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Happy 27th Anniversary Black Monday

Tyler Durden's picture




 

"It could never happen again... right?"

 

 

And if you think this time is different - just take a look at the 'tricks' they used 27 years ago to stop the fall - A Fed statement and borken/halted exchanges...

 

Charts: Bloomberg and Yahoo

*  *  *

Bonus Clip - as we noted previously,

"This is a market that has been seriously overvalued for some time," exclaims Paul Tudor Jones,"and what we are seeing today is the piercing of the bubble..." adding that "Wall Street was uniformly unprepared for this kind of a drop."

Of course Bill Griffeth asks should we buy this dip... Tudor Jones replies - so ironically -

"we should see massive Federal Reserve and Government intervention in the FX and debt markets to stem what has unquestionably been a panic."

But Tudor-Jones cautions:

"prudent investors should use any rally to scale back into short-term Treasuries."

The legendary trader goes on to explain he is trading fear as investors fear deflation and disinflation and warns

"every American needs to get their house in order, needs to be conservative in their investments, the next few years will be about capital preservation."

Wise words for record highs...

 

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Fri, 10/17/2014 - 17:20 | 5348781 ACP
ACP's picture

Funny, that graph actually looks like the last week, but of course, not quite to that magnitude.

Fri, 10/17/2014 - 18:09 | 5348894 Aknownymouse
Aknownymouse's picture

Funny. Is it me or did cnbc look a lot more interesting. They had an intelligent discussion one on one where the trader actually said his opinion without getting interrupted a million times by Bill Griffeth. Also there were not 6 or 8 boxes of stock pushers trying to talk their book and where you could not understand a word as they all shouted at the same time.. It was an actual interesting conversation. Maybe cnbc should watch those old tapes to understand what went wrong.

There was a promo intro saying the view from chicago at the end. I was so interested I actually wanted to hear that. This is where they would bring in Santelli now and then try desperately to shut him up. Why don't they just cancel him and get it over with.

Fri, 10/17/2014 - 19:34 | 5349111 Escrava Isaura
Escrava Isaura's picture

Aknownymouse

Do you refer CNBC as information? How do you refer propaganda?

 

Fri, 10/17/2014 - 20:30 | 5349260 max2205
max2205's picture

Spy 220. ...10 x in 27 years....btfd

Fri, 10/17/2014 - 20:55 | 5349308 BKbroiler
BKbroiler's picture

Funny. Is it me or did cnbc look a lot more interesting.

 

I was just thinking that.  And reporters had the guts to call traders maniacal and ask them if they were making money off the misery, nice bit of tension there.  

Fri, 10/17/2014 - 21:06 | 5349329 ZerOhead
ZerOhead's picture

Happy 27th Anniversary Black Monday

Tyler... you're shitting me right? Have you been spending time with Christine Legarde again?

27 ?

http://www.youtube.com/watch?v=QYmViPTndxw

Fri, 10/17/2014 - 21:46 | 5349445 Kirk2NCC1701
Kirk2NCC1701's picture

2014-1987=27

Questions?

Fri, 10/17/2014 - 22:05 | 5349497 Escrava Isaura
Escrava Isaura's picture

 

87-27+17=77

 

No question here... Just leave it ending in 7... Or whatever the hell that means.

Fri, 10/17/2014 - 22:21 | 5349539 Sick
Sick's picture

2014...14/2=7,  who knows how the pshycopaths think.

Sat, 10/18/2014 - 06:17 | 5349935 Robert.Paulson
Robert.Paulson's picture

23 ?!

Sat, 10/18/2014 - 08:50 | 5350037 Keyser
Keyser's picture

We've already played this game, comparing the current charts with 1929... How many got their face ripped off on that one?

Sat, 10/18/2014 - 09:44 | 5350091 GetZeeGold
GetZeeGold's picture

 

 

 

If anything.....we killed the Yuppies....and I'm happy about it.

http://www.youtube.com/watch?v=G1ga23DIAo8

 

 

What we forgot....is nature abhors a vacuum.

Sat, 10/18/2014 - 10:10 | 5350139 rccalhoun
rccalhoun's picture

1987 was the BTFD of all time........what are you touting ZH?   cant beat 'em, so join 'em?

Sat, 10/18/2014 - 10:42 | 5350182 TahoeBilly2012
TahoeBilly2012's picture

Morrisey "Suedehead" for those fags in the office.

https://www.youtube.com/watch?v=JenlsnA9-mE

Fri, 10/17/2014 - 22:36 | 5349581 ebworthen
ebworthen's picture

I would love for this Monday to be another Black Monday.

The house of cards is a lie, and needs to fall for good.

Is it wrong that I wish that?  I don't care, I wish it.

This time, hang the complicit Ponzi masters.

Hang 'em high.

Fri, 10/17/2014 - 23:41 | 5349696 Gromit
Gromit's picture

Bubble hasn't been burst just tickled a little.

Sat, 10/18/2014 - 03:22 | 5349854 hibou-Owl
hibou-Owl's picture

If it helps, I use Elliot wave analysis for shorter term timing and find it quite good.
This last run down hasn't completed, the bounce yesterday counts wave four. Wave three impulsive (down) is larger than wave one, which means wave five likely to extend as three cant be the smallest.

So I'm waiting for four to complete (up) and will add to shorts on the break.

So in plain English bit of covering to go then another potentially large leg down.

Sat, 10/18/2014 - 08:44 | 5350028 new game
new game's picture

only one bubble to watch-bonds, treasuries that is. endless waste of time cause it is just digits that have a digital carrying charge easily paid for at this point in tyme. when the tyme arrives that pomo is to pay the minimum interest payment, then it is tyme to head for da hills...

Sat, 10/18/2014 - 10:18 | 5350148 chunga
chunga's picture

I think it has a lot to do with misery loving company eb. There are a lot of people out there who have been seeing their standards of living go steadily down the tubes. Meanwhile, we're told the stock market is the bellwether of everything, and it does nothing but go up.

Throw in the fact that it's all fake (pure solid fraud) and I'm right with you. Crash baby.

Sat, 10/18/2014 - 11:01 | 5350209 RaceToTheBottom
RaceToTheBottom's picture

The FED thinking is if they can cause a 3-5% "crash" they can remove pressure and stave off the big one.  

Lame.

Sat, 10/18/2014 - 12:27 | 5350360 trulz4lulz
trulz4lulz's picture

Aint no moutain high enough, aint no valley low enough!

Sat, 10/18/2014 - 13:33 | 5350526 dark_matter
dark_matter's picture

Three is a holy number. Three to the third is the holy of holies.

Sat, 10/18/2014 - 18:15 | 5351033 trulz4lulz
trulz4lulz's picture

33rd degree no doubt. Ahh 27.....

Sat, 10/18/2014 - 00:33 | 5349752 Implied Violins
Implied Violins's picture

More like: 10/24/2014 = 1+2+4/2+1+4 = 7/7...and a second eclipse is involved. These fucks use numerology and astrology to plan their shit, even though that crap is worthless for anything else. I hope I'm wrong...

Sat, 10/18/2014 - 00:51 | 5349770 Escrava Isaura
Escrava Isaura's picture

Implied Violins

 Because it reassures the masses there’s divine intervention. Total farce, but it works because I have friends in Washington, DC that believe it. Buy into. Bring it up in conversations.

Amazing how well this propaganda ‘nonsense’ works.

 

Fri, 10/17/2014 - 21:53 | 5349467 Antifaschistische
Antifaschistische's picture

exactly....is that the next lesson, that no matter how bad it gets, keep BTFD..that is what 87 taught us.   I do get the feeling, that someday, someway, that strategy may actually hurt someone...but

Sat, 10/18/2014 - 01:16 | 5349794 sun tzu
sun tzu's picture

NIKKEI

1990 = 38,000

today = 15,000

Sat, 10/18/2014 - 04:17 | 5349882 Seahorse
Seahorse's picture

that hurt someone

Fri, 10/17/2014 - 20:17 | 5349224 Greenskeeper_Carl
Greenskeeper_Carl's picture

Santelli is kept there so that when the market goes up, they can make him look crazy, but when it inevitably crashes and people correctly blame the fed for creating this mess in the first place, they can claim some semblance of credibility by having a "semi-doomer" on there the whole time.

Sat, 10/18/2014 - 08:13 | 5350002 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

You mean "token-doomer", no?

Fri, 10/17/2014 - 21:21 | 5349378 Buck Johnson
Buck Johnson's picture

We never learn do we.  Well this time we may learn and it's going to hurt.

 

Fri, 10/17/2014 - 22:01 | 5349493 tarsubil
tarsubil's picture

Just imagine how worse the shit show will be in another 10 years.

Fri, 10/17/2014 - 23:30 | 5349679 frankTHE COIN
frankTHE COIN's picture

That was actually the FNN ( Financial News Network)
Bill Griffith, Ron Insana, Sue Herrara, Neil Cavuto, and John Bollinger.
When they merged to become CNBC there was overlap so John Bollinger had to leave. And John Murphy ( who wrote " Technical Analysis" stayed)
John Bollinger went on to develop the Bollinger Bands you see on Technical packages)

Sat, 10/18/2014 - 00:35 | 5349754 OldPhart
OldPhart's picture

"capital preservation"

Beans, Bullets, Bullion, Broads and, um...oh, yeah, Bacon!

Fri, 10/17/2014 - 19:33 | 5349107 SAT 800
SAT 800's picture

And un-prudent speculators should short said rally. Cause, it'll fail again. What's that expression? oh, yeah, "A dead cat bouinces"; something like that.

Fri, 10/17/2014 - 20:11 | 5349183 aVileRat
aVileRat's picture

Yes

As we saw with Goldman, CNX and Alcoa the market is not focused on earnings right now, unless its so horribly outside the realm of the "sell side" (like SLB or NFX) which requires market action.

"Nos Morituri Te Salutamus Esse".

Anyone else notice the WSJ writeup on the Shire deal falling apart on the 27th Anniv. of Black Monday was a dead ringer for their article printed on the Friday before the black Monday crash, when back then they also commented on the deal risk for other large M&A arb. players ?

If you are a retail trader, a good brushup this weekend on the use of flash market orders with controlled limit collars would be good reading vs. watching Netflix

If you are buyside, and your boss has not yet told you about the joys of 3am OSHIT fire drills, and you have not yet had one at your shop, Now would be a good time to brush up on the fail-to-buy of the Japanese today and the Ruble crisis, and today's current fail to cover in context to the last time a asian Central Bank had a minor crisis to allocate collateral.

If you are Fed ? Take the weekend off, go post on Reddit or something papers are not due until December anyways.

VIX term implies nothing bad will happen for the rest of the month, but it would really suck if Allergan is pulled or something big was fudging their Sapphire numbers or that slowdown in DRAM is due to something not being priced in, given everyone just ran into Healthcare & Dotcom stocks for "safety".

 

Sat, 10/18/2014 - 00:43 | 5349763 OldPhart
OldPhart's picture

After many experiments I can attest that a dead cat bounce is bullshit.

I tossed a dead cat...my own 23 year old cat who died of natural causes (ate something she shouldn't have) from my roof to the brick walkway ten feet below.  Now I launched about eight feet into the air, in forty attempts, and at no time did the pussy corpse bounce.  My results were essentially "Thud", "Thud, roll left/right", "Thud, roll forward/back", "Thud, slide through blood and gore and roll where-ever the corpse hit dirt", and "Thud.  Shit and guts pour out. (about thuds twenty five to forty)".

Forty attempts with one cat, and a lifetime with other pussies...and not once have I found a dead one to bounce.

 

Sat, 10/18/2014 - 12:45 | 5350398 just-my-opinion
just-my-opinion's picture

I saw the cat bounce....went from down over 400 less than 200 in a few seconds.....Then it BTFD on Friday.....This game needs too end or we are "Doomed"

Remember that ....standing around the copy room....we ran out of paper....we are "Doomed"

How long can we push the shit storm in to the future?

Fri, 10/17/2014 - 21:20 | 5349372 DarkLordofSadNews
DarkLordofSadNews's picture

Time to polish those canned food eh!

Although ZH gets insider info better than anybodyelse

Doom and gloom is a bit overrated , there I said it!!

Fri, 10/17/2014 - 22:04 | 5349496 nuke ISIS now
Fri, 10/17/2014 - 22:34 | 5349578 Redneck Hippy
Redneck Hippy's picture

I remember 1987.  I lost about 25% in one day.

But it all came back by January 1988.  It was all a sort of automated response due to "portfolio insurance," the HFT of those days.

The robots pay no attention to fundamentals.  Humans have a big advantage relative to robots.

Sat, 10/18/2014 - 00:51 | 5349769 OldPhart
OldPhart's picture

I remember 1987, too.  I was too dirt poor to have anything in the market back then. But I lost about 75% of everything for the next thirty years.

Sat, 10/18/2014 - 10:33 | 5350171 Keyser
Keyser's picture

I too was dirt poor back in the late 80's and had nothing... I'm happy to say that after all these years I still have most of it... 

 

Sat, 10/18/2014 - 01:24 | 5349799 Freddie
Freddie's picture

Is Russia (and China) trying to crash the US stock market?

http://www.vineyardsaker.blogspot.com/2014/10/is-russia-trying-to-crash-...

 

Sat, 10/18/2014 - 10:01 | 5350123 studfinder
studfinder's picture

All China would have to do is shut off exports to the US and it would be game over.  Can you imagine the Walmartians experiencing empty shelves? 

Sat, 10/18/2014 - 10:35 | 5350174 Keyser
Keyser's picture

Considering that Walmart has driven all the mom & pop stores out of business, the backlash would be grave... 

 

Sat, 10/18/2014 - 03:30 | 5349859 Jack Sheet
Jack Sheet's picture

Just stay wary, alert, and wery, wery, nimble.

Sat, 10/18/2014 - 21:45 | 5351491 CASTBOUND
CASTBOUND's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://goo.gl/yioYBZ

Fri, 10/17/2014 - 17:22 | 5348783 Bangalore Equit...
Bangalore Equity Trader's picture

Listen.

All that free money sitting on the short side waiting to be had.

Short ESX4?

Fri, 10/17/2014 - 17:29 | 5348796 TeamDepends
TeamDepends's picture

When Black Friday/Monday comes
I'll collect everything I'm owed
And by the time my friends find out
I'll be on the road
-Steely Dan
LISTEN to that.

Fri, 10/17/2014 - 17:35 | 5348820 negative rates
negative rates's picture

I'm gonna catch the grey men when they dive from the 14th floor.

Fri, 10/17/2014 - 17:39 | 5348827 seek
Fri, 10/17/2014 - 17:59 | 5348869 Bangalore Equit...
Bangalore Equity Trader's picture

Listen Raceists,

"I'm going to feed the Kangaroos!"

Bitchez!

Fri, 10/17/2014 - 20:28 | 5349178 new game
new game's picture

this aint no repeat, it is different!-manipulated into a election.

another week, another shitshow, stats will accomadate the fed to their reramp. s and p right back up to 2k. held 1850, bingo bango to 2k, fucking joke...

Fri, 10/17/2014 - 21:46 | 5349438 nuke ISIS now
nuke ISIS now's picture

Maybe we willl all be singing along next week

http://www.youtube.com/watch?v=q1ZV4Mx7tw8

Fri, 10/17/2014 - 17:22 | 5348784 Agent P
Agent P's picture

It would be a 3700 point move in the Dow today.  Think about that for a second or two.

Fri, 10/17/2014 - 17:59 | 5348866 seek
seek's picture

The wonder of circuit breakers...

"Specifically, the circuit-breaker halt for a Level 1 (7%) or Level 2 (13%) decline occurring after 9:30 a.m. Eastern and up to and including 3:25 p.m. Eastern, or in the case of an early scheduled close, 12:25 p.m. Eastern, would result in a trading halt in all stocks for 15 minutes. If the market declined by 20%, triggering a Level 3 circuit-breaker, at any time, trading would be halted for the remainder of the day."

At 16,380, 7%=1,146, 13% is  2,129, and 20% is 3,276.

So the 1987 move literally couldn't happen today, they'd close the exchange before it could. Gotta love the roach motel.

Fri, 10/17/2014 - 18:35 | 5348952 disabledvet
disabledvet's picture

See below and "E-bulla-ish"? Definitely se parallels to back then. Oil had bottomed at six bucks a barrel in 86...the economy was booming, interest rates were dropping.

Should be noted Alan Greenspan had just taken over at the Fed though.

Another big difference was/is the tremendous influence that media has on our lives now compared to then.

Fri, 10/17/2014 - 19:51 | 5349147 DirkDiggler11
DirkDiggler11's picture

I believe you are dead on Seek, they would close the market if it happened today. When the market does "re-open" people now have a 50% loss. So much for selling at the right time and heading for the exits. Of course all of the big money will be trading in dark pools while the "exchanges" are closed. That's how you wake up with half your fresking money gone.

Fri, 10/17/2014 - 20:20 | 5349230 aVileRat
aVileRat's picture

While Seek is correct, the whole point of reporting on when exchanges are declaring self help is that the breakers can be worked around or traded on ARCA / DARK to get around the lockouts, the mainboard may show a price of -5% on the exchange being printed to the traders at NY, but the real price may be DNS'd due to order volume and in reality the price may be -20% while the NY breaker is not engaged yet since there is a 10ms lag between many hubs. This was proven to be a big and as of yet, not corrected fault in the existing system, as proved by the FB IPO, and as recently as the BABA IPO.

In addition, it has been proven recently in the energy crash, liquidity backstops are not in play right now.

So even if the exchanges were closed for the day, markets would continue to trade OTC using derivatives and the orders would build up, and back-log into the currency markets, causing the panic in one market to turn into a currency panic. Since today, unlike 87, you can get a swap on and at pretty much anytime if you are big enough.

 

Sat, 10/18/2014 - 11:31 | 5350259 RaceToTheBottom
RaceToTheBottom's picture

So basically just like Cyrus when Russians went to London to withdraw money from frozen accounts while the local serfs could do squat.

Nice to be more equal.

Fri, 10/17/2014 - 20:01 | 5349180 Kirk2NCC1701
Kirk2NCC1701's picture

I remember it swell.  Drinking with friends and classmates at some Pub at Covent Garden.

We kept cheering the drops.  As it went down, up went the glasses.  [burp]  Also remember going home with an English chick, as the Canadian chick was too "lippy" and feminist for my liking.

Seriously though...

1. How long did it take to recover?  W/o checking the records, I'm betting it took less time than for the Gold prices to recover.  Mind you, having low stock or gold prices allows you to buy more. 

2. High stock prices seem to benefit mostly the Retired Boomers, who can cash in high prices or high dividends.  Remember my in-laws being bummed in 2009, but cheerful as hell the last 2 years.  And unlike me, who's over-balanced* on PM (that pays no dividends), they own ZERO gold.  Fuckers!  (Don't tell them I called them that).

 

* That'll teach me -- for not heeding my own advice about Diversifying and Balancing the Portfolio, and going overboard on Doom-porn.  Rickards is right:  Store no more than 10-20% in PM, and keep the the rest in a mix of Paper (hand-picked global stocks and corporate bonds) and other Appreciating/Real Wealth (Quality RE, Quality Art...).

Fri, 10/17/2014 - 20:17 | 5349222 Winston Churchill
Winston Churchill's picture

Remember the hurricane on the Thursday before Jim ?

Fri, 10/17/2014 - 22:34 | 5349475 Kirk2NCC1701
Kirk2NCC1701's picture

LOL. Hell, yes!

Was kinda "preoccupied" on a stormy night, but Hyde Park didn't look so good the next day.

Weeks later, I recall taking a train to Dover, and there were fallen giant trees everywhere.

No overturned or smashed Bentleys in South Kensington or Kensington High Street area though (near the College), for someone on a Student budget to enjoy some cheap Schadenfreude. ;-)

One helluva blow job by Mother Nature. ;-)

Sat, 10/18/2014 - 11:24 | 5350244 Winston Churchill
Winston Churchill's picture

Hurricane Gonzalo is forecast to hit the UK on Sunday.

History only rythmes, right ?

Sat, 10/18/2014 - 01:21 | 5349798 OldPhart
OldPhart's picture

The only thing I have in this fucked up market is my 401-k.  Value $55,000...contributions stopped back in 2008 when the value was $37,000.  I can lose about $15k and I'm back where I was with falsified inflation to date.

I used to day trade, idly, back in the 90's and oughts.  Once made 10k in one day on Corning.  Bought 1 lot of EDIG in 96 for a penny a share.  EDIG popped to around $4 a share in 2001 or so...took me over a week to find the certificate to cash it in.  So I only got $2.86 a share.

In 2008, Congress bailing out the banks in spite of 'overwhelming resistance' woke me up.  Our government is owned and it isn't owned by us.  I spent the next two years reading all the required shit that brings you to a fully alert status and, eventually, got my own sign in to ZeroHedge as part of that growth.

Since 2008, continuing through this moment, not a personal penny of mine has been tossed into that corrupt wishing well known as fucking 'Wall Street'.

I'm considered a small fry 'big wig' by our local bank (owned by China).  I have a 'relationship manager' that caters to me.  The company I'm Controller for has various loans, lines of credit, and cash balances that exceed $1,000,000,000.  Because of that "I" get special privileges (for instance, I can deposit more than $10k in cash without a lot of bullshit, though, initially I did have a lot of bullshit...what is your title?  "Superman", "International Arms Dealer", "Porn Movie Fluffer", "Rogue CIA Agent Shipping Arms to Syria"  Made them type it in letter by letter, whatever the fuck it was.)

Now, my personal bank bitch knows that I have no fucking intention of keeping more than a dollar in my personal account more than what is immediately needed to pay bills electronically.  And he knows why...because I sat his ass down and taught him how money is created.  He had no fucking clue!

Now, when I call to tell him I'm making a $10k or more cash withdrawal three days ahead, he cautions me to be careful and asks if I want a security team, NO!.

I don't want a bunch of ex-cops/ex-cons knowingly escorting me, and a pile of fucking cash, to the gold/silver outlet; nor do I want a bunch of reports describe my particular day.

 

Sat, 10/18/2014 - 10:12 | 5350142 americhinaman
americhinaman's picture

>I don't want a bunch of ex-cops/ex-cons knowingly escorting me, and a pile of fucking cash, to the gold/silver outlet; nor do I want a bunch of reports describe my particular day.

 

why not?  tenne mucho mucho deniro in su trucky trailer?

https://www.youtube.com/watch?v=3kEpZWGgJks&list=UU3XTzVzaHQEd30rQbuvCtTQ

Fri, 10/17/2014 - 17:25 | 5348789 debtor of last ...
debtor of last resort's picture

Record highs asking for record lows and a full blown market halt with ebola excuses.

Fri, 10/17/2014 - 17:24 | 5348790 yogibear
yogibear's picture

Fed's continued round of a much larger QE should fix that. Their already talking about. It's too close to the election to have a crash. So they'll do whatever it takes.

Fri, 10/17/2014 - 17:29 | 5348804 Payne
Payne's picture

And the FED has more tools than the CDC and ....  

Fri, 10/17/2014 - 17:26 | 5348795 Ethelred the Unready
Ethelred the Unready's picture

As I recall in 1987, T-bonds yields had been moving sharply up and stood at about ten percent at the close on Friday.  So maybe not 'deja vu all over' again.  

Fri, 10/17/2014 - 17:36 | 5348822 Big Brother
Big Brother's picture

Nowadays, holding a treasury short is like keeping a condom in your wallet- you know "wishful thinking- just in case"

Sat, 10/18/2014 - 01:26 | 5349800 OldPhart
OldPhart's picture

These day my wallet holds a 'wet ones' towlett, just in case.

Sat, 10/18/2014 - 03:29 | 5349858 Zafod
Zafod's picture

Dude, excellent quote

Fri, 10/17/2014 - 19:30 | 5349099 SAT 800
SAT 800's picture

What actually happened on Black Monday, was that they got confused and sold Stocks and Bonds; instead of rotating; so I bought a bunch of T-Bond call options Monday Afternoon, and by Thursday, I sold them; and took the winter off in Mexico; with the proceeds.

Fri, 10/17/2014 - 19:42 | 5349129 Escrava Isaura
Escrava Isaura's picture

SAT 800

So, do you call that investment?..... Or gambling?

Then, go to Mexico? What’s wrong vacationing in America?

 

Fri, 10/17/2014 - 21:05 | 5349328 Karaio
Karaio's picture

Ebola?

hehe

Fri, 10/17/2014 - 17:29 | 5348800 buzzsaw99
buzzsaw99's picture

1987 was the year of the PPT. and no, it won't be different this time, the PPT will ALWAYS force the market higher. it's what they do, IT'S ALL THEY DO! [/john connor]

Fri, 10/17/2014 - 18:08 | 5348881 Escrava Isaura
Escrava Isaura's picture

 

"Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.” -- Robert Heller, former Federal Reserve Board member..... Told us in 1989.

 

 

Fri, 10/17/2014 - 17:30 | 5348808 CitizenPete
CitizenPete's picture

BTFATHD ... Warren Buffet did not say, but is doing.

Fri, 10/17/2014 - 17:34 | 5348813 NoDebt
NoDebt's picture

We should be so lucky for it to be like 1987.  After a second test of the 87 October lows about a month later it proved to be a very buyable pull-back.  Up and to the right with only minor dips for over 2 years, at which point it exceeded it's 87 highs by nearly 10%.

Go run a chart of the S&P from 1/1/1987 to 1/1/1990 wherever you normally do.  Even Yahoo Finance has those capabilities.

 

Fri, 10/17/2014 - 20:38 | 5349269 max2205
max2205's picture

Testing new lows has been banned

Fri, 10/17/2014 - 22:09 | 5349508 Crawdaddy
Crawdaddy's picture

Back then there really were such things as bond vigilantes. Today the price of money is defined by the South Park wheel of fortune chicken

https://www.youtube.com/watch?v=wz-PtEJEaqY

 

Fri, 10/17/2014 - 17:33 | 5348814 Al Huxley
Al Huxley's picture

We are so much more knowledgeable now in the ways of market manipulation, not to mention general propaganda, and have so many more tools at our disposal, and so many fewer laws and so much less regulatory oversight, that this little hiccup will be nipped right in the bud.  I'm surprised its even been allowed to continue for this long, I guess just to give the whole thing an air of excitement and realism.

Fri, 10/17/2014 - 17:33 | 5348815 Big Brother
Big Brother's picture

Didn't someone famous once say "History does not repeat, but it rhymes"? 

(In hindsight) Luckily for young Paul Tudor Jones, he did not have to contend to with the sophistication of today's trading alorithms, an ever vigilant PPT, and he had a helluva warchest of OPM (not to detract on his trading abilities, I'm sure he's good). 

I will wait to get back in on the energy-side of my portfolio once QE4's been shored up. 

Fri, 10/17/2014 - 17:45 | 5348842 EINSILVERGUY
EINSILVERGUY's picture

Yes

Samuel Clemmons aka Mark Twain

Fri, 10/17/2014 - 17:51 | 5348851 notallangreenspan
notallangreenspan's picture

Yes,  it was Mark Twain. 

Fri, 10/17/2014 - 19:51 | 5349148 yogibear
yogibear's picture

QE4, QE5, QEinfinity. The fed cannot and won't raise rates. This should be well understood.

This game goes on until the US free-falls and there's no longer any trust in it.

Fri, 10/17/2014 - 19:54 | 5349156 Escrava Isaura
Escrava Isaura's picture

Big Brother

It is NOT going to rhyme because it’s the whole word, with over 7 billion people, and the US is bankrupted.

The next (1987) time (2016/2020), it will start taking humanity with.

 

Fri, 10/17/2014 - 21:12 | 5349350 Karaio
Karaio's picture

@ Slave Isaura: 

 

As the prayer says, the world will be people of good will. 

:-)

Fri, 10/17/2014 - 22:55 | 5349607 Big Brother
Big Brother's picture

So what you're telling me is the next 1987-esque crash (>3600 pt fall) may likely user the world into the next Kondratieff Winter? 

Sat, 10/18/2014 - 00:42 | 5349761 Escrava Isaura
Escrava Isaura's picture

Big Brother

No. I am not.

Those dates reflect:

Peak Bakken (shale oil) in 2016, followed by sharp decline.

And about 5 million barrel of oil less to export by 2020, if not sooner.

Oil, Coal, and Natural-Gas. I focus on these three. The problem with coal is embedded oil. And with the US, its size.

Fri, 10/17/2014 - 17:36 | 5348821 EINSILVERGUY
EINSILVERGUY's picture

I was there. Kidder Peabody & co. (thanks J Jett for killing it) 

Chicago 26th -29th floor. 

You should have seen the looks on the brokers faces that day

I worked till midnight teletyping margin calls to NY for submission to Western Union

"Those who fail to remember history are condemned to repeat it"

I'm in Cash and PM's

 

Fri, 10/17/2014 - 18:09 | 5348892 Bangalore Equit...
Fri, 10/17/2014 - 22:22 | 5349550 the grateful un...
the grateful unemployed's picture

to enlighten folks this was before paperless trading, if you owned a stock and you wanted to sell you had to mail in the certificates. it took days. then it took days to receive the new certificates, so if you wanted to sell that issue before you had the certs, well the whole system was not up to the volume. the government injection of liquidity could not be matched or overwhelmed by HFTs or ALGOs. it was like shooting fish in a barrell once the usg got in. no matter what happend in 2008 i dont think the USG has that kind of leverage anymore

Sat, 10/18/2014 - 11:37 | 5350273 EINSILVERGUY
EINSILVERGUY's picture

Thats not necessarily true.  A great deal of stock were paper certificates with the owners names typed on the certificate. I saw alot of people in their 60's and 70's (this was 1987) bring them to deposit into their accounts when they wanted to sell out of their accounts or sometimes they would pickup.  Certificates were issuse through the DTC and we would send on for them to be converted.

Brokerage accounts at the time allowed a person to stipulate whether they wanted the shares to be held in their account names or in "street name".  Those in street name could be sold through the account without requiring the account owner to sign the certificates. Most of the older generations kept their certificates in their possession.  

 

 

Fri, 10/17/2014 - 17:46 | 5348837 seek
seek's picture

I remember watching it happen live. The place I worked at had a few financial clients but not many, the boss got a phone call, turned on the 5" POS portable color TV that had been sitting on a shelf for so long there was a thick layer of dust on it.

An hour later there were probably over 20 people crammed into a 12x12 office watching. I remember guys in their trading jackets literally in tears.

Nightly Business Report from that day

Fri, 10/17/2014 - 18:12 | 5348887 NoDebt
NoDebt's picture

I remember it, too.

All things considered, I thought OJ and Al Cowlings leading 1000 police cars on a low-speed chase in the white Bronco was a lot more entertaining in hindsight.  

By the time somebody from the Howard Stern show (Captain Janks??) made a prank call into the news with his "I see.... I see OJ!" and then let rip with a bunch of Baba Booeys, we were laughing so hard I'm fairly sure that was one of the few times I actually peed myself as an adult.

Fri, 10/17/2014 - 18:42 | 5348971 Hohum
Hohum's picture

NoDebt,

"one of the few times" (?)

Fri, 10/17/2014 - 18:55 | 5348997 NoDebt
NoDebt's picture

I don't want to talk about it.

Fri, 10/17/2014 - 17:45 | 5348838 GeorgeHayduke
GeorgeHayduke's picture

A huge crash of the stock market would be karmic justice for those who have benefited from massive welfare since at least 2008. Naturally, such a crash would kick the ass of the players and retirees while the big boyzzz walk away clean, but such is the nature of the scam. This racket has run its course, it just hasn't fallen over yet due to constant injections.

Fri, 10/17/2014 - 18:25 | 5348931 Its Only Rock N Roll
Its Only Rock N Roll's picture

"big boys" do not walk away clean

see 1930's for what happens to the "big boys"

all the levered long equity barons of today either end up insolvent or in jail

Fri, 10/17/2014 - 18:50 | 5348987 GeorgeHayduke
GeorgeHayduke's picture

Hope you are correct. They are fully deserving of any ass whipping coming their way.

Sat, 10/18/2014 - 09:15 | 5350066 Comte d'herblay
Comte d'herblay's picture

Comparisons to the 30s are ludicrous.

There are no precedents to the current situation. NONE.

U who look for specters of the future in the past are seeking some rationale for the irrational.

 

Sat, 10/18/2014 - 18:36 | 5351080 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

Jump, you fuckers, jump!

Fri, 10/17/2014 - 17:55 | 5348856 Perimetr
Perimetr's picture

All the rich white Bros always are worring about BLACK events

 

Sat, 10/18/2014 - 09:13 | 5350063 Comte d'herblay
Comte d'herblay's picture

Vernon Jordan is not White.

Fri, 10/17/2014 - 18:03 | 5348877 worbsid
worbsid's picture

It only takes a nano-second for the HFTs to get short while the trading floor is just starting to yell, "Sell".

Sat, 10/18/2014 - 19:07 | 5351084 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

'specially since the uptick rule is gone. Gee, I wonder who and how much was paid for that? Rubin, Summers... the "big boys" are tribe!

Fri, 10/17/2014 - 18:08 | 5348890 Dazman
Dazman's picture

I love PTJ. No homo.

Fri, 10/17/2014 - 18:18 | 5348915 AdvancingTime
AdvancingTime's picture

Oh yes, the good old days. I believe ugliness lies ahead but the powers to be have avoided a meltdown up to now. A market collapse is always being kicked out a year or two and never going to happen tomorrow. It is as if we can't handle what is coming at us and need more time.

For a long time I have been trying to develop a scenario for a market "super crash" and a reasonable map that would arrive at such a situation. If things suddenly get bad they will simply close the markets. Below is an article looking at how it could happen sooner rather than later.

http://brucewilds.blogspot.com/2013/01/flash-crash-on-steroids.html

Fri, 10/17/2014 - 18:21 | 5348922 SilverIsMoney
SilverIsMoney's picture

Please... this shit again... where is that 1929 chart you guys posted over and over at the beginning of the year? Right... probably the same place this one will be in about 6 months...

Fri, 10/17/2014 - 18:56 | 5348998 Wait What
Wait What's picture

while I agree with your point that it won't happen (it won't be ALLOWED to happen) due to CB's being loaded up with futures and still buying more, as EscravaIturatutas points out above, I disagree with the trollish way in which you point it out.

Sat, 10/18/2014 - 09:12 | 5350059 Comte d'herblay
Comte d'herblay's picture

R U nuts????  Why in Judas' name, R U putting J Yell in your Avatar????

Sun, 10/19/2014 - 22:28 | 5354026 Wait What
Wait What's picture

you see that fear in her eyes? that's why. Facial action coding system, learn about it... you're welcome.

Fri, 10/17/2014 - 18:48 | 5348981 wswarrior
wswarrior's picture

Take a look at the put values on the far out of the money weekly options in the S&P minis.   

Fri, 10/17/2014 - 19:08 | 5349038 orangegeek
orangegeek's picture

wishful thinking - POMO on Mon, Tue and Thu.

 

not next week

Fri, 10/17/2014 - 19:24 | 5349044 fuu
fuu's picture

He was in that 1987 movie Trader right?

Fri, 10/17/2014 - 19:36 | 5349109 Dazman
Dazman's picture

Yes.

Fri, 10/17/2014 - 19:30 | 5349094 surf0766
surf0766's picture

Das racist

Fri, 10/17/2014 - 19:48 | 5349145 mattgallis
mattgallis's picture

After 1987, the market rallied for 13 fucking years.

Do we really want those cock suckers on the benefiting end of a 13-year rally?

 

Sat, 10/18/2014 - 09:10 | 5350055 Comte d'herblay
Comte d'herblay's picture

U bet, if u R on the same side, forsaking the cocksucking, and eagerly embrace labilial licking.

IT would be like watching your ship coming in from afar, right up to the dock.

Fri, 10/17/2014 - 20:08 | 5349200 ajkreider
ajkreider's picture

Um, backward looking has a PE of the Dow at 15.  That ain't no bubble.  Maybe by "bubble" he means the economy.  So, when should we start to see earnings fall?

Fri, 10/17/2014 - 20:19 | 5349231 Karaio
Karaio's picture

Do not worry, these guys are cabalistic. 

Players. 

When you get 21.000 (a Kabbalistic number) the thing down like a brick. 

Kkkkkkkkkkkkkkkkkkkkkkkkk

Fri, 10/17/2014 - 21:47 | 5349437 christiangustafson
christiangustafson's picture

Umm ... does anyone else see an inverse head & shoulders with a neckline at 1898 SPX and a target of 1976?

VIX of 22 means there are plenty of shorts left to rape.

Oh, and the VIX just gave a "buy" signal on the indexes, by closing outside its upper Bollinger ... and now back in.

All they need to do is gap us up over 1900 to start the week, and a mad panic squeeze will ensue, through Friday.

Next week could be a sick, sick run up, something truly special.  Even the market "bulls" will be unnerved by it.

Sat, 10/18/2014 - 00:52 | 5349774 christiangustafson
christiangustafson's picture

A couple of downvotes, OK, I get it.  Trust me, I'm more bearish than you are.

But what do you think will happen on Monday if they can push the tape just a hair over 1900?

What do you think the holders of the 41K contracts of front-week SPY 181 puts are going to do?  

They will dump them.  So will others.  This moves the VIX, the algos then press the point.  Before you know it, we're at 1950 SPX, or higher.

Next week is extremely dangerous for both sides.  If we start selling-off, a mini-crash to the 1700s is on the table.  But if we can push just a tad higher, we'll have another brush fire of short-covering.

Sat, 10/18/2014 - 09:07 | 5350052 Comte d'herblay
Comte d'herblay's picture

Now I know what to do.  Take a quickie hop to Vegas, rush on over to Bellagio, and put my entire savings account on red  and black.

Think I'll break out that Johnnie Walker Blue Label and celebrate tonight. 

Sat, 10/18/2014 - 17:30 | 5350939 christiangustafson
christiangustafson's picture

Here's a chart of what I mean, for anyone that cares.

You can see that we are right at the crux of two opposing trendlines -- which will resove north or south on Monday.

Fri, 10/17/2014 - 22:13 | 5349519 pocomotion
pocomotion's picture

No crash coming any time soon.  Relax and watch the ticker rise.  I cannot find one thing wrong that FEDs have done. not one.

Sat, 10/18/2014 - 09:03 | 5350048 Comte d'herblay
Comte d'herblay's picture

Then you have to be a sarcastic pundit who forgot to put his <sarc on>.  compeltely delusional, or  a connected Jew from Goldman Sucks' Lord Blankfein's country club.

 

Sat, 10/18/2014 - 21:29 | 5351451 bunzbunzbunz
bunzbunzbunz's picture

Or someone that thinks differently than you.

Fri, 10/17/2014 - 22:16 | 5349531 the grateful un...
the grateful unemployed's picture

i remember the 87 crash. there were two analysts, not household names at the time, who called it, Joe Granville, who became famous for his call, and later made market calls based on the trend oscillator he patented, and Elaine Garzarelli, a fund manager, who was a feature on the financial news for a long time. a lot people thought it was coming. in the runup to the crash there was a lot of put selling in the indexes, the dow mostly, guys picking up dimes in front of bulldozers, when the market broke through their strikes all hell broke loose. (i also take the thought that the buyers knew something) in other words sellers taking a lifechanging risk for a pot of beans are not long for this world. i tried to buy some energy stocks on the way down, i was hung up on energy at the time. the market reversed in a year, in retrospect it all had the smell of a something rotten, just like 2008, that some (little) guys were getting clocked, along with some big guys. but the big banks were not nearly as big, not TBTF, but there were no real derivatives. and once again it was the last year of a two term president. see Bush 2008, and Obama isnt quite there yet, well yes he is.

Fri, 10/17/2014 - 22:16 | 5349532 nachtliche
nachtliche's picture

Wow, look at how that chart lines up! Everyone short now and make a fortune! Seriously this chart overlay is meaningless. Particularly since QE is guaranteed at any substantial market drop. 

Fri, 10/17/2014 - 22:41 | 5349592 Platypus
Platypus's picture

Well ..... after this drop the market rallied till 2000!! I admire Tudor Jones but he made a wrong call on this one. Markets just like everything else in this planet goes up and it also goes down. 

Fri, 10/17/2014 - 23:56 | 5349717 holdbuysell
holdbuysell's picture

The good news:

To be fair, on the scaling shown, today's 'crash' would be a ~20% drop. Bad indeed, but not the 40-60 pct. drop.

The bad news:

That's in nominal terms.

In real terms, this (joke of a) market will go down much more than 20% to balance the system.

Sat, 10/18/2014 - 00:13 | 5349737 smokescreen
smokescreen's picture

am i crazy or did they lower crude not to hurt russia only but mainly to create demand on all levels of the ecomomy...i mean are you kidding thats it only 9% down and the fed goes into panic mode!! it's worse than we thought...germany,france,spain,italy...the list goes on...there is no growth!! QE my ass...it DID NOT WORK...we are in a world of shit...I have to say...I am very worried about how we as a global economy can continue!!! am I being unreasonable...does anybody really think we have a chance here...forget about buying the dip...the world economy has become to big to fail!!! they are without question out of viable options...how in hell can this shit show actually end well...HOW???

Sat, 10/18/2014 - 00:52 | 5349773 A Dollar Short
A Dollar Short's picture

How, says the blind man.  How can I walk across that street in traffic if there is no sidewalk? How?

Sat, 10/18/2014 - 00:59 | 5349780 Conax
Conax's picture

we hang the bastards

Sat, 10/18/2014 - 04:39 | 5349886 xcehn
xcehn's picture

It's completely about optics management now. Cracks, fissures, crevices....

http://www.weeklystandard.com/articles/six-reasons-panic_816387.html

Sat, 10/18/2014 - 01:15 | 5349793 economists_do_i...
economists_do_it_with_models's picture

Chart analogs are like records in sports -- they are made to be broken.  Yes, a big downside move will happen at some point, BUT ONLY when TPTB decide it's time to happen and they are positioned to profit from it.

In fairness, PTJ also predicted many lean years due to the accumulation of debt.  He was a bit off on that one to say the least.  The market has expanded/risen along with the amount of credit/debt issued.

Sat, 10/18/2014 - 06:45 | 5349955 SmallerGovNow2
SmallerGovNow2's picture

you mean expanded/risen like in 2000 and 2008?

Sat, 10/18/2014 - 13:59 | 5350579 WhackoWarner
WhackoWarner's picture

THE ONLY CHART that shows anything meaningful to the working class.

(Tried to insert it but did not work.....purchasing power of US dollar  1800-2002....and is less now.  http://www.mybudget360.com/cost-of-living-1938-to-2013-inflation-history-cost-of-goods-inflation/

Tell me how the Fed has done one damn thing that is positive. I dare you.

Sat, 10/18/2014 - 06:15 | 5349932 Robert.Paulson
Robert.Paulson's picture

This time it's gonna be different! :P

Sat, 10/18/2014 - 07:50 | 5349993 Raoul_Luke
Raoul_Luke's picture

I am a fan of PTJ, but nobody has a foolproof crystal ball.  And chart matching only works until it doesn't.  And even if it does follow 1987, we survived that and we'll survive this.  My guess right now is that as we get closer to the end of the Obama "you didn't build that" anti-capitalist agenda, the economy will continue to slowly improve, and all the money printing the fed did to keep the economy afloat despite the awful Obama economic policies will most likely set off a pretty strong inflationary spiral (once the velocity of money picks up), which tends to support higher stock prices, at least until someone like Volker comes forward to make us take our medicine.  So there's most likely a deep recession ahead but it's probably a decade out.

Having said that, I am currently net short stocks, but 75% or so cash.  I'm not ready to go all in on the crash scenario - yet.

Sat, 10/18/2014 - 07:59 | 5349995 observer007
observer007's picture

Ebola Rattles Commodities

--->Obama calls for end to Ebola 'hysteria'

Commodity traders, lawyers and insurers are grappling with how to handle potential delays and disruptions caused by the spread of Ebola in West Africa.

http://tersee.com/#!q=ebola&t=text

 

 

Sat, 10/18/2014 - 08:30 | 5350012 GFORCE
GFORCE's picture

We'll see a bounce then a retest of the lows! 16600-800 resistance in Dow at the broken trend line.

Sat, 10/18/2014 - 08:36 | 5350018 Duffy Duck
Duffy Duck's picture

Have you boys and girls read Dr. Krugman's latest missive?  Not to threadjack or anything, but it's not totally unrelated, and I'd be interested in the take of this crew:

http://www.nytimes.com/2014/10/17/opinion/paul-krugman-what-markets-will...

For the moment, I'll offer only this:  what the hell do 'the markets' have to do with the real, productive economy?  Okay, also - what happens if/when corporations and banks are induced to spend all the trillions they are sitting on, and dollars overseas start coming back [more and more as de-dollarization proceeds apace]?

 

I don't believe that he knows the first thing about how the real world works, and suffers from an "epistemic bubble" of fellow bearded, statist, cat-loving, Chardonnay-swilling, bleeding-heart fascist fools.

 

 

Sat, 10/18/2014 - 08:42 | 5350027 Raoul_Luke
Raoul_Luke's picture

This was my (published) reply:

In the areas Mr. Krugman writes about invocations of God's "presumed will are rare?" Well there is all those efforts by the left to justify their socialism on Biblical passages about looking out for the poor, but who's counting, eh?

Interest rates (and inflation) are low because economic growth and job creation are being crushed under the ("you didn't build that") big governmentism that Mr. Krugman ceaselessly cheerleads for. All the deficit spending and money printing in the world isn't going to offset that. Until you get the leftists' boots off the neck of the entrepreneurs, all that spending just gooses foreign production.

Sat, 10/18/2014 - 08:46 | 5350032 Duffy Duck
Duffy Duck's picture

good show, old horse!

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