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David Stockman Blasts, Brace For "The Explosion Of The Mother Of All Bubbles"

Tyler Durden's picture




 

David Stockman has never been shy of expressing his true feelings (about Bernanke's "Born Again Jobs Scam", Calamity Janet Yellen, Obamacare's resentment-encouraging rollout, and the entire Keynesian state wreck ahead). But this time, he aims his acerbic ire at the "markets."

During a brief interview on FOX Business, the author of The Age of Deformation exclaimed "There’s no one in the stock market today except drugged up day-traders and robots... This is utterly irrational," adding that "we're in the fourth bubble inflated by the Fed in this century... but now we have the greatest, mother of all bubbles."

The blame (and benefactors) are clear, he blasts, "how could someone in their right mind believe that you can have interest rates... at zero for nine years?... That is the greatest gift to the speculators, to the 1%, to the leveraged traders, to the carry trade ever imagined!" He concludes, "we're almost on the edge of another explosion at the present time."

 

In just over 3 minutes Stockman takes it all on...

 

 

 

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Thu, 11/07/2013 - 22:00 | 4133508 Ned Zeppelin
Ned Zeppelin's picture

Stockman should be revered by ZHers. Read his book and you will connect all of the dots.

It is worse than you think.

Thu, 11/07/2013 - 22:02 | 4133519 LetThemEatRand
LetThemEatRand's picture

I don't agree with everything Stockman has to say, but he defected from the Reagan camp when he figured out what was really going on and that it had nothing to do with what was sold to voters, and he's a hero for that.  

Thu, 11/07/2013 - 22:11 | 4133553 Bay of Pigs
Bay of Pigs's picture

There were a lot of Neocons and assorted assholes with the Reagan Administration. Cheney, Bush Sr., Shultz, Weinberger, Baker, Meese, Perle, Wolfowitz just to name a few.

Not sure when Stockman woke up, but he couldn't have missed that coming trainwreck seeing it from the inside.

Thu, 11/07/2013 - 22:19 | 4133588 Chris Jusset
Chris Jusset's picture

The US has had ongoing ZIRP & QE for five consecutive years ... utterly unprecedented ... and the Fed deliberately did this to reflate the old bubbles in real estate and the stock market, as well as blowing new bubbles in junk bonds and Treasuries.

 

The US has become a complete bubble economy.

Thu, 11/07/2013 - 22:32 | 4133629 LetThemEatRand
LetThemEatRand's picture

I don't disagree with you, but it was Greenspan who got this party started.  

Thu, 11/07/2013 - 22:50 | 4133686 DanDaley
DanDaley's picture

What about the Fabian socialists (Dexter White and JM Keynes) back at Bretton Woods...that seems to me to be the linchpin...other than Jekyll Island.

Thu, 11/07/2013 - 23:23 | 4133837 samsara
samsara's picture

Google "Rhodes CFR Fabians"

That'll start you.

Fri, 11/08/2013 - 00:38 | 4134015 Manthong
Manthong's picture

heh heh..

"c'mon in, the water is warm"

..and Cecil be de' man.

We must find new lands from which we can easily obtain raw materials and at the same time exploit the cheap slave labor that is available from the natives of the colonies. The colonies would also provide a dumping ground for the surplus goods produced in our factories.

and.. which slimeball Clinton was a "Rhodes Scholar"?

and.. and.. it is so refreshing to know that slime is gender neutral in politics.

Fri, 11/08/2013 - 03:23 | 4134280 Manthong
Manthong's picture

hmm.  curious as to how few in this forum understand the above...

Fri, 11/08/2013 - 07:40 | 4134450 new game
new game's picture

so i should hold off on next gold purchase?

heh heh

s/

mofo of all bottoms a comin...

Fri, 11/08/2013 - 07:43 | 4134457 new game
new game's picture

restated: cash is king til the king is beheaded...

timing is a bitch, bitcheez

Sat, 11/09/2013 - 00:12 | 4137794 Keyser
Keyser's picture

Thanks for the link above... I find this quote from Cecil Rhodes quite telling it's avarice...

"Why should we not form a secret society with but one object, the furtherance of the British Empire and the bringing of the whole world under British rule, for the recovery of the United States, for making the Anglo Saxon race but one Empire? What a dream, but yet it is probable; it is possible."

 

Sat, 11/09/2013 - 09:21 | 4138167 Bendromeda Strain
Bendromeda Strain's picture

Hey, one other thing Bill Clinton did was to bring Quigley's "Tragedy & Hope" into (semi) mainstream discussion. The pdf is free online.

Fri, 11/08/2013 - 07:40 | 4134451 economics9698
economics9698's picture

The Fed cannot do anything about ZIRP even if it wanted to without selling a few trillion in paper, which of course would cause the mother of all crashes.

The Fed lost control of interest rates when banks parked trillions in excess reserves at the Fed starting in 2008.  The excess reserves will stay parked there available to be loaned out at 0.05% until inflation or interest rates are more lucrative, see statement above.

Four paths, austerity, war, bankruptcy, or inflation.  The Fed will keep pushing until we get Venezuelan style inflation.  One thing people forget is inflation is a chance for the rich to get even richer.  In Germany (1923) people got rich overnight who could buy and sell.  The cockroach classes like Bernanke and Yellen probably look forward to the days of high inflation, just another buying opportunity for them. 

You have to understand these people think your life is a waste of space and resources and the sooner they own everything you have and can starve you to death the better for them.  Germans saw this in the 1920 in Germany and in the Ukraine, 1932-33, Holodomor. High inflation rates would be welcomed by these sick bastards.

 

The sooner you stop thinking these people are rational the sooner you understand them.  Cockroaches looking for food.

Thu, 11/07/2013 - 22:53 | 4133710 Freewheelin Franklin
Freewheelin Franklin's picture

“So you think that money is the root of all evil?” said Francisco d'Anconia. “Have you ever asked what is the root of money?"

When I read that speech, and then think that Greespan was part of that "inner circle", I think to myself, someone should have rammed a telephone pole up his ass.

Thu, 11/07/2013 - 23:06 | 4133764 Deo vindice
Deo vindice's picture

One of the most misquoted verses of the Bible is "the LOVE of money is the root of all (kinds of) evil".

Money per se is not evil. It is the inordinate lust after it that drives men to wicked acts. That is evil.

Thu, 11/07/2013 - 23:17 | 4133803 max2205
max2205's picture

Trillions lost/stolen from savers....it will be histories takeaway

Sat, 11/09/2013 - 00:22 | 4137819 Keyser
Keyser's picture

In another interview, Stockman calls for the USD index to fall to between 50 - 56 after the reset. 

Fri, 11/08/2013 - 08:31 | 4134524 Watauga
Watauga's picture

The root of all evil is "self."  Anything that is of the self is not of God, and anything that is not of God is mammon, and man cannot serve both God and mammon.

And just as importantly, Christ said, "I am the Way, and the Truth, and the Life; no one comes to the Father but through Me."  The if you believe in Christ and are baptized, you are not of mammon, but of God.

This is everything one needs to know about life, history, reality, and eternity. 

Fri, 11/08/2013 - 11:38 | 4135232 Deo vindice
Deo vindice's picture

@ Watauga - if you believe in Christ and are baptized, you are not of mammon, but of God.

I guess the dying thief who believed in Jesus while they were on their crosses was lied to by Jesus then when He told him he (the thief) would be with Him (Jesus) in paradise? (He never got baptized)

Baptism is indeed a matter of obedience, (an evidence of faith in Christ), but it is not a means of being saved, or "of God" as you put it.

Edit: last sentence for clarity.

Fri, 11/08/2013 - 05:02 | 4134355 Tall Tom
Tall Tom's picture

I must disagree with you in that it was Paul Volcker who started this PArTy. Before Paul Volcker "saved the day" back in 1979 it was Mr. Volcker who engineered the decoupling of the US Dollar from Gold back in 1971, before he was ever the Chairman of the Federal Reserve..

 

That was the beginning of this insane 42 Year experiment to have no Fiat Currency in the World backed by Gold...a supply which is not easily manipulated.

 

With the US Dollar backed by OPEC Oil it was easy to strengthen or weaken the currency by having our friend Saudi Arabia turn up of back off of the spigot. Conversely we could restrict the creation of new debt or increase the creation of new debt. The value, the purchasing power, of currency was too easily manipulated. 

 

Did you know that we had Saudi Arabia in the middle 1980s open the tap to full, ensuring $10 Oil, thus ensuring the Bankruptcy of the former Soviet Union? The USA bluffed the USSR into heavy Military Expenditures with implementing an unworkable Strategic Defense Initiative, "Star Wars", Program and depressed the price of the most marketable of assets which they had for sale, Oil, accounting for a large percentage of USSR GDP.  That is how America prevailed in victory in the Cold War.

 

All Wars are Economic...Hot Wars, Cold Wars, Proxy Wars, Currency Wars, Trade Wars, Culture Wars, Drug Wars, etc. The strategy is that you destroy the combatants will and capability ,as in their ECONOMY, to engage in Warfare. If you are successful then you emerge victorious. But there are associated costs with victory. It just costs the Victor less than it does the opponent, the Victim. (Remember Latin?)

 

With the discipline of Gold removed the Central Bankers had free reign and no discipline. We are just now starting to reap the just "rewards" of this Grand Fraud. THe ParTY iS OvER. Alan Greenspan was the Chairman of the Federal Reserve, Volcker's protege, who CONTINUED VOLCKER'S POLICIES.

 

The concept which so many fail to grasp it that Administrations are just CONTINUATIONS of previous Administrations and are in essence no different. This applies to Presidential Administrations. This applies to Federal Reserve Chairmanships.

 

Janet Yellen will continue Ben Bernanke's destructive policies. I will not expect anything different. In fact I cannot understand any reason behind expecting anything different.

 

It is evening in America.

Fri, 11/08/2013 - 19:32 | 4137148 validate
validate's picture

It's a little early to establish, with certainty, the real victor in the cold war. One particularly interesting aspect of the folding of the USSR is why did the City remove its support. I think that the USSR ceased to be an adequate model of socialism, with  the USSA moving so close to its socialistic destiny. Kruschev, remember, was a Stalinist's Stalinist and Breznev not nearly so clever, leading to a totaly new use of the Glasnost concept with Gorbachev.  Sombody with mega-power is now shining a powerful, favorable, spotlight on Putin. Who knows what will happen when the fruit bowl is upset. Whose population is better prepared for the NWO ?

 

 

Sat, 11/09/2013 - 09:50 | 4138193 Bendromeda Strain
Bendromeda Strain's picture

If Saudi oil was the linchpin of the Cold War, then apply this thesis to Russia's gas stranglehold of Europe and Putin's 'nyet' to Bandar's gambit on Syria. It would seem the shoe is now on the other foot.

Fri, 11/08/2013 - 08:26 | 4134516 ToNYC
ToNYC's picture

SeaTac minimum wage fight in ballot box vs. Reagan's Air Traffic Controllers strike firings for getting the working and living wage party started. Greenspan just brought the financial crack like Reagan used in mid-80s. Nixon went to China in 1972 for cheap labor, to transfer the benefits of democracy and skim the cream from the homies.

Fri, 11/08/2013 - 08:13 | 4134492 ToNYC
ToNYC's picture

Takes years of ZIRP spinning  to turn dross into gold and re-present it to the customers as the best dirty shirt.

Thu, 11/07/2013 - 23:18 | 4133810 samsara
samsara's picture

Not unlike Craig Paul Roberts.

Seen the inside, Drawing their.own conclusions.

Fri, 11/08/2013 - 00:24 | 4134001 Plata con Carne
Plata con Carne's picture

Ron Paul did the same, when all the Reganomics bullfunky started up.

Fri, 11/08/2013 - 00:52 | 4134074 scrappy
scrappy's picture

Who cares?

 

Bigger fish to fry first.

 

Hello?

 

This is ZH right?

 

Here you go - like all info - discect it.

 

http://investmentwatchblog.com/the-plane-truth-gas-and-gold-goodbye-to-t...

 

He never gets to solutions though.

 

We will have to.

 

WE MUST

 

Waiting and watching.

 

Scrappy out.

 

 

 

 

Fri, 11/08/2013 - 07:30 | 4134440 Tall Tom
Tall Tom's picture

Thanks for the link. Just finished it. Amazing.

Thu, 11/07/2013 - 22:27 | 4133612 Freddie
Freddie's picture

I am so glad I got a 1,000 shares of Tweeter today before the bubble bursts. I wanted to get in on the ground floor of this social media boom.

Fri, 11/08/2013 - 00:41 | 4134043 disabledvet
disabledvet's picture

i was kinda bummed out when i saw my (insert high beta annihilated name here) transmorgified by Twitter. I'd laugh if the Nasdaq headed straight back to 1000 again with Twitter blasting away one from record high to the next. The VinkleVoss twins will not be denied!

Thu, 11/07/2013 - 22:02 | 4133518 dcohen
dcohen's picture

Mr Yellen is different, she will know what to do to avoid another deflated bubble.

Thu, 11/07/2013 - 22:08 | 4133538 A Lunatic
A Lunatic's picture

Mr. Yellen will crawl out of her slimy cubicle, see her shadow and declare 4 moar years of the same old shit.....

Thu, 11/07/2013 - 22:23 | 4133598 smlbizman
smlbizman's picture

4 moar years of...new material...mr. yellen...(tff)...just made that up ..(to fucking funny)...going straight to the ipo dept. with that one..get it while u can..is that why my new and improved oblowmecare will pay for new tits for me, but not my wife....shit writes itself.....mr. moe yellen, knuck,knuck knuck......

Thu, 11/07/2013 - 23:04 | 4133729 andrewp111
andrewp111's picture

Mr. Yellen will just slam the pedal to the metal until there is no moar government bonds to buy. Then she is stuck unless she can get away with violating the law to buy non-Federal bonds, and unless she can the whole system blows up.  This incidentially, is why Obama really wanted Summers. Summers is brash enough to buy Munis and Junk Bonds and to dare anyone to try and stop him. Yellen is more likely to simply buy up all the Treasury, Fannie, and Freddie bonds in existence, but not expand to Munis. So, just as GreenSpan left 2 years before his real estate bubble imploded, Bernanke is leaving 1-3 years before his Mother Of All Bubbles implodes. If Mr. Yellen can expand the Fed's mandate to buying Munis, Corporates, Junk Bonds, and Stocks, she can probably get an additional 4 years and a second term out of it before the final implosion. After that it is Game Over.

And when the bubble finally implodes, it will go so fast that no one will get out. All an outside observer will see is a widening of spreads and then suddenly the entire interbank payment system seizes up. The bankster insiders of course will see the collateral calls that force them to pull the plug.

Thu, 11/07/2013 - 23:47 | 4133905 NoDebt
NoDebt's picture

"Mr. Yellen will just slam the pedal to the metal until there is no moar government bonds to buy."

They'll make more.


Fri, 11/08/2013 - 07:28 | 4134438 Ghordius
Ghordius's picture

? andrewp111, I don't understand your "unless she can get away with violating the law to buy non-Federal bonds"

as far as I understand, the FED has "stuck the pedal" into buying securities, one trillion per year, half of them US Treasuries, and half of them Mortgage-Backed Securities

I repeat: half of QE3 is already spent every month in support of the US housing market. I presume lots of Fannie and Freddie bonds

--------

this reminds me that in general most Americans are not aware how radically different the FED's balance sheet looks, compared to the other 110 central or national banks of the world. just look up FX reserves, for example

Thu, 11/07/2013 - 22:10 | 4133548 lasvegaspersona
lasvegaspersona's picture

joke yes?

you know she was cloned from Bernacke's obdulla longata right?

Thu, 11/07/2013 - 22:16 | 4133573 dcohen
dcohen's picture

Ofcourse

Thu, 11/07/2013 - 23:07 | 4133773 AlaricBalth
AlaricBalth's picture

But mama says Yellen is ornery because she has a brain but can't figure out how to use it.

Medulla Oblongata-The Water Boy
http://www.youtube.com/watch?v=UfC4u5GCy3I

Fri, 11/08/2013 - 00:26 | 4134007 Plata con Carne
Plata con Carne's picture

More likely cloned from his foreskin.

Fri, 11/08/2013 - 00:34 | 4134027 ebworthen
ebworthen's picture

I thought she was cloned from a hairy mole on his ass?

Thu, 11/07/2013 - 22:02 | 4133520 Bay of Pigs
Bay of Pigs's picture

Irrational exuberance?

Where have we heard that before?

Thu, 11/07/2013 - 22:09 | 4133546 TheBoyPlunger
TheBoyPlunger's picture

I got plenty of Chef Boyardi canned ravioli and .22lr

 

Let's get this party started !

Thu, 11/07/2013 - 22:22 | 4133592 10mm
10mm's picture

I hope you have just a little more than .22lr. Not that i want to get hit with a super soaker let alone a bullet.

Thu, 11/07/2013 - 22:35 | 4133637 Freddie
Freddie's picture

How about .22 MAG?

Thu, 11/07/2013 - 23:00 | 4133740 Oldwood
Oldwood's picture

Try the RockRiver 22 TCM. A 22 cal bullet with a bottleneck 9mm size casing. Wicked loud and will penetrate 1/4" steel. Utilizes a 1911 frame (typical to your standard military issue 45 semi auto) and has an interchangeable 9mm barrel so you have some alternatives in ammo. Nice pistol and ammo 50 cents/round.

Fri, 11/08/2013 - 01:57 | 4134190 Overfed
Overfed's picture

Love .22 mag.

Thu, 11/07/2013 - 22:38 | 4133650 Upswaller
Upswaller's picture

Don't fall for the one trick hoss, Buster.  The stats on 22LR are quite impressive.  

.45, .308 and 30'06 are fun, but withering semi fire into a gnat's eye can be had by 22LR. 

Pith, anyone?

Thu, 11/07/2013 - 22:43 | 4133669 Oldwood
Oldwood's picture

Sure, everyone knows that size doesn't matter. Besides, before long you will need a permit to open carry a bucket of rocks.

Thu, 11/07/2013 - 22:52 | 4133705 DanDaley
DanDaley's picture

Or else you won't need a permit to carry at all.

Fri, 11/08/2013 - 04:37 | 4134331 Rogue Trooper
Rogue Trooper's picture

True, but at some point, the rules of "carry or not to carry" will become somewhat a moot point.

.22 CCI Velocitor is quite good IMHO.   Double tap within 50, perhaps 75, yards to be sure but it does require some skill and training.

Still there is always the .223 'black rifle' to fall back on.  Perfect egonomics for engagement up to 300 ort 400 yards. On the other hand the .308 if you want to reach out and touch someone with confidence.

Off to the range we go, go, go..... it's nice to have choices.

BTW How would obamacare work for guns?

Just askin'

Thu, 11/07/2013 - 23:12 | 4133785 samsara
samsara's picture

.17 match rifle. Put 5 in a quarter size target.

Fri, 11/08/2013 - 00:37 | 4134033 ebworthen
ebworthen's picture

The ammo is light, the recoil almost non existent, and the report fairly quiet.

A .22LR to the eyeballs will stop anyone, and handy for tagging small game which one person can carry and clean.

Fri, 11/08/2013 - 01:05 | 4134095 yofish
yofish's picture

If I was forced to choose but one arm, it would be my 10/22. or old faithful, Rem nylon sixsix.

Fri, 11/08/2013 - 01:16 | 4134117 Miffed Microbio...
Miffed Microbiologist's picture

Agreed. Fun and easy to shoot. Quiet enough to shoot around the property at vermin to not bother the neighbors and cheap to burn through ammo target practicing. However, if woken up at the dead of night by an intruder I don't trust I'm that good of a shot to hit an eyeball.i rather rely on my trusty XD40 with a laser sight. That has got to be a simple point and click moment for me!

Miffed;-)

Fri, 11/08/2013 - 08:48 | 4134560 DanDaley
DanDaley's picture

Don't forget those wonderful commie guns, too.

Thu, 11/07/2013 - 22:18 | 4133580 stinkhammer
stinkhammer's picture

janet is one of benny's freakishly animated testicles

Thu, 11/07/2013 - 23:07 | 4133771 Anusocracy
Anusocracy's picture

If you squeeze Benny's head it disappears into his body and Yellen's head pops out.

Thu, 11/07/2013 - 22:20 | 4133589 Oldwood
Oldwood's picture

Its kind of sad when the only thing to look forward to is the end of the world.

Thu, 11/07/2013 - 22:23 | 4133604 10mm
10mm's picture

I look forward to the end of this earth age. No charge.

Thu, 11/07/2013 - 22:39 | 4133657 Oldwood
Oldwood's picture

Where is Frodo when you need him. We need to bring down Mordor.

Thu, 11/07/2013 - 23:29 | 4133856 Uber Vandal
Uber Vandal's picture

Keep in mind it was Gollum who ultimately saved the day.

Even Gandalf said "not even the very wise can see all ends."

 

Thu, 11/07/2013 - 22:56 | 4133721 hoist the bs flag
hoist the bs flag's picture

no shit...i hear you. everytime i "plan" something for the future i think of that Mike Tyson quote.

Thu, 11/07/2013 - 22:21 | 4133595 Big Ben
Big Ben's picture

Stockman has been predicting doom for as long as I can remember. And I'm sure he'll be proven correct any decade now.

Thu, 11/07/2013 - 22:28 | 4133618 Cdad
Cdad's picture

The economy has been proving him correct for the last five years.  The market has been proving him correct since the'90s.  What are you talking about?

Thu, 11/07/2013 - 22:23 | 4133605 jomama
jomama's picture

if you keep crying wolf, maybe one day it will appear?

on a long enough timeline?

Thu, 11/07/2013 - 22:36 | 4133642 spinone
spinone's picture

we know what, but when?

 

Thu, 11/07/2013 - 22:45 | 4133679 WTFUD
WTFUD's picture

If ugliness was a crime yellen would get the chair!

Thu, 11/07/2013 - 22:49 | 4133690 nakki
nakki's picture

I think he was proven right today. I mean the horror and calimity of the S&P being crushed today a full 1.25% most send shivers down the spine off every junkie on the street. Must increase QE to 100 billion per month tomorrow. Need moar and I mean like yesterday. Up to Lexington 125, for all the spikers, and down to the dirty boulevard for the rest of us.

Thu, 11/07/2013 - 23:50 | 4133915 swanpoint
swanpoint's picture

Down because everyone bought TWTR. Nothing left for anything else.

Thu, 11/07/2013 - 22:59 | 4133737 jballz
jballz's picture

how could someone in their right mind believe that you can have interest rates... at zero for nine years?

 

um because Japan?

 

pass the sushi, bitchez.

Fri, 11/08/2013 - 00:46 | 4134059 1000 splendid suns
1000 splendid suns's picture

You can have all the three eyed isotope rolls you want there pal. Japan's only afloat because of their kamikaze loyalty and the Fed.

Thu, 11/07/2013 - 23:00 | 4133741 DOGGONE
DOGGONE's picture

As the leader for the future yet to be seen, here is our track record to date.
http://patrick.net/forum/?p=1230886

Do you see drunk driving? What do you see coming?

Thu, 11/07/2013 - 23:09 | 4133776 g'kar
g'kar's picture

Brace for impact.

Fri, 11/08/2013 - 00:59 | 4134083 disabledvet
disabledvet's picture

earnings have slowed materially in this quarter. that's not a good reason to have your p/e ratio gap out. i still don't see the recession ironically enough...but i sure can see a p/e compression post "taper tantrum." sure...you can have 18 p/e's...but you can have p/e's of six too. treasuries are in a bubble? Amazon is bleeding money and sporting a 200 billion dollar market cap. "and they're the tightwad in group." if this thing really heads south "Nasdaq 5000 style" there is no other asset class to buy. No Syria? the ACA "not even a working website"? a taper disaster followed by "the greatest QE ever"? that's a lot of vodoo at work.

Thu, 11/07/2013 - 23:12 | 4133784 Seal
Seal's picture

Not forgotten

By ALAN ABELSON - 2004 or so

Saint Alan?

"WHAT DO YOU CALL A FIRE DEPARTMENT that concentrates not on putting out the fire, but on cleaning up afterward? Different, if you're polite. Insane, if you're us.

For Mr. Greenspan, in the course of delivering a glowing tribute to himself before a meeting of the American Economic Association, proudly enunciated the monetary equivalent of that aberrant fire-fighting technique. More specifically, he trumpeted the great virtue of passively watching a stock bubble grow bigger and bigger and bigger until it bursts - but making sure you have enough palliatives on hand to ease the pain."

IMO Greenspan has been functionally senile since about 1996, as for Bernank???? quien sabe?????

Thu, 11/07/2013 - 23:15 | 4133787 spine001
spine001's picture

I just finished my analysis, the correlation coeficient of the linear regression between the size of the Federal Reserve balance sheet and the weekly (ending Wednesday) values of the S&P500 is 0.90, and when I add the start and end of QE1, QE2 and QE3, as dummy variables and perform a multivariate correlation with this information, the correlation goes up to over 0.95 with r square of 0.90, meaning that 90% of the changes in the S&P500 are explained by balance sheet increases in the Federal Reserve, futhermore the causation is 1 to1, between cause = announcement and effect = S&P500 increase and end of QE and market decrease. I'd love any of the intellectual Krugman type economists to try to explain this one out! After this type of analysis there is no argument on the why the market is up.

If anybody knows how to attach a spreadsheet, I'll include it

Thu, 11/07/2013 - 23:21 | 4133822 prains
prains's picture

Dude....that was fucking awesome

 

 

there's only one chart left that matters, it's a set of concentric circles and calibrated cross hairs, everybody will be reading that chart soon enough

Fri, 11/08/2013 - 04:40 | 4134337 Rogue Trooper
Rogue Trooper's picture

Agreed.  One of the best posts of the year!  Glad I caught this one as well.

Nice follow yourself up Haka dude

Freekin' awesome ;)

Thu, 11/07/2013 - 23:44 | 4133893 Al Huxley
Al Huxley's picture

Nice.  So anybody who understands that the FED is totally fucked, and can never taper, can just leverage long on the highest-beta tech stocks and ride the wave into the end of civilization as we know it.  This is going to be the market equivalent of the those fucking big 70 ft wave rides that they have to jet-ski onto. 

 

EDIT - by the way, those rides are exciting and impressive as hell to watch, but the crashes at the end are usually terrifying, dangerous and occassionally fatal.

Fri, 11/08/2013 - 02:08 | 4134197 Thought Processor
Thought Processor's picture

Great analogy.

In this case though the wave get's bigger as you ride it-  and if you keep riding it will exceed your ability to remain in control and you will likely get crushed and die.  However if you jump off now you may very well die also.  You're too far in, and you can't exit.

It's a no win situation at best.  

 

We are in a zone now where the damage done from attempting to save ourselves is the same as continuing until the whole thing comes crashing down.

 

Therefor-  This will continue until it becomes unstable and comes crashing down.   Simply because no one will be brave enough to stop the madness and take credit for the aftermath.

 

It really is like a drug addict who is so far in that withdrawl would equal death.  Therefor keep the drugs coming until the end.  And enjoy the high for as long as it lasts.

 

We're so fucked.

Fri, 11/08/2013 - 08:14 | 4134495 StychoKiller
StychoKiller's picture

"The Wheel"
 Words by Robert Hunter; music by Jerry Garcia and Bill Kreutzmann
 Copyright Ice Nine Publishing; used by permission.

The wheel is turning
 and you can't slow down
 You can't let go
 and you can't hold on
 You can't go back
 and you can't stand still
 If the thunder don't get you
 then the lightning will
 
 Won't you try just a little bit harder?
 Couldn't you try just a little bit more?
 Won't you try just a little bit harder?
 Couldn't you try just a little bit more?
 
 Round round robin run around
 Gotta get back where you belong
 Little bit harder, just a little bit more
 Little bit farther than you than you've gone before
 
 The wheel is turning
 and you can't slow down
 You can't let go
 and you can't hold on
 You can't go back
 and you can't stand still
 If the thunder don't get you
 then the lightning will
 
 Small wheel turn by the fire and rod
 Big wheel turn by the grace of God
 Everytime that wheel turn round
 bound to cover just a little more ground
 
 The wheel is turning
 and you can't slow down
 You can't let go
 and you can't hold on
 You can't go back
 and you can't stand still
 If the thunder don't get you
 then the lightning will
 
 Won't you try just a little bit harder
 Couldn't you try just a little bit more?
 Won't you try just a little bit harder?
 Couldn't you try just a little bit more?

 

Fri, 11/08/2013 - 03:42 | 4134300 thewhigs
thewhigs's picture

I found a chart of your explanation - rather scary!

 

http://www.financialsense.com/contributors/greg-weldon/stock-market-fed-...

Fri, 11/08/2013 - 04:48 | 4134345 Rogue Trooper
Rogue Trooper's picture

A CALL TO THE TYLERS.  LET THE "spine001" DUDE POST HIS SPREADSHEET.

Some kind of special post or whatever the fuck it takes

ON BEHALF OF ALL OF THE VETERANS I DEMAND THIS!

 

Fri, 11/08/2013 - 07:45 | 4134456 Tall Tom
Tall Tom's picture

Do you have a blog at wordpress? Upload to that and then provide the link.

 

That was a through explanation.

 

Alternatively maybe use the "Contact Us" option located to the right of this page and ask Tyler to publish it. He looks for submissions...you might be a guest contributor...

 

Thanks a lot. That is one hell of a strong correlation...

 

I'd be interested in your Mathematical Analysis.

Fri, 11/08/2013 - 15:04 | 4136216 Black Warrior W...
Black Warrior Waterdog's picture

Post it to an online file hosting service then post the link on here (if that's allowed by the Tylers). Would be interested in viewing your work.

Fri, 11/08/2013 - 18:42 | 4137022 ImReady
ImReady's picture

Get Dropbox and post a link to the file here.

Thu, 11/07/2013 - 23:42 | 4133881 colonial
colonial's picture

this is why every hedge fund and private equity firm with a pulse is buying up real property...blackstone invented a new "slice and dice" approach just the other day.  

Its ironic but the only way we will survive liberal democrat policies is with cheap gas at the pump.  We won't be able to afford the imported stuff!

Thu, 11/07/2013 - 23:43 | 4133891 swanpoint
swanpoint's picture

BUT, the KRUGINATOR said Stock is just a grumpy old man without a IS-LM to masturbate with.. PG is the BRAIN!

Thu, 11/07/2013 - 23:58 | 4133926 TruthInSunshine
TruthInSunshine's picture

Paul Krugman is circulating a petition to have federal, state and local units of government hire every person between the ages of 17 and 65 who does not have a current full time job, and to provide them government benefits such as Mercedes health care and a gold plated pension plan, & a variety of other perks that 23 million present-day government workers have.

He claims that a single, trillion USD platinum coin, minted & deposited once per month, can accomplish this, thus eliminating poverty, unemployment, the ObamaCare insurance crisis & bring forth utopia.

Why didn't anyone else think of this? Say what you will about Krugman, but the man is an outside-the-box thinker.

I say unto Krugman, we put a rocket on the moon 50 years ago, so surely we can fire one right up Uranus today.

Fri, 11/08/2013 - 00:12 | 4133973 ejmoosa
ejmoosa's picture

On a sidenote, the reason we are NOT going back to the Moon is because it would take twice as long to engineer it today as it did back in the 1960's.

This is not the America of yesteryear.  

 

And Krugman's a pompous ass....

 

Fri, 11/08/2013 - 01:10 | 4134105 disabledvet
disabledvet's picture

the Fed screwed up with "Taper Talk." that's my take. someone blew their stack at their "yield hungry munchkin desk" and "kaploooyee"...all that has been worked for since 2008 was blown sky high. i'm speculating of course because as is true for all of us down here in the cheap seats "we're stuck with incomplete information." having said that the data points are really rolling in here right now like Timothy Burton's "Nightmare before Christmas." Black Friday followed by Cyber Attack Monday? http://www.youtube.com/watch?v=em9PtzQzWOg

Fri, 11/08/2013 - 01:19 | 4134120 yofish
yofish's picture

Not true at all. Now, if you actually believe your 1964 Dodge Dart was (is) superior to your 2013 'whatever', we cannot have further discussion until you clear the shit out of your ears. Unmanned space vehicles land with greater precision at greater distances (mars) than any mannd earlier effort. We could actually place man in Mars orbit today, something that would have been impossible in the 60-70's.

Fri, 11/08/2013 - 14:55 | 4136124 honestann
honestann's picture

That's absolutely true.  But he's correct too.  How?  A couple years ago NASA was asked how long it would take to return to the moon, and their answer was 17 years (about twice as long as the original effort).

So yes, if some completely private entity was to travel to the moon, and the project was controlled entirely by creative cost-and-quality conscious engineers and not "big shots", the effort would be much better (more sensible) and much cheaper.  Think "modern day Burt Rutan".

However, if you have government via government contractors go back to the moon via normal government practices of today, it is not even clear whether they'd get there at all... ever.  I mean, why actually get to the moon if the government keeps paying until you get there?

So you're both right.

Fri, 11/08/2013 - 07:28 | 4134437 falak pema
falak pema's picture

But he has Krugmanite up his ass as hidden WMD.

A man who is Fiatflashgordon cannot ever be underrated by those who have never felt the benefits of fiatfartharmony coming to the world.

"No, no, no !" As the lady said : "I DON'T want my money back. I want you to give it to FiatflashGordon. The man who will bring us harmony there where there is monetary discord."

Maggie's City farm now only believes in pumping the fiat gun like all those other whiz kids of CB cabal in wild west of WS squidification. 

Fri, 11/08/2013 - 04:50 | 4134348 Rogue Trooper
Rogue Trooper's picture

Who the fuck downvoted you? Is the REAL Dr Krugman back again?

Fri, 11/08/2013 - 06:16 | 4134396 StandardDeviant
StandardDeviant's picture

Wasn't me, but I'd like to see some pointers to this alleged petition.  Googling "Krugman petition" turns up lots of hits for a moveon.com effort to nominate him as Treasury Secretary (gawd) -- and one Facebook page hosting a petition to have him committed.  Links, or it didn't happen!

Fri, 11/08/2013 - 08:45 | 4134547 TrulyStupid
TrulyStupid's picture

Why not make it 2 trillion dollar coins and give everybody a new car and iphone, Heck with 3 trillion we can throw in a college education in income tax law. Maybe we can even buy our congressmen back.

Sun, 11/10/2013 - 21:02 | 4141653 BigJim
BigJim's picture

 Maybe we can even buy our congressmen back.

You're talking 4 trillion with that one.

Fri, 11/08/2013 - 01:24 | 4134130 yofish
yofish's picture

I've wondered how much Stockman has contributed to global warming, like, on ZH an WRH with all the hyperventilations.

Fri, 11/08/2013 - 04:21 | 4134323 kiwidor
kiwidor's picture

It will never happen.  And i mean NEVER.

Fri, 11/08/2013 - 04:47 | 4134344 polo007
polo007's picture

http://www.safehaven.com/article/31717/the-ecbs-tough-balancing-act-bubbles-vs-deflation

Today, a small group of central bank chiefs can meet in private and wield unprecedented power over global markets, economies, and wealth distribution. They are held accountable to the ruling politicians that in most cases have no respect for the principle of sound money. Instead, in Europe, the UK, Japan, the US, and elsewhere, central bankers have become intricately linked to monetizing government debts, and financing the expansion of the welfare state. As such, disciplined and independent central banking, a cornerstone to any hope for sound money and credit, has been relegated to the dustbin of history.

Central banking, - ostensibly designed to combat high levels of inflation and promote economic growth, while overseeing the stability of the banking industry, has instead, morphed into technocratic planning boards that are constantly involved in rigging the value of the financial markets. Their principal modus of operandi is to encourage risk taking in the local stock markets, through massive injections of ultra-cheap liquidity. However, the result isn't better economic conditions, but rather the expansion of massive bubbles in various financial markets. In turn, central bankers have widened the wealth gap between the owners of equities, and the rest of the struggling population whose wages are sliding backwards, and is increasingly seeking out assistance through welfare programs.

Historically, the value of the stock market reflected the dynamics of the local economy, and would influence the social mood of the populace. A stock market that is booming would signal an up-and-coming economy that would be followed by increased business investment and the creation of good paying jobs. Rising share prices boost the fortunes of about 10% of households in the country, and triggers a greater propensity to spend for goods and services - otherwise known as the "trickle down" effect. Therefore, keeping a constant vigil on the behavior of the stock market, - has become the raison d'être of central banks.

In earlier times, stocks traded on the local stock exchange used to track or even anticipate the nation's business cycle. But that reliable role as a leading indicator began to seriously break down after the financial crisis of 2008. Since then, because of the hallucinogenic effects of "quantitative easing" (QE), - stock markets are no longer reflections of the health of the local economies or forecasting mechanisms of the business cycles. Instead, they are just slices of ownership in specific companies that are unreliable gauges of anything but the underlying strength of the companies they represent, their dividend payments and buybacks, and the schizophrenic mind-set of the traders who buy and sell the shares.

Fri, 11/08/2013 - 08:32 | 4134526 TrulyStupid
TrulyStupid's picture

That would be the WARFARE/welfare state..... The ruling class has always debased the currency in order to support their favorite pastime....war.

Fri, 11/08/2013 - 09:32 | 4134683 kenezen
kenezen's picture

A truly great response! Portending a very bad outcome. Unfortunately I must agree. Nations ignore, especially the USA, the need for Capitalistic underpinnings to whatever political pictorial outcomes are put forth. We pretend the S&P has still a great deal to do with us on the physical production side of the equation. Sadly it's mainly investment and consumption. The politicians keep this illusion going to protect their status. Great Comment!  

Fri, 11/08/2013 - 09:41 | 4134749 d edwards
d edwards's picture

LOL-"drugged up day traders and robots...utterly irrational."

 

Irrational exuberance 2.0!

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