This page has been archived and commenting is disabled.

Albert Edwards: The "Freddie Kruger-Like Nightmare" For Stocks Is Coming

Tyler Durden's picture





 

The punchline from Albert Edwards latest note:

Tapering is tightening, which inevitably ends in recession, bailout and tears

 

Our warnings throughout last year that an unravelling of emerging markets (EM) was the final tweet of the canary in the coal mine have still not been taken on board. The ongoing EM debacle will be less contained than sub-prime ultimately proved to be. The simple fact is that US and global profits growth has now reached a tipping point and the unfolding EM crisis will push global profits and thereafter the global economy back into deep recession. Our thesis on how EM would be pushed to crisis was simple, especially as we saw close parallels with the 1997 Emerging Asia currency crisis. We saw yen weakness further undermining an already weak balance of payments situation in the emerging world as a direct replay of 1997. A strong dollar/weak yen environment is typically an incendiary combination for EM, and so it has proved once again. Having reached tipping point the yen will often rally strongly as it has now and as it did in May 1997. This may or may not delay the impending EM implosion for a few weeks. Indeed the Thai Baht, the first domino to fall in the Asian crisis, briefly rallied strongly (vs the US$) in early June 1997, reassuring investors just ahead of its ultimate collapse.

 

There has never been any shadow of doubt in my mind that tapering = tightening, and I marvel that the Fed convinced anyone otherwise. A Fed tightening cycle inevitably plays a key role in triggering the next crisis (see below). Plus ca change, hey?

  • 1970 Recession/Penn Central Railroad
  • 1974 Recession/Franklin National Bank
  • 1980 Recession/First Penn/Latin America
  • 1984 Continental Illinois Bank
  • 1987 Black Monday
  • 1990 Recession/S&L and banking crisis
  • 1997 Asian currency collapse/Russian default/LTCM
  • 2007 The Great Recession/Collapse of almost the entire global financial system
  • 2014 Emerging Market collapse/deflation/recession/another banking collapse etc., etc.?

Additionaly, we have now made it all too clear that there is no such thing as a market anymore - there is a carry trade, manifsted typically by the level of the USDJPY - which is the ultimate driver of all risk. It is this trade that Edwards warns will no longer work as it results directly in EM collapse, as can be seen most recently as the source of the EM crisis of 1997.

And while the bulk of the note focuses on Edwards' take of Andrew Lapthorne's comments which we summarized before (see Refuting The Biggest "Recovery" Lies In Four Simple Charts), his conclusion is worth highlighting as well:

But the inevitable has occurred and fundamentals have caught up with the markets as they always eventually do. The recent slide in US equity prices has been entirely consistent with the profits outlook Andrew has been flagging for some months (see chart below).

 

 

The market has at last awoken from the dream it hoped would last forever ? you must have had one of those dreams which you hope you can get back to if you fall asleep again quickly. The pungent smell of coffee has now overwhelmed the hallucinatory vapours contained in QE. Commodities snapped out of their trance some two years ago and could not find their way back into that same dream-like state. Now it is equities turn.

 

The dire profits situation will only get worse as EM implodes and waves of deflation flow from Asia to overwhelm the fragile situation in the US and Europe.

 

... the slump in the recent ISM data may be the ?straw in the wind? of what is to come. Certainly the three-month change of the leading indicator has now turned down sharply ? even before the recent ISM data has been incorporated. We watch the unfolding EM crisis with increasing trepidation because we know how this story ends. We have been here before.

 

And even if the Fed resumes massive QE at some point as the world melts down, and markets desperately attempt their return to the dream trance, they will instead find themselves locked into a Freddie Kruger-like nightmare in which phase 3 of this secular bear market takes equity valuations down to levels not seen for a generation.

Pure poetry.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 02/06/2014 - 10:55 | Link to Comment Newsboy
Newsboy's picture

"40% Overpriced"

Thu, 02/06/2014 - 11:02 | Link to Comment Chief Kessler
Chief Kessler's picture

The pic looks like Ted Nugget at his draft interview circa 1970

Thu, 02/06/2014 - 11:14 | Link to Comment Osmium
Osmium's picture

Wang Dang Sweet Poontang

Thu, 02/06/2014 - 11:27 | Link to Comment nightshiftsucks
nightshiftsucks's picture

No man, Stranglehold.

Thu, 02/06/2014 - 11:38 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Interesting that they are only going back to 1970. This can be 1897, 1907, 1913, 1919. Even if the FED was not active, it's owner's always were.

One way or the other, so many shades of 1929 it is not funny. The most re-peaty rhyming in history it feels like.

China is germany, Japan is England, the US is of course still the US, NK is Italy?....axes are allied....

Incidentally, Mercury is retrograde, trade lightly, everything is likely to be mis-understood.

ori

http://aadivaahan.wordpress.com/2010/09/02/retrograde-mercury-pearls-of-...

Thu, 02/06/2014 - 11:47 | Link to Comment WarriorClass
WarriorClass's picture

Despite Opposition, John 'Old Yellow Stain' Boehner Continues Treasonous Acts

http://americandictators.blogspot.com/2014/02/despite-opposition-john-ol...

Thu, 02/06/2014 - 12:47 | Link to Comment WarriorClass
WarriorClass's picture

Leaders to consult in Iroquois Nation Tribal Counsel:

http://americandictators.blogspot.com/2014/02/despite-opposition-john-ol...

Thu, 02/06/2014 - 13:33 | Link to Comment BLOTTO
BLOTTO's picture

It really makes one wonder what we did wrong in our past life, to be dropped off on this planet under these conditions...

 

Thu, 02/06/2014 - 13:38 | Link to Comment stant
stant's picture

thank krugman hes been picken a fite with yall since his trillion$ coin didnt fly

Thu, 02/06/2014 - 14:14 | Link to Comment IREN Colorado
IREN Colorado's picture

Blotto, I like to look at this as a unique opportunity to fix some mistakes we've made in the last couple hundred years. Lets round up some banksters and a few political hacks............

Who brought the ropes?

Thu, 02/06/2014 - 12:13 | Link to Comment 10mm
10mm's picture

Ted and the Mighty 10.

Thu, 02/06/2014 - 12:59 | Link to Comment bobnoxy
bobnoxy's picture

Have you ever actually listened to the lyrics of any of his songs? He's about as bright as my poodle. No, that slights my poodle.

Thu, 02/06/2014 - 13:14 | Link to Comment Trucker Glock
Trucker Glock's picture

He's no Anthrax, that's for certain.  Follow me or die, bitchez!

Thu, 02/06/2014 - 13:27 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

Some people you just wonder how they can talk

Thu, 02/06/2014 - 11:16 | Link to Comment Pladizow
Pladizow's picture

"Freddie Kruger-Like Nightmare"

This market is the offspring of a corrupt mixture of blended Ben/Allen DNA spewed into a whore of a banking system!

Thu, 02/06/2014 - 11:37 | Link to Comment DaddyO
DaddyO's picture

And this is how it will be policed when the sheeple wake up to the fact they have been hoodwinked.

SkyNet is well on its way to becoming fully self-aware...

http://www.youtube.com/watch?v=krkJ6jcqBB4

DaddyO

Thu, 02/06/2014 - 12:23 | Link to Comment General Decline
General Decline's picture

Now that they have this technology worked out they can begin the depopulation operations. They don't even need aggressive, low IQ thugs anymore to carry out their debauchery.

Thu, 02/06/2014 - 12:36 | Link to Comment Spastica Rex
Spastica Rex's picture

I think we will be cared for at some level of comfort while we slowly die off.

Thu, 02/06/2014 - 13:32 | Link to Comment DaddyO
DaddyO's picture

Care to elaborate?

DaddyO

Thu, 02/06/2014 - 13:59 | Link to Comment Spastica Rex
Spastica Rex's picture

Other than the physical "labor" that can't be automated or virtualized (decreasing all the time), those people existing outside the "knowledge economy" are superfluous. Consequently, the superfluous are placated with all kinds of bestowed benefits. To a great extent, I believe the motivation to do this comes from the potential consequences of not doing it. I also believe that our masters are not, in fact, entirely monstrous, and they do not wish to see unnecessary suffering, even from a purely moral standpoint. However, I also believe that our masters are willing to allow "natural" scourges such as disease and war to run their courses, if necessary.

I acknowledge that there are many (perhaps most, 'round these parts) who would argue that automation does not reduce the need for labor. My only response to that contention is that I don't believe the evidence supports it.

I also do not believe that the future I describe is inevitable, but rather that it will exist through the actions, and perhaps more importantly, the in-actions of all of us.

Finally, I'm not convinced that the energy exists to support this future.

Thu, 02/06/2014 - 15:16 | Link to Comment DaddyO
DaddyO's picture

At this point, I think most who are awake want a reset.

As to the automation aspect of things, wasn't it to make our lives easier? Has it accomplished that end? I think not.

I made a handsome living in the factory automation business for a number of years. It does automate many menial jobs.

I contend that as long as the FED has the power of the press, they will continue to print to solemnify the masses.

This is the reason that the POTUS has pushed .gov benefits like he has. It serves two purposes, to grow his power and to placate the ensnared.

DaddyO

Thu, 02/06/2014 - 11:40 | Link to Comment nasdaq99
nasdaq99's picture

what kind of a world values a gravel company at 100x forward earns???????????

 

Thu, 02/06/2014 - 11:42 | Link to Comment nasdaq99
nasdaq99's picture

that was supposed to have a chart of VMC

Thu, 02/06/2014 - 13:17 | Link to Comment Trucker Glock
Trucker Glock's picture

#the same world that values a company with loses that are double it's revenue.  or is the ratio 4:1?

Thu, 02/06/2014 - 12:33 | Link to Comment island
island's picture

This is all anyone needs to know to understand what is happening in the REAL economy.    Velocity of M2 Money Stock (M2V)      Bupkis.

 

 
Thu, 02/06/2014 - 10:56 | Link to Comment A Lunatic
A Lunatic's picture

Long cat food........

Thu, 02/06/2014 - 11:02 | Link to Comment nuclearsquid
nuclearsquid's picture

I am scared.  I need Simon Black to tell me where its safe to live this month.

Thu, 02/06/2014 - 11:14 | Link to Comment Levadiakos
Levadiakos's picture

Cue to bitcoin bull rant

Thu, 02/06/2014 - 11:20 | Link to Comment HyBrasilian
HyBrasilian's picture

cue fonestar to give us daily updates about all the "MONEY ON THE SIDELINES" just waiting, WAITING to jump into a crypto currency, of unknown origin, with any number of competitors that may come along, that evades the IRS, whereby all your transactions are logged ~ FOREVER, and that requires more 'energy' to mine a unit of the currency than it takes to mine & process a bar of gold.

Thu, 02/06/2014 - 14:59 | Link to Comment YC2
YC2's picture

Definitely among a bunch of strangers with whom you have no cultural ties, thats for sure!

Thu, 02/06/2014 - 12:30 | Link to Comment J Pancreas
J Pancreas's picture

Funny you mention cat food as I also had to eat some Fancy Feast tuna puree for breakfast this morning. Since I just purchased my 1-series with fixed payments for 120 months as well as my shares of TWTR and GRPN underperforming recently I've had to tighten my belt somewhat. Good thing I've got stable part time employment at my local Wal-Mart to help me weather this happy confluence of events.

Thu, 02/06/2014 - 10:56 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Did someone say "bailout"?  Where is old Hank "tanks in the streets" Paulson these days anyway?  Swinging from a lamppost I hope.  Just trying to stay optimistic.

Thu, 02/06/2014 - 11:01 | Link to Comment stant
stant's picture

us tanks are being moved to europe .just a fyi , if that shows any light on things

Thu, 02/06/2014 - 11:43 | Link to Comment Oh regional Indian
Oh regional Indian's picture

From where to where? They are all over Germany anyways. Do you have a source/link?

 

Thanks.

Thu, 02/06/2014 - 12:02 | Link to Comment stant
stant's picture

 just go to martin armstrong site , link wont paste here

Thu, 02/06/2014 - 12:37 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Thank you....

Thu, 02/06/2014 - 12:24 | Link to Comment BandGap
BandGap's picture

http://armstrongeconomics.com/2014/02/05/ukraine-becoming-the-real-focal...

The part about the US shipping oil to the EU is also interesting. I know the US is heavily involved with transferring fracking technology to Europe, as well.

 

Thu, 02/06/2014 - 13:33 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

OK, who is Archduke Franz Ferdinand?  The lady with the weaved bread hair or the other local thug oligarch?

Thu, 02/06/2014 - 11:43 | Link to Comment Pure Evil
Pure Evil's picture

Yep, better get ahead of the curve this time around. Looks like Europe will be target central for WW3 starting in Ukraine this time around instead of Poland for WW2 and the Balkans for WW1.

Thu, 02/06/2014 - 10:58 | Link to Comment Randoom Thought
Randoom Thought's picture

Too much predicting of gloom and doom. Those who control price do not manage the market to follow the narrative. There seems to be a pretty good case for a market fall, the the question is will it precede (contributing to) or follow (being caused by) the "crisis". The way those managing the markets typically like to do it is to have the crisis precede the market collapse. That way they can "claim" that it was unforeseen and there was nothing that they could do ... all along knowing full well that they control price and not a free market.

Thu, 02/06/2014 - 11:00 | Link to Comment Newsboy
Newsboy's picture

Yes.

Nervous-making, it is...

Thu, 02/06/2014 - 10:59 | Link to Comment Son of Loki
Son of Loki's picture

Bullish?  Robust?  Twerkish?

Thu, 02/06/2014 - 11:05 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

Dow up more than 100 points....

trade deficit increases....

GM aint selling shit....

earnings misses everywhere....

320k more mother fuckers hit the unemploment roll and about to be getting foodstamps...

AND THE MOTHER FUCKING DOW IS UP 1OO FUCKING POINTS...

fucking bullshit......

 

Thu, 02/06/2014 - 11:10 | Link to Comment J S Bach
J S Bach's picture

All that freshly printed QE money has to go somewhere before its inflationary effects hit the rest of us plebs.  The stock market is the natural magnet for it.  Don't bend your brains about the illogic of the ups & downs.  Just remember the end result which is coming.  A greater and greater loss of purchasing power of the world's fiat currencies.  Hold onto your physical assets and be patient.  End of sermon.

Thu, 02/06/2014 - 12:45 | Link to Comment Pegasus Muse
Pegasus Muse's picture

"Hold onto your physical assets and be patient." 

And try to focus the mind on pursuits that can produce a state of wonder and serenity.  

http://www.youtube.com/watch?v=-IeD0xW9404

"I think that if I were required to spend the rest of my life on a desert island, and to listen to or play the music of any one composer during all that time, that composer would almost certainly be Bach. I really can't think of any other music which is so all-encompassing, which moves me so deeply and so consistently, and which, to use a rather imprecise word, is valuable beyond all of its skill and brilliance for something more meaningful than that -- its humanity." --Glenn Gould

Thu, 02/06/2014 - 14:06 | Link to Comment redpill
redpill's picture

Just wait until they forceably make you associate it with ultraviolence, my droog.

Thu, 02/06/2014 - 16:52 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

that was Beethoven, wendy (i mean carlos)

Thu, 02/06/2014 - 14:33 | Link to Comment SilverSavant
SilverSavant's picture

Fuck patience, I want to mine donor organs.

Thu, 02/06/2014 - 11:13 | Link to Comment A Lunatic
A Lunatic's picture

BTFD

 

 

/s

Thu, 02/06/2014 - 11:18 | Link to Comment Ban KKiller
Ban KKiller's picture

No free market. There, makes sense now? 

Front run the Muppets is the ONLY game.

Thu, 02/06/2014 - 11:29 | Link to Comment CH1
CH1's picture

AND THE MOTHER FUCKING DOW IS UP 1OO FUCKING POINTS...

That's how it goes in the land of insanity.

Drop out of the system and pull your brain out of its pollution.

Thu, 02/06/2014 - 11:38 | Link to Comment Race Car Driver
Race Car Driver's picture

> Drop out of the system and pull your brain out of its pollution.

The only solution to the pollution. Personal general strike for as long as it takes. No excuses.

Yes, I am doing this. No, it's not easy. Nothing of any value is.

Thu, 02/06/2014 - 13:28 | Link to Comment knowshitsurelock
knowshitsurelock's picture

I've been waiting for the perfect time to enter the market, and I think this is it.  I'm re-mortgaging the house, maxing out my credit cards, borrowing from my IRA, and I'm going all in to buy triple X-ETF call options on margin and bet that this thing goes up foreva!!!!

Thu, 02/06/2014 - 13:40 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

To someone's moon!!!!

Thu, 02/06/2014 - 12:35 | Link to Comment joego1
joego1's picture

The fed trading desk is working hard to make your smoke and mirrors function correctly.

Thu, 02/06/2014 - 13:51 | Link to Comment 20-20 Hindsight
20-20 Hindsight's picture

Yes, DOW is up again, and so the wheel of corruption turneth.  If I hadn't paid so much attention to ZH apocalyptic prognostications for the past two years, my portfolio would be up more than 20% right now.  I'm a big loser for having believed that the world was on the verge of collapsing.  But it hasn't... and it's not likely to happen any time soon.  

ZH'ers need to come to grips with the fact that TPTB know that the entire system CANNOT be allowed to collapse because it's TBTF.  Period.  Why?  Because those who have money will keep on making more money.  This is why the markets are rigged.  Those who have money, but are not yet convinced that they CANNOT lose on these rigged markets, well... tough luck, you lose.  Keep on comforting yourselves and feeding yourselves the illusion that you will EVENTUALLY be right some day. 

I've finally reached the conclusion that this bullshit  can go on for a long, long time, so I've decided to ride the wave, as I should have if I hadn't fallen into this bullshit trap of constant doom and gloom.  If and when the shit hits the fan, it won't matter anyway: we will all be screwed.  In the meantime, why not be part of the winners instead of the whiners?  The world as we know it could end tomorrow, or maybe not... maybe in ten, twenty years... or maybe not.  

 


Thu, 02/06/2014 - 11:03 | Link to Comment Eeyores Enigma
Eeyores Enigma's picture

Does anyone else find it odd and twisted that all of the indicators of how the economy, global or otherwise, is measured by how much blood can be sucked out before it dies?

Thu, 02/06/2014 - 13:33 | Link to Comment Trucker Glock
Trucker Glock's picture

"It didn't die today.  Bullish!"

Thu, 02/06/2014 - 11:06 | Link to Comment Music101
Music101's picture

Yup... It's a WORLD OF DEBT... and eventually it all needs to be cleared... period.

See Video Below "WORLD OF DEBT":

http://www.youtube.com/watch?v=99xsqxzJnXs

Thu, 02/06/2014 - 11:09 | Link to Comment MikeInWatertown
MikeInWatertown's picture

I like gloom, doom, and Freddy Krueger as much as the next guy, but I'm not buying it. In '97 much more of the EM debt was denominated in dollars, compared to today, when a lot of it is in local currency. History might rhyme, but it doesn't repeat.

 

Thu, 02/06/2014 - 11:22 | Link to Comment Bertie Bear
Bertie Bear's picture

Take a look of this. I think the BIS are suggesting EM foreign denominated debt surged in recent years.

http://www.telegraph.co.uk/finance/financialcrisis/10618015/Emerging-mar...

And to the extent it is LC debt that has been issued, isn't it the western hedge and pension funds that will be stuffed as EM currencies slump?

Thu, 02/06/2014 - 11:12 | Link to Comment Sufiy
Sufiy's picture


CNBC: Thomas Demark Calls For Risk of 60% Crash In S&P 500


  Thomas Demark is calling that the next two - three days will be critical and if the markets go down they can unravel very quickly. If today's weak ADP report can be taken as any guidance the coming up Jobs Report can be weak as well. We think that his call is very extreme, but Taper Pause is becoming the reality with every sell off in the market. Thanks to Bernanke, Janet Yellen has her FED Chair Crisis right at the start of her reign. Gold is fighting the gravity and market manipulators at the $1270 level and once it will close above it the mother of short squeeze in Gold will arrive. http://sufiy.blogspot.co.uk/2014/02/cnbc-thomas-demark-calls-for-risk-of...

Thu, 02/06/2014 - 11:16 | Link to Comment buzzsaw99
buzzsaw99's picture

nobody wakes up from the matrix and there are no markets there is only old yeller

Thu, 02/06/2014 - 11:27 | Link to Comment ebworthen
ebworthen's picture

Well shit.

I wake up and see the DOW up +127 and happy talk about Coke "revolutionizing the beverage industry".  WTF?

This whole damn thing is a big lie, but its got nine lives and a glossy coat.

Thu, 02/06/2014 - 11:52 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

What I want, is a gigantic tube snaking from Central Coke Headquarters to my McMansion, so that I can attach the tube to a special dispensary unit next to my bed, network-enabled, installed by the properly trained, licensed, and insured corporate service task forces, so that I get the freshest and downright ice-coldest possible product at the most opportune moment, which is during commercial breaks as I watch my favorite shows on my 50-inch TV, which is of course opposite my bed, and which I watch until my restless leg syndrome dies down and allows me to sleep around 12:30pm, usually after I've consumed huge amounts of prescription drugs, so that I can wake up and roll into the ensuite shower stall and douse myself with body wash, never taking my eyes off the TV, while fresh product gurgles at the ready in the manifolds of my beloved dispensary unit, to which I've magnetically affixed a picture of the Holy Mother.

Thu, 02/06/2014 - 12:06 | Link to Comment sdmjake
sdmjake's picture

+1. Reads like a mixture of Consumer Reports and Penthouse Forum.

Thu, 02/06/2014 - 13:37 | Link to Comment Trucker Glock
Trucker Glock's picture

Hahahahaha.

Thu, 02/06/2014 - 12:08 | Link to Comment fijisailor
fijisailor's picture

Coke.  Now we're talkin productivity to drive the Chinese crazy baby.

Thu, 02/06/2014 - 11:22 | Link to Comment Phillycheesesteak
Phillycheesesteak's picture

Maybe he'll be right this time. He's been blabbering this for years.

Thu, 02/06/2014 - 11:45 | Link to Comment Big Corked Boots
Big Corked Boots's picture

Pat's or Geno's?

Thu, 02/06/2014 - 12:12 | Link to Comment Phillycheesesteak
Phillycheesesteak's picture

They both suck. Tourist traps. I would recommend Tony Luke's or any corner pizza place before them.

Thu, 02/06/2014 - 11:25 | Link to Comment tradewithdave
tradewithdave's picture

Altucher 20,000! 

Thu, 02/06/2014 - 11:25 | Link to Comment moonman
moonman's picture

Gonna go buy more shiny archaic trinkets today

Thu, 02/06/2014 - 11:35 | Link to Comment AGoldhamster
AGoldhamster's picture

The ZH driven sentiment is so bearish again - that it's time for new ATHs. Either in February or in March.

And new lows in Gold and Silver entually too. Or at least test of the last lows.

Thu, 02/06/2014 - 12:34 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

AG, this is the "all is OK rebound". Wait until about the end of Feb. That is when things will get interesting. Wall Street taking care of the Muppets.

Thu, 02/06/2014 - 11:30 | Link to Comment youngman
youngman's picture

I think the employment number tomorrow is going to be bad...I think Obamacare is kicking in...and the retail crash is happening...could be scary..but they will blame it all on the weather...

Thu, 02/06/2014 - 11:43 | Link to Comment Smiley
Smiley's picture

Have no fear, no matter what happens TPTB have a full-proof plan to shift any and all blame and responsibility.

Thu, 02/06/2014 - 11:43 | Link to Comment Martian Tourist
Martian Tourist's picture

Which previous generation is he referring to? The worst crash in decades was 2000 only 13 years ago

Thu, 02/06/2014 - 11:48 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

fuck these markets!

Thu, 02/06/2014 - 13:36 | Link to Comment nixy
nixy's picture

These are NOT markets.

Thu, 02/06/2014 - 11:49 | Link to Comment topshelfstuff
topshelfstuff's picture

"""""And even if the Fed resumes massive QE  at some point as the world melts down, and markets desperately attempt their return to the dream trance, they will instead find themselves locked into a Freddie Kruger-like nightmare in which phase 3 of this secular bear market takes equity valuations down to levels not seen for a generation."""""

WHY has nobody mentioned that the reduction in QE is absolutely meaningless, even if it was/is a truthful statement.  EXAMPLE:

All the Big Banks have to do is "Invest" at 30 per 1, instead of 20 per 1, so the actual Invested amount might be more, at least the same ... excluding Jawbones

Thu, 02/06/2014 - 12:07 | Link to Comment fijisailor
fijisailor's picture

Lying is a habit now so the market will be artificially supported from somewhere.  Count on it.

Thu, 02/06/2014 - 11:50 | Link to Comment ptoemmes
ptoemmes's picture

Cue WB7 for a Freddie Krugman caricature....

Thu, 02/06/2014 - 11:56 | Link to Comment homiegot
homiegot's picture

Let's blow this thing wide open.

Thu, 02/06/2014 - 12:01 | Link to Comment world_debt_slave
world_debt_slave's picture

Reality is a bitch.

Thu, 02/06/2014 - 12:04 | Link to Comment w00dmann
w00dmann's picture

Make it happen, already! 

Thu, 02/06/2014 - 12:27 | Link to Comment dizzyfingers
dizzyfingers's picture

After the Federal Reserve failed to end bad mortgage lending, the nation suffered the economic crisis of 2008/09. Now, as the nation’s debt load grows, the Fed is pursuing policies that devalue your existing dollars in part by printing vast quantities of new dollars. In sum, it failed in its regulatory job and is now penalizing your dollars.  Americans, on the hook for each dollar printed, have taken to ‘circulating’ the handouts below as a way to focus attention on the devaluation and the debt. ( See: The Financial Crisis Inquiry Report issued in 2011.)

http://thingstothinkby.com/wwu-2/

Thu, 02/06/2014 - 12:28 | Link to Comment NoWayJose
NoWayJose's picture

Favorability Ratings - Freddie Krueger 38%, US Congress 19%...

Thu, 02/06/2014 - 12:29 | Link to Comment Iam Yue2
Iam Yue2's picture

Utter twaddle.

Thu, 02/06/2014 - 12:38 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Great word, twaddle. Right up there with Foppish...

Thu, 02/06/2014 - 12:31 | Link to Comment Quinvarius
Quinvarius's picture

This would require on to believe they are actually putting less money into the system instead of more.  I think we all really know it is more, and will be more...forevermore. 

Thu, 02/06/2014 - 12:51 | Link to Comment ak_khanna
ak_khanna's picture

The markets continue to rise till all short positions in the market are covered and the majority of traders move to the long side. Once this is done the market falls till all long positions are closed and short positions undertaken. Then rinse and repeat. The price mechanism has little to do with the actual demand, supply, fundamentals or state of the economy.

The stock, bond, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.

www.marketoracle.co.uk/Article40231.html

Thu, 02/06/2014 - 13:37 | Link to Comment nixy
nixy's picture

So 'gambling dens' or 'markets' ...... can't be both.

Thu, 02/06/2014 - 12:55 | Link to Comment notquantumdum
notquantumdum's picture

What was that 1% mini-flash-crash I just saw in SPY?  Stop hunt or bad quote?

Thu, 02/06/2014 - 12:56 | Link to Comment css1971
css1971's picture

3 year decline for the S&P down to 450.

Followed by 30 years of deflation, just like Japan.

 

Got your MyRA yet?

 

Thu, 02/06/2014 - 13:46 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

Read James Rickards The Currency Wars, last night.   Excellent book

Reading Talebs Antifragile: Things that gain from disorder, today.

Thu, 02/06/2014 - 13:50 | Link to Comment muleskinner
muleskinner's picture

Have the US mint in Denver strike platinum/paladium 1 trillion dollar coins, 100 of them, have 100 trillion dollars, deposit them into the US Treasury, pay the 18 trillion in debt, pay the toobigtofail banks the interest owed on the debt, have about 69 trillion dollar coins to pay any future fiduciary obligations.

It can work.

I found a 1911 penny with a D on it for the Denver mint.  The first year the mint struck coins.

It is my favorite penny.

Thu, 02/06/2014 - 14:37 | Link to Comment AKrandy
AKrandy's picture

Does old yellen get shot in the end?

Thu, 02/06/2014 - 21:15 | Link to Comment Cashcollateral
Cashcollateral's picture

Oh the market is going to crash. I can see why this wwarning is different from every single other warning for the last 5 years.

Do NOT follow this link or you will be banned from the site!