S&P 500 Pushes To All Time Highs On First Economic Contraction In Three Years

Tyler Durden's picture

What do you do when GDP prints twice as bad as expected... buy stawks! And so it is that -1.0% GDP print for Q1 has been greeted with a buying drive in S&P 500 futures to lift it back near all-time record highs this morning. Gold, silver, and the USD are also rising.. and bond yields are rising very modestly.


S&P is up...


But the Nasdaq is leading...


Leaving the S&P 60 points rich to bonds...


And here's why everyone's bulled up...


Charts: Bloomberg

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Xibalba's picture

How much printing do they have to do in order to get to 3%? 

Winston Churchill's picture

So much  the Congo, Zaire,Monaco, and the Maldives will soon be very large holders of


Tabarnaque's picture

Keep pumping it up Yellen! To the moon and beyond!

john39's picture

slightly OT, but on point with the big picture... saw a story over at CNN today extolling the virtues of psychopathy in business:


our leaders, business and government, in all their true glory...  and people wonder why the world looks like it does.

Headbanger's picture

It's all an insane game of chicken now.

The financial markets implode the moment anybody blinks.

clooney_art's picture

Yeah baby. That's the way to do it. Show it to them to never doubt an  official "Economic Recovery", as coordinated by central planners.

MillionDollarBonus_'s picture

The S&P's resilience in the face of bad news signifies excellent market strength. I think what would really give it that extra push over the 2000 mark is a comprehensive plan by congress to eliminate the deficit by 2030 based on projected tax revenues and economic growth.  

Oh regional Indian's picture

@ john39

I think the motto of the driving force in this fast descending huxlian dystopia is:

And One Pill To Rule Them All.

It'll have some crazy name like 


The pinnacle of pharmacological achievement.


john39's picture

whatever it takes to keep humanity and the truth apart until its too late to turn back...

BTFDemocracy's picture

Long time no see! MDB, you have not done your work of trolling enough. I enjoy your posts and you should definitely try to be the top comment of every article.

CH1's picture


Reality has been made irrelevant!!

Free shit and rainbow unicorns forevah!!!!!

loonyleft's picture

bipartisan plan. still +1. keep up the good work. 

Tabarnaque's picture

The problem is that in a monetary system where money is created out of debt, you can NEVER eliminate the deficit. The deficit is doomed to grow at least by 3% of GDP per year for ever. The problem is that 3% per year is componded, which means is represents an exponential function over time. And we are in the vertical part of the curve right here, right now.

To infinity and beyond and long live to the Belgiums for their growing appetite of T-Bonds!

Ghordius's picture

correct, yet only in part. what screws up everything is the fixed rates of lending in a real world where revenues fluctuate. yet this would lead to failures, and bankruptcies

your 3% used to contain at least 1.5% to 2% of risk of failure. think Merchant of Venice, all in gold, yet sometimes ships don't return

so to jump to my conclusion: money created out of debt is just a system. what screws the system is... when it's used to finance failure... the phenomenon of misallocation

Tabarnaque's picture

Money created out of debt is a fraudulent system that aims at benefiting the very few who posses the monopoly over money creation. Money out of debt is not an acceptable system. It is the basis of most of the problems that we have. It imposes a matrix of economic laws that are totally absurde, unfair and destructive to everything.

Ghordius's picture

I agree with you because you are describing the misuse of the system. yet as such, it's only a system. one thought for you: two nations at war. the first uses fiat, the second uses gold. all things being equal, who wins? the one that can use the monetary inflation tax. it's like a giant credit card and a weapon system wrapped together

Tabarnaque's picture

Fiat currency and debt based monetary system are 2 different things not to be confused.


Fiat money has been defined variously as:

  • Any money declared by a government to be legal tender 
  • State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
  • Intrinsically valueless money used as money because of government decree.
Ghordius's picture

"Money out of debt is not an acceptable system"

interestingly, archeology points to debt being always the first invention, and money often first a derivate of debt. the IOU. which is a private contract, btw, like the Letter of Credit

you need a gold miner like King Midas, or a silver miner like the city of Athens to establish a metallic monetary system

and the first metallic monetary system was the one Spartans kept even when it became obsolete: meteoritic iron. Iron was way more valuable than gold, as long as there was no technology to reduce ore to iron. it was literally the metal from the heavens

MeelionDollerBogus's picture

All the metals are from the heavens, from the stars,  but no: debt was not the first money.
The first money predates even what is written.
The first money was stone, metal & food, and probably really sharp but durable sticks.
The first money, trading, predates even language, and certainly predates the intangible concept of debt.

MeelionDollerBogus's picture

Centrally controlled debt,  yes. Money issued privately with no central control & no legal power to make it 'special money' above other money from other issuers would have no such problem.
Instead one would decide if any particular person, location or period of time makes that/some private money safer or not safer to use.
In which case one should wisely balance physical commodities as real money from nature, like gold & silver, even copper & iron, rather than exclusively relying on a credit system.

venturen's picture

so by your deluded thinking...if we get a 10% negative contraction the market should go to the moon? What dare I say "college" or night school did you go to?

MeelionDollerBogus's picture

MDB_ graduated with a Masters in Trollgineering from Yale & has a lengthy resume of professional experience since graduating.

MeelionDollerBogus's picture

Along with putting LSD into the water supply that sounds equally sane & plausible!

Oh regional Indian's picture

Even further OT, a short puzzle....



Ghordius's picture

still OT: it's an open secret that London HR firms recruited psychopaths for megabanks... on purpose. with attitude tests

Dewey Cheatum Howe's picture

Interesting read on this.


I'll highlight some key passages.


Our research team and egroup have been engaged for some time in researching and analyzing these interactions and the characteristics and the dynamics and the personalities. Our research has led us to identify them with "Psychopaths." They can also be Narcissists since Narcissism seems to be merely a "facet" of the psychopath or a "milder" manifestation. You could say that the Narcissist is a "garden variety psychopath" who, because of his or her "social programming," has less likelihood of running afoul of the law. In this way, they are very efficient "survival machines," living out their lives doing untold damage to their families, friends and business associates.

It is only when a person takes a long and careful look at the full-blown psychopath - a sort of exaggerated Narcissist - that they are able to see the caricature of the traits that then make it easier for them to identify the "garden variety" psychopath - and/or the Narcissist.


Our world seems to have been invaded by individuals whose approach to life and love is so drastically different from what has been the established norm for a very long time that we are ill- prepared to deal with their tactics of what Robert Canup calls "plausible lie." As he demonstrates, this philosophy of the "plausible lie" has overtaken the legal and administrative domains of our world, turning them into machines in which human beings with real emotions are destroyed.



Human beings have been accustomed to assume that other human beings are - at the very least - trying to "do right" and "be good" and fair and honest. And so, very often, we do not take the time to use due diligence in order to determine if a person who has entered our life is, in fact, a "good person." And when a conflict ensues, we automatically fall into the cultural assumption that in any conflict, one side is partly right one way, and the other is partly right the other, and that we can form opinions about which side is mostly right or wrong. Because of our exposure to the "legal argument" norms, when any dispute arises, we automatically think that the truth will lie somewhere between two extremes. In this case, application of a little mathematical logic to the problem of the legal argument might be helpful.

Let us assume that in a dispute, one side is innocent, honest, and tells the truth. It is obvious that lying does an innocent person no good; what lie can he tell? If he is innocent, the only lie he can tell is to falsely confess "I did it." But lying is nothing but good for the liar. He can declare that "I didn't do it," and accuse another of doing it, all the while the innocent person he has accused is saying "I didn't do it," and is actually telling the truth.

The truth - when twisted by good liars, can always make an innocent person look bad - especially if the innocent person is honest and admits his mistakes.

The basic assumption that the truth lies between the testimony of the two sides always shifts the advantage to the lying side and away from the side telling the truth. Under most circumstances, this shift put together with the fact that the truth is going to also be twisted in such a way as to bring detriment to the innocent person, results in the advantage always resting in the hands of liars - psychopaths. Even the simple act of giving testimony under oath is useless. If a person is a liar, swearing an oath means nothing to that person. However, swearing an oath acts strongly on a serious, truthful witness. Again, the advantage is placed on the side of the liar. [Robert Canup]

This highlights one of the unique things about the psychopath: their seeming inability to conceive of the abstract idea of "the future."



In short, the psychopath - and the narcissist to a lesser extent - is a predator. If we think about the interactions of predators with their prey in the animal kingdom, we can come to some idea of what is behind the "mask of sanity" of the psychopath. Just as an animal predator will adopt all kinds of stealthy functions in order to stalk their prey, cut them out of the herd, get close to them and reduce their resistance, so does the psychopath construct all kinds of elaborate camoflage composed of words and appearances - lies and manipulations - in order to "assimilate" their prey.

This leads us to an important quesion: what does the psychopath REALLY get from their victims? It's easy to see what they are after when they lie and manipulate for money or material goods or power. But in many instances, such as love relationships or faked friendships, it is not so easy to see what the psychopath is after. Without wandering too far afield into spiritual speculations - a problem Cleckley also faced - we can only say that it seems to be that the psychopath ENJOYS making others suffer. Just as normal humans enjoy seeing other people happy, or doing things that make other people smile, the psychopath enjoys the exact opposite.



Conscience seems to depend on the ability to imagine consequences. But most "consequences" relate to pain in some way, and psychopaths really don't understand pain in the emotional sense. They understand frustration of not getting what they want, and to them, that is pain. But the fact seems to be that they act based solely on a sort of Game Theory evaluation of a situation: what will they get out of it, and what will it cost? And these "costs" have nothing to do with being humiliated, causing pain, sabotaging the future, or any of the other possibilities that normal people consider when making a choice. In short, it is almost impossible for normal people to even imagine the inner life of the psychopath.

This leads us to what psychopaths DO have that is truly outstanding: an ability to give their undivided attention to something that interests them intensely.



At the same time, psychopaths are good imposters. They have absolutely no hesitation about forging and brazenly using impressive credentials to adopt professional roles that bring prestige and power. They pick professions in which the requisite skills are easy to fake, the jargon is easy to learn, and the credentials are unlikely to be thoroughly checked. Psychopaths find it extremely easy to pose as financial consultants, ministers, psychological counselors and psychologists. And that's a scary thought.

Psychopaths make their way by conning people into doing things for them; obtaining money for them, prestige, power, or even standing up for them when others try to expose them. But that is their claim to fame. That's what they do. And they do it very well. What's more, the job is very easy because most people are gullible with an unshakable belief in the inherent goodness of man.

Manipulation is the key to the psychopath's conquests. Initially, the psychopath will feign false emotions to create empathy, and many of them study the tricks that can be employed by the empathy technique. Psychopaths are often able to incite pity from people because they seem like "lost souls" as Guggenbuhl-Craig writes. So the pity factor is one reason why victims often fall for these "poor" people.



Those of us who have had experiences with psychopaths know that the language of the psychopath is two-dimensional. They are, as someone once said, as "deep as a thimble." An analogy is given of the psychopath as a color blind person who has learned how to function in the world of color by special strategies. They may tell you that they "stopped at a red light," but what it really means to them is that they knew that the light at the top means "stop," and they stopped. They call it the "red" light like everyone else, but they have no experience of what "red" really is.

A person who is color blind who has developed such coping mechanisms, is virtually undetectable from people who see colors.

Psychopaths use words about emotions the same way people who are color blind use words about colors they cannot perceive. Psychopaths not only learn to use the words more or less appropriately, they learn to pantomime the feeling. But they never HAVE the feeling.


Psychopaths respond to all emotional words as if they were neutral.


And this is why they are so good at using Game Theory. And unless we learn the rules of how they think, they will continue to use it on us with devastating results. Normal people HURT when treated cruelly and insensitively. Psychopaths only feign being hurt because they perceive hurt as not getting what they wanted, and tried to get by manipulation!


Another extremely interesting study had to do with the way psychopaths move their hands when they speak. Hand movement can tell researchers a lot about what are called "thought units." The studies indicate that psychopaths' thoughts and ideas are organized into small mental packages. This is handy for lying, but makes dealing with an overall, coherent, integrated complex of deep thoughts virtually impossible.


Psychopaths are notorious for not answering the questions asked them. They will answer something else, or in such a way that the direct question is never addressed. They also phrase things so that some parts of their narratives are difficult to understand. This is not careless speech, of which everyone is guilty at times, but an ongoing indication of the underlying condition in which the organization of mental activity suggests something is wrong. It's not what they say, but how they say it that gives insight into their true nature.


Psychopaths are not "fragile" individuals, as Robert Hare says after years of research. What they think and do is produced from a "rock solid personality structure that is extremely resistant to outside influences." Many of them are protected for years from the consequences of their behavior by well-meaning family and friends. As long as their behavior remains unchecked or unpunished, they continue to go through life without too much inconvenience.


In other words: they are born that way and you can't fix them.



And this is why as long as you keep giving consent and trying to save system without hanging people from lamp posts nothing will change. You either don't participate and not allow these people the ability to use outside levers to control the system or you make them go bye bye or nothing changes.

MeelionDollerBogus's picture

Not so sure I can agree with all this. It's almost as if a person who isn't "very good" or "very bad" but is thrust into a world that is in fact very bad would need to adapt in much the same ways.

Being clever and/or faking empathy isn't a problem. Doing harm to others as a primary mode of living is a problem. I'm not sure I care or should care what the intention is behind it, only the amount of damage I can expect is attempted and/or achieved, when/where and how much will come my way.

MillionDollarBonus_'s picture

This temporary contraction was priced in long ago. You can't trade the S&P based on today's news when professional investors and analysts are predicting double digit economic growth three or four years into the future.

Winston Churchill's picture


Do you have to wear Depends when you write these motifs ?

You have to be pissing yourself laughing as you do them.

yogibear's picture

"Professional investors and analysts are predicting double digit economic growth three or four years into the future."


The 1%ers are going to have to step up and start blowing more money so there's more trickle down because it ain't working so far. Asset prices keep going higher with less people working. Max debt and asset prices won't work very much longer.

JRobby's picture

And you get flamed for this!


See John39's contribution above about psychopaths.

DonutBoy's picture

That's flipp'n awesome!  You're going to get a slot on CNBC

power steering's picture

Looks like the "insider" that scored on the 12,500 HSH calls sold a couple days and $5 or $6,250,000 too soon! 

lipskid's picture


August is coming and bad news is good for stocks. The worse the news, the higher the chance the QE punch bowl gets refilled.

Shizzmoney's picture

Contraction = more printing = bullish for markets.

This will end swell.

Ignatius's picture

Old saw: Don't fight the FED.

People will make money in stawks and everything will look great till it blows up.

Rainman's picture

Whooda thunk it ? .... Failure has never been moar profitable !!

Racer's picture

Just like all the manipulations and massive fraud

= tiny fines =  cost of doing business = even morerer of the same

Racer's picture

Oh it's because of the weather 'caused' the contraction and the 'eCONomy' will bounce dramatically for the rest of the year

SillySalesmanQuestion's picture

That poor is pretty standard in today's markets...

Devotional's picture

since QE started my grey hairs exploded. true story, really.

astoriajoe's picture

So that leaves all natural hairs if the others have exploded. #winning.

-.-'s picture






fockewulf190's picture

"Since QE started my grey hairs exploded. true story, really."

Since I have been stacking phyzz, my gray hair production has been stopped.  True story.  I´m sure it will start up again once the Great Reset comes though.

Kina's picture

Stocks up because US still in recession...5 years later and no end in sight.


I guess stocks are getting a head start on hyperinflation.

q99x2's picture

Shortly after the GDP contraction in 2011 is when the FED inplemented its software algo into the US markets. What are they going to do this time?

orangegeek's picture

BIG POMO DAY!!!!!!  GDP?? WTF is that???


Big up day coming!!!!