This page has been archived and commenting is disabled.

"The Stock Market Is A Mood Ring For Faith In The Fed"

Tyler Durden's picture




 

Submitted by Monty Pelerin's World blog,

Debt is the great palliative that has enabled the US and other major economies to escape reality, at least for a time. Ayn Rand described such behavior:

You can avoid reality, but you cannot avoid the consequences of avoiding reality.

It is possible to steal from tomorrow to improve today but only at the cost of having less of a future. That is what both nations and citizens have been doing. The ability to continue doing so has about run its course. The damage done to the future is real and will result in substantially lower living standards for those who foolishly believed that spending beyond one’s income was a miracle created by John Maynard Keynes.

The ability to continue the debt charade is nearing its end. As it slows down and reverses, the poverty and hardship that is covered up will surface.

 

When that occurs, another Great Depression, likely to be known as The Great Depression or The Greater Depression in the history books yet to be written will emerge.

For those wanting to learn more about the emergence of debt as an economic palliative and its implications for markets, a refreshing interview with Fred Sheehan. Here is one of Mr. Sheehan’s observations:

All asset markets are disengaged from their foundations. They have been elevated by governments and their central banks. Central banks have done so by prodding savers into stocks and bonds. They have set artificially low borrowing rates. These artificially low rates are the source of so many perversities that are not immediately evident but have fractured the structure of companies, industries and the stock market. With Treasury rates so low, the issuance of investment grade, junk, covenant lite, PIKs and almost every other category of sloppy finance that met its maker in 2007 set new world records in 2013.

 

The present and future consequences should be obvious.

Mr. Sheehan captures in one sentence my opinion of today’s markets:

The stock market is a mood ring for faith in the Fed.

Read this article if you want to learn some history and honest economics and understand the risks inherent in today’s financial asset markets.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 02/24/2014 - 15:17 | 4471862 _ConanTheLibert...
_ConanTheLibertarian_'s picture

OMG that picture!

Mon, 02/24/2014 - 15:20 | 4471873 Jumbotron
Jumbotron's picture

That is the SINGLE BEST BUMPER STICKER statement ever about the ponzi.  A MOOD RING......brilliant !

Too bad about my eyes....after seeing the BerSkank.

Wow !!!

Mon, 02/24/2014 - 15:27 | 4471907 Pure Evil
Pure Evil's picture

Undoubtedly, the berstank saw himself exactly that way every time he looked into the mirror as he stepped out of the shower.

Mon, 02/24/2014 - 15:37 | 4471953 Thought Processor
Thought Processor's picture

 

Must extend the pretend until there is no more to extend.

 

Then the pretend ends.

Mon, 02/24/2014 - 15:52 | 4472010 BaBaBouy
BaBaBouy's picture

TYLER... Time To Make Up A New Photo With YELLIN And USD's Sticking Out Of Her White Paunchy ASS...

Mon, 02/24/2014 - 15:20 | 4471878 williambanzai7
williambanzai7's picture

Mon, 02/24/2014 - 15:26 | 4471902 CaptainSpaulding
CaptainSpaulding's picture

" Me so hawny. Me love you long time"

  - Pretty Vietnamese girl, Kubrick's Full metal jacket

Mon, 02/24/2014 - 15:26 | 4471904 Dr. Engali
Dr. Engali's picture

You're a disturbed person William. ;->

Mon, 02/24/2014 - 15:28 | 4471910 Pure Evil
Pure Evil's picture

And, I thought I was pure evil.

Now I need an ice pick to give myself a lobotomy.

Mon, 02/24/2014 - 15:42 | 4471967 CaptainSpaulding
CaptainSpaulding's picture

Willy B and i have something in common. He is the master. I am the master.....bater

Mon, 02/24/2014 - 15:57 | 4472030 hangemhigh77
hangemhigh77's picture

You're giving pole smokers a bad name.

Mon, 02/24/2014 - 15:59 | 4472045 hangemhigh77
hangemhigh77's picture

Ben's thinking, "Did Timah leak my Valentine card to him to the press?"

Mon, 02/24/2014 - 16:01 | 4472049 hangemhigh77
hangemhigh77's picture

Obviously "working" at the Fed is a "hard" job.  Or a blow job, depends on how long you take for lunch.

Mon, 02/24/2014 - 16:19 | 4472099 yogibear
yogibear's picture

Photo edit Yellen poll dancing with Wall Street written on the poll.

Tue, 02/25/2014 - 06:04 | 4474453 EddieBurgerPie
EddieBurgerPie's picture

Woa. You need to put a warning on those graphic images!!! I just woke up this morning to this photo and now that image is burned into my retinas. Not cool. Not cool! Now I can't even go back to bed for fear of a major nightmare.

Mon, 02/24/2014 - 15:23 | 4471879 GOSPLAN HERO
GOSPLAN HERO's picture

Don't eat the Skittles.

Mon, 02/24/2014 - 15:56 | 4472023 Atlas Crapped
Atlas Crapped's picture

I know !! I can't WAIT for the Yellen version. 

PRICELESS !!!

Mon, 02/24/2014 - 16:17 | 4472087 HardAssets
HardAssets's picture

Conan:  "OMG that picture!"

 

 

"Must . . . . try . . . . to . . . . keep. . . my lunch down.  Concentrate . . . on anything else."

Mon, 02/24/2014 - 22:01 | 4473431 Doctor Who
Doctor Who's picture

I think we just found the design for the United States new one trillion dollar stainless steel coin.

Mon, 02/24/2014 - 15:17 | 4471864 Truther
Truther's picture

What a Fucktard...

Mon, 02/24/2014 - 15:20 | 4471871 TahoeBilly2012
TahoeBilly2012's picture

Why do they use phoney front men for their Presidents and then the real deal for their Fed Chairs? It seems like they would want some dude named Johnson heading the Fed for cred reasons...just sayin'

Mon, 02/24/2014 - 15:30 | 4471919 Pure Evil
Pure Evil's picture

With a nickname like Dix Enormous or Big Johnson.

Mon, 02/24/2014 - 15:20 | 4471865 Beam Me Up Scotty
Beam Me Up Scotty's picture

And that douchebag Richard "Dick" Cheney said deficits don't matter. Fuck that Republican price of shit. So much for fiscal responsibility eh Repubs?

Mon, 02/24/2014 - 15:21 | 4471881 camaro68ss
camaro68ss's picture

Someone is still stuck in the Left vs Right paradigm

Mon, 02/24/2014 - 15:29 | 4471915 Professorlocknload
Professorlocknload's picture

It's the Koolaid.

Mon, 02/24/2014 - 15:31 | 4471927 Pure Evil
Pure Evil's picture

He couldn't decide whether to take the Blue or Red pill this morning.

Do yourself a favor and take both.

Mon, 02/24/2014 - 17:17 | 4472123 Beam Me Up Scotty
Beam Me Up Scotty's picture

Nope. Just berating that idiot Cheney. Has nothing do do with the left/right bullshit. Also the fact that the R's used to allegedly be the the champions of fiscal responsibility.  Just because someone makes a comment about a party and what the so called party says they stand for, doesn't mean they are automatically for the "other" party.  You guys need to chill out.  In other words, we all get that they are the same shit, different color.

Mon, 02/24/2014 - 16:24 | 4472110 HardAssets
HardAssets's picture

Yep the so-called conservative elephant 'representative' from my district was one of those from the  'red team' who recently voted to give the spenders a blank check .

But I stopped caring what the various demorepublicraps say & do.

Woke up from that 'right' vs 'left'  b.s. years ago.

Mon, 02/24/2014 - 15:21 | 4471880 Navymugsy
Navymugsy's picture

That was the most nauseating picture on ZH ever. Ever!!!!

Mon, 02/24/2014 - 15:22 | 4471885 MsCreant
MsCreant's picture

You know Ben loves that picture. He can't say it, but he loves it. Better than the chopper one.

Mon, 02/24/2014 - 15:24 | 4471893 MsCreant
MsCreant's picture

It is possible to steal from tomorrow to improve today but only at the cost of having less of a future. ...The damage done to the future is real and will result in substantially lower living standards for those who foolishly believed that spending beyond one’s income was a miracle created by John Maynard Keynes.

Not if you default...

Mon, 02/24/2014 - 16:06 | 4472039 Law97
Law97's picture

Especially after Wall Street buys up all the real assets with the funny money first. 

 

Yes, they know default is the answer, but not before they can get all they can first.  The top 1% get to buy up everything in exchange for giving up the dollar and its reserve status.  If you are the top 1% then this is literally a once-a-civilization's lifetime's-opportunity.  A civilization can only screw the world like this once every few centuries.  They are so far down this road that default is inevitable and they know it.  They are now looting the dead carcass of America for their own benefit, trading centuries of hard-won American prosperity and credibility for a few extra mega-yachts and Gulfstream private jets. 

 

What a damn shame that the American people are letting their country be destroyed like this, but in a way ironic, that greed from within is what finally brought America down. 

 

Too bad 99% of us will have to suffer for the sins of the top 1%.

Mon, 02/24/2014 - 23:37 | 4473854 scaleindependent
scaleindependent's picture

Exactly, very well said.

Mon, 02/24/2014 - 16:16 | 4472086 new game
new game's picture

banksters don't let banksters default-the club, ya know. that is the essence of the ponzzi scheme. moar debt.

but wait, there is a thingy called math... ok, still waiting on japan to be the litmus test. or is it greece? or cyrus?

or argintina? or venzualla? or spain? or italy? or ukraine? or ______? ah, fuck it, it has all been said already...

nice day to ya- anyways!!!!

Mon, 02/24/2014 - 16:39 | 4472148 HardAssets
HardAssets's picture

MsCreant:  "Not if you default..."

 

Yep.  Most people don't get that the 'debt' is nothing but made up b.s. blips in computer memories. (Fabricated in many cases out of nothing  to scam & control people.)  What matters is real, physical resources & knowledge that will (as Buckminster Fuller put it)  "support X number of human lives, for X number of forward days".  If you have those resources, and don't need them from others - you can recognize that the 'debt' is a complete fraud.  Others will still trade with you if you have something they need or can use.

Re-set

Mon, 02/24/2014 - 15:25 | 4471897 Sufiy
Sufiy's picture


Gregory Mannarino: Pump and Dump Wealth Transfer Coming Soon 


George Soros holds now 1.3 billion rolling Put on the market to protect his long positions. How long this levitation in the markets can continue? Nobody knows for sure, but this interview gives us a very good food for thought. Gregory expect the serious correction starting within next few weeks, when money after initial drop will be reallocated into Commodities, Gold and Silver. Big banks are already shorting the market and it will create the Pump and Dump Wealth Transfer again.   So far market was playing along the Toby Connor's scenario: with general equities topping in the last move up into the late spring of this year, Commodities are breaking Up and Gold and Silver are going much higher. Silver is topping $22.00 level today and Gold is at $1,340. http://sufiy.blogspot.co.uk/2014/02/gregory-mannarino-pump-and-dump-weal...

Mon, 02/24/2014 - 15:33 | 4471933 Pure Evil
Pure Evil's picture

Yeah, and Obama thinks he's POTUS when he reads from the teleprompter.

Mon, 02/24/2014 - 15:41 | 4471898 Dr. Engali
Dr. Engali's picture

Where in the hell has this guy been? Sleeping under a rock? We've been living the greater depression since 2000, but it's all been masked over with printing, SNAP cards, and other welfare programs. The shit will really get ugly once the money dries up for those programs.

Mon, 02/24/2014 - 15:26 | 4471903 Professorlocknload
Professorlocknload's picture

The dollar is a mood ring for faith in the fed. FIFY

 

Mon, 02/24/2014 - 15:29 | 4471913 HamRove
HamRove's picture

Can't ....unsee .....that ...picture...

Thanks ZH...now I HAVE to kill myself.

Mon, 02/24/2014 - 15:49 | 4471999 1stepcloser
1stepcloser's picture

Say hello to Ramis for me...Francis is taking it hard

Mon, 02/24/2014 - 15:30 | 4471921 Hohum
Hohum's picture

May I have a date and time when the debt charade will end?  I want to enjoy a good beer at that moment.

Mon, 02/24/2014 - 15:43 | 4471979 I Write Code
I Write Code's picture

Drink it now, beat the rush.

Mon, 02/24/2014 - 15:30 | 4471922 Hongcha
Hongcha's picture

Adblocker Plus

Enabled for this site

Block Element

Block

Mon, 02/24/2014 - 15:30 | 4471926 flyingcaveman
flyingcaveman's picture

Milk shot out of my nose, and I'm not even drinking milk.

Mon, 02/24/2014 - 15:31 | 4471929 centerline
centerline's picture

Inscription on that ring ought to read "Moral Hazard."

Mon, 02/24/2014 - 15:35 | 4471943 bearish1
bearish1's picture

MY EYES!!!! Those pictures!!! 

Mon, 02/24/2014 - 15:37 | 4471951 Pure Evil
Pure Evil's picture

I doubt even Banzai's combat girls can wipe that image away.

Mon, 02/24/2014 - 15:37 | 4471948 all-priced-in
all-priced-in's picture

At least it wasn't a picture of Yellen.

 

 

Mon, 02/24/2014 - 15:38 | 4471957 1stepcloser
1stepcloser's picture

This Hole thread aint right!

Mon, 02/24/2014 - 15:41 | 4471964 I Write Code
I Write Code's picture

Good article.

I'm actually more sympathetic to Bernanke than that, because only half of what Bernanke thought he was doing has worked.  If it had all worked - who knows.  But we have NOT had the inflation that he wanted, well at least not officially.  And we are still here (somewhat surprisingly) when we might not have been after 2008.  And he acted, when nobody else did.  Even if after five years drunk on printers ink he can't find the exit.

I will revise my opinions over time no doubt, looking backwards is so much clearer.  Things are so crazy these days, looking forward is a mug's game.  Are you guys aware of just who/what is president these days, omg.

Mon, 02/24/2014 - 15:43 | 4471971 Kirk2NCC1701
Kirk2NCC1701's picture

They're not stealing from Tomorrow.
They're simply stealing Today and ENSLAVING for Tomorrow.

The NWO Elite are marching up and down the Field, because there is no substantial resistance to them. They act like the Borg, and people raised as Sheeple are all to eager to comply. Those who resist, are identified & tagged, marginalized & eliminated (economically or biologically).

Mon, 02/24/2014 - 15:48 | 4471989 Chupacabra-322
Chupacabra-322's picture

That's one tight ass Ben's sporting there. He's going to get pounded in it pretty soon in a pound me in the ass prison penitentiary.

Mon, 02/24/2014 - 16:30 | 4472131 Spungo
Spungo's picture

I had to post that cover picture on FB. It's too fucked up not to share.

Mon, 02/24/2014 - 17:06 | 4472269 dexter_morgan
dexter_morgan's picture

That picture needs to be updated for Ms. Yellen.........uggghhh

Mon, 02/24/2014 - 18:11 | 4472514 MsCreant
Mon, 02/24/2014 - 17:59 | 4472463 shankster
shankster's picture

Wow! Ben's been pumping iron!

Mon, 02/24/2014 - 18:44 | 4472644 Albert_
Albert_'s picture

Debt as a means of avoiding reality?

Well, maybe, if you're a newbie. (Right now almost everyone still is)

If you abuse it, you will most probably have to default, sooner or later.

But if you learn about the limits of the tool that debt is, then the debt becomes a very versatile tool. Debt is for those who know how to use it.

Not to use the debt tool is like avoiding doing things because of fear of sin. 

 

 

Mon, 02/24/2014 - 18:50 | 4472671 stant
stant's picture

well it was a factual picture hes wiped his ass with the flagg

Mon, 02/24/2014 - 20:45 | 4473194 fijisailor
fijisailor's picture

That picture is so disgusting that I have delayed for hours clicking to read the article.  

Mon, 02/24/2014 - 22:30 | 4473558 idontcare
idontcare's picture

The only reason I opened the article was to see if there were a few couples shots of the various FED Prez's.  Oh well, not even one with Yellen in the buff.  Guess that we have to wait for the crash to see that one.

Mon, 02/24/2014 - 22:40 | 4473570 novictim
novictim's picture

Wow...listening to Alan Greenspan on CSPAN right now.  

Several incoherent points stood out.

1) People are not buying homes because they lack long term confidence...so they rent. (huh!? Could someone tell Mr. Greenspan that the American Citizen is TOO BROKE to afford both a house and paying their mortgage!?)

 

2) Wealth inequality is a real problem. 

3)stock market rise correlates with the lowering of American workforce pay. Greenspan notes that charts showing this are convincing.   Thankfully, he got that right but then he says:

 

4)He goes on to say that the problem of wealth inequality is due to poor GDP growth and if the GDP were to be spurred to 4% then the wealth inequality problem would solve itself.  WTF?  Cart before the horse!

 

5)Or, he says we, could get rid of the H1B-Visa program and allow an "opening up" of skilled positions for the world labor force to take American jobs here in America..."it would make incomes go down but it would spur US workers to compete"...  (America needs to get poorer in order to get better jobs...does that make any sense with you?)

 

6) and we should build a high-class k-12 education system. Well, he got that right.  Except that the local home owners across America are broke and can't pay more property tax until they get a raise

 

7) And we should allow illegal immigrants to just be legalized. 

Greenspan was sincere and the interviewer seemed to accept his evil nonsense as logical and good.

Americans, you have been betrayed by a clique of ideologues all cut from Alan Greenspan's mindset...they won't be satisfied til we are all beggars tapping tin cups at the nations street corners.  

The shackles are being forged by our own hands, brothers and sisters, and the internationalist oligarchs like Greenspan have only to slip the chains onto us with the acquiescence of our developing police state. 

Ukraine has shown us what we must do.  No more drumming circles! Rise up!

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