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Larry Fink Warns There Is "Way Too Much Optimism", We Are Headed For "Much Greater Volatility"

Tyler Durden's picture




 

What a difference half a year makes. It seems like it was yesterday when Blackrock head Larry Fink, when discussing the future of capital markets with the now defunct money honey, uttered these infamous words about any and all possible risks: "it doesn't matter."

Suddenly, it matters.

Speaking in Davos, Fink warned there is 'way too much optimism' in financial markets as he predicted repeats of the market turmoil that roiled investors this week.

As Bloomberg reports, Fink warned a Davos panel that "the experience of the marketplace this past week is going to be indicative of this entire year... We’re going to be in a world of much greater volatility."

Some other notable soundbites:

Fink’s outlook challenged the relatively upbeat tone struck by others during the four-day gathering in the Swiss Alps, which began after the International Monetary Fund predicted the strongest world economic expansion since 2011. The meetings of the past seven years were clouded by jitters about financial crisis in the U.S. and Europe.

 

While Fink agreed “the overall trend is going to be fine,” he predicted “quite a bit of disruption” and said the onus was now on governments to work to improve economies.

 

That troubles me, as there has been great consistency of dragging their feet by politicians,” he said. “The marketplace has been rather encouraged by good, consistent monetary policy across the world.” “It would be very abnormal if we didn’t have consolidating moves in the assets that have gone up so much,” he said.

And while it appears lost on Fink that the only reason politicians have been dragging their feet is precisely due to central banker money printing policies which have allowed elected representative to do absolutely nothing while reaping the benefits of rising or stable popularity ratings thanks to all time stock market highs, at least we know how the world's largest asset manager is positioned.

That said, it would be very ironic if the Davos billionaires really did follow through on their promise of eliminating inequality... by destroying the financial wealth of the uber-wealthy.

 

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Sun, 01/26/2014 - 12:21 | 4368372 Fips_OnTheSpot
Fips_OnTheSpot's picture

http://www.weforum.org/sessions/summary/global-economic-outlook-2014

 

Fink after 48min -- and the "RESET!" of Lagarde between 9min and 11min is interesting, too

Sun, 01/26/2014 - 12:24 | 4368385 LetThemEatRand
LetThemEatRand's picture

Has anyone ever seen Lagarde and George Hamilton in the same place at the same time?

Sun, 01/26/2014 - 12:29 | 4368394 MsCreant
MsCreant's picture

Orange you glad you said that?

Sun, 01/26/2014 - 12:53 | 4368438 Oh regional Indian
Oh regional Indian's picture

I think he's willing to black up his statement.

That said, too funny, these names. Fink...

How can you trust a fink?

Eh/

ori

 

Sun, 01/26/2014 - 13:29 | 4368497 jbvtme
jbvtme's picture

with all that money, you'd think he would have changed his last name by now

Sun, 01/26/2014 - 14:02 | 4368559 Oh regional Indian
Oh regional Indian's picture

Yes, like a lie-bovitz who turned into a stewart....magic....

Sun, 01/26/2014 - 14:12 | 4368586 TruthInSunshine
TruthInSunshine's picture

Larry Fuckin' Fink, the clairvoyant.

He'll next tell us that things get wet when it rains.

Sun, 01/26/2014 - 15:04 | 4368738 WarriorClass
WarriorClass's picture

Diversity:

Eventually, Americans will realize that we haven’t had a representative government since 1860, when big business got Lincoln into office and then declared war on the States. Free market capitalism died at the same time, we just didn’t realize it until 1913 when the Bankster cartel formally took over the Federal monopoly on power and money. We’ve had a fascist dictatorship since then and your vote has meant exactly squat. The only way to return to a Jeffersonian Representative Republic is the way our Founders did it in 1775.

Eventually, when Americans find that every person in the world is entitled to a job in the USA, except for them – all in the name of diversity. When they find themselves a dirt poor minority in the country their fathers founded. When they find out that diversity is not THEIR strength, but the strength of their enemies.

Eventually, but not today. Today many Americans will go to work at their corporate jobs chanting the mantra, “Diversity is our strength;” until it isn’t.

And it’s too late.

 

Supply and Demand:

The law of supply and demand dictates that an increase in supply results in a lower price.

An increase in the supply of labor, results in lower wages.

If you want to cut wages in half, double the workforce.

Almost half of the US population is here due to the Immigration Reform Act of 1965 and its subsequent iterations. Add to that the massive amount of work visas, student visas, and refugee visas, and you have doubled the labor market.

Comprende?

http://americandictators.blogspot.com/2013/07/legal-immigration-and-immi...

Sun, 01/26/2014 - 19:49 | 4369414 caShOnlY
caShOnlY's picture

Larry Fuckin' Fink, the clairvoyant.

He'll next tell us that things get wet when it rains.

I notice the same mantra in many "talkers".  I remember John Mauldon talking up US oil production and stating by 2020 the US would lead the world. 

Fink is clearly lying.  He has tried to anchor himself comfortably in the chair but his hands are flailing to release his nervous energy.  He even hits the microphone as he spews his shit to the audience.  Watch his eyes they are looking all over the place in jagged abrubt movements while rarely looking at the crowd. 

They cannot admit that the ol' king consumer states is dead.  He died in 2008 and monthly pumps of adrenaline are needed to keep the body twitching.  Admission is a death kiss on the dollar.   China is slowly pulling the gold game away from W.ST and the FED.  Then the petrodollar will be the next target.  

Sun, 01/26/2014 - 14:15 | 4368588 Tim_
Tim_'s picture

Laurence Douglas "Larry" Fink is a jew.

Sun, 01/26/2014 - 17:50 | 4369137 Ratscam
Ratscam's picture

who cares if he is jewish, muslim, christian, buddhist, hindu or any other religion.
I found it easier to judge people by what they do for society, rather than what their race is or what they believe in.
Fink,s score on working for the benefit of society is rather low.

Sun, 01/26/2014 - 16:35 | 4368396 BoNeSxxx
BoNeSxxx's picture

"That said, it would be very ironic if the Davos billionaires really did follow through on their promise of eliminating inequality... by destroying the financial wealth of the uber-wealthy."

No.  What would be very ironic would be if they stuck themselves with pitchforks before hanging themselves from lamp posts.

Sun, 01/26/2014 - 17:16 | 4369072 Offthebeach
Offthebeach's picture

Kill, drug, war, hollywood depress suicide off, de-future the young so they don't have kids, cop murder, imprison the entire bottom 2/5ths.

No need to harm the 1% ers, just get rid of the "little people", you know, losers, white trash, dreadful minorities, annoying small shopkeepers, constitutional crackpots and so forth.
/s

Sun, 01/26/2014 - 12:35 | 4368411 Hulk
Hulk's picture

Ah, the smell of Leather on Leather !!!

Sun, 01/26/2014 - 13:38 | 4368511 Yancey Ward
Yancey Ward's picture

You could make a fine pair of boots out of either of them.

Sun, 01/26/2014 - 13:49 | 4368531 gwar5
gwar5's picture

I'm either wearing Gator goggles or that was Christine Lagarde.

Sun, 01/26/2014 - 12:33 | 4368402 CPL
CPL's picture

What's interesting is the large heavy armour division rolling out of Austria.

http://www.youtube.com/watch?v=mb5EfF12v3g

Sun, 01/26/2014 - 12:48 | 4368432 Mrs. Cog
Mrs. Cog's picture

Nice find. I suppose it would be overly optimistic to hope they were making the seven hour drive to invade Davos?

Sun, 01/26/2014 - 12:54 | 4368437 stant
stant's picture

That's alot of heavy equipment

Sun, 01/26/2014 - 13:08 | 4368451 MrPalladium
MrPalladium's picture

Mostly self propelled artillery. Looks like a heavy battallion with two protective main battle tanks, plus several smaller tanks with 40 mm cannon in the lead, but mostly 155 mm SP howitzers plus longer range 210 mm SP howitzers.

Sun, 01/26/2014 - 13:54 | 4368543 RaceToTheBottom
RaceToTheBottom's picture

Just moving Philharmonics.

Europe re-discovering physical gold...

Sun, 01/26/2014 - 17:02 | 4369050 QQQBall
QQQBall's picture

Autrains get to see their taxes up in smoke.

Sun, 01/26/2014 - 19:27 | 4369382 caShOnlY
caShOnlY's picture

FuckFink

Sun, 01/26/2014 - 12:58 | 4368444 Oracle of Kypseli
Oracle of Kypseli's picture

<<<<<Fink after 48min -- and the "RESET!" of Lagarde between 9min and 11min is interesting, too>>>>

Too theoretical, too cliché, too much jargon no one is touching on catch 22, all relying on growth which is not coming and cannot ever outpace the easing.

They all sound professorial, they all sound polite, but no one is of course upset or worried. In one word CRAP 

 

Sun, 01/26/2014 - 13:04 | 4368449 Rainman
Rainman's picture

Let it all burn.

" Capitalism without bankruptcy is like Christianity without Hell "

                 Frank Borman

Sun, 01/26/2014 - 13:37 | 4368508 Son of Captain Nemo
Son of Captain Nemo's picture

"Structural Reforms" on rigid labor markets "Bottlenecks", "Governance" including "unleashing the potential" by "breaking down "protective barriers" (like starting more wars and occupations for those who resist) being the operative words in  summary...

Thanks to 'Fips_OnTheSpot' for pointing out that most important of summaries in The Witche's Brew!

Sun, 01/26/2014 - 13:46 | 4368525 gwar5
gwar5's picture

Yep, public happy talk of growth and recovery, but plotting behind the scenes to bail-in and confiscate. Trying not to spook the sheep.

 

Sun, 01/26/2014 - 14:05 | 4368577 csmith
csmith's picture

YHTBFKM...

"Transformating" ???

Really, Larry?

You lost me right there.

Sun, 01/26/2014 - 12:21 | 4368373 LetThemEatRand
LetThemEatRand's picture

So is this another head fake to burn the shorts, or does it mean the big boys are now short?  I've given up trying to read the Tea leaves.

Sun, 01/26/2014 - 12:30 | 4368399 Renewable Life
Renewable Life's picture

All these rumblings and warnings of danger because they did this tiny fucking taper BS as Uncle Ben took his bow!!! The message to Yellen shoud be obvious at this point!

Get your foot back on that printing accelerator or its all over in months!!

Sun, 01/26/2014 - 14:30 | 4368633 disabledvet
disabledvet's picture

that's the problem. if she reverses course and goes back to QE ("the New New Orders") then that would REALLY "move the needle." far easier to stay the course...taper...and then allow the policy makers to figure out how to deal with World War Z.

Sun, 01/26/2014 - 12:33 | 4368404 ms8172
ms8172's picture

There is a bigger move to the downside than justifying a small move up here and there.

Sun, 01/26/2014 - 12:26 | 4368376 q99x2
q99x2's picture

Arrest the Rat Fink. China do you know who this man is? Don't let him get away.He is a scum bucket, non-humanist, anti-democratic, M'Fer. Save the Planet. Help shut down Blackrock. Buy Bitcoin.

Sun, 01/26/2014 - 13:15 | 4368464 Oh regional Indian
Oh regional Indian's picture

BlackRock is now either THE biggest or perhaps 2nd largest commercial property owner in India.

Fancy that, and take a hint. For all it's weirdness in it's current form, an uncomfortable square peg, round hole fit with technology, the money spigot will turn firmly this way once the US is "done with" so to speak...

And then, now through 2020, they will pump the shit out of India. One indicator, Auto loans are at 10-17%.....looong way to fall yet and meanwhile they are grabbing more and mor epeople into the banking net through something called the aadhaar card, a bio-metric national id, not YET compulsory.

So, whether you like the caste system or not or what ever other xenophobic, natGeo false fed impression you might have, this is the next investment destination.

 

Here and the middle east because the population is totally under control.

 

If you need specific pointers, feel free to ask...

ori

http://aadivaahan.wordpress.com/2010/07/13/whither-india/

http://aadivaahan.wordpress.com/2013/10/04/the-spirit-of-india-in-one-pi...

Sun, 01/26/2014 - 15:22 | 4368584 RaceToTheBottom
RaceToTheBottom's picture

Yep, they are all just positioning themselves to leave the US and to say, "well we told you what you needed to do and you never cut costs so we are leaving".

They view the US as cooked and all of their future growth will be outside of the US.  They know it and have already positioned themselves for it.  They have sucked the golden goose dry and are looking for new Muppets.

Sun, 01/26/2014 - 16:53 | 4369025 TruthInSunshine
TruthInSunshine's picture

I think that's wrong in large part.

Do you remember the reporting of the Chinese Elite & their family members stuffing 4 trillion USD of ill-gotten gains in Caribbean banks (along with using funds to buy assets the world over)?

Do you think the Elite in India are any less completely corrupt?

The under-wealthy connected criminals in China & India, as in many other EMs, have been fleeing to the west or preparing do so for a long time.

Mon, 01/27/2014 - 21:22 | 4373344 RaceToTheBottom
RaceToTheBottom's picture

Wasn't really talking about individuals, I was talking about companies and their focus.

Check out IBM.  Most of their income comes from international stuff.  They multiply that by using foreign employees, as well

Sun, 01/26/2014 - 12:22 | 4368377 Heroic Couplet
Heroic Couplet's picture

Detroit needs to have an accounting sheet that includes how much traditional banking has been screwed out of. Publica Bank of North Dakota: replicate in 49 other states. If 49 states don't have Wall Street, then New York state doesn't need it either.

Real estate bubble and Alan Greenspan: give both a one finger salute. There is a sustainable house movement in Texas. For Detroit, tear down, salvage what can be salvaged, and rebuild sustainable. Create a balance sheet to account for how much Alan Greenspan, his real estate bubble, and traditional banks have been screwed out of and bypassed. Calculate how much Phil Gramm and his CDOs have been screwed out of.

Account for municipal bonds. Avoice issuing muni bonds and calculate how much traditional banks have been screwed out of and bypassed.

Do the same for food corporations like Monsanto. Get a new accounting balanace sheet going, and regularly present to bank CEOs and Members of Congress.

Sun, 01/26/2014 - 12:31 | 4368398 Clowns on Acid
Clowns on Acid's picture

HC - only problem is that each State has a Banking Commissioner. If the Publica Bank of North Dakota tried to get into NYC or other major cities... do you think that their State license would be approved? 

Of course your general thesis is spot on. To implement  it will require some force however.

Sun, 01/26/2014 - 14:50 | 4368691 JimS
JimS's picture

It's not the "Publica" Bank of North Dakota, just "Bank of North Dakota". The Bank got it's start in 1919 because the farmers and business people in ND were pissed about getting fucked by the bankers in Minneapolis. So, they took matters into their own hands. Sounds like something "We The People" should do right now, huh?

Sun, 01/26/2014 - 12:23 | 4368379 SaulRosenberg
SaulRosenberg's picture

In related and infinitely more important news, MSNBC is reporting Justin Bieber is on a beach in Panama.

Sun, 01/26/2014 - 13:00 | 4368445 NoDebt
NoDebt's picture

Where the drinking age is 18.

And, no I don't want to see Justin flash his junk as he gets out of a limo in a skirt with no underwear on sometime in the next year (Britney).  Or twerk on his father (Miley).  Yet, somehow I think some horrible version of that will happen over the next year.  He's on a BAD path.  Doesn't take much imagination to see where he's headed.

Sun, 01/26/2014 - 14:00 | 4368558 JimS
JimS's picture

I didn't give you the down arrow, but, who gives a fuck about justin/britney/miley. If all 3 were to die tomorrow I wouldn't give one flying fuck at a rollin' donut about the event.

Sun, 01/26/2014 - 14:41 | 4368660 JimS
JimS's picture

I see someone really cares about justin/britney/miley. Question: are you glued to ET every night waiting for the "update" about the 3 of them, or do you cry watching every commercial on TV? Just curious.

Sun, 01/26/2014 - 17:35 | 4369119 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Miley is hot. Say what you will but I would do her at the drop of a hat.

Sun, 01/26/2014 - 12:23 | 4368382 Jason T
Jason T's picture

music to my ears with my VIX call options.

Sun, 01/26/2014 - 12:24 | 4368383 Bearwagon
Bearwagon's picture

Wait, I'll try to get it together: Blackrock owns Sacksman Gold, who, on the other hand, own Blackrock, so what is this asshole lamenting about. He's possibly nearly as influential as Obama, and in financial regards he sure has way more power. So all sense that his speech can make is, like, give me and my cronys MOAR, right? He's just too lazy. Why do anything worthwile when crying functions just as good.

Sun, 01/26/2014 - 13:27 | 4368495 Oh regional Indian
Oh regional Indian's picture

Make no mistake about this please.

Goldman Sachs IS actually Gold ManSachs.

That's right, Golden Balls.

Being dangled, in our faces

Take that, sheep, they say....

Their buggery leaving no traces

Curly hair glinting in our weary eyes....

And THAT while you're at tit...

That's right,

I mean

Left

At Tit...

I am That....

Gold ManSachs...

 

Sun, 01/26/2014 - 12:23 | 4368384 sunny
sunny's picture

"That said, it would be very ironic if the Davos billionaires really did follow through on their promise of eliminating inequality... by destroying the financial wealth of the uber-wealthy."

Right after the Vatican annouces that the pope is pregnant, the Prez works to remove Obamacare as a government program, Congress cuts military spending by 80+% and the FOMC demands annual audits of the Fed and full audits of US gold reserves.

Yep, any day now.

sunny

 

Sun, 01/26/2014 - 17:29 | 4369105 Offthebeach
Offthebeach's picture

Every time I hear an elite say they want to palaver about helping I think of the scene in the movie Bridge Over The River Kwai where the Japanese Army camp commander tells Alec Guinness and the POWs, "Be Happy In Your Work!"

Thanks a fukn lots.

( French writer wrote both Planet Of The Apes and Bridge Over River Kwai )

Sun, 01/26/2014 - 12:26 | 4368391 Clowns on Acid
Clowns on Acid's picture

Larry Feckin' Fink... his name tells one everything one needs to know about this d_bag.

Why doesn't any of these feckin' fucks at Davos have any opinion on the disastrous QE policies of their cousin Ben Shalom Bernanke? Now all of a sardine they are concerned about the fiscal indecision of the US Congress and a bitter and twisted half breed President foisted upon the US public by racists , socialists, and the typical douche bags at Google and Facebook?

Larry feckin' Fink and the rest of Berananke's cousins have been one of the largest beneficiaries of the QE policies / hand outs. A $10B tapir puts the fear of Lucifer into these immoral souls.

Sun, 01/26/2014 - 12:33 | 4368400 chunga
chunga's picture

Not fair.

There are lots of good, decent termites out there that never chew wood; but get blamed for it just the same.

Sun, 01/26/2014 - 12:36 | 4368405 BoNeSxxx
BoNeSxxx's picture

Correct on all points but one.  They do not fear Lucifer.  They worship Him.

So in this case it would be correct to say 'put the fear of 'God' into these immoral souls' :-)

Sun, 01/26/2014 - 12:57 | 4368442 buzzsaw99
buzzsaw99's picture

they don't worship. they are agnostic alien lizard people.

Sun, 01/26/2014 - 17:52 | 4369150 bobert
bobert's picture

Whatever you call taking an oath.

That is what it is Buzz.

Sun, 01/26/2014 - 13:54 | 4368539 TheReplacement
TheReplacement's picture

You don't worship that which you don't fear.  If you don't fear it, why worship it?  It obviously isn't worth the attention if you don't fear it.  They fear and admire Lucifier, not God.

Sun, 01/26/2014 - 12:35 | 4368408 yogibear
yogibear's picture

Some people are branded with last names that describe them well.

Like Steve the Liesman

Larry the Fink.

 

Sun, 01/26/2014 - 12:45 | 4368427 Seasmoke
Seasmoke's picture

BERNIE MADE OFF. 

ANDREW WIENER 

 

THE TRIBE TELLS YOU WHAT THEY ARE ABOUT , YOU JUST NEED TO LISTEN. 

 

Free Francis Sawyer !!!

Sun, 01/26/2014 - 12:36 | 4368409 buzzsaw99
buzzsaw99's picture

what a jackass

Sun, 01/26/2014 - 12:36 | 4368413 jon dough
jon dough's picture

Think Fink

Thank Skank

Sun, 01/26/2014 - 13:06 | 4368420 JustObserving
JustObserving's picture
"Way Too Much Optimism"


But, but, but.... how will the US economy survive without the wealth effect with labor participation rates hitting new lows every month?  If we cannot have fast, free money from TWTR, FB, NFLX, and TSLA, we may need real jobs in this economy.  

What happened to exceptional US optimism? And the right of every American to fast, free wealth?

http://research.stlouisfed.org/fred2/series/CIVPART/

Sun, 01/26/2014 - 12:43 | 4368424 buzzsaw99
buzzsaw99's picture

ask him how much blackrock is selling if they're so scared

Sun, 01/26/2014 - 13:37 | 4368506 Yancey Ward
Yancey Ward's picture

Shit, I read that as Larry Fine.

Sun, 01/26/2014 - 13:41 | 4368517 gwar5
gwar5's picture

Larry is fine. Talked to him yesterday. Curly and Mo ain't doing so hot, tho.

Sun, 01/26/2014 - 13:38 | 4368512 gwar5
gwar5's picture

Way too much optimism for whom? Certainly not the man on the street for the last 5 years. Tone deaf and out of touch.

 

Sun, 01/26/2014 - 13:49 | 4368520 RaceToTheBottom
RaceToTheBottom's picture

Banksters are very consistent is saying that they have done all they can. 

WTF, It is quite easy to say that when :

  • Accounting has been re-arranged to allow Mark to Anything...
  • Guaranteed money that has no other place to go but the stock market...
  • Bankster re-write Basell n to fite their quarterly whims with lifetime guarantees.......
  • ....

 

Work in a real market and then pop off you bankster scum

Sun, 01/26/2014 - 13:44 | 4368522 smacker
smacker's picture

     Some BREAKING NEWS in the UK:

TSB Bank - the newly spun off part of Lloyds Bank - has problems this Sunday evening with customers unable to get money out of ATMs. Debit cards are also not working.

TSB have issued the usual profuse apologies about this "glitch" and hope to restore full service as soon as possible. Yeah right.

This incident highlights the growing number of ATM shutdowns affecting UK banks in recent times: HSBC, Lloyds, RBS/NatWest/Ulster Bank and now TSB have all been affected by curious "glitches".

As someone posted on ZH only a coupla days ago, are the banks all installing software "kill switches" and testing them??

Sun, 01/26/2014 - 14:16 | 4368589 Wile-E-Coyote
Wile-E-Coyote's picture

Yes, interesting it happens on a Sunday. I would imagine a kill switch would be a software upgrade, what makes me suspicious is these banks have disaster plans and backup systems. This sort of thing should not happen. Over the last year there has been too many of these occurrences at different banks, something odd is afoot.

Sun, 01/26/2014 - 14:05 | 4368573 Yen Cross
Yen Cross's picture

    I hope you fall into a well and never hit bottom you "rat bastard" Fink!  It's you and you're ilk that put us in this situation in the first place.

    How fitting it is, that you're one of the first 'Wall Street' scumbags trying to vindicate yourself before the guillotines roll...

Sun, 01/26/2014 - 15:00 | 4368723 Clowns on Acid
Clowns on Acid's picture

Yen - Fink isn't the 1st. Robert Rubin, Sandy Weill, and Greespan came out with their "It's not my fault" cameos 12 months ago on MSNBC and the rest of the left wing facsist outlets. The fact that Fink is saying at Davos... well shows what a true low life piece of shiite this guy is. 

Sun, 01/26/2014 - 14:29 | 4368627 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

What Larry means to say, but didn't add was that risk doesn't matter when central banks are in control,problem is, when central banks start to lose control the prior extensions,overvaluations and bubbles they have created in the market s tend to over correct on the downside.

Sorry Larry, but if the plan was to overshoot the markets to the upside, so much so that the correction when stimulus was withdrawn wouldn't cause too much of a problem to the downside, is soon going to get tested in a big, big way.

Sun, 01/26/2014 - 14:36 | 4368643 Its Only Rock N Roll
Its Only Rock N Roll's picture

I thought that ass clown was "hyper bullish" last March.  That was a 10 month investment time frame Larry? 

http://www.zerohedge.com/news/2013-03-20/larry-fink-cyprus-i-dont-really...

 

Yet another TBTF leader giving his warning, aka setting up their defense for the next round off congressional hearings into the collapse (again) of the markets.  He and GS must have the same legal team consulting them. 

 

 

 

Sun, 01/26/2014 - 14:44 | 4368674 disabledvet
disabledvet's picture

if he's lucky he does. More than likely "he's just Larry." (with a microphone however!) point being "there is no master plan" folks...just the market doing what the market does.

believed the last thing these folks want is a market that trades sideways for the next six months while treasuries yields plunge and the dollar soars.

Sun, 01/26/2014 - 15:01 | 4368726 DIgnified
DIgnified's picture

When I heat the word "volatility" I think of things like nitro glycerine (thank you LooneyTunes), etc...  A big bang.  This is going to be more like the thump from hitting rock bottom, like Wile E. Coyote- Super Genius (again, thank you Looney Tunes).

Sun, 01/26/2014 - 15:04 | 4368737 dragoneyes74
dragoneyes74's picture

China schmina.  Sentiment schmentiment.  Overbought schmoverbought.  The big money has not supported the taper for one day.  The only reason they didn't selloff in December was because the liquidity wasn't going to be there due to holiday trading.  You can attribute 100% of the year-end rally to junior traders obediently buying up everything on light volume to push prices up as their bosses hit the beach.  Every rally this year was quietly, and not so quietly, sold into.  I would like to point out that it made the same exact topping pattern that I wrote about last time.  You didn't have to worry about the first sharp move down off the highs.  The time to be worried was on the backtest after the first sharp move down, which literally touched one tick off the highs.  No, I didn't participate because I'm distracted by my animation (almost done).  Bummer, but there's always another setup.  Caught me some VIX, though.    

The big question now is whether the Fed will taper more being that there isn't a press conference to explain WTF they plan on doing until March (I believe).  Whether or not this matters to them in the age of "communication transparency" is yet to be seen.  Obviously, the short side has to be aware that if there it not more tapering, we could repeat the same pattern of every selloff in 2013 and see aggressive buying to force the squeeze and before you can blink we're back at the highs.  I'm more inclined to think we've started a process that needs to unwind a bit more, so, while you have to respect a spike up on Wed if it happens, I'm hoping the algos have their "grind our way down to the 200-day" program on, which by the time we got there would line up with the 1705/1710-ish area of horizontal support.  If I'm available, I will be looking for the reversal in three spots (not counting Wed): 1768; 1730; and the lowest I think it's possible to get to is that 200-day at 1702.  I think it's highly likely we make another move up toward the highs in the spring.  At that point, it's time to worry about the possibility of a final top, depending on what degree of insanity the central banks are willing to resort to in their vain attempts to keep the bubble inflated, and assuming we don't have a Black Swan event in the meantime.  Is there any possibility the politicians solve the debt ceiling EARLY?  I know the short-term is all about timing and making your best guess based on the incomplete information at hand, but in the long-term there is nothing the Fed can do to stop the debt destruction that the free market will force one way or another.  Not sure why anyone would believe otherwise.  

More important to me at the moment is the gold setup.  I'm praying to the trading gods we see sideways to slightly down action for the next couple days, building energy for the possible breakout of 1270/1275, or at the very least, I hope it doesn't happen in overnight trading because I plan on pushing all-in if it goes just right.  We broke and closed above that downtrend line, which is positive.  The short squeeze potential for gold coming out the other side of a breakout should make the 200-day at 1334 a given with the possibility of a slow grind higher.   What bothers me is how silver is lagging and has now tagged its downtrend line 5 times and pulled back.  What also bothers me is how the dollar bounced off support on Friday and formed a possible reversal stick.  The gold trade might be highly dependent on what comes out of the Fed, but the beauty of a breakout trade is if there is even the slightest hesitation, you just get out.  High reward, low risk, instant answer.  

The Yen is a great example of why you have to respect extreme positioning.  There was plenty of time to lighten up on that trade, or even reverse if you were so inclined.  Chances are much higher now that the USD/JPY tests 100, which is just above the 200-day currently at 99.  I expect it to at least temporarily bottom in this area.  I'm totally open to it going much lower before resuming its uptrend, but I'll be looking to play a bounce if we get there and it shapes up right. 

Oil bounced into its moving averages as expected and may still be in an overall unwinding process from the extreme positioning it got itself into in Sept, but I can't be bothered with oil right now. 

I can't for the life of me figure out what the EUR/USD is doing.  It's DOWN, wait, no it's UP, wait, no, reversal!   Probably waiting on the Fed now.  This will be a good trade at some point.  In the bigger picture, the dollar will go way up when everything falls apart.  But I can't rule out significant downside first.  Waiting for something tradeable to shape up.  I'm thinking the direction coming out of Wed could have legs. 

Bonds did as expected.  This will be an interesting situation in the future.  Will it be selling off from central banks reaching their limits, or rallying from the economy collapsing?  The long-term for bonds is bearish due to the fact that one day massive debt will be wiped out, but you can't rule out short or medium term flight-to-safety rallies, which aren't really flight-to-safety at all.  Eventually, that will be learned the hard way. Could be years though.  Look at Japan.  

Bernanke himself stated in several press conferences that the Fed is currently resistricted to buying MBS and Treasuries.  Unless that changes, they have limits.  Not saying we've reached those limits, but they do exist.  At some point, the gov't will have to increase its deficits or the intervention game unwinds, but there's political pressure against more deficits, so someone somewhere will have to get us involved in a war, or should I say more wars.  We've never really escaped the deflationary spiral of 2008.  All we've done is used a jetpack with limited fuel to keep us from falling, visibly.  The foundation is being eroded by the termites of globalization. The steriod era of finance will end in injury.  The immune system of the free market will heal our excesses of debt. But sobering up ain't pleasant. And I'm out of analogies.

Sun, 01/26/2014 - 16:04 | 4368907 Luke 21
Luke 21's picture

Fink was right about 2013 and he will probably be right about 2014. ZH should appreciate the great market calls made the likes of Tepper and Fink. They have been the true contrarians.

Sun, 01/26/2014 - 16:29 | 4368960 djsmps
djsmps's picture

OT-I am always amazed at the HP readers:

Daniel F. (usapatriot2012) 1,941 Fans · beside holy need Ours is just little sorrowed talk                                                                        
Obama had a crappy 2013 because THE MEDIA SAYS SO.

DOW at 16,000...Bush DOW AT 6,000.

Millions of NEW JOBS added...Bush lost SEVEN MILLION JOBS.

Deficit CUT IN HALF.

Economy roaring back.

MILLIONS getting Health Care for the first time in their lives.

OBAMA AND AMERICA HAD A GREAT YEAR. Luke 3:11
And Jesus answered them, “Whoever has two tunics is to share with him who has none, and whoever has food is to do likewise.”

By railing against The Affordable Care Act, Republicans have turned their backs on the essential obvious message of Christ.

……”He who has ears to hear, let him hear.” Matthew 11:15

Sun, 01/26/2014 - 18:13 | 4369191 Absinthe Minded
Absinthe Minded's picture

Not only are you drinking the Kool-aid, you've taken a Gatorade bath in it. Fucking clown.

Sun, 01/26/2014 - 21:32 | 4369793 djsmps
djsmps's picture

This is not my post, this is what I saw on the HP. So, if you are giving me a negative, then you are full fledged HP Christian retard.

Sun, 01/26/2014 - 18:37 | 4369249 Yen Cross
Yen Cross's picture

  Deficit cut in half? really? The deficit reduction is largely attributable to energy costs dipshit. ( Fracking in the U.S. & sequestration cuts).

  If I wasn't busy trading I'd rip you into a "new asshole" over the rest of your post.

 

 

 

Sun, 01/26/2014 - 18:31 | 4369235 Pressfiretostart
Pressfiretostart's picture

Our patience has it's limits.

 

Fcking Rat.

Sun, 01/26/2014 - 20:04 | 4369424 Goldilocks
Goldilocks's picture

Strawberry Alarm Clock - Incense And Peppermints - 45 RPM ORIGINAL MONO MIX
http://www.youtube.com/watch?v=FL7p4BcFNJc (3:14)

Eurythmics - Would I Lie To You 45rpm
http://www.youtube.com/watch?v=_q9zF8OsR_8 (4:06)

Mon, 01/27/2014 - 08:57 | 4370741 kenezen
kenezen's picture

Larry's got a good argument. International maturity in emerging industrial labor began in earnest in the late 1960's through today. It's now mature. Competing maturity creates more volatility. This is the beginning of that volatility in directional movement.

The problem for the American Banks is what the direction and volatility may have on the still massive Derivative product residing in FDIC accounts apparently guaranteed by the Federal Government formally!   

Everything from Interest rate Swaps in CDS's to Synthetic CDO's with removed asset classes, to TruPS all highly leveraged. 

Will they be able to hedge it this time?

By the way Bermuda has had the classic Re-Insurance Funds at the big Re-Insurers to reduce offshore profits from 35% to 5%  for maybe twenty years.

Why all of a sudden are Fund managers of note all setting up Subsidiaries to these Re-Insurance Companies Now?? Einhorn S.Cohen, Paulson and many others?   Why now? And for what purpose other than the shelter?

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