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Bill Fleckenstein Blasts "The Price Of Everything Is Out Of Whack"

Tyler Durden's picture


"People are, once again, being fooled," fears Bill Fleckenstein in this brief CNBC clip, warning that investors buying into the stock market at all-time highs here are making a grave error. Investors are ignoring fundamentals at their peril, "in the stock mania in 1999, people were bullish because stocks were going up. In 2007, people were bullish because stocks and real estate were going up. They didn't look ask - Why are they going up? Is this sustainable? Is this healthy? - and in both cases, it was not." In the current environment, the bubble Fleckenstein points to is powered not by tech stocks or real estate, but by the Fed's quantitative easing program. But, he warns, the Fed is losing control of one key market...



"Now we have the Fed suppressing the bond market such that rates are ridiculously low, and capital is being misallocated everywhere, and the price of nearly everything is out of whack," Fleckenstein said.

But he says the Fed is starting to lose control already - meaning that stocks could crack even if the Fed continues to buy $85 billion worth of assets each month.

"Interest rates on the 10-year bonds have risen 100 basis points since last spring, and there's still no tapering," Fleckenstein noted.

"So why have bond rates risen? I think the Fed is no longer able to dictate where the bond market is going to trade. If that's the case - and I say 'if' - then the game is going to change prospectively, because if the Fed loses control of the bond market, it's not going to be able to have unilateral say in where assets trade."
Specifically, Fleckenstein is watching the 3-percent level on the 10-year yield very closely.

"If the bond market trades through 3 percent in the absence of some superstrong economic data or an actual tapering, then it will be clear that something is radically different," Fleckenstein said.

So once things do change, how low can the market go?

Without getting specific, Fleckenstein said the stocks will head "a lot lower, and enough lower to make people really unhappy."


Via CNBC Futures Now


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Fri, 11/08/2013 - 19:53 | 4137189 max2205
max2205's picture

30 yr almost at 4% has got to help.....

Fri, 11/08/2013 - 19:57 | 4137206 Fredo Corleone
Fredo Corleone's picture

Astonishing that CNBC would even have Fleck back on their 'Street propagandist network.

Fri, 11/08/2013 - 20:00 | 4137218 gmrpeabody
gmrpeabody's picture

Token party pooper...

Fri, 11/08/2013 - 20:09 | 4137241 Ahmeexnal
Ahmeexnal's picture

Russian hacker cracks open Yomommacare website security and steals all information on those who signed up:

Fri, 11/08/2013 - 20:14 | 4137252 chumbawamba
chumbawamba's picture

God damn, Bill's hair is the very definition of sexy.

I am Chumbawamba.

Fri, 11/08/2013 - 20:20 | 4137264 gmrpeabody
gmrpeabody's picture

Chumba..., is there a little jealousy there?

Fri, 11/08/2013 - 20:35 | 4137305 Wyatt Junker
Wyatt Junker's picture


Fri, 11/08/2013 - 21:06 | 4137394 kaiserhoff
kaiserhoff's picture

Screw the markets.  How does that old man grow so much hair.  There's a fortune in that Dad gum elixer.  Leroy, get a tweet out to that pilgrim, mondo pronto.  Time's a wastin.


Fri, 11/08/2013 - 21:39 | 4137453 Harbanger
Harbanger's picture

Interesting.  In battle, fighting with long hair usually means you're going to end up being dragged around like a bitch by your opponent.

Fri, 11/08/2013 - 21:51 | 4137483 Manthong
Manthong's picture

I like Bill..

but I also would not mind being in combat with a guy with flowing locks or better yet, dreadlocks or a pony tail.

..more to grab on to and lever with gravity. 

Fri, 11/08/2013 - 22:07 | 4137532 Harbanger
Harbanger's picture

"..more to grab on to and lever with gravity. "  I see, like something to grab on to and get ahead of when you have to run for your life.

Fri, 11/08/2013 - 23:43 | 4137743 markmotive
markmotive's picture

Catchup via hyperinflation?

Some seem to think so.

Sat, 11/09/2013 - 00:16 | 4137806 NoDebt
NoDebt's picture

I got it.  I know where I've seen this guy before.  John Travolta from the 'Welcome Back Kotter' days.

Sat, 11/09/2013 - 00:23 | 4137822 Manthong
Manthong's picture

Bill is cool.. read his book.. "Greenspan's Bubbles'..

lots of interviews on KWN.. always a solid perspective..

evidently, he closed his short in 2009.. I wish I knew what he did back then.

..but now, we all know what he knew then..........

Sat, 11/09/2013 - 00:36 | 4137838 fonestar
fonestar's picture

Bill Fleckenstein has always been one of my favourite interviews to listen to on KWN.

Sat, 11/09/2013 - 00:55 | 4137868 Manthong
Manthong's picture

Fleck, Grant, Turk, Sprott, Williams, Kaye, Roberts, Maguire et al…..

So much sanity, it enough to make a guy go stark, raving Celente.

(Um.. Gerald .. just creating some contrast - luv you ,too)

Sat, 11/09/2013 - 01:31 | 4137874 Manthong
Manthong's picture

You gotta' love the disclaimers at the end..

Flee!  Flee! ...  run for your lives! ...


..i agree.. it is time to run

Sat, 11/09/2013 - 01:35 | 4137913 Manthong
Manthong's picture

so what about "unhappy" do people not understand??

Sat, 11/09/2013 - 07:13 | 4138080 Supernova Born
Supernova Born's picture

He should say he'd cut his hair if he is wrong.

It would give him more credibility than a zealot swearing on their religion.

Sat, 11/09/2013 - 11:25 | 4138318 Abi Normal
Abi Normal's picture

He's just another talking piehole, they are guessing at what will happen, aren't you all?  Who can figure this shit out with math or charts?  Nobody can, it is THAT FUCKED UP!

We may never see sanity again, that is a sad thing to think about.

Love me some Schiff logic, and a Celente rant every now and then.  This guy looks like Vinny Barbarino, not saying he is wrong though, hardly, he seems to have something there.

Sat, 11/09/2013 - 14:33 | 4138704 Manthong
Manthong's picture

yeah,,  but give the guy credit.. he admits to the unknowing time frame and the inevitable consequences.

We are all bozo’s on this bus waiting for the next stop.  


Sat, 11/09/2013 - 15:56 | 4138889 daveO
daveO's picture

He knows what he's talking about. I've read his stuff for over 10 years. He was predicting the housing collapse years ahead of others. He saved me tens of thousands of $.

Sat, 11/09/2013 - 02:22 | 4137949 garypaul
garypaul's picture

Good choice with Fleckenstein. Also Art Cashin is respectable and I also listen to Pento, Eveliard and that Franco-Nevada guy. Please let me point out that the others, and the KWN site overall, are a bunch of pumpers. Guys like Turk and Sprott and Embry are sane but they talk their book so you have to be careful. The others, especially that "Whistler's Mother blower" Macguire is full of S***.

Sat, 11/09/2013 - 02:41 | 4137966 Lost My Shorts
Lost My Shorts's picture

Long hair care products.  Bear he might be, but he is definitely supporting the economy.  I bet CNBC has to bring in an extra hairdresser every time he drops by for an interview.

Sat, 11/09/2013 - 00:00 | 4137774 HulkHogan
HulkHogan's picture

In the ring I lift my opponents off the mat by their hair.

Sat, 11/09/2013 - 10:23 | 4138218 GMadScientist
GMadScientist's picture

Juiced up homo-eroticism at best.

Sat, 11/09/2013 - 06:24 | 4138048 RSloane
RSloane's picture

I regret to inform all of you that its not just his hair.

Fri, 11/08/2013 - 21:44 | 4137468 NotApplicable
NotApplicable's picture

True bromance?

Fri, 11/08/2013 - 23:57 | 4137767 HulkHogan
HulkHogan's picture

I'm going bald. Wish the FED could QE on my cranium.

Sat, 11/09/2013 - 01:21 | 4137888 LetThemEatRand
LetThemEatRand's picture

Going bald is a choice.  I have hair.  My parents and their parents had hair before I was even born and I have hair now, therefore everyone who does not have hair must be defective or otherwise lesser.   Just try harder.   

Sat, 11/09/2013 - 10:24 | 4138220 GMadScientist
GMadScientist's picture

The Ayn Rand Hair Club for Women.

Sat, 11/09/2013 - 20:17 | 4139393 prains
prains's picture

LOL! LTER, very high brow humour excuse the pun.....pretty sure i played against this guy in an Okotoks Junior 'B' game circa 1977. He like to toe drag and go top shelf so i caved in his face with my Sherwood on a dangle to his feet. It appears he went into American economics after that.....fucking pussy, seems to be a lot of those types assembled there

Sat, 11/09/2013 - 06:56 | 4138064 Gringo Viejo
Gringo Viejo's picture

Nice hair. But he looks like Huey Lewis' mildly retarded brother.

Fri, 11/08/2013 - 21:38 | 4137461 uncle.bigs
uncle.bigs's picture

That hair looks terrible.  Looks like he's stuck in 1981 at a Van Halen concert.

Fri, 11/08/2013 - 22:00 | 4137495 Manthong
Manthong's picture

what are you.. some kind of commie???   :-)

 (I would love to be back there knowing that it will take at least 30 years for it to all go to hell.)

Sat, 11/09/2013 - 00:09 | 4137791 NoDebt
NoDebt's picture

You say that like we don't have 30 more years of this BS left to go.

Sat, 11/09/2013 - 10:58 | 4138268 Manthong
Manthong's picture

Oy...  (and I'm not even Jewish) ..

Let's see... 100 years into this currency regime.. most others in history had a hard time making it past 50..

Dollar has less than a couple percent of it original purchasing power.. dot guv is insane CF.. 

- I'd say it will have a hard time hanging in there that long. 

Sat, 11/09/2013 - 00:49 | 4137858 mumbo_jumbo
mumbo_jumbo's picture

as opposed to what?? follow the flavor of the week and be "in style"

real men have their own style and could care less about trying to be with the "in crowd" or look in style, that always reminds me of my sisters LOL


Sat, 11/09/2013 - 15:06 | 4138728 Manthong
Manthong's picture

:-D  -LOL when you know that the "Conan the Barbarian" look will be back in vogue soon. much for the little girl??  

and.. how many here have dined at Chez Paul on the near north in Chicago..

and.. how many have had a joy ride in a '67 Monaco fleeing from the cops?

..a true story that should be told.  maybe someone will drag it out of me.

Fri, 11/08/2013 - 20:15 | 4137255 Jendrzejczyk
Jendrzejczyk's picture

Both of them?


Holy crap!

Fri, 11/08/2013 - 20:23 | 4137271 Harbanger
Harbanger's picture

So what did they steal? Maybe there's some politican's boy lover with aids who signed up.

Fri, 11/08/2013 - 20:36 | 4137308 gmrpeabody
gmrpeabody's picture

Except that no politician would ever sign up, nor must they.

It's only for sheep.

Fri, 11/08/2013 - 21:24 | 4137329 Harbanger
Harbanger's picture

I said, some politican's boy lover with aids must have signed up.  There's always a juicy story if you know what to look for on a short list.

Fri, 11/08/2013 - 23:35 | 4137724 MrPoopypants
MrPoopypants's picture

Sorcha Faal is notorious disinfo. Occasionally there are interesting sources, but beware.

Sat, 11/09/2013 - 20:06 | 4139372 SokPOTUS
SokPOTUS's picture

Yeah....except Alexsey Belan was added to the FBI's Cyber Most Wanted *yesterday*.

Sat, 11/09/2013 - 07:10 | 4138077 Truthseeker2
Truthseeker2's picture

"Global Financial And Trading Platforms On System OVERLOAD"

"The global financial and trading platforms have become overloaded by the competing demands and overwhelmed with fierce competition among too many players at the top of the Pyramid (as in scheme). The top 1% are now playing a very serious game, the skirmishes of which have broken out into the open as never before."


Sat, 11/09/2013 - 11:15 | 4138300 czardas
czardas's picture

"Astonishing that CNBC would even have Fleck back on their 'Street propagandist network."

Unlike many, I don't get all that excited by CNBC.  I don't have the time or energy to go stark-raving mad over TV folks I don't know.  I like the news and some commentators since they do, unlike the MSM, give contrarians a chance to gab for a while.  Of course it's their job to push securities and sweet talk the economy. They've done a pretty good job if the stock market is any indication although as has been said repeatedly, when adjusted for inflation it's not that much higher.  It's like comparing movie ticket sales of $3 movies in 1980 to $13 in 2013.

Sat, 11/09/2013 - 13:14 | 4138513 Nobody For President
Nobody For President's picture

CNBC mandates 1% reality check as fair offset to their 99% cheerleader squad.

Has to have long hair to offset suit and tie - who the fuck is gonna pay any attention to a cross-over hippy?


Fri, 11/08/2013 - 19:53 | 4137191 Sufiy
Sufiy's picture

Gold Miners Are Ready For A Launch

  We have the very interesting action today in Gold and Gold Miners. With Gold hammered down on the bad news for the sector: "very strong payroll numbers" - which should imply Taper Impulsive Disorder again - Gold miners refused to sell off and made the reversal with many names closing Up for the day. It will be important this time to see for how long Gold will stay below $1300 again. This kind of diversion in Gold and Gold Miners is the very good sign, when Gold Miners are leading the Gold prices Up.

Fri, 11/08/2013 - 20:02 | 4137222 gmrpeabody
gmrpeabody's picture

The train is leaving the station...

To the moon, baby...

Wake me when it re-coops $1500

Fri, 11/08/2013 - 20:20 | 4137262 stacking12321
stacking12321's picture

re-coops? is that anything like chicken coops?

Fri, 11/08/2013 - 20:37 | 4137314 gmrpeabody
gmrpeabody's picture

I'm only a dog..., and I haven't had a drink yet.


Fri, 11/08/2013 - 20:37 | 4137315 James_Cole
James_Cole's picture

You're right, Royal Gold has had a great year, only down 48%. 

Fri, 11/08/2013 - 22:59 | 4137644 F-Tipp
F-Tipp's picture

Have you ever heard of the allegory of the cave?

Sat, 11/09/2013 - 03:36 | 4137982 James_Cole
James_Cole's picture

Right, so rgld's plunge is all shadowplay. Ohhh loookkk you think rgld is plunging but if only you knewww reality!! RGLD is soaring!!

Fri, 11/08/2013 - 21:32 | 4137450 new game
new game's picture

only train leaving the station has printers loaded and heading to federal reserve h.q. to manipulate paper price to sub production levels.  and it is working for now. back is broken in the markets of reality / phys for now. for me a grand opp to buy phys and step it up to 8 oz increments. TIA fuckers/manipulators of reality/ponzi masters of the money changers. stacker anon...lifejackets are standard fare.

Fri, 11/08/2013 - 21:25 | 4137437 new game
new game's picture

these fuckin miners get what they deserve - they let the paper price determine their viability and ultimate survival or loss of profits! are you believing this to be true? can it be? think they are fucking idiots. sell their phys ina phys traded exchange and fuck the etf/paper bullshit pricing. fucking joke and i hope they all loose there asses and are liquidated  and sold for 50 cents on a dollar/scrap value. put em on the fed balance sheet cause that is where they deserve to be...

Sat, 11/09/2013 - 10:26 | 4138224 GMadScientist
GMadScientist's picture


Sat, 11/09/2013 - 13:15 | 4138518 Nobody For President
Nobody For President's picture

I'm not a gold bug (more a silver bug), but +1 for 'Taper Impulsive Disorder'.

Fri, 11/08/2013 - 19:54 | 4137195 hangemhigh77
hangemhigh77's picture

Unhappy? Destitute is more like it.

Fri, 11/08/2013 - 19:55 | 4137199 rum_runner
rum_runner's picture

Nudge me when the shit actually hits the fan.  This is getting tedious.  I'll be in the corner drinking.

Fri, 11/08/2013 - 19:59 | 4137211 I am a Man I am...
I am a Man I am Forty's picture

Bond prices were higher in July of 2012, big deal.

Fri, 11/08/2013 - 20:01 | 4137220 Elliptico
Elliptico's picture

It''s duh New Nawmul.

Fri, 11/08/2013 - 20:08 | 4137221 Rainman
Rainman's picture

Reality alert : 10y JGB @ .58

< get a haircut, Bill >

Fri, 11/08/2013 - 20:06 | 4137229 gafgroocK
gafgroocK's picture



I'm Sorry, Bill

Fri, 11/08/2013 - 20:07 | 4137231 Black Warrior W...
Black Warrior Waterdog's picture

Great hair!

Fri, 11/08/2013 - 20:12 | 4137247 NOTaREALmerican
NOTaREALmerican's picture

Cement wig,  hot in KaLi right now.

Sat, 11/09/2013 - 03:53 | 4137989 Coldfire
Coldfire's picture

Fleck is a wise man but that comment is damn funny.

Fri, 11/08/2013 - 20:10 | 4137244 toe
toe's picture

i think the bulls were really unhappy with the market down 30 yesterday. your target was reached buddy, good job.

Fri, 11/08/2013 - 20:16 | 4137257 monopoly
monopoly's picture

Fleck is amazing. I am surprised he agreed to even show up at CNBC. He thinks that station is useless. 

Fri, 11/08/2013 - 20:23 | 4137269 knukles
knukles's picture

I think CNBS is useless too, so I didn't even bother to show up. 
So there.


   reaching around trying to tweeze back

Sat, 11/09/2013 - 10:39 | 4138239 GMadScientist
GMadScientist's picture

Reach around: you're doin it wrong.

Sat, 11/09/2013 - 13:47 | 4138577 Nobody For President
Nobody For President's picture

Knucks - you would be GREAT on CNBC (our favorite station), but only as long as you wore the pinhead mask...

Fri, 11/08/2013 - 20:29 | 4137287 stacking12321
stacking12321's picture

yes, but, it's unfortunate the article didn't adress him by his proper title: legendary investor bill fleckenstein

Fri, 11/08/2013 - 20:19 | 4137260 Dingleberry
Dingleberry's picture

He is correct. There is only AND ONLY ONE real market: bonds


Everything else is window dressing.


If and when that goes, Mad Max will look like Mayberry.

Sat, 11/09/2013 - 13:48 | 4138580 Nobody For President
Nobody For President's picture

alas, Dingleberry, you are wrong - there are NO real 'markets' presently.

Fri, 11/08/2013 - 20:22 | 4137268 mark mchugh
mark mchugh's picture

Fleck's a smart dude.

Fri, 11/08/2013 - 20:30 | 4137282 DOGGONE
DOGGONE's picture

These compelling histories are kept out of sight!
The people are being DAMN-fooled!

***Hey you attorneys ... Deception by omission is false advertising, which is a fraud, which is a federal felony!!!

Fri, 11/08/2013 - 20:32 | 4137296 disabledvet
disabledvet's picture

first off...and I've never said this before...but I really am a silver addict. I know we're nowhere near the Hunt Brothers high of fifty bucks...but if I had an income stream and free cash flow machine worthy of the name (cough cough Amazon cough cough) I'd be buying every ounce of silver out there right now. second the clowns who were just dicking around the last five years (cough cough XOM cough cough) have just woken up to "the world of Continental Resources." these things don't normally happen which is why I like point out what a truly great 'merican that CEO is. Amazingly he's still drilling! I know this isn't politically correct but I feel like Hitler having just taken down France. "I might have been a nobody but you'll never forget me now." in any case "this is just the tip of Titanicus Maximus." cloud computing, three d printing, carbon fiber....I mean insofar as "capital expression" goes even if the market insanity corrects 40% here (which would be a healthy thing in my view) the folks who went all in on recovery after the collapse have truly knocked the ball out of the park here. to XOM's credit they've gotten the memo and are ramping up production. CVX has never stood idly by so that California based energy giant looks equally imposing as well. GM eliminated the bond holders as part of the bailout..something I would argue was a big mistake....needless to say I would not be shorting that company going forward here as well. there is no repealing of the business cycle. it exists irregardless of anything you and I say and do. I was bullish in 2008 precisely because the business cycle had rolled over right at the moment of maximum Wall Street Delusion...and contrary to the interpretation of everyone that "the Fed didn't see the bubble"...well, they sure ACTED like they did...whereas Wall Street went full on Thelma and Louise. so policy makers are messing it up again eh? they just need to "get out of the way and let free market capitalism do its job"? well, you won't get an argument about free market capitalism going above and beyond the call of duty from me. but this is NEW money that did this...not the old. Are DuPont and British Petroleum going down as a consequence? I sure don't feel that way. Are we in a bubble here? of course we are. Equities are ALWAYS in a bubble. What is truly rare is to see debt both this cheap and this readily available. those who have withheld credit here have truly missed out on something truly spectacular. as someone who was all in from day one of QE (screaming like a maniac I might add) I never thought we would be where we are today as a result of these extraordinary policies. As a consequence my personal view has been we're way over extended here. but of course..."markets always undershoot...and over shoot." with Tesla everybody's whipping boy now le me add "hey, at least Elon did something with the money." unlike NASA that included launching a rocket into space where an engine blew up but the rocket still maintained integrity I might add. oh, and "don't mess with the Vinklevoss Twins."

Fri, 11/08/2013 - 20:42 | 4137326 sablya
sablya's picture

That was very Proustian, interesting thoughts...

Fri, 11/08/2013 - 22:19 | 4137562 Born into this
Born into this's picture

Paragraphs dude

Sat, 11/09/2013 - 10:33 | 4138236 Tinky
Tinky's picture

Only two words, yet you could have used a comma.

Sat, 11/09/2013 - 10:40 | 4138242 GMadScientist
GMadScientist's picture

Whatever you're taking, you should either double it or cut it in half.

Sat, 11/09/2013 - 11:11 | 4138293 disabledvet
disabledvet's picture

That bad eh. Hehehehe. Buy's a bargain.

Sat, 11/09/2013 - 14:35 | 4138708 Nobody For President
Nobody For President's picture

I love you disabled Vet (I'm a vet [VN era]), but only mentally disabled...

I suspect you were drunk when you wrote this - it is a bit more incoherent than your usual posts - but I don't care. There is truth in drink (or your recreational drug of choice - I live in the Emerald Triangle, but don't grow or smoke it, but am fine with those that do, I used to many years ago, and yes, l  DID inhale); but I am SO conflicted - I agree with you while owning a fucking TON of XOM and CVX - and I have owned them for years and years and have a cost basis that would bring tears to your eyes. I'll never sell those fuckers - the kids get them when I die at a new cost basis, and they can sell them and buy something worthwhile and future oriented. Meanwhile, I live on the dividends and perform a lot of community service in my rural area. (I did sell the fucking DD though.) And I agree totally with you on Elon - he is the NikolaTesla of the day

and that is why his car is named 'Tesla'.

Yeah, the stock is way overpriced right now, what stock isn't? AND Elon is saying so. Is there any CEO in America more honest?

And this list keeps trashing Tesla?

Sometimes, you guys get really clueless. The Tesla S has a soft underbelly which will be corected.  Bet on it.

For a group of people (ZHers I'm talkin' about) so market oriented, you are as blind as CNBC. You are anti-solar and anti-any energy alternative to the max.

You don't get it. The future of solar is decentralization - I have been off the grid for 40 fucking years now, and solar WORKS = ON A LOCAL LEVEL.

As a big corporation, huge solar/wind whatever distributed through THEIR grid, not so much.

Get your head out of your ass you guys - the very things you rail about = big corporate control etc, you buy into every time you say solar power/alternative energy won't work. Yeah, it won't work if you are in an apartment in the the big city - any big city. But if you are in an apartment or rental house in the big city or suburb, you are part of the fucking problem, and you will not admit it. You are fucking owned by the man.

So down arrow me you assholes...Continue to play the game that you are morally superior to the 'sheeple' while you (maybe subconsiously) support the world you rail against because you do not have the balls to REALLY cut the cord. YOU are as much sheeple as the sheeple you rail against. 

Think seriously about where you are and what you are doing right now.

I'm 74 years old, I minored in economics (MBA from a long time ago) and the ONLY economic 'law' that is true is TINSTAAFL. This is espcially true in energy/power.

Solar heated water is the best cost/benefit ratio alternative power presently - good for almost anyone that owns their own home. (Yeah, fuck you folks that want to argue you don't own your place because of taxes - who the fuck is gonna pay for road maintenance - I pay for my own to the county road, and I don't mind paying some taxes to maintain that county road or the state freeway - fucking idiots, there is SOME stuff that is worth paying taxes for assholes.)

Sometimes. the Randians on ZH get a little out there - we need some gubernmint, just a lot less than we have right now. Don't trash it all.

And yes, the 'markets' are dead 'cause of the Feds $85B a month to keep the rich happy and the market propped and the bond market depressed, and yes it is gonna bust - Real Soon Now.

But we can go broke predicting the bust... ;-)

And finally, as a hardcore day-trader/ZH on the side, some of you guys need to moderate your medications...

Fri, 11/08/2013 - 20:35 | 4137307 sablya
sablya's picture

What the bond markets have done in rising 100 bp is what markets are supposed to do - discount the foreseeable future.  Now some tapering is already being priced in, not sure how much to be honest, but there is always the chance that, when tapering is finally announced, interest rates may fall.  So there is absolutely no evidence that the Fed is losing control of the market.  

The Fed mentioned tapering and the bond markets teeth were set on edge.  Now what?  Everything has become unclear.  The silver market flies when the ECB announces a surprise rate cut and then tanks when the US releases some hollow economic numbers.  The real act of the ECB was far less powerful than the merely imagined act of the Fed.  Look at what happened in the PM markets.  Gold tanked and SPX was down but then magically up, up, up.  Nothing makes sense anymore.  If you didn't know it was POMO day, the market's surge would be inexplicable.

How dare the Fed even threaten to take this pure intravenous goodness away?

Fri, 11/08/2013 - 21:41 | 4137466 uncle.bigs
uncle.bigs's picture

Fleck doesn't understand the bond market.  QE causes higher growth which causes long interest rates to rise.  Bond yields would be lower without QE as the economy slides into deflation.  Higher rates are signaling that QE is working as intended.  A steep yield curve is bullish for equities.  Always has been.

Sat, 11/09/2013 - 10:42 | 4138245 GMadScientist
GMadScientist's picture

"QE causes higher growth" LOL

You get the dipshit of the year award for that one.

Sat, 11/09/2013 - 11:18 | 4138306 disabledvet
disabledvet's picture

12% in North Dakota. Double the rate of China's...with the inflation to prove it. Record profits at all the money center banks coming...and for Life Insurance companies as well. You might want to start by swilling tequila. Average size of high end apartments in New York City has doubled over the past 5 years...classic signs of a bubble. And yes your taxes are going to go up to pay for it.

Sat, 11/09/2013 - 11:06 | 4138273 HardAssets
HardAssets's picture

Your false premise:  "QE causes hgher growth"

if by growth you mean general growth of the economy, rather than juicing certain asset prices.

Interest rises can rise during a tme of real growth.

Deflation has occured . . . for those who must tap into their savings because of near zero interest rate returns (the plight of many retired people).

HIndsight is 20:20   But if you now wished you'd put more money into the basket called the stock market back in 2008, do you do the same thing now in 2013 ?  Many didn't think things could keep up this long, will they go on forever ?    An ever rising QE driven stock market ?  Or will some 'super event' like a Black Monday 1987 occur, just after you decided to start tossing more of your money into the Fed pumped market ?  Your stops are over run and in the rush to the exits, you can't get out - - - like most people.

With a crystal ball, it'd all be easy.

Fri, 11/08/2013 - 20:39 | 4137319 Devotional
Devotional's picture

In summary: Sovereign debt bubble, Bond bubble, Stock Market bubble, Student loan debt bubble, Car Loan Debt bubble, Housing bubble. Then add MBS fraud, LIBOR rigging, FOREX rigging, Drug money laundering, Energy price rigging. Did I miss anything? (Please feel free to complete).

Nah, everything will end well. Yep, I am damn sure of it.

(I need a drink and off to the weekend I go).

Fri, 11/08/2013 - 20:46 | 4137341 Axenolith
Axenolith's picture

Damn, Bill looks like his former gig was as frontman for a 70s/80s tampon rock band...

Sat, 11/09/2013 - 10:43 | 4138247 GMadScientist
GMadScientist's picture

Hmm...Whitesnake or Winger.

Fri, 11/08/2013 - 20:50 | 4137349 Seasmoke
Seasmoke's picture

They are very unhappy when it goes down 10 points ....

Fri, 11/08/2013 - 20:55 | 4137362 sablya
sablya's picture

The System Open Market Account (SOMA), managed by the Federal Reserve Bank of New York, contains dollar-denominated assets acquired via open market operations.

Security Type Total (in Thousands)

Total SOMA Holdings




$3T balance sheet.  The market freaks out when the Fed so much as hints at decreasing the rate at which the balance sheet is growing. Can anyone even imagine the bond market's reaction to the idea of reducing the balance sheet?  

Fri, 11/08/2013 - 21:10 | 4137405 RMolineaux
RMolineaux's picture

Question: Who is doing the freaking out?

Answer:  The people who have pushed the stock market into a bubble for short-term gain, refuse to pay taxes and fatten up their bonus accounts.  The hell with them!


Fri, 11/08/2013 - 21:25 | 4137438 sablya
sablya's picture

They may indeed go down, those fats pigs, but they'll be riding us all the way.

Fri, 11/08/2013 - 23:34 | 4137721 Bear
Bear's picture

They will be the first to the door and off to New Zealand

Sat, 11/09/2013 - 10:44 | 4138251 GMadScientist
GMadScientist's picture

Typical sheep-fucker maneuver.

Sat, 11/09/2013 - 11:23 | 4138314 disabledvet
disabledvet's picture

Yes because it has already happened (briefly.) Gold prices collapsed, binds got whacked, the dollar soared, Detroit went bankrupt. The stock market briefly declined only to soar to new all time highs.

Sat, 11/09/2013 - 14:42 | 4138724 Nobody For President
Nobody For President's picture

Who he fuck gave you the down arrow?

Clueless or paid troll?

Fri, 11/08/2013 - 21:04 | 4137389 RMolineaux
RMolineaux's picture

Fleckenstein says in one sentence that the Fed has pushed interest rates to a ridiculously low level, and then, two sentences later he says the Fed has lost control of the bond market because the ten year note has risen 10 basis points in the last few days.  Which is it Bill?  As all statisticians know, when you want to prove a point with statistics, the trick is to choose the right starting point.  Thus the 10 year has risen 100 basis points from its all time low.  So what?  A normal level would be slightly more than inflation for a "risk free" investment.  This would put it at 2.5 to 3 percent, and, voila, that's what we've got.    But Fleckenstein may be right in suggesting that this level can only be maintained by Fed purchases, since the Japanese are no longer able, and the Chinese are no longer willing, to buy more bonds.    Hence, the Fed is trapped into printing money until the Congress balances the budget. 


Fri, 11/08/2013 - 22:43 | 4137615 therevolutionwas
therevolutionwas's picture

Fleckenstein has previously expressed his frustration that the whole system should  have collaped long ago.  We are all just waiting.

Sat, 11/09/2013 - 14:44 | 4138732 Nobody For President
Nobody For President's picture

until the Congress balances the budget.



Fri, 11/08/2013 - 21:42 | 4137467 venturen
venturen's picture

The criminally stupid Bernanke and Yellen will just print $200 Billion or $500 Billion a month....THEY ARE THAT STUPID!

Fri, 11/08/2013 - 21:59 | 4137503 new game
new game's picture

keep on stackin bitcheez

keep the life jackets handy

Fri, 11/08/2013 - 22:00 | 4137511 g'kar
g&#039;kar's picture

Why do these guys smile and state the obvious......oh I forgot, not everyone reads ZH.

Fri, 11/08/2013 - 22:06 | 4137527 Yen Cross
Yen Cross's picture

  At least put your mullet away for the interview. I like his ideas, but CNBS was just shilling him for their "airport crowd". The guy got used.

  If we want to put CNBS in their grave, we need to destroy the last bastion of their reach! (mass transportation)

 CNBS thrives on mass transportation. ( provide better<> TRUTHFUL) no douchebag lobbyists and advertisers.


Sat, 11/09/2013 - 10:46 | 4138254 GMadScientist
GMadScientist's picture

Would you stop looking to the MSM for "news" already? How long do you search for a virgin hooker before you realize you're being daft?

Sat, 11/09/2013 - 15:39 | 4138849 Nobody For President
Nobody For President's picture

+1 for 'virgin hooker'

Fri, 11/08/2013 - 22:07 | 4137531 Bernankenstein
Bernankenstein's picture

For some reason the proportion of down arrows to up arrows here is abnormally high. About 88 down to 100 up. 

Fri, 11/08/2013 - 22:16 | 4137553 g'kar
g&#039;kar's picture

Arrows mean nothing unless the bowman is pointing towards you.

Fri, 11/08/2013 - 22:32 | 4137594 Notarocketscientist
Notarocketscientist's picture

Read from p. 56 if you want details of what happens when collapse comes

Sat, 11/09/2013 - 00:19 | 4137815 forwardho
forwardho's picture

Excellent link!

Many thanks for your post. Well worth the time to read and digest.

Will pass this along to many.

With a H/T for the humble rocket scientist.

Sat, 11/09/2013 - 15:48 | 4138869 Nobody For President
Nobody For President's picture

Many thanks to Forwarho - I would not have gone there without your post.

This is hard work - not for sheeple, but a good read and thoughtfull broad-brush analysis.

From the forward:

"A networked society behaves like a multicellular organism...random damage is like lopping off a 

chunk of sheep. Whether or not the sheep survives depends upon which chunk is lost....When we 

do the analysis, almost any part is critical if you lose enough of it.... Now that we can ask 

questions of such systems in more sophisticated ways, we are discovering that they can be very 

vulnerable. That means civilisation is very vulnerable. 

Yaneer Bar-Yam1"

At some point, a chunk of sheeple is gonna get lopt off, and things ae gonna get ugly.


Sat, 11/09/2013 - 04:54 | 4138014 kurt
kurt's picture

Georgia Guidestones Guys

Sat, 11/09/2013 - 16:10 | 4138923 RockyRacoon
RockyRacoon's picture

Page 33 explains the situation, and the prognosis is not all that encouraging.

Fri, 11/08/2013 - 22:37 | 4137604 LFMayor
LFMayor's picture

Bill's fucking hairdo is "whack".  Does he sell records on late night tv ads?  He looks like the guy off of that old commercial, the President of the Society to Bring Back the Seventies.

You know dude has all the E.L.O. on vinyl.

Fri, 11/08/2013 - 23:07 | 4137658 Westcoastliberal
Westcoastliberal's picture

Former lead singer for "Journey". Still shillin' for that "Wheel in the Sky".

Fri, 11/08/2013 - 23:03 | 4137653 CuriousPasserby
CuriousPasserby's picture

That guy needs a haircut. Can someone photoshop him a crewcut?

Fri, 11/08/2013 - 23:09 | 4137663 WTFUD
WTFUD's picture

Never trust folks called bill, rhymes with shill.

Fri, 11/08/2013 - 23:32 | 4137718 Dre4dwolf
Dre4dwolf's picture

The stock market will go up, because the only ones still trading are computers.

If they shutdown the HFT'S volume would drop to ZERO....

Its computers trading against computers.

They will keep trading untl all the assets of the planet are transfered to the banks.

Sat, 11/09/2013 - 00:18 | 4137812 nakki
nakki's picture

I agree with you that in the end a few bank will own most of everything. However there will be a few more slam downs to crush a few more players at the table. The big swinging dicks are playing Texas Hold'em and there's still to many players at the table.

Sat, 11/09/2013 - 00:17 | 4137810 ak_khanna
ak_khanna's picture

The main aim of the political class and the central bankers around the world is to create one bubble after another for the zombie bankers to feed on. The majority of the population who actually work hard to earn their living by engaging in productive work have to pay the price by either loosing a majority of their earnings in the form of taxes, interest on loans or paying the bill for the bailouts.

Sat, 11/09/2013 - 00:21 | 4137817 Bear
Bear's picture

Well at least he is consistent ... Greenspan, Bernake ... now he will be Yellin again

Sat, 11/09/2013 - 00:24 | 4137824 nah
nah's picture

lost decade bitchez!

Sat, 11/09/2013 - 00:31 | 4137833 Money Squid
Money Squid's picture

Is that a pic of Fonzi ? Aaaaaaaaaaaa

Sun, 11/10/2013 - 00:30 | 4137852 ToNYC
ToNYC's picture

FED can't put the crack pipe down.


Sat, 11/09/2013 - 01:14 | 4137886 q99x2
q99x2's picture

Supply and demand are not relevant to market indexes.


The FED took technological control of market indexes at the end of 2011.

Sat, 11/09/2013 - 01:17 | 4137892 Boop
Boop's picture

The '70's look to have been very good to Mr. Fleckenstein.

Sat, 11/09/2013 - 11:08 | 4138287 WillyGroper
WillyGroper's picture

Considering he's somewhere near 60, I'd say he looks damn good.

Sat, 11/09/2013 - 01:17 | 4137893 Bunga Bunga
Bunga Bunga's picture

But but but this time is different.

Sat, 11/09/2013 - 02:48 | 4137970 Yen Cross
Yen Cross's picture

 The United States is in a full blown depression. People feel helpless, and are going to start "bearing arms"!

Sat, 11/09/2013 - 03:26 | 4137981 gosh
gosh's picture

hey its fonzy eehhhhhh

Sat, 11/09/2013 - 04:51 | 4138013 FreeBull
FreeBull's picture

Amen...Bill Fleckenstein

Sat, 11/09/2013 - 06:50 | 4138060 frednash
frednash's picture

you all are dreaming about confidence fairies


no way interest rates go up


10000 boomers a day retiring


they would love higher rates

Sat, 11/09/2013 - 12:32 | 4138424 GMadScientist
GMadScientist's picture

Then they shouldn't have voted for and/or given all their money to corrupt assholes for the last four decades. Fuck em.

Sat, 11/09/2013 - 07:10 | 4138076 WhiteNight123129
WhiteNight123129's picture


There might be a last fighting move from the Fed to buy more Treasuries, and increasing.

If the Fed does actually do that, you can short with abandon as the Fed prints.


Sat, 11/09/2013 - 08:20 | 4138115 The Burning Planet
The Burning Planet's picture

I've always thought Bill Fleckenstein to be of sound mind. A real critical thinker on all matters economic. Here he proves himself yet again.

Sat, 11/09/2013 - 08:36 | 4138133 bulldung
bulldung's picture

Only hope for markets is the return of Lex Rex.

Sat, 11/09/2013 - 08:55 | 4138147 MyBrothersKeeper
MyBrothersKeeper's picture

As i've said, there will be no taper imo.  A hint of real tapering will send yields beyond we've seen before.  Actual tapering would send them toward 4% and make more idiots believe the economy is robust when it isn't.  It would also make the debt interest at a level where it would squeeze govt more, hurt GDP, and drive up borrowing costs for business which will hurt their bottom line.  Can't have any of that in an election year.  The job numbers, at least the underlying ones, show no signs of real momentum in sustained hiring. The GDP numbers were bolstered by govt spending and inventory....not exactly historical indications of a more robust economy.

It's not a question of being right/wrong as the question is simple: who appointed Yellen and what are his objectives for the coming election year. I can only conclude you will see MORE easing before you see any tapering. Thus, I think you will see rates closer to 2% than 3% when it is all said and done over the next 6 mths.  In the meantime, the charade of taper/no taper will continue. In the long run, I believe what Kyle Bass says that once Japan or Europe breaks and is forced to deleverage you will see US 10yr Treas yields at or below 1%.  I disagree that nobody will see it coming but most will ignore it and be caught in riptide.

Sat, 11/09/2013 - 09:01 | 4138152 q99x2
q99x2's picture

BitCoin in doubling mode: Last price:$384.97500

Sat, 11/09/2013 - 09:06 | 4138154 tradewithdave
tradewithdave's picture

Are you sure it's the stocks that over-priced.  Could it be the dollars you're using to buy the stocks that represents the whacked?  Didn't Altucher predict this?  Hmmm.

Sat, 11/09/2013 - 12:34 | 4138429 GMadScientist
GMadScientist's picture

Could it be you have no concept of the term 'nominal'? Could it be that you'll reap the rewards of your 'growth' with confetti?


Sat, 11/09/2013 - 09:34 | 4138180 Sufiy
Sufiy's picture

China, India, Turkey and Thailand Buying Record Amount of Gold - What Do They Know The Others Don't?

These two charts present the big picture in Gold Supply and Demand the best. When Central Banks are distorting the markets by suppressing the Gold price the increased Demand is overwhelming the diminishing Supply. The Game of Musical Chairs in Fractional Reserve Gold System continues, but it is very close to its logical conclusion with COMEX deliverable Gold being leveraged of 59 times at least.

Sat, 11/09/2013 - 09:43 | 4138186 all-priced-in
all-priced-in's picture

I don't think the FED ever really had control - not the way I define it - more of a manipulation.

The FED allows some people to make buckets of cash if they do what the FED wants - I get that.

Sort of like a parent offering to give their kid candy if they do what the parent wants -

Pick up your toys and daddy will give you a candy bar - do your homework and daddy will take you for ice cream.

Really poor way to raise a kid - really poor way to run a country.






Sat, 11/09/2013 - 09:46 | 4138187 Marco
Marco's picture

What most people fail to recognize is that stock market bubbles have historically been the main way for the US to keep it's current accounts a bit balanced since the 70s (until MBS's). A stock market bubble and crash is not really that bad for the US ... because it repatriates money. The losers are by and large foreigners, the winners are by and large Americans.

It's hard to believe European pension funds and sovereign wealth funds are being suckered into this so fast yet again, but here we are.

Sat, 11/09/2013 - 10:09 | 4138208 bugs_
bugs_'s picture

theres a bear on the loose - has a Jim Traficant hairdoo that some people think is real

 but might possibly involve ancient aliens

Sat, 11/09/2013 - 12:35 | 4138431 GMadScientist
GMadScientist's picture

That hair does look like "not of this earth" technology. LOL.

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