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Back At The Gates

Tyler Durden's picture





 

Submitted by Mark J. Grant, author of Out of the Box,

It is Mr. Green in the library with the candlestick.
 
That is the clue; what are you going to do with it? This is a real world portrayal of the financial markets these days. The economy languishes in the United States. The economies of Europe are floundering or in serious decline. The equity markets are at all-time highs. The Fed, including calls and pre-payments, is probably pushing somewhat over $100 billion a month into the system. Bond yields are not far off their lows and the compression in risk assets continues unabated as the money must be put somewhere. It is a disparate world.
 
We were all taught that the markets eventually get back to fundamentals. It is not that we have forgotten this; it is that the supply of money has trumped the notion. Yet we amble on because it has been the winning strategy and we play to win.
 
I warn when appropriate because that is the main tenet of my commentary. In a two percent ten year Treasury environment making a mistake is a very costly affair. When yields are this low it is not "better to be safe than sorry" but "better to be safe then dead" as the amount of time that it will take to make back any mistakes could end you and your firm given the duration of any correction that you might attempt.
 
It is not that one market is in a bubble it is that they all are in a bubble. Chairman Bernanke and Lord High Draghi hold their small piece of plastic and blow hot air and the soap bubble enlarges around everything. Nothing is forgotten, nothing is spared; everything is encased.
 
Cyprus was not a thought in anyone's mind a month ago. Many may not have known exactly where it was located. Then it takes center stage and tosses off infection into the rest of Europe. Every fingerprint may be different but to have a fingerprint you must have fingers and everyone on the Continent has them and uses them for pointing, waving and utilizes them for a number of specific and special gestures.
 
It was never Armageddon or Apocalypse that caught my attention but caution and wariness of idiocy. You can one-off Cyprus all you like but stupidity was the Master of Ceremonies at that show. Consequently I stare at the world and wonder what lunacy might come next. 
 
It is not that the world is devoid of crises. It is that the supply of money acts as a painkiller and that the markets have become mostly numb. Yet still I man the watchtower. Yet still I peer at the Barbarians. Cyprus was the latest foray. Never fear; the Barbarians will be back at the gates.

 


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Wed, 04/03/2013 - 08:48 | Link to Comment CDSMonkey
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Is every day the same?

Wed, 04/03/2013 - 08:55 | Link to Comment Doña K
Doña K's picture

Is gold and silver in a bubble? I am ready to click the buy now button.

Wed, 04/03/2013 - 08:57 | Link to Comment Rubicon
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This dude is fucking depressing!

 

Wed, 04/03/2013 - 09:04 | Link to Comment GetZeeGold
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Not if you're on Prozac.....and most everyone in the markets is.

Wed, 04/03/2013 - 09:07 | Link to Comment Rubicon
Rubicon's picture

On and on we go with more fucking morose predicions but not one genius has stepped up and accurately said when D-day is. 

Wed, 04/03/2013 - 09:49 | Link to Comment GetZeeGold
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I guess we figured you didn't want to know.......do you?

Wed, 04/03/2013 - 10:28 | Link to Comment BadKiTTy
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"On and on we go with more fucking morose predicions but not one genius has stepped up and accurately said when D-day is"

 

We all want to know..... but it is unknowable.  

K@  

Wed, 04/03/2013 - 10:36 | Link to Comment prains
prains's picture

I'll go out on a limb and say there will be no D-day but instead a multi generational unwind, de-evoluting, morally polluting dimming of humanity. Plutocracy will be walled off in defendable enclaves and slavery will be a growth industry once again. Basically a modern dark ages brought to mankind thanks to an incredibly robust american financial model of greed/war and outright theft. Think; Dick Cheney with a bull whip and the right to use it and you'll get the picture

Wed, 04/03/2013 - 08:50 | Link to Comment TeamDepends
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"Better to be safe then dead".  Boring!

Wed, 04/03/2013 - 09:03 | Link to Comment madcows
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Er, not to be all Editor-English-language-like, but I think it should read "safe THAN dead".  It's a comparison thing, not a time thing.  "Safe Then Dead"?  Well, crap, we're all dead at some point.  I could just as well be Unsafe then dead.

 

BTW, what was the point of the article?  The Shit is going to HTF?  we all know that.  Cyprus isn't going to be the only one to confiscate money?  Yep.  I figured that one, too, when Eurobankerdude DieselBum said it was the template - oops, retract, dedact.  Everything's a bubble?  Yep.  When banks print, money flows to everywhere.  So, where do we hide?  We can't safely stay in cash b/c of the coming inflation.  We can't stay in equities b/c of the coming crash.  We can't stay in bonds b/c they are a bubble, too.  What about PM's?  Won't they fall, too with a crashing economy.  There is nowhere to hide.  The hands of the CB's are in everyone's shorts.

Wed, 04/03/2013 - 09:44 | Link to Comment new game
new game's picture

simple mater of which has least risk and/or fall the least or/and come back best.

hmmm...

think youall know.

Wed, 04/03/2013 - 08:51 | Link to Comment Shizzmoney
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RE:

We were all taught that the markets eventually get back to fundamentals. It is not that we have forgotten this; it is that the supply of money has trumped the notion. Yet we amble on because it has been the winning strategy and we play to win.

When you come to the point that the people who taught you this were either a) stupid or b) complicit with the stupidity.....this will make more sense.

Wed, 04/03/2013 - 08:56 | Link to Comment SheepDog-One
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Yep, and wait till the morning when it comes crashing down here all these brilliant philosophers on the 'new new normal winning' will be crying the loudest.

Wed, 04/03/2013 - 09:02 | Link to Comment Dr Benway
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They may have been both, but the statement is still true; eventually fundamentals prevail, eventually cash matters, eventually every bubble pops

Wed, 04/03/2013 - 08:53 | Link to Comment Cursive
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Sometimes you can let the milk go a week or two past the expiration date, but sooner or later, you can't stomach the spoilage.  That is today's economic world.  We are long overdue for a systemic correction to hedonistic central banker policies.  When it is realized, it won't taste good.

Wed, 04/03/2013 - 08:54 | Link to Comment Croesus
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And the people will flock to Bitcoin...... </sarc>

Wed, 04/03/2013 - 08:58 | Link to Comment Doña K
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Hedonistic? No. Masochistic narcisism

Wed, 04/03/2013 - 08:55 | Link to Comment SheepDog-One
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OH, so basically the man with the spoon is king in the starvation camp.

Got it.

Wed, 04/03/2013 - 08:56 | Link to Comment Waterman Jim
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"stupidity was the Master of Ceremonies at that show."

Dude,

Stupid people don't get rich or stay rich.

Wed, 04/03/2013 - 09:42 | Link to Comment Diogenes
Diogenes's picture

You wouldn't say that if you had ever been part of a bubble.

Wed, 04/03/2013 - 08:58 | Link to Comment NEOSERF
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And from the Washington Post today in news I can't even classify as beyond stupid...

The Obama administration is pushing to have home loans more readily available to consumers with weaker credit.

The Washington Post reports that the White House wants to loosen up credit to boost the housing market, and the broader economic recovery. Critics say this could lead to the kind of risky lending that created the housing bubble and the subsequent economic collapse.

 

Wed, 04/03/2013 - 09:00 | Link to Comment Croesus
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MOAR SERFS!

Wed, 04/03/2013 - 09:04 | Link to Comment Temporalist
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I posted this yesterday:

 

I have a picture of this never ending cycle in my mind:

Sell the American Real Estate Dream

Politicians/economists say everyone deserves a home

People with poor credit are given lax loans with little due diligence to buy homes

People with no credit and no job buy homes

RE agents, banks, politicians, appraisers and assessors collude to make money off lax lending

Defaults and fraud start system collapse

People lose lots of money after bidding up RE prices

Lending dries up

The Fed sustains the bubble for "wealth effect" and starts to blow another with "liquidity measures"

Sell the American Real Estate Dream

Politicians/economists say everyone deserves a home

People with poor credit are given lax loans with little due diligence to buy homes

http://www.zerohedge.com/news/2013-04-02/walking-dead-housing-recovery-z...

Wed, 04/03/2013 - 09:08 | Link to Comment Doña K
Doña K's picture

This is the epitome of doing the same thing and expect different results. Or better yet promising to build bridges in an area with no rivers. Banksters and cleptoticians

Wed, 04/03/2013 - 09:16 | Link to Comment machineh
machineh's picture

Bernanke's secret motto: S&P 2000 before gold 2000.

Not a joke, comrades ...

Wed, 04/03/2013 - 09:27 | Link to Comment forwardho
forwardho's picture

With great respect for Mr Gant, I fear he may have spent to much of the last five years staring into the abyss. Clearly what he has seen staring back at him has infected him with doom.

Wed, 04/03/2013 - 09:36 | Link to Comment Hulk
Hulk's picture

Suddenly Mark, I find myself interested in 21 year olds...

Wed, 04/03/2013 - 10:18 | Link to Comment americanspirit
americanspirit's picture

Just reading on another financial blog that silver is dropping because holders of silver are selling and moving to equities. Just can't wait to get in on the action and get rich, I suppose. As for me, I'm stacking every time I get some spare fiat paper.

Wed, 04/03/2013 - 10:40 | Link to Comment NoTTD
NoTTD's picture

If true, that is a sure sign the bubble is about to pop.

 

Also, a sign of the apocaplypse.    So, you know, take your pick.

Wed, 04/03/2013 - 10:37 | Link to Comment NoTTD
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I would change that to "comfortably numb".

Wed, 04/03/2013 - 10:51 | Link to Comment moneybots
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"Chairman Bernanke and Lord High Draghi hold their small piece of plastic and blow hot air and the soap bubble enlarges around everything."

 

Everything except the economy.

Wed, 04/03/2013 - 10:55 | Link to Comment moneybots
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"It is Mr. Green in the library with the candlestick."

 

It is Mr. Greenspan in the Federal Reserve vault with a gold bar.

Wed, 04/03/2013 - 11:24 | Link to Comment Gamma735
Gamma735's picture

Lots of waxing poetic.  Bottom line is that you will know when the dollar bubble will pop, because Big Uncle Ben and every politician will be on MSM screaming at the top of their lungs, "We will not devalue the dollar overnight!"  Then the next day the dollar will be devalued 30-60%.  Isn't fractional reserve banking fun?

 

Wed, 04/03/2013 - 11:24 | Link to Comment Clowns on Acid
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Spot on article Mr Grant. This is the misery that the neo Keynesians have infected the world with. People sya DEMs and "Congress" yet that is only partially true. If the Fed had been an honest broker then interest rates must go up when the Fed Gov't runs enormous deficits.

Obviously Greenspan, Bernanke and their lot of smirking jackals have set their bejeweled, crooked fingers on the Constitution and stained it with their mark.

Now..there is no end game except collapse. Thats why we see the outright theft (Corzine, Dimon, Cyprus, Obama's green "initiatives") going on....they all know this ends badly.

Thu, 04/04/2013 - 02:57 | Link to Comment Sudden Debt
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is probably pushing somewhat over $100 billion a month into the system...

NOW LET'S TALK ABOUT THAT DOWNPAYMENT PLAN OF YOURS!!

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