Several books of S&H green stamps should be worth a lot!

lolmao500's picture

PPT, get to work or else Obama is gonna be gone!

tsx500's picture

Oh...they will. just watch. Remember, Monday is debate day ...

hairball48's picture

Regarding that video from Zimbabwe...A lifestyle soon coming our way here in the USA :)

I'm old and poor but I got gold, silver, food and plenty of ammo. I good to go.

Bring it on you no good saggy ass pants illiterate teenage punk bitchez!!



unununium's picture


Wealthy Advised to Sell for Gains Before Unfriendly 2013

First paragraph...





Martdin's picture

Meh... I don't think a lot is gonna happen until a Lehman style wipeout event occurs.