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No Volume, No Problem

Tyler Durden's picture





 

Presented with no comment...

 

(h/t @Not_Jim_Cramer)

 


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Sat, 05/11/2013 - 14:43 | Link to Comment HoofHearted
HoofHearted's picture

It's free, swipe your HFT.

Sat, 05/11/2013 - 14:58 | Link to Comment AlaricBalth
AlaricBalth's picture

No Volume, No Problem
Where have I heard that before?
Thanks Viagra!!!
;-(

Sat, 05/11/2013 - 15:15 | Link to Comment cifo
cifo's picture

No Value, no problem.

Sat, 05/11/2013 - 16:22 | Link to Comment negative rates
negative rates's picture

Your up and your down, your in and your out, we fight we break up, we kiss we make up.

Sat, 05/11/2013 - 16:39 | Link to Comment AldousHuxley
AldousHuxley's picture

when correlation amongst equities is high, just put your money in low cost ETF and let Fed do their magic.

Sun, 05/12/2013 - 00:49 | Link to Comment s2man
s2man's picture

Why didn't you tell me that in 2009?

Sat, 05/11/2013 - 14:44 | Link to Comment Yen Cross
Yen Cross's picture

   Parabolic $ no problem. I can just see the Q-2 earnings estimates blamed on a stronger currency. BTFD

Sat, 05/11/2013 - 14:45 | Link to Comment polo007
polo007's picture

According to Bank of America Merrill Lynch:

http://fs1.hidemyass.com/download/h8Cqx/1s3nkvl62fipb7krsefh0bajr1

Easy Fed policy: too much of a good thing

The costs of easy Fed policy

Fed policy is aimed at stimulating economic activity, which involves incentivizing households, businesses and investors to take more risk. Investors have obliged, resulting in low rates, tight credit and mortgage spreads, and new all-time highs for major stock indices. But some worry the Fed is causing a dangerous search for yield that could lead to new asset bubbles and financial instability. Our assessment is that Fed policy has not led to an increase in systemic risk.

Risk-taking is good; systemic risk is bad

This piece provides a guide for monitoring financial stability and the linkages between asset markets, financial institutions and the real economy. We believe the ultimate question is whether the Fed’s policies have increased systemic risk.

This depends on the following, which we address in the note:

- Do market valuations appear overstretched and are there signs of asset
bubbles forming?

- Is there an increase in leverage in the market or an overreliance on short term funding? Would systemically important institutions be at risk of failure?

- How are the beneficiaries of easy credit using the proceeds? Are they using debt to fund risky investments, buy homes they can't afford or go on a consumption spree? Or is issuance going toward improving their balance sheets and lowering their vulnerably to the eventual rise in interest rates?

Risk transfer underway, but systemic concerns muted

We argue that Fed policies have encouraged a transfer of risk from borrowers (indebted households and corporations) to creditors (investors) who are willing to accept lower risk premiums. Increased real money participation in credit markets mitigates the systemic implications of this risk transfer. Corporate and household balance sheets are healthier, thanks in part to easy Fed policy, but signs of increased appetite for leverage in the corporate sector bear close monitoring.

Fed to stay the course

Our survey of financial conditions and systemic risk supports our base case that the Fed will maintain its asset purchase program at the current pace of $85bn/month through March 2014, followed by a 6-8 month tapering period.

QE will limit the upside in yields

The potential for a sizable rise in yields will be limited if the Fed maintains QE well into next year as we expect. We forecast a gradual rise in 10y rates by year-end.

Sat, 05/11/2013 - 14:52 | Link to Comment thecoloredsky
thecoloredsky's picture

Reminds me of this beer I'm drinking. Really low ABV (alcohol by volume) enough of it will get me drunk though. This market is like miller 64. Ah Fuck it. Let's get drunk.

Sat, 05/11/2013 - 15:10 | Link to Comment WmMcK
WmMcK's picture

I prefer "GatorBlades".  Gatorade and Everclear (real high APV).

Sip it until drunk, then "fine tune" as needed. YMMV.

Sat, 05/11/2013 - 14:54 | Link to Comment uno
uno's picture

Thank you Zerohedge for constantly exposing the fall of the empire in real time.

Sat, 05/11/2013 - 15:25 | Link to Comment The Heart
The Heart's picture

When crime like this runs rampant in a society, it is not long before it falls under the sheer weight of the overwhelming corruption and crimes.

"Today Mark Mardell, the BBC’s North American editor, issued an apology for continuing to believe Obama’s lies and went on to state heads will roll."

Yeah, right. Heads will roll. There is no such thing as real justice or oversight of the out of control criminality and corruption in the systems of babylonian govt. What happened to America is a question there will be plenty of answers for in a thousand years. Right now, no one even cares.

http://beforeitsnews.com/scandals/2013/05/bbc-heads-will-roll-white-hous...

Sat, 05/11/2013 - 14:56 | Link to Comment francis_sawyer
francis_sawyer's picture

BTFD [with printed money]... Otherwise, you're 'rayciss' & 'anti-semitic'...

Sat, 05/11/2013 - 14:57 | Link to Comment Yen Cross
Yen Cross's picture

   That was a good post. +1

Sat, 05/11/2013 - 15:27 | Link to Comment francis_sawyer
francis_sawyer's picture

If any of you... homos... touch me... I'll kiss you...

~ francis_sawyer

Sat, 05/11/2013 - 15:53 | Link to Comment Dadburnitpa
Dadburnitpa's picture

Lighten up Francis.

Sat, 05/11/2013 - 16:35 | Link to Comment francis_sawyer
francis_sawyer's picture

I'm JOE BIDEN & I approve of this message...

Sun, 05/12/2013 - 09:39 | Link to Comment Pooper Popper
Pooper Popper's picture
What about homosexuality, Tony? You like men? You like to dress up like a woman? What is wrong with this guy? He kidding me or what? Just answer the questions, Tony. Okay. No. Fuck, no!
Sat, 05/11/2013 - 14:57 | Link to Comment AynRandFan
AynRandFan's picture

Still amazes me that the Fed was able to monetize so much debt that it completely took over stock and bond markets.  I never would have believed it before, and most of us still have trouble believing it now.

Sat, 05/11/2013 - 16:07 | Link to Comment Precious
Precious's picture

Welcome to the USSA.

Sat, 05/11/2013 - 16:11 | Link to Comment donsluck
donsluck's picture

While dying, most people cannot believe it.

Sat, 05/11/2013 - 16:44 | Link to Comment freewolf7
freewolf7's picture

...until they do.
Steve Jobs: Oh wow.

Sat, 05/11/2013 - 18:18 | Link to Comment Precious
Precious's picture

"Oh wow."  That's what a Buddhist says when he sees Jesus.

Sat, 05/11/2013 - 18:37 | Link to Comment espirit
espirit's picture

Taoism: Shit happens.

Buddhism: If shit happens, it isn't really shit.

Zen Buddhism: Shit is, and is not.

Hinduism: This shit has happened before.

Islam: If shit happens, it is the will of Allah.

Catholicism: If shit happens, you deserve it.

Rastafarianism: Let's smoke this shit!

Bernankeism:  Let’s print MOAR shit!

Sat, 05/11/2013 - 19:06 | Link to Comment nmewn
nmewn's picture

Now thats some good shit!

Sat, 05/11/2013 - 19:15 | Link to Comment The Swedish Chef
The Swedish Chef's picture

Cronyism: When the shit hits the fan, the muppets will clean it up. And we will have thrown it. 

 

Sat, 05/11/2013 - 20:11 | Link to Comment KickIce
KickIce's picture

Or the muppets will drown in it.

Sat, 05/11/2013 - 20:02 | Link to Comment KickIce
KickIce's picture

No gold standard + dumbed down population + corrupt politicians = bankers gone wild

Sat, 05/11/2013 - 14:58 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Oh well, you can't book a profit without selling.  to be outlawed in 3...2...1...

Sat, 05/11/2013 - 15:00 | Link to Comment Yen Cross
Yen Cross's picture

     What do you call a room full of Greeks and Cypriots?

Sat, 05/11/2013 - 15:03 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Bagholders who should have sold when they had the chance.

Sat, 05/11/2013 - 19:16 | Link to Comment The Swedish Chef
The Swedish Chef's picture

"What do you call a room full of Greeks and Cypriots?"

 

A war with Turkey waiting to happen.

Sun, 05/12/2013 - 14:20 | Link to Comment NoClueSneaker
NoClueSneaker's picture

Threesome ... whereby  Greeks DP ed ...

Sat, 05/11/2013 - 15:06 | Link to Comment ekm
ekm's picture

Imagine a neighborhood with 10 houses and the Fed owns 9. What is the price & volume of the housing market in that neighborhood?

Sat, 05/11/2013 - 15:20 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Whatever the Fed wants it to be.  Now actually taking possession of a home might be another story altogether.  The latter would depend on the neighborhood.  Anyone else see the whole problem with "mark to fantasy" accounting?

Sat, 05/11/2013 - 16:25 | Link to Comment negative rates
negative rates's picture

Only if green shoots are involved.

Sat, 05/11/2013 - 16:55 | Link to Comment Village Smithy
Village Smithy's picture

I think EKMs' point is that when such large quantities of stocks are already owned by the Fed and the PDs, if they simply do not sell then the stocks won't start to freefall. It costs them relatively little to buy up the little bit of stock that is being sold (the tenth house) and thus keep up the illusion that things are well bid. They have repeatedly proven their ability to not only kill short sellers but actually cause the market to rise by very carefully (read algorithmically) squeezing them out. IMO that is Bernanke's "exit strategy" . The Fed and the PDs are sitting on billions of unbooked profits. Bernanke has promised the dealers (who most certainly must have gone to him months ago and demanded WTF he had in mind for exiting) that if they sat tight and didn't panic sell, he would make sure that over the rest of his term he would allow them (using taxpayer money) to book these profits. If we don't see a big sell-off this week I will be even more conviced of this. If the market was widely owned (as it should be if it were actually operating freely) every investor with any knowledge should be realising this weekend that the pump job is ending, and then racing for the exit on Monday. But they won't cause it aint.  This should be the proverbial "everyone to the other side of the boat" moment but I will be shocked if by Friday we aren't green on the week. This was not a monetary policy experiment it was a market manipulation experiment. If we are lucky at best it will have only cost our country $ billions in future debt and done nothing to create jobs. If Bernanke can't control his exit strategy who knows what will ensue.

Sat, 05/11/2013 - 19:58 | Link to Comment ekm
ekm's picture

The collapse will start when Primary dealers are scheduled to do swap losses payouts.

 

Also, since there's no one else to buy those stocks from PDs, they will be unloading most of those securities to one or two PDs, wrap a rope around them and throw them into the ocean.

 

NOBODY IS INTERESTED IN LEVITATION. NOBODY MAKES MONEY FROM LEVITATION.

 

That's what happened with Bear Stearns, with Lehman, with MF Global.

Sat, 05/11/2013 - 23:29 | Link to Comment Zigs
Zigs's picture

And, our politicals fiddle while Rome burns.

Sat, 05/11/2013 - 23:29 | Link to Comment Zigs
Zigs's picture

And, our politicals fiddle while Rome burns.

Sat, 05/11/2013 - 19:17 | Link to Comment The Swedish Chef
The Swedish Chef's picture

"Imagine a neighborhood with 10 houses and the Fed owns 9. What is the price & volume of the housing market in that neighborhood?"

 

Zero, of course. Who the fuck would want to live in that neighborhood?!?

Sat, 05/11/2013 - 20:10 | Link to Comment KickIce
KickIce's picture

Might as well kiss private property ownership good bye, they'll rent to you as long as you play their game.

As far as theone remaining owner, if they can't get it from him/her, they'll get from the children or grandchildren.

Sat, 05/11/2013 - 20:32 | Link to Comment ekm
ekm's picture

I was using the comparison as a way to show that the Fed + primary dealers own most of stocks if not all and of course a huge chunk of bonds.

 

However, the basic line is correct. This is what QE is:

 

QE is government ownership of means of production (we used to call it communism).

In reality the Fed/Gov own 9 out 10 houses in USA and yes it means to kiss bye bye to private ownership ...if it continues.

Sat, 05/11/2013 - 22:11 | Link to Comment KickIce
KickIce's picture

And if you add the properties listed on central bank's financials, the situation becomes even more dire.

Sat, 05/11/2013 - 15:29 | Link to Comment electricgorilla
electricgorilla's picture

Sat, 05/11/2013 - 15:42 | Link to Comment Motorhead
Motorhead's picture

Come on, stock market bubble makers, get on the stick!  The gum'ment needs the capital gains to fill the tax coffers.

Sat, 05/11/2013 - 16:08 | Link to Comment Yen Cross
Yen Cross's picture

  Who needs volume, when you have a closed loop? I hope you guys like this song.

  Oingo Boingo Dead Man's Party - YouTube

Sat, 05/11/2013 - 16:40 | Link to Comment Tulpa
Tulpa's picture

Maybe I'm just stupid or something, but I don't understand what the difference between "Volume > 1 Year Avg" and "Volume < 1 Year Avg" is.  This is one of those times when I wish the chart were presented WITH comment.

Sat, 05/11/2013 - 18:41 | Link to Comment One World Mafia
One World Mafia's picture

Volume > (greater than) 1 year avg. Volume < (less than) 1 year avg Compare the magnitudes (y-axis) to see that low volume predominates as time advances. Low vol is past the 2800 mark today. When the graph begins in 2010 they are the same magnitude.

Sat, 05/11/2013 - 18:54 | Link to Comment Socialized Losses
Socialized Losses's picture

@Tulpa Don't worry about this chart.  I suspect it has been assembled by some "goal seek" trained statistician aka an economist.  It's designed to make you see something that "may or may not" be there. To use an economist phrase. In the end the caption should read "this chart presented without comment and without relevance".

Regardless, the authors et al of ZH do a bang up job & I appreciate all their efforts and dedication. I'd nominate em' all for a Nobel Prize in Free Speech but that would just be a slap in the face to them.

Sat, 05/11/2013 - 19:20 | Link to Comment The Swedish Chef
The Swedish Chef's picture

"Maybe I'm just stupid or something, but I don't understand what the difference between "Volume > 1 Year Avg" and "Volume < 1 Year Avg" is.  This is one of those times when I wish the chart were presented WITH comment."

 

What did that IRS guy say about targetin conservatives the other day? "I´m just a laywer, I don´t know about math?" 

 

In sixth grade or around that time they taught you about <, >, ? and ?. 

Sat, 05/11/2013 - 16:44 | Link to Comment q99x2
q99x2's picture

The guy that owns all the corporations and the Federal Government doesn't have to trade much. That's all that means.

Dude's got a tail and a big head and runs in the tunnels beneath the FED, Brown Brothers, JP Morgue and Wells Fargo.

Sat, 05/11/2013 - 16:47 | Link to Comment freewolf7
freewolf7's picture

He could probably afford a nicer place.

Sat, 05/11/2013 - 18:56 | Link to Comment buzzsaw99
buzzsaw99's picture

well done boyz, take another bonus out of petty cash

Sat, 05/11/2013 - 19:52 | Link to Comment W T F II
W T F II's picture

After things keep deteriorating, they'll get very bad and then get much worse.

Sun, 05/12/2013 - 01:08 | Link to Comment polo007
polo007's picture

According to Deutsche Bank:

The lack of confidence in final demand that seems to justify corporate reticence has a mirror image in the financial sector’s liquidity trap – the fact that corporates prefer to save and not to leverage and invest. And it seems reasonable to justify the lack of confidence in the context of ongoing and unresolved fiscal tightening; household savings rates that are “naturally” capped not to go to zero or below this time; and a global sector that seems decidedly weaker. In other words, of all the Keynesian circular flow of income external drivers there are none doing any driving except corporate investment. But the Catch 22 is that corporate investment itself is restrained by the fear for the lack of the other drivers! The answer might be waiting for a pick up in the external sector; it might be seeing through the fiscal austerity and or at least suspending or reversing some of it; or it might be further improvement in the household balance sheets via housing. However all of these likely need time.

In this context we can then handicap central bank reaction functions. While we wait for something to give positively in favor of a stronger recovery, policy stays unusually easy. This then creates the dichotomy of buying more time in the near term through easier policy to deliver a proper recovery whilst potentially running the risk longer term of too much inflation the other side. The pent up monetary stimulus that exaggerates a liquidity trap now becomes a challenge to control on the other side. This schizophrenia has been played out numerous times since 2008. And it defines the unusual dislocation between ultra low real yields and high inflation expectations (inflation risk premia) that is also known as financial repression. Financial repression being one of the metrics that is supposed to encourage more risky lending and to break the liquidity trap.

The consensus of course is that after a certain amount of financial repression, the world will sufficiently improve and central banks have the tools to contain inflation so that the bulk of financial repression is contained to ultra low real yields rather than ultra high (realized) inflation. In this spirit Bernanke and now Kuroda are extremely confident. However we would actually go one stage forward. In the current low growth equilibrium there is a good chance that there is jolt to higher growth because the fiscal dynamics can never be resolved. This is particularly true for peripheral Europe and Japan; less true for the US but then partly depends on the willingness to address structural contingent liabilities. Absent that, the US might well be in the same boat as the others. In this case, the only solution is for the central banks to end up holding the majority of government claims and to consolidate their balance sheets with the government. In one fell swoop, cumulated deficits that may stretch back several years are ex post deficit financed. This would almost certainly break the liquidity trap in that it would represent a massive relief to expected fiscal tightening for the private sector. The central banks would quickly need to use their “tools” to contain a splurge in lending and control inflation. Ex post however there is no reason why inflation would materially rise, as long as liquidity was tightened commensurately with the debt relief implied by consolidated balance sheets of the central banks and the government. Moreover if G3+ acted synchronously, at least for the currency majors there may be little fall out.

So the interesting question is why not? Is there any cost of consolidation when we are otherwise in an eternal liquidity trap? The answer is, unfortunately yes. This would have to be a one shot game. Going forward governments’ would unlikely be able to borrow from the private sector for a long long time precisely because it threatened financial repression, even if only in the kind of negative real rates ex ante rather than even more negative ex post. Instead, government would be obliged to run balanced budgets. These authors don’t think this is necessarily a bad outcome. However it does mean that if and when consolidation comes, as much as possible needs to be consolidated otherwise fiscal policy would be on a perpetual tightening path to run the extant liabilities down. If you are going to consolidate, do it big because you are likely to have only one chance. It may seem extraordinary to think about consolidated balance sheets but there are plenty of examples in history, particularly during wars, of deficit financing. And however outlandish and non consensus it is, remember that a few years ago we talked about QE never ending, which at the time was also outlandish. Consolidation sounds an anathema to consensus but it is a logical conclusion to the liquidity trap and the probability rises each day that growth disappoints.

Sun, 05/12/2013 - 02:25 | Link to Comment orangegeek
orangegeek's picture

Let's see if the "melt up" continues:

 

http://bullandbearmash.com/chart/sp500-daily-closes-above-bull-channel-a...

 

Nothing but bull since last November - markets are so clearly detached from reality.

Sun, 05/12/2013 - 07:03 | Link to Comment 100pcDredge
100pcDredge's picture

No economy, no es problemo.

Do NOT follow this link or you will be banned from the site!