"Why This Stock Market Will Never Go Down"

Tyler Durden's picture

Update: turns out it was satire. Supposedly:


While the last thing we would like to do is bring even more attention to today's grand slam in financial trollery, the following article by the ironically-named MarketWatch author Michael Sincere is just too funny to pass by.

Presenting: "Why this stock market will never go down" which contains such stunning pearls of financial insight as the following:

Everyone believes the U.S. stock market has reached a permanently high plateau. Everyone, that is, but the bears.

 

Last week’s Investors Intelligence survey showed bearish sentiment at its lowest since 1987 (13.3%). In fact, short-sellers have nearly disappeared along with the few remaining bears. In addition, the VIX is at historic lows (near 12), which reflects investor complacency.

 

Put another way, almost no one believes this market will go down.

Wait, "permanently high plateau"? When was the last time we heard that line. Oh wait, nevermind.

That said, the author does point out the clear inherent falacy in his premise, namely that there no longer is any retail participation in a market which everyone realizes is too rigged, too manipulated and too broken to hope to even break even:

Ironically, retail investors are not as gung-ho about the market as in the past. Viewership of financial television programs is at 20-year lows, especially in the coveted 25-to-54 age group. It’s a sign that even as the market climbs higher, interest in the stock market is falling along with volatility.

So who benefits: why Wall Street of course - the same source which eagerly passes one hot potato to itself after another, in the process CYNKing the S&P to higher records on ever declining volume.

On the other hand, the overwhelming view of Wall Street can be summarized by two Morgan Stanley analysts, who predicted that the S&P 500 SPX, -0.40%  will be at 3,000 in five years, a 50% increase. If they’re right, the Dow will hit 25,000 lickety-split. Dow 25,000 has a nice ring to it, and to Morgan Stanley and others on Wall Street, an additional 50% gain is actually a conservative estimate. This is a market that is unstoppable. If only they can convince Ma and Pa, the market would go even higher.

Then the author for some inexplicable reason decides to troll "bears" by "exposing" two "conspiracy theories." Actually, in retrospect the click-bait reason is quite explicable.

While the bulls are laughing, the bears are sulking. No one believes their Chicken Little doom-and-gloom warnings. A 10% correction? Wrong! A 20% crash? Wrong! Last month, after the Dow fell more than 600 points, the bears thought they had a chance, but they were mistaken. If you believed the bad news bears, you would have missed out on a 200% gain since 2009.

 

The market has shrugged off multiple geopolitical problems, low market volume, trillions of dollars of debt, sky-high sentiment, extreme P/E ratios for many high-flying stocks, and dozens of other red flags. Yawn. The only gorilla in the room that matters is the Fed.

 

And because bears are sore losers, they have come up with wild conspiracy theories to explain why they have been so wrong:

 

Conspiracy theory #1 — Plunge protection: Market observers have noticed a pattern that has been repeated for months. As soon as the market begins to sell off (usually in the morning), a massive computer algorithm enters with buy orders, preventing the market from falling. On the chart, it makes a “V” pattern. Conspiracy theorists believe the Fed is doing the buying, but they have no proof. We know that the Fed buys bonds, but buying stocks would go way beyond their mandate. Conspiracy theorists believe the Fed is terrified of letting the market fall because it could turn into a massive crash.

 

Conspiracy theory #2 — Ignore inflation: The bears believe this is a faux bull market that has turned into the biggest bubble in stock market history. They believe the Fed and other central banks around the world will keep interest rates low indefinitely by ignoring inflation. I have bad news for the bears: You’re right: The Fed will do everything in its power to keep interest rates low. As soon as the Fed seems serious about raising interest rates (that’ll be the day), the stock market might hiccup. But why would the Fed raise interest rates and crash the party?

Why indeed... Oh, maybe because as we showed yesterday excess liquidity in the market has never been higher and the central banks, the Fed included, know that once the Kool-Aid spice ends, nobody knows just how far the market will crash. So instead they do the only thing they can - push it to ever bubblier levels.

It is not until the end that one senses of hint of sarcasm:

If you study history, you know that no one thought the price of tulips, houses, or stocks would ever go down. Even most bulls believe that “one day” there will be a correction, but that day is far away. After all, the Fed has an unlimited supply of magical tools, and they are determined to keep the market from falling.

But said "sarcasm" promptly evaporates when one reads the final sentence, and realizes that the author was serious all along.

Unfortunately for soul-searching bears, the Fed trumps all. As long as new money flows into stocks, interest rates are low, and the market keeps going up, why worry?

As we said: pure trolling comedy. As to why worry... well "long-term" trader memories may be 6 years or less, but the last time everyone put their faith in the Fed, the market plunged some 60%.

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El Hosel's picture

"Retail Investor" left the building and is not coming back.... The rigged Market is old news to all but those rigging it. The Machine has all but gauranteed higher stock prices, come on in and buy the fraud.

zaphod42's picture

There are no retail investors any more; only a few super PACs, using algos to bid up each others stock, and using money they get on the cheap from the FED.  That way it looks like they are "growing" their wealth.

 

What's the difference between growing and inflation?  I dunno... 

 

However, as a bubble grows, the wall thins until pressure from within is so great it overcomes surface tension.  Or until someone with a pin comes along.

 

Enjoy!

 

Craig

Kina's picture

Cant believe the guy actually said that....surely he would have known the spectacularly failed comment of Sept. 5, 1929......

EDIT: Yeh , he had to have been joking writing that line...

Professor Irving Fisher, of Yale, one of the most diversely innovative scholars of his time. Fisher said, "Stock prices have reached what looks like a permanently high plateau." Fisher was, in fact, long in the market and by some estimates lost between eight and ten million dollars in the almost immediately ensuing crash.

Dr. Richard Head's picture

Watching these guys lose their shirts may indeed be inevitable in the long run.  Kind of like the high school jock who peaked in high school and then later in life has all of his hair fall out, ends up living in the ghetto, and now cleans septic tanks for a living (not that there is anything wrong with that).  One can dream, no?

boattrash's picture

Michael Sincere, I award you the "King of Mental Masturbation" award.

Spungo's picture

Great article. Very tongue in cheek. The term "permanently high plateau" is what gives it away. People always use that term when they're being sarcastic about markets never going down. People who don't know history miss it completely, but people who know the term get the joke.

Colonel Klink's picture

Fuck the rigged shyster market.

Kaiser Sousa's picture

Fuck MarketFarce...
bitch made propagandist cocksucker mother fuckers...

i_call_you_my_base's picture

I read the comments of that article and the author responded to a poster saying he was being sarcastic.

Kina's picture

Look at all these falling knives.....must have killed a lot people...

 

http://www.usagold.com/gildedopinion/prognost.html

 

Buying stocks between 1929 and 1932 hazardous to your health...

Bear's picture

This is not good news for The Bear

Soul Glow's picture

"No one believes this market won't go down, so it won't go down" is a logical fallacy in so many ways.

Confermation bias, assuming the conclusion, (circular reasoning), correlation proves causation, base rate fallacy, appeal to probability, ad hom ("conspiracy theories"), begging the question, kettle logic, and many more.

It is quite a statement to make, that all Wall Street must do is never hit the sell button, because there will be a point someone wants to sell stocks and buy something else.

CHX's picture

LCD, here I come...

Soul Glow's picture
"Why This Stock Market Will Never Go Down"

Because Yellen is sprinkling it with pixie dust before this Fall's harvest.

LoneStarHog's picture

Old Normal:  I am mad as hell and I'm not going to take it anymore.

New Normal:  USA! USA! USA!

Bell's 2 hearted's picture

Never say Never

 

all systems GO ... for now

 

due to stock buybacks and record high corporate profits 

 

BOTH on the clock 

 

Mr Sincere will need to change to Mr Insincere

Bazinga's picture

Shite like this is EXACTLY WHY IT WILL GO DOWN!

WSP's picture

Very good article with the last sentence deserving a follow-on.  Specifically, in response to:

"but the last time everyone put their faith in the Fed, the market plunged some 60%."

But, but, but----the ONE CRUCIAL part that I think is missing here is that this time it is "different".  The Federal Reserve's controllers----the evil globalists that manipulate the world to advance their sociopathic self-interests use the market to enrich their followers/supporters and punish those who know what they are up to.  By bankrupting those who are opposed to the "one world" where the serfs wear all-white clothes, have chips that tell them everything, and cannot move without the controllers permission etc., they can reach their sociopathic "Elysium" much sooner.

The bottom line is like so many other battles in history, this battle has nothing to do with money, but rather, control of the masses by the psychopaths and sociopaths who believe they have been anointed by the universe to be "God"---and they shall.   In the end, the market is just a way for the elites to get everyone to slave for them---they reward those who help them "progress" towards their total "hell on earth" goals, while punishing those smart enough to see right through their hellish, evil plans.

And so it is---we are a f#cked, and they will not allow any dignity in the process, you can be sure of that.  The globalists have demonstrated that they will destroy anyone that gets in their way, and they have a multitude of tools to accomplish that---the market is just one of many tools they can use to enslave and control us.

FWIW!

 

 

 

JR's picture

It’s been coming for centuries. The end battle: the people versus the banks.

And the ruthlessness of the world oligarchy has destroyed economies, countries, jobs, savers, homeowners, and what’s worse, supported wars of aggression and, at bottom, threatened to sink the most significant economic miracle ever created – the United States. The Fed is systemically destroying all the nation’s economic foundations.

They have to be stopped; they will be stopped. The market will go down because it must if Western Civilization is to survive.

EmmittFitzhume's picture

Hehehe, Ah the American sense of humor!

Al Huxley's picture

Sarcasm guys, lighten up.

optimator's picture

Never use never and always.

Kaiser Sousa's picture

everybody get ready for the v shaped rally off the lows going into the close of London - AGAIN.

Banker Buster's picture

good call.  They have been nibbling every low all morning.

LawsofPhysics's picture

Primary dealers, specifically their trading arms most certainly do buy stocks.  What a tool.

fed_depression's picture

We should be close to the end game. Daily upgrades of the bubble stocks from the investment banks.

Fed unlikely next week to indicate more QE I would think. If they don't cool the market it will blow up and everyone knows it. It can only go so high.

Bell's 2 hearted's picture

We well might be

 

Look at yesterdays July Credit report 

+$26.0 billion .... consensus +$17.3 billion

revolving (credit card) took a big jump from $1.8 billion to $5.4 billion

 

Shows "confidence" in economy, right?

 

Well, July retail sales were 0.0% (expected +0.2%)

 

Suggests  the masses are broke and putting essentials on the credit card

 

Have to wait for next retail report (and revisions) to see if the trend continues.

JR's picture

You can’t climb the pathway to the stars on paper money.

Banker Buster's picture

You have to love how complacent everyone is when they are making money in a bull mkt.  Even if it's a fake mkt brought to you by the fed.  It is really interesting how people blissfully accept false realities until it hurts them.

 

So that's a reason why some might not feel so bad when a lot of people lose a lot of money when crashes do happen.  Some professional managers will have a huge smile on their face as the gains "Joe blow ride the fake bull buy the ATH because I'm a genius" gets all his profits over the last few years taken away from him in a few days.

juggalo1's picture

I don't understand why ZHedge is jumping on this guy.  His thesis sounds exactly the same as what I hear trumpeted on here every day.  The market is broken.  There is no diversity of opinon.  The Fed is guiding the market higher.  He is clearly throwing in some sarcasm, and it was wrong to highlight his line about a permanently high plateau.  That was supposed to be your indicator that this is snark but you somehow missed it.

Seal's picture

Hell, the German market went to 23 million or so in 1923

khakuda's picture

Hyperinflation - The Bull Case.

orangegeek's picture

MSM strikes again - do the opposite

gmak's picture

The market can reach escape velocity if sentiment changes on the USD and inflation expectations accelerate (perhaps one reason why .gov has changed the calculation - to remove the expectation of rising inflation that leads to hyper-inflation).  Just look at Zimbabwe - the stock market didn't crash there, it kept going up and up.

khakuda's picture

What he is missing is that asset bubbles caused by free money/no cost credit lead to financial and human capital misallocation in the real economy.  Eventually, this leads to the popping of the bubble.

"Oh, we had no idea the stock market gains were flowing through into earnings for banks and corporate VC portfolios and overstating earnings"

"Oh, we didn't realize that low interest, low down loans would lead to trouble"

"Oh, we didn't know that zero rates for 7 years led to increased buybacks and leverage and endangered a bunch of companies during the inevitable recession"

Who could have foreseen that no cost money for the better part of a decades would lead to speculation?  Who?

Bell's 2 hearted's picture

yep ... only a matter of time before blow up.

 

subprime auto lending ... already beginning to crack

Professorlocknload's picture

Must be true. A lot like the fact that everything I put my builders level on is plumb and level. Ever since I painted the bubbles onto the vials.

ncdirtdigger's picture

One of the last levels to ever leave the gun rack in the back of a pick up truck. How do you say 'level' in Spanglish? 'No problem, we feex.'

RaceToTheBottom's picture

"But why would the Fed raise interest rates and crash the party?"

Ummm, cause that is supposed to be their role...

Marketwatch, the CNBC of print.

 

LooseLee's picture

A 'Sincere' IDIOT, no doubt!

Son of Captain Nemo's picture

Another reason this market will never go down even though both inevitably will and "are"as we speak!...

If a debate like this had taken place in the House or Senate just 40 years ago the National Guard would be dispatched to put down the protestors and the fires to the government buildings that line Constitution and Pennsylvaina Avenue(s).

What a different 40 years and meds make???!!!

fed_depression's picture

Will Netflix go down on an upgrade today? That would be a red flag. So far nada no but only up 1.3% on the upgrade is interesting.

Felix da Kat's picture

Russia has developed a suitcase-size Electro-Magnetic Pulse (EMP) bomb. If Russia were to be provoked into retaliation for the Unites States' coming interference into Russia's Ukrainian foray and/or the (coming) intrusion into their Estonian/Baltic (NATO) neighbors, they could quite easily and anonymously detonate such an EMP bomb in the New York City area (and blame it on Somali Jihadists). Well, Mr. Perma-Bull... think of a Mad Max scenerio enveloping the entire USA within 48 hours. Poof... you're money is gone (We're sorry, we have no record of your account, please press 1 for english; 2 for spanish)... Stocks are cut by 90%, Gas pumps are off, your radio can only pick up garbled voices, your twelve hour generator is only half full and you're scrounging around for more candles. But don't worry; Barry's got you covered. He's on Air Force One and coming to the country's rescue right after his celebrity golf outing. The electorate now knows that Obama has character flaws that prevent him from being anything but a failed president. The remaining 29 months of his presidency may spell the end of america as we know (knew) it.    

Felix da Kat's picture

... or was his abject and colossal failure a glowing success in his (and Geo. Soros's) view because he succeeded so well in destroying the United States as a world power and turning it into little more than a populous banana republic.

Titus's picture

Any bets on "Sincere" not being his real last name? My guess it used to be Davidson, Liebowicz, or some other version of AshkaNAZI.

When it goes pear shaped, and it will, this fucker needs his article tattooed onto his face.

Downtoolong's picture

Sure Sign of a Market Top:

When financial reporters start using words and phrases like never, can’t, impossible, guaranteed, sustainable, riskless, unstoppable, why worry ………

 

Sure Sign of Irresponsible, Biased, Captured, Advertising Client Driven Financial Reporting:

(See Sure Sign of a Market Top)

insanelysane's picture

A long time ago when the market was normal, I am guessing that 80% of stock market plays were bullish in nature and 20% were bearish plays.  Fast forward to today, a rigged bull market with very little volume.  Of course the number of bearish plays are low.  I find the 13% number in the article to be high.