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Dow Closes Over 14,000 - Highest Close Since October 2007

Tyler Durden's picture




 

While the close was not exactly bullish (just look at HY credit, volatility, and homebuilders), the only thing that matters is - Dow 14,000. The highest close since 10/12/2007. Since that time, 10Y Treasury yields have dropped from 4.68% to today's 2.03% - the first close above 2.00% since early April 2012. Risk-assets spent the day catching up to equity's early lead and recoupled into the close. Some modest after-hours weakness to the shine off an otherwise exuberant day as Treasuries snapped lower in yield on NFP and spent the rest of the day surging higher in yield to end the week +6 to 8bps. Silver gained 2% on the week - beating stocks, as the USD dropped 0.7% (almost equal to Gold's gain). With stocks unch from Oct 07, perhaps it is worth reflecting on Gas prices being up 58% since then... but that would spoil the party...

 

A little context for today's exuberance - cross-asset class performance from 10/12/2007...Bonds +28.5%, Stocks Unch.

 

Since October 2007...'wealth' has changed...

 

Gold

 

Gasoline...

 

and the rest...

 

and today...

 

and the sectors...(homebuilders ugly but Utes winning?)

 

Now that was a crazy day in Treasuries!!!

 

Stocks led the risk-off move as the rest of risk-assets in general did not play along initially - but mysteriously perfectly recoupled into the close...

 

Gold and Silver had a good week - outperforming stocks - as the USD lost 0.7%...

 

Source: Bloomberg and Capital Context

Capital Context (@CapitalContext) LLC is the leader in integrating credit-market data to actively trade equity markets. From our world-renowned intraday 'CONTEXT' and 'SPY Arb' models to the daily long-short equity portfolio, sector-weight updates and tactical asset-allocation strategies, Capital Context offers sophisticated hedge-fund strategies to the active trading community.

 

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Fri, 02/01/2013 - 17:30 | 3207543 Say What Again
Say What Again's picture

Don't worry about inflation

Whenever one talks about "inflation," it should be noted that the fed/gov has a leg up on the problem.  They call it the "Hedonic Quality Adjustment."  The use of "hedonism" is really creative.  So when a new computer is more powerful -and- more expensive than the previous version, they will say it actually costs less because it makes you more productive and presumably more hedonistic.

So the bottom line is that even though prices are going UP, the fed will tell you that consumer prices are going DOWN.  So those big expensive "smart" phones are actually making inflation go DOWN!!!

http://www.bls.gov/cpi/cpihqaitem.htm

A nice little book that talks about this is;

GREENSPAN'S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE
http://www.amazon.com/GREENSPANS-BUBBLES-IGNORANCE-FEDERAL-RESERVE/dp/00...

Fri, 02/01/2013 - 17:29 | 3207549 King_of_simpletons
King_of_simpletons's picture

Okay what next ?

Bernanke has achieved a number after so much QE and waste.

Fri, 02/01/2013 - 17:33 | 3207556 Lohn Jocke
Lohn Jocke's picture

Next, Ben Diocletian Bernanke sets a price ceilint to solve that pesky inflation problem.

Fri, 02/01/2013 - 17:40 | 3207584 Say What Again
Say What Again's picture

Also -- I like the way they usually exclude fuel prices from their calculations, because they are considered "transitory."

All I know is that if fuel prices to go UP, I'll be a lot more "stationary."

 

Fri, 02/01/2013 - 17:47 | 3207604 Dre4dwolf
Dre4dwolf's picture

Everything is transitory because when we all die we wont need to eat, thats why food prices are transitory, people "transit" through life and go to heaven where Ben Bernanke gives then Monopoly Money to buy stocks with and gamble / party.

 

 

Fri, 02/01/2013 - 17:50 | 3207619 SAT 800
SAT 800's picture

Whoa! thanks for the laugh. that was funny.

Fri, 02/01/2013 - 17:54 | 3207637 GOSPLAN HERO
GOSPLAN HERO's picture

Say What Again,

You look like George Obama.

How goes life in your hut?

Has Barry sent you any coin?

Fri, 02/01/2013 - 17:56 | 3207653 Say What Again
Say What Again's picture

"George Obama?"

Who dat?

I *WAS* thinkin bout moving into dat big house in D.C.

Fri, 02/01/2013 - 17:32 | 3207554 Lohn Jocke
Lohn Jocke's picture

That's the wonderful thing about economic measurement. I could say I have a 14 inch penis, but you're just measuring it the wrong way.

Fri, 02/01/2013 - 17:36 | 3207569 de3de8
de3de8's picture

Like in mm?

Fri, 02/01/2013 - 17:37 | 3207571 de3de8
de3de8's picture

Sorry, dp

Fri, 02/01/2013 - 17:38 | 3207577 Say What Again
Say What Again's picture

Can your girlfriend be heard all through the neighborhood?

That's all that matters!

Sat, 02/02/2013 - 03:51 | 3208749 mkhs
mkhs's picture

If she could, it would probably wake my wife.

Fri, 02/01/2013 - 18:45 | 3207734 bobthehorse
bobthehorse's picture

The DOW will climb to 30,000.

Why not?

The whole fucking thing is rigged anyway.

http://angrysinner.blogspot.kr/2013/02/yesterday-i-used-my-phillips-air-fryer.html

Fri, 02/01/2013 - 23:20 | 3208436 Bindar Dundat
Bindar Dundat's picture

If it does that it will still be down when measured against gold since 2007.

Fri, 02/01/2013 - 17:29 | 3207544 buzzsaw99
buzzsaw99's picture

Greedscam only had to cut rates to near zero.

the bernank had to do bailouts and qe infinity

the next time they will????

Fri, 02/01/2013 - 17:41 | 3207587 kliguy38
kliguy38's picture

the next time they will????  Just imagine what pale green glass stretching as far as the eye can see 

Fri, 02/01/2013 - 17:45 | 3207598 buzzsaw99
buzzsaw99's picture

Kill us all. Good answer!

Fri, 02/01/2013 - 17:53 | 3207633 IridiumRebel
IridiumRebel's picture

so the answer is War.....yep.

Sat, 02/02/2013 - 15:41 | 3209392 disabledvet
disabledvet's picture

"Pray."

Fri, 02/01/2013 - 17:47 | 3207612 Dre4dwolf
Dre4dwolf's picture

They will Jay Wilson it and Double it.

Fri, 02/01/2013 - 17:28 | 3207547 Shizzmoney
Shizzmoney's picture

Employment stagnant, wages falling, growth contracting, institutions failing....... and markets booming.

I give up.

http://upload.wikimedia.org/wikipedia/commons/7/73/Roflcopter.gif

Fri, 02/01/2013 - 17:30 | 3207548 IridiumRebel
IridiumRebel's picture

Just loaded up on Herbalies, Netfux and COCAINE! Me and Menendez are jetting down to drop loads on 16 yr. old hookers in the DR!

Fri, 02/01/2013 - 17:31 | 3207550 Temporalist
Fri, 02/01/2013 - 17:34 | 3207557 Dr. Engali
Dr. Engali's picture

Now that Jobs is dead will Apple please settle their dispute wit Adobe? Fuck I hate when I can only watch half of what's on the web!

Fri, 02/01/2013 - 17:42 | 3207562 buzzsaw99
buzzsaw99's picture

they settled. view this [pdf] [/just kidding]

edit: why settle? they could buy adobe for a measly $20B.

Fri, 02/01/2013 - 17:44 | 3207593 Say What Again
Say What Again's picture

And when will ORCL fix the F*~k$ng JAVA bug?

Wait -- It just dawned on me why ORCL isn't fixing that bug!  It helps their biggest customer monitor the web.

Fri, 02/01/2013 - 17:46 | 3207608 buzzsaw99
buzzsaw99's picture

Java and their thrice daily updates. I hate those bastidges. They are the biggest security breach on the interwebz.

Fri, 02/01/2013 - 17:43 | 3207573 ToNYC
ToNYC's picture

Steve may be dead, but Apple only has Steve's entitled children following. Like you were saying, they stay DENIED. How cool is that?

Sat, 02/02/2013 - 10:30 | 3208950 SmallerGovNow2
SmallerGovNow2's picture

Thanks for that, Schiff is the bomb...

Fri, 02/01/2013 - 17:33 | 3207560 Bon Hagar
Bon Hagar's picture

Folks that ignore history are always enamored with how shiny 'new' objects are.

Fri, 02/01/2013 - 21:51 | 3208166 Tango in the Blight
Tango in the Blight's picture

History is pisstory..

Duh!

/6th graders and Fed board members

Fri, 02/01/2013 - 17:35 | 3207561 Shizzmoney
Shizzmoney's picture
Millennial Jobs Report: Youth Unemployment Reaches 13.1 Percent as U.S. Economy Shrinks

“President Obama says America should be ‘investing in the generation that will build its future,’ yet four years of his government-driven economic policies have left us with record youth unemployment and an economy that is literally shrinking. My generation is suffering disproportionately,” said Terence Grado, Director of National and State Policy at Generation Opportunity. “Instead of staying the course and doubling down on failure, we need a new strategy that encourages the private sector to grow, invest, and provide real opportunities for the millions of young people who have great skills, are ready to contribute, and have waited long enough.”

Read more: http://generationopportunity.org/press/millennial-jobs-report-youth-unemployment-reaches-13-1-percent-as-u-s-economy-shrinks/#ixzz2JgZJygYZ
Sat, 02/02/2013 - 09:52 | 3208924 goldenbuddha454
goldenbuddha454's picture

The youth in Europe would give their nuts to be an American youth right now.  Try 52% in Greece!  Crazy times we're living through.  Glad I got that vasectomy.

Fri, 02/01/2013 - 17:35 | 3207563 Motorhead
Motorhead's picture

Charts over 14,000, bitchez!

Fri, 02/01/2013 - 17:36 | 3207564 Tsar Pointless
Tsar Pointless's picture

Record highs coming by months-end.

That's about all the little people will care.

Fri, 02/01/2013 - 17:37 | 3207572 ParkAveFlasher
Fri, 02/01/2013 - 17:40 | 3207576 Dre4dwolf
Dre4dwolf's picture

Markets will Rally Forever

Markets will crash

 

Which one is it more likely to be?

Someone remind me what happened last time we were here... o yea right didn't a financial disaster happen or something? my memmory is short, but I remember the markets were all high as a kite and oblivious and then KASPLAT "everyone print money so we don't go to jail, JOHNSON WHERE THE FUCK IS JOHNSON (two sec. later they hear Johnson hit the curb at terminal velocity).

 

Yea... not gona end-well.

Fri, 02/01/2013 - 17:39 | 3207578 IridiumRebel
IridiumRebel's picture

DOW <----26,000 by 1/1/14

DOW <----8,500 by 1/1/14

Fri, 02/01/2013 - 17:41 | 3207589 Dre4dwolf
Dre4dwolf's picture

8,500? i know we are supposed to stay optimistic but really man?

Fri, 02/01/2013 - 17:46 | 3207601 IridiumRebel
IridiumRebel's picture

I was gonna say 1500, but I thought I should account for Bernank's toilet paper printing

Fri, 02/01/2013 - 19:04 | 3207773 edifice
edifice's picture

I'm really waiting for DOW/Gold 1:1 and DOW/Silver 1:30

Fri, 02/01/2013 - 17:39 | 3207580 Motorhead
Motorhead's picture

I can see it now...a phony economic system runs up (to say nothing of all the newly "printed" fiat currency) the stock markets...people (maybe) begin to jump back into the market...people believe all is well...people (nominally) get rich...big gum'ment likes capital gains taxes.  There are way too many bozos on this bus.

Fri, 02/01/2013 - 17:42 | 3207595 LongSoupLine
LongSoupLine's picture

congratulations Bernanke you fucking shit eating bank fuck.  Die painfully you fucking walking economic piece of retarded shit.

Fri, 02/01/2013 - 17:47 | 3207606 IridiumRebel
IridiumRebel's picture

tell us how you really feel

Fri, 02/01/2013 - 17:46 | 3207610 Motorhead
Motorhead's picture

He must not be feeling well today...that's rather mellow!

Fri, 02/01/2013 - 17:46 | 3207611 falak pema
falak pema's picture

Big Oil and its in refining...says it all. All the while they junked Euro refining.

ExxonMobil affiche des bénéfices mirobolants pour 2012 grâce au raffinage

45 bliion AT; 480 B Sales. Whats new pussy cat! 

Fri, 02/01/2013 - 17:54 | 3207634 Dre4dwolf
Dre4dwolf's picture

"Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs"

 

 

Lol the bankers are lucky the public can't tell the difference between "nominal growth" and "actual growth".

 

 

Fri, 02/01/2013 - 18:10 | 3207674 toomanyfakecons...
toomanyfakeconservatives's picture

Music to distract passengers as the Titanic goes down.

Fri, 02/01/2013 - 18:31 | 3207705 mr. mirbach
mr. mirbach's picture

Dow - Jones 14000 = SIGNAL OF THE DECEASING VALUE OF THE DOLLAR!!

Yes I said deceasing - they are killing the value of the dollar, just like they said was their plan all along.

Value and price are not the same. The price of an item is the translation of the value of an item into a mutually acceptable quantity of some other item that both parties feel is an equal or equitable trade. This is barter. We use paper money to barter. Sellers set a value for their goods based on their belief on the value on paper currency and name the price in terms of dollars, yen, euro, etc.

If the number or paper bills required to buy the same quantity of an item within a pool of a relatively fixed amount/supply of that item class (e.g. oil, gas, bread, stocks, precious metals) increases noticeably in a relatively short amount of time, BE ON GUARD. 

Also: 

If your gov't (US Congress) eliminates the debt ceiling...

If your Central Bank (the FED) is flooding the market with new dollars from debt (thin air) 

If your stock market (Dow Jones) shoots way up for no good reason...

If taxes on your population have risen dramatically....

If your military is practicing urban warfare on home soil...

If your gov't has purchased 1.6 billion hollow point bullets...

If your gov't ordered 7000 fully automatic weapons...

If your gov't just built a massive internet screening facility...

If your gov't has 25,000 drones ready for domestic deployment...

If your gov't is building a surveillance network with facial recognition...

If your gov't is infringing on rights that the law says they cannot infringe...

If your leaders are invading foreign countries to exploit resources...

If your leaders are not following the law or making more un-Constitutional law...

If your leaders allow a law to be broken by some while prosecuting others...

If your leaders can kill it's own citizens with impunity...

If your gov't has a history of genocide or mass interment...

If your local police forces are getting military grade hardware...

If your gov't does not provide details or intentionally covers up scandals...

If your gov't is complicit with the media in spinning stories to hide the truth...

If your gov't seems to ignore it's people and give favor to big business...

Then it might be time to turn off the TV, get off the couch and get ready for hard times.

Sat, 02/02/2013 - 10:08 | 3208934 SmallerGovNow2
SmallerGovNow2's picture

Best post of the year...

Fri, 02/01/2013 - 18:38 | 3207720 Lord Of Finance
Lord Of Finance's picture

Dow 14,000. Interests rates on bonds half of what they were the last time we hit this marker and the financial nitwits are in celebration.

 

And now another message from the second most interesting man in the world:

 

"I don't always buy silver, but when I do, I prefer silver eagles."

 

                   "Stay patient my friends."

Fri, 02/01/2013 - 18:56 | 3207759 ebworthen
ebworthen's picture

PONZI!  PONZI!  PONZI!

I feel as though I am trapped in the plot line of a dystopian novel.

Fri, 02/01/2013 - 21:24 | 3208069 Totentänzerlied
Totentänzerlied's picture

Moar QE. DOW 15,000. The stake is now through the heart of the real economy. Time to urinate on the corpse.

 

F

O

R

W

A

R

D

PS: Fuck you Timmy.

Fri, 02/01/2013 - 22:25 | 3208295 LucasATX
LucasATX's picture

Who the fuck actually has money to invest in the stock market these days? The vast (VAST!) majority of us no longer give a shit if it is 14,000 or 28,000. What the fuck do you think this is? 1999? The only ones "investing" in the markets are big ballers and pension funds. The rest of us who, when we have enough cash to invest -  are buying real, physical things. Something you can hold in your hand. Fuck digital. Fuck paper. Fuck you Wall Street.

Sat, 02/02/2013 - 10:03 | 3208931 SmallerGovNow2
SmallerGovNow2's picture

Well said, good observation... Definately describes my situation...

Fri, 02/01/2013 - 23:30 | 3208458 Mister Minsk
Mister Minsk's picture

15,000 is just right around the corner...

Sat, 02/02/2013 - 09:49 | 3208921 goldenbuddha454
goldenbuddha454's picture

"What the Wise man does first, the Fool does last".   Is buying a VIX Call a good idea right now?  Worried that my "irrational exuberance" might make me want to get in on the action.

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