The 34 Words That May Have Caused Today's Crash In Stocks

Tyler Durden's picture




 

There is much consternation about what triggered today's rapid escalation of selling pressure in US stocks. As the evening wends on and traders sip their Absinthe, it appears an embargoed record of the Fed's Advisory Panel minutes was at least a major concern as it raised the very real specter that those in charge are concerned at the monster they have created:

"There is also concern about the possibility of a breakout of inflation, although current inflation risk is not considered unmanageable, and of an unsustainable bubble in equity and fixed-income markets given current prices."

"Unsustainable bubble"? And this not from some fringe blog but... bankers?

And some bonus words, which have to be read to be believed:

Uncertainty exists about how markets will reestablish normal valuations when the Fed withdraws from the market. It will likely be difficult to unwind policy accommodation, and the end of monetary easing may be painful for consumers and businesses. Given the Fed’s balance sheet increase of approximately $2.5 trillion since 2008, the Fed may now be perceived as integral to the housing finance system.

Uhm... wow.

Full minutes below:

 

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Fri, 05/31/2013 - 18:37 | 3615409 max2205
max2205's picture

Wack jobs!

Fri, 05/31/2013 - 18:41 | 3615420 HulkHogan
HulkHogan's picture

Fringe Lunatics!

Fri, 05/31/2013 - 18:44 | 3615432 Stoploss
Stoploss's picture

Holy shit.  Did we finally get through?

Fri, 05/31/2013 - 19:06 | 3615494 Cult_of_Reason
Cult_of_Reason's picture

Holy shit indeed!

This is equivalent to Greenspan's "irrational exuberance" comments.

"Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"

http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm

Fri, 05/31/2013 - 19:17 | 3615533 Jumbotron
Jumbotron's picture

"Holy shit indeed!

This is equivalent to Greenspan's "irrational exuberance" comments."

Yeah...but that was in 1996.....a full 5 years before the Tech Crash and 12 years before the Housing Crash.

I think the Elites will try to extend this freak show until @2020.  Then all bets are off as Peak Oil, Peak Social Security, Peak Medicaid, Peak Medicare, Peak Obamacare, Peak Debt, and Peak Inflation are all for all to see, brazen and clear.

 

Fri, 05/31/2013 - 19:20 | 3615541 King_of_simpletons
King_of_simpletons's picture

Didn't you hear... there is a fart, sorry exfart, coming out everyday and trying to convince mom and pop that the stock market is not in a bubble.

It isn't a bubble until it has burst.

Fri, 05/31/2013 - 20:16 | 3615564 Pinto Currency
Pinto Currency's picture

 

The break-out of inflation started in 1913.

 

p.s. what they really fear is a break-out in gold, so they jaw-bone.  First the 'tapering' talk, now this.  Talk is cheap - cheaper than even fiat money.

Fri, 05/31/2013 - 20:30 | 3615740 Meat Hammer
Meat Hammer's picture

More evidence that they're hanging on by a thread

http://finance.yahoo.com/news/digital-currency-firms-rush-adopt-204551963.html

Fri, 05/31/2013 - 20:33 | 3615743 nope-1004
nope-1004's picture

Maybe Bernocchio reads ZH.  F U Bernocchio!!!!

There is no stock market.  It's now become the Talk Market.  Ineffectual bankers!

 

Fri, 05/31/2013 - 20:40 | 3615757 Chupacabra-322
Chupacabra-322's picture

Weimar anyone?

Fri, 05/31/2013 - 22:46 | 3615984 lewy14
lewy14's picture

We are all Tylerians now.

Sat, 06/01/2013 - 00:36 | 3616117 Pinto Currency
Pinto Currency's picture

 

After this, we will all be Tyroleans.

Sat, 06/01/2013 - 00:40 | 3616122 Crisismode
Crisismode's picture

 

 

And now, the end is near

And as we face the final curtain,

My Friends, I'll make it clear

about our fate, of which I'm certain,

To think, we've Screwed Ourselves

and now, along the by way,

Oh no, much more than this,

we did it our way.

Sat, 06/01/2013 - 00:44 | 3616127 markmotive
markmotive's picture

Conclusion: The Fed will never withdraw.

Combine that with the controversy surrounding Rogoff and Reinhart's research on austerity and the pump isn't going anywhere.

http://www.planbeconomics.com/2013/05/rogoff-and-reinhart-get-more-bad-n...

Fri, 05/31/2013 - 21:45 | 3615879 StarTedStackin'
StarTedStackin''s picture

"now becoming", or HAS BEEN since Obama/Bernanke Put?

 

 

I mean why the fuck is anyone stupid enough to believe that Obama is not in charge of Bernanke?

 

 

If you disagree, explain why no QE occurred under "Busch".....

 

 

Fug off otherwise.......

Fri, 05/31/2013 - 22:06 | 3615900 jeff montanye
jeff montanye's picture

nice talk.  

from this:  http://www.data360.org/dsg.aspx?Data_Set_Group_Id=2052, it looks as if the growth in m2 in the latter stages of bush's administration was comparable to what it was under obama.  both greatly expanded the debt, bush having the stronger economy and better tax revenues.

the bible continues to impress this nonbeliever, courtesy of dan norcini, from ecclesiastes (seems to fit both bush and obama if read a little metaphorically): “Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”.

Sat, 06/01/2013 - 00:39 | 3616119 Pinto Currency
Pinto Currency's picture

 

Happy the land with dispersed power; woe to the land with Kings and leaders.

Sat, 06/01/2013 - 11:07 | 3616487 sschu
sschu's picture

the bible continues to impress this nonbeliever

Try:

1 Sammuel 8 - Israel Wants a King

1 Corinthinas 1:18:25 - Wisdom of the Wise is Foolishness

sschu

Fri, 05/31/2013 - 23:43 | 3616022 WonderDawg
WonderDawg's picture

Obama in charge of Bernanke? You're naive and delusional. Obama works for the same people Bernanke works for. You think the trillionaire families that own the Fed are going to let Obama make any decisions? Would you trust your wealth to the whims of a community organizer? They installed Obama just like they installed Bernanke. Wake the fuck up. Obama is a puppet, just like Bush was, and Clinton was, etc. The people who run the show are never seen by the likes of you and I, but they pull the strings just as surely as the sun will rise tomorrow on a nation of debt slaves.

Sat, 06/01/2013 - 00:48 | 3616130 Mactheknife
Mactheknife's picture

Nailed it.

Sat, 06/01/2013 - 07:02 | 3616240 BeetleBailey
BeetleBailey's picture

Well said Dawg. +100

Ocuntus is the latest in a long line of bought and paid for douchebags who've held the office for decades.

My personal belief is we jumped the shark when Ike left office; his final speech the most telling. Eisenhower was the last good CIC.

From there:

Kennedy: The Mob, Compromised shortened term in office; assassinated by elements of the MIC and banks.

Johnson: The first modern day puppet of the MIC. He ought to be mucking stalls out in Hell for eternity for Vietnam alone.

Nixon: More senior member of the MIC puppet line up. Fucked with gold to the tune of the Trillionaires. Fucked himself. A real asshole.

Ford: A stop gap puppet. A good man...but a puppet nonetheless.

Carter: A douchebag micro-manager who fucked things up badly...he had to go so...

Reagan could get in....talk about a puppet...the anti-Obama...good talker/bullshitter...two terms and debt begins....big time...and the bubbles commence...

so we get....

Bush I....who is THE "company man"; a resume that WREAKS of CIA. MIC, and shadow Trillateral Burgermeister uber acronym horseshit power mad fuckers....but he fucked things up...and we got...

Clinton...the lucky fucker did all he could to fuck up his election, but Bush fucked up more...

The man ought to be licking Ross Perot's taint, but Perot was also a MIC diversionary plant.

Willie Monica'ed himself up....and did more damage to the US than the Japs did December 7th....and then some.

which led us to..

Bush II - a mumbling lucky sperm club fuckhead, who used 9/11 as his war platform, as he was given the role by the MIC and elite to do their bidding, with COMPANY MAN Cheney as ramrod to the entire crime scene of Iraq et. al....

8 years of that fuck, with the Saturday night global fucking of 2008, brought us...

Barry Soetero O-Cuntus.....about as "qualified" to be leader of the US as a maggot.....

No wonder we are in a state of fucking madness.....

 

Sat, 06/01/2013 - 10:09 | 3616400 BoNeSxxx
Sat, 06/01/2013 - 06:45 | 3616258 Go Tribe
Go Tribe's picture

Obama's nothing but a, pardon the term, house nigger. He does the laundry for the elite, cooks their meals, ensures their comforts. See how readily he scooted over to the Detroit union HQ in 2009, doing their bidding. See how he holds bankster roundtables in the White House. See how he wields the IRS against the little guy - any Wall Street banks victims of the IRS recently?

"Yes sah, massah, I be your nigga, tell me what to do."

His election wasn't a tribute to American equality, but a caustic backhand to the face of any who think they can be free.

Sat, 06/01/2013 - 10:00 | 3616389 freewolf7
freewolf7's picture

You lost me at "nigger".
Could've made your point
better without the racism.

Sat, 06/01/2013 - 10:23 | 3616422 TheMeatTrapper
TheMeatTrapper's picture

Since most of the people that use the term nigger are in fact, other niggers; are niggers racist against themselves?

Sat, 06/01/2013 - 19:09 | 3617175 NihilistZero
NihilistZero's picture

There's black people, and there's niggers.  Obama certainly qualifies as a nigger.  Black people like Thomas Sowell would confirm this off the record.

Sun, 06/02/2013 - 10:55 | 3618078 Urban Redneck
Urban Redneck's picture

Psychological conditioning is a bitch to undo, but certainly worth the pain and effort.  

 

 

 

 

Definition of racism noun

[mass noun]

  • the belief that all members of each race possess characteristics, abilities, or qualities specific to that race, especially so as to distinguish it as inferior or superior to another race or races:theories of racism
  • prejudice, discrimination, or antagonism directed against someone of a different race based on the belief that one’s own race is superior:a programme to combat racism

http://oxforddictionaries.com/definition/english/racism

Sun, 06/02/2013 - 11:45 | 3618171 MeelionDollerBogus
MeelionDollerBogus's picture

While normally true in some cases there are exceptions. Harry Belafonte had no qualms about calling Rice or Powell house-niggers, and he's black (not much darker than Powell) in the Bush Era. Doin' the white man's work just to be in the plantation house. His words. He's the guy who did the "Banana Boat song" that's so famous again recently from being in Beetlejuice.

That being said, Obama's done the same as Bush so if this applies to Obama, then regardless of skin colour, Bush just as equally worked in the white-house to serve other masters and he is just as lacking in value as Obama is. The one key difference I'd imagine is that Bush Jr. had to call his own daddy (CIA chief, always connected in) Massa as well.

Sat, 06/01/2013 - 08:29 | 3616307 fuckitall
fuckitall's picture

Maybe OT, but reading this morning about Carney devaluing british pound (officially anyway, it's been devalued defacto already), it hit me how ludicrous it is to still call an unbacked paper currency "pound sterling", meaning 1 lb of sterling silver (I assume).

It's just like calling federal reserve notes "dollars".  "dollar" was a unit of weight, so much gold, so much silver.  "dollars" used to be certificates redeemable for x amount of gold or x amount of silver.    Calling unbacked federal reserve notes "dollars" is crazy.  It's not a "dollar's worth" of anything.

This knowledge has been lost in today's world.  Paper currency used to be "claim checks" redeemable for real gold or silver.  Paper currency was merely a convenience so people wouldn't have to carry physical coins around with them. 

Now here we are, paper currency still has the old physical metal type names but the physical metal aspect is gone.

OTOH maybe it's not crazy.  Maybe it's genius.

Sat, 06/01/2013 - 09:07 | 3616337 KickIce
KickIce's picture

Back to 1815, this is the year Nathan Mayer Rothschild makes his famous statement,

"I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man who controls Britain's money supply controls the British Empire, and I control the British money supply."

 

He would go onto brag that in the 17 years he had been in England he had increased the £20,000 stake given to him by his father, 2500 times to £50 million.

 

This quote applies to any country with a Rothschild installed central bank; our politicians have ceded all their power.

 

Sat, 06/01/2013 - 09:59 | 3616388 Hulk
Hulk's picture

So, thats whats going on....

Sat, 06/01/2013 - 10:17 | 3616412 WonderDawg
WonderDawg's picture

Hard to believe, isn't it? If you look at a chart of US debt over the last 40 years, you'd think it made a difference if the Dems or the Repubs were in charge, wouldn't you?

Uh, wait a minute... No you wouldn't. Nevermind.

Sun, 06/02/2013 - 10:39 | 3618049 Jake88
Jake88's picture

Yeah right.  You're logic is all FUBAR dude. You shouldn't even try to reason. You're not equipped for it.

Sat, 06/01/2013 - 02:00 | 3616173 jonjon831983
jonjon831983's picture

It is only a matter of time when unregulated money gets regulated.

No way any gov't out there wouldn't put a hand on it.

Sat, 06/01/2013 - 03:11 | 3616196 balolalo
balolalo's picture

Guys,  here's a couple of thoughts that came to mind:

1.  This means that the Fed has declared itself landlord supreme.  The takeover is complete.  So why even hide it?    

2.  They are dropping hints that eventually (aka soon enough to talk about it) the sysrem will crash; major lifstyle adjustments are going to happen.  Including cutbacks everywhere (with a token drop from the top).   And since they are the lord supreme why not make the edict, there are no major challengers to question. 

Hey, they just admitted it in black and white.  

Don't be foolish and forget these FED guys all have golden parachuts, escape hatches, lifeboats, hideouts, protection and everything is plush...  they'll be MIA living in style before you even knew TSHTF.  Then they'll morph themselves into a new incarnation.  But always being our ultimate masters.  Welcome to our newly minted aristocracy.  Feudalism redux.  

 

Sun, 06/02/2013 - 09:53 | 3618009 MeelionDollerBogus
MeelionDollerBogus's picture

unless one of their underling minions actually turns out to belong to some anonymous branch of Occupy or worse yet, is just a really pissed off fucker who's able to use a good poker face, and offs a few of them on their way through the escape hatch.

Fri, 05/31/2013 - 22:11 | 3615912 StarTedStackin'
StarTedStackin''s picture

Why would a gold breakout be the fear, and not a silver breakout? There is 16 times more silver thAn gold, yet the G S Ratio is over 60, and gold has not the industrial demand of silver.

Sat, 06/01/2013 - 06:32 | 3616252 cnmcdee
cnmcdee's picture

The only thing they would fear *moar is equity creation without debt.. John F Kennedy issued Executive Order 11110 which allowed the Treasury to issue money without Interest.  Had that been followed we would have no crushing debt burden today..  I mean THE REPORT IS EXPLICIT.  The *only* thing the federal reserve is talking about is Debt, Debt, Debt.  Natually 6 months later JFK was shot to pieces, and decades later CIA operatives  (E Howard. Hunt) would leave death bed confessions to the crime of shooting him.

And Student Loans are even worse!!! If I want to financially CRIPPLE a population I'd give them student loans that will take the rest of their lives to pay off in an anemic economy.

The *only* thing that will ever give power back to the people is to STOP the creation of MOARRR debt!  Especially at the government level.

Fri, 05/31/2013 - 19:32 | 3615565 Cult_of_Reason
Cult_of_Reason's picture

The speech was interpreted as a warning that the market might be overvalued; followed by a 2%+ market selloff on Monday (equivalent to ~300+ Dow points plunge in 2013).

 

Greenspan's `irrational exuberance' comment jawbones markets down

 12/6/96

By FARRELL KRAMER

The Associated Press

NEW YORK (AP) - Wall Street stocks opened with a thud this morning following a global plunge caused by Federal Reserve Chairman Alan Greenspan's suggestion that the markets were irrationally high.

Within 30 minutes of the market's opening, the Dow Jones industrial average plunged 145.35 points, a decline of more than 2 percent.

Fri, 05/31/2013 - 19:34 | 3615573 fonzannoon
fonzannoon's picture

Back then they had the ability to lower rates and begin stimulus. They are toast now.

Fri, 05/31/2013 - 20:04 | 3615667 Almost Solvent
Almost Solvent's picture

Or they could go for broke and pay people to borrow money @ 0% APR.

Imagine the boost in GDP with that! $10k loan to be reapid @ 0% over 82 months, plus we'll give you $2k free for taking out the loan! Here's your $12k!

Fri, 05/31/2013 - 20:07 | 3615676 Pinto Currency
Pinto Currency's picture

 

Or they can raise rates, wiping-out bond holders and bail-in the rest.

Fri, 05/31/2013 - 21:04 | 3615809 kito
kito's picture

No fonz, they are not toast....the country is.......

Fri, 05/31/2013 - 21:46 | 3615882 StarTedStackin'
StarTedStackin''s picture

No Kito,

 

 

Individuals who have not taken the proper preparations are fucked. Some of us will make out better thAn the Amish!

Sat, 06/01/2013 - 07:40 | 3616281 eclectic syncretist
eclectic syncretist's picture

Only relative to those who fall further and faster, but all will fall together.

Fri, 05/31/2013 - 21:22 | 3615834 Buck Johnson
Buck Johnson's picture

I know, they can't.

Fri, 05/31/2013 - 20:46 | 3615773 lord of the flies
lord of the flies's picture

the abolition of Gold Standard  made it affordable for the banking system to be used as an infinite Credit expansion tool

the financial politics of well-fare state requires no possibility for private capital owners to protect themselves.

do you understand know why those in charge dislike the gold standard?

budget deficit is just a plan of wealth-confiscation!

gold stands in their way as the guardian of private property.

if you understand that , why not understand gold price must be supressed so that free party shall go on ?

(alan greenspan)

Fri, 05/31/2013 - 22:09 | 3615907 GreatUncle
GreatUncle's picture

The main point is as every day passes they find it harder to conceal. All bets are off already just a matter of time.

Fri, 05/31/2013 - 21:22 | 3615833 Never One Roach
Never One Roach's picture

Is "IE" similar to "QE"?

 

IE = Irrational Exuberance;

QE = ....well, enuff said....

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