Mark Spitznagel Warns Today's "Distorted" Market Is "Set Up For A Major Crash"

Tyler Durden's picture

Despite Ron Insana's insta-dismissal of all things "Austrian", and Maria Bartiromo's scoffing at his comments, Mark Spitznagel (who most recently discussed the problems we face here, here and here) ventured on to the unreality channel this afternoon and much eyebrow-raising ensued. Spitznagel, author of The Dao of Capital , explained why he believes "the market is setup for a major crash," and expects a 40% decline in stocks. The current market "entirely artificial" environment driven by zero-interest-rates and central bank asset purchases, along with valuations and sentiment, has distorted the 'markets' in the same way as "in all other major tops in history." His investing advice is simple, "step aside!" But doesn't expect many to heed his proven advice, because, "it is the hardest thing to do right now, "and makes you look like a fool."

"this notion of a 'catalyst' for the decline is false"...

If you prefer your business media with a sense of reality - the following 210 seconds is must watch!



As Spitznagel noted previously,



Our fear of corrective crashes is misplaced. They are necessary purges to clear the financial system of unhealthy mal-investment and to allow the redistribution of resources to stronger industries. I would argue that had the government followed this path in 1929, there would have been a garden-variety recession — not a Depression.


Unfortunately, we have labored under faulty assumptions and failed logic, particularly since 2008-2009. This is the legacy that Bernanke leaves not only to his successor, but to all of us.


What we must learn from history is that the government should stop suppressing the natural, homeostatic functions of the market. Otherwise, the "cure" will prove deadlier than the disease.

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LetThemEatRand's picture

Is she actually taking a shit while he's talking?

prains's picture

WOW, really impressed he didn't grab her clip board and fucking beat her to a pulp with it


i would have pushed it thru the bridge of her nose til it came out the other side

Zer0head's picture

Marty, is that you?

RIP Marty and Mark (Marty) you are spot on,

King_of_simpletons's picture

A token correction will happen when dow hits 36K. It will be engineered though not a natural one -- just to make things look cool and "normal", not for main street, but for the WallstreetWashingtonDCMediaFederalReserve complex.

markmotive's picture

The Fed has painted itself into a corner. It has to keep printing money until the entire thing implodes.

Chris Martenson on the Fed's deep hole:

new game's picture

hey , (dah) are you smarter than a fukin 5th grader...

wow, can't believe my eyes anymore-reading/listening

to the most obvious, but most will not heed.

humans are truely stupid animals. head shot at watering hole....

lickspitler's picture

we know we fucking know shiff rogers farber bass yar da yar dah fuckin ya, shut the fuck unless u got some time line input.



jbvtme's picture

"keep your powder dry" he says. then the camera focuses on fifty pounds of makeup known as Maria...

GetZeeGold's picture



Funny Maria didn't mention owning gold. I'm sure it just skipped her mind.

zorba THE GREEK's picture

It's hard to believe that Maria was actually hot at one time, but that was during another century.

WTFUD's picture

Yeah, like when she was burning at the stake!

DeadFred's picture

Reptilian host bodies are subjected to extreme chemical imbalances.

Otrader's picture

I hope she'll become Flavor Flav's wife one day.   That would be just as unbelievable as Bridgette Nielsen with Flavor Flav. 



ParkAveFlasher's picture

Would it?  I bet Maria would fancy a snorgle with Flav if he arrived to the Ball kickin' a gold iPhone, dangling from his neck bling suggestively.  It would be irresistably dirty for her.

Freddie's picture

Check out her face at 12 seconds afetr he said we are set up for a major crash.  She looks like she is going to throw up.  God is she bloated too. 

whirlybird rules's picture

Bartiromo is not a genius, but give her a break!  She looks like she had a monster cold.  xD

zorba THE GREEK's picture

Mark is amazing...He's figured out the market is overpriced.

He should get a Nobel prize. Next he is going to figure out it is rigged too.

What insight!

fonzannoon's picture

the guy wins 9 olympic gold medals and throws "nagel" on there to seem geeky and all the sudden we have to get investment advice from him?

NoDebt's picture

Lenny Dykstra with a few extra IQ points?

dreadnaught's picture

wha???    youre thinking Mark Spitz

Hedgetard55's picture

Who is the skanky ho asking the questions there? God she looks nasty.

bubblemania's picture

It sure looked that way, she probably had too much salad at Chopt for lunch.

Ham-bone's picture

I'm neither "mom and pop" or an institutional investor...hell, I'm not invested in this at all...I stepped aside as of '11.  Still, I don't see the "catalyst" that makes Ben step aside and allow true market pricing to take over.  The worse things get, the worse they'll make things with their facade of a monetary cure.

RebelDevil's picture

"Stepping aside" is always the safe way to play, but to short this "market" with the right timing is fucking GOLDEN right now.

asteroids's picture

There is another more important reason to step aside. Once you are "in" the market, long or short, the boyz with their supercomputers will figure a way of "shaking" weak hands out as quickly as possible to make their quarterly nut. They punish the bears on a daily basis. After 5 years of zero money I suspect they have HUGE piles of cash to fund this type of operation.

g'kar's picture

Waiting...waiting....waiting.......foot tapping.....charts are saying....waiting....foot tapping.....


No one really will believe this crap until it happens. One day.

NoDebt's picture

And after it happens you know what they'll do?  Print up another one.

Amagnonx's picture

Out of a number of places to park cash at the moment, gold and silver have been a tragi-comedy, but Bitcoin has really paid off.


I watched a clip of John McAfee saying that BTC can't be stopped, now the guy sure does a lot of drugs, and maybe has been out of the tech scene for a while - but he is looking to come back into tech making some IP address scrambling devices and other privacy protection hardware - at the moment, I can't see a bigger opportunity than selling privacy.  So he is not an idiot.


BTC may or may not deliver on its long term promises, but for right now its a pretty good gamble - compared to the other potential gambles you could be making.


Long term, I still think silver is the ultimate investment, and I have plenty - but BTC has paid me out extremely well.

NoDebt's picture

I'm not bolting till be get the parabolic blow-off top up to DOW 20,000 (I already have the commemorative hats printed up).  

I ask one simple question:  If all risk has been removed from the system by central banks, what P/E is too high for stocks?


prains's picture

when they run out of P

DeadFred's picture

Somewhat lower than it is now.

new game's picture

pe is a fools errand. it is fear and greed that runs da show.

right now the majority are at the punch bowl thinking they are pretty crafty.

luv it, the fuks will be quiet as hell soon. no "da shit" talk from da shit head...

disabledvet's picture

so the "cash out refi's" have already been so staggering (Carl Icon clearing 440 million in 13 months? and that's only HALF his position????!!!) I think 40 percent would qualify as "mere sell off" at this point. in other words "probably healthy actually." I would agree anything in the 70% range might be "a baddie" however. I've got a whole list of stuff worth buying right now actually...and if this really is rigged all I have to say is "God bless 'merica!" They tried this during the Great Depression, epic fail. After Japan? Epic Fail. Europe now? Epic Fail. I have no clue why this version is working...although I do agree it makes me hungry for some Freedom Fries though. How about we start with the right to practice our faith free from "interventions."

Cabreado's picture

Apparently he's been having trouble sleeping at night.

Bay of Pigs's picture

Maria looks like she was up all night drinking and doing blow.

Stonedog's picture

Only a 40% crash?  He is what I like to call an optimist.

ebworthen's picture

Watched this today on CNBC, Maria's lips kind of flushed and she had to stymy a reaction.

He's right, but just don't let those folks with IRA's and 401K's hear it and go to cash.

Wall Street needs to crash the Ponzi all over again and clear more chips off the table.

Maria's lips were looking rather ready for some action though.

fonzannoon's picture

what happens after a 40% crash? The sheep go back to dollar cost averaging into their growth fund? I don't think so. lawsuits up tha anus against anyone and everyone managing money, especially retirement plans? Absolutely. Followed by Obamamarket? Definitely. 40% drop is the end of whatever this sham of a market is.

Ham-bone's picture

Fonz - there is no 40% market correction coming...the unwinding leverage would be catastrophic.

Fedz key to money - is there Fed desired inflation? commodities going anywhere but churning since '11. 

Is the jobz market getting any better?  nooo...participation rate is laughable and quantity of jobz isn't keeping up w/ birth rate, quality of jobz is weak tit. 

No end to taper - in fact, taper off but instead QE up, up, and away.

fonzannoon's picture

I agree about no taper, and up and up...but I just see skynet. I see positive gains every year. where do you see the breakdown coming from?

Ham-bone's picture

Fonz - what average American will piss and moan about a stock market that makes new highs everyday...simply another example of our exceptionalism.  The only breakdown will be that this process will serve fewer and fewer leaving more and more lower middle folks (formely blue collar) to be wards of the state.

fonzannoon's picture

yeah man. I totally agree, I just don't see why the market has to have a big selloff. But the big picture (moar qe, less middle class) you describe makes total sense.

Ham-bone's picture

As best I can tell, market as an independent entity ceased to exist in March '09 and May '10 flash crash was proof the Fed or PPT or whatever well and truly was the market.  August / Sept '11 gold (and other commodities) got disorderly to the upside while equities were getting dumped...liquidity was going to the "wrong" places.  That was unacceptable and has been entirely reversed absent "natural" reason.

Now???  Watching the market is silly.  Simply like watching the daily morphine application via POMO and up we go.

How it breaks down or falls apart...seems only via political upheaval and we don't seem near a political breaking point...thus, on we go.

The other option is international game changes everything overnight...any night.

Bay of Pigs's picture

+1 Ham-Bone,

Nobody ever talks about the dumping of FASB 157 anymore, and the following "marked to unicorn" fantasy that exists today. The gold and silver paper induced slaughter the last two years is well documented but less understood, even by some here at ZH.

Like you, I have no idea what breaks this Twilight Zone mentality and refusal to accept the reality of the situation we are now in. The stock market is a useless gauge to anything going on in the economy these days.

We've never seen anything like this going on before.

Ham-bone's picture

FASB 157 - adjustable rate mortgage reset armageddon - dollar collapse - bond vigilantes - gold $1900

All things of yesteryear that "should have been" but never came to be...$7 T in debt added in 5yrs and rates halved, PM's halved'ish, equities doubled.  Whoodathunkit.

Funny thing is, back in '08 - '11 there were so many black swans on the, everything depends on the Fed...everything.  The power of a king...the power of an emperor...almost like Nathan Rothschild was onto something.

tarsubil's picture

I might not remember this perfectly but I think this is the gist of it. There once was a king who was told he was very powerful by his court. He brought his court out to the beach and ordered the tide not to come in. It came in.

The tide will come in. The plans of those at the top will be laughed at as one laughs at dreams in the morning.

BringOnTheAsteroid's picture

It's simply unknowable but there are plenty of contenders. How careful do you think BB has to be when he strays outside. Another terrorist attack on US soil, a war erupting, Tokyo needing evacuation from Fukushima disaster, some fat finger deciding enough is enough and bailing setting in motion the first snow flake in the avalanche.

Dr Benway's picture

I think it will be simpler than that. The manipulated market levels can only be sustained as long as people don't cash in.

As people retire they will look try to sell their stawks and cash all their great gains. They need someone to sell to.

For a while you can lure or force new suckers in to the "market", or alternatively borrow the money, but outflows will eventually exceed what inflows can be mustered, as with any ponzi, and the whole thing collapses.