Forget What They Say And Watch What They Do

Tyler Durden's picture

Via Mark St.Cyr,

Once again we are breaking records on a near weekly basis. Week after week and sometimes daily new never before seen in the history of financial markets record prints. Yet, business people across the spectrum don’t feel it, nor are they buying it.

Should one be worried about this conundrum? Financial mavens say no. In earnest, most seem to insinuate one should “Just buy the all time highs and sleep like a baby.” Then again, that’s what they say all the time do they not?

So what is someone to do that doesn’t believe the hype or the meme “it’s different this time” and can’t get that feeling out of their gut for they know – it truly never is?

You pay attention to when implementations seem to be appearing on a near regular basis that can separate you from your money with, or by the force, of law. e.g., The “Gates” Are Closing: SEC Votes Through Money Market Reform

You don’t sit down and draft this stuff up when everything is just ducky. You do it when you know or believe: If this shite hits the fan – its gonna get a whole lot worse even faster.

One of the (and I do mean the) most ominous signs I have seen over the last few years where if something were to go wrong the very place that is supposedly the safest in most people’s eyes and where a great bulk of ordinary people’s money is parked; was just quietly approved permission that in the event they deem as “a panic” (my word not theirs) they will put up gates. i.e., Separate you from your money.

This seemingly inconsequential event as is being portrayed by the under reporting of it through out all the media is absolutely breath-taking. The vast majority of people have absolutely no clue, and for all intents and purposes appear to not want too either. This is where things can go bad very, very, quickly in my opinion.

The troubling fact that gives this issue credence as the one you should pay close attention to, is when you also hear in concert heads of state from not only other countries but right here at home where the tenor and tone starts to ring tones of “bail in” i.e., Bail out was how the banks got your money via you tax dollars. Bail in will be how the banks are going to get your money via your deposits. That’s what surely is being proposed  or considered should another crisis occur and the banks need to be bailed out – again.

“But they told us they wouldn’t do it again with tax payer dollars!” I can hear you say. Well, I can hear the legal ease laced argument now: “They used depositors dollars, not tax payers. After all – depositors knew the risks that money in a money market account wasn’t really the same as cash in the bank! That’s why we feel comfortable with this bail in approach.”

Maybe some of you reading this understand the difference, however I’ll argue the vast majority that have money in money markets have absolutely no idea let alone they were just legally put behind a gate if need be.

As far as they’re concerned if the markets go haywire, they think they’ve played it safe. You watch the moment in today’s social media fueled populace the hysteria that will take off the moment just a few realize they can’t get their money. If that happens all, and I do mean all bets are off.

Remember that pesky little thing that was drilled into everyone’s head as being the root cause of everything that happened during the crisis? It was a thing called leverage, and too much leverage was a very bad thing.

What have we learned over these 5 years? Wall Street can’t get enough of a bad good thing. I guess more must make it better, because leverage today is at heights right along with where we are in stock prices: Above where it was in 2007. I guess it’s back to: Nothing to see here folks please just move along and try the brie, it’s superb!

How does one think others will react to their monthly “money market” balances when that other hidden jewel that was reported to be implemented takes effect? You know, the one that will allow the legal “breaking of the buck.”

How will the first people with significant sums (significant is a relative word) feel when they politely inquire on why their “balance” doesn’t seem to quite jive with what they believe it should state?

How do you think they’ll react if it’s during a 3%,5%,10%, out of the blue generic market correction? How about if they then decide screw it – they want it under their mattress only to be informed. “Ah we’re sorry, we wont can’t do that at this time.” Then what? Again, all bets are off in my opinion.

I discussed in an article not that long ago about how many were missing the point on the “getting in” to this market and forgetting the real issue is about having the ability to “get out.” Many took that as if I was complaining or taking issue as some sulking boy crying wolf and not even a shiatsu ever appearing. It was far from that.

What I see far too often today is nobody either remembers (for they’re new to investing or business overall and didn’t have money at work during the crisis) Or, they’ve bought into the hype that this market is supported by fundamentals that prove not only these levels are “fairly priced and based on sound economic fundamentals” but that pigs can fly because they’re actually legitimate offspring of unicorns.

The issue that needs to be pointed out again, and again, and again is the fact of just how quickly bad things can happen at these heights. And – based on why. i.e., The Federal Reserve’s current interventionist monetary policies.

All the economic numbers touted as “proof positive” why this market is to be believed will be the exact reasoning many will need to embrace when they look at their money market balances and ask themselves, “Huh?”

I’ll never forget during the real panic as the market fell, sometimes in an outright free fall. Suddenly all the people who were touted across the financial media for their stock prowess were facing cameras slack-jawed and dumb founded. Some were even near incoherent in trying to sound as if they knew what was taking place but obviously had no clue.

This wasn’t years after a bull run where people were caught off guard, this was months, and some of it was no further away than the next earnings cycle. The meme right before everything went bad then? “Just buy in at these now even better prices!” Sound familiar?

I remember watching one of the financial shows where Mohamed El-Erian was talking. Although I don’t agree with all his viewpoints, I gained a lot of respect for him that day for the way he honestly answered a question poised by one of the talking heads. A question was posited in reference to what people should be or should have done during one of the panic days. He replied back (I’m paraphrasing to the best of my ability as I can remember) “He hadn’t any idea of what was happening or where it would go or end that day.” He told the story of his wife calling him asking what she should do and the best advice he could think of was to tell her, “to go to the ATM and withdraw as much as you can.” For even he had no idea.

That took great candor on his part to state that in my view. It also was a wake up call to anyone that if the some of the smartest credible guy’s in the business of money and markets didn’t have a clue – what did that say about the rest of them.

Today, these markets are at heights that even a correction down to those previous record levels would feel like the world is coming to an end. And what has been made more clear if one is paying attention?

If there were to be another panic of any sorts access to an ATM may be the least of most people’s problems. But there’s no need to be concerned. The world today is a far more tranquil stable place or environment than it’s ever been. Not only that: “The Fed’s got your back!” Right?

Nothing to see here folks, move along is today’s newest battle rally cry.

For myself I’m still a believer that opportunity abounds no matter the times if one truly remembers and understands: Some of the greatest opportunities in both one’s personal and business life, is if you can keep you wits about you while everyone is losing theirs. That’s the true reason why you always need to pay attention and have plans of action in place.

Personally, I’m paying even more attention now than I have in recent years for as Andrew Carnegie famously said, “The older I get the less I pay attention to what men say, and pay more attention to what they do.”

I believe watching the fortification or installment of legal “gates” as a barrier to one’s money is far more important than hearing another reason why I need to “buy the all time high” for the gazillionth time. But that’s just me.

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Loucleve's picture

I thought that this only applied to institutional money market funds?

y3maxx's picture

Ball Washer in Chief

Mulligan in Chief

macholatte's picture

Open the Gate to Marshall law?

No impeachment for Barry, no elections while there is chaos in the streets.

Yes?  Maybe? Paranoia?

p00k1e's picture

It's 'martial'.  No offense. 

max2205's picture

LOL...If MM lock up...stocks would open at

I'd rather be in MMs than govt bonds , banks accounts, or stocks...even gold

What's this guy say is the safe alternative.


TheReplacement's picture

Yeah down with gold because, you know, you actually hold it yourself and stuff.

disabledvet's picture

It's Marshmellow Law actually.

That's what's out.

All Risk No Reward's picture

It's marshamallow.  No offense.

Unless you mean...  "marsh" "mellow."

neidermeyer's picture

Ball Washer in Chief

Are you saying that our president is a closeted teabagger?

junction's picture

The only certainty is that, comes the next catastrophic downturn in the economy, you will have guys coming out of the woodwork like Mark Faber to tell you they called this crash.  Cry wolf enough and sometimes you are right, just as a clock with its hands frozen tells the correct time twice a day.  Talking about predictions, I see in the future a giant downturn in the economy caused by a giant earthquake.    If nothing of the sort happens by March 22, 2015, I will forget I made this prediction.  You can describe this forgetfulness as "stock market analyst amnesia."

Radical Marijuana's picture

I quote a cliche about forest fire management, which applies to how the monetary system has been managed, in more and more obvious ways since the financial crises of 2008:

“We made a decision decades ago that fire had only negative effects on the forests and we valued the forests for economic reasons … so we made a huge effort to suppress fires and we have been very successful. ... But the success of firefighting created more risk. Without regular fires, fuel built up on the forest floor. When there’s high frequency of fires, every 10, 20, even 40 years, that means in a human lifetime there would have been three or four fires repeated in the forest around them. And those fires would have burned off leaf litter and needles and fine fuels that accumulate on the ground … But in absence of those fires the fuels accumulate and … you get the conditions for a much more severe fire, ... And so there’s the big paradox – by trying to protect ourselves from surface fires we’ve created conditions … for big severe fires."


When fires get going in a forest where fuel has been stockpiled, they can quickly get out of control. The real ways that the political economy is operated as enforced frauds, which attempt to stabilize themselves with even more enforced frauds, is building and building up the potential for things to go utterly out of control, as extremely severe social storms. HOWEVER, THE PERSONALITIES THAT DOMINATE THOSE SYSTEMS ARE TAKING THOSE RISKS, WHILE THE VAST MAJORITY OF OTHER PEOPLE HAVE ADAPTED BY BECOMING EVEN MORE DELIBERATELY IGNORANT OF THAT SITUATION.

That situation is globalized electronic fiat money frauds, leveraged more than 100 to 1, as fictional speculation to physical collateral, while the only thing actually backing up those financial frauds are weapons of mass destruction like atomic bombs, which is why the established systems are still able to fly like dragons or unicorns. The consequences of such systems finally collapsing into chaotic conflagrations are that their debt insanities will provoke death insanities!

All Risk No Reward's picture

Rad, I disagree.  They are preventing "forest fires" precisely because they want to burn this b* down to the maximum extent possible.

By "burn down" I mean bankrupt and seize as much collateral as possible from American Muppets that so nescient / ignorant they think the Supranational Banking Cartel that runs this mofo is stupid.

Burning this b* down is just another tactic in the long term strategy of resource dominance and control.

If they told everyone that, they'd be arrested and charged with treason so they need a false narrative to fool most of the people.

NickVegas's picture

The orchestrated destruction of America is another term I like to use.

Radical Marijuana's picture

Yeah, like fire fighters who are aronists.

A Nanny Moose's picture

So, because they could not call the timing, they are flat wrong? Got it.

That which cannot continue, will not continue. Most people don't even understand the unsustainable nature of the system in place. There is no harm in telling people to prepare for that event horizon, which we WILL cross.

ableman28's picture

The people who are best prepared for the next crisis are the ones who got hurt by the last one.  And the deeper the hurt the better they are prepared.  I well remember my parents generation hammered by WW1, the "Great Depression", and WW2 were always ready with the basics.  Not too much firepower, that didn't seem to be a big thing with them, but they always owned at least one rifle and one shotgun........more to the point is that they gardened when they didn't have to, kept a very well stocked pantry, and also kept part of their savings at home and often in silver.  I well remember an uncle proud of his silver dollar collection.  I never could figure out why that was better than folding money.  But then I was young and stupid.

Now, I'm older, not a whole lot smarter, but I've learned to respect my elders and match what they did.

freewolf7's picture

I am consistently intrigued that people believe the written and spoken word over one's behavior.

kchrisc's picture

"Forget What They Say And Watch What They Do"

That is the best way to understand any of them, but especially Obama.

Bananamerican's picture

That is the best way to understand any of them, but especially Any of them (fixed)

SuperRay's picture

We are all living in a state of 'forced dissociation." Why? Because if we really allowed our 'core self' to have total access to the truth of the world today, we wouldn't be able to function.  We would be too angry and too outraged to not take some form of sustained action, if only to hold a vigil outside our representative's office (or the white house), demanding accountability and justice.  As the old saying goes, which I don't see or hear too much any more - "if you're not outraged, you're not paying attention." 

Libertarian777's picture

i think the fine print goes beyond institutional money market.

And even if it was 'only' institutional... how many 401(k) funds have money market components? Those are classified as 'institutional'.

Urban Redneck's picture

For a lot of retail investors it would be a distinction without a difference. How many retail money market funds are actively managed versus effectively feeder funds to larger institutions where the depositor's institution is simply pocketing few bps in placement fees?

buzzsaw99's picture

bullshit. they have been trying to scare people out of money markets for years. they need bag holders. they will say/do whatever it takes to get them.


wsj 2012:

The nearly $3 trillion money market mutual fund industry remains at risk in times of panic, Federal Reserve Chairman Ben Bernanke warned Thursday, echoing calls from other federal regulators to address risks from the industry.

“They still could be subject to runs,” Bernanke told Senate lawmakers, suggesting the ability of policy makers to step in to stem a panic is now limited. “Some of the tools we used in 2008 to arrest the run on the funds are no longer available; Treasury can no longer provide ad-hoc insurance.”


buzzsaw99's picture

from the ny times 2010:


If the Fed had not taken the step it did, the central bank’s balance sheet would have gradually shrunk, which would amount to a passive tightening of monetary policy — what Mr. Bernanke called “a perverse outcome.”...


Yellen is a bigger dove than bernanke. she is not going to allow ANYONE to lose ANYTHING.

Oracle 911's picture

And that is why the US will loose EVERYTHING.

Bananamerican's picture

America's bowels will become "loose" right before it LOSES everything.

TheReplacement's picture

Our southern border is pretty "loose" right now.  Good call.

SF beatnik's picture

Mexico's bowels are loose... uh, the Aztec two-step.


"Treasury can no longer provide ad-hoc insurance."

In other words, Treasury no longer walks around with a bazooka in the Treasury Secretary's pocket like Paulson claimed to have in 2008. The bazooka was actually TARP back in 2008. TARP Part Deux the Revenge

of Tim Geithner's Dark Pool Derivatives Unwind Nightmare coming to a theater near you in 2014.

Drink Coke - Eat Popcorn - Drink Coke - Eat Popcorn - Drink Coke -

TheReplacement's picture

Lift - Run - Shoot - Build - Work - Learn - Grow

Grow your abilities not your booties.

catch edge ghost's picture

As for gates, I have very little sympathy for anyone who thinks any place other than their warm, live hands is a secure place to stash cash. I don't know the Mony Market market but I know that in the mm fund managed by one large 401k provider, the nominal compounded return is negative, around  -0.45%.

But, it's no matter as there can be no market crash ever again. It will just keep going up while They (tm) convince everyone it's safe to send their Social Security withholdings to Blackrock ETF's.

SilverDOG's picture

Paraphrase to one word; psychology.

Comprehend the underlying intent, good or bad, and invest accordingly so.

Damn easy I dare say, if one is not addicted to stock races, like greyhounds on a track.

.....and they're off: the cliff maybe.

logicalman's picture

To quote Henry Ford

 "As betting at the race ring adds neither strength nor speed to the horse, so the exchange of shares in the stock market adds no capital to business, no increase in the production and no purchasing power to the market."

All Risk No Reward's picture

Unless the Banksters are blowing debt money bubbles in a gobemouche society...  setting the stage to take the country into a receivorship when the b* is taken into bankruptcy.

This plan is so transparent but so few have "They Live" glasses...  Inflate their own wealth away and bail out debtors?

Man, they must laugh their *sses off at how gullible the masses are for believing that tripe.  They may well inflate the currency away, but it will be after they seized the maximimum amount of reality first - and that by ripping the faces off of Muppet debtors.


On March 10th 2008 @ 11:00am Bear Stearns time the entire economic house of cards toppled due to excessive leverage which

was caused by the removal of Glass-Steagall. Expectation fueled

the cascade and by the time the talking heads caught on to what might possibly be going on Lehman Bros., AIG, Fannie, Freddie, and everything else including the kitchen sink was thrown into the proverbial shitter. Not only did the entire economic world of academics not know what was going on but the entire global village of CAs, CFOs,

CMAs, et cetera could not even buy a clue. Up until March 10th 2008 @ 11:00am Bear Stearns time the expectations of market participants had been building towards the notion that one participant would be all that is needed to change the direction of expectations that market participants were trending towards. Since 2008 March 10th @ 11:00am Bear Stearns time the so-called 'masters of the universe' have been less than forthright to the world regarding their lack of a working knowledge of real world academic Economics Theory. Simply put, the entire domain of academic economists in the world cannot figure out what went wrong with the economy and they cannot understand how they got us here in the first place. Why is it that I can see what went wrong and the 'Economists' can't? Frankly, the bottom line since 2008 March 10th @ 11:00am has been Glass-Steagall and every single solitary viewer of Z/H knows it now. When will Z/H residents rise up to the challenge we must put before the so-called academic 'Economists'

of the world? What are we waiting for when it comes to the absolute necessity for the reinstatement of Glass-Steagall? As Z/H users we can form a collective here and put out a press release too. What are we waiting for given the participatory democracy we have at our fingertips?

moneybots's picture

"On March 10th 2008 @ 11:00am Bear Stearns time the entire economic house of cards toppled due to excessive leverage which

was caused by the removal of Glass-Steagall."


The big five investment banks got leverage waivers from the SEC in 2004.


The Wizard of Oz @ the FED told the Munchkins @ the SEC to get assurances that Dorothy, the Scarecrow, the Tin Man, and Cowardly Lion [TPTF] would not meltdown the Wicked Witch of the West [Economy]. The Munchkins had no way of knowing that the Wicked Witch of the West would meltdown when Dorothy poured water [Expectation fueled run on Bear Stearns 'economy'] on the bitch.

The Wizard of Oz just wanted the bitches' broom stick and had no way of knowing that Dorothy would pour water on the bitch. The FED is covered and the SEC is covered and so is the bitch that got melted down. Unfortunately, the Tin Man only got cheap reassurances from the Wizard that he indeed had a 'heart' but the Wizard purchased that clock from China and it actually failed to function. The Scarecrow was duped into believing that the Wizard actually gave him the ability to think but he only gave him A2 + B2 = C2 and the dumb motherfucker bought it like an Equilibrium Economist. The Cowardly Lion was told he indeed had courage when the Wizard forged the fake document 'Diploma' that he purchased off a degree mill like the University of Columbia in New York. Dorothy [Janet Yellen] never made it home to Kansas City because the Wizard of Oz left the bitch at the baloon launch and the Good Witch of the North keeps getting dropped calls on her BlackBerry.

So, the economy burns while Yellen pretends all is okay down on the farm in Kansas.

Angelo Misterioso's picture

don't follow the Yellen brick road - follow the yellow brick road......






Yo, Angelo, thanks for that tid bit on Frank L. Baum. I'm a big fan of FLB. Like Orwell he had vision in his writing. Gotta love it.

logicalman's picture

Money in the bank belongs to the bank until you ask for it back.

If you can't hold it................

All Risk No Reward's picture

Newsflash, 99% of the money isn't even in the bank!

ebworthen's picture

Wall Street/Washington Crony Cabal - Operation Fleece:


  1. Corral the assets and savings of the middle class in a FED backed - public debt fueled - Ponzi casino - and inflate.
  2. Crash it, rake in the sheeple's chips, re-inflate the bubble -lather, rinse, repeat.
disabledvet's picture

Still gotta pay all those bills....with interest.

TheReplacement's picture

You know the common misconception that we the people owe all that debt to ourselves so we can right it off?  We all know the Fed is privately owned and we can't write off squat.  On the otherhand, they can write off what they owe to themselves.  This is an important thing to understand.  Their debt is not like our debt.

jack stephan's picture

I'm solely here to piss everyone off, because if you feel checked and out classed then you try more. I play air hockey at a burning chucky cheese with air hockey tragedies. Back and forth tennis match with the year of horse, I read some special chink is the one you don't piss off for luck, I gave up in march, fuck you special chink. America is space and you're the local fire hydrant you fancy ape, I don't need your answer I have my own.

Keep your head down all, you got yours I got mine, make it a while maybe well have beers all, good luck

palmereldritch's picture

Your trolling lacks élan