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The People On This Photo Have A Warning For The Market: There Is "A Build Up Of Excessive Risk"
The people shown on the photo below, also known as "the people in charge"...
... have a warning for the algos.
First, a step back.
Two months ago, none other than Janet Yellen warned that a bubble is forming in some equity sectors, namely biotechs and social media when the Fed said that "valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year."
The warning was ignored, and as a result both biotechs and social/tech stocks have soared to fresh post dot com, if not record, highs.
Then, a week ago, the central banks' central bank, BIS, warned again of unprecedented complacency when it said there was "low volatility everywhere", and once again reprised its warning from the summer of 2013, that there is a asset bubble, and that it is central banks policies themselves that are responsible for this.
This warning too was ignored, although one wonders why: while there is no doubt that it is the central banks that are reflating the bubble to end all bubbles, it is not as if the BIS' Board of Directors, shown below, is unaware of the BIS' own warnings:
Then earlier last week, the very organization that is in charge of globalization and perpetuating the status quo, the IMF said "that excessive risk taking may be building up, which could sharply reverse in the run-up to U.S. rate hikes or should geopolitical events trigger higher risk aversion."
Nobody even pretended to pay attention, even as the Financial Stability Board came out with a statement the very same day also warning that investors are becoming complacent about risks in financial markets.
Finally on Friday, none other than the Fed itself in the fact of Dallas Fed president Dick Fisher, admitted that "the Fed has levitated markets."
The result? Stocks soared to records highs as Alibaba's IPO priced, soared over 30%, and briefly was more valuable than Walmart, before settling at a much more reasonable 30x forward EBITDA multiple.
So with everyone ignoring any warning that there is froth, bubbles, or outright irrational exuberance in the market, uttered by the very people who are in charge of creating these bubbles in the first place, we found it rather amusing that the 20 most developed nations in the world, which met yesterday in Cairns, Australia, decided to be the latest to issue yet another hollow warning, which obviously will fall on deaf algorithmic ears, when a memo issued by the Group of 20 finance chiefs and central bankers "said low interest rates are contributing to a potential increase in financial market risk, as major policy makers rely on monetary stimulus to bolster growth."
“We are mindful of the potential for a build-up of excessive risk in financial markets, particularly in an environment of low interest rates and low asset price volatility,” the G-20 officials said in a communique released in Cairns, Australia. “We welcome the stronger economic conditions in some key economies, although growth in the global economy is uneven.”
It is unclear just what that statement means: BTFATH, but only on a downtick?
Putting this meeting in context, the G-20 met as the global economic recovery has once again faltered since a February G-20 meeting in Sydney when nobody apparently noticed the "harsh snowfall" that had just taken place in the US and was about to subtract $150 billion in potential US GDP growth, and of course as it is almost a given that Europe is about to enter a triple-dip recession. In Asia, Japan’s revival is being blunted by a sales tax increase and concerns are mounting that China’s 7.5%growth target for 2014 is becoming harder to attain.
In other words, the G-20 is warning that the credit bubble that has kep the world afloat is about to explode, even as its impact on the global economy, by kicking the can on the day of inevitable reckoning, is the weakest since the Lehman failure.
Bottom line: monetary policy, which has done nothing but push risky asset values to record, all time high levels, has failed to stimulate the global economy into the much needed "take off velocity" necessary for the virtuous cycle that is critical for central planning to be able to pull away from micromanaging capital markets around the globe. In fact, quite the opposite. And this time around, after 6 years of consecutive failures, even the G-20 itself is realizing the time to make hard decisions has come.
What does this mean? Bloomberg explains:
Policy makers in the U.S. and Canada are putting pressure on Europe to bolster demand. U.S. Treasury Secretary Jacob J. Lew has urged Europe to spur demand, while Canada’s Oliver has said some European countries should consider additional fiscal measures.
“It became clear that in the short-term, more work needs to be done to bolster cyclical measures,” Mexican Deputy Finance Minister Fernando Aportela said in an interview in Cairns.
“There was a strong focus on the need to carefully communicate potential monetary policy changes,” Hockey said. “In this regard I want to particularly commend the chair of the Federal Reserve, Janet Yellen, for the careful and deliberate way she has undertaken this difficult task.”
Lagarde stressed the importance of finding the right policy mix for each country. “The recommendations have to be tailored and targeted for each and every country,” she said. “Each and every one is different.”
Translated, this means that while the world was able to avoid making any tough fiscal choices to boost growth, instead punting to central banks time and time again, the time when "Mr. Chairmanwoman will not get to work" has arrived. As such it is up to the various local governments to finally pick up the baton and instead of pushing regional equity markets to record highs rewarding on ly the super rich, it is time to encourage broad fiscal reform.
And since the only thing more incompetent than a central banker are the bought and paid for corrupt corporate muppets also known as "politicians", the time to secure seat belts appears to have finally arrived.
Finally, one wonders: just what needs to happen for any of these warnings to be finally not ignored by the market: should the alphabet soup of enabling "warners" listed above, the Fed, BIS, IMF, FSB, etc, have to start speaking in binary for the algos to understand the message?
Source: Communique Meeting of G20 Finance Ministers and Central Bank Governors
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All those unelected 'officials' making decisions to screw Main Street and transfer society's wealth to their Nazionist masters.
I don't want these parasitic puppets making any decisions that affect me or mine.
They can all go to hell.
The BIS is all, knows all, sees all. THey are your Lord and Masters. All answer to BIS yet, BIS answers to no one. They are your Gods.
Anyone notice in the past several years your auto / home insurance premiums keep rising by 5-10% every year? More inflation amidst supposed "deflation". Insurance companies, like the rest of us, used to get 3-5% on their cash. Now they too get zero. How do they then maintain their insurance float profit margins in excess of paid claims? By sticking it to you, of course. One more thank you to QE and to the gentlefolk in that pic above.
As a followup: shop your rates just like cable, then call your exitsting insurer. They have a desk waiting for the 10-20% who actually notice or care, and will reset or re-rate your policy to try and keep you. It's a hassle but worth it... and one small way you can fight the Fed
You can beat these suckers, just don't borrow and live within your means. Starve these monster till they die.
Where's a Hellfire missile when ya need one?
So the idiots who not only reduced interest rates but continued to do so and then continue to hold them down are now worried about the dangerous beaviour they have spawned.
The only way they have a chance of retreating from this situation is first by increasing margin requiremens on all new investments rather than raising rates.
By the way since when are people ON phtographs rather than IN photographs? Although strangely enough they would be ON the front cover of a magazine.
Yea..its kinda like they're telling you theres trouble ahead. Oh..they dont intend to stop..or admit that they made the trouble. .its just so they can say "we warned that trouble was coming..and nobody did anything...sorry bout that."
Instead of Cairns, this meeting of liars, parasites and pedophiles should have been held in Freetown, Sierra Leone.
Wow! If there were one more we would have 52. That's a deck of cards. Reminds me of those cards they used to identify all those Iraqis during the Saddam purge when they were on the run.
"We're very concerned about this. We don't think we brought enough suntan lotion!"
Lagarde looks orange. What's up with that!?
Being bright orange like that would have made those 'Finding Waldo' games way easier.
Solarium.
i want all the Vets here on Zh to read this artcle from start to finish...
the dots are there and are hard to ignore...cant believe everything u read but i do have the sense that we r being played...remember, these sociopath mother fuckers r diabolical mother fuckers and plan way in advance...
READ IT.
http://redefininggod.com/2014/09/mainstream-globalist-propaganda-reveals...
Very interesting article. The Phoenix in 2018... sounds about right. I was watching the latest Captain America movie last night with my kids. I think it is called the winter soldier or something like that. The plot of how S.H.I.E.L.D. had been infiltrated by HYDRA and corrupted to its very core. Yeah, I know, its Hollywood, but interesting how it seemed to parrallel in many ways today's reality. Just sayin....
every movie aint just a movie...
"THE MATRIX."
WHO finances Hollywood propaganda == WHO finances the government.
Sociopaths get special joy from mocking their victims...
Rollerball, They Live, The Matrix, Michael Clayton, and possibly Winter Soldier (haven't seen it yet).
Listen closely...
Michael Clayton - Opening Rant
https://www.youtube.com/watch?v=Qtd_k9CkciA
The moment of truth has arrived, not because these vampires say so, because all bad things must come to an end.
Starting in the next week or so, risk off dies. The bulls and bears will wage war for a year, after which time the bears will so viciously crush the bulls, they may never recover.
Bears have been unduly and unfairly humiliated since 2008, they have a mountain of pent up rage. It will be released.
Don't swim at the beaches there. The shark and jellie nets are gross. Gotta take the ferry to green island. Paradise right there.
Two options:
1) $10-20 trillion USD have to be extinguished via bank shutdown, Madoffization, closure of offshore accounts or plain assassinations. There are $80 trillion in existence
Issues is: Whose trillions? Who will be the victim?
I'd say offshore accounts will simply be shut down, computers unplugged and a couple of assassinations
2) Globalization dies. World sinks into chaos
I bet the first is about to happen.
Targets:
S&P as low as 400 temporarily then go up again 800
Oil as low as #20 temporarily then go up again to $60
10yr UST yields as high 10% then go down again to 6%
Timeline?
It should have already happened.
In may 2013 I made a prediction that by no later than Dec 31st, 2014, Federal Reserve will call the margin on the system, forced by Military Complex.
I may end up being correct timewise, still possible.
However, the events will inevitably occur, sooner or later.
1. Then 2. Both occur. Welcome to the Hunger Games. I will be in the banana district.
Bank lobby is cooperating with Iran and Iran Quds, it seems to me, in order to survive. They just offered Iran to simply disconnect pipes to nuke centrifuges, not dismantle them.
This is an invitation for blood to Military Complex and Saudis.
Iran just seized the 3rd arab capital, Sanaa in Yemen, after seizing Baghdad then Damascus.
We are going to see blood shed, I am very much affraid.
The additional real option is to knock on the door of the $20-$30 trillion residing in tax havens and politely tell them that they will have to become benefactors of a massive debt jubilee.
That is part of number 1 and I think it is very very very possible.
There are officially $40 trillion in existence and another $20-30 trillion in offshore accounts, unaccounted for.
WARNING! WARNING! Danger Will Robinson and Dr. Smith, Hedge Fund Hotel is getting ready to blow up! WARNING!
Perpetual bubble blowing via public debt until central banking is exterminated.
What we have is a buildup of excess bankers.
We should make some banking guide-stones with basic commandments:
Thou shalt keep the population of bankers under 100.
Thou shalt not let the finance sector over-take more than a 2% share of the economy.
Thou shalt not make student debt un-affordable.
Thou shalt not loan in a predatory manor.
Banks shall be limited to three story buildings.
Thou shalt not trade stocks with automatic computers.
Banks shal not be allowed to fractionally reserve anything.
Violation results in hanging.
Might soon become reality since our gubmint is destroying the rule of law and trust. Faith is waning. They care not what we warn about.
There is a reason the VIX is so low. The TBTF banks have used the Fed's "infinite" leverage to paint the tape selling vol while providing strategic technical support (selling unlimited GLD puts with key takedowns while abusing market maker status, options and asymmetric leverage to lead the technical traders to turn everything almost opposite where they should be based on fundamentals. But, they cannot succeed unless we succumb. As long as people/institutional investors sell the predatory trading scams (NFLX did $5B notional derivatives Friday when it averages only $20MM real world revenue per trading day and $1MM profits) and convert their synthetic financial assets to gold, they will lose and the 99.999% and our progeny will win.
Translation;
We own the game, we own the gun, we fired the bullet racing toward your financial head.
We are warning you now that you will soon own the bullet.
How you will die an ugly death will be different for each individual.
The Market isn't broken, it's Fixed. They will have their thumbs on the scale until it no longer suits them, during which time we should all be stacking and taking massive profits from our ETFs.
A War Footing is immensely popular in the US from which all wealth truly flows (as the last exploited commonwealth) from its innovation, raw materials and gas. Every couch monkey and SNAP-taker secretly wishes they were successful, and every American meatbag secretly understands wars make profits. Americans are the alpha and omega of the problem, and like Crowded House said so presciently "now the excess of fat on your American bones will cushion the impact as you sink like a stone."
Not a single one of those mother fuckers gives a shit about anyone on main street. Screw the serfs. They are concerned with only one thing, themselves and the very top tier income individuals. All the bildge they spew is bullsiht! When the shit does hit the fan and it will, not one spec will get on their Savile Row suits.
As I understand it, Main Street shouldn't give two shits what people in naptha-smelling John Phillips think.
Main Street cares about making jobs, homes, families and fortunes off their sweat and innovation.
You want to help Main Street? Reduce the load of paper they must file in order to exist. The burden of expansion is that with every new hire Main Street makes, it must hire another administrative support person just to shuffle the paper. It starts at 1 employee and doubles with every five.
Don't attack investors who know where to place their fortunes, attack communities and states that make owning a business on Main Street onerous, and soul-sucking.
You must fly under the radar to survive. Uncle Sam hates competition against their big-box brethren. This is a known reality.
Starve the beast or live the consequences. It could not be more simple.
Still have direct deposit?
Why did Draghi suddenly shrink in size? Damn the bitchezzz...
Lagarde looks like a tomatoe..... A sun dried tomatoe
Revenge of the Killer Tomatoes. Dropping LaGarde in here is an insult to tomatoes everywhere. They will come for you.
I notice that she isn't on the list. Only positive thing about this article.
By the way, do some strategic thinking. Those people want a flight to USD right now to maintain the status quo. They've thoroughly abused money and lost vontrol to those who used it to accumulate gold, now they are desperately issuing warnings. They created the imbalance between financial assets and real assets. I've said for years imbalance creates its own instability, which it has and they've lost control because of their hubris that they could control everything. They're finding the truth of the Golden rules (both the "he who holds" and the "do unto others").
Risk? The Federal Reserve took that word out of trading for nearly 6 years now! Anyone not blinded by CNBC knows that real risk is there and not priced in, but the real risk has been overridden by the Federal Reserve and other Central Banks well known Wealth Effect Ecnomic Stimulation Program. This wealth effect also hid the real purpose of money printing, and that was to save banks, and big investors.
Lets say the Fed stopped it's money printing, Liquidity injections, blatent asset purchases and buying of indexes. Come on! Where would a real Price Discovery Market price todays stocks?? Fuck, the market would be a Big Bang implosion.
It's all fake, it's all fiat. That is why the west has chosen WAR, all acorss the globe, as it's last exit strategy. Who is gonna care about market manipulations when NATO is plowing towards Moscow and tactical nuclear weapons are being readied by the RUssian Federation to stop the attack.
I think it is important for the world to remember that Russia and only Russia has the right to use Nuclear weapons in response to conventional war. Not only that but about a couple of hundred of Putin's ra ra team on ZH would tell us why it was the right thing to do should it happen.
I totally agree with your frustration, but you need to understand something:
American innovation leads the 500, whether it's software, hardware, ASICs or polymers. With our control of Wal-Mart, we have a giant tiger by the tail and basically at our whim. Now expand this reasoning to an ASIC maker: does Shenzen want to lose its easy labor fabricating American ideas?
Over 20 years, I only took a paycheck for two. I speak as an inventor, business owner, programmer and more: it's so much easier taking a paycheck than doing the work creating the paycheck. China will not cook our goose. Therefore Russia can't hurt us. Their interests are in supplanting us, industrially, with China.
An Alexandria Think Tank is playing 3D Chess while Mr Putin is jammed up installing Age of Empires on his new Windows 8.1 crap-box. "Sergei -- Compatibility mode? What is this sheet?"
Such an amazingly arrogant and amazingly misleading post. Most of our scientific inventions ate now made by foreign nationals. By making it difficult for them to become citizens, we've strengthened the innovative capacity of the rest of the world. Financialization has gutted both our productive and innovative capacity. The banks must be stopped.
I agree with you. Right now Mexican fathers are importing themselves to protect children they never knew, and working in jobs, in foreign towns where their fruit has been misappropriated.
Our innovations are being made by foreign nationals. You said that.
We are leveraging our control by innovating, then foisting the labor onto foreigners. Why do you think we disagree? Can you show me one non-Japanese Asian innovation in the last 6 months, or have they been in total "scramble for jobs" mode?
Do you have any idea the strength of the IIT Silicon Valley network? The Chinese are aggressively financing cutting edge materials and manufacturing technology that US financial institutions no longer finance because they are busy playing MOMO consumer stock ponzis. So, the Chinese will own the manufacturing and the next generation technology.
The facts do not comport with the propaganda.
You are suitably informed.
The Chinese do not own the brains, they can buy what they want. Look at the disaster of Lenovo. IBM still persists in my beloved Colorado.
QED
Lenovo was a commodity PC business. They are buying controlling interests in many of our highest tech companies, both directly and indirectly. And those companies will have their products manufactured directly in China, bypassing the F500.
No, tech companies are wisely carving off unprofitable lines and handing them to what Ayn Rand called the second-handers, the Chinese. For reference see what HP tried to do with its PC line. Sad melee of silliness.
Not convinced? Okay, let's look at a small shop. Who really owns the IP on the low-nm ASIC? Is it BitMain, or is it Mike Schwartz in Manhattan?
What about a dimmable ballast from Colorado? Who owns the tech, the Chinese plant or the IP holder?
Similarly for every thing on the 500. Who holds the purse strings is immaterial. Who does the labor is essential. We hold the chips because we employ the meat.
Not true. Without Western consumers and a robust American economy, China descends into feudal chaos. We aren't far behind but the facts are easily discerned.
The fall of the dollar as the world's reserve currency may be inevitable but it brings with it hard to imagine consequences. They don't teach that in economy101 or anywhere else.
Complete chaos is in the offing.
Unless China decides to let us currency (now with gold backing to provide required trust) appreciate. The 40% of income that currently goes to food and energy now becomes much less expensive in RMB terms, providing both a wealth and income effect, jumpstarting the consumer economy of 1.3B people.
The Fed must be stopped. Congress should be hung.
Hanged.
All of them, including Ron Paul, Rand Paul and Rand Paul's hairpiece. All hanged until dead.
Im sure they are all thinking............ LET THEM EAT IPHONES
How did that hobbitette sneak in there? She's like a rat amongst wolves.
On a more serious note, when the pitchforks come out of storage, this photo will prove very useful.
They will want a few insurance runs on this market. That means Dow has to exceed 2.5 times the 2007 record before they will tighten. That means about 37,000 will feel just about right.
Actually, I look at this photo and think, man .. what a missed opportunity for a drone strike. Too bad....
The worst terrorists in the history of the world all in a happy photo before the fall. Wonder where they will be in a few years.
"THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.
-
At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987. The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates – a logical preliminary, it might seem, to radical monetary reform. For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October. These events have chastened exchange-rate reformers.
The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.
…
The new world economy
The biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates. as a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another. These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates. As telecommunications technology continues to advance, these transactions will be cheaper and faster still. With unco-ordinated economic policies, currencies can get only more volatile."
http://socioecohistory.wordpress.com/2014/07/26/flashback-1988-get-ready...
“It became clear that in the short-term, more work needs to be done to bolster cyclical measures,”
How long is that short term, now? Five years? Six years?
Sorry guys - you are two years too late to prevent the upcoming crash
S&P 500 Index - update for week ending 9/19/14 - it appears the top is in
http://www.globaldeflationnews.com/sp-500-indexelliott-wave-update-for-w...
The recent drum beats and flames of war have distracted many people from focusing on the economy. The markets are extended beyond beyond, all this comes at a time when the IMF is calling for more QE. It seems this might be a good time to review the reasons this is economically unsound and a bad idea while markets are setting new record highs and economies continue to struggle.
The policies of the last six years have yet to produce the desired and expected results promised. As a consolation many economist, bankers, and those who have benefited greatly tell us we would be in far worse shape if we had not taken this course. Now it seems Central Banks and the IMF are clueless on how to proceed and a policy going forward. More on the lack of a clear path in the article below.
http://brucewilds.blogspot.com/2014/09/central-banks-and-imf-clueless-on...
Too much going on for people to focus on one thing--no one knows which way to look. I think most people have info overload.
Whatever.
...keeps gently shaking champagne bottle.
interesting to see that ZH seems to be a permanent $ bear. $ index is on a tear and highly explosive as it is the only sure alibaba kind of thing...
watch for Gold to break down just like most commodities...
Well looks like the market came off on this warning fo all of 10 minutes USJPY now back over 109 and the Dow has bounced 50 points...rally on?