David Stockman Blasts "It's 2007/8 All Over Again"

Tyler Durden's picture

"Bubbles are breaking out everywhere," exclaims outspoken former-insider David Stockman in this brief FoxTV clip, warning that "its like 2007/2008 all over again." Of course, we have heard 'bubble' talk before but Stockman steps methodically from the broad market (exposing the incredible numbers behind the Russell 2000) to junk bonds (and the record-breaking issuance and risk ignorance) and Fannie Mae (as an example of the idiocy). Crucially, Stockman explains to Neilo Cavuto who tempers the bubble-talk with aggregate measures, "bubbles don't form at the heart of the Dow, they form on the speculative periphery of the economy and work their way in," - something that is very evident in today's market, "the market will have a huge hissy-fit if Yellen tapers... the Fed has taken itself hostage."

 

Stockman goes on to destroy the myth of a housing recovery "there are few 'real buyers' this is massive speculation only"

"This is the 4th bubble the Fed has created through easy money and printing press expansion."

"we need to get the Fed out of the market..."

"the market will have a huge hissy-fit if Yellen tapers..."

"the Fed has taken itself hostage"

"This is a destructive poisonous monetary medicine that is being put into the system that is distorting all kinds of economic mechanisms with malinvestments on a massive scale"

 

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Max Damage's picture

He missed off FUCK YOU BERNANKE at the end of it. So I'll say it for him. FUCK YOU BERNANKE. And in advance I will add FUCK YOU YELLEN.

Chris Jusset's picture

David Stockman says:

"Bubbles are breaking out everywhere," exclaims outspoken former-insider David Stockman in this brief FoxTV clip, warning that "its like 2007/2008 all over again."

Stockman is 100% correct.  The Fed is intentionally blowing massive mega-bubbles everywhere.

Occident Mortal's picture

Lot's of people calling the top.

 

See this chart

 

http://i43.tinypic.com/71mj5f.png

Headbanger's picture

Oh but it can't be cause "everybody" is saying it's a top...   So funny...

idea_hamster's picture

"the Fed has taken itself hostage"

Ah...it's Blazing Saddles all over again -- "He's CRAZY!  He'll do it!"

http://2.bp.blogspot.com/-C_W_7gFrBB0/T8IoRMT03_I/AAAAAAAABpI/27Cr2TevYU...

 

Its Only Rock N Roll's picture

I have heard more "this can go on for a long time" these past 2 weeks than I did in 1999 & 2007.  Almost like people saying "hey its ok, jump in cause you have another 20%-30% upside before it REALLY is a bubble"

My question is then if its not a "top" or a "bubble" because everyone is saying it is...do you really think people are going to stop saying it if the markets go up another 10%, 20%, 30%???  Or are the cries going to get louder? 

Jeremy Grantham saying it this week almost felt like a frustrated bear capitulating, IMO.

BandGap's picture

Bubbles are fragilke things, apt to pop when least expected.

Fucking shills will say anything at this point. Almost as if the networks get paid to perpetuate this crap. And why the fuck does Crammer still have a job?

swmnguy's picture

Why the fuck is Crammer not in jail?

derek_vineyard's picture

eliminate tax deductions for pension plan contributions, dividends taxed as capital gains (who the fuck got this through), and pomo

TBT or not TBT's picture

Sure, the government needs more money. Right.

moneybots's picture

"My question is then if its not a "top" or a "bubble" because everyone is saying it is...do you really think people are going to stop saying it if the markets go up another 10%, 20%, 30%???"

 

No.  It will just be a more obvious bubble.

In 1999, most people did not know what a bubble was.  Now they do.  Best bubble indicator, alan greenspan.  When he denies it is a bubble, it is a sure sign that it is.

Never One Roach's picture

What Stockman talking about?  I just heard, "The Recovery is Robust.""Never a Better time then now." "Prices will only go up."

CNNBCC said so this morning.

 

bubblemania's picture

The market will NOT collapse until Tyler Capitulates.

SDShack's picture

A "collapse" in my mind is when the Great Ponzi finally unravels. That will be a Great Depression event and the market will collapse on the order of 75% give or take 5% or so. But we are probably decades from that happening. A more realistic drop will be what I call a recession "correction" of about 20%. I could see the market grind lower in 2014 as 0zer0care kicks in. About a 10% drop in the first half of the year when the real sticker shock converts to wallet shock, and then another 10% drop at the end of 2014 when the reality of cancelled EMPLOYEE plans hit. Of course all of this could be easily reversed by the Fed announcing or even hinting at an EXPANSION of QE as the economy starts to go into recession as a result of 0zer0care. So we could just continue to grind along at this level or even a little higher all next year with more QE heroin.

So I think the 30%,40%, 50% drops that so many think might happen, have almost no chance of happening unless some massive unforseen trigger happens somewhere in the world, and I don't see anything on the horizon like that unless we somehow stumble deliberately into WWIII. And I don't see that happening because I don't think TPTB want WWIII at this point, so it won't happen. No, I think we will just continue this same slow slog forward. The US dollar will continue to lose value. Commodities (except PM) will rise unless demand drops due to another recession. The consumer will be squeezed between higher costs for essentials (HC, energy, food, housing) and stagnate or fallling wages. TPTB have the perfect Goldilocks System in place to melt the stock markets higher and PM lower to continue the wealth redistribution to the elites. No way they change anything to upset that plan, or allow anything else to upset that plan. It's a BTFATH or at best BTFD world for quite some time. After the 2014 elections, TPTB will tip their hand as to whether they will support the Red or Blue team in 2016, and that could be interesting as the chess pieces get moved around like 2008. 

Unprepared's picture

"its like 2007/2008 all over again."

 

Remember when people used to refer to a century-old calamity to describe the worst possible scenario? Now we are referring to catastrophes that happened... 5 years ago? People had the excuse of not having experienced the great depreciation and therefore didn't learn from it. What's the excuse this time around?

Same f**ing players.

HulkHogan's picture

Stockman always says the stock market is overvalued. Who cares anymore?

 

Liquid Courage's picture

    The ultimate result of shielding men from the effects of folly, is to fill the world with fools.
        Vol. 3, Ch. IX, State-Tamperings with Money and Banks.

Herbert Spencer (27 April 1820 – 8 December 1903) was an English philosopher, prominent classical liberal political theorist, and sociological theorist of the Victorian era.

corporatewhore's picture

people can you hear me? love is everywhere

allman brothers

Kirk2NCC1701's picture

Big deal.  I'm also 100% correct that F=ma.  That does not make it newsworthy or praiseworthy, just because I know Newton's Laws.

The chiming in reminds me of "sheeple" from that other ZH article...  Free-range sheeple, but still sheeple.  /s

GetZeeGold's picture

 

 

Ben Shalom is cowering under his desk......just a few more days!

Headbanger's picture

No, I think that's one of his favorite hookers under there giving him one more go around while she picks his pockets for the last time.

Hey!  At least I said "she" !

depression's picture

Janet or Nancy (Pelosi)... maybe both ???!!!

Tim Knight from Slope of Hope's picture

There's something unsettling about seeing the words "Fuck" and "Yellen" within spitting distance of one another.

stormsailor's picture

yes in fact when you see yellen fuck goes into a parallel universe or something,  sort of like neopolitano, cankles, pelosi, etc.

 

can you imagine a nightmare where you were in bed with all three doing the most degenerate things your mind can contrive.  probably wake up and sever your penis.

Hippocratic Oaf's picture

Mr. Stockman will NOT be invited on CNBC

Chris Jusset's picture

Stockman says:

"This is the 4th bubble the Fed has created through easy money and printing press expansion."

Very true.

Chris Jusset's picture

What's more, the Fed is intentionally replacing the natural free-market forces with its own twisted, manipulative policies: "This is a destructive poisonus monetray medicine that is being put into the system that is distorting all kinds of economic mechanisms with malinvestments on a massive scale"

adr's picture

I'm pretty sure the people running the German economy did the same thing after WWI. Didn't turn out so good for them. Of course the real villains there handed over patsies to take the blame so they could escape scott free to run the scams again.

BandGap's picture

No, they did not run the German economy the same way, nothing close to it. Germany was in shambles and was blamed for WW1. The country had to rebuild while paying war reparations, something of a monumental task. Socialism had taken hold of Russia and was spreading throughout Europe, most notably in England, whose unions were battling the government on a daily basis.  Completely different picture than the one we are seeing now.

Today's "leaders" are dealing from a position of strength and perceived pseudo prosperity. Smoke, mirrors and greed. Watch them pile the shit up they want and head for the exits when they smell trouble OR use the police to keep order. In any regard, what we are experiencing is nothing akin to Germany after WW1.

Read "To End All Wars" for a counter viewpoint to what is generally seen of WW1

kchrisc's picture

"...head for the exits..."

Our job is to make sure that all exits lead to a guillotine.

fonzannoon's picture

when this thing pops in 7 years it's gonna be epic. 

forwardho's picture

About that 7 yrs fonz, from your mouth to Gods ears dude.

BandGap's picture

fonz, this isn't linear. When the "Affordable" Care Act fully hits the SS Fucking Dancing Monkeys Greed Barge the fun will really start. The candle is lit before the 2014 midterms.

Seven years from now it will be a mess.

quasimodo's picture

Seven years fonz?! I have already convinced the Mrs. to suspend putting money in our 401's since '08, no fucking way she will want to for another seven. All I hear is "THE DOW IS SOARING, STAWKS ARE REALLY HIGH WE SHOULD BE BUYING, IT'S FREE MONEY"

Bendromeda Strain's picture

I find Martin Armstrong's constant reference to 2015.75 to be more than a little interesting. He bases it on his proprietary Economic Confidence Model, but I find it lines up differently, with 2001.75 (9/11) and 2008.75 (TARP).

Very superstitious, nothin' more to say,
Very superstitious, the devil's on his way,
Thirteen month old baby, broke the lookin' glass,
Seven years of bad luck, good things in your past

So yeah, fonz is right - he just forgot to start his clock...

geminiRX's picture

I think he's calling for a minor correction in US equities soon, but will fly into the stratosphere into mid 2015? If I read him right, gold looks set to possibly crater to the 900-1000 mark soon with January 2014being the possible reversal point. He's been incredibly accurate on the gold calls these past two years.

Everybodys All American's picture

I'll take the under on that one.

fonzannoon's picture

Ghordius once told me that when you can't imagine something going o  for any longer, it probably will continue for another seven years. so i start my seven year clock over every morning.

speaking of seven i'm in manhattan and it looks just like Detroit did in the movie Seven. every fourth person is insane,

KnightTakesKing's picture

The movie 'Seven' was based in New Orleans if I recall. But point taken about Manhattan.

stormsailor's picture

i recall morgan freeman going into the main branch of the new york public library at night to do research.

Dr. Everett V. Scott's picture

The Bible understands our financial system better than the "experts":

 

Seven (7) year cycles of capital growth, and then debt forgiveness: the Sabbatical Year

 

50 year cycles of property acquisition, and then property redistribution: Jubilee  

 

These natural cycles are nothing to fear.  Nor can they be avoided.

SunRise's picture

Crystal Ball? or will it be 72 HOURS?

SDShack's picture

Stockman says:

"This is the 4th bubble the Fed has created through easy money and printing press expansion."

Very true.

TPTB say: "What difference does it make?"... and let their sociopath designed system continue to redistribute wealth from the masses to the elites. The sociopaths have gamed the system so they always win. It really is "it works, until it doesn't", but that day of reckoning is probably decades in the future because the sheep are content within their cages with their toys and food generously given them whenever they bleat to their masters.

101 years and counting's picture

The fat cow said there are no bubbles.  Therefore, there are bubbles.  Just assume everything coming from a Fed douchebag/cunt is a lie.

thismarketisrigged's picture

but there cant be any bubbles in this market.

 

cramer said there r no bubbles, david tepper said yesterday there were no bubbles, all this is on record profits by these phenominal companies we have.

 

o and btw, btfd now, dow is down a whopping 15 pts as i type this, dont worry though, they will make sure its up at least 50-60 pts today.

 

there is no red allowed

adr's picture

It isn't 2007-2008. It is a whole new predatory animal. Never before have we had the Fed openly buy the market up nearly tick for tick.

This bubble is also completely global. Blowing bigger, surrounding the planet.

I read another story yesterday about how we aren't in a bubble becuase you can't see bubbles while they are being blown. You only know something is a bubble after it pops.

So if you were in a bubble while it was being blown, but didn't see the bubble, you weren't actually in a bubble. Is this tree falling in a forest logic?

thismarketisrigged's picture

agreed man, this is nothing like 07-08.

 

at least in 07-08, interest rates were not being manipulated day in and day out, the market was actually allowed to fall, there was not a fed speaker out there every day when the dow dropped 20 pts, etc.

 

these r like times never seen before, times that future generation kids will be reading in there history books when all is set and done.

 

when it ends, it will be worse than the great depression and the financial crisis of 07-08 combined

BandGap's picture

The only difference now is we are aware of the manipulations and aren't going to sit still when we're told what to do or "the entire world economy will fall into the shit bucket".

We are near the end of the spiral. Five years ago we were starting the process.

NoDebt's picture

When future historians write the book on this era they will laugh at the idiotic "wealth effect" premise.  "How could they be so stupid?  That only affects a tiny portion of the population!  I can't believe they thought that would work and they kept doing for YEARS after it was obvious it didn't."

No mention will be made that it was all a power grab or that there were thousands of people who saw through it right from the beginning and posted like mad on what were then called "internet blogs" decrying the policy.