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Are Markets And Macro Repeating 2008?

Tyler Durden's picture


In mid 2008, when macro data surprises were very weak, equity markets continued to push inexorably higher; happily ignorant of reality as The Fed has your back, 'bad is good', and the impossible was still impossible. This rally front-ran the economic surprise data - as economists had (in their ubiquitously extrapolant manner) over-cooked the downside and a reflexive bounce and rate cuts swung us into the green economically and market-wise. That surge in macro surprise data proved fleeting and we crashed a few short months after. Four years later and once again we are told that 'bad is good', every central bank is just dying to add more liquidity fuel to the fire, and macro data is 'surprising' to the upside. However, instead of following the 2009, 2010, and 2011 patterns, we are mimicking that 2008 pattern as 3-month S&P return turns red while ECO data is still rising. We suspect the hope-driven 'magic' in that ECO data will rapidly fall to the bottom-up-biased earnings data we discussed earlier and while 'expecting' a 30% plunge in stocks is a little much - we've seen this kind of hopeful optimism dashed before on the rocks of reality.


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Fri, 11/09/2012 - 16:02 | 2965736 Tsar Pointless
Tsar Pointless's picture

Quick answer:


Fri, 11/09/2012 - 16:07 | 2965757 DoChenRollingBearing
DoChenRollingBearing's picture

Becoming physically fit, financially fit and spiritutally fit looks to be the smart thing to do in the New America.



Fri, 11/09/2012 - 16:31 | 2965840 vast-dom
vast-dom's picture

these charts line up EXACTLY with my calcs....of Sept....of....last year....when i was certain of 2008 style crash and then some...but the motherfucking Bernank Put rendered all of my good positions delayed until.....NOW? LATER? I know nothing....but my narrative remains...

Fri, 11/09/2012 - 18:25 | 2966356 Ookspay
Ookspay's picture

All in due time. On a long enough timeline...

Fri, 11/09/2012 - 16:49 | 2966014 Atlasshruggedme
Atlasshruggedme's picture

Yes, but is this the final plunge? 

You can't just post a graph that shows a peak and say "OMG 2008" 

Fri, 11/09/2012 - 17:31 | 2966158 Bag Of Meat
Bag Of Meat's picture

THANK you. This gets confusing, please stop it tylers. I'm sure you could present us a correlation between plunging numbers of condom sales and the coming skyrocketing of PM's prices

Fri, 11/09/2012 - 16:08 | 2965758 TheSilverJournal
TheSilverJournal's picture

Quick answer:

No. Bond yields are too low for a massive crash. Because in order to sell stocks, that inherintly means buying dollars (and bonds). Stocks are over priced, but bonds are even more over priced. Why jump out of one bad bet and into a worse one?

Fri, 11/09/2012 - 16:14 | 2965800 Mark Carney
Mark Carney's picture

Because one cannot cure the mental state of people, doing the same thing over and over and o'vr again.


Jump? sure, into which pit of fire sir?

Fri, 11/09/2012 - 16:29 | 2965894 FinalCollapse
FinalCollapse's picture

When you sell stocks then you have USD. There are many things that you can do with USD other than buying bonds:

- do nothing

- buy another currency and bonds

- short the stock market

- buy commodities.

and so on...

Why do people use the binary logic: stocks vs. bonds?

Fri, 11/09/2012 - 17:30 | 2965997 CClarity
CClarity's picture

Jeffrey Gundlach says there are times that cash is good even without any return.  Yup.  Like when equities go down.  

Fri, 11/09/2012 - 16:46 | 2965998 TheSilverJournal
TheSilverJournal's picture

Umm...because stocks are measured in dollars. It's hard to imagine a flow of wealth out of stocks isn't going into dollars, without the dollar also tanking. Even though stocks won't go up in real terms, the move out of dollars will cause stocks to go up in nominal terms.

Fri, 11/09/2012 - 16:55 | 2966044 SheepDog-One
SheepDog-One's picture

Sell bullshitass stocks, use the doellars to buy long term supplies.

Sat, 11/10/2012 - 01:35 | 2967245 pfairley
pfairley's picture

?    stocks seem to go in opposite directions of T bonds ..but that is on a daily basis only...over the last 2 years both are up..with different peaks...correlation logic needs to see the bigger picture. Stock crash is possible. Bond crash also possible.

Fri, 11/09/2012 - 16:10 | 2965764 Yen Cross
Yen Cross's picture

 To hell with this crap... These markets are lost in translation today. (childish politicans)

  I'm going to walk down the liquor store. I wasted more brain cells trying to get [20pips] today, then a weekend of hard drinking could kill off...


Fri, 11/09/2012 - 16:25 | 2965832 Ineverslice
Ineverslice's picture


Cliff, my ass....O-Man gonna sip his beer with Boner this weekend wth a grin.

Still a touch short... can't help it.  

edit:  fb grinds it's buyers...no retrace yet.

Fri, 11/09/2012 - 16:38 | 2965963 Lewshine
Lewshine's picture

If "Lost in translation" means, moving by the influence of a few in order to destroy the many, or in other words; back to same ole bullshit - then I agree with you. BTW, Now I know why we all embrace the monster sell offs anymore., Its as close to a free market as we ever get to see!

Fri, 11/09/2012 - 16:53 | 2966026 SheepDog-One
SheepDog-One's picture

Funny part is you can do so well in other things now, the stock/bond markets are irrelevant relics....who even cares at this point? Really only a fool would risk the manipulated markets now. Woe to the baby boomer fundies though, theyre about to get screwed big time.

Fri, 11/09/2012 - 16:13 | 2965793 Quinvarius
Quinvarius's picture

I am not optimistic on the economy.  But the stock market is still going to go up.

Fri, 11/09/2012 - 16:16 | 2965814 slaughterer
slaughterer's picture

Bear paws do not want to get caught in the Bernanke iron lock jaw.  

2008/1987 are not going to repeat in the near term.  

Fri, 11/09/2012 - 17:17 | 2966120 TheSilverJournal
TheSilverJournal's picture

There's not much that I would bet on winning the race to the bottom against dollars.

Fri, 11/09/2012 - 16:27 | 2965889 Schmuck Raker
Schmuck Raker's picture

I sure hope so...$800 gold, YUM!

Fri, 11/09/2012 - 16:49 | 2966008 SheepDog-One
SheepDog-One's picture

After a nice 4 years of Thorazine induced euphoric suspension of disbelief, reality is about to come crashing back in big time, the party is over theyve repaid their puppet Obama for being a good boy, now time to shear a whole slew of sheeple, again.

Fri, 11/09/2012 - 16:54 | 2966039 Lewshine
Lewshine's picture

Spy has been in a 15 point circle jerk since Obama told Boehner "to go fawk himself news conference".

Fri, 11/09/2012 - 17:03 | 2966069 razorthin
razorthin's picture

One can only "hope".

Fri, 11/09/2012 - 17:41 | 2966190 Soph
Soph's picture

Politicians will kick the can, markets will drool in approval, S&P over 1500 by year end. They have had a great teacher in Europe over the past many years. Its a model that works, and works well.


...doesn't fix anything mind you, but that's nothing to worry about. They can always find a bigger can to kick.

Fri, 11/09/2012 - 17:56 | 2966251 GernB
GernB's picture

They can always find a bigger can to kick.

No they can't. That's the problem.

Fri, 11/09/2012 - 18:05 | 2966288 slaughterer
slaughterer's picture

They will be able to kick the can for another 10 years.  2012 is not the end: it is just the simulation of the end.  

Fri, 11/09/2012 - 18:30 | 2966375 dracos_ghost
dracos_ghost's picture

Jan 3 2011 SPX 1258 - Jan 3 2012 SPX 1258 ---------------- Pensions get screwed

Jan 3 2012 SPX 1258 - Jan 1 2013 SPX ???? ----------------- Hmm, let's take a guess.


Sat, 11/10/2012 - 08:21 | 2967445 swabeyjw
swabeyjw's picture

So with all that money being printed, is there an expectation of iflows to wages instead of the stock market.

Ok, my vote is that the stock market is a fire at the receiving end of the bellows (printing). Issue is there is only one lump of coal and the bellows are wasting the coals utility. The intractable part is that each pump of the bellows builds the debt.

Don't forget we need innovative poor to drive cost effective innovation. I am assuming you were taught - Necessity is the mother of invention.

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