Sam Zell: "The Stock Market Feels Like The Housing Market Of 2006"

Tyler Durden's picture

Instead of the endless procession of "different this time", "buy-the-dip", "money-on-the-sidelines" asset-gathering, Muppet-fleecers that CNBC so typically trots out, Sam Zell graced them with his presence and the truth was allowed a voice for a few minutes. Joined by David Rosenberg, who clarifies the insanity that engulfs US equities, explaining in wonderment that it is "not surprising the market rises even in the face of bad ISMs, worse jobs, and worst NFIB data, because Japan and the US are embarking on a gargantuan quantitative easing that is the lynchpin behind the stock market." It is not about being bullish, or bearish, or agnostic, it is understanding the driver of this market - and that is not the economy, not earnings, "it is the mother of all liquidity-driven rallies." Maria B, soundbite in hand, is slammed for her "glibness" at not fighting the Fed but it is Sam Zell's brutal honesty that shocks even the money-honey. "This is a very treacherous market," Zell explains - thanks to the giant tsunami of liquidity, "the problems of 2007 haven't been dealt with," and given the poor macro data and earnings, "we are suffering through another irrational exuberance," leaving the entire CNBC audience speechless when he concludes, "the stock market feels like the housing market of 2006." 

Maria B:

"So don't fight the Fed?"


"That's a pretty glib comment for what is going on. You could have fought the Fed in 2000 and 2009 and done quite well... [thanks to the Fed] the market will tend to drift up - until something breaks."


"We're debasing our currencies around the world.. which ultimately translates into a lot of inflation."


"What we are seeing here is like a giant tsunami of liquidity."


"People look at the market and think things are better. The level of uncertainty has reached a point where people are just throwing money [at risky assets] because they don't know what else to do with it."


"I would not be adding money to the stock market. This is a very treacherous market."


"Yes, it's gone up every day. Yes, you're not supposed to fight the Fed, but sitting on the sidelines is preferable."


"In our businesses, we are not seeing strong conditions."


"The problems leading up to 2007 haven't been dealt with."


Then at 6:00

Zell:"The current stock market feels like the housing market of 2006. Everybody can't afford to miss it."


Maria B: "That's a scary comment."


Zell: "Why? Every single day it goes up. What were the headlines in 2006 - housing prices going up every day. What are you talking about every day now - new high in stocks every day!"


"We are suffering through another irrational exuberance."


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taniquetil's picture

We've all been waiting for this:



Key-Rick's picture

Don't fight the fed!!!  As long as uncle Ben keeps printing, stocks will continue their upward explosion. Who can swim upstream against a $85,000,000,000 a month current?

markmotive's picture

There certainly is a lot of downside risk.

But as long as Central Banks keep dropping 'carpet bombs of liquidity' - as Sprott puts it - shouldn't we just play the game?

mayhem_korner's picture

shouldn't we just play the game?


Just by saying that you are playing exactly the game they intend for you.  The only thing that matters in the game, however, is your place in line when everyone heads for the exits.  If you believe you can outrun a front-running HFT algo, my best to ya.

Pinto Currency's picture


Obama official told Kyle Bass their intention was to "kill the dollar".

They are well on their way to achieving their goal (and thus creating starvation and social chaos in the U.S.).

Rogue Trooper's picture

Fuck this is soooooooo Ground Hog Day.

Haven't watched the clip but I assume the 'talking heads' laughed Sam off the screen?

Better to watch this (interesting version)

Into the blue again, after the money's gone 
Once in a lifetime, water flowing underground 
Same as it ever was, same as it ever was, same as it ever was, same as it ever was 
Same as it ever was, same as it ever was, same as it ever was, same as it ever was 

quintago's picture

We pay taxes to service the debt the Treasury issues, and the FED feeds. Why is there any expectation that they would pull back on the reins?

Why do you expect the FED to do anything different. If our government empowers the FED to lend and purchase debt, it will continue unabated so long as you and I continue to hustle every day to pay the taxes to service that debt.

smlbizman's picture

man i would love to waterboard torture her, but only use the board.....she is the perfect example of why spanish chicks are so hot and stay hot....why? ...cause i dont have a clue what the senoritas are saying...

GetZeeGold's picture



We're on double secret probation now.


Keep smiling and always keep one hand on the ejection handle.

kaa1016's picture

CNBC right now talking about how Sam Zell said the stock market feels like housing in 2006. Instead of debating the call itself, they instead try to discredit what he said by rolling a tape of some of his wrong calls on housing over the last few years. This ladies and gentlemen is how I know that we are at a market top.

WhiteNight123129's picture

The Weakness is not in the stock market but in the bond market.

darrenstory's picture

That was a nice way to start the morning. 


But ... I can DANCE better than that guy!

optionsman's picture

IMHO, current waves of currency war or competitive devaluation around the globe will only benefit the US even though everyone knows that one cannot win a currency competitive devaluation. Perhaps a good way to see how this currency war benefits the US is by comparing it to the arms race with the former USSR back in the day. Soviets lost, the US won. the outcome of this currency war is going to be the same. hence the US equities, USD etc. will outperform in the long run despite the fundamentals.

Thisson's picture

That's a naive view.  Yes, the soviets went bankrupt first, but that is a far cry from saying that the US benefitted from the cold war.  The waste on both sides was incredible, and there is no way to know the outcome of the "null case" where we spent our resources on actual productive investments, research, etc instead of wasting those resources on warfare.  And all these many years later, we are still stuck with the debts and interest payments, and the "peace dividend" has been diverted to the oligarchs.

world_debt_slave's picture

IMO we should not play their game, I got out of the stock market in 2000 after the tech bubble burst b/c of the manipulation. 2004 bought some silver after reading Griffins book "The Creature from Jekyl Island".

spankthebernank's picture

It's funny to watch Bartiromo be so fucking stupid, or ACT so fucking stupid.  Trying to frame the conversation with Zell to say that its ok to debase our currency for nominal gains in the stock market makes me queasy.

I feel quite sorry for any young burgeoning investors out there trying to figure out what end is up in this age of constant disinformation. 

Viva Zero Hedge

Taterboy's picture

Bad Zell, bad Zell! He scared Maria! Bad Zell!

mayhem_korner's picture



The only winning move is not to play.

(War Games)

RockyRacoon's picture

I watched this circus as it unfolded.  I was amazed that ole Sam didn't get the hook.

Drag him out of the building and throw him in the street for his blasphemy!

RaceToTheBottom's picture

Maria Bottleroma.... Stupid snatch

new game's picture

i say you are an idiot if you watch this trash - do you like to be provoked by high paid spineless face socks?

i says you are not one bit better than them-oh keep watching you fucking idiot...

bet ya listem to right wing stuff like rush too. loosers...

hey try thinking for yourself. formulate an idea based on the principles like bass or dr paul craig roberts(if you have a brain that doesn't just soak water).

wrink out the spounge loosers...

Disenchanted's picture

I like what you're saying new game, but your presentation needs a little work.

+/- 0


btw, I don't listen to 'left' or 'right' wing losers...

new game's picture

yea, the presentation is rough(upon reread), but i am fed up with hearing about cnbc. i disconnected cable 8 years ago, never registered at facelost, and don't have a numb phone.  yea i'm in a cave, but trust me my club works just fine..

now to beat some sense into the few left standing...

samcontrol's picture

why live like a caveman before they take us there. You'll be long gone buddy by then.

SilverDOG's picture




They will take you there, only to find those caves occupied by us. You'll be in long line and ill prepared

and assetless.

Why live in a farce, to be sacrificed during transition.

Caves are, and will remain, top dollar.

Caves are not your fear based Scooby Doo "rut ro".

You get a Scooby snack if you figure out the most blatant clue thereof.

Disenchanted's picture




"but i am fed up with hearing about cnbc."


Me I can't even watch them with the sound on mute. Didn't even bother pressing play on the clip above, because I have zero interest in anything anyone says on CNBS.

I have no FB, a dumb phone and 0 apps. I also search the web/internets on my ancient desktop, not google(as in a verb).

I like my cave.

spankfish's picture

Hedley Lamarr: Wait a minute... there might be legal precedent. Of course! Land-snatching!
[grabs a law book]
Hedley Lamarr: Land, land... "Land: see Snatch."

mdtrader's picture

In late 2007 Wall Street analysts said the same. Don't fight the FED, they are cutting rates and banking crisis is probably a 2 quarter event! The market fell 50% next. The market feels just as complacent now. Eventually something will happen that rocks the market, whether it's a natural disaster, man made disaster, econimic disaster or an earnings disaster. The world is still full of risk despite what the stock market thinks. The trouble is when something bad happens now, the central bankers have no bullets left to fire!

BandGap's picture

Like the final scene in The Good, the Bad and the Ugly. It's not a matter of anything other than who draws first. Then the bullets fly (unless soemone unloaded your gun).

Salah's picture

What takes out this market and the whole QE paradigm back to the 1930's will be a 'natsec event' that cascades into a series of bigger, serialized 'NATSEC' events.  As a whole they undermine the entire post Cold War world.

And now's the time for all that to happen...pick a place, pick the contenders.  More importantly, the current planetary astro-matrix is AWFUL; a fart in church could set this thing off.




candyman's picture

And from the Elliott Wave folks, long term, " Then after a Major wave 4 correction, another uptrend should follow to complete Primary III. So if we are indeed in Intermediate wave iv of Major 3, we still have three more uptrends, after this correction, before the bull market concludes in the spring of 2014." <paraphrase>

Fukushima Sam's picture

Models don't mean much when the signaling mechanism is massively manipulated.

justinius1969's picture

 What a stupid CUNT...

I cant wait to her face when all this blows up...

marketexpress's picture

We have totally opposite situation in india we are making new lows when world market is making new highs


i think so key is

SheepDog-One's picture

Gold, minus another -28....just brutal out there for anyone with a bit of sanity left!

Mr. Fix's picture

It may be time to get out of this market,

 In fact it's been time for a long time,

 but those that are still in it when the music finally stops,  will not have much to show for it.

 The music is about to stop.

Banksters's picture



As long as bernank prints, it seems to go up.  I'm not suggesting this is good. Data sucks, market goes up.  


We'll see.

DormRoom's picture

This logic is similar to the one that caused the financial collapse, namely the belief that housing prices will never go down.  Today, investors belief Central Bankers will not let the stock markets drop, so they recklessly buy up risk asset,s until the day when the Central Banks are impotent (hyperinflation, stagflation, EU collapse, thermonuclear war).  Then the financial collapse will be EPIC.

Providing liquidity into a super-structure that is unsustainable, and woefully inefficient because of prior misallocation of capital is not a sound strategy.  You're simply keeping the zombies alive when they should all die. 


Banksters's picture

Agreed. I've kept my strategy to short on political instability and god awful news.   

I know many who have shorted off of fundamentals and gotten steam rolled.


I think the disgust goes like this:  FUCK YOU BERNANK


I feel for those folks. I really do.   

Freddie's picture

Look - I am back to flipping condos which is obviously much safer than bitcoin.  (sarc)

samcontrol's picture

flipping condos is way safer than bitcoin...98% know condos, who has ever heard of bitcoin around the world...
Zh not being he world.

sun tzu's picture

In the stock market, investors are playing with their own money. In the housing market, investors were playing with the lenders money with zero down loans

RaceToTheBottom's picture

Banksters are playing with Fractional lending of free money from the fed.  That is like Inverse skin in the game....

Radical Marijuana's picture

"Irrational exuberance" is such an excellent euphemism for runaway financial fraud.

The way that we RaceToTheBottom is paradoxically by zooming to the top of an exponential growth curve of creating money out of nothing as debts, that has become a rocket ride almost straight up ... which then must eventually result in some tipping point in the foreseeable future ... where, at that turning point, we will have OVERSHOT, and therefore, must fall back down.

Thus, we are inside an endless series of bubbles of "irrational exuberance,"  where each new bubble has the same basic driver, which is being able to make "money" out of nothing, and therefore, those who can do that find every possible excuse to do that MOAR!!!

I loved the cute turn of the phrase, that since we live inside of an "inverted totalitarianism" there is "Inverse skin in the game."


Since the mainstream pundits refuse to recognized the fundamental fraudulence of the established monetary system, they spout the superficial psychological euphemisms, like "irrational exuberance," to pretend to explain what is happening. We are actually racing to the bottom by shooting at the moon, like an arrow that must fall back down.

... exactly when and where, of course, I do not know ...

BUT, since money is actually backed by murder, since this financial fraud only works because it is backed by the force of government, when this "irrational exuberance" OVERSHOOTS AND CRASHES INTO CHAOS, THERE WILL BE MOAR MASS MURDERS TO PAY FOR WHAT HAS BEEN DONE!

Shizzmoney's picture

This is the "doomsday" scenario......however, I foresee a Japan-like decline here in the US when SHTF (starting in 2015).  The bottom won't fall off completely - the system will crumble like feta.

If you look back at the end of presidental terms since 1970, they have always ended with a crash or serious market downturn.

Nixon had the end of Bretton Woods (and the start of oil inflation...which would contagion to Ford via a Kuwait Stock Market crash in 1973, and Carter with major inflation in 1980, spurred on by the Iran conflict..which was due to oil pressures). 

Reagan and Clinton had stock market crashes based off of inflated asset prices and the fact that computers may NOT be the best way to run a market (because they can be manipulated).  Bush had the housing debacle, spurred on by Fed driven deregulation. 

And Obama will have sovereign bonds (so will other countries: UK, Japan, EZ).

This will cause politicians to react to the bond holders...and completely ignore the public. 

They'll threaten to haircut pensions and 401Ks if Congress doesn't "compromise" to cut Social Security and other programs.  It will be legislation at gunpoint, like in 2007 (this is incredibily easy to manipulate because of our bought off Congressional system). 

Basically, if the political hacks don't do what the banks and corporations want: they get no cash.  And Cash > Votes (because cash = more votes).

Broken windows will result.  Maybe for a long time.  It won't be fun.


Sabibaby's picture


Because the value of what is being printing goes down. 

Just because you're earning more money doesn't mean you're doing better if at the same time the price of gas, food, and common utilities goes up.

Almost Solvent's picture

Whoa there.

Drop the truth stick and sloooooowly back into buying AAPL.

Sabibaby's picture

What's the point of existance with out an iPhone? 

People would be blowing there brains out if there were ever a "peak iPhone"

Freddie's picture

I saw 5 kids around early high school age walking the other day. 4 girls and a boy. All the girls were staring at their cell phone. There is no personal interaction among them.  I see this everywhere.