This page has been archived and commenting is disabled.
Visualizing The Triumph Of Hope Over Reality
The Federal Reserve's extreme monetary policy has done nothing but repress 'safe' assets to the point of making 'risky' assets relatively cheap. This is of course not the case were you to isolate each risky or safe asset and consider its value standalone. Choosing stocks over bonds because "well, what is the alternative?" is akin to the red-pill/blue-pill choice from The Matrix and the reflationary 'normal' that we are supposed to believe in is what 'apparently' justifies a 1.7x rise (12%!) in multiples since QE4EVA was announced. During that same period, consensus earnings expectations have plunged (merely pushed out one more year for the renaissance) and global trade and growth has collapsed. However, while we have shown many divergences from reality in the past, it is the manic/depressive difference between inflation expectations and stock valuations (implicitly supported by reflation) that is the clearest example of the short-term triumph of hope over reality.
The plunge in consensus 2013 earnings since August is stunning (as is the resplendent rise in 2014 expectations)... just one more year....
but that didn't matter as P/E ratios surged... on the back of QE4EVA - though 'cyclically' we appear to be nearing the Central Banker limit for short-term impacts...
But this time, the inflationary pull of rising P/E ratios simply does not fit with the deflationary 'pricing' the market assigns to forward inflation expectations...
In fact, inflation expectations have now faded all the way back to QE3 levels - which can mean only one thing (for fear of the dreaded deflation)... moar QE...
Charts: Barclays, Bloomberg
- 16281 reads
- Printer-friendly version
- Send to friend
- advertisements -






And thus, Bernanke's Keyboard:
http://silverdoctors.com/pic-of-the-day-bernankes-keyboard/
Cute
Purple microdot, orange sunshine, windowpane, and Goofy® blotter: visualizing the triumph of dope over banality.
Long King Tut.
They figured out why Bernanke must skip the Jackson Hole meeting. He's going to be busy shitting his pants.
Hit the high air in the choom wagon.
Smells like Hopium!
"Hope" is a fundamentally flawed and dangerous thing to support an economy and thereby an entire country on, "Hope" by it's very definition automatically expresses doubt and uncertainty about whether or not said dream, wish or vision will bloom into fruition. You only have the "Hope" that it will materialize into a reality and if it does, what word do you use to describe the ensuing nightmare that does indeed become a reality?
DOOM.
http://www.youtube.com/watch?v=mfXC9T8hzlY
I figured it'd have a ctrl lock instead of a caps lock.
This is one of those charts that someone has to translate for me...
All you need to know is Print Moar. And when done......repeat.
When coordinating variables begin an inverse coordination, they create a spread. At some point one or both of those variables will change course, ending the inverse action, closing the spread, and they will continue to coordinate again. How and when those spreads meet is anyone's guess.
In April 2011, EPS y/y growth for 2013 was expected to be ~10%, went as high as 13% in April 2012, now --when the time is upon us-- it has crashed to 7.6%.
Aliens dont like 0.01% on their money.....they get antsy.
They want moar.
Students deserve moar.
Hey, TBTF banks, would you like some free money or would you like to have to earn it?
Um.... we'll take free money, please!
Everyone is on the government dole. Except the middle class. They can go fuck themselves, apparently.
Soon there won't be a middle class...... but apparently TPTB haven't realized that the middle class is the only group actually paying INTO this mess of a system.
marx's hatred was always directed at the middle class-sound familiar?
You really haven't read much Marx, have you? Marx' hatred was directed at parasites, those rentiers who extracted value from the economy without actually 'producing' anything. Marx viewed the rise of the middle class (what he called the 'bourgeoisie") as an inevitable byproduct of the rise of capitalism. Marx eventually saw the rise of a classless society, meaning no middle class, but that does not mean he 'hated' the middle class. Why would he? He was thoroughly middle class himself.
Same as it ever was...
Hope triumphs when logic is replaced by emotions ... a good description of USA 2013
Ya I logically exited silver and joined paper 6 months ago. What are you saying? Are you impying that your emotions don't exist in your activities? Maybe I'm an idiot to you and all but logically seeing ron paul run for president again then seeing he's the headline post spouting a "house of cards" in May 2013 is emotional abuse to sane thinkers.
Do yourself a favor before the fake tyler durdens ban my ass like others have. Go to thetalkativeone.com my website listen to the beats I bought. Ask how I did that since I haven't worked in 5 years. High quality sound and rights are pricey.
Then go to the billionares portfolio wheigh, mull your options if you want to talk contact me. I buy stocks that go up in any market and I don't have 5 yrs to wait.
Somehow Fed minutes statement of,"increase or reduce" empasis on reduce,is being overlooked.
Beenie cap Ben wouldn't have added that wording just to see how it might fly.Titer lower of crack high QE may be in offing especially when 23+
Ben coleuges have expressed this should begin.I expect moderate market drops met with reduced POMO comming.
Fed knows diminished returns are at hand and know they must titer before QE tool becomes entirely useless.
When someone invests he evaluates all the relative risk-benefit alternatives. When governments wade into market they screw up all the proper prices and weightings. In an economy everything is connected to everything else. Screw up bond prices and you screw up debt prices. Your grandma's bond indexed annuity payments go to zero. Then stocks look artificially good. Money flows to artificially priced stocks. The same happens with commodities, property and even the value of paper money itself. Given that we have not only government interference but control only God himself knows the true price of anything these days.
This is why once the great unwind starts I think everybody will get burned as markets reset. We have to give up the idea that governments can control economies any more than botanists can improve a rain forest.
"We have to give up the idea that governments can control economies any more than botanists can improve a rain forest."
This government isn't trying to control the economy -- this government is along for the ride afforded them by those elsewhere.
"we have to fuck up the economy to know what's in it"- nancy pelosi
Always wondered why St. Ronnie was the one to set up the Plunge Protection Team. What ever happened to all that 'free market' stuff and anti-Fed rhetoric when he was campaigning? Does everyone get a 'briefing' when they get close to the reins of power - 'vetted' so to speak before being allowed to run for higher office?
a couple of mean looking mf-ers sit them down in a darkened room and tell them how it's gonna be.
TRIUMPH - Lay It On The Line (OFFICIAL VIDEO)
http://www.youtube.com/watch?v=Pz26fcmq3S8
rik emmett played a mean double-necked ax on that track.
"up with dope and down with hope"- d. chapelle.
Cocaine is a hell of a drug.
Consensus always gets it wrong.
Eventually...but this "don't fight the Fed" stuff has lasted...until maybe right now..??
Just printed CNY Chinese HSBC Services PMI 51.1 54.3 I can't believe that POS indicator is still over 50.
The sad fact is most people are losing their shirts in this market...getting almost zero return from Benanke and then losing their 401(k) money. true, there are a handful of insiders making profits in the market...or groups of investors who hope to make money buying foreclosures and renting them to the sheeples...but the majority of Americans, esp those in the private sector, are sinking lower in quality of life in this manipulated market.
Market forces usually win so the end result could be startling, if not very surprising.
Market forces usually win so the end result could be startling, if not very surprising...............
my concern with your comment is how one defines "market forces"................because right now the forces that control the markets are winning.......................and its not startling nor surprising.....................................
i think he means when it turns it sinks.
If you call corruption winning, I have a cop shop, and a court house that needs shooted up, you know , the 2 birds wit one stone story.
People who have not heard of Self Directed IRAs, need to. You can roll some money over out of 401K (no penalty) and invest in physical gold, foreign property, and most anything else. Be creative, be free, before it's too late.
Can you take posession of that physical gold?
hahahahaa....that was a good one fonz.......................please.......tell us another joke................i need some humor tonight....................
Sure you can! See above. That's what the LLC is for.
You are the manager of the LLC. You place the order; you sign the check, and you take possession of it the second you sign the paper for it from the sweaty UPS guy that shows up with a handtruck full of heavy shit at the address of your choosing. Who loves yah, baby!
The LLC is technically taking possession of it -- the owner of the LLC is still the Trustee. You are the manager directing all investment activity with power of attorney, so the LLC is wherever you are.
Take a trip to Hong Kong to buy PMs? Or, travel check out some rental property in Thailand? Sure.... just don't over do it and fuck it up for everybody else! I'm sure windows are closing. Hard to make out, but my avatar picture is an Elephant from Chang Mai, Thailand. You guys are way too hard on Simon Black, btw!
I believe I've mentioned self-directed IRAs many times at ZH. Nobody listen to Gwar5...... Gwar5 sad.
a +1 to make you happy <3
What's the first law of holes?
If you're in one, STOP DIGGING.
Of course! That's what makes it so sweet, Fonz.
Step one: You choose a Self-Directed IRA Trustee and do a rollover to fund it.
Step two: Have the Trustee help you set up an LLC as your vehicle.
It's a big cottage industry. But online is full of potential trustees, here's one list: http://www.thehardmoneypros.com /self_directed_ira_custodians.shtm
Can do the usual stocks, bonds..... But the real magic is the LLC. The trustee functions as the silent owner of the LLC; You are the manager and do everything you can like a CEO to make money. The LLC start up is funded by your rollover. LLC is usually set up by a Trustee affiliate, they will walk you through it.
Not complicated at all. You generally pay a couple thousand to set it all up, you fill out some forms and they can do everything for you. It's way worth it so you don't screw it up as a non-taxed, qualified LLC with a local checking account.
The IRA service below is very low cost. Yearly fees are based on usage (so only about $100-200). When you call they all sound like a bunch of little old ladies, but they are very knowledgeable and great to talk to! Like getting sound advice from your mother. They talk to newbies all the time.
https://www.iraservices.com/
[Note: Only a few simple rules. You will be told: no buying stupid shit like baseball cards, and no self-dealing. Self dealing is buying your mother's home or your own house to live in (too easy to mark up values to cheat the system, so disallowed). I generally buy foreclosures, then rent or sell; but I own a bug out rental in Central America. Interestingly, I recently saw where there are self-directed IRA meet up groups (eg., California) perhaps people are working in teams to maximize what they can do for each other -- eg., I buy your house, you buy mine? ... and then swap rent at a zero net?]
Rate of diminishing returns after each QE is accelerating like a countdown clock. Didn't QE just double to $85 Billion/mo, 6 months ago? Ben's gonna have to go Japanese and do a monetary Fukishima so he can outprint Abe. That's gonna be one serious pissing contest.
If the FED ever wanted to exit I suppose they could just hold steady here at a mere $1 Trillion/yr and let things collapse? No way, these guys really want to go down in flames bad.
"Moooar power Scotty!"
"I'm already givin her all she's got, Captain, and she canno give any moar! Unless... unless I cross link the Dilithium Crystals with the power from the Photon Torpedoes!"
"Do it Scotty! Now! That's an order! Cross. your. fingers!"
double or nothing.
is it just me, or are all charts relating to the ups and downs of the s&p and dow completely and utterly worthless??????
p/e is meaningless, margins are meaningless......everything is meaningless except for the amount of money being doled out to bens favored sons................here is the most important graphic that matters for the stock market:
here is lloyd, jamie and (name the third bird) all waiting for ben to drop the next worm:
http://fellowshipofminds.files.wordpress.com/2011/07/baby-birds-are-hung...
Worms live undergound, the only way a worm could drop to the ground, is if an early bird were to have dropped him on the way home.
It's Etch-A-Sketch charting!
Let's not forget Dr. Copper's 20% retreat over the last 2 months did not cause a pullback or even a blip in the S&P 500. Copper is up 6% over the last 24 hours, this should fuel a spectacular rally in the S&P before the open. Liesman will be like " the numbers don't lie when they go up, but they are also bullish when they go down".
I'm sure this has been said before here at ZH, but it bears repeating...
Fuck Bernanke
Hope, hope,
Rope a dope,
Buy some stocks,
Down to the docks.
Get in on Maria's plan,
No other for you Stan,
Or Jan, buy buy,
Don't you try...
To buy Gold or silver or land,
Guns and ammo, all in your hand.
Don't trust the FED or your bank,
Go on get out your hank.
Cry for the believers in the dollar,
Give them a warning, at least a holler,
This shit will crash and burn,
Buy tangibles and turn.
Turn away from the lies,
Turn away from the tube,
The markets are flies,
PM's the lube.
http://www.paulcraigroberts.org/2013/05/05/the-financial-press-a-disinformation-machine-paul-craig-roberts/
None of this circus would be happening without Q/E. it's no longer investing, it's gambling now. The debt situation is systemic. Plain and simple, there just too much debt in the global economy. Buy land, food, silver/gold and ammo. This to will end.