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Biderman On The Market's 'A-Ha' Moment And Obama's (Apparent) Omnipotence
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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I love these Biderman stories.
Here's one of my favorites from back in the day when he had words with Schiff:
http://www.youtube.com/watch?v=S06nIz4scvI
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.
Can vacuum tubes say Aha?
Biderman's back? The dude that went long Facebook and then lied about his positions? He is being posted here again? Really?
someone had to post it: http://www.youtube.com/watch?v=MIFGfgKHrwU
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.
It's the thought that counts ;)
He forgets that mkts can remain sane longer than he can remain financially solvent, and he does not know why.
Insane, not Sane.
"Then I checked. It turns out I posted the wrong one"
never mind my down arrow then
Never get enough of that one...it was so cute when the "journalists" bantered about the $9T debt ceiling before the interview....those were good times indeed.
Perhaps Biderman had received an epiphany since those days back in 2006?
@ Mr L H
Good on you dude, + 1. Junks for truthiness?
Is 'truthiness' related to 'truthishly'?
http://www.youtube.com/watch?v=eAhthGmnUeg
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.
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?
;-)
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.
He misses the point. Obama only claims he can solve problems. Obama wants power, he doesn't care about problems.
FORWARD SOVIET!
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?
"What exactly is the mechanism for the "aha" moment?"
Kate Upton.
That's an 'Oh-ho-so-that's-how-big-it-gets' moment...
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.
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.
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.
We're all getting fleeced by GS.
Regardless the baggage -- yours included -- when you hear truth, don't shove a rag in it.
At Lennon Hendrix, if this is what you wanted:
http://trimtabs.com/blog/2012/05/14/bidermans-daily-edge-5142012-stocks-...
edit: I stripped the h-tt-p so that the link would show the reference to FB
trimtabs.com/blog/2012/05/14/bidermans-daily-edge-5142012-stocks-gold-should-rally-post-facebook-ipo/
Are "aha" moments and "oh shit" moments the same thing?
No, "Aha" moments are when others srew up, "Oh Shit" moments are when you screw up...
100 AHAS == 1 Oh Shit
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.
They're paid (bribed) to NOT understand that.
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.
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. http://thecivillibertarian.blogspot.com/2013/02/hunter-thompson-had-it-r...
Cheers to the brotherhood of partisan atheists...!!
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.
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?
+1 for the Max Smart memory. Which reminds me, Agent 99 ... Aha
+ 99 for excellent comment!
How about a couple of minnows & an anchovy...
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.
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.
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.
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.
SO while reading him ramble about the corrupt governemnt did you take his advice and buy facebook at the IPO?
The Feds peed in the pool. i'm not going swimming.
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??
Geopolitical oil shock. $20 gas will crash everything.
Replace the Federal Government with open source software.
Incomes Flat in Recovery, but Not for the 1%http://www.nytimes.com/2013/02/16/business/economy/income-gains-after-re...
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.
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....
Keep in mind the insiders get their shares for free. The selling price is 100% profit.
Will High Frequency Trading Robots ever become intelligent?
and the rivers will run red with...
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.
[2:49]
"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..."
[3:31]
"All of a sudden the markets will not allow Central Banks to use newly created money to pay government bills and expenditures..."
Think Gresham's Law....
Dive, Dive, Dive....
Amen Biderman!... as always
How does that Golden Sack taste Biderman?
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.....
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)
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.
here's the greatest student of the Depression: http://en.wikipedia.org/wiki/Elliott_wave_principle
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."
Right, FED just making it worse, and bigger.
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
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.
i see a drone in his future...kill dat bitch the american national socialist party way
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.
@Biderman:
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.
The S-CURVE. Get out at the top. Hmm
Anyone who takes Bidomite seriously after what we have been through thus far needs to have their head examined.
Has this guy ever been right?