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David Stockman Rages Market "Valuation Has Lost Any Anchor To The Real World"

Tyler Durden's picture




 

The current malaise of news, data, and spin is "meaningless," David Stockman tells Bloomberg's Tom Keene, adding that markets are exhibiting "the kind of speculative froth you get at the top of a cycle where valuation loses any anchor in the real world; from earnings or the prospects of the economy." As he argued before, "owning stocks here is very dangerous," and despite Keene's best efforts to denigrate Stockman's "of course it's a bubble," perspective; the former inside-man exposes the hard mathematical truths of valuations, performance, and reality in this brief clip. Who is to blame - The Fed or Wall Street? "It is a question of who has taken whom hostage," Stockman concludes ominously, "it's a co-dependency... it's very dangerous."

"Wall street demands that the Fed keeps dishing out the liquidity, keeps dishing out the monetary heroin...

 

They have a hissy fit if the chairman of the Fed even suggested they might begin to taper four years into a recovery.

 

So - it's a codependency.

 

It's a very dangerous thing. "

Interview below:

 

 

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Mon, 12/09/2013 - 22:20 | 4231383 markmotive
markmotive's picture

Market is a bubble according to both David Stockman and Christine Hughes (Otterwood Capital)

http://www.planbeconomics.com/2013/12/christine-hughes-stock-market-is-i...

Mon, 12/09/2013 - 22:21 | 4231386 Dear Infinity
Dear Infinity's picture

But they will be long till the bottom falls out.

Mon, 12/09/2013 - 22:37 | 4231414 krispkritter
krispkritter's picture

Convinced my much younger partner that 'speculative froth' is good for her, and she agrees.  Swallowing any difference is just par for the (inter)course.  We're all going to get screwed in the end, why bother splitting (pubic) hairs? ;)

Mon, 12/09/2013 - 23:19 | 4231491 NotApplicable
NotApplicable's picture

co-dependency = feedback loop

those always end well...

Mon, 12/09/2013 - 23:50 | 4231535 Harbanger
Harbanger's picture

Without fake money creation and political favors, there is no economy in this land of oz.

Tue, 12/10/2013 - 01:57 | 4231617 FinalCollapse
FinalCollapse's picture

Who's that old dick interviewing David?

If he does not see the bubble then his dickhead got more smarts than his brain - if he has one.

On second thought - he's a perfect fit for Bloomberg.

Tue, 12/10/2013 - 04:52 | 4231772 kurt
kurt's picture

He waxes his balls one hair at a time. He then stands them up and interviews them, dressed in a pink taffeta skirt, Barbie looking on. Old dusty hairs get put in a silver box and carefully stacked next to the My Little Poney. "I will cherish you for ever and ever and ever...."

Tue, 12/10/2013 - 06:45 | 4231811 new game
new game's picture

keane or whomever-just sickening media that i will not watch-revolting.

by watching they gain credit for being worth more that a pile of shit.

self appointed by viewership rating-kind of like our currency. self fulfilling and you aint in the club.

trickle down is the best we get until enough figure it out...

Tue, 12/10/2013 - 10:41 | 4232290 gmrpeabody
gmrpeabody's picture

"Market is a bubble according to both David Stockman and Christine Hughes (Otterwood Capital)"

Wow..., Christine Hughes seems quite bullish in that clip that you obviously didn't watch.

Tue, 12/10/2013 - 16:36 | 4233564 EscapingProgress
EscapingProgress's picture

Yes, QE creates bubbles. I've known that since 2009. Why must I have it repeated to me over and over by credentialed establishmentarians?

P.S. No, there isn't and there will never be a recovery.

Mon, 12/09/2013 - 23:57 | 4231543 Son of Captain Nemo
Son of Captain Nemo's picture

I just spit beer all over my monitor on reading this.

LoL!

Mon, 12/09/2013 - 22:50 | 4231439 Pig Circus
Pig Circus's picture

Had to share this one fresh from my inbox:

Harassed boyfriend jumped to his death after his girlfriend insisted on going into another clothes shop

http://www.dailymail.co.uk/news/article-2520753/Chinese-boyfriend-jumped-death-girlfriend-insisted-going-clothes-shop.html

Mon, 12/09/2013 - 22:59 | 4231462 The Wisp
The Wisp's picture

She'd love to go to his funeral but she will be shopping that day...

Tue, 12/10/2013 - 03:55 | 4231739 Seer
Seer's picture

And one of the comments was: "Shop till you drop."

Self-centered prick!   He should have pushed Her over the balcony!  Now the world is stuck with Her, totally unrestrained.

Tue, 12/10/2013 - 07:34 | 4231828 Ned Zeppelin
Ned Zeppelin's picture

Or until the 10 yr inflation expectations measured by TIPS dips below its 200 day moving average. The Hendry Rule.

Mon, 12/09/2013 - 22:44 | 4231428 rubiconsolutions
rubiconsolutions's picture

"speculative froth".....yummy

Mon, 12/09/2013 - 22:45 | 4231434 Oldwood
Oldwood's picture

The stock market without QE would be like flat warm beer, no froth at all.

Tue, 12/10/2013 - 00:38 | 4231579 CIABS
CIABS's picture

The word "froth" in this kind of situation is lame.  A market is "frothy" when there's a bit too much optimisim about it, when prices are somewhat high. Then some selling comes in and the froth settles down.

This stock market is intensely manic, an out-of-control freight train heading for a sharp spike high.  It's not "frothy".

Tue, 12/10/2013 - 03:45 | 4231730 HardlyZero
HardlyZero's picture

In the shuffling madness
Of the locomotive breath,
Runs the all-time loser,
Headlong to his death.
He feels the piston scraping --
Steam breaking on his brow --
Old Charlie stole the handle and
The train won't stop going --
No way to slow down.

Tue, 12/10/2013 - 04:45 | 4231768 kurt
kurt's picture

John Voight's Character gritting his bad teeth into the wind in "Run Away Train."

(if you've never watched it, do it now, before the power goes out)

Tue, 12/10/2013 - 10:45 | 4232309 grgy
grgy's picture

 Why do these bimbo taking heads think they can argue this stuff with Stockman? He knows his shit so much more than them, they end up looking foolish.

Mon, 12/09/2013 - 22:22 | 4231385 razorthin
razorthin's picture

Keene can suck my ass.  Hate that nerd.

Mon, 12/09/2013 - 22:23 | 4231390 sixsigma cygnus...
sixsigma cygnusatratus's picture

At this point, I'm even starting to question anchors.

Mon, 12/09/2013 - 22:23 | 4231393 ebworthen
ebworthen's picture

What?

The Titanic doesn't have an anchor?

Old Stockman tells it like it is; too bad the band on the deck is playing so loud.

"Codependency" = EXACTLY.

Mon, 12/09/2013 - 22:28 | 4231395 disabledvet
disabledvet's picture

price it in bitcoin. what's the problem...

Mon, 12/09/2013 - 22:31 | 4231403 ExecutionParty
ExecutionParty's picture

Its almost as if they're saying theres a codependancy between a crack dealer and a crackwhore...

TPTB sit and laugh at the idea of a codependancy

Mon, 12/09/2013 - 22:30 | 4231405 Prairie Dog
Prairie Dog's picture

The end is nigh! The end is nigh! Repent! Repent!

 

Mon, 12/09/2013 - 22:32 | 4231411 firstdivision
firstdivision's picture

Was Stockman hibernating for the last 4 years?

Mon, 12/09/2013 - 22:35 | 4231413 Atomizer
Atomizer's picture

What goes up, must go down. Cyclical market principal. The implosion will double down once minimum wage increases and cost of goods rise by 1%. IMHO 

Mon, 12/09/2013 - 22:51 | 4231446 infinity8
infinity8's picture

"talk about your troubles but you never learn. . . ":

http://www.youtube.com/watch?v=kK62tfoCmuQ

Mon, 12/09/2013 - 23:27 | 4231511 Atomizer
Atomizer's picture

Too funny. My mother would often play that song on the stereo turntable  Thanks for the memory. All of her memories seems like it was just yesterday. Lost her 25+ years ago. 

Tue, 12/10/2013 - 23:36 | 4234908 infinity8
infinity8's picture

Well, I sincerely hope that it was good for you..... I have an old "auntie" with a great turn-table and a lot of $ that turned me on to Steely Dan and David Bowie and others, when I was quite young and i'll always love her for that.

Mon, 12/09/2013 - 22:37 | 4231415 RaceToTheBottom
RaceToTheBottom's picture

Keene is a moron, but I hate the way the lady commentator asks a question and then tries to answer it.  The stupid biotch has been given a line to burp up by WS.  WS is afraid that the bill for their freebees is coming due and is trying to throw the FED under the bus. 

Keene even tried to cut off Stockman when he saw that Stockman was not going to give WS a free ride.

Mon, 12/09/2013 - 22:44 | 4231429 Oldwood
Oldwood's picture

As they own the camera, they believe themselves the star and so obviously Gods gift to all audiences. Its hard to imagine anyone who could sit before a camera repeatedly and not see themselves that way. It would be like sitting in front of a mirror admiring and talking to yourself, convinced you are "it".

Tue, 12/10/2013 - 04:40 | 4231767 kurt
kurt's picture

Bioch, she looks like a scared Kathy Lee. Look at her hair. It doesn't move. Freak! And the woman, she's even worse.

Mon, 12/09/2013 - 22:50 | 4231444 Atomizer
Atomizer's picture

The Group of Ten. See how simple that was? Sock puppets know, it's just not written to read off their teleprompter. 

http://www.bis.org/list/g10publications/index.htm

Mon, 12/09/2013 - 22:38 | 4231420 Oldwood
Oldwood's picture

Just the final stages of the death of a star.

http://www-astro.physics.ox.ac.uk/~podsi/SN_sketch5.pdf

Following an initial collapse having spent all of it fuel, our "economic star" experiences rapid expansion, mostly in hot gases before it "pops". All that will be left is a black hole. How fitting.

Mon, 12/09/2013 - 22:41 | 4231422 Al Huxley
Al Huxley's picture

The FED and Wall Street - don't talk about them as if they're two separate entities in a co-dependent relationship.  They're not - they're partners in a giant, coordinated, well planned fraud.  They're not threatening each other, doing some kind of crazed co-dependent dance of death, they're methodically stripping the country and the people outside their club of all their fucking wealth.  Dammit, this is what always pisses me off about Stockman.

Mon, 12/09/2013 - 22:43 | 4231426 Pareto
Pareto's picture

+1 Coordinated, planned and methodical fleecing of the middle class.  The greatest redistribution EVER.

Mon, 12/09/2013 - 22:43 | 4231432 Oldwood
Oldwood's picture

It hardly ever happens by accident.

Mon, 12/09/2013 - 22:48 | 4231435 Bobportlandor
Bobportlandor's picture

Codependency, by definition, means making the relationship more important to you than you are to yourself," It's a one-sided relationship. It means you're trying to make the relationship work with someone else who's not.

 

Mon, 12/09/2013 - 22:57 | 4231459 Al Huxley
Al Huxley's picture

...which is precisely why it's a terrible description of the current situation.  Codependent describes an alcoholic husband, and his wife who gets some sense of value from supporting him in his addiction, not two criminals robbing a liquor store together.

Mon, 12/09/2013 - 23:35 | 4231517 NoDebt
NoDebt's picture

It takes a village, Al.  Not a very big one, but it still takes a village.  No man can loot the entire world single-handedly.

Mon, 12/09/2013 - 23:45 | 4231532 Al Huxley
Al Huxley's picture

LOL

Tue, 12/10/2013 - 03:59 | 4231741 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

No Debt. Never underestimate the greed of Obama, if he can't to it , he will still take credit for it.

Tue, 12/10/2013 - 01:26 | 4231553 Son of Captain Nemo
Son of Captain Nemo's picture

Greed the operative word -left unchecked can get amazingly stupid!

Tue, 12/10/2013 - 04:06 | 4231748 Seer
Seer's picture

Masters...  Convincing us of things like "Death Taxes," which merely ensures that their prodgeny carries it all forward.

Tue, 12/10/2013 - 04:36 | 4231766 kurt
kurt's picture

You are correct sir. Dylan Radigan was espousing this until they boxed him up. The Great Extraction. If you could see the machine for what it is; a giant hand on an udder. We're the cow. When milk stops flowing, they have a barbeque. Burp. 

Mon, 12/09/2013 - 22:39 | 4231423 Pareto
Pareto's picture

Love Stockman, but, I bet the "Great Deformation" goes another 4 years.  The FED is just getting warmed up.

Tue, 12/10/2013 - 14:04 | 4233062 Offthebeach
Offthebeach's picture

It can go generations. There's unfathomable new paper and instruments to be conjured.
Half the peasantry are a dedicated voting army. The elite have never in the history of the world had it so good. The rest of the trades, small business, professionals are some how some way at some time in violation of a law, code, form, permit, regulation. It is only a matter of inspection. " Show me the man, and I will find the crime."

Those who have nothing, have the state. Those that have much, got theirs in the present rent seeking, crony capitalists environment. The rest cower.

Mon, 12/09/2013 - 22:43 | 4231430 Clowns on Acid
Clowns on Acid's picture

The market is calling the Fed's bluff. Like Hugh Hendry ranting that he is going to buy everythng and anything.

If the Fed doesn't taper then all bets are off ... the Stalingrad and Poorski Index (great one Tyler) goes to the even more parabolic and we then know that we are Zimbabwe.

The Fed has no choice this time around if the choice is defined as "Taper or Vapor". Vapor it might well be, but then we get to a new meme regarding the US socio-economic condition.

Tue, 12/10/2013 - 07:37 | 4231831 Ned Zeppelin
Ned Zeppelin's picture

Expect the next move to be a phony taper: minor action accompanied by much jawboning.

But when, this month? I say no way.

Tue, 12/10/2013 - 09:32 | 4231943 victor82
victor82's picture

Poor Yellin. She's going to wonder why she took this job at some point.

Not Ben. He's headed for Grand Cayman...

Mon, 12/09/2013 - 22:48 | 4231438 TheRideNeverEnds
TheRideNeverEnds's picture

So what?  Who cares? 

 

Are you short the market here?  Or are you waiting till we shoot up another 5% after they announce no taper this month?   Maybe you are waiting to sell them next year after we are up another 60% because yellen quadruppled QE?

 

Face it, this is what the first phases of hyperinflation looks like, there is no going back at this point, everyone knows this will end badly, everyone says it will end badly, but they are still buying stocks and why shouldn't they?  You cannot short a printing press; in another two years when the dow is trading 17,000,000,000. will you still be holding your shorts waiting for the crash?

 

The FED has two options, let it crash now or try to postpone it long enough so that .gov has all the infastructure and manpower ready plus the elite have their fortresses stocked and ready for the great purge.

 

clearly they are going for the latter as it seems this will be the big one. 

 

 

 

 

 

Tue, 12/10/2013 - 00:39 | 4231577 Burnbright
Burnbright's picture

Sadly I agree with you, it is why bitcoin is going to the moon. I was just at the store buying groceries and everything just seems expensive. I brake down the costs for a meal and it is easy to spend 10 dollars on salad ingredients for just one fucking dinner! The pistachios I buy from costco are almost 20 dollars for a 3 pound bag that's more than 6 dollars a pound for fucking unshelled nuts. The cheapest fish, talpia,  was farmed at 6 a pound. Thank god we have cheap grass fed beef around here or I don't know what I'd eat.

 

Tue, 12/10/2013 - 04:08 | 4231750 Seer
Seer's picture

Yup.  It's why this quote has been one of my favorites for quite some time now:

"The secret plan is that we're going to keep doing exactly what we've been doing, for as long as we can."

- Daniel Quinn, in, "What a Way To Go"

The System never came with brakes, let alone a reverse.  Cliff dead ahead...

Mon, 12/09/2013 - 22:55 | 4231454 eddiebe
eddiebe's picture

I suppose we need to define what is meant by ' real '.

Tue, 12/10/2013 - 04:10 | 4231751 Seer
Seer's picture

That's easy!

Bitcoins!

Mon, 12/09/2013 - 23:07 | 4231474 One eyed man
One eyed man's picture

Markets are connected to the real world by a very long bungee cord.

Mon, 12/09/2013 - 23:10 | 4231477 Atomizer
Atomizer's picture

Our bearded Federal Reserve Santa Claus subsiding Wall Street will not be spoken when the parrots talk about the best equity returns in years. Contraction will be brutal once the exchange of buying inflationary shit goes dormant. Preparing for ObamaCare and April taxes will stall the economy. 

Tue, 12/10/2013 - 04:01 | 4231740 HardlyZero
HardlyZero's picture

2014 everyone who is working in US might just freak.

All the new 'taxes' will start biting and people will go hungy so they can have healthcare or pay their ACA tax.

100 million may see 2x to 3x premiums....and it will take a year for all those to go into effect starting Jan 1 2014.

Dropping spouses from health plans is the newest "bail-in" for corprate.

The next election should be hilarious.

Tue, 12/10/2013 - 07:03 | 4231817 new game
new game's picture

i wouldn't be suprised if o was elected to a third term!

 

Mon, 12/09/2013 - 23:18 | 4231490 DOGGONE
DOGGONE's picture

The Public Be Suckered
GOT US HERE
and it continues.
http://patrick.net/forum/?p=1230886

Leadershit uber alles.

Mon, 12/09/2013 - 23:21 | 4231496 Spungo
Spungo's picture

I like how all of the big name investors have pulled all of their money out of the stock market. It's now in their best interest to crash it as fast as possible so they can buy in at the bottom and start the cycle again. The sooner people realize how overbought the market is, the sooner it can crash back to where it should be.

Tue, 12/10/2013 - 04:13 | 4231753 Seer
Seer's picture

Yeah, but the problem is that of who the fuck is going to buy?

This is economies of scale in reverse.  The only thing left is to con folks into believing that TWTR and FB have "real" value.

Mon, 12/09/2013 - 23:22 | 4231499 swanpoint
swanpoint's picture

Hook these Brothers Up! Hookers for the Up Brothers! 

Tue, 12/10/2013 - 00:03 | 4231552 Blano
Blano's picture

I agree with the Stockmans, Fabers etc. of the world but sheesh I've been listening to this stuff for 4, going on 5 years now and it's getting a bit old.  Yeah it's all gonna go up in flames but until that day comes it's just up up up, buy buy buy, more more more.  Maybe we should all just curl up with some good books for a few years.

Tue, 12/10/2013 - 00:44 | 4231585 OneTinSoldier66
OneTinSoldier66's picture

+1

 

I am Hugh Hendry.

Tue, 12/10/2013 - 04:19 | 4231756 Seer
Seer's picture

Could be worse.  You could be Canadian or Australian.  Canada and Australia haven't had their housing bubble burst yet.  At least in the US there's a bit of realization that things aren't adding up.

Tue, 12/10/2013 - 07:40 | 4231833 Ned Zeppelin
Ned Zeppelin's picture

The name for that feeling is "capitulation."

Tue, 12/10/2013 - 11:16 | 4232449 kenezen
kenezen's picture

No trade the volitility with leverage. Make sure to convert a good part out of the dollar into other more stable currencies in places more survivable

Tue, 12/10/2013 - 00:48 | 4231589 the 300000000th...
the 300000000th percent's picture

Wow what an uncomfortable moment for the robots on Bloomberg

Tue, 12/10/2013 - 00:47 | 4231590 holdbuysell
holdbuysell's picture

When JPM et al owns shares in the Fed, there's such massive conflict of interest that anyone with scruples would see this whole establishment should be shut down as a complete farce.

It's utterly ridiculous.

It is complete madness and a total separation from what the original colonies endeavored.

Tue, 12/10/2013 - 00:57 | 4231600 AUD
AUD's picture

Stockman is a dickhead, he's trying to value things in $. Of course valuation has no anchor in $. The $ is an imaginary unit of measure. It might as well be Shitcoin.

Tue, 12/10/2013 - 07:31 | 4231825 Ned Zeppelin
Ned Zeppelin's picture

Suggest you read Stockman's book, The Great Deformation.

Required reading for ZHers.

Tue, 12/10/2013 - 09:29 | 4231938 withglee
withglee's picture

Valuations are up 47% in two years. Earnings are up only 5%.

Well, if valuations were down 60% the two years before that while earnings were up 5%, is there a problem? When they're diddling the market, valuations go up and down radically while earnings are a function of what's going on in the real world. The gyrations aren't as bad, up or down.

And you can't "inject" liquidity. Traders create money by making trading promises. You can offer to back all promises (i.e. create certificates ... money ... if traders want them), but if traders don't want to make trading promises (i.e. they can't see a way to make a beneficial trade), it doesn't matter how loose the money is.

Governments, on the other hand, never keep their trading promises. They just roll over their defaults. So governments are willing to promise anything. If there's any "injecting" going on, its the backing of bogus government trading promises.

Tue, 12/10/2013 - 02:38 | 4231682 BullyBearish
BullyBearish's picture

Like Pareto says, given the shape everybody else in the world is in, "Why Can't QE/Double QE Go On for Another 4 years?"

 

Tue, 12/10/2013 - 04:00 | 4231743 HardlyZero
HardlyZero's picture

The Bond Market.

Tue, 12/10/2013 - 04:19 | 4231758 Seer
Seer's picture

We're rapidly running out of consumers, that's why...

Tue, 12/10/2013 - 07:28 | 4231824 Ned Zeppelin
Ned Zeppelin's picture

Stockman on the one side and and Hugh "Ride the Trend" Hendry on the other.

Who is right? Both.

Tue, 12/10/2013 - 07:37 | 4231827 Dre4dwolf
Dre4dwolf's picture

The government and Federal Reserve ran out of anchors, but the 99cents store accross the street from the Fed was having a sale on balloons.... when life gives you balloons.... break out the coke and have a party.

http://www.investwithalex.com/wp-content/uploads/2013/09/cocaine-is-bad-you-guys.jpg

Tue, 12/10/2013 - 08:14 | 4231870 jmcadg
jmcadg's picture

They can't handle the truth. That tart was almost blaming Stockman.

If Tom Keene has any credibility he would walk out now. Ain't gonna happen.

Tue, 12/10/2013 - 08:23 | 4231883 hangemhigh77
hangemhigh77's picture

Who's the mad bitch? She probably sits on the old mans face every night for her job.

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