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Where Are We Now?
It used to be called the "New Paradigm", it is now the "New Normal" - aside from that everything else is still the same, Ben Bernanke's aspirations to overturn math, economics and the business cycle notwithstanding. The only question is where on the red valuation line is the global market currently located, and how much longer can the central bankers reject the inevitable arrival of the first denial, then fear , then all other increasingly more unpleasant phases.
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I think we've been in the "denial" phase the past five years.
wut? are yeah five years old?
Are we ready for the End-of-Day / End-of-Week rampapalooza?
I tend to thin the returnb to normal in the chart. The good old chutes and ladders from there.
I believe the underlying assumption, when drafting that chart, was that the market is free and unfettered. It was assumed that capital will flow to innovation, debts will have to be repaid, and bankrupt banks required to fail.
Now we live in some kind of fairytale economic land.
christ. cnbc is in full cheerleader mode, the stock pom pom squad is warming up in
the wings with the rockettes. this is going to end very badly.
I think that's known as the elasticity of charting.
Did they fuck up and accidentally put the bitcoin 2013 chart in there?
Exactly, only part of this chart that would apply is the 'denial/delusion' phase since 2008....the rest of it appears to be some out dated stuff from the 1930's.
One thing missing from the chart: projections. They always add amusement. They are expressed with statements like: hockey stick, explosive growth, conservative estimates, and the sky's the limit.
Return to normal then down to despair where we will flatline for a while
The Nikkei followed this to the tee. Lets hope the Dow is just lagging by a couple of weeks.
I'm tellin you it's over DS. Today will will hear about the recovery ad nauseum. Any push further means bigger breakout in crude and rates inch towards 2.25% on the ten year, so over 4% mortgage rates.
They can keep this "buy stocks to hedge against higher interest rates" for a bit longer but once real estate throws up on it's shoes in the next few weeks we start the finger pointing.
I hope you are right fonzy...I mean what you are telling me aint good news for society but at least, at least, we are prepared mentally for what shit is going to hit the fan. I dont think many people, unlike those that read ZH, will be prepared for what is to come.
Yes, you know the end is near when finger pointing leads to middle finger which leads to fat finger stock market moves on the downside and not even larry fuckin finker can do anything about.
I hate to tell you this, but outside of JGB 10yr yields going to 2% all I am expecting is a 15-20% pullback.
I just don't see us having that moment in one big flash bang. I think we just get shredded over time.
When I say it's over I mean the top is in. Japan is Lehman x 10 though and if it does go, all bets are off.
Over?... It's not over until we say it is... Was it over when Lehman bombed Pearl Harbor?
This could be the best day of our lives. But you're gonna let it be the worst. Ooooh, we're afraid to go with you Bluto, we might get in trouble. Well just kiss my ass from now on!!!
I humbly apologize that my comment shoud have been reserved for you... I just figured you were takin a piss, missed the window of opportunity, & so I decided to pinch hit...
No apology necessary.
They confiscated everything, even the stuff we didn't steal.
your 15% scenario is fine with me actually...but unfortunately I dont see how there will be any control once the ball starts rolling...there are other factors that even the great Bernank hasnt considered. Take this scenario, you have a bunch of horny guys that just got out of jail at the same time. Some bigger, some smaller, some smarter, some dumber...and they all see the same hot chick. you think that you can say to them "OK guys, you guys can all do it with her but I want each of you to have a limit of 2 minutes with this girl and you guys can figure out the order of who goes first" It aint going to work. Its every man for himself.
H.E.L.L.
I still see delusion everywhere in these markets.
As well as the return of the serial junker, silent troller of these threads.
Is this a chart of Gold and Silver? :-P
Yes, where on the red valuation line are PMs? I would say bear trap.
We don't know where we are, but PRISM does!
Would've also accepted:
I read it's $4.70 a gallon in Chicago. Doc says it's $4.25 by him.
It's $3.65 by me. Wtf is up with the disparity?
I can confirm $4.70 in Chicao and $3.65 down in southern IL near St. Louis.
taxes....and chicago has lots of them.
But, it's for the kids!
Wtf is up with the disparity?
~~~
Same with everything else... It depends on how many cheesepopes stand between you & the napalm...
Jerseys about 3.45.... where you at Fonz? The midwest has some kind of refining issue, was inmissouri the other week they were about 60 cents higher than here, they always used to be less...
Chicago could be supply and demand with the number of drive bys way up gas consumption should be up also.
I am outside of NYC
what do you think gator? 15 bp move from low to high on the 10yr and I was still upset we did not hit 2.2%
Disparity is taxes and blends.
http://www.gaspricewatch.com/web_gas_taxes.php
If you want to really have fun, go buy some tax-free smokes on a reservation. It'll seriously make you consider a smuggler's life.
Special gas blends. You can't buy non ethanol mixture gas in a corridor from south of Chicago up thru Milwaukee, and their blends are different from other areas of their respective states.
Had a friend in Milwaukee that had to go to somewhere west of Madison to find leaded gas for his lawn mower, trimmer, snow blower. Ethanol reeks havoc with small engine carbs.
Not leaded gas, merely unleaded gas unadulterated with ethanol. After going through a shitload of small engines, I now only buy premium for them, as it is the only way to get ethanol-free gas (though not all premium is ethanol-free, you have to ask).
Right, ethanol attracts water. Ethanol blends are usually OK if you commute every day but a big issue if stationary for weeks. It's not a carb issue but a water-phase separation issue. Use ethanol free gas for your boat, mower, quad and grandma's car. And if there's ethanol in the tank of your mower or boat: empty it before the winter-stop.
Isn't it obvious, we're currenty in new paradigm number 4
World revolution phase / Pre WWIII
New normal.
Sound money, labor, and production no longer needed.
Markets and prospertity to the moon now that we have digital money.
Oh, 'public' ran it up from around 8,000 to 15,200? Bullshit.
US indexes up 1.3% and look mom - NO POMO today.
Recession must be over. Prosperity for everyone. It's a new paradigm.
IS THIS FUCKING DELUSIONAL ENOUGH FOR YOU??????
Some might say that what is needed is a collapse and a "reset" of the system.
To that, I would say the only one of those two we haven't had is the reset.
If bank bailouts followed by printing of money out of thin air(another form of bank bailouts) isn't a collapse, then I guess I don't know what a collapse is.
Appears to me that the writer believes we're at the Return to "normal" area on the chart. And in my opinion he's probably right.
nope you dont.... wait till the ATMs dont work, or spit a twenty a day.... thats where we are headed....
I hear you. It comes down to what an individual would define as, collapse. For me, it's already happened.
Some might say the collapse happened on August 15, 1971.
Some might say, including myself, THE REAL COLLAPSE happened in 1913 with the Federal Reserve Act, and... the "Income" Tax(the law that never was).
Dec. 23rd, 1913, the day the pro-bank "Aldrich Plan" came to life disquised as an anti-bank bill to regulate banks.
Then again, there's the fake "Civil War" that destroyed the voluntary union.
Then again, there's the Constitutional Convention that was nothing but a coup against the Articles of Confederation.
Hmmm... infinite regression, anyone?
From where I'm sitting, you are correct on every point.
i want to punch that david darvish guy from morgan stanley in the face.
every friday he comes on cnbc and pumps up market.
he also fucking said that the 21 percent drop in nikkei over the last 3 weeks is ''healthy'' and that he would buy. fuck him. i hope he does buy, so he can lose everything.
Thismarket yesterday they had some big shot from cantor fitzgerald on. He said that when currencies devalue it is fantastic for stocks, real estate, art etc. etc. etc. no mention of gold.
Then when talking about real estate a minute later he mentions some big high end building that sold for a trillion dollars or something. He says "you would have thought it was covered in gold!!!"
Gold covered building? How barbaric, no one would want that!
That's damn funny, even for this place!
WTB despair
biggest bull trap ever built :3
definitely in dellusion....
I don't see the "FED QE Reflation Phase" on the chart.
We never finished the "Capitulation phase", but the Bankernazi went full bubble-tard.
A.k.a. "Stuck on Stupid."
DOW closes on second best day of the year. Fuck me......
I see that we have the return of the Down Arrow Hitman in here! Lol
What kind of douschebag would do that? Tyler, it looks like the doorman let in an undesirable.
It's over. He just choked in his blue pill.
It was the WARRIORS!... The Warriors did it!...
~Cyrus
Waarr-iiou-rrrs... come out to plaaa-yee-aaa
http://www.youtube.com/watch?v=aRM2YcGpmxg
http://people.hofstra.edu/geotrans/eng/ch7en/conc7en/stages_in_a_bubble.html
Stages in a Bubble
Business cycles are a well understood concept commonly linked with technological innovations, which are often triggering a phase of investment and new opportunities in terms of market and employment. The outcome is economic expansion and as the technology matures and markets become saturated, expansion slows down. A phase of recession is then a likely possibility as a correction is required to clear the excess investment or capacity that irremediably occur in the later stages of an economic cycle. The bottom line is that recessions are a normal condition to a market economy as they are regulating any excess, bankrupting the weakest players or those with the highest leverage. However, one of the mandates of central banking is to fight a process (business cycles) that occurs "naturally". The interference of central banks such as the Federal Reserve appear to be exaggerating the amplitude of bubbles and the manias that fuel them. It could be argued that business cycles are being replaced by phases of booms and busts, which are still displaying a cyclic behavior, but subject to much more volatility. Although manias and bubbles have taken place many times before in history under very specific circumstances (Tulip Mania, South Sea Company, Mississippi Company, etc.), central banks appear to make matters worst by providing too much credit and being unable or unwilling to stop the process with things are getting out of control (massive borrowing). Instead of economic stability regulated by market forces, monetary intervention creates long term instability for the sake of short term stability.
Bubbles (financial manias) unfold in several stages, an observation which backed up by 500 years of economic history. Each mania is obviously different, but there are always similarities; simplistically four phases can be identified:
1. Stealth. Those who understand the new fundamentals realize an emerging opportunity for substantial future appreciation, but at a risk since their assumptions are so far unproven. So the "smart money" gets invested in the asset class, often quietly and cautiously. This category of investor tends to have better access to information and a higher capacity to understand the wider economic context that would trigger asset inflation. Prices gradually increase, but often completely unnoticed by the general population. Larger and larger positions are established as the smart money start to better understand that the fundamentals are well grounded and that this asset class is likely to experience significant future valuations.
2. Awareness. Many investors start to notice the momentum, bringing additional money in and pushing prices higher. There can be a short-lived sell off phase taking place as a few investors cash in their first profits (there could also be several sell off phases, each beginning at an higher level than the previous one). The smart money takes this opportunity to reinforce its existing positions. In the later stages of this phase the media starts to notice with positive reports about how this new boom benefits the economy by "creating" wealth; those getting in becoming increasingly "unsophisticated".
3. Mania. Everyone is noticing that prices are going up and the public jumps in for this "investment opportunity of a lifetime". The expectations about future appreciation becomes a "no brainer" and a linear inference mentality sets in; future prices are an extrapolation of past price appreciation, which of course goes against any conventional wisdom. This phase is however not about logic, but a lot about psychology. Floods of money come in creating even greater expectations and pushing prices to stratospheric levels. The higher the price, the more investments pour in. Fairly unnoticed from the general public caught in this new frenzy, the smart money as well as many institutional investors are quietly pulling out and selling their assets. Unbiased opinion about the fundamentals becomes increasingly difficult to find as many players are heavily invested and have every interest to keep asset inflation going. The market gradually becomes more exuberant as "paper fortunes" are made from regular "investors" and greed sets in. Everyone tries to jump in and new intrants have absolutely no understanding of the market, its dynamic and fundamentals. Prices are simply bid up with all financial means possible, particularly leverage and debt. If the bubble is linked with lax sources of credit, then it will endure far longer than many observers would expect, therefore discrediting many rational assessments that the situation is unsustainable. At some point statements are made about entirely new fundamentals implying that a "permanent high plateau" has been reached to justify future price increases; the bubble is about to collapse.
4. Blow-off. A moment of epiphany (a trigger) arrives and everyone roughly at the same time realize that the situation has changed. Confidence and expectations encounter a paradigm shift, not without a phase of denial where many try to reassure the public that this is just a temporary setback. Some are fooled, but not for long. Many try to unload their assets, but takers are few; everyone is expecting further price declines. The house of cards collapses under its own weight and late comers (commonly the general public) are left holding depreciating assets while the smart money has pulled out a long time ago. Prices plummet at a rate much faster than the one that inflated the bubble. Many over-leveraged asset owners go bankrupt, triggering additional waves of sales. There is even the possibility that the valuation undershoots the long term mean, implying a significant buying opportunity. However, the general public at this point considers this sector as "the worst possible investment one can make". This is the time when the smart money starts acquiring assets at low prices.
Bubbles can be very damaging, especially for those who arrived late with the hope of getting something for nothing. Even if they are inflationary events, the outcome of a bubble's blow off is very deflationary as large quantities of capital vanish in the wave of bankruptcies and financial defaults they trigger. Historically, they tended to be far in-between, but between 1995 and 2008 three bubbles took place back-to-back; the stock market (deflated in 2000), real estate (deflated in 2006) and commodities (deflated in 2008).
Where we're at depends on the category. For equities I think we just passed the "return to normal" for gold we might be at the "bear trap".
Here is where we are. Where we started in 1913.....
The most insidious nature of central bankers' promises are starting to surface for all to see (i.e. markets are starting to show signs of strain). The real evil of QE, Draghi's promise, BOJ/BOE printing is the carry trade when all assets are thought to be risk-free, especially when everyone knows Spanish, Greek, Italian.....bonds are more risky without Draghi's promise.
Everyone knows Jon Corzine was Corzined (My term for a logically perfect trade that trusted the state too much.)Everyone knows they are all on the same side of the boat, everyone knows some will drown, maybe many, but all know they will get off before the boat rolls into a turbulent sea and they drown. Many people will be Corzined. The only question is the longer you continue the QE and zero-interest rate policies the worse the CRASH and the more the people will suffer.
I am speaking about the same Fed who never had a problem with fradulent MERS, triple A rated securities stacked with subprime loans of near junk rate status, zooming housing prices and much more, all driven hyper-speed with low interest rate Fed POLICY; thus never enacted a Fed policy to prevent the 2008/09 financial crisis. Why should I question if this Fed driven tragedy will end differently?
almost an 5 up, 3 down Elliott Wave
To insure that the wheels don't fall off too quickly while we go from "New Paradigm" to Despair, Pavlovian BTFD stimulus has been expertly and repeatedly applied in this ponzi. When it finally breaks, the looks of betrayal and confusion will be priceless. Short Squeeze becomes Long Squeeze. Gnashing of teeth, cries of injustice and anger will congeal into a call to "Do Something"!!!
"Long squeeze" is what we normally call "Margin Call"
Looks incredibly like gold chart, in all details.
If anyone would over lap gold on this chart its easy to see its in the bull trap phase, anyone care to admit that?