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David Tepper Is Back, Sees "Beginning Of The End" Of Bond Bubble
It has been a while since Tepper warned of "nervous time" and told his hedge fund pals "don't be too freakin' long."
Since then the manipulated equity market bubble has gone straight up with every single dip bought massively by the algos, in the process surely eliminating any nervous thoughts Tepper may have had. So in a world starved for pundit philosophy, Bloomberg just reported that the bond market bubble is about to pop, at least according to the folicularly challenged billionaire. The reason, paradoxically enough, the ECB's decision to monetize private assets and cut rates.
BREAKING: Tepper: ECB decision means "beginning of the end" of bond market bubble
— Bloomberg TV (@BloombergTV) September 4, 2014
Empirically, Tepper may be right: in the past every time a central bank has launched a massive easing program (think QE1, QE2, Twist, QE3, etc.) it resulted in aggressive stock buying offset by bond selling. The issue is when said programs came to an end, and led to major selloffs in equities, pushing bonds to newer and lower record low yields. So perhaps for the time being, we may have seen the lows in the 10Year and in the periphery. The question is what happens when Europe's latest "Private QE" operation comes to an end: just how massive will the bond bid be when all the money currently invested in risk assets decided to shift out all in one move.
More importantly, it also explains why central banks now have to work in a constant, staggered basis when easing, as the global capital markets simply can not exist in a world in which every single central bank stops cold turkey with the "market" manipulation and/or liquidity injections.
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In May of last year, Appaloosa's David Tepper explained "as long as the central banks are worried about deflation, I am not worried about inflation." However, it appears the the $20 billion fund manager has changed his tune, noting in a Bloomberg TV interview that "“Draghi wants inflation in the Euro zone. He will not stop." Having slammed Draghi in May for being "really far behind the curve," Tepper now believes the ECB Chief's actions mean "it’s the beginning of the end of the bond market rally... We are done."
"What the ECB did today is very important; they want growth, an increase in the money supply, and inflation. Basically what it all means for the market is higher equity prices and the beginning of the end of the world bond market bubble."
* * *
Finally, one wonders: just what will be the catalyst that forces equity investor David Tepper to see the end of the equity bubble?
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seems to be moving the US Indexes a little lower? 1/3 Dow now red
Time to go long the TBT guys! : )
...at your own peril.
You can shove all sorts of propaganda. If in the end, everyone is long already there is no one left to buy. Markets have only one way to go, down.
I wonder how close to the door Hendry's been dancing these days?
Being early is the same as being wrong.
We need some real world examples of monetary debasement and consumer goods price inflation driving real growth.
It's like the ghostly spirit of the former Soviet Union is running the world's monetary system.
Stocks will go up on zero volume. Buy everything forever.
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TEPPER YOU ATE UP FUKKER TRY THIS:
"Can someone please sell some bonds so the FED can REPO them and have SOMETHING to give back to Jack. Please??"
I told the homeless fellows under the highway this morning they can expect new highs in the stawk market and they seemed genuinely excited about it. I could tell by the dull befuddled look in their eyes and the twitch of their noses they were genuinely exited about the news.
I thought Peter owed Paul? Who is Jack?
Perhaps there's a legislative solution?
In this world, I see the "Beginning Of The End" for a great many things.
stocks going lower...thats ludicrous
I think Tepper lost around 25 pct in the 1998 Russian collapse, the 2002 Tech Wreck , and the 2008 Melt Down.
OK Very intresting
The equity bubble won't burst until the fed starts raising rates, and that will be never. So we have that going for us.
which is nice.
+100 for the Carl Spackler reference.
Only a +1 from me. I'm stingy like that.
PS Gunga la gunga.
look at all the things going for the market
1)billionare cash on the sidelines
2)everyone expecting a correction
3)secure flow of 401k dollars
4) low volume stock buying
5) strong insider selling
6) ebola
7)war in ukraine....sorry skirmish
8) drone bombings in middle east
You forgot drought and riots.
and don't forget the incompetent Buffoon of a President using his progressive minions to run everything into the ground.......
Anything else ?
You mean the incompetent buffoon of a president using his progressive minions to follow the script written by the previous incompetent buffoon of a president.
That's what else.
Never, Doc? Or, is my sarcasm detector not working today? Some had said the same thing about the QE never being unwound else the market gets it. I still remember the meme QE4Eva, buy silver crash JPM, gold bitchez... :-)
Me and Doc already have a sandwich bet on this one. We both agree raising rates would be a disaster. I just differ with him in that I think they'll do it anyway because, from time to time, they try to convince themselves they aren't in a liquidity trap.
They do it, things tank (mostly the market, but the economy, too) and then they rush to undo it again. The Fed Cycle, as opposed to the Business Cycle.
I abhor that institution as much as you do, if not more. However, after watching them navigating the rapids, I feel we are underestimating their shrewdness. All the central banks are in cahoots now. They know that they have to be in absolute control or the life as we know it collapses. Hence, I think they will raise the rates and there won't be any disasters because all of them are working in tandem.
The only way we see a disaster unfold would be if the western flank of Cumbre Vieaja collapses and triggers a mega-tsunami. For everything else there is BTFD or BTFATH.
Only time will tell.
Thank Gaaaawd fer Belgium buyin' dem Treasuries...
LMAO
There must be one hell of a profit in waffles.
Who knew?:)
Of course the Fed will raise rates. Like they have shown us before, it will be extremely well telegraphed and in increments of 25 basis points so that they do not shock financial markets. How high will they raise rates, who knows. What is more important than the Fed raising rates is the reason that they are raising rates. Also, in terms of the market, the Fed, the economy and the political backdrop, this is a very similar to 1998. I think stocks will rip higher over the next two years. As always, time will tell.
Rates will go up, stawks will drop and house prices will correct. I've lived long enough now to realize almost everything cycles/corrects given eough time. The fed just delayed and lengthened this cycle thru its heavy manipulations. We know for cetain some things will inevitably occur; timing is extremely difficult if not impossible. Just be prepared.
Same in 1998. My broker at the time told me to dump all my internet stawks. I half way listened to him and in disbelief saw CSCO, Lucent, etc relentlessly rise...until they didn't. It was swift, sudden and devastating for those who failed to realize the above; namely, everything runs in cycles. The stawks I held dropped alot; those i sold by heeding his advice saved my butt.
Good luck to all ZH'ers!
Well said. The Fed hates the idea of raising rates, but in spite of what they say, they know their policies and models have failed miserably. They are desperately seeking an exit strategy which Ben was too arrogant to think about.
Anecdotal, but real estate in my area has hit a wall. The cheap stuff still sells, but there is no inventory, and the builders shifted to selling poorly built, 100 percent financed condos about five years ago. Look out below.
And how is that going to work out with respect to all the unfunded liabilities of the western governments?
Do tell...
We've got pics of jenn Lawrence with cum on her face, Victoria justice spreading her pink flower and shelling in Ukraine to sufficiently occupy us at the moment, so Tepper's inconsequentlal ruminations about the end of the bond market will have to wait
exactly, I am sure Janet will hike those rates any second now...
She'll (they'll) do it for sure... but just not too many times. They're scared to death they won't have any "tools" left when the economy crashes and burns again (like in a couple of years).
I'd rather have Janet hike rates than hike up her skirt
Anyone got photos of Janet Yellen doing those things? Please share!
Until they have pics of J Lawrence with cum on her face eating Victorias pink flower...im not looking.
HEAR THAT NSA.....I wont look unless!!!
RIPS
Ah, we need a link to the Jenn Lawerence thing, please....otherwise its just a distraction and not REAL news ;>
The rats are beginning to fleeing...will be ugly.
What is the actual collapse of the equity market?
(This is in the Jeapordy format...under "I'll take market bubbles for one trillion category. Hey look! Daily Double! I'll risk it all!")
"More importantly, it also explains why central banks now have to work in a constant, staggered basis when easing, as the global capital markets simply can not exist in a world in which every single central bank stops cold turky with the "market" manipulation and/or liquidity injections."
Bingo. This is in fact an acceleration without it being obvious. With the Euro dropping like a rock along with the Yen just recently, the carry trade is re-accelerated and the merry-go-round gets another boast back up to warp speed.
We are getting closer to the bottom of the toilet bowl where the fiat swirl picks up speed just before it flushes.
True enough. It's hard to keep patiently watching and waiting on this sewage (the manipulations of TPTB), when you know how the flush will end...
There is no such thing as a good market manipulation plan. It's pretty much an axiom of market economics that when you try and manipulate price the market moves against you.
In other words policy (QE) is one thing but the result (soaring asset prices without even the pretense of economic recovery) is quite another.
And yes...I did agree with the bulk of extraordinary measures taken in 2008 (save for the one still ongoing...HAMP. That thing is a total disaster.)
Having said that "wind down is still wind down." No US based company save for the natural gas folks and the banks can afford to sell into their own market. I mean seriously...just friggin default already. Prices don't just collapse for "no reason." They collapse because demand has failed to materialize.
Not that demand isn't there ironically. Who wouldn't want to stay warm in winter "at pennies on the current dollar"?
Bottom line: "Detroit wasn't big enough." (Cough, cough, largest City by land mass in the Western Hemisphere if not the World cough, cough.)
"I did agree with the bulk of extraordinary measures taken in 2008"
And it was sold to you/us in that the fraud would be prosecuted.
Has any one of the "arsonists" that Tim Geihtner mentions in his book actually gone bankrupt or to prison yet?
Are any of the underlying "structural" problems fixed yet?
Execute every last useless paper-pushing fuck, starting at the top of the corporate structure and finish with their political puppets.
Nothing changes otherwise.
Execute yes, but first gut shoot them with a 22 short.
You have a source for .22 short?
My 95 year old Model 1890 is aching for more lead down the tube....
I bought all Knob Creek had and I need moar....
"where the fiat swirl picks up speed"
Poopushima?
Excellent analysis, Mr. Cog, thank you.
:yawn:
"ECB's decision to monetize private assets"
What the hell is this?
Basically printing money to pay for toxic assets, paying $1 on the dollar, when marked to market they should be priced at $0.02.
That's my guess.
And nobody loses of course ;)
Gee, where did they get that idea?
its all the rage in Basel
Is that a bail in or bail out?
I would not pee on Mr. Tepper if he was on fire. What a self-serving jag-off.
Confucius says: "most dangerous to fight treasury", "ice too thick", "beware vigilantes", "11am sunshine on field of equities", "a Penis is the only thing that a woman hopes she will find hard to handle".
Tight pants like cheap hotel - no ballroom.
U can have both increase in the interest rate and stock market as long as IR increase is not significant, which it will not be if they even dare. I dont see how they can. Tepper is too smart, he is up to something.
Here's a new drinking game - drink every time ZH has an article in which a Jewish billionaire or hf manager dispenses advice...
Why not get a monkey and a dart board and see who makes better predictions over the next quarter...
Now, now. The Jewish are the folks who founded your nation of freedoms. They are the ones who made you into a superpower, of sorts.
Why not take a little bentsch after you feed on all this finance info? Do me a chesid and stop your kvetching, take a listen to this mensch.
"Tepper may be right: in the past every time a central bank has launched a massive easing program (think QE1, QE2, Twist, QE3, etc.) it resulted in aggressive stock buying offset by bond selling"
1. Perhaps in the Subprime/Junk Bond Market. I think we make see investors jump as the risk become more noticable.
2. As far as QE, I see gov't bonds dropping lower. This is because cash holder are worried about bank bail-ins. The are seeking ways to avoid getting there money stolen and investing in gov't bonds is deemed "safer" than money in the bank.
3. Stock buybacks are slowing and ending. Unless retail investors start piling in, its hard to believe stock will continue to risk. Trading volume is near all time lows.
"we may have seen the lows in the 10Year and in the periphery."
I don't think so. A sell off in the stock markets would almost certainly drive US10Yr to multiyear lows. Look at Japan: many, many times people though the yield on JGB to rise, However over the past 30 years yields only went lower. All of the industrialed gov'ts are dead broke. They can't afford any increases in yields without going belly up.
"just how massive will the bond bid be when all the money currently invested in risk assets decided to shift out all in one move."
Just were will all this money go? Cash? Nope because of Bank Bail-in. Precsion Metals? Unlikely as the majority of people do not believe PMs are a sound investment. Volatile in PM prices make people nervious of buying PMs. For the near future, the most likely choice will be gov't bonds. There is no "safe" currency or country to invest in. People will seek investments that they perceive that have the least risks. FWIW: It would not supprise me that the US 10Yr drops to 1.30% to 1.00% in the next two to three years. All that is need is a strong sell off in the US stock market. I don't see gov't bonds increasing, except perhaps the weak EU nations that are likely to default because they can't print their own money.
Finally an intelligent comment, congrats.
Tepper is not smart, he is just someone who gambles with other people's money and bets on risk all the time.
This is not QE, Europe is not the US, this will backfire as has everything done in Europe to save banks.
I've actually toyed with the idea of moving out of index funds and buying an actual equity for the first time since the 90's.
The move in German bunds has been nothing short of spectacular and says to me an outright deflation is well underway over there. Combined with a collapse in the euro and yen there ought to be an American company able to keep things "stable" out there somewhere.
So is this the beginning of the beginning of the end, or the beginning of the beginning of the beginning of the end? Or the end of the beginning of the beginning of the end. Surely it couldn't be the beginning of the end of the beginning of the end? Things can't be that fucked, can they? Or is it more like, yuh know, 'middle'?
"Finally, one wonders: just what will be the catalyst that forces equity investor David Tepper to see the end of the equity bubble?"
Really, who the fuck knows anymore? We've had earthquakes, wars, hurricanes, nuclear meltdowns, financial meltdowns, ebola, Russians, Syrians, Russians again, Ben and Janet, Mario and Abe, Obamacare/phone/war/telepromter/golf/Ferguson/Al-ISIS, no jobs, three jobs, bailouts, ZIRPS, NIRPS and circle jerks.
Maybe when fucking Skynet becomes sentient?
golf?
"you thru to the Oval Office chillin' with tha Preezy fo' sheezy. I'm all up in the links right now homebwoy, leave a message and your approval rating after these words from our fundraising sponsors....."
this is the most predicted crash in the history of the market. the bond bubble and the equity bubble and the real estate bubble are all going to crash? at the same time? the other side of that bet looks real appetizing. sam zell had it right? where else are billionaires and pension funds going to put their money? as long as they keep feeding the pig the pig will eat. besides, none of this can happen without a pearl harbor like event. what's the liklihood?
Will all the "markets" you mention "crash" in dollar terms? Not likely anytime soon. Will they crash priced in gold? Book it.
We are on the edge of another round of global QE. When they get the USD high enough for a cushion, they will start it up again in the USA. They all print together.
Tyler - can you report back when Tepper says we're closer to the "middle of the end" as opposed to the "beginning of the end." Sounds to me like we've still got time...
I would just go balls to the wall. Buy blocks of 5 to 10k. Just buy everything. This market is headed for 20. Make sure to refinance your only pathetic home refinanced 3 times. You might get lucky this time around.
Tomorrow's jobs report will be bogused up good for coming elections. Long term tbonds are a little overbought. The yield will spike on jobs and rise into this months 10 and 30 year bond auctions. This will be the great opportunity to reload that I wanted. They trot mutha fuckas like tepper out every time they are desperate. Fuck him.
Tepper is probably one of the suckas massively short the 10 year bond. He would love to cover. EU cuts are sign of very weak globe. He shitting in his boots.
Another pay to view HBO special. $19.99
Lloyd Blankfein vs. Bill Gross.
Who can Shit the Biggest Turd.
This game only allows one lifeline call.
"There is a season, 'Churn, churn, churn,'.....
I believe it is ,"follically challenged".
So, DRAGHI'S PLACEBO going pretty well?
How's that working out?
Next?
Yellen's Placebo
So many bubbles! Many are set to burst. If you even think about the vast money printing across the central banks of the world since 2008, it is obvious that much of the rise in markets of ALL kinds is simple liquidity seeking return above ZIRP. We all wonder how and when the giant money printing exercise will be slowed without total melt down. My great fear, is that the next economic bubble will be WAR. All the signs point in that direction, a bubble in Western war making is looming. Again, it will be funded with printed money. That is why the coming struggle against King Dollar will result in military attacks by the USA and NATO against those seeking to exit the global hegomony of King Dollar. I see a new Dark Age about to befall the world, our elites are running scared and will lash out with all their forces of armies and cops, the 99% will be their targets.
And vicey versey.
it's. oh. so quiet
it's oh. so still
you're all alone
and so peaceful until...
https://www.youtube.com/watch?v=FHTwQd1881Y&feature=related
This came in emailWhat is our "Day After Plan?"
You won't like the answer
Mount Weather is a national security stronghold located near the Blue Ridge Mountains.Dear Concerned American,
?
Its maze of underground bunkers is known as "Area B."
My colleagues have given Mount Weather the code name "High Point Special Facility."
You can view footage of it below.
(Click here if you can't see it)
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The primary command facility here is codenamed "Site R," and nicknamed "The Rock."
I'm sharing this with you now, because my colleagues and I in the U.S. Intelligence Community have uncovered a series of alarming signals that point to a fast-approaching, 70% stock market crash.
And we have begun to prepare for an unstoppable $100 trillion American meltdown that will be unleashed in its aftermath.
Unfortunately, our government has already put emergency measures in play for this coming catastrophe as well. They call it "The Day After Plan."
And these two locations, at Mount Weather and Raven Rock, have major roles to play ahead.
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Stay Safe,
?
Jim Rickards
Financial Threat and Asymmetric Warfare Advisor
CIA & The Director of National Intelligence
People have made a ton in bonds so why not they take profits and buy stocks with it. No one wants cash in the bank any more.
Mr Ben B. Set this up to happen.
Oh he's an expert on bonds now is he? Well if you think the bond bubble is bursting then you should be getting out of stocks pronto.
Funny - my eyes are already whack so when I looked at the bold sentence I thought it said "the bond market bubble is about to POOP."
If tepper is talking shit about bonds he must be buying them. If he is talking, he is lying.
isnt the 'reason' stocks can be valued so high is b/c rates are so low? there will be no stock mkt highs under any kind of 'normalization'. strong US $; funny japan had strong yen and rates stay down.....strong $, higher rates, negative euro rates and stock mkt highs do not go together---one must be eliminated.
They are all fearful. Buy.