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Biderman On The Market's 'A-Ha' Moment And Obama's (Apparent) Omnipotence

Tyler Durden's picture


TrimTabs' CEO Charles Biderman finds it hard to hide his disdain for the omnipotent reality that President Obama espoused of a non-deficit increasing State of the Union solution to all our ills (from climate, income inequality, opportunity, and health) as he notes the politicians "do not seem to understand is that big government is, in fact, the problem, not the solution."

The problem is it is hard to find one service the government provides that is effective, other then writing checks. We have not won the federal wars on poverty, or drugs, nor overseas wars in Iraq, and Afghanistan - so although governments have rarely successfully provided services, we have a government committed to doing just that.

This faith in government omnipotence is now bleeding over into stocks, as Biderman notes "since January 1, investors are pouring billions into the markets in the mistaken belief that the “fake” money created by central banks is just as good as previously existing money, and the markets will keep soaring. But for how long?"

He is clear on the implication of this "magical thinking" At some point "the markets will have an “aha” moment and stop allowing central banks to use newly created money with which to pay government bills. When that happens the markets will crash."



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Fri, 02/15/2013 - 20:05 | 3248211 malikai
malikai's picture

I love these Biderman stories.

Here's one of my favorites from back in the day when he had words with Schiff:

Fri, 02/15/2013 - 20:12 | 3248225 mikla
mikla's picture

Agreed.  Government is merely market distortions, ensuring capital mis-allocation.

Thus, people are "worse-off".  Unfortunately, most people don't understand "opportunity cost", so it is easy for them to mis-understand *why* they have "less-of-everything" and "increasing-social-suffering".

People *assume* "economies of scale" with government.  They misunderstand the possibility of "dis-economies of scale".

Last, government is "overhead".  That can be of value, if we had "Police" and "Fire" and "Regulated Markets".  However, corruption has ensured we do not get the benefits of regulation, but we get all the penalties of organized crime with which every citizen is forced to interact.

Fri, 02/15/2013 - 20:45 | 3248317 Randall Cabot
Randall Cabot's picture

Can vacuum tubes say Aha?

Fri, 02/15/2013 - 21:01 | 3248358 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Biderman's back?  The dude that went long Facebook and then lied about his positions?  He is being posted here again?  Really? 



Fri, 02/15/2013 - 21:17 | 3248380 The They
Fri, 02/15/2013 - 21:39 | 3248411 malikai
malikai's picture

For a second I thought you reposted my link. Then I checked. It turns out I posted the wrong one. I meant to post the one you did, but posted the FMJ video instead. Meh.

I guess what I posted was close enough to what really happened in the Biderman vs. Schiff video anyway.

Fri, 02/15/2013 - 22:08 | 3248506 The They
The They's picture

It's the thought that counts ;)

Sat, 02/16/2013 - 08:25 | 3249125 negative rates
negative rates's picture

He forgets that mkts can remain sane longer than he can remain financially solvent, and he does not know why.

Sat, 02/16/2013 - 10:53 | 3249298 andrewp111
andrewp111's picture

Insane, not Sane.

Sat, 02/16/2013 - 14:26 | 3249708 Svendblaaskaeg
Svendblaaskaeg's picture

"Then I checked. It turns out I posted the wrong one"

never mind my down arrow then

Fri, 02/15/2013 - 22:45 | 3248607 Its Only Rock N Roll
Its Only Rock N Roll's picture

Never get enough of that was so cute when the "journalists" bantered about the $9T debt ceiling before the interview....those were good times indeed.

Sat, 02/16/2013 - 08:26 | 3249127 Deacon Frost
Deacon Frost's picture

Perhaps Biderman had received an epiphany since those days back in 2006?

Fri, 02/15/2013 - 23:14 | 3248645 DoChenRollingBearing
DoChenRollingBearing's picture

@ Mr L H

Good on you dude, + 1.  Junks for truthiness?

Sat, 02/16/2013 - 06:56 | 3249070 French Frog
French Frog's picture

Is 'truthiness' related to 'truthishly'?

And yes DCRB, there is a self-appointed - and dare I say completely missing the point - ZH police that will junk anyone daring to question any 'official' thread in here.

Sat, 02/16/2013 - 06:43 | 3249067 French Frog
French Frog's picture

He is being posted here again? Really?

Did you not know that ZH was a plant by GS to make people constantly go short the market when the right strategy has been to BTFD since 2009?


Sat, 02/16/2013 - 00:48 | 3248815 Spigot
Spigot's picture

Once the bond boys figure out that Japan is committed to hyperinflation, and that means everyone else will also have to commit to hyperinflation in order to keep some kind of parity, and that means that fixed interest rate, fixed currency bonds are soon to become worth only pennies on the dollar, and then begin to sell the shit out of any and all bonds, and interest rates zoom through the roof as all the vacuum tubes and relays hit the SELL switch and drive it through the control panel, and deriviatives nukes start popping in the underpants of every bank, insurance company, etc CFO/COO/CEO's on the planet leaving behind a combined crater the size of Jupiter, with nothing but stunned looks and every "leader" in the world wimpering like little teenage girls who realize THEY will not have a fucking Mall to go to, let alone BUY ANYTHING from (while their populous is burning them at the stake) ... then, my friend, and only then, will you recognize the utter destruction these disgusting fools have wrot.

Sat, 02/16/2013 - 09:37 | 3249180 Chuck Walla
Chuck Walla's picture

He misses the point. Obama only claims he can solve problems.  Obama wants power, he doesn't care about problems.



Fri, 02/15/2013 - 20:10 | 3248222 Hohum
Hohum's picture

He seems quite vague.  What exactly is the mechanism for the "aha" moment?  Plunging corporate profits?  Oil price increases?  A reverse in animal spirits?  Bad weather?

Fri, 02/15/2013 - 20:16 | 3248239 nmewn
nmewn's picture

"What exactly is the mechanism for the "aha" moment?"

Kate Upton.

Fri, 02/15/2013 - 20:34 | 3248292 krispkritter
krispkritter's picture

That's an 'Oh-ho-so-that's-how-big-it-gets' moment...

Fri, 02/15/2013 - 21:03 | 3248363 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

He doesn't fucking know.  He just rambles bullshit and hopes people will keep paying him to lose money.

Goldman Sachs owned Trimtabs by the way.  Oh, and GS had a private stake in Facebook.  Oh, and Trimtabs went long Facebook at the IPO.

Biderman is a joke.

Fri, 02/15/2013 - 22:22 | 3248544 Cabreado
Cabreado's picture

I didn't hear any jokes there... could you point one out?

Perhaps you will rue the day when you ridiculed the purveyors of simple truth.


Sat, 02/16/2013 - 00:26 | 3248780 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Biderman.  Runs.  An investment group.  That was owned by Goldman Sachs.  When it had a buy rating on facebook.  Goldman Sachs.  Owned.  Facebook.

Did I really need to spell it out?

Or is it....

Do as he says, not as he does?

Go get fleeced by GS anyway you like, I'm not having it.

Sat, 02/16/2013 - 00:39 | 3248801 Cabreado
Cabreado's picture

We're all getting fleeced by GS.

Regardless the baggage -- yours included -- when you hear truth, don't shove a rag in it.

Sat, 02/16/2013 - 01:29 | 3248856 Tapeworm
Tapeworm's picture

At Lennon Hendrix, if this is what you wanted:

edit: I stripped the h-tt-p so that the link would show the reference to FB

Fri, 02/15/2013 - 20:18 | 3248236 tenpanhandle
tenpanhandle's picture

Are "aha" moments and "oh shit" moments the same thing?

Fri, 02/15/2013 - 20:42 | 3248312 El Oregonian
El Oregonian's picture

No, "Aha" moments are when others srew up, "Oh Shit" moments are when you screw up...

Sat, 02/16/2013 - 13:54 | 3249634 jimijon
jimijon's picture

100 AHAS == 1 Oh Shit

Fri, 02/15/2013 - 20:17 | 3248240 Bunga Bunga
Bunga Bunga's picture

Politicians "do not seem to understand is that big government is, in fact, the problem, not the solution."

That's a banality. If politicians understood, they would not exist.

Sat, 02/16/2013 - 03:15 | 3248961 StychoKiller
StychoKiller's picture

They're paid (bribed) to NOT understand that.

Sat, 02/16/2013 - 09:55 | 3249204 NoDebt
NoDebt's picture

Nah, nah, nah.  They are sure as hell SOMEBODY'S solution, or they wouldn't exist, let alone grow exponentially like a virus.  You just aren't that somebody.

Fri, 02/15/2013 - 20:17 | 3248242 lunaticfringe
lunaticfringe's picture

Everything is a lie. The market is a lie. Obama is a lie. He will never be held accountable. 

Get ok with this. If I never pimp another blog.

Fri, 02/15/2013 - 20:18 | 3248244 Rainman
Rainman's picture

Cheers to the brotherhood of partisan atheists...!!

Fri, 02/15/2013 - 20:26 | 3248265 The Alarmist
The Alarmist's picture

You heard it here first ... The markets will never, ever crash again.  Our PTB will see to it even if it means killing the markets to save the markets.

Fri, 02/15/2013 - 20:28 | 3248272 The Alarmist
The Alarmist's picture

Aha moment, or Ahi moment?  Don't look now, but you are surrounded by the Seventh Fleet ... Ok, would you believe you are surrounded by an angry school of tuna?

Fri, 02/15/2013 - 20:46 | 3248325 Being Free
Being Free's picture

+1 for the Max Smart memory.  Which reminds me, Agent 99 ... Aha

Fri, 02/15/2013 - 23:16 | 3248648 DoChenRollingBearing
DoChenRollingBearing's picture

+ 99 for excellent comment!

Sat, 02/16/2013 - 02:41 | 3248944 francis_sawyer
francis_sawyer's picture

How about a couple of minnows & an anchovy...

Fri, 02/15/2013 - 20:33 | 3248285 Everybodys All ...
Everybodys All American's picture

Biderman needs to back that camera away a bit. I always find myself agreeing the markets can't go any higher after they go up yet another 1000 Dow points. I'm concluding the market is so broken that it may never go down again.

Fri, 02/15/2013 - 22:12 | 3248523 FreeMktFisherMN
FreeMktFisherMN's picture

the market isn't going up. The fiat in which it is priced is plentiful. In the 19th century there was gasp deflation, and incredible productivity gains as people reaped the benefits of their gains in productivity with lower prices due to sound money. 

Fri, 02/15/2013 - 20:36 | 3248298 are we there yet
are we there yet's picture

At least no one will be protesting publicly. H.R. 347 was passed last year that makes it a federal crime to protest or disrupt even acidentally anywhere in the country whenever a secret service protected individual is nearby, even if unknown to the individual that is so charged. Forget that pesky first ammendment. The first ammendment is rude in how it throws off the teleprompter. 'Respect my authoritii' quote Cartman.

Fri, 02/15/2013 - 20:54 | 3248341 Atomizer
Atomizer's picture

Charles.. Your one of my daily reads. Keep up your great work. This corrupt government is on a slippery slope. Funny how some step forward, yet others think they can avoid procesution. 

Fri, 02/15/2013 - 21:06 | 3248369 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

SO while reading him ramble about the corrupt governemnt did you take his advice and buy facebook at the IPO?

Fri, 02/15/2013 - 20:55 | 3248344 Mae Kadoodie
Mae Kadoodie's picture

The Feds peed in the pool.  i'm not going swimming.

Fri, 02/15/2013 - 20:59 | 3248355 davidsmith
davidsmith's picture

At some point "the markets will have an “aha” moment and stop allowing central banks to use newly created money with which to pay government bills. When that happens the markets will crash."


Dream on!! This will NEVER happen.   There is no market: how could it crash??

Sat, 02/16/2013 - 10:49 | 3249288 andrewp111
andrewp111's picture

Geopolitical oil shock. $20 gas will crash everything.

Fri, 02/15/2013 - 21:04 | 3248365 q99x2
q99x2's picture

Replace the Federal Government with open source software.

Fri, 02/15/2013 - 21:22 | 3248383 km4
km4's picture


Incomes Flat in Recovery, but Not for the 1%

The disparity between top earners and everybody else can be attributed, in part, to differences in how the two groups make their money. The wealthy have benefited from a four-year boom in the stock market, while high rates of unemployment have continued to hold down the income of wage earners.

“We have in the middle basically three decades of problems compounded by high unemployment,” said Lawrence Mishel of the Economic Policy Institute, a left-of-center research group in Washington. “That high unemployment we know depresses wage growth throughout the wage scale, but more so for the bottom than the middle and the middle than the top.”

In his analysis, Mr. Saez said he saw no reason that the trend would reverse for 2012, which has not yet been analyzed. For that year, the “top 1 percent income will likely surge, due to booming stock prices, as well as retiming of income to avoid the higher 2013 top tax rates,” Mr. Saez wrote, referring to income tax increases for the wealthy that were passed by Congress in January. The incomes of the other “99 percent will likely grow much more modestly,” he said.


Fri, 02/15/2013 - 21:24 | 3248385 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah, the insiders all sell their shares at the tops, then the Fed does QE at the low of the cycle, and stocks go back up....

....where the insiders sell their shares....

Sat, 02/16/2013 - 10:47 | 3249285 andrewp111
andrewp111's picture

Keep in mind the insiders get their shares for free. The selling price is 100% profit.

Fri, 02/15/2013 - 21:59 | 3248478 treasurefish
treasurefish's picture

Will High Frequency Trading Robots ever become intelligent?  

Fri, 02/15/2013 - 22:01 | 3248483 ramacers
ramacers's picture

and the rivers will run red with...

Fri, 02/15/2013 - 22:08 | 3248511 socalbeach
socalbeach's picture

Can't say that I understand what Mr Biderman is talking about with these 2 quotes.  Newly created bank reserves the Fed uses to buy Treasuries or MBS are the same as all previously existing reserves.

"But since January 1 investors are pouring billions into the stock market in the mistaken belief that the fake money created by Central Banks is just as good as previously existing money..."

"All of a sudden the markets will not allow Central Banks to use newly created money to pay government bills and expenditures..." 

Fri, 02/15/2013 - 22:50 | 3248613 Clowns on Acid
Clowns on Acid's picture

Think Gresham's Law....

Fri, 02/15/2013 - 22:13 | 3248529 Tombstone
Tombstone's picture

Dive, Dive, Dive....

Fri, 02/15/2013 - 22:14 | 3248530 LMLP
LMLP's picture

Amen Biderman!... as always

Fri, 02/15/2013 - 22:25 | 3248554 fuu
fuu's picture

How does that Golden Sack taste Biderman?

Fri, 02/15/2013 - 22:26 | 3248558 hannah
hannah's picture

the martket will not crash because it realizes it is living off QE...these fuckers already know it and are taking all the free cash they can. the market crashes when it can no longer support the overwhelming bullshit.....

Fri, 02/15/2013 - 23:36 | 3248685 the grateful un...
the grateful unemployed's picture

the market is IRAQ (you break it you bought it) and since 2008 they bought it, and they broke it. now what's the exit strategy?would you want to invest in IRAQ? [now we're going to look at Africa, which by way of market metaphor means what?] setting up the circus in a new town. rules will be the same, the players will have new costumes, the show will look different. money will run away from the broken market into the new market (with gold backed currency, Africa has that after all)

Fri, 02/15/2013 - 22:29 | 3248562 ebworthen
ebworthen's picture

I've missed Biderman's sardonic cognitively dissonant chuckle and grin.

Yes, Washington, in collusion and slavery to Wall Street, is the problem.

Now we are not going to get affordable healthcare, but be forced to pay premiums to private insurance companies that benefit them and big pharma and corporate run healthcare - or pay a "penalty" (tax) to the Infernal Revenue Service (wonder where that money will go?).

Fucking corrupt Ponzi, the whole fucking thing.

Fri, 02/15/2013 - 23:07 | 3248634 disabledvet
disabledvet's picture

here's the greatest student of the Depression:
and i think Mr. Biderman would make more sense if he talked about "Wave 4." Obviously most have missed Waves 1,2 and 3...include Charles Biderman. Having said that "unless and until the psychology cracks" we're still stuck in Wave 3..."where we're always waiting for the market to correct and it just goes higher." if you get into this stuff the REAL interesting question then becomes "what type of wave are we in?" He posits many types of cycles...and i think a good case can be made "we're talking a very large one this time."

Sat, 02/16/2013 - 01:46 | 3248874 ebworthen
ebworthen's picture

Right, FED just making it worse, and bigger.

Fri, 02/15/2013 - 23:30 | 3248675 the grateful un...
the grateful unemployed's picture

the governments purpose is to launder new (fake) money into old money. and so far things aren't going well, the banks won't lend the money, money velocity is at a crawl. its pretty hard to slip a few new bills into the system. the purpose of new credit is to monetize it immediately. the problem is most of the old money is gone. the Fed UST have sucked it out of savings accounts, forced people to live off their principle, rather than their interest. now there is no old money to dilute with new money,  its like that bourbon maker who cut the proof. there's nothing left to cut, that's why every one is drinking (new) beer, metaphor

Sat, 02/16/2013 - 03:54 | 3248978 dunce
dunce's picture

He might have the sequence reversed, the morons in DC keep touting the rising indexes as  a measure of the health of our economy. stock markets crash all the time and leave people guessing what went wrong. Soon they figure it out and then wonder why they did not see it coming. The indexes are the only number that they can point to that has recovered but it is a fake number to go with fake inflation, jobs, deficit, debt and maybe every official statistic. The next crash may leave them with just a bunch of lies that no one will buy even in Detroit.

Sat, 02/16/2013 - 09:17 | 3249157 wonderatitall
wonderatitall's picture

i see a drone in his future...kill dat bitch the american national socialist party way

Sat, 02/16/2013 - 10:25 | 3249251 manich
manich's picture

I kind of like having "free" access to interstate highways, when driving to visit a national park. I wouldn't want Dick and his Halliburton buddies owning them.

Sat, 02/16/2013 - 12:50 | 3249397 steve from virginia
steve from virginia's picture





"since January 1, investors are pouring billions into the markets in the mistaken belief that the “fake” money created by central banks is just as good as previously existing money ..."


Smartest remark in an article @ ZeroHedge since ol' Whatzizname started the site!


The distinction must be made between ledger loans (amounts noted on spreadsheets as due and payable) and circulating money. Here, Biderman implies understanding of our credit money system!


Central banks offer ledger loans as do private sector lenders. The latter offer unsecured loans. Ledger loans are credits made to borrowers' accounts, funds thereto are simply 'invented'. As the name implies, circulating money is loans that have changed hands to 3d (or more) parties in the marketplace where their worth is determined.


Banks' offering unsecured loans is called 'inflation', demanding circulating money as repayment for unsecured loans is called 'deflation'. Since most repayment is made by taking out greater loans, inflation tends to be a background condition. Unsecured loans represent economic 'growth' as their tally makes up the components of GDP.


Private sector lenders demand repayment in circulating money which is always in limited/finite supply. Borrowers cannot offer ledger repayments! They must earn, borrow or steal the funds demanded for repayment from others who then do not have the funds. Repayment reduces the amount of money in circulation which reduces GDP. When repayment demands exceed the amount of new loans there is a recession.


Clearly, offering more ledger credit -- which costs very little -- and gaining circulating money in return -- which costs everything -- is good business for lenders, everyone else is robbed whether they borrow or not!


Central banks cannot make unsecured loans (loans in excess of collateral) therefor there is no such thing as central bank 'money printing'. Because reserve banks have no capital structure -- they are reserve banks after all -- they cannot extend unsecured credit. Any central bank that offers unsecured loans is instantly and permanently insolvent!


Under such circumstances, there is no effective lender of last resort, the only real collateral for all loans is currency and there are bank runs to redeem it ... (as are underway in Europe and commencing in Japan).


Meanwhile, government can be effective but it must be scrupulously honest with the citizens and take effective actions. Inept, criminally corrupt government or governments that fail on purpose are indeed the problem.


Lying about Peak Oil is not honest.


Hanging a few government bosses usually solves the 'criminal government' problem.



Sat, 02/16/2013 - 15:28 | 3249858 boh knows
boh knows's picture

The S-CURVE. Get out at the top. Hmm

Sat, 02/16/2013 - 16:02 | 3249961 Brixton Guns
Brixton Guns's picture

Anyone who takes Bidomite seriously after what we have been through thus far needs to have their head examined.

Sat, 02/16/2013 - 21:05 | 3250516 devo
devo's picture

Has this guy ever been right?

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