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Chartapalooza: Complex Recovery Paths And Will It Ever Be The Same?

Tyler Durden's picture





 

Major central bank activism and some sporadically good economic data in the U.S. have lifted equity markets and also helped the credit markets continue their rally. Central bank policy has been focused on an emergency bailout footing to stave off sudden panic and is also is aimed at stimulating economic activity. This has involved incentivizing households and businesses to expand and take some more risk. But no new policy initiative is perfect – not in implementation nor is it precise in its impact.

Some in the markets and even in the Fed itself worry that the massive and unprecedented easing could be causing its own distortions and perverse side effects. It has clearly triggered a chancy search for yield that may yet lead to new asset bubbles and financial instability. There are numerous examples. One is highlighted on the first page of Abraham Gulkowitz's PunchLine (chart extravaganza) and later on the credit pages. Bank lending to larger corporates has exploded, growing at rates not seen since the boom that was central to the great financial collapse.

Also, Spanish and Italian benchmark borrowing costs are now at their lowest levels since the last quarter of 2010, as these high-yielding peripheral securities have caught the attention of both domestic and international investors. While the liquidity provided by key central banks -- including the move by the Bank of Japan to initiate massive monetary easing -- will likely continue suppressing yields, there is a serious argument to be made that the rallies have moved beyond fundamentals... This increases the likelihood of more surprises, not less...

TPL May 12 13

 


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Wed, 05/15/2013 - 20:08 | Link to Comment Seize Mars
Seize Mars's picture

Sorry, a little OT:

Is it me or did the writing style of the Tylers change abruptly about two weeks ago? Then all that stuff about free speech being punished with banishment? Did somebody just give ZeroHedge a good "talking to?" The Principal's office? Or did this place get sold and repopulated?

Wed, 05/15/2013 - 20:11 | Link to Comment Dr Benway
Dr Benway's picture

Agree with you Seize Mars, this article has a radically different writing style than usual.. Perhaps a guest post that hasn't been labelled, or a new Tyler?

Wed, 05/15/2013 - 20:45 | Link to Comment The Thunder Child
The Thunder Child's picture

There are more then 10 writer Tylers and 3-4 Editor Tylers so articles have different flavours depending on who wrote them. Also the racism and banning page was probably added just to shut up JDL and Hasbara email bombing them. It would have to be pretty nasty and hateful for them to ban someone from commenting.

EDIT: This article does blow though, I could find something like this in the MSM...guess you can't win them all

Wed, 05/15/2013 - 20:26 | Link to Comment ACP
ACP's picture

Yeah, someone else noticed that too yesterday, the same time I noticed those two links about complaints and discrimination. Who knows? Maybe a complaint to the Swiss govt from someone.

If ZH had gotten in front of any significant changes, it might prevent some questions. Being forthright and way out front of background issues prevents other possibilities from being tossed around.

 

Wed, 05/15/2013 - 20:21 | Link to Comment taraxias
taraxias's picture

A lot changed about two weeks ago, not just the writting style.

Wed, 05/15/2013 - 20:26 | Link to Comment Cheeseus Sonofdog
Cheeseus Sonofdog's picture

The advertisements for porn and mail order brides has also stopped. Me thinks some Tylers cashed out their stake and the remaining ones have visions of becoming a mainstream money maker. 

Thu, 05/16/2013 - 12:04 | Link to Comment Livingstrong
Livingstrong's picture

I noticed that too. Too bad Zerohedge has changed. Great coment and analisis, Seize, I agree.

Wed, 05/15/2013 - 20:15 | Link to Comment random shots
random shots's picture

Old Tylers flipping Zero Hedge to New Tylers?

Wed, 05/15/2013 - 22:01 | Link to Comment Raynja
Raynja's picture

that sounds rayciss

Wed, 05/15/2013 - 20:21 | Link to Comment Hedgetard55
Hedgetard55's picture

"there is a serious argument to be made that the rallies have moved beyond fundamentals.."

 

     Really, douchebag? You think? Where the fuck have you been the last 4 years?

Wed, 05/15/2013 - 20:25 | Link to Comment Dr Benway
Dr Benway's picture

Lol.. Yeah.. Wtf?

Wed, 05/15/2013 - 23:33 | Link to Comment Schmuck Raker
Schmuck Raker's picture

That quote is a very good example of what many are calling a "change of tone" here on ZH.

It's a shame.

 

"Some in the markets and even in the Fed itself worry that the massive and unprecedented easing could be causing its own distortions and perverse side effects." - is another example.

There must be a new Tyler.

But what the hell, you get what you pay for.

Thu, 05/16/2013 - 03:00 | Link to Comment e-recep
e-recep's picture

probably the douchebags threatened tyler with a collosal lawsuit and tyler handed them the keys and moved along. oh well, twas nice while it lasted. at least we have the commenters.

Thu, 05/16/2013 - 05:48 | Link to Comment Rodders75
Rodders75's picture

Yeah, but read the bloody paper "Tyler" put up. In a lot of areas life (real estate etc), ain't so bad. Remember the market has been "right" 23 out of 24 times in since 1961. It only got it "wrong" in 1980. 

http://www.sshermanassociates.com/marketnews/MARKET%20REPORTS%202012/MARKET%20REPORTS%2009-28/EOTM.pdf

I'd like to see a serious, reasoned refutation of this paper, without the usual profanities and moronic language that usually appear on this site. Yes, a lot of things stink to high heaven and equity performance is "unjustifiable". But the market has an annoying habit of proving permabears like you wrong time after time. 
Wed, 05/15/2013 - 20:28 | Link to Comment FreedomGuy
FreedomGuy's picture

It's all a political economy worldwide, now. No one person can guess how it will all come out because no one can relibably predict the next government intervention. There is no economic theory to predict what will happen and make any long term bets based on rational free market theories. The one theory that probably will work is that all government interventions end badly at some point.

Wed, 05/15/2013 - 21:05 | Link to Comment kchrisc
kchrisc's picture

Off topic, but did anyone see this gem?

Emanuel to shift retired city workers to Obamacare

Mayor Rahm Emanuel plans to start reducing health insurance coverage next year for more than 30,000 retired city workers and begin shifting them to President Barack Obama’s new federal system.

http://www.chicagotribune.com/news/politics/clout/chi-emanuel-to-shift-r...

I guess a lot of people that never expected to "find out" are going to "find out what is in it." LOL       hujel

Wed, 05/15/2013 - 21:05 | Link to Comment adr
adr's picture

I've sat in product meetings with some big corporations over the last four years. Each year themeetings had less and less to do with product and more about stock performance.

You don't design a product based on the consumer desire anymore. You design a product based on major shareholder desire. It skews everything. Labor is worthless, product quality is the lowest priority. Investor PR runs the show. In fact when just the mention of a product can send a stock up 30% in a few days, who cares what it actually ends up being.

Apple is a prime example. A cheaper iPhone would do wonders for sales and bring more people under the Apple umbrella. But, a cheaper iPhone means less profit per unit, so the stock must tank. Was it really realistic to think Apple could sell a $700 phone to 3/4 of the world's population to justify the stock price?

Investing is bullshit. You are investing money based on lies, fibs, fraud, twisted truths, etc. Nobody really cares as long as the money retured is greater than the money put in. BUT IF THERE IS A LOSS, then the finger pointing begins. What was known to be a lie is now serious and heads must roll.

Sales of a product are booked before the thing is even produced. I've sat there with a VP who stated that the product has been booked for 600k units, so wholesale channels to unload inventory need to be found in case the sales don't live up to expectations.

Everything is based on quarterly results. Thanks to mark to myth, earnings are essentially free to be any number they wish. The only goal is to be believeable enough that the big shareholders don't think something is fishy. Forward booking sales of $300 million of inventory in Q1 is fine, even if $250 million of it never sells. Gives you a nice loss to offset taxes in Q4. Nobody calls any corporation out for fraud.

The entire public corporate environment is screwed up beyond belief. There is no such thing as recognizable business anymore. If you dropped a CEO from the 1950s into a corporation today, he'd jump out the nearest window in 15 seconds.

My job is to design and sell product I believe a consumer would wish to buy. Instead I get told that is not what the CEO is looking for. He wants to know how I believe the product will increase the stock. I say, well if the consumer likes the product, sales will increase and that will be good for the stock. In reply I get, "No, tell me what I can use now."

I really don't get that question. I truly believe I was meant to have lived in 1952.

Wed, 05/15/2013 - 22:00 | Link to Comment bugs_
bugs_'s picture

El-Chartacabre!!

Wed, 05/15/2013 - 22:50 | Link to Comment JR
JR's picture

“While the liquidity provided by key central banks -- including the move by the Bank of Japan to initiate massive monetary easing -- will likely continue suppressing yields…” -- Abraham Gulkowitz

The bankers are cleaning up, wiping up whatever isn’t nailed down; they are sweeping the world and putting it in their pockets. And they are doing it with impunity.

It is becoming increasingly difficult to listen to forecasts from the people who are taking the money, who are stealing it. And it makes one wonder when they provide their insight, i.e., that they are going to continue to confiscate savers’ and depositors’ income and wave the money that they’ve taken in our faces, if they are forecasting in order to flaunt their power and/or to demonstrate that the international bankers who own the Fed are in charge not only of the nation’s finances, including the arbitrary destruction of a man's purchasing power, but of the nation’s government

It is beyond sad that we are subjected over and over to this banker propaganda and mockery (and make no mistake, Abraham Gulkowitz is an investment banker) and not one whisper of interference from our so-called Congressional representatives.

Thu, 05/16/2013 - 07:16 | Link to Comment OpTwoMistic
OpTwoMistic's picture

1. Where is your income unless you sell, when?

2. All this pumping does not create jobs

3. No jobs, no taxes

4. FAIL

There is no way out.  It is a wealth transfer and not to you.

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