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2013 In Just 2 Charts

Tyler Durden's picture




 

Two phrases sum up the 'new normal' farce that is the world's equity markets in 2013... "Don't fight the Fed (or BoJ, or PBoC, or BoE)" and "Climbing the wall of worry"... one wonders, of course, what happens to 'climber' once the central bank's 'belay' is taken away (but that's just silly talk because it's all priced in, right?)...

 

Via Strategas' Jason Trennert (WSJ blog),

“YOU’RE NOT JUST FIGHTING THE FED”

The Federal Reserve’s $85 billion-a-month bond-buying program has been a major driver of the stock market rally. But as the chart below shows, it’s not just the Fed that has been attempting to stimulate the economy. Central banks around the globe, from the Bank of England to the European Central Bank to the Bank of Japan, have launched policies designed to kickstart economic growth. Even as the Fed may start trimming its bond purchases later this month or early next year, global monetary policy remains very easy. The old Wall Street adage is “don’t fight the Fed.” But as Mr. Trennert points out, it’s now more like don’t fight the world’s central banks.

 
 
 
which means "The Wall Of Worry" has been handily ascended...
 
 
So what next?
 

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Sat, 12/14/2013 - 18:53 | 4247062 ZerOhead
ZerOhead's picture

Wait!... I've seen this ride before. It's good old "Mister Bonestripper" from "Nothing But Trouble"...

http://www.youtube.com/watch?v=enUo-1TjdEs

Sat, 12/14/2013 - 18:47 | 4247064 Surging Chaos
Surging Chaos's picture

What next? The Fed doubles down on QE. Can't let the 10-year blow out now, especially since it's creeping back up to 3% despite the $85 billion/month injections.

Sat, 12/14/2013 - 18:59 | 4247086 Sudden Debt
Sudden Debt's picture

that's only 100 million per hour. I wonder how long it will take untill they'll print a billion per hour...

Sat, 12/14/2013 - 19:10 | 4247107 seek
seek's picture

Another two years.

I know everyone keeps talking war, but this paints a picture where a planet-wide revolt makes more sense.

Sun, 12/15/2013 - 16:30 | 4248799 max2205
max2205's picture

2011....1 trillion or a thousand billion....3 years of spending a billion a day....then another trillion the following year so 5 more years of a billion a day ...then 2013's 1 trillion,  adding another 3 or 8 more years of spending a billion a day....

 

How does this even make cents unless tbtp are embezzling most of it.....

 

Seriously someone should look into this

Sat, 12/14/2013 - 20:57 | 4247145 MollyHacker
MollyHacker's picture

What's needed is a congressional budget add-mended uptick for 2014 fiscal spending, moving maybe upwards of 300bln out of the DoD plus an additional 600bln into the main-street. Secondly; defund the ACA and end QE with the increases in federal spending proportionately. The Fed gets a stable bond market with wiggle room for the treasury, Congress gets a capital surplus with interest to work with and the states get the need revenues for spending. Not everyone will like what the others get. Some would want the Fed run off with huge losses, crashing the COMEX.

Sat, 12/14/2013 - 21:36 | 4247344 MeBizarro
MeBizarro's picture

Like Westmoreland to LBJ - 'We are winning but I just need more manpower and resources to achieve victory' 

Personally, I am making a guess that '14 is more a year of spinning wheels in terms of stock prices unless there is foreign policy flareup and an actual shooting war.  Good luck on predicting where and when on that. 

Sat, 12/14/2013 - 18:58 | 4247083 Sudden Debt
Sudden Debt's picture

MY BIRTHDAY ISN'T ON THAT CHART!!! BASTARDS!!!

Sat, 12/14/2013 - 19:00 | 4247085 ebworthen
ebworthen's picture

I wish what was next would be S&P 666 and 10 Year T at 6%, and sanity.

What is much more likely is Yellen announcing $170 Billion/month of QE, bailouts of health insurers, and bail-in's of bank deposits.

 

Sat, 12/14/2013 - 19:01 | 4247092 Sudden Debt
Sudden Debt's picture

My bet is 340 to 400 billion a month.

And that's about the national debt of Belgium with 11 million people that they'll print a month. And than it's virtually over with the dollar.

Sat, 12/14/2013 - 19:07 | 4247102 CrashisOptimistic
CrashisOptimistic's picture

There was a subtle question asked of Bernanke in a press conference.  "What do other countries think of QE?"  Answer: The consensus has been formed that if a country buys bonds for the purpose of stimulating its own growth, then global growth will benefit and it will not be thought of as currency manipulation.

But . . . now we have the Fed faced with a taper decision.  Taper will definitely strengthen the USD, which allows the Yen to fall sharply, maybe towards 120 yen to the dollar.

The problem is this means only Toyotas will be bought.  GM will not be able to compete with $6000 Camrys.  Nor Ford (whose CEO already waved a red flag on this when Abe first started his printing).

So . . . this is a constraint that most don't talk about.  Tapering could destroy GM.  Simply that.

Sat, 12/14/2013 - 19:17 | 4247116 Debeachesand Je...
Debeachesand Jerseyshores's picture

If you like your Central Bank,you can have your Central Bank.

 

If you hate your Central Bank,buy Gold,Silver and BitCoins.

Sat, 12/14/2013 - 19:30 | 4247135 LetThemEatRand
LetThemEatRand's picture

"Don't Fight the Fed" was once a figurative term.  I think for the NSA and the Department of Homeland Security, it is a literal mandate to the population.   "Your desire for freedom is irrelevant.  Resistance is futile.  Nothing is beyond our reach."

Sat, 12/14/2013 - 19:59 | 4247146 Sudden Debt
Sudden Debt's picture

What I don't understand....

85 billion buys you a company that employs about 160000 people.
THAT'S A LOT!!

So with 85billion a month for one year you could have created 2 million jobs easy!!

And yet the number of employed people went down.

Weird shit.....

Sat, 12/14/2013 - 20:24 | 4247212 michael_engineer
michael_engineer's picture

Structurally, new jobs need new resources.   Forget about the 85 billion as it's not in any way shape or form a resource.  Not weird at all.

Sat, 12/14/2013 - 23:50 | 4247614 lotsoffun
lotsoffun's picture

with 85 billion a month - what'one' is trying to do (ask how funny this is to your dutch neighbors - but belgium has plenty of dykes also) - what you are trying to do it put a finger in the dyke of the $200 TRILLION  of derivitive bets that the 5 big banks (tbtf of course) in the USA have created.

anyone is 'free' to check it out here:

http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/derivatives-quarterly-report.html

when the dyke breaks, and they know it will,  what happens is anyone's guess, and everybody is certainly going to be on their own.

Sun, 12/15/2013 - 05:14 | 4247905 Seeking Aphids
Seeking Aphids's picture

Thanks for the link L. Looks like about $185T of derivates are interest rate related........what does this mean if interest rates jump? I can only guess but it does not look good..........house of cards doesn't even begin to describe it, neither does clusterfuck....a new term is needed, how about galacticclusterfuck? Supernovaclusterfuck? Themotherofallclusterfucks? But seriously folks, these are big numbers we are talking here.....no way any CB can stop the run on the bank if interest rates get out of hand......any dissenters? Is this the real elephant in the room??

Sun, 12/15/2013 - 15:59 | 4248747 lotsoffun
lotsoffun's picture

yes, that's the mammoth in the room.  except there are only a very few people that are aware of it.  or, could understand it.

 

Sun, 12/15/2013 - 16:03 | 4248759 lotsoffun
lotsoffun's picture

aphid - although, if you read the fine print in the quarterly reports, - they all claim there is very low risk in this, because it all 'net's out'.  which is a game, because i'm long, i'm short the same thing. (i'm drunk actually) and so, there is no real risk.  it doesn't (in their b.s.) represent really trillions.  just a few millions.  which is cool and all good as long as all the counterparties are alive and paying their losses.  except - it never works that way..  this is really a huge mess that is going to happen, at some point.

 

Sat, 12/14/2013 - 19:47 | 4247170 Atomizer
Atomizer's picture

Let’s roll back the hands of time. Review the translator during Mandela's funeral. Do you remember my caustic posts? Have a look from your own eyeballs.

 

 Fog Donkey: the only honest man in a stadium of fools

Does this skit now explain how the mind translates different languages based on sound, not sight? The media is back using the terrorist war suspect maneuvering . When they ran a Iraq/Afghanistan video scene, the background message rarely matched the media CC transcript blown up on the TV screen.

This is getting interesting.

Sat, 12/14/2013 - 20:18 | 4247208 Waterfallsparkles
Waterfallsparkles's picture

Helicopter Ben needs a parachute and no one on Wall Street will give it to him.  No wonder why he does not want to jump from a Helicopter out of Money.

Sun, 12/15/2013 - 00:32 | 4247677 Decimus Lunius ...
Decimus Lunius Luvenalis's picture

Which is why all the normal, every day folk, don't believe is this bullshit recovery.  The mythical middle class amazingly has sustained the ever increasing weight of the poor hammer against the rock solid wealthy over the past 100 years and its starting to show.  The sad truth is that a country's economic dominance depends on (1) it's ability to use cheap labor; (2) it's natural resource capacity; or it's (3) ability to threaten destruction. This is the species Jebus hasth giventh us.  In the end, what a tragic irony that we can create such amazing things whether it be art or buildings and, yet, we are all too willign to subjugate our fellow monkeys.  Alcohol helped me quite a bit.

Sun, 12/15/2013 - 13:17 | 4248311 moneybots
moneybots's picture

"The Federal Reserve’s $85 billion-a-month bond-buying program has been a major driver of the stock market rally."

 

Financial fraud does drive the market higher.  The problem is what happens when the truth comes out.  We haven't seen the truth, yet.

Sun, 12/15/2013 - 15:48 | 4248724 new game
new game's picture

inconvient truth?!

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