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Albert Edwards: 'Investors Demand A Sign Of When To Get Out And That Trigger May Have Just Arrived"

Tyler Durden's picture


With every other bear throwing in the towel left and right these days, we fully expected that the latest letter by SocGen's Albert Edwards would have something about "how much he hates looking at himself in the mirror, but..." and then we would be served with some garbage like the following margin expectations chart.

Luckily none of that happened. Instead we were greeted by the sharp insight and keen intellect that we have grown to expect from AE, and that have disappeared from the repertoire of so many other sellouts and lemming cheerleaders. Ironically, the topic of Edwards' latest piece is precisely the chart above - the explosion in future margins, or rather the complete lack thereof. In fact, what Edwards is seeing is quite the opposite. To wit:

The margin squeeze that is unfolding as unit labour costs climb above company selling price inflation...



... leaves the economy extremely vulnerable to a downturn in the investment cycle. Business output inflation is measuring a wider basket of goods and services than the Fed?s favoured measure of inflation, the core personal consumption expenditure (PCE) deflator, but it does move in a very similar fashion (see chart below). Low pricing power is leaving the US economy more vulnerable than many suppose. In my view, a full-blown profits and investment downturn is most likely to be triggered by Asian and EM devaluations releasing surplus capacity onto the West and crushing pricing power even further. As Ian Harwood, my former boss used to say, ?"Watch the profit cycle closely. We ignore it at our peril?."


This is a useful follow up to our earlier observations on the current status of the leverage cycle, when we noted that while the business cycle may be dead, but if it isn't we are now on the verge, if not have entered a full-blown recession.

We have, on these pages, long believed that corporate profits should be watched closely, not for their direct impact on equity valuations, but their impact on the economic cycle. Most economic models have profits dropping out as a residual, but they are a key driver of the economic cycle. Growth in profits determines the growth of investment, inventories and employment. (Note I emphasise the growth, and not the level, of profits or the rate of profitability).


Over the years I have tended to focus on US pre-tax domestic non-financial profits as a best lead indicator for US-based company business spending. In the chart below I show this profits measure together with real growth in business investment, including inventories. Profits growth typically leads investment spending.



If we can get a handle on the profits cycle we can avoid being caught out by the investment cycle and recessions. Typically it was said that ?recessions were made in Washington? as the Fed jacked up rates to fight inflation. This not only curbed the credit cycle but squeezed corporate profits to the point that it triggered a downswing in the investment cycle and ?caused? a recession.


So in many investors? minds a recession will not occur unless the Fed triggers one with monetary tightening. That is of course nonsense. A credit bubble can burst without any monetary tightening and similarly the profit cycle can turn down due to a variety of factors.

This is a critical observation, one that everyone ignores, and one which as the first two charts above show, means that unless the Fed proceeds to inject funds directly into corporate revenues (there is a reason why revenues will have declined for 3 quarters in a row), one can kiss not only the idiotic hockeystick forecast margin chart goodbye, but that negative margins, and earnings, are just around the horizon.

Edwards' conculsion is simple: if the US economy continues on the current track, an economic decline is inevitable, which in turn will crush confidence in the Fed, and make future monetary policy prohibitively costly:

... a recession seems a distant prospect in the minds of most investors. Yet one key precursor for a recession has now fallen into place. Slowing productivity growth means that unit labour costs are now running well ahead of output price inflation. This means a margin and profits downturn is now about to unfold. That typically is a key precursor of recession.

Finally, for those who are will be quick to acuse Edwards of crying wolf, he has a few words for you too:

That confidence in a long cycle comes partly with a high level of certainty that the monetary authorities remain in control of the economic cycle. The doomsayers who predicted that this recovery was on the verge of faltering have been proved wrong, and like the boy who cried wolf, can be safely ignored by the market. Yet that is exactly what happened in 2006 with the US consumer and housing boom, where the voices of caution had been so wrong, for so long, that their Cassandra-like utterances were ignored. Cassandra?s forecasts may have been ignored, but they proved to be correct. Investors demand a sign of when to get out and that trigger may have just arrived.

Crying wolf or not, what Bernanke and his central-planning henchmen are now doing, is simply delaying the inevitable day when realty finally catches up with every cycle, and law of nature that the Fed, courtesy of hundreds of billions of de novo liquidity, has - until this point - successfully deferred. The problem is that perhaps the most important law - that of diminishing returns - is now fianlly breathing down Mr. Chair(wo)man's neck.


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Wed, 11/27/2013 - 17:53 | 4195000 algol_dog
algol_dog's picture

Sounds like more QE coming up ...

Wed, 11/27/2013 - 18:00 | 4195024 VD
VD's picture

Yellen will order Fed to buy iGadgets and tractors in 2014.

Wed, 11/27/2013 - 18:07 | 4195047 kaiserhoff
kaiserhoff's picture

Popular siren's song in Chicom's bad old days...

   Our village has a tractor.

   I couldn't make this shit up.

Wed, 11/27/2013 - 18:12 | 4195062 kurt
kurt's picture

Maybe I can buy de tractor with bigcoins after I clean my shorts?

Wed, 11/27/2013 - 18:52 | 4195157 Richard Chesler
Richard Chesler's picture

Think I'll keep that DOW 20000 cap anyway...


Wed, 11/27/2013 - 20:05 | 4195330 NoDebt
NoDebt's picture

Last time we had a crash it took the failure of one semi-major investment bank to start the dominoes falling.  I suspect it will take something like that happening again to signal "everyone out of the pool."

Wed, 11/27/2013 - 20:35 | 4195431 Four chan
Four chan's picture

bitcoin just topped 1000 $ per. fiat is going the wrong way.

Wed, 11/27/2013 - 20:50 | 4195492 HardlyZero
HardlyZero's picture

Will Yellen write the new Five-Year Plan, or Kathleen Sebelius ?  Hopefully surviving 2014.

Thu, 11/28/2013 - 00:35 | 4196075 fockewulf190
fockewulf190's picture

The roadkill muppets will be piled high once again. 

Thu, 11/28/2013 - 07:01 | 4196305 GetZeeGold
GetZeeGold's picture



Elvis has left the building....and he's leaving with gold.....which is going to make him pretty hard to track.

Thu, 11/28/2013 - 10:07 | 4196412 new game
new game's picture

he is not the only one getting out of dodge. still searchg for j. galt, oh sorry, just i found him, but can't tell you where. - it is all in your mind:)

Wed, 11/27/2013 - 19:01 | 4195174 mjcOH1
mjcOH1's picture

"Yellen will order Fed to buy iGadgets and tractors in 2014."

Maybe the fed will just buy food and burn it....corn or something. Because eventually even iShit is considered discretionary.

Wed, 11/27/2013 - 21:13 | 4195339 philipat
philipat's picture

Tractors, iGadgets and food all have some utility and value. Also, buying them does not help the Fed's shareholders, the TBTF Banks. More likely next step for the Fed, therefore: Student loans and car loans, all neatly wrapped and securitised. Rated AAA by the Rating Agencies. What could possibly go wrong?

Thu, 11/28/2013 - 00:24 | 4196048 jeff montanye
jeff montanye's picture

why does the screen keep going blank?  this has not happened in years on this site.

Wed, 11/27/2013 - 18:19 | 4195076 johngaltfla
johngaltfla's picture

Yellen will buy A+ or higher corporate bonds from the regime's favorite S&P 500 companies to "push" economic growth...


Watch and see then remember this comment.

Thu, 11/28/2013 - 05:59 | 4196282 andrewp111
andrewp111's picture

She will have to buy Munis too. Chicago may need bailin'

Wed, 11/27/2013 - 19:12 | 4195207 y3maxx
y3maxx's picture

Hitler's Rise to Power Explained

Notice any comparison w/ Obama?...

“”by hyperinflating currency to reduce debt, the govt also transfers all middle class wealth to the govt.

Conditions attract a Diktator.””

...Hitler utilized the Great Depression to ascend Power and Control...played on the Citizens’s Fears.

Then seized the Rights of the People from the Weimar Constitution

....Private Property Rights

.... the Right to Assemble,

...the Right to Privacy, in the Mail and the Telephone System

Economic Crisis leads to the Rise of a Diktator.

15:00 minute mark....

When Money Is Corrupted - Hidden Secrets Of Money

Thu, 11/28/2013 - 00:24 | 4196052 jeff montanye
jeff montanye's picture

to call obama a monster insults ted bundy.

Thu, 11/28/2013 - 04:06 | 4196246 Colonel Klink
Colonel Klink's picture

Yeah because Ted Bundy only murdered 30+ innocents.  Obama makes Ted look like a piker.  I'm sure Obama's totals are 30,000+ and rising.

Thu, 11/28/2013 - 06:59 | 4196306 GetZeeGold
GetZeeGold's picture



When the public turns on the's not gonna be pretty.

Thu, 11/28/2013 - 09:11 | 4196350 RSloane
RSloane's picture

They already are. CNN and MSNBC lost almost half of all their viewers. CNBC is crawling along with viewership limited to the friends and families of the people who work there.

Thu, 11/28/2013 - 09:15 | 4196354 fonzannoon
fonzannoon's picture

Happy thanksgiving RSloane. Hope your arm is getting better.

Thu, 11/28/2013 - 09:39 | 4196378 RSloane
RSloane's picture

Happy Thanksgiving Fonz! My arm is healing fine without a cast - good enough to have put two turkeys in the oven at 3:00 am. If I had gone to the ER I would still have a cast on and be forced to sit this Thanksgiving out as far as cooking is concerned. I baked quite a bit yesterday, I think kneeding dough was good excercise for it.

Hope your Thanksgiving is a very tasty one and you and yours are healthy and happy.

Thu, 11/28/2013 - 02:32 | 4196190 observer007
observer007's picture



will replace Dollar

Chinse are crasy

Realtime quotes:

Thu, 11/28/2013 - 03:42 | 4196220 Ham-bone
Ham-bone's picture

thinking of bubbles...2000, 2007 clearly bubbles...'15 not likely to be known as a bubble but an end of something and starting point of something as yet to be defined...

'00 day trading and small investors (alongside Wall Street) chased outsized returns in a fairly narrow segment of the economy in a new "transformative technology"...frenzy buying up, believed "this time it was different"...damage was fairly well contained and effected primarily those actively involved

'07 homeowners and homes were turned into ATM's (via inflation, zero lending standards, leverage, and ever lower rates) ultimately effecting the entire economy regardless average persons involvement or risk levels...frenzy buying RE / CRE, buying speculative believing "home prices never go down"...damage was broad and effected most, whom had no active part in the bubble

'14 or '15 or however long til the terminus... it will likely effect everything, everyone, everywhere as all the major currencies (not simply the dollar) will print ever more with the benefits to ever fewer.  So hard to prognosticate when or how but hyper-stagnation, inflation, deflation or in what order...but this time there is no excitement, no belief this time is different (except for those that believe QE can go to infinity or Bitcoin is the new "transformative technology"), simply people with no where else to go but riskier positions...staring @ outsized returns but for all the wrong reasons and with the clear feeling we are being funneled into the cattle car...

Definitey feels like the "exits" are being barred as PM's or other commodity based options are "failing" in the short term.  This doesn't feel like a bubble but more of a financial and economic centrally planned "5yr plan" with hardly any choice but to dance until the needle falls off the record (it would be like (imagining) a "democracy" with "elections" where only two candidates are allowed but they are actually in matter of fact not representing either "party" but the same monied interests...try to imagine, no matter how foreign it may sound, that there really is no choice.  Well done and well played TPTB.  Glad to know there will never be enuf money or power or fame or sex or or guess is the only thing you folks really understand is hate

Thu, 11/28/2013 - 05:44 | 4196279 Mike in GA
Mike in GA's picture

Looks like you got paranoia covered for us "folks".

Thu, 11/28/2013 - 05:11 | 4196268 Doña K
Doña K's picture

Desparate people who lost their money are trying to get rich quickly. Another ponzi which will also end in tears.

20% of the bitcoins are owned by only a few and when they start realizing that their millions may evaporate any minute and head for the exits, its curtains for the rest.

I know there are some believers out there - ipse dixit. They just want bitcoin to be kosher. Pray my friends.

Can someone prove that it is not a ponzi? Can someone prove it's not TPTB behind it?

Just saying....

Wed, 11/27/2013 - 18:13 | 4195064 wallstreetapost...
wallstreetaposteriori's picture

Earnings downturn.... that doesn't matter.  Companies will just issue more debt to buy back shares and manipulate their EPS numbers in their favor so the C suites keep getting those big bonuses.   

Wed, 11/27/2013 - 18:52 | 4195155 Mentaliusanything
Mentaliusanything's picture

Share buybacks are a sure sign that the management has looked at all the options to expand, found none that will produce a ROI that is better than the current interest costs (low).

A business that does not go forward must go into decline. Decreasing the shares on offer does increase the share price but it won't keep the lights on. Voodoo economics like this is the sign that it's time to bug out. seen it time after time. 

Wed, 11/27/2013 - 20:58 | 4195530 new game
new game's picture

buybacks are a indirect transfer of corporate earnings back to the shareholders via options.

when these fuckers sell indtead of hold then look out below...

Wed, 11/27/2013 - 21:16 | 4195578 disabledvet
disabledvet's picture

actually any turn around in hiring should probably be construed of as bearish at this point. now lets talk moonshots here: that peak move in the Spring and Summer of 1929 is truly extraordinary and very similar to the moonshot the Nasdaq had on its way to 5400 (all time) to 5000 (closing.) In other words a 20 percent move in the market average in a single day--up to down. in order to play this game you literally have to be long everything. if you've been short you've been ruined...even buying protection means you've given away all your equity. I see nothing to stand in the way of the Nasdaq pushing to 5000 between now and Christmas...nor the S&P going up 40% here. HPQ didn't do much that was all that special with earnings and took off like a rocket today. I could see GE at 60 by Spring. Solar City and Tesla went parabolic today. these are "loss leaders"...and no i should not see any Tesla's where i live because there is no way to fuel the car up here I thought. Nay...there it was. we'll see if those who throw caution to the wind this holiday season get burned or not.

Thu, 11/28/2013 - 12:43 | 4196858 spine001
spine001's picture

I just went through this in Corporate Finance in my MBA. Absollutely true, getting rid of capital is the best indication that a company can not find profitable projects, or in thecnical terms projects with IRR > 0

Wed, 11/27/2013 - 18:13 | 4195066 aVileRat
aVileRat's picture

Since mainbody trading is now 100% leveraged algo or signal trading the whole thing is on cruise control until the December consumer confidence and black friday guidance for holiday retail push (and boxing day inventory liquidations). You could press release that you have cured Cancer and are buying everyone a free wonkabar and the market will pop 4%, then return to the 50d VWAP in a series of slow drips down in correlated pair trades.

Until that day in second week of December and the second week of January it's all in to generate the Xmas rally. If that means throwing oil, Canada, Brics, AUD, gold, or EU policy independence out the window then so be it. Market has to be at as stupid a multiple as possible so that when the January hit comes, a dip does not blow through retail 'returns' and the 20% paper drop to a retail P&L sheet still shows them 'green' for the last 12 months.

On another note, HP cleared the stupidly low bar today. Herp Derp.


Wed, 11/27/2013 - 18:59 | 4195166 Rainman
Rainman's picture

As good a theory as any. Government shutdown iminent, thus fall from a higher branch. Rinse and repeat with credible quarterly causations.

Wed, 11/27/2013 - 21:22 | 4195596 disabledvet
disabledvet's picture

what was that "sometimes you've got lie" line again? just because a correction is healthy doesn't mean you don't get a moon shot instead. this is not the "how is one to know?" Fed either. this Fed did attempt to Taper this summer. You didn't hear me complain either even though it definitely made me feel like i was missing out on something.

Thu, 11/28/2013 - 05:40 | 4196275 XAU XAG
XAU XAG's picture

Though I agree it's total madness.


The markets going up could just be a sighn of inflation and no where else to go.

With auction prices for collectables going sky high you are seeing the same thing................but no one is bitching about high collectable prices are they.

Real wealth are going for collectables, pension funds and other funds going for stocks as is the middle class with thier 401's.

The lower class has no money and are out of the race.



That will all change sometime in the future


In this game of musical chairs it pays to sit on the chair as the music is playing...........but look out below when the music stops and you are on the wrong chair (it's legs brake)


Gold and silver had a good run and is taking a breather......stocks are having a good run................a breather will arrive ............just don't no when.


Happy Thanks giving to all of you "the other side of the Pond"

And many thanks to ZH and those that post educational economical post's for us all to take in!


And last but not least...........those that post funny comments that force you to clean your screen and keyboard!



Charlie Chaplin




Thu, 11/28/2013 - 09:59 | 4196401 Crash Overide
Crash Overide's picture

Isn't there a point in the game where the money creation just stops working because everyone finally sees the fraud?

At this point doesn't diminishing returns + more QE = faster diminishing returns until it goes "boom" and blows up in everyone's faces?


Gobble gobble, enjoy your turkey...

Wed, 11/27/2013 - 17:55 | 4195005 Trimmed Hedge
Trimmed Hedge's picture

The new flight to safety is Bigcoins™...

Wed, 11/27/2013 - 18:12 | 4195063 nope-1004
nope-1004's picture

I prefer Bigcons™

Wed, 11/27/2013 - 19:03 | 4195181 graftvshost
graftvshost's picture


pull 'em right out of your ass! Or hoard 'em in there for safekeeping.

Wed, 11/27/2013 - 19:50 | 4195285 lotsoffun
lotsoffun's picture

you can have mine for a pittance.  i swear, there is a secret mapped buried somewhere in the united states and you don't even need a computer

to find the map.  just start digging.  and when you find the map, it will show you the way to my stash.  but you better get there quick, because

most of the stash flushs into a major river.  so - there is a limited amount of the stuff that will ever be available.  and it's better than gold.

you can exchange it for anything - college degrees, sex and drugs, why, even farmers want it, so they'll exchange crops for my buttcoins.

and the best part is - it's backed by nothing!!!  except - that we all agree it's worth a lot.  right guys?  this is so cool, it's just like when we

were sleeping in zuccoti park together.  (or sorry about that, i didn't tell you, but the clinics are free).  we are going to bring down

the fiat system with this sh*t!! 

but i have to remind you - don't be the first one to break the chain.  don't lose confidence.  this stuff really is worth more than

you or anyone can ever imagine, just feel yourself lucky to be able to get in, because so many others are stupid or greedy and just

don't understand.

good-night kids.  happy thanksgiving.


Thu, 11/28/2013 - 01:57 | 4196167 mc225
mc225's picture

it would be great to see manifold competing currencies; everyone trading in whatever they want; each person with the opportunity to float their own currency.

Wed, 11/27/2013 - 17:59 | 4195021 Son of Captain Nemo
Son of Captain Nemo's picture

If this can be defined as a "trigger" for the markets knowing what we already know about the way the U.S. uses it's military in order to get what it wants.


Wed, 11/27/2013 - 18:01 | 4195029 Son of Captain Nemo
Son of Captain Nemo's picture

Anyone want to volunteer that the great lead story in the news the other day on the deal we struck with Iran and it's partner(s) probably didn't work out exactly according to script?!!!

Wed, 11/27/2013 - 18:03 | 4195032 NOTaREALmerican
NOTaREALmerican's picture

When Alan Greenspan talks, people listen.

Wed, 11/27/2013 - 18:10 | 4195053 kaiserhoff
kaiserhoff's picture

The economy is stalling.  Cut interest rates.

  Er, how, what, where???

Wed, 11/27/2013 - 18:21 | 4195080 Uber Vandal
Uber Vandal's picture

If interest rates were cut to say -100%, wouldn't that clear up everything then?

Poof, All gone.

This line is for cash customers only.

Wed, 11/27/2013 - 19:11 | 4195202 optimator
optimator's picture

Have bank deposits return a negative interest rate.  that'll get their money into the market where we'll take it as we usually do.  Only other place in their bedding, but we are getting that through inflation.  No place for them to hide it from us.    Never mention gold to them.

Wed, 11/27/2013 - 18:03 | 4195034 max2205
max2205's picture

I say next year is a double...just to clean out the shorts

Wed, 11/27/2013 - 18:07 | 4195041 Rainman
Rainman's picture

Negative margins, bitchez .

Wed, 11/27/2013 - 18:12 | 4195058 kaiserhoff
kaiserhoff's picture

Works for Amazon.

God knows how.

Wed, 11/27/2013 - 18:46 | 4195140 Hulk
Hulk's picture


Wed, 11/27/2013 - 18:57 | 4195165 El Tuco
El Tuco's picture

Boss, were losing money on every single item, we're not charging enough! Don't worry son will make it up on volume.......


Wed, 11/27/2013 - 18:12 | 4195059 Wilcox1
Wilcox1's picture

How do you get out on this thin volume?

Wed, 11/27/2013 - 18:14 | 4195067 kaiserhoff
kaiserhoff's picture

Make Obamadon't care free?

Wait, what was the question?

Wed, 11/27/2013 - 18:30 | 4195104 knukles
knukles's picture

No, that was the original promise.


Wed, 11/27/2013 - 18:25 | 4195091 Son of Captain Nemo
Son of Captain Nemo's picture

Start a war?

Thu, 11/28/2013 - 01:06 | 4196124 disabledvet
disabledvet's picture

that's what I don' get. this Syria thing was put on the President's plate with perfection. Breathtaking...wisdom? I am thankful...and I second what's said below. Hang in their fellow ZH'ers. "We're going Plaid on this one" methinks.

Wed, 11/27/2013 - 18:12 | 4195061 assistedliving
assistedliving's picture

Happy Thanksgiving to all those who celebrate

and thank you ZH/Zh'ers

Wed, 11/27/2013 - 18:16 | 4195071 asteroids
asteroids's picture

As long as there is POMO, the market goes up. We've had 5 years of it and it don't matter what the news is, the market just does up. BUT.... one day the taper will come and the POMO will stop. There will be hell to pay for 5 years of stupidity. Stay in cash, wait, be patient.

Wed, 11/27/2013 - 19:10 | 4195198 johnmack
johnmack's picture

hey pal, whats been your return on investment for staying in cash for the past 5 years?


Thu, 11/28/2013 - 00:36 | 4196082 Panafrican Funk...
Panafrican Funktron Robot's picture

John has a valid point.  The value of USD cash has been completely obliterated, particularly since QE began.  If you're staying in cash, you are fucking stupid and haven't learned a goddamn thing from being here at ZH.

Thu, 11/28/2013 - 01:08 | 4196125 disabledvet
disabledvet's picture

you should try working for a living.

Thu, 11/28/2013 - 10:19 | 4196421 new game
new game's picture

pana funk - traded for 30 years, news for you-think you got this one figured out and booked those PROfits, you da greatest investor in the universe. keep on truckin dude, sure the house will get it all EVENTUALLY - GET HELP!

Wed, 11/27/2013 - 18:20 | 4195077 ejmoosa
ejmoosa's picture

The last chart is the key.  There is no acceleration of profit growth in the future without first encountering a recession.


Wed, 11/27/2013 - 18:23 | 4195082 NOTW777
NOTW777's picture

"which in turn will crush confidence in the Fed, and make future monetary policy prohibitively costly"

just abolish the Fed

Wed, 11/27/2013 - 18:24 | 4195087 Trimmed Hedge
Trimmed Hedge's picture

After years of getting fucked over, labor is finally striking back...

Wed, 11/27/2013 - 18:46 | 4195142 Jlasoon
Jlasoon's picture

Cry me a river, My wife has to work a 12hr shift at the hospital on Thanksgiving and Christmas day.

Wed, 11/27/2013 - 19:39 | 4195245 lotsoffun
lotsoffun's picture

jlasoon  - i'm calling total BS on that.  that is her gig.  it's life or death.  whole foods is 'honey, basmati long or short grain rice?'

she took that gig knowing full well she dealt with life or death.  it's a responsibility and she is most likely compensated for it. 

it's a responsibility and she is most likely compensated for it, and as bad as things are, i'm sure she is, and i don't mean

'overtime' i mean if she doesn't like health care - then send her to a job at whole foods and see how much that pays?

people should NOT BE WORKING MAJOR HOLIDAYS as slaves so people can shop for things they don't need with money that they don't have.

this whole situation is what the founding father slave owners learned and have since repeated.  breakdown the family structure and you can't have opposition, because they have no strength.  (and they have no strength because they have no education, or values, or idea's about working together, etc., it's called dog eat dog)

people should spend a day home quietly with family enjoying family, friends and being thankful.  instead the ones that aren't

running around shopping for no reason are servicing them.

it's a very sick culture.  sickness ends in ? 

end.  BS - fuck off.


Wed, 11/27/2013 - 20:10 | 4195350 outofideas
outofideas's picture

And I call BS on your theory. There is no natural right to special days of the year off.  If whole foods or whatever employer wants to make money (which at least in part pays your time as well) you get to choose if you want to work there or not. I know it sucks, but think about what Thanksgiving is, it is a fall harvest celebration, a time when traditionally agrarian societies celebrated having enough food for the winter. Roll that notion forward to modern standards, and how confident are you that we have food for the economic winter that is coming? Are we really celebrating stability or are we pretending that things are good? In a agrarian society if the food was still in the fields with a freeze coming would you stop and celebrate because that is where are now, winter is coming and the food is short. Whole Foods may be just trying to generate the economic velocity that is the food of the modern world.



Thu, 11/28/2013 - 01:28 | 4196143 Rock On Roger
Rock On Roger's picture

Make hay while the sun shines. It doesn't matter whether it is a 'holi' day.


Stack On


Wed, 11/27/2013 - 20:41 | 4195451 Levadiakos
Levadiakos's picture

So move to Cuba already

Wed, 11/27/2013 - 20:40 | 4195452 messy
messy's picture

unbelieve thanksgiving and christmas and you will be fine

Thu, 11/28/2013 - 01:10 | 4196127 SnobGobbler
SnobGobbler's picture

aww you gotta cook your own dinner eh?


Wed, 11/27/2013 - 18:26 | 4195094 OutLookingIn
OutLookingIn's picture

In economist speak;

The law of diminishing returns -

The diminishing marginal productivity of debt. More means less bang for the buck. A lot less!

Wed, 11/27/2013 - 18:32 | 4195109 Freddie
Freddie's picture

Can't the Fed (Yellen/Bernake) just print profits for corporations?   They could help all companies be profitable.

Wed, 11/27/2013 - 18:41 | 4195126 acetinker
acetinker's picture

Huh, got an email just today about an SL10BB in Chi-town for 37.5.  It's a 2007, and I havn't got pics of it yet, but it's a whole bunch faster than my TL1, just by definition.

You may be asking, just what is ace on about?  Well, it's just the jargon of my trade.  It's a situation where I might benefit from the misfortune of the current owner.  An SL10BB is a cnc lathe.  If ya' don't know what a lathe is, I'm sorry, I ain't gonna explain it.  I will tell you that cnc is shorthand for Computer Numerical Control.

Where was I going with this...?  Oh yeah, you see I could baffle y'all with bullshit about the area I know like the back of my hand, even though it ain't magic.

Market manipulation ain't magic either.  It's bullshit.

Happy Turkey Day, y'all!



Wed, 11/27/2013 - 18:48 | 4195148 Hulk
Hulk's picture

You'll be happy to hear that I turn my turkey over the fire with a CNC Lathe !!!

Wed, 11/27/2013 - 18:56 | 4195161 acetinker
acetinker's picture

Hope you have skimmer on the sump, 'cos those turkey drippins will have your coolant smellin' like a cesspool in no time otherwise:) 





Wed, 11/27/2013 - 18:48 | 4195145 moneybots
moneybots's picture

"So in many investors? minds a recession will not occur unless the Fed triggers one with monetary tightening. That is of course nonsense."


What is the financial truth anymore?  Banks are allowed to lie about the value of assets.  GDP is rigged by counting research and developement.  Inflation rate is rigged.  What is the actual level of unemployment?  75% of jobs created are part time.  Christmas sales are expected to be poor.

It feels like a recession, regardless what any offical numbers say.


Wed, 11/27/2013 - 18:56 | 4195162 NOTaREALmerican
NOTaREALmerican's picture

Not for the top 10-15% tho.    They are doing great.

We're simply entering the beginning of the new "survival of the fittest" society that so many have been wishing for.    Perpetual recession for the losers and perpetual prosperity for those in on the various scams.   

It'll take some time getting used to, but eventually the peasants will suck-it-up and stop bitching like a bunch of pinko commies and learn how to be optimistic about the future greatness of this great-n-glorious country again.

Wed, 11/27/2013 - 19:04 | 4195173 Harbanger
Harbanger's picture

You are in the top 10-15% with all your loot Bro..    You are doing great.

I'm not sure you will survive what you've been wishing for.  No bitch gets out of here untouched by the spirit.

Wed, 11/27/2013 - 19:21 | 4195230 NOTaREALmerican
NOTaREALmerican's picture

Re: No bitch gets out of here untouched by the spirit.

When the SHTF the new sociopaths ALWAYS manipulate the dumbasses into killing "those people".  The sociopaths are able to do this because the new sociopaths are always the same as the old sociopaths.     I'm not one of "those people".

The US, EU, Japan, China, and every country on the planet, with a government run by sociopaths, is doing exactly the same thing.   It's going to be another glorious battle of the dumbasses while the sociopaths - and their DNA bling - will be laughing all the way to (well) the bank.  

It's always always always ends the same way.

Wed, 11/27/2013 - 19:34 | 4195242 Harbanger
Harbanger's picture

"I'm not one of "those people"."

Really? Maybe you need to rethink that, you seem to be doing very well for yourself, way beyond the average wealth.   New sociopaths are replaced with old sociopaths but it depends on your definition.  Some call it "change" some call it victory, some say it's inevitable.

Wed, 11/27/2013 - 20:16 | 4195365 acetinker
acetinker's picture

Hurts my head, watching this. NARA is just so cocksure, and so wrong.  Maybe he/she will be one of those hanging from lampposts?  Dunno, maybe it'll wind up being me.  If we don't hang together, we will surely hang seperately.

Wed, 11/27/2013 - 21:00 | 4195536 Harbanger
Harbanger's picture

Cocksure that she will eventually suck my cock, I'm no saint.  I would gladly give myself and my fortune if it came to that.  NARA wants to escape the fire.  Our wills will be tested.

Wed, 11/27/2013 - 22:46 | 4195801 acetinker
acetinker's picture

You know, I ain't so sure of a hereafter, but i'm equally sure that he/she will probably never suck any part of me.






Thu, 11/28/2013 - 21:01 | 4198084 acetinker
acetinker's picture

Hope you know it wasn't me who red-arrowed you.  Probably NARA.  At least NARA appears to act alone.  Some others seem to have a posse of minions who'd red-arrow you if you said the sky is blue.

Not that I give a rat's ass about red arrows, just that you got one, and it wasn't me.

Wed, 11/27/2013 - 19:22 | 4195232 noless
noless's picture

Can someone help me remember, didn't they redefine productivity gains to include commenting on articles on the internet? Something like that?

Wed, 11/27/2013 - 18:48 | 4195147 Iam Yue2
Iam Yue2's picture

Russell Napier: S&P 500 'will fall 70%'. 11/10/2013.

Thu, 11/28/2013 - 04:27 | 4196254 Manic by Proxy
Manic by Proxy's picture

Napier is an optimist. Betting 90%.

Wed, 11/27/2013 - 19:05 | 4195183 falak pema
falak pema's picture

Trigger what trigger,  I didn't even know what a nuke trigger was. 

The catch phrase in this Hollywood producer's testimony  who spied for Israel; double agent 007 for Mossad.

Arnon Milchan Says He's An Israeli Spy - Business Insider

Wed, 11/27/2013 - 19:08 | 4195192 optimator
optimator's picture

He's honest.  Said he's "working for his country".  We do know which country he means and it isn't the country where he makes his living and his home.

Wed, 11/27/2013 - 19:11 | 4195203 SmittyinLA
SmittyinLA's picture

yes, get out of investing in real assets and get into fiat paper, frontrun the greatest debasement in currency in the history of fiat. 

You don't want to be the guy holding real producing assets when the fiat party ends, get into fiat now!





Wed, 11/27/2013 - 19:17 | 4195219 MichiganMilitiaMan
MichiganMilitiaMan's picture

Looking for a sign to get out! Yawn: Hindenburg omens, crashing baltic dry index, fragile record index highs, unit labor costs margin squeeze.

The only signs that will matter are that the Dow, S&P, Russell 2000, NASDAQ keep making record highs to secure our somewhat black, first socialist/marxists president's legacy (it will be the only thing that can be claimed from his presidency). Once every single, solitary bear has thrown in the towel, Yellen and her marry band of bankers and politicians will double down even further, print money to the moon since the unemployment rate will still be greater than 7.0% and since non-food/energy inflation will be non-exsistent, just to ramp this mother f&*cker higher and to prove once and for all that Keynes and Krugman were right.

Wed, 11/27/2013 - 19:53 | 4195292 Jack Burton
Jack Burton's picture

China's world wild card status is growing by the month. Not more than a few days ago they announced an official attitude towards the dollar as being that of a "Deliberate Ponzi Scheme". They announced that "We have no desire to expand our foreign currency reserves held in dollars." To add to that, the recent surge in physical gold buying in the face of a decline in paper gold hints at the two above statements being more than just show. Also, they announced a desire to conclude more oil and energy deals with Russia outside the dollar system.

Now we have seen China expand it's control over the Japanese disputed Islands. The USA promptly flew two B-52's right over an airspace just declared as part of the Chinese Air Defense Zone.

Our stock markets are built on QE money printing and the ocean of liquidity that select bankers and speculators have access to for speculation in equities. The world is doing the same. China is now such an important part of the real world productive economy, unlike Britain and the USA who are financial engineers, CHina's actions can blow this sucker wide open. Failing relations with the USA seem ensured by the Chinese attack on the dollar system and the US response with all it knows how to do, set off military threats.

The USA and CHina partnership is at the core of the last decade's world economy. It looks to be going to hell very fast. Were I long stocks, I would have one on on the Yellen bitch at the Fed and the other on the Chinese/Russian relations with the USA in world power politics.

Wed, 11/27/2013 - 20:23 | 4195385 Caveman93
Caveman93's picture

Should I hold off a bit on buying more shares of FAZ then?

Wed, 11/27/2013 - 20:25 | 4195391 CPL
CPL's picture

When was the sell signal?  About six years ago when they printed the entire economy of the US and everyone followed suit.

That would have been the time.

Wed, 11/27/2013 - 20:30 | 4195412 devo
devo's picture

I think everyone's waiting for a Santa Claus rally; then they'll get out.

Wed, 11/27/2013 - 23:26 | 4195905 DirkDiggler11
DirkDiggler11's picture

That's exactly the problem, EVERYONE expects a Santa rally given the Fed as a backstop on a long position. When everyone is on one side if the boat, watch the hole sucker tip over. I do think we will get a sharp correction, not a crash, in December.

Wed, 11/27/2013 - 20:29 | 4195414 ebworthen
ebworthen's picture

Bernanke and his central-planning henchmen (yes that includes you, Mr. Yellen) are in their fifth year of paying ZERO interest to savers.

So, people are either chasing yield in leveraged risky instruments and stocks or playing it safe and losing money each year to inflation.

If you think there won't be a comeuppance for that crime you aren't paying attention.

Honey Badger markets don't care, because they won't be left holding the bag.

Once again it will be savers and taxpayers.

End The FED!!!

Thu, 11/28/2013 - 00:45 | 4196100 Panafrican Funk...
Panafrican Funktron Robot's picture

The broad market indicies have gone up about 40% slower than the rate of increase in the USD supply, so leveraged bets on the broad market are viewed as one of the very few ways to keep pace with debasement, at least for USD denominated assets.

Wed, 11/27/2013 - 20:48 | 4195489 comrade rally monkey
comrade rally monkey's picture

Direct eps injections....thats hot

Wed, 11/27/2013 - 20:56 | 4195521 robertocarlos
robertocarlos's picture

Why didn't China shoot down those B52s?

Wed, 11/27/2013 - 21:44 | 4195668 Solarman
Solarman's picture

Because China is not so stupid to cut off its own nose to spite its face.  How many oil tankers would make it to China's ports in winter.  Oh, and you can kiss you export market goodbye.  Nothing like 200 million unemployed and and cold citizens to deal with.


You know, you must be over 18 to post here.

Thu, 11/28/2013 - 00:57 | 4196114 Clever Name
Clever Name's picture

Two sides to that coin. What happens to the US if China stops exporting goods to the US? How long until WM and TGT go under, and all their former employees are out on the street? I actually thought you were talking about us with your '200 million unemployed'.

Thu, 11/28/2013 - 04:43 | 4196262 hootowl
hootowl's picture

Perhaps a good number of WM employees could find a job in a revived U.S. manufacturing sector....maybe an underground small business manufacturing sector....The feds would destroy above ground U.S. manufacturing before it could get on its feet.

Thu, 11/28/2013 - 04:38 | 4196259 hootowl
hootowl's picture

Because Obowel Movement would threaten to spank them.

Wed, 11/27/2013 - 21:45 | 4195671 Downtoolong
Downtoolong's picture

“Investors Demand A Sign Of When To Get Out”

I sold some stock last Friday. I was so relieved and elated I felt compelled to celebrate with a half bottle of scotch.

Now that’s a sign………for me to sell some more stock next POMO Tuesday.

Get your hands off my scotch.


Wed, 11/27/2013 - 23:42 | 4195956 billw
billw's picture

As AE said , most recessions have been started by monetary tightening by the government. Well we have already had a year of that tightening in the form of Obamacare. In the last year per the BLS 77% of all new jobs created were part time. The BLS definition of a part time job is one of under 30 hours. Going from a 40 hour job lost to a new job at under 30 hours is at best a 25% pay loss, which will also result in a 25% drop in that part of the PCE that impacts the GDP ( ~ 17.5% drop in GDP). This loss in spending is finally starting to hurt the revenues and hence profits of American companies. That does not even begin to take into account the amount of money taken out of the economy by the increased costs of insurance under Obamacare.

Thu, 11/28/2013 - 04:37 | 4196258 hootowl
hootowl's picture

......not to mention the billions extracted from the economy and sent out of the country by both legal immigrants and illegal aliens.

Thu, 11/28/2013 - 00:40 | 4196088 rationaldemocracy
rationaldemocracy's picture

Whats the alternative to stocks?


Thu, 11/28/2013 - 02:59 | 4196213 zebrasquid
zebrasquid's picture

No stocks...

Thu, 11/28/2013 - 00:55 | 4196113 The Heart
The Heart's picture


Up in the sky...

It's a bird...

It's a plane...

It's a sign!

Thu, 11/28/2013 - 02:18 | 4196181 Rock On Roger
Rock On Roger's picture

So I googled comet Ison.

It truly could be a sign.



Stack On

Thu, 11/28/2013 - 01:45 | 4196156 ToNYC
ToNYC's picture

The hockey stick has termites of the zero interest rate-kind. No one could have seen it coming.

Thu, 11/28/2013 - 01:46 | 4196159 IridiumRebel
IridiumRebel's picture

I bought QQQ today. That's your sign. GTFO!

Thu, 11/28/2013 - 03:28 | 4196223 Bear
Bear's picture

WTF ... why didn't you buy it at 30? I sold it there, and you could have bought it from me.

Thu, 11/28/2013 - 03:52 | 4196236 zebrasquid
zebrasquid's picture

The market fell apart when general confidence in certain Presidents did..Nixon, Carter, Bush Jr....Good thing for bulls that Oblather is riding so high, eh?

Thu, 11/28/2013 - 04:28 | 4196255 Atomizer
Atomizer's picture

just before black Friday numbers trickle in. oops i did it again.

Thu, 11/28/2013 - 05:34 | 4196272 bdub2
bdub2's picture

The only religion: The Federal Reserve. Praise The Lord. The Love of Money has Won.   

Thu, 11/28/2013 - 06:29 | 4196289 Peter Pan
Peter Pan's picture

There will be many signs:

Negative interest rates

The stock market rising on less and less turnover

Police looking more and more like soldiers

Kim Kardashian tops the ratings

More and more oldies continuing to work into their late 70's and beyond if they can survive.

More and more young people begin to live underground in their parents' basements

The percentage of people on food stamps grows but amount paid decreases.

The number of people who own paid off houses decreases steadily


Thu, 11/28/2013 - 06:51 | 4196304 HL Shancken
HL Shancken's picture

I demand relief from Communist Party rule. It is surrepticious, but it is there. Not just in this country. In countries on most every continent. You don't believe me, but it's true. You want to blather about the new world order and how it's a banker's Utopia. You're a gullible bunch. And so full of yourselves! Most of you are insufferable. A bunch of idiots weaned on John Stewart and educated by the descendants of Marx. A confused, narcissistic, juvenile crew up against the most organized, ruthless, and effective killing machine the world has ever known. If you're honest with yourselves, you have no idea what's going to happen in the future because you have no idea what's gone on in the past and are completely misled about what is happening now.


Soon our nuclear warheads will number under 1,000. We have a population that will not in the end submit to Communist Party rule or anything like it. Potassium iodide will be worth more than gold. You will forget all about your Goldman Sachs conspiracy theories then.


Thu, 11/28/2013 - 10:54 | 4196418 Mi Naem
Mi Naem's picture

Communists, bankers, ... just different tribes of gangsters with shifting agendas, alliances, strategies, but with their eyes always on the prize: total global dominion made practically possible as never before with unprecedented technological power and cultural influence. 
Sure, humans are livestock to them, but are not much more to pompous asses like you. 

You think Potassium iodide is going to save you?  You don't have a clue. 

Should the worst happen, and the mushroom clouds start sprouting, your first reaction will be to smile at the false affirmation that you were right all along.  Asshole. 

Thu, 11/28/2013 - 07:54 | 4196317 surf0766
surf0766's picture

The DOW and S&P are meaningless

Thu, 11/28/2013 - 08:06 | 4196322 observer007
observer007's picture


Bitcoin shots to $1200

movement now vertical:

Thu, 11/28/2013 - 08:37 | 4196343 The Abstraction...
The Abstraction of Justice's picture

Sold all my bitcoins three days ago. Bought into alterantives. Not looking back ;pD.

Thu, 11/28/2013 - 08:28 | 4196336 tradewithdave
tradewithdave's picture

Altucher 20,000

Thu, 11/28/2013 - 09:24 | 4196361 djsmps
djsmps's picture

Altucher on Fukushima:

 Fact: Success. this is an amazing success for nuclear technology. We had a 9.0 magnitude earthquake AND a tsunami and it turns out that nobody will die from nuclear radiation, despite the mass devastation caused by these natural disasters.

It’s a scam. The pundits need something to talk about. The media needs something to make you panic and scared. The larger institutional investors need mom and pop to sell their retirement portfolio to them at cheap prices. So they all scare you to save their own lives and businesses. When we were all kids, “nuclear” meant something horrible and frightful. There was a big red button that could be pressed and maniacs seemed to be at the helm on both sides. That was scary. But that fear is long over.

Thu, 11/28/2013 - 09:27 | 4196365 q99x2
q99x2's picture

Why squint. Yellen print  Everybody gonna be happy.

Thu, 11/28/2013 - 09:34 | 4196372 goldenbuddha454
goldenbuddha454's picture

Head and shoulders formation, nice!

Thu, 11/28/2013 - 09:57 | 4196399 JailBanksters
JailBanksters's picture

They want a sign eh...

How about 18th Jan 2014

So what you gonna do about it?

Yank all your money out before

Oops, I meant 23rd May 2014, Fat Fingers



Thu, 11/28/2013 - 10:08 | 4196410 goldenbuddha454
goldenbuddha454's picture

Look at what they were saying a month after the tech bubble of 2000 popped on March 10, 2000.  People believed it was just a minor correction.

Why is noone looking at the commodities markets today as a precursor to a broader market selloff? 


Fri, 11/29/2013 - 01:59 | 4198564 Notarocketscientist
Notarocketscientist's picture

happy genocide day everyone!

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