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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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Wed, 01/02/2013 - 10:46 | 3114683 vast-dom
vast-dom's picture


Wed, 01/02/2013 - 10:50 | 3114696 Archimedes
Archimedes's picture

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

Wed, 01/02/2013 - 10:51 | 3114704 vast-dom
vast-dom's picture

anywhere from one millisecond to a few decades.

Wed, 01/02/2013 - 11:07 | 3114765 Enslavethechild...
EnslavethechildrenforBen's picture

You can keep a prison economy going forever.


Wed, 01/02/2013 - 11:10 | 3114775 Ying-Yang
Ying-Yang's picture

Russell the love muscle!

Wed, 01/02/2013 - 11:18 | 3114804 Enslavethechild...
EnslavethechildrenforBen's picture

The Grapes of Wrath

Wed, 01/02/2013 - 12:15 | 3114965 TheSilverJournal
TheSilverJournal's picture

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

Wed, 01/02/2013 - 11:29 | 3114835 Archimedes
Archimedes's picture

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

Wed, 01/02/2013 - 11:32 | 3114846 vast-dom
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.

Wed, 01/02/2013 - 12:55 | 3115063 retiringteach
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

Thu, 01/03/2013 - 00:37 | 3117692 JeffB
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.

Wed, 01/02/2013 - 10:47 | 3114684 Sheeple Shepard
Sheeple Shepard's picture

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

Wed, 01/02/2013 - 10:55 | 3114719 unrulian
unrulian's picture

too easy

Wed, 01/02/2013 - 11:01 | 3114742 ptoemmes
ptoemmes's picture

You mean I can't guess Tiny Tim Geithner?

Wed, 01/02/2013 - 10:48 | 3114686 Pool Shark
Pool Shark's picture



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




Wed, 01/02/2013 - 10:50 | 3114701 yogibear
yogibear's picture

Exactly!  Zimbabwe economic policy on auto pilot. 

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

Wed, 01/02/2013 - 11:14 | 3114792 Enslavethechild...
EnslavethechildrenforBen's picture

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

Wed, 01/02/2013 - 10:49 | 3114691 yogibear
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?


Wed, 01/02/2013 - 10:50 | 3114692 fonzannoon
fonzannoon's picture

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

Wed, 01/02/2013 - 10:49 | 3114697 busted by the b...
busted by the bailout's picture

Post cliff, we have entered nirvana.

Relax and float downstream...

Wed, 01/02/2013 - 10:51 | 3114702 TraderTimm
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.


Wed, 01/02/2013 - 10:52 | 3114707 Muppet Pimp
Muppet Pimp's picture

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

Wed, 01/02/2013 - 10:56 | 3114721 ekm
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.

Wed, 01/02/2013 - 10:57 | 3114730 GMadScientist
GMadScientist's picture

Not alive in 1999?

Wed, 01/02/2013 - 11:02 | 3114745 ekm
ekm's picture

What happened in 1999? Teach me

Wed, 01/02/2013 - 11:04 | 3114755 GMadScientist
GMadScientist's picture

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


Wed, 01/02/2013 - 11:12 | 3114771 ekm
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.

Wed, 01/02/2013 - 11:24 | 3114821 GMadScientist
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".

Wed, 01/02/2013 - 11:26 | 3114827 ekm
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.

Wed, 01/02/2013 - 11:41 | 3114877 GMadScientist
GMadScientist's picture

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


Wed, 01/02/2013 - 11:45 | 3114885 ekm
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.

Wed, 01/02/2013 - 11:16 | 3114799 ekm
ekm's picture

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

Wed, 01/02/2013 - 11:25 | 3114825 SheepDog-One
SheepDog-One's picture

Just 1 pump'n'dump to the next.

Wed, 01/02/2013 - 10:56 | 3114725 GMadScientist
GMadScientist's picture

Ferbus, Edo, and Sigma are pleased.

Wed, 01/02/2013 - 11:03 | 3114749 machineh
machineh's picture

Yeah, they love that chicken-flavored dog food.

Wed, 01/02/2013 - 11:05 | 3114758 GMadScientist
GMadScientist's picture

Tastes like human.

Wed, 01/02/2013 - 11:00 | 3114738 adr
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.

Wed, 01/02/2013 - 11:05 | 3114760 PeeramidIdeologies
PeeramidIdeologies's picture

Both obviously. And neither.

Wed, 01/02/2013 - 11:42 | 3114879 slyhill
slyhill's picture

Yea, the formatter.

Wed, 01/02/2013 - 12:58 | 3115078 optimator
optimator's picture


Wed, 01/02/2013 - 11:08 | 3114770 Ying-Yang
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)

Wed, 01/02/2013 - 11:38 | 3114873 optimator
optimator's picture

The Back Order Log never lies. 

Wed, 01/02/2013 - 11:09 | 3114772 PeeramidIdeologies
PeeramidIdeologies's picture

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

Wed, 01/02/2013 - 11:12 | 3114784 Grand Supercycle
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.

Wed, 01/02/2013 - 11:20 | 3114810 sunny
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.


Wed, 01/02/2013 - 12:56 | 3115070 optimator
optimator's picture

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

Wed, 01/02/2013 - 11:37 | 3114868 optimator
optimator's picture

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

Wed, 01/02/2013 - 11:14 | 3114793 XtraBullish
XtraBullish's picture

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

Wed, 01/02/2013 - 11:19 | 3114808 XtraBullish
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.


Wed, 01/02/2013 - 11:53 | 3114918 Racer
Racer's picture

An overlay of small business confidence would be most interesting

Wed, 01/02/2013 - 11:57 | 3114932 Neo1
Neo1's picture

Irrecusable obligation, which according to 'Bouvier's Law Dictionary' (1914 ed.), is "a term used to indicate a certain class of contractual obligations recognized by the law which are imposed upon a person without his consent and without regard to any act of his own." This is distinguished from a recusable obligation which, according to Bouvier, arises from a voluntary act by which one incurs the obligation imposed by the operation of law. The Income Tax succinctly described is an irrecusable obligation.

However, if anyone else accepts this private credit and uses it to purchase goods and services, the user voluntarily incurs the obligation requiring him to make a return of income whereby a portion of the income is collected by the IRS and delivered to the Federal Reserve banksters. Actually the federal income tax imparts two separate obligations: the obligation to file a return and the obligation to abide by the Internal Revenue Code. The obligation to make a return of income for using private credit is recognized in law as an irrecusable obligation. The voluntary use of private credit is the condition precedent which imposes the irrecusable obligation to file a tax return. If private credit is not used or rejected, then the operation of law which imposes the irrecusable obligation lies dormant and cannot apply.

A Banksters defeatism (realization of defeat) nightmare, Being forced to Return to Real Money=United States Note=Lawful Money, Use the Remedy within the Federal Reserve Act. Redeemed 12USC411, Refusal Penalty 12USC501a  Stop being a Slave!!!!!! This is Tax Free Money!!!!!!!!

Wed, 01/02/2013 - 12:26 | 3114991 Vince Clortho
Vince Clortho's picture

The market manipulation has been going on for years now.  A toy for the CPs to abuse at their whim.  The generation coming of age now has never experienced a free market.

Looking a few years down the road, I can see "Free Markets" as a theoretical concept of the past.  And probably roundly condemned in the new history books as a flawed theory that was overcome and corrected with the advent of of the omniscient centrally planned economies.

Wed, 01/02/2013 - 12:39 | 3115010 Boilermaker
Boilermaker's picture

Well, 401k basically assured it would be manipulated.  They have to keep the INFLOW of money.  The way to do that is to keep it going up.  People love to 'win'.  But they hate to 'miss out' on 'winnings' even more.  You have ignorant masses just shoveling it in and blindly assuming it will their ticket to riches.

What better recipe could the banksters come up with?  Seriously, it's a 360 alley opp dunk, Griffin style, for them.

Wed, 01/02/2013 - 13:03 | 3115085 optimator
optimator's picture

Biggest jump in 13 months?  lunch hour will see the little guy taking out Bernak's money...lets see what Mr. Market ends the day with.  On second thought, the Bernak first said he'd put 40 mil in per diem, then sain 80 mil, and then said he didn't have to tell us what he was putting in (or taking out when the time comes).

Wed, 01/02/2013 - 15:03 | 3115585 Burst
Burst's picture

Ferbus' acumen in all things economic aside, the most amusing thing to me is that Bernanke proudly trumpets the performance of the Russell 2000 as he did on one of his '60 Minutes' interviews because, as we all know, 'small business' creates most of the jobs in the US. But somewhere it was lost on The Bernank, and I haven't seen anyone call him on this, that the small-capitalization index known as the Russell 2000 is not in any meaningful way representative of small business. In fact, virtually none of that index's constituents can be called small businesses, at least as defined by our government's own Small Business Administration . . . small-cap publicly traded corporations do NOT equal small business. BigBen's ignorance, with his head buried deep in the textbook, is incredibly disappointing . . . or enlightening depending on one's perspective I suppose...


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