Druckenmiller: "Markets Are Spoiled, And Policy Makers Are Terrified"

Tyler Durden's picture

Stanley Druckenmiller is no stranger to the pages of Zero Hedge as he appears immune to the herd-like status-quo-hugging nature of 99% of the financial markets lackeys that strut on TV. His comments today - lengthy, aggressive, and very worried about what the Fed has done - can be summed up in the following chart and his ominous conclusion, "when the Fed ends QE, there'll be a bear market."



Source: SocGen

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Sudden Debt's picture

When the fed stops... They'll own it all...

buzzsaw99's picture

+1. either they'll own it all or this is a bigger screw job than even i think.

ArkansasAngie's picture

Thank God we have Belgium

Sudden Debt's picture

Yes you do...

I'm ready to receive your compliments and words of grace now...

Those with the gifts may start first.

frankTHE COIN's picture

Please Accept my gift. It's the Gift that keeps on giving.

frankTHE COIN's picture

No Ointment necessary. Just having having some fun.

SheepDog-One's picture

Belgium can go fuck itself, and take that dumb soccer game along with you.

booboo's picture

I'm mailing you several pre cooked squab and some blood sausage, apple sauce is extra.

Clowns on Acid's picture

The US had to let Belgium win the World Cup game or else they would stop "buying" US bonds.

Sudden Debt's picture

No... i don't think so... You just sucked at the game...

gcjohns1971's picture

Well at least Belgium will have their football crown to console them when the dollar collapses and they are left destitute.

NoDebt's picture

We figured we'd leave the rest of the world at least one sport that the US doesn't dominate.

<Putting on my flame-retardant underwear>

LawsofPhysics's picture

QE has not stopped folks.  Notice that we didn't here a lot of taper talk today....

Vampyroteuthis infernalis's picture

One day the Fed's pumping will do no good. They will be the last investor in town with any money. Smart money will dump their stock into the Fed and everyone else will get the short end of the stick.

SheepDog-One's picture

I always called bullshit on the taper, in reality QE is now probably $120 billion a month.

SheepDog-One's picture

Sorry, I don't trust the Feds papers or the words they puke out of their lying mouths.

Headbanger's picture

Here's a more user friendly version of that chart:



But do you want to see something really scary?



But even MOAR scary is Toatal MArket Cap to GDP Ratio!!



LawsofPhysics's picture

That fact that we are seeing the kind of food and energy inflation that we are with the lowest velocity on record should scare the fuck out of people.

LawsofPhysics's picture

"slowing" is not "stopping", much less decreasing that 4+ trillion dollar balance sheet.

FrankieGoesToHollywood's picture

Slowing is stopping in a world where exponetial acceleration is required to maintain status quo.

LetsGetPhysical's picture

Who says it's gonna stop?

buzzsaw99's picture

thanks for the chart. there have been so many qe like shenanigans that they all run together anymore causing me to make nomenclature errors.

starman's picture

"When the Fed ends QE" = Never!

IMF has 29 Trillion under this market. Its not your grandfathers stock market anymore. It's the Federal Reserve Monopoly Market! There! 

Bernoulli's picture

But the chart shows clearly, that everything is under control! The FED balance sheet size will be reduced gradually and the equity indices will normalize accordingly.


Al Huxley's picture

I trust them - after all, they are supergeniuses.  I'm just glad they're on the general public's side, otherwise think how bad things might be.  If it means a few bankers have to become trillionaires, I guess that's the price we all pay to save the system.  God bless America and the banking industry (or maybe that's a redundancy now).

JustObserving's picture
"Markets Are Spoiled, And Policy Makers Are Terrified"

You should have complained decades ago when they started faking all the economic statistics to cover up a failing economy and mounting debts. Not to mention, the $6 trillion we blew in the wars in Iraq and Afghanistan.

Corrected for inflation, US GDP may only be $6 to $8 trillion with a debt to GDP of over 300%.  Not to mention, unfunded liabilities of $130 trillion and rising at $7 trillion a year.

But then, if the truth were told, who would touch US treasuries with a 50 foot pole?

Keep telling me those sweet, little lies:



RaceToTheBottom's picture

I liked it better when the Monopoly game was the only fictional financial game out there

agstacks's picture

at least some went to jail playing monopoly..

Ness.'s picture

You're wasting your breath Stan.  They're #winning, and they have been for years.

orangegeek's picture

fed-head reports to Barry - he's the one who appoints


Barry wanted to get re-elected to further his communist manifesto


and so here we are


my guess is that there is massive infighting within the Fed - the 12 regionals are not liking this

MykeTheVet's picture

I love this fu**ing website. I've never learned so much on finance in my life. 


Quick question to all reading: does ZeroHedge endorse methods in Austrian economics?


Great article, Tyler. Sometimes, your material goes way over my head, but that's what challenges me to pry more. 

And your articles are heavily discussed on a website called "The Daily Paul." Just an FYI ;)

TheRedScourge's picture

To answer your question, for the most part yes it does.

Blues Traveler's picture

Read de Tocqueville and Nials Ferguson

Callz d Ballz's picture

Looks sustainable. 

Keltner Channel Surf's picture

Well . . . at this stage it's more correct to say the shorts are the only ones that truly seem terrified.  A puff of air from algos would easily send this rocketing to a triple digit day, and if so it'd be 80% covering, 20% new buys.  Small caps are back to the hourly 20 MA, standard resting place.  

Even so, my trading sense tells me we get a late afternoon leg down, but what do I know ...

SheepDog-One's picture

I have zero belief that there's an army of ultra rich full retard shorts out there getting cornholed daily to drive stocks to new highs every close, utter nonsense, the big shorter is the Fed itself.

Keltner Channel Surf's picture

a) no one said "daily", some days definitely have a short-driven up component, and had today rocketed, my sense is it would, at least today, have been more due to shorts with respect to the Dow & S&P;  b) the "ultra rich" shorts aren't the ones covering, thus the low-volume melt-ups on some, but not all,  days c) I'm really a Russell guy, and the late afternoon "leg down" I was forecasting is indeed happening in that index, starting roughly the time of my post.  Whether it ends now or continues for the last 15 min is up to JPY & RVX.  I'd say the odds are 70% we break toward the lows, but turnaround before making it, say at 3:53

Fairly new here and have long found you to be one of the most readable posters here.  Cheers.

hedgiex's picture

Yes. the unleveraged shorts aren't the ones covering and are not terrified...just rolling over options. They are in "risk-in" mode leashing their money managers to preserve wealth and to trade not invest.

astoriajoe's picture

In the posted chart, maybe it should read "taper" instead of taper.

Itchy and Scratchy's picture

Global soverign governments (read: tax payers) & central banks own US$29T in equities!

Yancey Ward's picture

There are anecdotal reports that Ma and Pa are getting into the stock market again- stories popped up starting late last week.  If true, that is the sign post of the next bear market.


As for QE ending, I don't think it will be ended very long, even if does end, but I would expect another central bank to grab the baton- ECB maybe.

Quinvarius's picture

The DOW could drop all the way to 14400 and still be in an uptrend.  That is how over stretched it is right now.  The same goes for the NASDAQ to 3500.

gcjohns1971's picture

The first leg down will just be people selling to avoid a fallling knife.

THEN people will start to look at long-forgotten fundamentals and realize there's no 'THERE' there, and that they can't determine how much business in these businesses exists in the absence of Fed pumping.

Since we never really had an expansion phase, and no one really knows how much market is hiding under the Fed intervention the THIRD LEG DOWN will be old-fashioned FEAR.

Where will it end?  No telling.  Under those conditions people could decide to abandon the dollar for real assets - hyperinflation - call it what you will.

hedgiex's picture

Yes. On the same page with you. Millions will be made if you get the Third Leg right whether it is hyperinflation, stagflation or deflation. Good news is that you have time to see how the first and second legs develop. Not forgetting 1) how global markets will react and 2) how the top 10% that holds 90% of the wealth plays (they matter however nauseous we think of them).

Al Huxley's picture

I notice that the 'Taper' tightening has lead to a 12% increase, so it looks to me like they finally got the bugs out of the system that caused it to crash everytime they tried to taper.  Production ready at last... singularity here we come.