Biderman Bashes Buffett's Biased Bearish Bond Banalities

Tyler Durden's picture


The mainstream media was cock-a-hoop to use Warren Buffett's recent diatribe against being a bond buyer (because prices are artificially high due to the Fed creating phony money and at some point the Fed will stop) as more evidence that stocks are the only game in town. TrimTabs' CEO Charles Biderman questions Buffett's seemingly disingenuous one-sided perspective - "stocks are just as vulnerable as bonds to the Fed withdrawing the narcotic known as free money, why does Mr. Buffett say stock prices are reasonable? To me, logic says stocks are just as overpriced as bonds." Biderman's point is that one cannot look at one market without implications for the other, and as we have noted numerous times, the only thing that matters is the flow (not the stock) of the balance sheet expansion. The Fed is buying up the entire US Government deficit and then some, Biderman explains, "that means there is lots of extra cash floating around the financial markets bidding up the prices of not just bonds but stocks as well;" so while we agree with Mr. Buffet that at some point bond prices have to drop significantly, so do stocks.


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Wed, 05/08/2013 - 20:52 | 3543195 slaughterer
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100% short

200 ES points





Wed, 05/08/2013 - 23:21 | 3543535 MythicalFish
MythicalFish's picture

slaughterer went short "400%" some 50 ES points lower (or paper traded on ZH) - same result?

Thu, 05/09/2013 - 01:16 | 3543695 Solon the Destroyer
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I think Buffet and the article are wrong from the point of view of bonds...  I don't think there's any chance of bond prices dropping. Equities, absolutely, USTs n Bs, no chancey.

There is an ongoing flight to safety to the USD right now that will turn into a deluge when shit really starts hitting the fan in Europe, Japan, UK, Australia, Canada.  That's part of the reason why the Fed is printing... in the misguided belief that artificially keeping the exchange rates lower will stimulate Exports and thus the economy, not being smart enough to realize that the rising cost of inputs destroys far more economic activity than is stimulated.

While this flight to safety continues, while the Fed continues to provide an eternal bid in the secondary market, while bondholders continue to front run and use USBs for capital gains rather than coupons...

Ain't no way the bond market will drop.  Equities have no such guarantee.

That's not to say the day ain't coming for US gov't paper, just that it will be the last fiat up against the wall when the firing squads come.  Equities and industrial commodities will be long crushed by then.  Probably more than once.


Wed, 05/08/2013 - 20:52 | 3543197 zorba THE GREEK
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Biderman is like the uncle your family won't talk about, but you like him anyway.

Wed, 05/08/2013 - 20:53 | 3543200 Kirk2NCC1701
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We Wish We Were Wealthy Winners, but... Algos Anonymize All Assets, Till They Tank.  Thanks!

Wed, 05/08/2013 - 20:57 | 3543217 StarTedStackin'
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Wed, 05/08/2013 - 21:28 | 3543297 zorba THE GREEK
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Ted... I am drinkin Mt Gay rum and diet Gingerale and loving it.

Thu, 05/09/2013 - 04:51 | 3543807 StychoKiller
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Methinks it's Saurian Brandy.

Wed, 05/08/2013 - 20:57 | 3543214 StarTedStackin'
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Nick Nostril aN the Nine Nasty Nosepickers.....Now Nightly.......Never!

Wed, 05/08/2013 - 20:58 | 3543221 Lost Wages
Lost Wages's picture

I listened to Biderman once in 2012 and regretted the investment decisions I made.

Wed, 05/08/2013 - 21:26 | 3543287 Cabreado
Cabreado's picture

Biderman didn't invent the chaos, and is doing the best he can in the midst of it.

He deserves praise for calling out the lies.

Wed, 05/08/2013 - 20:58 | 3543222 algol_dog
algol_dog's picture

Love how everybody says this can't go on, yet at the same time they say it won't end anytime soon. Sounds pretty bullish to me ...

Wed, 05/08/2013 - 21:06 | 3543237 LiberalConstitu...
LiberalConstitutionalist's picture

Bernanke's betting boyish bullish bozos buy buy Bitcoins, not bullion.

Wed, 05/08/2013 - 21:11 | 3543245 StarTedStackin'
StarTedStackin''s picture

burnt bitches buy bitcoins but bullion becomes better bidness

Wed, 05/08/2013 - 21:44 | 3543314 ebworthen
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Benny buries Bitcoins in brutal barbacidal butchery of "barbaric" but beautiful barriers to banana republic Benny buck bubbles.

Next - the D.O.J. will crack down on any Sally's selling seashells by the seashore (anyone besides Jon Corzine).

Wed, 05/08/2013 - 22:02 | 3543369 lickspitler
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Stackers still smarting since silver slapped senseless , safer saving on servers..........BITCHEZ

Wed, 05/08/2013 - 21:07 | 3543241 Bay of Pigs
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You would think this guy had been totally wiped out by now.

Seriously...I don't remember any of his calls working out in the last year or two.

Wed, 05/08/2013 - 21:20 | 3543244 ToNYC
ToNYC's picture

Same as it ever was. An adult in 1929 was born in 1908. There are no commentators alive today  and providing perspective at age 105.

In 1929, leverage in stocks was 10:1. Stocks (Equity hopes and dreams) could be bought  on 10% margin and bucket shops were the flash crashes of the day. The game never changes. In 2013, ZIRP is the mathematical equivalent or trigger of 1929 'leverage' as if a fractional denominator: the functional equivalent of 10% margin on the price of real money outside the faking FED reservation. Bernanke's version of Celestial Mechanics as it were. Don't do it, 'till the fools puke their hopeass, bloody guts out like they always do.

Wed, 05/08/2013 - 21:10 | 3543247 Cheesy Bastard
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Bastard bought bullets, beans, bandaids, blah, blah, blah before bureaucratic bankruptcy began.  Bitchez.

Wed, 05/08/2013 - 21:38 | 3543299 ebworthen
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You mean Buffet not Biderman, right? 

Buffet bought some ketchup too - to slather on Becky Quick's pert little titties when she grovels at his feet.

"Oracle of Omaha" my ass, feed him to the Hyenas from Mutual of Omaha's Wild Kingdom.

Wed, 05/08/2013 - 22:02 | 3543347 Cheesy Bastard
Cheesy Bastard's picture

Bastard is me,  Cheesy Bastard.  But I see your point.  Warren is clearly a member of the bastard family.

"I'll wait here in the jeep while Jim feeds Warren to the hyenas" (Marlin Perkins)

Wed, 05/08/2013 - 22:41 | 3543440 booboo
booboo's picture

+1 for remembering marlin Perkins, of course the American Sportsman hosted by Curt Gowdy was a personal favorite. A young man could watch Dick Butkis shoot ducks too. Things have changed a bit since the pc crowd fucked up the planet.


Wed, 05/08/2013 - 22:54 | 3543471 Freddie
Freddie's picture

"Oracle of Omaha" my ass, feed him to the Hyenas from Mutual of Omaha's Wild Kingdom."

LOL! I might go back to watching TV for that shit.

F TV, Hollywood and Buffet!

Wed, 05/08/2013 - 21:25 | 3543281 villainvomit
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Stawks are reasonably priced !  Buy stawks !


Buffett is an ass....donkey butt mofo.  The End,

Wed, 05/08/2013 - 21:28 | 3543293 ebworthen
ebworthen's picture

Biderman is using logic and common sense - this is forbidden in the inner domes of Washington and Wall Street!

Buffet is an asshole - the kind of guy you want to bitch-slap for being a self-serving tool.

C'mon Ben Bernanke, the recovery is here, take away the QE grain alcohol spiked punch bowl and put rates at 4% - I dare you.

Wed, 05/08/2013 - 21:38 | 3543308 Dr. Engali
Dr. Engali's picture

Stocks are over priced and are going to go down but not anytime soon maybe I don't think by next year maybe a few months this could go on for a while but they will go down pretty soon. Sounds like Biderman has been hitting the sauce.

He's right... Everything is over priced, but he was way to early. I wonder if he covered his short.

Wed, 05/08/2013 - 21:35 | 3543311 MrBoompi
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Stocks were overbought a year ago too. Instead of telling us something we all know, tell us when the correction will come.

Wed, 05/08/2013 - 21:37 | 3543317 Dr. Engali
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That's the 16.5 trillion dollar question now isn't it? If you find out let me know.

Wed, 05/08/2013 - 21:49 | 3543341 fonzannoon
fonzannoon's picture

They are just holding this thing together until the election. Then it all comes crashing down.

 - Fonzanoon fall 2012

Wed, 05/08/2013 - 21:36 | 3543315 Hedgetard55
Hedgetard55's picture

Damn, Biderman looks like he had a full bottle of Oban the previous night.

Wed, 05/08/2013 - 23:07 | 3543505 azzhatter
azzhatter's picture

He is not a handsome guy

Thu, 05/09/2013 - 01:00 | 3543684 Taffy Lewis
Taffy Lewis's picture

I love Uncle Charlie. He makes me laugh and it's a laugh with him and not at him.

Wed, 05/08/2013 - 21:45 | 3543330 I am a Man I am...
I am a Man I am Forty's picture

bonds have a ceiling and stocks don't

Wed, 05/08/2013 - 22:42 | 3543442 Notarocketscientist
Notarocketscientist's picture

Is he addicated to Xanax?

Wed, 05/08/2013 - 22:58 | 3543480 Freddie
Freddie's picture

He is all jacked up on Hopium.

Wed, 05/08/2013 - 23:03 | 3543494 azzhatter
azzhatter's picture

Fuck you buffett, bernanke, obama, rubio, boehner, reid

oh never mind, its a long list

Wed, 05/08/2013 - 23:22 | 3543538 Occasional
Occasional's picture

Great comment thread
Laughed my ass off
Thx ZHers

Thu, 05/09/2013 - 07:56 | 3543920 Rodders75
Rodders75's picture

Sorry to piss on the permabear campfire, but PMIs and economic are never a good guide to what the equity market will do next.

See this study by the Morgue plotting 2 year subsequent perf vs PMIs.

Equity markets got it "right" 23/24 times since 1961, the only failure being in 1980.

According to all you chumps this time is different of course  

But I'm committing heresy saying such things on a site like this.

The one thing that could, however, get in the way of this rose-tinted version of the world and prove you lot right is the bloody nutters slugging it out in the Middle East.

Let slip the dogs of war!

Thu, 05/09/2013 - 08:41 | 3544036 Downtoolong
Downtoolong's picture

Buffett says don’t worry about a 20% correction. If it happens, just ride it out, because, the market always comes back eventually.

Well, that’s easy for someone like him to say. He could go through an 80% correction in stocks and still have more money than he needs to live his life. Becky too. They’re talking about strategies that work for rich people like themselves. Unfortunately, the same strategy doesn’t work so well for most people who rely on their investments to eat when they retire, lose their job, or end up grossly underemployed. These are the Muppets who get forced to sell at a loss to guys like Buffett in a correction as he smiles and says thank you, better luck next time. The scary thing is, these people are out there in the market now and there are more of them gathering every day. They can’t see through the haze of their euphoric gains to the simple fact that the market will suffer a significant correction at some point, and the primary reason is simply because they are already in it. And, don't think for a second that Buffett and Becky don't already know this. I believe it was Buffett who publically stated years ago that, "95% of all people in the stock market shouldn't be there." I guess he's not as honest as he used to be.

Thu, 05/09/2013 - 08:53 | 3544080 Rodders75
Rodders75's picture

Erm. Who's Becky?

Thu, 05/09/2013 - 09:45 | 3544273 Mi Naem
Mi Naem's picture

With the alliterative title I expected to see Biderman put his forefinger vertically against his lips and vigorously push up and down - bbuhbbuhbbuhbbuhbbuhbbuhbbuhbbuhbbuhbbuhbbuhbbuhbb.  


Oh, wait - he did!

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