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Visualizing The 'All-In' Hope That QE3 Will Save The US Economy

Tyler Durden's picture


Presented with little comment but to note the somewhat exponential exuberance in US cyclical stocks (relative to defensives) that has gradually accelerated since the Fed launched QE3. If ever there was a chart of 'hope' or 'faith', this is it.



Chart: Credit Suisse


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Mon, 03/25/2013 - 18:33 | 3374460 toys for tits
toys for tits's picture

The unstoppable glorious Hindenberg is lifting off.

Mon, 03/25/2013 - 18:36 | 3374470 FieldingMellish
FieldingMellish's picture

Oh, the huge manatee!

Mon, 03/25/2013 - 18:39 | 3374479 flacon
flacon's picture

What iscyclical to defensive ratio?

Mon, 03/25/2013 - 18:44 | 3374510 mikla
mikla's picture


Mon, 03/25/2013 - 20:14 | 3374848 Thomas
Thomas's picture

It's the Lusitania.

Mon, 03/25/2013 - 21:10 | 3375058 Pool Shark
Pool Shark's picture



You mean it was secretly carrying munitions like the Germans had claimed all along?...

[brings a whole new meaning to guns 'n (in?) butter...]

Mon, 03/25/2013 - 21:05 | 3375056 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Divide 10 by 3. You get 3.3333333etc.

Now multiply that by 3: you get 9.9999999etc.

Proof that 10 = 9.999999etc.

Mon, 03/25/2013 - 21:24 | 3375107 Pool Shark
Pool Shark's picture



On a long enough timeline the difference drops to zero...


Tue, 03/26/2013 - 01:51 | 3375719 BringOnTheAsteroid
BringOnTheAsteroid's picture

Holy shit, that just blew my mind. Is that missing 0.00000000000000000000000000000000000 . . . . . . . 1 what the algos are skimming every 0.0000000000000000000000000000 . . . . . . . . .1 seconds.

It all adds up now. 

Mon, 03/25/2013 - 18:55 | 3374545 McMolotov
McMolotov's picture

Another metric which probably means exactly jack shit in the glorious era of Big Ben printing $85 billion a month out his ass. The Europeons need to have more faith that Ben can save the day.

Tue, 03/26/2013 - 09:00 | 3376217 NEOSERF
NEOSERF's picture

Exactly, if you trade against this you are killed.

Tue, 03/26/2013 - 09:53 | 3376464 LongBalls
LongBalls's picture

+1 Everytime I tried to play the fundamentals in this market by shorting it I have been gang raped by Benny and the boys. The only shorts I place now are on PM's. I take the profits and buy the physical. If it's not in your hands, you don't own it. Remember that.

Tue, 03/26/2013 - 10:57 | 3376863 A is A
A is A's picture

Ownership of cyclical stocks to defensive stocks, aka how doped up we are on Bernanke bucks. 

Mon, 03/25/2013 - 18:37 | 3374469 Cognitive Dissonance
Cognitive Dissonance's picture

Lift off. We have lift off of the US Space Ship QE3, Ponzinomics last great tribute to Too Big Too Fail.

Mon, 03/25/2013 - 18:40 | 3374486 TeamDepends
TeamDepends's picture

Doing God's work....

Mon, 03/25/2013 - 18:51 | 3374533 Beam Me Up Scotty
Beam Me Up Scotty's picture

Rockets continue to climb for a short while after they explode too.  Eventually, they end up in the ocean.

Mon, 03/25/2013 - 20:57 | 3375007 CheapBastard
CheapBastard's picture

Hopefully this stock bubble compensates for what the beleaguered  consumers now face in awe:

Moar toll roads, higher property taxes, higher school "security" taxes, the new internet sales tax, higher postal rates, higher gas prices, and on and on.


BTW, I'm surprised no one has asked me how my New Life is going with my recently acquired Japanese Love Doll, Miko:


It's no wonder these Japanese exports are holding their economy afloat. I wonder what percentage of sales of these goes to the PRC?

Mon, 03/25/2013 - 18:38 | 3374477 Translational Lift
Translational Lift's picture

The ride down the other side should be thrilling ..........

Mon, 03/25/2013 - 18:45 | 3374498 sunaJ
sunaJ's picture

Remember to jump at the last second.  I hear you can survive if you do that.

Express elevator to hell...

Mon, 03/25/2013 - 19:11 | 3374609 YHC-FTSE
YHC-FTSE's picture

+1 nice analogy. Reckon most people here would rather take the golden emergency stairs.


Mon, 03/25/2013 - 18:45 | 3374513 Goldilocks
Goldilocks's picture

Michael Jackson - Thriller (13:43)

Mon, 03/25/2013 - 19:02 | 3374577 tradingdaze
tradingdaze's picture

I'm investing in Attends because it's going to scare the sh&t out of me.

Mon, 03/25/2013 - 19:08 | 3374596 Beam Me Up Scotty
Beam Me Up Scotty's picture

I am to young to know, but I thought the were called Depends.

Mon, 03/25/2013 - 19:22 | 3374630 akak
akak's picture

It depends on where you buy them.


PS: I was in a Costco yesterday, and I swear they had a third of an entire aisle devoted to these adult diapers.  Who ARE all these people who are apparently continually shitting their pants?  (Now, if I were shopping at the Washington DC or Brussels or Nicosia Costcos, I could understand it ...)

Mon, 03/25/2013 - 19:26 | 3374653 TeamDepends
TeamDepends's picture

And you will have full control of your bowels when Bernanke looks right into the camera and says, "We are f&cked"?

Mon, 03/25/2013 - 19:30 | 3374664 akak
akak's picture

As always!

Besides, I don't need B.S. Bernanke's official pronouncement to tell me that.


PS: Appropriate handle, given the discussion.

Mon, 03/25/2013 - 19:48 | 3374759 TeamDepends
TeamDepends's picture

Okay, you are in your backyard barbecuing when several drones buzz you.  You run inside and look out your front window.  There are dozens of DHS tanks rolling around and about 50 'roidgoons who speak no english getting ready to kick your door in.  You will be cool as a cucumber, right?

Mon, 03/25/2013 - 19:59 | 3374804 akak
akak's picture

I will invite them in for tea.

Mon, 03/25/2013 - 22:08 | 3375285 TeamDepends
TeamDepends's picture

You have passed the test, Grasshopper.  Well done!

Tue, 03/26/2013 - 09:07 | 3376251 StychoKiller
StychoKiller's picture

This has gotta be the zaniest repartee I've ever seen on this site, and that's really saying something! :>D

Mon, 03/25/2013 - 20:00 | 3374806 de3de8
de3de8's picture

Akak, tks for another good laugh.

Mon, 03/25/2013 - 19:14 | 3374620 TeamDepends
TeamDepends's picture

It is Kimberly-Clark you seek.  Yes, they also make toilet paper.  We have been all in for years and it's a feeling of security that money can't buy.

Mon, 03/25/2013 - 19:27 | 3374658 Help Is Not Coming
Help Is Not Coming's picture

Actually Kimberly-Clark hasn't made anything in years. They sold off all of their paper mills several years ago and just contract out to those mills what they want produced. Seems that they took the attitude that the only thing that they needed to make was money.

Mon, 03/25/2013 - 19:36 | 3374693 TeamDepends
TeamDepends's picture

The dividend checks keep coming so we ask no questions.

Mon, 03/25/2013 - 18:40 | 3374485 lolmao500
lolmao500's picture

All those stupid Krugmanites and Obamabots praising Bernanke for his ``glorious saving`` of their 401k will have a nasty surprise when reality hits.

Mon, 03/25/2013 - 18:47 | 3374523 TeamDepends
TeamDepends's picture

"We need your 401k to keep moving foward but don't worry!  We will instead send you a check every month.  Until we don't".

Mon, 03/25/2013 - 19:34 | 3374598 shuckster
shuckster's picture

Watch this video as Rothschild expresses his concern for the pensioners (401k holders) in late 2008

Tue, 03/26/2013 - 05:26 | 3375880 Anasteus
Anasteus's picture

And for all the rest, artificially suppressed and undervalued gold could be finally recognized as by far the best investment ever. Once it bursts one will be barely able to afford more than few ounces.

Mon, 03/25/2013 - 18:43 | 3374499 Bill D. Cat
Bill D. Cat's picture

As God is my witness , I thought turkeys could fly .

Mon, 03/25/2013 - 18:46 | 3374514 HD
HD's picture

Baby if you ever wondered - wondered whatever became of me...

Mon, 03/25/2013 - 19:09 | 3374600 Beam Me Up Scotty
Beam Me Up Scotty's picture

Turkeys can fly, and some day in the not too distant future, shit will fly too.

Mon, 03/25/2013 - 19:14 | 3374619 negative rates
negative rates's picture

Okay, just buzz the house once, and we should win that bet.

Mon, 03/25/2013 - 19:46 | 3374741 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Bill D. Cat, I can still remember how much that made laugh the first time I saw it. About a year ago was flipping through the channels and landed on the channel showing that episode and ended up laughing so hard it hurt. Thanks for the laugh..

Mon, 03/25/2013 - 18:43 | 3374500 ebworthen
ebworthen's picture

The sharks are just waiting until enough retail 401K, IRA, and Pension money comes back in the water before the next bloodbath.

Ben gave them all the FED gravy (taxpayer flesh) necessary to ramp things up on low volume rotating in and out of sectors and names within sectors.

Just when the average retiree and retail investor think it's safe to go back in the water the next feeding frenzy will commence.

Mon, 03/25/2013 - 18:44 | 3374505 realtick
Mon, 03/25/2013 - 19:01 | 3374572 Tsar Pointless
Tsar Pointless's picture

As a resident of the Pittsburgh area and a frequent frequenter of East Liberty, I think this is a horrid idea.

But, this being Pittsburgh, and Pittsburgh being in the FSofA, I am not surprised at all.

Mon, 03/25/2013 - 18:45 | 3374509 HD
HD's picture

Well it makes sense - the stock market has never declined during massive QE...


"We've never had a decline in house prices on a nationwide basis."


Mon, 03/25/2013 - 18:46 | 3374515 kill switch
kill switch's picture


I love to turn promissory notes to pay nothing into gold, ya know the FRN,,,these idiots are so fucked that they think I would save FRN'S in the form of stocks,,,IRA'S 401 KFUCKS.... And I do it with bank of America's line of credit, fucking extreme irony.... QE ME..



the kill switch

Mon, 03/25/2013 - 18:46 | 3374517 Tijuana Donkey Show
Tijuana Donkey Show's picture

Mon, 03/25/2013 - 18:47 | 3374519 nmewn
nmewn's picture

No bubble here.

Mon, 03/25/2013 - 18:47 | 3374520 JustObserving
JustObserving's picture

American Exceptionalism

Mon, 03/25/2013 - 22:56 | 3375472 sgorem
sgorem's picture

American EXPRESSionalism...........

Mon, 03/25/2013 - 18:53 | 3374540 All_Is_Well
All_Is_Well's picture


Mon, 03/25/2013 - 18:56 | 3374557 Moe Hamhead
Moe Hamhead's picture

There will be blood!

Mon, 03/25/2013 - 19:01 | 3374568 adr
adr's picture

it isn't in the thread yet so....


Tue, 03/26/2013 - 01:57 | 3375723 BringOnTheAsteroid
BringOnTheAsteroid's picture

Hey, hey, hey. I was going to say that.

Mon, 03/25/2013 - 19:04 | 3374579 Miss Expectations
Miss Expectations's picture

Here's hoping that whoever is on the top of this curve is wearing a helmet know, so we can look back and see what happened.

Mon, 03/25/2013 - 19:07 | 3374591 YHC-FTSE
YHC-FTSE's picture

Say what you want about them,  but CS guys do the best charts. 

That baby is going to burn so bright, just thinking about it makes my eyes water. Then, phut! All gone until QE whateverthefuckthenumberisnow. 

Mon, 03/25/2013 - 19:09 | 3374603 Herdee
Herdee's picture

You have to know Big Ben's motto. When he talked to one U.S. Senator during testimony before the Senate, Bernanke said, "Don't forget Senator we want to make a profit."And trust me,because the Government is allowed to intervene and trade at will in any market means that they can make money going down,not just up.I wouldn't put it past a bunch of gangsters.These guys in Washington are no different than the Russians for being crooks.

Mon, 03/25/2013 - 19:13 | 3374616 toys for tits
toys for tits's picture

C'mon, there's no reason to disparage Russians.

Mon, 03/25/2013 - 19:14 | 3374608 ebworthen
ebworthen's picture

The history books will read:

"It worked until it didn't.  What seemed like ingenious policy and a near miracle combined with the resiliency of the American people turned out to be just another debt bubble. 

The rule-of-law was replaced with expediency, and sound money relegated as a relic of the past. As with crises from history, prudence and common sense were abandoned for the sake of a crisis, then more-so for the next crisis, and so on.

The brightest minds of the time denied the immorality and recklessness of their actions, stating that they must act - even if it meant stealing depositor money - to prevent a 'collapse'; thus ensuring an even more spectacular collapse with each equivocation, lie, and self-lie.

With each micro-managed crisis the reassurances became louder as the lies became larger; until there was no faith left in the leaders and institutions of the nation and chaos had it's hour.

As history teaches, hubris or pride is ever the downfall of the great."

Mon, 03/25/2013 - 19:23 | 3374645 Miss Expectations
Miss Expectations's picture

You've summed it up beautifully.  Now, just inscribe it on a stone tablet, cause pixels won't stand the test of time.

Mon, 03/25/2013 - 19:12 | 3374612 toys for tits
toys for tits's picture

I don't see a head and shoulders formation but I do see a bent penis.

Mon, 03/25/2013 - 19:12 | 3374613 q99x2
q99x2's picture

As long as the money flows to pay off politicians countries will not stop massive demonstrations against Gay marriage. But once the banksters don't have money to bribe the politicians of the world its back to the real issues like jailing banksters and traitors.

Mon, 03/25/2013 - 19:16 | 3374623 thewayitis
thewayitis's picture

    You have to admit. I DOES make one sick .....

Mon, 03/25/2013 - 19:21 | 3374635 cliffynator
cliffynator's picture

"Exponential", isn't that another word for "irrational"?

Mon, 03/25/2013 - 19:26 | 3374655 ArmyofOne
ArmyofOne's picture

Change you can believe in./sarc

Mon, 03/25/2013 - 19:46 | 3374747 Hedgetard55
Hedgetard55's picture

Bernanke will burn in Hell for eternity for taking a house with termite eaten foundations and putting a new coat of paint on it, new wallpaper, and getting the inspectors to lie about it's condition, then selling it to the American taxpayer.

Mon, 03/25/2013 - 19:53 | 3374776 dumpster
dumpster's picture

sorry no hell to burn in

though he may fill a position in the slime pits of calcutta which by inference is not a walk in park

Mon, 03/25/2013 - 20:01 | 3374811 Hedgetard55
Hedgetard55's picture

Why do you say no hell?

Tue, 03/26/2013 - 03:00 | 3375777 BringOnTheAsteroid
BringOnTheAsteroid's picture

Because hell is a childish human construct invented by man, to subdue and control man.



There is no god <beating head against the wall>, there is no devil <stamping feet in exhausted temper tantrum>, it's all a construct of our minds.

Now that we've finally dispensed with that silly notion of gods and devils, FOREVER, NEVER TO BE SPOKEN OF AGAIN, let's get back on topic.


Mon, 03/25/2013 - 20:16 | 3374855 Things that go bump
Things that go bump's picture

Since I have abandoned any hope of seeing justice in this world, you are cruel to crush the last bit of faith of an old woman. 

Mon, 03/25/2013 - 19:51 | 3374769 dumpster
dumpster's picture

graham summer ..... i do not believe we will see q3

q3   graham summers is a dope


Mon, 03/25/2013 - 19:57 | 3374793 mt paul
mt paul's picture

paint the debt..


with a nice shade

of asset valued

epoxy enamel 

Mon, 03/25/2013 - 20:07 | 3374828 sitenine
sitenine's picture

Sustainability is one of those concepts (such as the exponential function) that economists regard as 'voodoo science'.

Tue, 03/26/2013 - 02:01 | 3375728 polo007
polo007's picture

According to Wells Fargo Securities:

H2 2013 - Time To Fade The Fed?

Fed Put May Diminish In H2

• As confirmed by the FOMC last week, the uncertain impact of fiscal policy in the U.S. and ongoing turmoil in Europe are together likely to keep the Fed in the game for the near term. However, as the calendar turns to the second half, we suspect stocks may start to sniff out the beginnings of a balance sheet unwind and rate tightening in 2014. Beware H2, as the Fed put may start to fade, resulting in a rocky climate for U.S. stocks. On average, stocks have lost 8% in the six months prior to the first Fed tightening, and posted a 12.9% decline prior to tightening when earnings growth was weak, as today. Portfolio positioning should favor defensives over commodity-sensitives and cyclicals as tightening nears.

• In the very short run, we expect the combination of fiscal policy constraints and renewed turmoil in Europe will result in another growth scare, keeping the Fed firmly supportive. However, by suggesting the Fed may alter purchase patterns in his comments after the meeting last week, Chairman Bernanke cracked open the door of monetary policy uncertainty. Moving into the second half of this year, continuous improvement in the unemployment rate and slow growth may be enough to get markets thinking about a shift in Fed policy in 2014.

• Stocks usually sniff out the coming change to Fed policy before the policy change occurs, and the initial reaction is negative. Indeed, the bulk of market weakness surrounding Fed policy changes in the pre-QE period occurred in the six months prior to the first target rate change. The average decline in the six months preceding tightening was 8.0%. Recently, stocks have suffered more when Fed bond buying programs ended, with stocks recording an average sell-off of 14.4%.

• Timing of Fed tightening could be particularly difficult for stocks to absorb this cycle because earnings growth is in a weak state at this time. Indeed, recent S&P 500 EPS growth is just 6.6% YoY. Similarly, EPS growth was -3.1% YoY when the Fed started tightening in the late 1980s and merely 3.2% YoY when the Fed started tightening in the late 1990s. Perhaps due in part to the weak earnings environment, stocks suffered more than usual during these two tightening phases. The peak to trough decline surrounding the late 1980s tightening was 33.5% and the peak to trough decline surrounding the late 1990s tightening was 19.1%.

• With this backdrop in mind, we continue to suggest defensive positioning remains the best alternative for portfolios benchmarked to the S&P 500. Should the Fed indeed approach tightening in 2014, we suspect the dollar will continue to rally, weighing on the relative performance of commodity sensitive segments of the index, and rising rates should affect cyclicals more than defensives. Sector performance has tended to follow a generally consistent pattern during tightening, and this pattern supports our view that commodity sensitive and cyclical sectors are at risk. Indeed, in the six months prior to the late 1980s tightening tech and energy suffered most, while in the mid-1990s tightening tech and materials led declines. In the late 1990s cycle tech and materials again recorded the largest declines. Finally, energy and industrials led declines prior to the 2004 tightening phase.

Tue, 03/26/2013 - 02:05 | 3375744 serema
serema's picture

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Tue, 03/26/2013 - 12:05 | 3377357 marathonman
marathonman's picture

Now that's funny!

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