IMF's Christine Lagarde Joins The Chorus, Warns Market Is "Too Upbeat"

Tyler Durden's picture

First, three weeks ago, it was the BIS.

Then, last week, it was Janet Yellen, Series 7, 63 certified, who during last week's Humphrey Hawkins testimony, did what no Fed Chairman had done before: commented on stock prices, and what's worse (if only for the momo, liquidity addicts so used to be being bailed out by the Fed always and forever) she had her "irrational exuberance" moment when the Chairmanwoman of the Fed explicitly stated that biotech and social-network stocks are in a bubble.

Scotiabank's Guy Haselmann summarized it best:

The most shocking moment came shortly thereafter, when Oscar-winner Yellen screamed to Hensarling after a question, “Because you can’t handle the truth!” She then launched into an explanation about how the plan all along has been to intentionally create asset inflation (as opposed to asset bubbles). Such a proclamation means that Yellen must be an expert on market valuation metrics and can responsibly recognize the difference between asset inflation and asset bubbles. To be fair however, she admits that should (another) boom /bust mistake be made, she has great confidence (this time) that the FOMC has the ability to clean up the fallout through macro-prudential and regulatory tools. Regrettably, not making the transcript was her barely audible whisper of “pump and regulate, baby”.

That she finally admitted that the market is approaching its upper limit should have been enough to launch a major market correction. Instead the market barely budged and subsequently recovered virtually all its losses, even as the war in Ukraine and Gaza reached new highs, in the process confirming that other recurring Fed concern: that the market has hit record complacency (to be sure, the Fed had zero commentary that it is the Fed's fault the market no longer responds to any newsflow, fundamentals or stimuli).

It appears that the Fed has created a terrifying "central-planning" Frankenstein monster with its monetary policy, one which will keep going higher and higher until it crashes so epically, it will complete the finacial system wipe out that was started with the collapse of Lehman and merely delayed with the $4 trillion Fed balance sheet expansion. And the Fed is finally realizing just this, with a 5+ year delay: after all we cautioned just this would happen in March of 2009.

Then, yesterday, it was none other that the IMF's Christine Lagarde, who joined the chorus of warnings that the market is overvalued and due for a correction. From Reuters and BBC:

"The head of the International Monetary Fund warned on Friday that financial markets were "perhaps too upbeat" because high unemployment and high debt in Europe could drag down investment and hurt future growth prospects... She also warned that continuing low inflation could undermine growth prospects in the region.

 

"There is the danger of a vicious cycle: persistently high unemployment and high debt-to-GDP ratios jeopardize investment and lower future growth," Lagarde said on Friday, according to the prepared text of her speech

So to summarize: first the BIS, then the Fed and now the IMF are not only warning there is either a broad market bubble or a localized one, impacting primarily the momentum stocks (which is ironic in a new normal in which momentum ignition has replaced fundamentals as the main price discovery mechanism), they are doing so ever more frequently.

And how do the same momentum algos react? They promptly ramp the S&P 500 to essentially its all time high. Why? Because at this point it is far too late for even the Fed to pretend it has any control over the "centrally-planned" market. Or rather, centrally-unplanned. And because it is now also too late for the Fed to even conduct a controlled crash.

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Bollixed's picture

That lead-in image of CL looks like a Salvador Dali rendition of the Portrait of Dorian Gray.

She's never looked better...

Pinto Currency's picture

 

 

The central banks buy $29 trillion of equities and financial assets and then the BIS, the IMF, and the central banks tell us the markets are "too upbeat".  Thanks.

DoChenRollingBearing's picture

The central banksters and the numerologists agree: stocks are too high, look out below.

Despite that odd couple, there may be truth there.  It is important to see what Lagarde, Yellen & Co. are saying, that the building (stocks) rests on shaky foundations...

Pinto Currency's picture

 

 

The cb's have propped the market up on a shakey foundation and now that all the retail investors are in, they give some warnings.

CognacAndMencken's picture

 

 

All this bull-market skepticism from Wall Street banks to Yellen to IMF/BIS officials to internet blogs means only one thing:  the market is going higher.  Skepticism is the single healthiest ingredient to a bull market; temporary pullbacks here and there are great, too.    

Leonardo Fibonacci2's picture

Fake tan bitch!!!  Why do the wrong people get melanoma's

Keyser's picture

"Only two things are infinite, the universe and human stupidity, and I'm not sure about the former." - Albert Einstein

max2205's picture

She'd look better with a gallon of cum all over her face....on second thought...

gh0atrider's picture

gh0atrider knew Christine Lagarde was a shape-shifting reptilian.

Too much moonshine one night and he went there.

Thought Processor's picture

 

 

Anyone else find it just slightly odd that this comes out of her mouth after giving that lesson on numerology?  Not to mention Dick Cheney coming out of his closet recently to bless us with his dire predictions.

 

This crowd has a history of giving prognostications of future events that they help create.  

 

 

They are digging their own graves.

 

 

 

Eirik Magnus Larssen's picture

" I can calculate the movements of the stars, but not the madness of men. " -- Isaac Newton on the South Sea Bubble

HardAssets's picture

I guess it helps, a tiny bit, to be reminded that Newton lost his ass in the South Sea Bubble. If he couldn't predict the moves of a scam 'market' very easily, who of us here can do so today.

ms8172's picture

If the central banks buy stocks... do they have the ability to short them?  Anyone know?  I would say yes... they might be warning what is coming.

john39's picture

They bought the entire planet with monopoly money.  Now time to stomp humanity's guts out. Or so they think.

Offthebeach's picture

What are you implying? That markets are rigged?
/S

Redneck Hippy's picture

Like the Fed and the IMF have been such great forecasters...d

Redneck Hippy's picture

Like the Fed and the IMF have been such great forecasters...d

toxic8's picture

scary stuff, that thumbnail image!

Implied Violins's picture

My balls could only enhance two of those chins, max.

yogibear's picture

She might look good at night with extermely dark sunglasses.

cowdiddly's picture

Well, her and Angelo Mozillo do make such a lovely couple. Pass the TANG tm

Tarshatha's picture

"That lead-in image of CL looks like a Salvador Dali rendition of the Portrait of Dorian Gray.

She's never looked better..."

 

Reptilian shape shifting glitch. 

TeamDepends's picture

Yep, bravo Tyler for putting it right there in your face. Won't be much longer boys, before we go toe to claw with these things.

TheFourthStooge-ing's picture

.

Reptilian shape shifting glitch.

Also known as molting.

Jumbotron's picture

First "Yellen like a Felon"....now Lagarde.  This is code for the Elites and the Smart Money to start getting out before the Panic.  Controlled collapse is coming.  We'll see how controlled it is.

nidaar's picture

"When the seven years of plenty came to an end, and the seven years of famine began to come"

From 2007 to 2014...

knukles's picture

2+7+2+14=25
2+5=7

 

Still won't bring Mary Jo back from her swim.
Talking about swims, know what kinda wood don't float?
Natalie

Chief Wonder Bread's picture

Does anyone know anymore who Mary Jo was, knuks? Few I suspect.

Know what kind of moon don't rise?

Keith

Cognitive Dissonance's picture

I think this is as close to "SELL" you'll ever hear from the central banks and other financial omnipotents..

NoDebt's picture

This could be the creepiest article I've ever read on ZH.  I'm buying more Facebook on Monday morning.

disabledvet's picture

Actually "inverting the yield curve and being speechless for over 18 months" was a far better cue.

This is all about noise and the market knows it..."start talking over valuation and then print anyways" (reverse repos.)

So "just in case" the market corrects anyways...say "just invade" ...I mean... "say just in case."

The fact is the only thing better for Central Banks than debauching and devaluing is creating a MASSIVE "bubble in everything." Takes the "monkey off the back" so to speak and allows "the other bubble blowers" (rhetoricians) to explain while in fact your life is a living hell...in fact you've never had it better! (Now here's your sweaty wad of Benjamin's.)

I think we have achieved Peak Pete Puma here. "How many lumps? A WHOLE LOTTA LUMPS!" And instead of trying something new (like anything other than fiat/central planning) "we'll try coffee instead of tea!"

Chupacabra-322's picture

This Major League Pure Evil CUNT is just blowing smoke up people's asses. Die Bitch, just fucking die already.

xamax's picture

Absolutely RIDICULOUS
Each time the fucking idiots of FMI or FED warn about topic markets, its only to accelerate the upward move, will not be different this time.
THE SKY IS THE LIMIT, WHATEVER IT TAKES!

medium giraffe's picture

This is gonna hurt price/equity ratios.

debtor of last resort's picture

Yeah, sunburn causes cancer, bitch.

IridiumRebel's picture

please take that pic down from the front page of Satan LaGarde.

knukles's picture

Dude!  She's Shape Shifting!
Fucking Reptilians; they're everywhere.  I've warned you..... but you'll see them soon enough...

"We were somewhere around Barstow on the edge of the desert when the drugs began to take hold. I remember saying something like "I feel a bit lightheaded; maybe you should drive...." And suddenly there was a terrible roar all around us and the sky was full of what looked like huge bats, all swooping and screeching and diving around the car, which was going about a hundred miles an hour with the top down to Las Vegas. And a voice was screaming: "Holy Jesus! What are these goddamn animals?" Then it was quiet again. My attorney had taken his shirt off and was pouring beer on his chest, to facilitate the tanning process. "What the hell are you yelling about?" he muttered, staring up at the sun with his eyes closed and covered with wraparound Spanish sunglasses. "Never mind," I said. "It's your turn to drive." I hit the brakes and aimed the Great Red Shark toward the shoulder of the highway. No point mentioning those bats, I thought. The poor bastard will see them soon enough."
Hunter S Thompson

Amongst other oddities, on this day in history in 1969, Ted Kennedy drove a car off a bridge in Chappaquiddick MA drowning his secretary.  After a night of supposedly sane and sober behavior.

medium giraffe's picture

...once you get locked into a serious drug collection, the tendency is to push it as far as you can.

knukles's picture

"We had two bags of grass, seventy-five pellets of mescaline, five sheets of high powered blotter acid, a salt shaker half full of cocaine, and a whole galaxy of multi-colored uppers, downers, screamers, laughers... and also a quart of tequila, a quart of rum, a case of Budweiser, a pint of raw ether and two dozen amyls.  Not that we needed all for that trip...."

           -The Good Doctor
Boozer's picture

Knuk, my internet went down yesterday and I pick up my original copy of that classic

to reread for the umpteenth  time!  It's yellowed but still in decent shape...also has

phone number of favorite college concubine on inside cover.  Now where did those

35 years go?  Seem to suddenly have a craving to chew up some blotter...

nmewn's picture

The few, the proud, the Heads ;-)

IridiumRebel's picture

When killing time on youtube I'll eventually màke it to the Reptilian vids...

john39's picture

Imho, it is best interpreted as a metaphor.  Although I don't rule out that some carry demon in their dna.