Bernanke Policy Tool Reaches All-Time High

Tyler Durden's picture

Presented with little comment as the Russell 2000 reaches up to its all-time (nominal) record highs...

Biggest 2-day jump in 13 months.


Charts: Bloomberg

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vast-dom's picture


Archimedes's picture

Can you give me a timeline on that crash? I have been waiting five years.

vast-dom's picture

anywhere from one millisecond to a few decades.

EnslavethechildrenforBen's picture

You can keep a prison economy going forever.


TheSilverJournal's picture

Prices are ratios and the dollar is going down hard. I wouldn't count on any price in dollars to crash.

Archimedes's picture

Great answer. So then why is everyone here? Just passing time?

vast-dom's picture

fight club. tylers have been getting their faces ripped off of late for attempting to predict Ponzi Planet. i'm bloodied and beaten too. but we fight on.

retiringteach's picture

i've been reading zh on/off 2 years-never have i seen so many so proud of so many bad calls. gold/silver lock shorts-world knows governmtent deficits forever and pm barely moves-gold should be up at least $100 today if it was restart uptrend-what doesnt go up will--go down---big! zh sheeple!! and the banks-bac going to 0 etc etc

JeffB's picture

Timing is tough to impossible it seems to me. There are a lot of variables in play.

I remember seeing a panel of experts at a forum sponsored by the Economist talking about the crash of the housing bubble. The editor at one point asked the rhetorical question about how far in advance could one have predicted the housing bubble without losing credibility. She noted that there were many economists warning about it for a few years before it happened, but the longer it took to come about the less credibility those predicting it had.

Remember folks publicly mocking Peter Schiff for his predictions which in retrospect were spot on?

Bernanke was wrong while Peter Schiff was right

 Fed to People: It's Not Our Fault

(an excerpt below)

As proof that the Fed caused the housing bubble, I offer a commentary that I wrote in May of 2004 and which was published as an opinion piece in the Orange County Register.

You can read the entire commentary here.

However, let me reproduce some key quotes:

That so many are currently opting for ARMs reflects a level of real estate speculation unparalleled in American history. Homebuyers have been lured into this foolish choice by... a Fed chairman desperate to keep the real estate bubble inflating. Unfortunately, the longer the Fed remains "patient" with regard to raising short-term interest rates to appropriate levels, the more homeowners that will be lured into the ARM time bomb.

The real losers in this whole fiasco are likely to be those who did not even participate in the mania. As over-leveraged borrowers walk away from properties in which they have no equity, the Fed will most likely attempt to bail out both debtors and bank depositors (and the government sponsored enterprises that insured the loans) with the most inflationary monetary policy ever undertaken in the history of central banking. The savings of an entire generationwill be wiped out, as it will have been squandered to perpetuate the biggest real estate and consumer debt bubbles of all time.

Now if I could have seen that coming as early as May 2004, why couldn't the Fed? Even with the full benefit of hindsight, Bernanke still cannot recognize the Fed's mistakes.

Sheeple Shepard's picture

And let the jokes about "Benanke's policy tool" commence!

Pool Shark's picture



Soon we'll all be billionaires - Zimbabwe style...




yogibear's picture

Exactly!  Zimbabwe economic policy on auto pilot. 

The Zimbabwe stock market shot up. It's Bernanke and the Fed's plan.

EnslavethechildrenforBen's picture

Deal is those devalued dollars are still the world's reserve currency and will buy plenty of Colombian tail.

yogibear's picture

Benny Bernanke and the Federal Reserve banksters are happy.

More and more monetizing of debt. Remove the debt ceiling, infinite spending, debt and printing is their weapon that's working so far.

LOL, not one mention from a credit rating agency, who's your daddy?


fonzannoon's picture

Gold up ten bucks. Funny. They should make it go negative just for shits and giggles.

busted by the bailout's picture

Post cliff, we have entered nirvana.

Relax and float downstream...

TraderTimm's picture

I'm sick to death of all this crap. Perhaps I should just make a web-scraper that pops up a message when the markets are down for more than five days, totaling more than 8% cumulative decline.

Watching these gyrations really wear me down.


Muppet Pimp's picture

Go go go, go Potter its your birthday we gone party like its your birthday...

ekm's picture

The gov wants the Fed to increase stocks prices but reduce oil and gold prices.

Anybody knows that's impossible and it has never been possible.

Check oil price.

You have MS sellingto C selling to BAC and BAC completing the circle sellingto MS the same exact thing inside DARK POOLS.

Again, oil price is the check on DOW.

My forecast: 48 hrs.

ekm's picture

What happened in 1999? Teach me

GMadScientist's picture

oil $10/bbl, gold $300/toz, SPX ~1500


ekm's picture

Oh I see.

That's why the west did not collapse after the dot com crash, CHEAP OIL.

Newly printed money to recover from the crash went to oil and housing.

That was a lot of freaking money printed.


That's exactly my point. If oil were $10 today nobody would have cared and DOW could have really been 40000

Oil price, it's all about oil price.

In other words: Low oil price is compatible with high stocks price.

High oil price is NOT compatible with high stocks price, for a real economy.

GMadScientist's picture

I will grant you that oil price is significant in that it affects corporate margins and hits people driving dumb vehicles right in the pocketbook, but you seem to be confusing Main St (affected by pump prices) and Wall St (living in their own cone of reality denial). Exxon makes even more money when the price of oil goes up and the pump price stays up even after oil goes back down.

High oil price is not compatible with real economic growth, but that has fuck-all to do with "the market".

ekm's picture

Do not disagree at all, except for I'd like to add something to the last sentence:


High oil price is not compatible with real economic growth,but that has fuck-all to do with "the market".............UNTIL IT DOES.

GMadScientist's picture

Wall St will be bailed continuously like a sump pump, as necessary.


ekm's picture

No doubt. After each crash there will be a bailout.

It's been like this and it will be like this.

But in order to bail out, somebody's got to crash, otherwise the economy stalls as it has already stalled due to extremely high oil prices.

ekm's picture

Thx for the info by the way. I'll use this for future comments. Very precious.

SheepDog-One's picture

Just 1 pump'n'dump to the next.

GMadScientist's picture

Ferbus, Edo, and Sigma are pleased.

machineh's picture

Yeah, they love that chicken-flavored dog food.

adr's picture

Funny, if business was really going as well as the market suggests, my company should be seeing orders pour in. Same with my suppliers, POP manufacturers, printers, etc.

All of them are begging for orders. Retail shelves are packed with the lowest amount of January inventory I have ever seen.

So either the stock market has it right, or real business does.

PeeramidIdeologies's picture

Both obviously. And neither.

Ying-Yang's picture

Your business must not be a greedy blood-sucking multinational corporation that chooses to horde cash and not pay employees a living wage. That's real business..(sarc)

optimator's picture

The Back Order Log never lies. 

PeeramidIdeologies's picture

2013 the year the fix is priced in. It's a wave, ride it.

Grand Supercycle's picture

Wile E Coyote is not going away...

Recurring short squeezes propelling markets higher just ensures the Wile E. Coyote drop will be brutal ~ we are witnessing a mega crash in the making.

Whether it’s caused by fiscal cliff, debt ceiling, Europe or flesh-eating zombies invading Wall St, it doesn’t matter because another crash is guaranteed.

It’s a no brainer.
Charts don’t lie.

sunny's picture

Yep, I'm thinking the same thing.  TZA is at all time lows and when she rolls over, there will be all sorts of exciting times.  These markets are setting up for a turn around that will be legend.


optimator's picture

And as Walter Sickn, er, Kronkeit would have said, "And you are there".

optimator's picture

What are left of the "Little Goy, ah guys", will be toast when the Banksters suddenly pull out.

XtraBullish's picture

NEVER underestimate the replacement power of equities within an inflationary spiral. Barbecued shorts everywhere! OUCH!

XtraBullish's picture

Reflationary markets do not "crash" - Purchasing power of debased currencies crash and that means non-cash assets remain "bid".

Wiley Coyote has a money-printing helium balloon levitating him until the policy-makers pop it!

"Charts don't lie?"

In the hold of every sunken ship you will always find a chart.


Racer's picture

An overlay of small business confidence would be most interesting