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It’s Always Been About Getting Out – Not In
Submitted by Mark St. Cyr,
An issue that has been debated more times across the financial media than the main stream media’s fixation on some celebrities bottom has been about “missing out” or “getting in” since the so-called “generational bottom” of 2009.
What has been lost on so many of the nascent “just buy the dips” crowd is they have been systematically rewarded as to forgo any objective analysis on why this market keeps rising; and like Pavlov’s dogs they’ve been rewarded every-time they’ve answered the opening bell.
Getting in to buy every dip fueled with free and easy money to spend via the Federal Reserve has taken little skill or expertise. However, who is going to be there to buy what you’re holding; when you want out? Especially in any unexpected downdraft.
That is the only fundamental issue that still seems to have true relevancy in this 5 year bizarro world we now define as “the market.”
Call them Shorts, Bears, whatever, but the one moniker that doesn’t fit properly yet is applied universally so is: wrong.
Bears have been wrong: but they’ve been wrong for all the right reasons.
Yes, they have been wrong as in calling the direction of this market. But is this truly a “market” any longer since it’s now singularly based on interventionist policies never before witnessed in its history?
Yet this latest moniker has been allowed to be affixed with such permanency it would make a bottle of Superglue™ blush. Personally I wear it as a badge of honor.
To show just how far we have come in looking at true fundamental, objective analysis, consider the following:
If Billy Paintmiester goes to the local store and purchases a paint by number set, then puts it up for sale where it’s purchased for $1,000,000.00. Then does it again, and again, and again. What would one think?
Of course Billy’s paintings would now be the rage throughout the media as “Genius” or “Picasso-esque” and more. You would have a cacophony of art critics and more heralding his brilliance on the use of his brush along with critiquing every other minute detail as to keep the story alive.
Yet, as a few dig deeper it’s revealed “the bids are only coming from one buyer” however, they are refuted and branded as critics jealous of having missed out on this nouveau craze of painting by the numbers.
The refuted critics are continuously sneered, jeered, and finger wagged as every new painting sold is held up as “proof” they didn’t know what they are talking about for: “it’s different this time.”
Then suddenly everyone realizes that “one buyer” can’t be explained away. The one bidder is found out to be Billy’s rich uncle and without his influence: there is no “paint by the numbers market.”
This is where I believe we are in respects to today’s market highs. At some point true fundamentals of market forces will come back into play. And the fundamental that may be missing currently is the most important as well as overlooked by today’s just buy the dip crowd: Who will they sell to when they need to get out?
Since former chairman Ben Bernanke’s famous (some will say infamous) Jackson Hole speech where he announced in no uncertain terms the Federal Reserve will supply the funding (via QE) as long as the economy’s picture is made up by certain numbers contained within lines the “Fed” deems correct. The market picture has been hailed as a work of art worthy to be placed in museums where scholarly work and interpretations will be bestowed for all times.
Yes these numbers or colors are within defined lines as to make something which resembles a picture of economic recovery, but what you don’t have is something resembling a picture worth looking at: Let alone one worth buying.
There’s no true true economic recovery picture to be bought. The only artistry on display here has been of the BS variety. And most serious business people are not, and have not bought it for a very long time.
People everywhere continually point at “the numbers” as concrete evidence to hang their horns on. Although if I’m not mistaken Bernie Madoff, Enron, and few others had quite spectacular numbers also. They too created great pictures staying within the lines showing a picture only Wall Street could love. Till they didn’t.
However, what’s again the real issue with the markets at these heights is that little unsettling, as well as under reported fact that Shorts (as well as even the contrarian play trader) has been decimated, discouraged, and for many even bankrupted when trying to play the fundamental elements of supply and demand contained within free markets. For the Fed. has proven it will use its own bazooka to protect this so-called art gallery from being exposed as the paint by numbers fraud that it is.
We are now at heights where even the so-called “Uber Bulls” are beginning to get a little nervous in the hoof. For just who is going to buy when the first major dip goes stampeding past?
There are no shorts to speak of at these levels that would need to cover and buy as to close a position. The Fed. has all but eliminated them giving a possible free-falling market even more wind at its back. Market volume analysis alone should bring this fact to light for anyone who’s serious about looking into why volume is so atrocious. You have only one side now playing.
In 2010 when the market first showed signs of honest weakness you had prudent bulls that rode the 666 train from the market lows that could take profits as the euphoric killing bears would inject rational thinking back into the markets by tamping down unicorn and rainbow exuberance. The Federal Reserve has completely thrown that market dynamic out the window – by opening their own.
The dirty little secret that everyone (and I mean everyone) wants to act as if it no longer exists is: These prices are only representative of anything worth value if they can be sold.
And as of right now, just how much of a discount will be needed if suddenly someone shouts “Fire Sale!” in this crowded theater?
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Off topic....but not by much speaking of getting out. Get out from around Fukushima
http://www.telegraph.co.uk/news/worldnews/asia/japan/10958496/Typhoon-Ne...
And watch it round the bend from the far left of this satellite shot down over the North Pacific and eventually turning into an extra-tropical low heading to the Western U.S.
http://www.weather.com/maps/maptype/satelliteworld/pacificoceansatellite...
Who is going to buy? Well, Kev' has this big "Portugese Panic" dip to within 3 ES points of green right now.
Amazing...I think this fucker is going to green. Long live the mooks!
That guy from this am has a born to lose tattoo on his ass. I am sure of it.
I am in awe of your mookness.
Crazy fucking market...which I am starting to understand....which means I am going batshit crazy.
Only people with non-accredited Ivy League Univeristy pee H Dee degrees need to worry about (pfft) "getting out". What ever man... this is the Esss And Pea - the most LIQUID market on the faced of this planet! ~ Professor from Princecton University
I suppose that's better than "Born Too Loose".
Need. Dow. 17,000. Again.
NFLX, AAPL already green again.
Let's be honest. Just like last time, the government will buy it.
There can be no panic until bonds cave.
*Head Shake* We are probably far from that point. Just take a look at a day like today. Even if there are no "real" buyers the central banks of the world will step in before there is any real trouble. They decided in 2008 - never again. Until they lose control of the currencies and there is hyper inflation to the point people are rioting in the streets, buyers can be comforted that we are only going in one direction. I think it's all a farce too that will end in calamity, but it is what it is.
There are pockets of dissatisfaction, but the common person is just trying to make it dayto day. Even when there is a political movement like Occupy Wall Street or the Tea Party it is effectively smeared by the MSM in short order. Until people can't feed their families and the benefits run out on we go
This is what loss of confidence in paper looks like when it starts.
Nailed it. The CB's have become the market, so the market will never go down other than for appearances sake. When you have digital currency that can be created on a computer, with no actual accountability, there is nothing you can't buy. It's the CB's dream come true, because now they don't even have to buy the paper and ink. Just keep the 'illusion' going (easier and easier every day) and who knows, maybe it never has to end. We are in uncharted waters, we keep talking as if the old rules are still valid, they aren't. I thought there was no way they could ever taper, but they have, just by shuffling from one the purchase vehicle they told us about, to the purchase vehicle they haven't told us about.
Yes, I could sell my overvalued stocks, exchanging them for overvalued fiat. But companies are buying back stock, while the Fed prints a billion new dollars every day.
For some time now...
I just like making $$..
Being 'right' isn't as important...
One shouldn't try to argue with 29 Trillion Dollars (of CBs joint effort..)
No sense 'Tilting at Windmills..'
And, of course, skim a little off the top, for some 'Stacking'..
When you hear fire, it will be too late.
But to your point, they are acting as one global currency now anyway.
I have stopped calling it a market for a long time. Buyers are just riding the FED's coat-tails with any equity purchase....
Too true, TPTB will keep the exchanges inflated at all costs because they know there will be a rush for the exits by the non-institutional investors of the middle and upper middle class at the first signs of a repeat of 2001 and 2008. The tickers are central to the propaganda that all is well in the economy. The banksters are more than happy to keep the party going with the FED's Monopoly money, it's their cash cow.
Joe Sixpack knows that he's being pissed on but is too busy trying to make ends meet to do anything about it.
I used to be a sophisticated investor until I was humbled with a pie to the face.
Joe sixpack...he is one smart guy.
It's in TPTBs best interest to keep the party going as long as possible, I think the only reasonable investing strategy is to be long with a finger on the sell button and one foot out the door. There is some more skinning of bears to be done, the only safe "short" is buying PMs as insurance against the inevitable.
I took out the insurance policy. I lost my fingers in a shorting accident.
I took out a short policy on the footsie six months ago, still have it. My worst investment in
my portfolio. Too much funny money to be too clever.
If you have any doubt, then there is no doubt...
God I dream of the day.......... to awake me from this nightmare.
I short this market everyday...and then I wake up.
I am not long either...more of a peeper.
the fed will buy them eventually: http://www.zerohedge.com/news/2014-07-09/bank-japan-prepares-buy-nikkei-...
nothin from nothin leaves nothin. you gotta have somethin, if you wanna be with me.
metals looking great
going to bbq this weekend.
happy thoughts
Today, it looks like the PPT is alive and well ... Nasdaq is green ... my book is red
Kev is on the job.
All U.S. equities scream higher ignoring any and all warnings even from the Fed...fuckin full retard.
It's hard waking up to the fact that this is all a show. Not some of it. All of it. There isn't a single legitimate business purpose listed and if they are listed it's because whoever 'runs' the company is pinned to the cork board like a bug.
You see in 1666 a law was introduced, it's rarely discussed but it is the foundation which all laws were created in the 'developed world'. It's the reason we have 'life' insurance and 'living' wills. I'll avoid my usual wall of text but if you do the foot work you'll understand very quickly the very foundation of the problem.
Google Search: Cestui que Vie Act of 1666
People thought it made sense then because the world was 'HUGE', populations were still regulated by natural processes thereby there was a creation destruction cycle in balance with how things operated. Plus the world was run by Churches, Kings and Queens.
It's the foundation of sand the entire world is built on and the primary reason it will all sink into the swamp at the end of the day.
Below – this full page paid advertisement in today’s SF Chronicle - is an example of a citizen stepping forward, using his own money and energy, to take on the lies of government.
And, with this revelation, he is accusing the media of assisting government in its lies, either intentionally or through incompetence. Here is the ad, page A7, July 10, 2014 (emphasis mine):
LIAR, LIAR, PANTS ON FIRE!
When I was in elementary school, Liar, Liar, is what we called kids who told big whoppers. (That saying dates from an 1810 poem by William Blake, the first line of which is “Dissembler, Deceiver, your trousers are alight…”)
Recently Governor Brown and California Legislators (aka Politicians) have been telling a very BIG WHOPPER that their 2014-15 state budget was “Balanced”. I call that a BIG LIE and here’s why.
Using deceptive “cash in-cash out” accounting, the so-called “Balanced Budget” simply leaves out SIX BILLION DOLLARS of expense to fund the state’s 2014-15 obligations to the Retired State Employees Health Benefits fund (3 BILLION dollars) and the California Teachers Fund (3 BILLION dollars)?! That’s right – because the “balanced Budget” does not fund that six BILLION dollars in cash, it’s as if that very real obligation doesn’t occur in the 2014-15 budget year?!
Virtually all California business enterprises of any size are required to file California tax returns on the “accrual basis”. (Accrual basis accounting means ALL income and ALL expense is recorded during the year they occur, regardless of what cash is received or disbursed.) Any business enterprise that filed a California tax return based on “cash in—cash out” accounting would be promptly charged with tax fraud and probably result in jail time for who signed it.!
However, California politicians don’t appky the same accounting rules to themselves that they impose on taxpayer businesses. Why not? Because cash in-cash out” accounting allows them to annually OVERSPEND REVENUES while hiding their Ponzi schemes for “kicking the can down the road”. That’s how the Governor and Legislators conspire to hide the truth of California’s total expenses and then tell Whoppers about how they “Balanced the Budget” for 2014-15.
You decide whether the Governor/Legislators should be labeled “Dissemblers, Deceivers, or Liars”. What is indisputable is their hiding the true costs of their profligate spending behind cash-in—cash-out flim-flam, and then claiming California’s 2014-15 budget is “Balanced”!
I challenge the Governor/Legislative leaders to deny any of the factual substance set forth herein. I also challenge the media to explain why they haven’t discovered/exposed the Big Whopper of the so-called “Balanced Budget”. Does that media silence result from simply not understanding basic accounting? Or does the silence arise from partisan sympathy for politicians in power hiding the ball?
The next edition of “Liar, Liar, Pants on Fire” will expose other examples of California politicians deceiving voters about the true costs of state government.
Dino Cortopassi
DEAN (“DINO”) CORTOPASSI:
“I am a 77-year-old lifelong California resident retired from a 55-year career, first in farming and then in food processing.
“All costs of this and subsequent communications are paid from my wife’s and my tax-paid personal savings. We are motivated to do so because we believe saddling our grandkids’ generation with the sins of unsustainable state overspending is morally wrong.”
There is still moral courage in the world ... we are not lost yet
Dean Cortopassi people like him are the reason we are running up costs so that his wife might have some assets to draw on to pay tax. Tax is just a way of the power rubing your face in the mud (at least you are told its mud).
Just another guy with economic morality OCD. The adults running the show understand things, the children (and those with OCD) don't.
I'm not sure. California has plenty of rich people, so I suppose that it's realistic to expect that the wealthy will foot this bill, when it eventually comes due. Illinois, another blue one-party state, is still stumbling along, and they don't have any resources to compare to Silicon Valley, Hollywood, etc.
Bad news Dino. Over 70% of the State is on the payroll / gravytrain (without a paddle!). At 77, it's time to acknowledge that California is the old gray mare.
The point is Dino didn’t recognize that all is lost or he wouldn’t be spending his time and his money trying to do something about it. And for my part, I think he’s on the right track. The Chronicle is a very large circulation newspaper and my guess is that this ad, which was well placed in the front section, received tremendous readership.
And it probably did more to show how duplicitous California’s state government is than any news story could have.
The point is California could still be electing conservative Californians that at least provided an alternative counterbalance to what has become a complete Democrat rubber-stamp state if a Federal judge in 1994 had not singlehandedly invalidated voter initiatives to rein in immigration
In 1994, California voters voted 59 to 41 percent to approve Proposition 187, the “Save Our State” Initiatives that said California residents were not responsible for the schooling and health care of illegal aliens. It also stepped up labor law and border enforcement.
Judge Mariana Pfaelzer blocked its implementation on the basis of “a balance of hardship” and its “non-constitutionality.”
Now there no longer is a “59 percent” majority vote to pass a “Save Our State” initiative. Already the white population of California has fallen to 38.8% percent with the Mexican population now surpassing it at 39 percent.
Those who don't want this to happen in their states need to stand, as Dino did.
According to Mark Hugo Lopez of Pew Center Reseach:
“According to California Governor Jerry Brown’s new state budget, Latinos are projected to become the largest single racial/ethnic group in the state by March of this year, making up 39% of the state’s population…
“California’s demographers also project that in mid-2014, the state’s residents will be 38.8% white non-Hispanic, 13% Asian American or Pacific Islander, 5.8% black non-Hispanic, and less than 1% Native American.”
"In comparison, “In 1990, white non-Hispanics made up more than half (57.4%) of the state’s then 29.7 million residents, while 25.4% of Californians were Latino, 9.2% were Asian American or Pacific Islander, 7.1% were black non-Hispanic and about 1% were Native American.”
Latinos are the Golden State’s single largest racial or ethnic group; in New Mexico, Hispanics make up 47% of the state’s population. According to Pew, Texas may be next. Already in Texas, ”in 2012, non-Hispanic whites made up 38.2% of the state’s population; by contrast, in 2000, whites made up 52.4% of the Lone Star state population.
http://www.pewresearch.org/fact-tank/2014/01/24/in-2014-latinos-will-surpass-whites-as-largest-racialethnic-group-in-california/
'Its about getting out not in.' THANK YOU.
That is so difficult to tell people, you have no IDEA.
Maybe you do. But still, people just dont understand that just because things are priced, doesn't mean you will get that price when you sell.
Go ahead, trade your shares for bonds, or fiat. Have you "gotten out", or have you jumped out of the frying pan, to land in the fire?
I have a good amount of cash on the sidelines. I will be looking to get it in as it dips. Of course my name is not Mitt or Pierpont, so I can't arrest the fall singlehandedly.
You're good at catching knives?
As an expert at knive catching ive been out of the market for years. (for IRS reasons) but if you want to catch knives you need to control the fan.
Buy in normal traded lots; with the robot building a position and then sell it on news or other down volume day in mass forceing the price lower then it normally would go. You will know by watching the tape.
Then start buying it back.
Remember your tradeing with robots, ONLY robots dont ever think you are trading with a human; or you will question yourself, robots never question the tape. But all this is commen trader knowledge.
Don't. Buy a dive bar or a fishing boat or anything a chinaman would want to collect rent on.
You dont have to pay 200X liquid price on a pos of something that has only a name.
Me too, i'm going to buy at the bottom and then ride the next boom up and cash out at the top as a (near) bazzilionaire, get me a yacht, some high prices hookers (who won't murder me), and live the life of the smart-n-savvy most-fit people. That's the plan anyway.
You can me can dock our yatchs together some time, and exchange stories (and hookers).
All that nonsense about yatchs are in your head. If you dont want to live in a tent you dont want to live on a yatch.
Its a tent that moves, and under 15-30ft waves you would rather have the boy scout pup tent on nice wet mud.
It's not called panicking if you're first.
The article illustrates why it's important to have a paid off house before the realization that the U.S. collapsed back at the 2000 election.
fuck this stupid shit about equities.
it's ALWAYS ABOUT GETTING PEOPLE INTO BONDS. GETTING THE PUBLIC AND EVERYONE ELSE INTO NEGATIVE REAL INTEREST RATE DEBT.
that's the real history of debt. forcefeeding the public and international markets bonds.
Bonds are the light. Go to the light. If you are not trading bonds you are at risk for a heart attack, bonds are the beat of money.
Without bonds everything becomes, TO RISKY FOR MONEY.
Thats why bonds can go low no risk in getting my dollars. Otherwise i would have to work for dollars, parish the thought.
Calvera: "Did you think these barricades would keep me out?"
Chris: "They were built to keep you in."
.........The Magnificent Seven
Mark St. Clr wrote in his article:
"However, who is going to be there to buy what you’re holding; when you want out? Especially in any unexpected downdraft."
There are many tough questions to answer in this world, but that question you wrote is one of the easiest to answer---real simple---THE FEDERAL RESERVE will NEVER let the market go down again, and if by some weird chance a "Black Swan" happens and the market drops a little, the Federal Reserve will gladly buy stocks , futures, and derivatives of these with printed out of thin air money they conjure up on their computer screens for the benefit of their criminal friends.
Wow, that was easy---not as easy as printing money but not far behind!
As Janet Yellen said, in a nutshell, It’s not the Fed’s job to pop bubbles” (Tyler).
It’s just to blow bubbles out of thin air, I guess, never knowing when to stop and when the bubbles “bust” from excessive credit expansion, do a few bailouts and bail-ins to prop up falling corporate prices, unsound business situations, banks and business firms in trouble, and the welfare state, all the while targeting taxpayers, savers and market-oriented investors for wealth transfers to the oligarchs.
The excessive market intervention of this Stanley Fischer Fed team of Greenspane/Bernanke/Yellen has made economic collapse inevitable. Already it has caused mass unemployment in vital industries and a generalized lower standard of living while its billionaire-connected capitalize on our overheated Big Government, Wall Street and Welfare State.
Ron Paul nailed it when he said, “Rather than preventing financial crises, the Fed has constantly caused new ones…
“Now we are reaping the noxious effects of a century of loose monetary policy, as our economy remains mired in mediocrity and utterly dependent on a stream of easy money from the central bank. A century ago, politicians failed to understand that the financial panics of the 19th century were caused by collusion between government and the banking sector. The government’s growing monopoly on money creation, high barriers to entry into banking to protect politically favored incumbents, and favored treatment for government debt combined to create a rickety, panic-prone banking system. Had legislators known then what we know now, we could hope that they never would have established the Federal Reserve System.
“Today, however, we do know better. We know that the Federal Reserve continues to strengthen the collusion between banks and politicians. We know that the Fed’s inflationary monetary policy continues to reap profits for Wall Street while impoverishing Main Street. And we know that the current monetary regime is teetering on a precipice. One hundred years is long enough. End the Fed.”
http://www.zerohedge.com/news/2013-12-20/ron-paul-blasts-after-100-years-failure-its-time-end-fed
I doubt they're very good at actual printing anymore anyway. And when they forget the all-seeing eyeball at the top of the pyramid, the re-do will cost almost A HALF A TRILLION DOLLARS more(digital chickenfeed).
http://www.nytimes.com/2014/07/08/upshot/welcome-to-the-everything-boom-...
"Welcome to the Everything Boom — and, quite possibly, the Everything Bubble. Around the world, nearly every asset class is expensive by historical standards. Stocks and bonds; emerging markets and advanced economies; urban office towers and Iowa farmland; you name it, and it is trading at prices that are high by historical standards relative to fundamentals. The inverse of that is relatively low returns for investors."
It's called inflation folks. I'm not sure why people can't describe financial depressions with the word 'depression'. And they can't admit to inflation.
Fucking losers. What, you thought printing trillions in fiat wouldn't cause inflation?
We prefer the term "Juicier".
The Great Squid has a sucker for every sucker's face. I'm bullish on squid repellant.
Gerry Brown. Pat Brown. The Cuomos. The Bushes. The Dulles', the Clintons, the Daleys, the Roosevelts, the Udalls, the Kennedys, Gerry Brown ......something stinks (and it ain't in Denmark).
oops! That was meant for Gerry Brown's (gerrymandered) "balanced California budget" article. You can sue me but I'm a Soetoro so you may just want to cry.
OMFG! http://dailycaller.com/2014/07/05/border-meltdown-obama-delivering-29000...
Ok, does this not look like pooky from that one movie in the 80s? Help me out... NEW JACK CITY.
Who the fuck is this?
BTW I love watching "prezidents" hair turn gray over the years. Must be from meeting their masters' demands, 'cause they sure aren't meeting ours.
HAHAHA. Fucking wimp.
The economic recovery that the media and talking heads have been bantering around does not exist and is just a myth. A manipulated stock market distorted by recent economic policy hides and mask the real truth, in many ways it is ground zero in the war to convince us all is well.
The American people and Main Street will tell you they are far from convinced that it is smooth sailing ahead. Huge weakness in the economy has been shown by numbers that barely get by even after record amounts of stimulus. Fact is if QE or the massive government deficit spending that props up our economy is removed it will fold like a cheap umbrella.
They just keep printing more money. Recent changes in how the GDP is figured , which boosted growth thus reducing the debt to growth ratio, and attempts to spin poor numbers regarding employment have been met with skepticism. More on this subject in the article below.
http://brucewilds.blogspot.com/2013/10/myth-of-economic-recovery.html