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Guess What The Fair Value Of The S&P Is

Tyler Durden's picture


On the off chance there is still any confusion about what would happen should the Fed "step away"...


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Thu, 07/04/2013 - 11:17 | Link to Comment diogeneslaertius
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Thu, 07/04/2013 - 11:19 | Link to Comment Sylvia Plath
Sylvia Plath's picture

"The market can stay irrational longer than you can stay solvent being short"


Took 3 years for the last "test" of these levels... could take another 3 years for the next irrational exhuberence to wind down!

Thu, 07/04/2013 - 11:38 | Link to Comment malikai
malikai's picture

In LOLBucks? $10,000,000 at least!

Thu, 07/04/2013 - 11:48 | Link to Comment Harlequin001
Harlequin001's picture

The point is that even if they never stop, the market will one day decide that $85 billion/month isn't enough and it will crash anyway. That is something that just like sub prime mortgages and auction rate securities, Goldman will make a decidion on in their own good time, and when they do we will be the last to know.

Taper or not, if you haven't got a seat on the board of the big banks this is a mugs game. A crash is inevitable, and entirely predictable by the banks, who will decide when and by how much the market will 'adjust', but only when they have sufficient CDS to cover their loss and make  a huge bonus.

Thu, 07/04/2013 - 11:59 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

The market will crash in terms of purchasing power, sure.

But in nominal terms, a crash in equities isn't necessary if the currency is plummeting in value.

Thu, 07/04/2013 - 12:00 | Link to Comment Headbanger
Headbanger's picture

The S&P fair value is.....     FORTY TWO!

Thu, 07/04/2013 - 12:27 | Link to Comment Frozen IcQb
Frozen IcQb's picture
The S&P fair value is.....   The answer is ... 4?

Thu, 07/04/2013 - 11:21 | Link to Comment Widowmaker
Widowmaker's picture

There is no such thing as "fair" or "value" in the markets worldwide.   The Fed has killed the US dollar by eliminating price discovery and replaced it with hope and fraud.  Why?  To protect criminals.


Thu, 07/04/2013 - 11:45 | Link to Comment Ban KKiller
Ban KKiller's picture

Agreed. How long until the FED owns all the MBS's? Only then will they ease?


Thu, 07/04/2013 - 11:55 | Link to Comment FeralSerf
FeralSerf's picture

Then the Fed will need to buy something else until it owns everything there is, lock, stock and barrel (just like the Soviet Union owned everything). The only thing the SUs' proles owned then was a big wad of rubles that wouldn't and couldn't buy anything of value. That's the beginning of The End. "They pretend to pay us and we pretend to work."

I presume you meant "tighten" instead of "ease"?

Thu, 07/04/2013 - 11:20 | Link to Comment CPL
CPL's picture

1200 points higher than I would have offered for it

Thu, 07/04/2013 - 11:22 | Link to Comment I am Jobe
I am Jobe's picture

More like zero

Thu, 07/04/2013 - 12:08 | Link to Comment Debt-Is-Not-Money
Debt-Is-Not-Money's picture

666 ?

Thu, 07/04/2013 - 11:20 | Link to Comment Pairadimes
Pairadimes's picture

It's only play money anyway.

Thu, 07/04/2013 - 11:44 | Link to Comment BurningBetty
BurningBetty's picture

Yes, playmoney to the banksters and real money for everyone else.

Thu, 07/04/2013 - 11:22 | Link to Comment I am Jobe
I am Jobe's picture

Question: What is the value of 1/Infinity  ?


Fuck u Bendonkey, Carney, Draghi

Thu, 07/04/2013 - 12:02 | Link to Comment gjp
gjp's picture

More like the reverse.  It's 1/0, or nominally infinite.  The dollar is trash, so nominal prices can keep going higher, until currency breakdown finally causes the system to implode.

Concept of fair value in dollars in meaningless.

Dollar price of gold is a meaningless concept too.

Thu, 07/04/2013 - 13:23 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

Don't sell your gold, not least in exchange for USD.  Ideally you exchange your gold for gold-backed currency at some point in the future.  The price of gold vs S&P/equities, gold vs real estate, gold vs various commodities, is what we will be comparing in the not so distant future.

Thu, 07/04/2013 - 11:22 | Link to Comment e-recep
e-recep's picture

taper my ass.

Thu, 07/04/2013 - 11:51 | Link to Comment Ban KKiller
Ban KKiller's picture

Hold still!


Thu, 07/04/2013 - 11:56 | Link to Comment knukles
knukles's picture

Ban, did you take your amyl nitrite this morning like a good little boy?

Thu, 07/04/2013 - 12:49 | Link to Comment derek_vineyard
derek_vineyard's picture

paint the taper

Thu, 07/04/2013 - 13:54 | Link to Comment Ban KKiller
Ban KKiller's picture

No, I am in Granada so only weed, rum and cigars...


Thu, 07/04/2013 - 15:32 | Link to Comment Jake88
Jake88's picture

dream on dude. Do you think the taper talk was just to spook the markets. It is a very clear warning. They will taper and it has nothing to do with recovery or inflation. They see QE has not been effective and they fear the instabilities it has created. They will taper no matter what starting September. The Bernanke does not wish his legacy to be the biggest bubble in history. 

Thu, 07/04/2013 - 11:24 | Link to Comment Quinvarius
Quinvarius's picture

Slightly OT: And how much is this effecting the price of oil in USD:

It takes 20% more USD to buy oil in Iran than it did a month ago.

Thu, 07/04/2013 - 11:30 | Link to Comment Yancey Ward
Yancey Ward's picture

Nah.... This time is different!

Thu, 07/04/2013 - 11:47 | Link to Comment starman
starman's picture

I remeber a chart like this, Id say around th spring of 1992 , I sold all my margins on Monday then Wednesday came.  Then darkness came.

Thu, 07/04/2013 - 11:49 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

OK, OK, but a new recession has already started. Let's see what happens next. The stock market will have to go down now.

Thu, 07/04/2013 - 11:54 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

"have to..." LOL - see Harlequin above @ 11:48

Thu, 07/04/2013 - 11:54 | Link to Comment bnbdnb
bnbdnb's picture

Whats a recession?

Thu, 07/04/2013 - 11:57 | Link to Comment knukles
knukles's picture

a quaint old concept when a few people were out of jobs for a short period of time...

Thu, 07/04/2013 - 11:59 | Link to Comment bnbdnb
bnbdnb's picture

How many recessions did the crew of NCC-1701 experience?

Thu, 07/04/2013 - 15:32 | Link to Comment spinone
spinone's picture

They could replicate anything they needed. 

Thu, 07/04/2013 - 11:47 | Link to Comment caimen garou
caimen garou's picture

I like tylers term "stalingrad & propaganda" real value is what the banker comrades want it be!

Thu, 07/04/2013 - 12:00 | Link to Comment bnbdnb
bnbdnb's picture

The SP, in dollars, is worth what the number says. Quit playing their stupid semantical fiat games.

Thu, 07/04/2013 - 14:08 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Make me.

Thu, 07/04/2013 - 12:00 | Link to Comment boeing747
boeing747's picture

Did anybody notice that shows Oil drop 100% lost $99.6 yesterday?

Thu, 07/04/2013 - 12:14 | Link to Comment SIOP
SIOP's picture

It's still there on the web page.  lol. 

Oil 101.24 -99.60 -100.00%   (<---click on the oil)


Thu, 07/04/2013 - 14:46 | Link to Comment akarc
akarc's picture

Unless some black flag operation scares the price higher, the world economy can not sustain 100 plus oil. Down 100 is obviously a typo. Down 50% could be predictive. Short oil.

Thu, 07/04/2013 - 13:03 | Link to Comment Yancey Ward
Yancey Ward's picture

And has promptly been put into the coming CPI numbers.

Thu, 07/04/2013 - 12:05 | Link to Comment the grateful un...
the grateful unemployed's picture

if the market tries to fall too quickly the exchange will cancel all the trades that day, and reliquify the players. TBTF has catasprophic insurance, but another nasdaq selloff like 2000 is more problematic. greenspan moved interest rates and the rest was a slow motion train wreck. now we know that crashes are preventable there is no way they will make a policy mistake again, they will never raise rates again. [how they control rates is another matter] and this is really important because this time the bubble isn't in no earnings tech stocks, its in treasury bonds, so we're doubly committed to protect this bubble. the greenspan fed made a bigger mistake than the 37 fed, first by inflating a bubble in speculative paper and then bursting it. you only inflate things like UST and maybe gold (did I say gold?) in a slow turn, the markets can do sector reallocation. would you still hate the DOW if there were three or four major gold producers in the index? and gold was a bubble? a bubble you could sustain? [buy gold bitchez, uncle bennie has a plan] 

no bull market in stocks has ever continued for long without gold and gold stocks moving in tandem..

Thu, 07/04/2013 - 12:29 | Link to Comment Winston of Oceania
Winston of Oceania's picture

Sorry chum, the Fed can only MANIPULATE rates they cannot control them. The lie is spreading thin and soon will be in front of all eyes to see. Then the Fed will be seen as the illusion that it is and rates will FLY.

Thu, 07/04/2013 - 14:25 | Link to Comment the grateful un...
the grateful unemployed's picture

the NSA isn't interested in your political views, they're interested in your consumer habits. they already know your credit score, and where you borrow your money, and how much you pay. i want you and Bob Prechter to take a deep breath and repeat after me, we're not in Kansas anymore.

Fri, 07/05/2013 - 08:26 | Link to Comment Winston of Oceania
Winston of Oceania's picture

The NSA has yet to change the laws of mathmatics and that is all that matters, the Fed has NO control.

Thu, 07/04/2013 - 12:13 | Link to Comment sunnyside
sunnyside's picture

I'm thinkin' it's worth 'bout "tree fity"

Thu, 07/04/2013 - 12:18 | Link to Comment Randall Cabot
Randall Cabot's picture

Europe up 3%, SP futures up 15!!!

Thu, 07/04/2013 - 12:31 | Link to Comment Obnoxio
Obnoxio's picture

The S&P may seem high but government bonds are where the real bubble is. Bond investors may flee to stocks and other private assets as bonds get hammered over the next several years in my opinion.

Thu, 07/04/2013 - 13:09 | Link to Comment malek
malek's picture

Nice chart!

Now add the ECB LTRO and you can also see what caused the bounce at end of 2011.

Thu, 07/04/2013 - 13:10 | Link to Comment eddiebe
eddiebe's picture

It's worth whatever someone will pay for it. Period.

Thu, 07/04/2013 - 13:14 | Link to Comment catch edge ghost
catch edge ghost's picture

If only there was some basket of currencies and commodities backed up with some kind of bond that could be used as a reserve currency, instead of US T-Bills.. and a huge new source of US domestic spending, maybe on defense.. or health care.. or something, then maybe I could see the Fed stepping away.

But that'll never happen.

Thu, 07/04/2013 - 13:43 | Link to Comment HowardBeale
HowardBeale's picture

The thing that rarely gets mentioned is that with the Fed. decreasing the available securities (we need to start calling them IN-securities) and, thus, artificially raising the price, they have caused all pension funds to grossly overpay for a limited supply; the overpayment is such already, that the pension funds will be permanently destroyed with a modest downturn in the markets--and worse yet, they will be destoyed if the markets don't turn down, as overpayment continues and inflation is assured. 

Bernanke has destroyed the American pension system; there is no way out.

Thu, 07/04/2013 - 18:09 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Start wriitng up the charges against Bernanke4 and Obama's smirking jackals....

Thu, 07/04/2013 - 13:51 | Link to Comment 0b1knob
Fri, 07/05/2013 - 00:12 | Link to Comment sablya
sablya's picture

Hulbert trusts the CPI values coming out.  It ought to be clear by now that the CPI has nothing to do with real inflation experienced by real people.

Thu, 07/04/2013 - 14:03 | Link to Comment firstdivision
firstdivision's picture

How about tracking s&p vs the feds "Other Assets" since the bottom in '09

Thu, 07/04/2013 - 14:12 | Link to Comment orangegeek
orangegeek's picture

Europe was up over 2-3% today across the board  - DAX, FTSE, etc.


Underlying value has been irrelevant for some time.  There are more buyers than sellers - including the FED.


S&P500 Weekly shows no end in sight - any downside is quickly reversed - and POMO schedule still seems to have the right effect.

Thu, 07/04/2013 - 14:39 | Link to Comment Crash Overide
Crash Overide's picture

It's to the point where no one want's to play anymore, even the ride down doesn't look to good.

Thu, 07/04/2013 - 14:57 | Link to Comment spooz
spooz's picture

From Ritholtz, looking at global cyclically adjusted PE ratios, US equities are overpriced:

Thu, 07/04/2013 - 15:30 | Link to Comment csodak
csodak's picture

whether it is today or 3 years from now f you r caught long you will los a substantial amt of wealth as everyone leverages positions and there will be few, and i mean few bids to hit.

Thu, 07/04/2013 - 18:08 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Long what ? Equities ? Bonds? or....PMS...?

Thu, 07/04/2013 - 15:49 | Link to Comment all-priced-in
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Deleted -

Thu, 07/04/2013 - 17:45 | Link to Comment Dr.Engineer
Dr.Engineer's picture

Central banks are omnipotent impotent. 

Fri, 07/05/2013 - 03:23 | Link to Comment Escapeclaws
Escapeclaws's picture

Great graphic with seemingly great explanatory power, but I'm too ignorant to really know.

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