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Why A 5% Correction Is The Least We Should Expect

Tyler Durden's picture





 

While cherry-picking individual macro data points to confirm self-referential biases appears to work for the majority of Wall Street's strategists and asset-gatherers, the sad truth is that fundamentally (top-down and bottom-up) things are not doing so great. We have exposed many of the divergences in the last few weeks and some cracks are appearing in the unbreakable vestibule of central bank liquidity; however, just as we saw late last summer (as gas prices rose once again), macro fundamentals have collapsed (based on Goldman's Macro data assessment platform) and with the normal hope-driven 2-3 month lag, equities are set to follow soon. The size of the shift implies a 5-10% correction to revert to 'reality' though we suspect - given positioning - if we ever saw it, the over-reach could be notably worse.

 

 

Chart: Goldman Sachs

 


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Sun, 02/24/2013 - 18:15 | Link to Comment thismarketisrigged
thismarketisrigged's picture

i hope for a 80 percent correction, but as longs as these fuckers continue to  print, itll be hard. lets hope though

Sun, 02/24/2013 - 18:55 | Link to Comment mind_imminst
mind_imminst's picture

I have serious doubts that fundamentals play much of a role right now. I doubt a 5% or 10% correction is in the cards. The FED and CBs will just print more and the NOMINAL price of stocks will rise, just like in Zimbabwe.

Sun, 02/24/2013 - 20:27 | Link to Comment PersonalRespons...
PersonalResponsibility's picture

The only thing I wish for is to be able to live somewhere without property taxes.  Central banks can do whatever the fuck they want as long as I have a place where I can play the game without being fucked with.  I really think it's the only thing people need to be free, is to be able to own land without permanent debt.  You step off your property and you play the game.

Property taxes are the "devil".

Sun, 02/24/2013 - 23:13 | Link to Comment Aussiekiwi
Aussiekiwi's picture

we pay rates on property in Aussie and NZ but they are only a fraction of what you suckers in the US pay each year, you guys don't buy property you rent it.

Mon, 02/25/2013 - 04:10 | Link to Comment Zosynspiracy
Zosynspiracy's picture

Hallelefuckinglujah! FINALLY someone that gets it!  I love how so many idiot Americans think they are free let alone actually own their home or other property for that matter.  Property taxes are the most tyrannical form of slavery that exists.  NOTHING else matters except being able to own land free and clear.  The problem is there are idiots out there like Ted Turner who own millions.  I have a big problem with one human being owning more than they need.  Need is subjective but I think most intelligent rational human beings can agree that one human being owning millions of acres is a little much. 

Mon, 02/25/2013 - 10:43 | Link to Comment PowerzThatB
PowerzThatB's picture

No, you sound like an unhappy communist with little to no land. If you're unhappy with how much you own, get your fat ass off the internet, work harder and buy more land. Grow a pair.

Mon, 02/25/2013 - 09:30 | Link to Comment SamAdams
SamAdams's picture

The pullback was last Thursday.  A bigger one is coming, but aren't they always?  $85B is A LOT of money...  Since Thur, you should have been long. 

Sun, 02/24/2013 - 18:17 | Link to Comment francis_sawyer
francis_sawyer's picture

Goldman[Jew] Sachs... Technical Traders/Muppet Slayers par excellence!

Sun, 02/24/2013 - 20:35 | Link to Comment espirit
espirit's picture

Go bidless, bitchez.  Double dog dare you.

Sun, 02/24/2013 - 18:22 | Link to Comment scatterbrains
scatterbrains's picture

Like magic beginning with 666, each printer induce leg higher has crested at .666 the time it took the previous printer induce up leg and now we've just crested the latest target in that freakish pattern..  if the weirdness continues we should take out about half  this latest printer induced rally and go from there.

Sun, 02/24/2013 - 20:05 | Link to Comment francis_sawyer
francis_sawyer's picture

999 is 666 upside down... 1.618 is the 'golden ratio'... [the architecture of the universe]... Think these MOLOCH worshipping frat boys don't know this?...

~~~

Jew Kabbalah is largely founded in NUMEROLOGY bitchez... Wake the fuck up!

Edit: So happy to see the GS 'Kabbalists' here in force on a Sunday Night...[u kno ~ 'representin' ~ just minutes before Seth McFarlane - THE 'ATHEIST JEW' ~ entertains us all with Spielberg rhetoric on how Lincoln's sole purpose in life was to abolish slavery & how Navy 'Seal Team 6' captured Bin Laden & gently slid his corpse [after anointing it with frankinscence & myrhh & wrapping it in the finest linens] into the calm soothing waters of the Indian Ocean on the EXACT day that JOOBUCK PAPER SILVER got monkey hammered from $50]...

Warms my gonads...

Sun, 02/24/2013 - 21:50 | Link to Comment MedTechEntrepreneur
MedTechEntrepreneur's picture

Oh look...another anti-joooo rant by Francis_sawyer...named after a psyco character in a childish goy movie.

Mon, 02/25/2013 - 09:35 | Link to Comment SamAdams
SamAdams's picture

Pretty good rant.  You managed to squeeze a lot of truth in there.  However, most Jews aren't orthodox meaning they don't go around saying, "The first five chapters of the old testament say it's okay to cheat, steal, rape and kill... so long as it is people of other nations (goyim)".  Most of them have not read the Talmud, which explains how they are to deal with each other and Goyim in day to day routine.  And, very few know what the Kabbalah (cabalah) actually teaches. 

They are setting you guys up.  History repeats with "Kill the Jews" theme playing in the background (gold is leaving as did wealth from Germany, hint, hint).  Funny how the so called Zionists managed to escape unscathed?  The bad Jews/Christians are for the most part, just people that want to pretend they are something special, and when you get a group of them together, this is the result.  A bunch of creepy, owl-worshipping pediophiles.  

Do you think Christians know that when they pray to God for protection against the Muslims, the Muslims are praying to the same God for protection against the Christians? 

 

Mon, 02/25/2013 - 10:29 | Link to Comment Hi Ho Silver
Hi Ho Silver's picture

It's not the same God.

 

Allah is a composite Mohammed created at the time. Much like BHO's girlfriend.

Sun, 02/24/2013 - 18:27 | Link to Comment Motorhead
Motorhead's picture

Pull-back, bitchez!

Sun, 02/24/2013 - 19:16 | Link to Comment Mesquite
Mesquite's picture

9%....(My guess..)

Sun, 02/24/2013 - 18:29 | Link to Comment kaiserhoff
kaiserhoff's picture

Peeps should be prohibited from posting charts, unless they have traded their own money - based on charts..., in which case they would have blown up more than once. 

Sometimes, less is more.

Sun, 02/24/2013 - 18:31 | Link to Comment MoneyThangs
MoneyThangs's picture

Hard to see a  correction with all this job creation coming from mein fuhrer

Sun, 02/24/2013 - 18:32 | Link to Comment KRUZER
KRUZER's picture

,,,,,,,,,,,,,,,,leave us alone with charts its"" fondamental"" now.

Sun, 02/24/2013 - 18:32 | Link to Comment gimli
gimli's picture

BTFFFFFFFD

Sun, 02/24/2013 - 18:38 | Link to Comment PUD
PUD's picture

Reality is 5% from here?  Oh do behave!

Why are so many so brainwashed by wall st jargon?

"investors"? 'correction"?

The word "correction" implies that something is not properly valued. Says who? What law of nature says the proper value of the dow is x? What fixed rule says that a pe of x is real and one of y is not?

Was everyone stupid or blind when they obviously overpaid and now have to suffer a 5% "correction" before we can go on to new highs?

And just how does a 5% "correction" pave the way to a 10% rise to new highs as so many wall st types drone on about?

If the market fell 5% tomorrow would the stage be set for a 10% climb on tuesday?

It's so tiresome to hear these same empty words over and over lulling the masses into irrational non-sensical thinking.

There are no 'investors' there is no such thing as 'fair value' "over valued" "over sold" "over bought' or any of the other drivel spewed on cnbc and the like

It is a casino. A legal online betting parlor in a rigged casino aided by a criminal congress who passes enticements to gamble in the form of "retirement vehicles' (ira, 401k etc)

It goes up when money pours in and it goes down when money pours out. There is no right anything about it. It's Las Vegas in your living room with you in your underwear putting down chips

Sun, 02/24/2013 - 18:43 | Link to Comment francis_sawyer
francis_sawyer's picture

I'm not sure, but I think I actually like your joobuck [$] logo better than this one MDB...

Sun, 02/24/2013 - 18:43 | Link to Comment PUD
PUD's picture

use your words down arrow lemmings. prove how I'm wrong. 

Sun, 02/24/2013 - 19:05 | Link to Comment GMadScientist
GMadScientist's picture

Here's a word for you: aptonymic.

 

Sun, 02/24/2013 - 19:02 | Link to Comment Desert Rat
Desert Rat's picture

Was everyone blind or stupid... is this a rhetorical question? LOL

Sun, 02/24/2013 - 19:16 | Link to Comment New_Meat
New_Meat's picture

pud

You're a technician fer sure:

"It goes up when money pours in and it goes down when money pours out. There is no right anything about it"

Hmmmmmm, who might be pouring the money?

I'd bet u gotta' theorem or 2.

- Ned

Sun, 02/24/2013 - 19:31 | Link to Comment PUD
PUD's picture

Of course. The fed through its proxies, the sheep through their 401k's. The gamblers like most of you. All the deluded people who have been conned into a free lunch buffet at the casino where money is "made'

Sun, 02/24/2013 - 21:27 | Link to Comment Oldwood
Oldwood's picture

It’s going to take more than just a little honesty to get these guys to push back from the table. Of course we all know that gambling is an addictive habit, but only a downer would point it out at this late date. Human weaknesses are the greatest source of profit after all. We wonder why Vegas took such a hit with the depression but it’s pretty obvious Wall Street is the New gaming center of the country.

Sun, 02/24/2013 - 22:28 | Link to Comment Vooter
Vooter's picture

Which is exactly why 9/11 was AWESOME!!!

Sun, 02/24/2013 - 23:17 | Link to Comment Aussiekiwi
Aussiekiwi's picture

Pud, all those financial analysts won't like you one bit but you are right, it is gambling in a rigged game.

Sun, 02/24/2013 - 18:55 | Link to Comment buzzsaw99
buzzsaw99's picture

The horror...

Sun, 02/24/2013 - 19:00 | Link to Comment Glass Seagull
Glass Seagull's picture

Time to fire up the positive surprise machine.

Sun, 02/24/2013 - 19:06 | Link to Comment chump666
chump666's picture

Central bank puts are at 2% neg on all indexes globally.

For anyone confused with the word correction, well this market is almost a 100% Wall Street jive, there are very few retail flows going in.  Study crashes of the last 100years and you'll find that when the sh*t flies, it flies with a mixture of two things: greed and leverage.   We may not get a significant correction, what we might get is a juicy market crash.

 

Sun, 02/24/2013 - 19:47 | Link to Comment Jake88
Jake88's picture

hope you haven't bet on it.

Sun, 02/24/2013 - 22:25 | Link to Comment Vooter
Vooter's picture

'Cuz Jake is long, and he's got some PARTYIN' to do!

Sun, 02/24/2013 - 23:19 | Link to Comment Aussiekiwi
Aussiekiwi's picture

All jake needs is more reality television, nothing else matters, believe.

Sun, 02/24/2013 - 19:11 | Link to Comment UnRealized Reality
UnRealized Reality's picture

Been hearing this crap since 2009, Equities crashing right along with 55000 an ounce of Gold, Haven't been right yet. Maybe if anyone would have any clue on Capital flows, you would change your tune. But I guess if you scream it will crash for 24 years you'll be right eventually. But I guess 10% is better then the 90% crash that was being spewed. 

 

WOW ES and YM just gapped up, what a bummer, wrong again!!

Sun, 02/24/2013 - 19:31 | Link to Comment Desert Rat
Desert Rat's picture

Remember, ZH is truth not reality. And I respect it for that.

Sun, 02/24/2013 - 20:00 | Link to Comment Jason T
Jason T's picture

go to Martin Armstrong 

Sun, 02/24/2013 - 21:31 | Link to Comment Oldwood
Oldwood's picture

Do we really need to markets to crash to tell us we are fucked? Sure, it might create a little awareness amongst "investors", but for the rest of us it just kind of puts a ribbon on it.

Sun, 02/24/2013 - 22:13 | Link to Comment WmMcK
WmMcK's picture

You only have to be right once.

I say it will crash in (at most) 24 MONTHS.

It won't be the end of the world, which of course you can only correctly predict once.

Sun, 02/24/2013 - 19:18 | Link to Comment ebworthen
ebworthen's picture

S&P 400!!!

C'mon!!!

We need to expose this casino for what it is!!!

Sun, 02/24/2013 - 19:27 | Link to Comment caimen garou
caimen garou's picture

let it correct to hell, gave up gambling for new years......2008! fuck em

Sun, 02/24/2013 - 19:27 | Link to Comment TraderTimm
TraderTimm's picture

We'll get 5 - 10% more debt issuance and printing via complicated financial acronyms. This game isn't ending until everyone is screaming for blood.

Sun, 02/24/2013 - 19:43 | Link to Comment nobusiness
nobusiness's picture

% correction is only one part of the equation.  We need to know the timing as well.  I hope it is this week even if goldman uses the stupid Sequestration as the fake issue as their excuse to drop the market

Sun, 02/24/2013 - 19:54 | Link to Comment Desert Rat
Desert Rat's picture

thanks nobusiness, i agree, it is all about time... and the flexibility to bend like a palm in a haboob... 

Sun, 02/24/2013 - 19:43 | Link to Comment Jake88
Jake88's picture

Sorry folks. You just saw the correction. You should have just bought the fucking dip.

Sun, 02/24/2013 - 19:45 | Link to Comment disabledvet
disabledvet's picture

well it's not going down yet in spite of all us peanut gallery types cheering for it too. i guess we'll just have to wait then...http://www.youtube.com/watch?v=nFv8BR_0oms

Sun, 02/24/2013 - 19:48 | Link to Comment enloe creek
enloe creek's picture

whatever, this whole blogsite could be a clever snare by the nsa to get malcontents and zombies to open up 

 

Sun, 02/24/2013 - 23:21 | Link to Comment Aussiekiwi
Aussiekiwi's picture

Be nice to have a chat with the boys, they have to bring their own beers though.

Sun, 02/24/2013 - 20:00 | Link to Comment Hongcha
Hongcha's picture

There is a limit and we are fast coming up on it.

They need to take gasoline prices down.

$4.31 for 87 octane here in Contra Costa County.

This price is bleeding out the working class, everywhere in the U.S.

The wealthy do not care and Free Shit Nation does not care; so maybe the WH doesn't, either - but I don't see that we go much higher with gas this high.

Everything we do and eat depends on it.

All it will take is a quiff in the air to the effect that the punchbowl is empty and not being refilled; and -5% SPY in the first 3 days for starters.

Sun, 02/24/2013 - 20:13 | Link to Comment stormsailor
stormsailor's picture

bullshit,  bet your damn money on a correction, and better still go long and make money.  it pays off in frn, wonder how much it devalued? nobody knows.  but i think it will be funny as hell watching assholes driving those hummer h2o's( a tahoe with ground effects) playing fred flintstone when they start off at the traffic light. 

 

some say gold, silver.  that is just as manipulated.  bad time to buy ammo now.  maybe raw metals if you can buy them cheap,cheap.  trouble is if the enonomy goes in the toilet a damned likely prospect,  raw metals go in the toilet for a while too. 

 

i say get out of debt,  stock up some supplies and rotate their use.  get a patch of land with springs, thats cheap right now, just for a bug-out place.   putting your hard earned coin into any of this market is clodhopper stupid. 

 

maybe you could buy up a dozen or so  92 geo metro's, so when gas goes to 8 a gallon you can double up, or trade them for ammo,  whiskey,  female hygiene products, toilet paper,  hand wipes,  water carriers. you know,  survivalist shit.

 

rant off.

 

i'm just about to the point where i might sell everything, business, properties, antiques, and buy  a large sailboat.  take my gold, silver, gemstones guns,etc. and sail off into the sunset.  spend my last 20 years totally off the civilization grid.  i'm a pretty good sailor,  and the biggest problem for a month being fixing a leaking bilge, or repairing a blown sail seems like a pretty cool life.  i know how to tie all those really cool knots, lashing and whipping.  i could have the fanciest schooner in fuji.

Sun, 02/24/2013 - 20:45 | Link to Comment espirit
espirit's picture

Best to keep an eye out for smokers, in Waterworld.

Sun, 02/24/2013 - 20:47 | Link to Comment espirit
espirit's picture

Better yet would be to buy a "solar powered submarine".

Sun, 02/24/2013 - 20:13 | Link to Comment Tombstone
Tombstone's picture

Dream on.  As long as one zombie follows another, this brainless rise will continue into 2014.  You might see a 5% correction after another 10% rise.  With lower volume overall, the machines are buying and hardly anyone is selling.  Thus, we float up into the heavens with little rhyme or reason.  At least the goons on CNBC are having a good time telling us how great things are and how important every point is.

Sun, 02/24/2013 - 20:32 | Link to Comment thismarketisrigged
thismarketisrigged's picture

how sickening is it that every single time a market is up, its not due to any fundementals, its all due to endless qe.

 

look at the nikkei tonight, nothing whatsoever happened in japan that would be able to justify a 2 percent plus move towards the upside, but since it is believed that this guy kuroda is going to head the bank of japan and he is very dovish, the market goes up.

 

its just sickening, but let these assholes on cnbc keep spewing shit.

 

ppl wonder why santeli has so many rants on cnbc, well lets say u were working with a bunch of retards, wouldnt u also get very excited often and go on rants? he is the only level headed one on that channel who actually knows the reality of this economy.

Sun, 02/24/2013 - 21:34 | Link to Comment espirit
espirit's picture

It's a good cop/bad cop rant for the ratings.

That's reality.

Sun, 02/24/2013 - 22:31 | Link to Comment They Tried to S...
They Tried to Steal My Gold's picture

So Tyler either Goldman has their shorts already in place and got spooked by the recent reversal of Friday's performance or

They want to add to their shares for another run up and they are in essence selling against their clients....

 

Which one is it?

 

 

Mon, 02/25/2013 - 11:25 | Link to Comment orangegeek
orangegeek's picture

We've been in a bear market since 2007.  The push from 2009 to current has taken four years and still has not passed the all time high.

 

The Fed can keeping pouring billions per day into the markets, but they will eventually run out.

 

http://bullandbearmash.com/chart/sp500-ends-week-marginally-week/

 

It's sad that the coffers have been emptied for the purpose of getting re-elected.  Pork barreling is one thing, but this is historically unprecedented. 

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