What's Wrong With This Picture?

Tyler Durden's picture

This is your Federal Reserve on drugs...



The Fed realizes investors do not act rationally... blowing up their models entirely...

“In a world of rational expectations, asset prices adjust and that’s it,” Mr. Williams said. ” He added, “but if one allows for limited information, the resulting bull market may cause investors to get ‘carried away’ over time and confuse what is a one-time, perhaps transitory, shift in fundamentals for a new paradigm of rising asset prices.”


Mr. Williams explained that it appears to be the case that investors, on balance, look at where a given market has been heading and assume that pattern will persist. Rapidly rising markets fuel the belief the good times are here to stay, while market blowouts generate such pessimism that investors cease to act as if prices will rise again.


“The recognition that people behave in this way can move us a long way closer to understanding how asset price booms and busts can emerge and how policy actions could influence that process,” he said.

In summary... It's entirely circular...

The Fed must blow bubbles because otherwise irrational investors get "carried away" and inevitably crash the markets...


Ultimately it seems clearer and clearer that, as Williams himself opines "financial stability is just as important as pursuing price stability and growth."

Ultimately it is clear that The Fed wants supreme control to protect us all from irrational investors..."ourselves"

Source: @Not_Jim_Cramer

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So Close's picture

How far up the parabola can we/dare we climb?

The man with pointy horns's picture

Up to, but not exceeding the point, where we use US dollars for toilet paper.

Global hyperinflation bitchez!

MisterMousePotato's picture

Anyone know if the pattern prevailing up to the middle of 2011 also prevailed prior to 1999 (the beginning of this chart)?

GetZeeGold's picture




This is your Federal Reserve on drugs...


I would just like to publicly state that I am in no way affiliated with the Fed.


It's not my fault! I'm an American..but those guys have nothing to do with the US government. Soooooooo....I'm not the guy to talk to if you're having any problems with them.

knukles's picture

Who is Mr Williams?
I know, I know who you're all assuming him to be, but..... hummm?

BeetleBailey's picture

It's Andy Williams....propped up and back from the dead to sing;


followed by the Mandrell Sisters with that old country standard;

"Why Did You Leave The One You Left For Me, When You Left The One You Left For Her?"

Bendromeda Strain's picture

Thanks Knuks, I was thinking the same thing as I reread the post. POOR FORM, TYLERS. Passing this off on Not_Jim Cramer doesn't wash either. You quote w/o a link and you cite w/o identification? Since when? You are better than that. Tighten up your loose shit, boys.

rubiconsolutions's picture

Based on this chart I'll be buying lots of 10 year T's because they are so undervalued.


infinity8's picture

Errr.. . . Jaws of Death?

Reaper's picture

Not wanting the Fed closed is irrational.

q99x2's picture

Move in with the Navy Seals and put cuffs on those pricks.

Milestones's picture

Either this site is fucked up or there is some very bad interference for posting comments or my computer is crashing again.      Mustang

FredFlintstone's picture

Block the ads w/adblocker. Fixed it for me.

blindman's picture

Otis Redding - You Don't Miss Your Water
Taj Mahal - You Don't Miss Your Water
"you don't miss your water till your well.." is on fire.

kchrisc's picture

With her legs spread like that, only one thing can be about to happen.

Pyrrhus's picture

What is wrong with that picture? Bullish! Looks like a perfect opportunity to make money.

TheRideNeverEnds's picture

let me set the stage for a future posting of that chart; rates are negative, S&P is closing in on 5000, connect the dots. 

disabledvet's picture

Ummmm.  "gasoline soars to 8 bucks a gallon"? And...

" still bullish"?

BeetleBailey's picture

very well may be.....the insanity of things....might be spot on.....which is fuckin sad

SeattleBruce's picture

Real unemployment rate = 15 - 20+%
Food stamp usage approaching 75 million
National debt = $30 Tr
Interest load on debt approaching 25+% of annual expenditures (no budget will have passed the Senate for more than a decade)

All will be well in Camelot!

Postal's picture

It is most assuredly not my Federal Reserve: I did not vote to create it, I did not invest within it, I own no interest in it. It's like the Great Ponzi: I'm just expected to participate like a good little sheeple boy.

Freewheelin Franklin's picture

You are not expected to participate in it, you do participate in it. Everybody does whether they want to or not. 


Hume's Guillotine - solved! 

Oldwood's picture

A divergence is a good thing, no? It means we can finally get rich without even trying? Recent history would indicate that this could go on forever. Maybe we could get some of those "scientists" who came up with the hockey stick graph for global warming to do some economics work.

Peter Pan's picture

Back in 1999 when the S&P was 1200 the rate was 5.0% so theoretcially now that the rate is at 2,5% we could see the market approach 2400.

I know that this is an insane proposition but the insane propositions seem to be having the better run over the last 5-6 years.

BeetleBailey's picture

Entries & Exits....and the end....all the stawk market is...and ever will be....even with these crazy MOTHERFUCKERS at the helm....

Dent has the DOW going to 3,300....in the great re-set to come....not sure if that number will ever be breached again.....I got my series 7 back when the DOW was 3,100....


in 1993.....

luna_man's picture



Well, the CRIMINALS, couldn't do what was best when it mattered, so now it's time to reap what you sew...RIGHT?


did they ask me or you...going down together

razorthin's picture

The length of that insane slope reminds you just how crazy those fed fuckers are and just how stupid investors are.  Yeh, this will end well.  Well below 500 on the S&P.

disabledvet's picture

Investors? If this is a recovery I'm Mother Theresa.

mcgoverntm's picture

Who is "Mr. Williams?"  From the context, I expect that he's a regional Fed president.  It's poor writing and editing that he is not identified.

BeetleBailey's picture

Might as well be fucking Pharell Williams....or even that guy Serena Williams....

Could be Bruce Williams...

I think Sherwin Williams went and painted the town drunk....couldn't be him....

Dre4dwolf's picture

To prevent irrational investors from becoming rational, we must use an irrational level of money printing.

Makes total sense.








To a heroin addict.

Edit: Other thoughts. . . 

I bet the following charts would sync up pretty well:

from 2000 to 2014

Accidental Drug Deaths 

Bank Failures

Monetary Expansion

Credit Card Applications

Drug Prescriptions Written

Pharmacutical Stocks

Financial Suicides

Luxury Car Purchases

Obesity (especially childhood)




Its a clear problem with the design of the human brain.

Human Beings lack the ability to control themselves, so much so, that when presented with "too much of a good thing" there is a high statistical probability that they will over-consume to the point of self-destruction.



You have great depressions, when the future doesn't look better than the present, so people make a conscious decision to stop working towards that future, and instead opt to consume the wealth of the present, which in-tern creates a self-fulfilling prophecy as the species rushes to consume the temporary over-abundance, which then inevitably creates a shortage and a depression.

Our printing money, is simply a fruitless mad attempt to pull blood from a stone as a society because the brain can not deal with the reality that today will turn into tomorrow no matter how much we consume.


BeetleBailey's picture


Food stamp "growth"

Small Business Failures

The Fed Balance Sheet

Gold (especially highlighted 2011 to now....the "barbarous relic" phase....)

Mass murders (has to be 3 or more) by gun/rifle

Federal Disability Payments



Housing starts - 500k + only and up....

BeetleBailey's picture

More illuminating is the Fed's balance sheet "growth" since 2000....

But this fucked UP chart will do just fine.....


to the sheep?

It's still "a bunch of squiggly lines/I don't understand it/doesn't effect me/BUYBUYBUY!"


buzzsaw99's picture

it was barzini all along

1stepcloser's picture

so my 401K is my new ATM?  

Joe A's picture

What goes up must come down and the higher the fly the harder they fall.

JeffB's picture

I don't disagree with the hypothesis that our Federal Reserve acts like it's on mind altering drugs, nor even that stocks are significantly overvalued, but showing a chart of a break in the correlation between the yield on 10 yr treasuries & the S&P 500 since 2000 doesn't seem like slam dunk proof that investors are acting irrationally in buying S&P stocks.

It seems to me, in fact, that a drop in interest rates could be the cause of a jump in stock prices. When alternative investments, such as Treasuries have lower yields it tends to make stocks more attractive. The lower interest rates also presumably would work their way over to the commercial paper market lowering interest expense for businesses, which should help their bottom line, and theoretically eventually work their way over to dividends, making them more attractive to investors in that way as well.

In other words, even though it is foolish in the extreme for our government to artificially suppress interest rates, I don't think it's so obvious that investors' reactions to that are to buy less fixed income investments and buy more stocks are necessarily 'irrational'.


SheepDog-One's picture

We're all financial terrorists obviously, and must be protected from ourselves!
Fuck U Bernyellin!