Veteran S&P Futures Trader: "I Am 100% Confident That Central Banks Are Buying S&P Futures"

Tyler Durden's picture

A Zero Hedge reader, and long-time futures trader, shares his views on the evolution of the "market", where it was, where it is, and where it may be going.

* * *

I have been an independent trader for 23 years, starting at the CBOT in grains and CME in the S&P 500 futures markets long ago while they were auction outcry markets, and have stayed in the alternative investment space ever since, and now run a small fund.

I understand better than most I would think, the "mechanics" of the markets and how they have evolved over time from the auction market to 'upstairs".  I am a self-taught, top down global macro economist, and historian of "money" and the Fed and all economic and governmental structures in the world.  One thing so many managers don't understand is that the markets take away the most amounts of money from the most amounts of people, and do so non-linearly.  Most sophisticated investors know to be successful, one must be a contrarian, and this philosophy is in parallel.  Markets will, on all time scales, through exponential decay (fat tails, or black swans, on longer term scales), or exponential growth of price itself.  Why was I so bearish on gold at its peak a few years back for instance?  Because of the ascent of non-linearity of price, and the massive consensus buildup of bulls.  Didier Sornette, author of "Why Stock Markets Crash", I believe correctly summarizes how Power Law Behavior, or exponential consensus, and how it lead to crashes.  The buildup of buyers' zeal, and the squeezing of shorts, leads to that "complex system" popping.  I have traded as a contrarian with these philosophies for some time.

The point here is, our general indices have been at that critical point now for a year, without "normal" reactions post critical points in time, from longer term time scales to intraday.  This suggests that many times, there is only an audience of one buyer, and as price goes up to certain levels, that buyer extracts all sellers.   After this year and especially this last 1900 point Dow run up in October, and post non-reaction, that I am 100 percent confident that that one buyer is our own Federal Reserve or other central banks with a goal to "stimulate" our economy by directly buying stock index futures.  Talking about a perpetual fat finger!  I guess "don't fight the Fed" truly exists, without fluctuation, in this situation.  Its important to note the mechanics; the Fed buys futures and the actual underlying constituents that make up the general indices will align by opportunistic spread arbitragers who sell the futures and buy the actual equities, thus, the Fed could use the con, if asked, that they aren't actually buying equities. 

They also consistently use events through their controlled media, whether bad or good price altering news, to create investment behavior.  The "ending" QE 3, and the immediate Bank of Japan QE news that night, and thus the ability to not quit QE using them as their front, and then propping our markets on Globex, like this is suppose to be good news, free markets totally dependent on QE, is one example.  Last night, Obama passing the amnesty bill, and the more great news about how Europe and now China are also printing money out of thin air and "stimulating" their economies with QE too, which in turn prompts the Fed to prop up overnight futures markets on Globex to make that look like great news as well.  I guess this is suppose to create a behavioral pattern for investors, that dependency on government gives us positive feedback and is good, much like Pavlov's dog and the ringing of the bell.

Why would the Fed prop up our stock market to begin with?  Weren't they just supposed to "stimulate" the treasuries market only, to keep interest rates low, indirectly, by an eventual direct purchase in secondary markets, keeping them propped up (for five years now!)?  Well, first of all as it relates to equities and utilizing the "Plunge Protection" mandate, why not just bypass the "plunge" altogether.  Can't the definition of Plunge Protection be just that?  Protection against a plunge instead of during a plunge?  Doesn't propping the market equate to "Plunge Protection" since propping alleviates plunge and "protects" us?  Does it depend on what the definition of "is" is?  And really, doesn't the Fed buying futures directly alleviate those bankers who take their money in TARP or however means and then this money doesn't make its way into the very heart of what the public deems as its consumption motivator, higher stocks and real estate?  Plus, buying futures is a means of then delivering fiat cash upon every expiration, therefore, "stimulus" to someone who receives it. 

The Fed boasts about having a printing press, and I guess this allows them to "fix" everything.  They "print money out of thin air" we keep hearing (which is true by the way) and with US taxpayer backing (fiat currency (always fails throughout history)), (perhaps post QE 3 there is an Executive Order for QE infinity), they sit on the actual bid and hold our treasury markets steady, and by buying out big sellers as they arise like Russia and China via their Belgium central bank franchise as an example, propping our dollar and then staying on that bid by other franchises, having constant bid flow into equity futures in real time hours and Globex overnite, all in order to retain US consumer confidence (since that is what we are suppose to continue to do) and the image of global strength to keep the dollar from losing its reserve status.  Their obsession of stopping a deflationary depression, has headfaked people like Bill Gross, formerly of PIMCO, and known to have started hedging long bond positions five years ago with the assumptions that Fed printing would be inflationary, and rates would move higher, but without the assumption of the perpetual direct bid in the market place by the Fed creating, "price discovery".  For now, that is.

In the end, which they know exactly when that is, the ultimate con is exposed through mass theft.  Americans finally find out what those guys on CNBC are talking about when they mention "inflation" and how it destroys buying power over time.  The end reflects the Fed stepping away from the bid in all markets.  Prior to this, of course, they prep their offshore fund accounts to take the other side and short dollar, short global equities, and short fixed income, with mass leverage for maximum gain.  I mean, why wouldn't they?  They are a private entity and are composed of non-US citizens with no accountability or oversight and they seem to be globalist humanists with a depopulation bent (Rockefeller Foundation). Why wouldn't they use our money to prop, their money to take other side in a massive global short play, then let it all crash by simply stepping off the bid of these markets.  They can then use the controlled talking heads who can relay the complexities of fiat money, index arbitrage, money velocity, currency and CDO swaps, with some geopolitical China worries, whatever, but really emphasize that the whole capitalistic system and constitution was flawed to begin with anyways, and that perhaps totalitarian fascism would be best for the country at this point since everyone's wealth is destroyed overnight and are literally hungry.  Perhaps Obama is just that person!  Maybe Dinesh D'souza was right about Obama.  This is the way to destroy us, or "equal" the playing field globally by taking us down to third world status, is it not?  Leverage the American people's money by trillions of dollars at the tops of capital markets, then bury them in a death spiral?  Maybe Thomas Jefferson knew what he was saying' "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered."  

Why wouldn't anyone believe these words written here?  Perhaps you can't imagine someone being so evil?  Wasn't the Federal Reserve Bank concept initially funded by a Rothschild in the 1800s, who used the media to deceive the public and sway the London Stock Market down negatively, who then speculated against that panicking public's sell orders by taking long positions in stocks, then making a fortune when everyone found out that the news was wrong and positive?  Then later another Rothschild founded our Federal Reserve in 1913, and others like JP Morgan who supposedly bought the US stock market in a banking panic and "saved" America in 1909?  Aren't all of these Fed owners Fabian Socialists?

Details of this last market move:

This last 1900 point Dow Jones push upwards - and the Ebola events leading into it - it was so orchestrated and heightened at critical points but the ascent and push straight up in price, and sideways nonreaction after was completely unlike anything I've seen before.   After going up for a record breaking amount of time the last five or so years, in a nonlinear exponential mania type of ascent, there should normally be tremendous volatility that follows.  But, this isn't a tech-like mania!  There aren't any buyers here other then the Fed.  The shorts were all squeezed in 2009, 2010, 11, 12, and everyone who has ever wanted to buy stocks is in! 

Modern Portfolio Theory has reached it's pinnacle, leading 55% of the American public who partake in that "diversified" portfolio theory off an eventual cliff. The market acts more like a penny stock that has been pumped up and is "boxed" (boxed, meaning, the whole float is buying and holding and held with the promoter, one broker dealer, and thus this one broker dealer can control price "discovery"(regardless of actual fundamentals and using "press releases" to sway and create order flow they want and need from naive clients)) , and less like a free market.  The Dow runs up that much that quickly, then on Globex its down .02 percent at the most over night, multiple days in a row?  No pullback?  Are you kidding me!?  Then the actual trading days have very little volume, and the peaks in price intraday also exhibit nonreactions sideways, just a couple of tics from the highs.  This price manipulation reflects that they want to expunge all shorts on all time scales, to the point that there will be no point to try, and at the very end, there will be very few.  This also reflects that a group of very smart prop trader types, experienced behavioralists, perhaps off of a prior prop desk like a Goldman, are controlling this game, and not some government treasury/cftc/sec "plunge protect" type who doesn't understand this game. 

With the indoctrination of Modern Portfolio Theory, and the masses' epistemology from experience and from "experts" to never ever get out because "it always comes back", and from corporate buybacks, the actual intraday trading float has disappeared, thus, easier and cheaper to manipulate and find the perfect "price discovery" for every situation to control investor behavior, especially during off hours on Globex.  This past situation, during the break and runup, there would be thousands of opportunities for the Fed insiders using different variations of ways to front run (without using the focus dump then pump futures contract itself), making the HFT guys front running for pennies look like complete chumps.  Can you imagine all the different ways to bet the global markets at the height of the ebola scare, which just happened to be the height of the mass media hammering the public with fear about it(haven't heard a word since!), which happened to be the exact moment of a very large Dow Jones 600 points intraday range after falling 1000 points in 9 days, which also happened to be at the height of put option premiums expanding and call option premiums eroding quickly, by knowing that the Fed is now going to prop it back up, way back up, and quickly!  Shorting put premium globally for expiration in 7 or 37 days?  Buying way out of the money cheap calls, buying the underlying equities, shorting interest rates, buying inflation, buying emerging markets and all of their liquid securities, options plays etc...  on and on.  That prior knowledge ts worth trillions, is it not?  We all know that investment bank broker dealer desks take the other side of trades, and inventory the other side opportunistically.  Why wouldn't this "bank" too, especially now that they are intertwined with investment banks thus have gained their intellectual property in trading?  And why wouldn't they influence our idiot sheepish politicians to mandate the Fed Reserve, to encourage the Fed Reserve, to stimulate, whereas our Fed could use that for "the people", while at the same time, for themselves take the other side based on their offshore opportunistic mandate?  Today's current markets are completely manipulated, every market, all the time, with our money and political Keynesian (control) mandate doing the manipulation in order for their money to front run and profit from there opportunistic mandate. 

So if I am right, and my 23 years of experience trading equities, during manias enables me to know with certainty that I am, that they are allowed to directly be involved and have a perpetual standing bid in the secondary derivatives markets, they can then take the other side when they want (no need to publicly announce this, but to justify in their own heads).  So when they take the other side in the public markets upon themselves pulling the prior US citizen backed bids in all markets for the ultimate 80 year cyclical "end game" (btw, about 23 years past the Kondratief Cycle deadline which is one way to describe the inevitable delay in this ongoing natural economic system reset) of the US fiat backed paper print con capped off by mass leverage, wouldn't they make trillions on the bubble pop on the way down?  Wouldn't they also end up eventually owning the whole US since commerce would halt immediately, everyone would lose their jobs causing mass deflation (and hyperinflation due to our currency being booted as reserve currency, and imports becoming expensive overnight) causing mass defaults on their home loan obligations?  Where do our mortgages end up now post 2008, 2009 financial collapse?  Our governments coffers via FHA, FNMA, GNMA?  And who will place a lien on our government when they default on it's loans?  Wouldn't they be able to foreclose on America? 

The US mandate on allowing Plunge Protection enabling the Fed to stick their noses directly in the equities markets was written in 1988 and is public knowledge and found in the public forum.  And the attached "memo" shows incentives from the Chicago Mercantile Exchange for Central Bankers to use their equity futures markets. 

Write me if you have any questions or comments, or if you need me to join in your efforts help to expose this Ponzi scam. 



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StrawberryBlonde's picture

Moses...many thanks for your comments...very interesting...they seem to prove my point that I made on Friday:



Al Tinfoil's picture

Welcome to the new economic paradigm.  Mega-Keynesianism on steroids.  The central banks backed themselves into a corner with massive injections of liquidity to counteract every financial crisis while governments engaged in perpetual deifict spending and mounting debt, and the American Dream delusion was perpetuated through easy credit.  Now that the buying public has maxed out its credit cards, governments cannot concievably cover present and future commitments, and wealth-creating activites like manufacturing have fled from the US and EU to China, how can the illusions of prosperity and economic growth be continued?

 The central banks have stumbled upon the solution, almost by accident: Perpetual QE, in various guises - buying government debt, buying private debt, buying toxic assets (TARP), buying equities and debt instruments, bank bailouts, and maintaining interest rates at zero.

The Fed and Wall Street have merged, and the Fed money-printing capacity is now utilized through Wall Street to play the market as trader, investor, and market manipulator, while governing monetary and fiscal policy. We are only now beginning to see how the game is being played.  Market volatility can be managed very much to the profit of the central banks and their Wall Street partners.

Central banks have realized that QE can no longer be merely periodic.  QE must be continued forever: (a) to prevent the rise of interest rates which would result in private and government defaults; (b) to conceal the fact that underlying economies cannot produce the wealth necessary to support government and private living standards; and (c) to provide the liquidity that is used to inflate stock and bond prices, thus pushing stock markets ever higher and keeping bond yields low. 

There is even a new theory of money being touted, which endorses the game - Modern Monetary Theory (MMT).  MMT posits that money should not be fixed in value relation to any asset such as precious metals or commodities, but rather floats of itself, and is an electronic construct that can be created out of thin air forever.  Wiemar-like inflation, with its image of wheelbarrow loads of paper money needed to purchase a loaf bread,  is now not a problem, since multiples of zeroes can be tacked onto our credit card limits electronically in order to maintain buying power.   The support of MMT requires that the public be disabused of the idea that precious metals are money - hence the relentless manipulation of the paper gold and silver markets to dislocate precious metal prices from the value of currencies debased by rampant printing.

The idea that Wall Street, London City, and other bankers, traders, and exchanges are mere facilitators of investment and trading activities of others is long past.  Backed by unlimited fiat money from central banks, investment banks have long since moved into investing and trading on their own accounts, and manipulating the markets through dark pools and structured trading activities for their own benefit.  Wall Street has diversified into equity positions in commodities, international transportation, ABS's, metal depositories, etc., which have been shown to be used to manipulate prices and reap profits.  The profits are huge, and the profiteers have been smart enough to recognize that they must give politicians a piece of the action, in the form of campaign contributions. to gain government cooperation and immunity from prosecution.  At the same time, the implied threat that withdrawal of QE would cause economic chaos keeps politicians from daring to challenge the new economic hegemony of central banks.

Meet the new Capitalism, and the new Masters of the Universe.    

aleph0's picture

Agreed .. and this new "Modern Monetary Theory" outfit  - MMT -  is just as you say .... more BS and to perfection.

TheFutureReset's picture

So you'd recommend physical PMs? I think if we had some alternative means of transferring money, outside the control of the fiat system we could save a lot of the economic activity ffrom a paralysed banking crash and accompanying extended banking holiday. An equity market based on that system could quickly replace the rigged system. E-gold tried this to a bad result, because TPTB can take the gold from any physical vault. Enter bitcoin. 

dexter_morgan's picture

Too bad there is not a way to beat them at their own game. That would be sweet.

devo's picture

Get a job at Goldman and take it down from the inside.

Mi Naem's picture

In the attached "memo" Moses refers to shows a Program Term beginning "July 1, 2013. End date is December 31, 2014. 

So, are we scheduled to fall off the cliff at year end? 

petedanels's picture

They will crash it when the sellers are gone, because they can't when there's nobody selling.  At that point they have everyone in their box.  At that point they can sell and finish off their plan.  

We have our financial system being destroyed while our muslim leader kills our constitution.  The voters realized how wrong they were too late in the game, while the rest of us are along for the ride.

Turin Turambar's picture

Newsflash!  The Constitution has been dead for over 150+ years.


Karaio's picture

Well, I'll sleep.

Here the temperature is 24.9º Celsius, 63% air humidity, altitude 1100 meters.


mastersnark's picture

LOL, "celsius." It's 23 degrees American here and my car gets forty rods to the hogshead and that's the way I like it.

Turin Turambar's picture

Thank you Captain Obvious.  This has been apparent for YEARS!

general ripper's picture

I.....I just don't know what to say. Plunge protection?.....rigged?.........central banks don't love us. I think there is something very, very wrong here. I suspect no one is watching out for little old retail me! Just an ordinary senior who does hours of research to find an A minus bond that pays 2.9% over 12.7 years. Like WTF am I to do with all this $$ i saved over the course of 38 years of work.

Oh wait......I bought gold in 2005. I'm way way ahead. Prepared for the end game. Movies & popcorn for me motherf'er!

Roger Knights's picture

Excuse me if this has been pointed out before, but, in the 1st paragraph of the article, the word fail or fall should be inserted in:

"Markets will [fail], on all time scales, through exponential decay (fat tails, or black swans, on longer term scales), or exponential growth of price itself."

Baby Eating Dingo22's picture

Here's one of many instances of Benny marveling at the implied ripple effect

But as is typical, his position is incomplete and biased

Broken and unsupported theory- or more specifically flat out lying

He makes connections that just aren't there. Worried about price deflation and wage deflation???? Seriously??????

But the all telling "Higher stock prices will boost spending" is in here

Hang the fucker tomorrow




Chairman Ben S. Bernanke Op-ed column for The Washington Post November 5, 2010

Aiding the Economy: What the Fed Did and Why

Two years have passed since the worst financial crisis since the 1930s dealt a body blow to the world economy. Working with policymakers at home and abroad, the Federal Reserve responded with strong and creative measures to help stabilize the financial system and the economy. Among the Fed's responses was a dramatic easing of monetary policy--reducing short-term interest rates nearly to zero. The Fed also purchased more than a trillion dollars' worth of Treasury securities and U.S.-backed mortgage-related securities, which helped reduce longer-term interest rates, such as those for mortgages and corporate bonds. These steps helped end the economic free fall and set the stage for a resumption of economic growth in mid-2009. 

Notwithstanding the progress that has been made, when the Fed's monetary policymaking committee--the Federal Open Market Committee (FOMC)--met this week to review the economic situation, we could hardly be satisfied. The Federal Reserve's objectives--its dual mandate, set by Congress--are to promote a high level of employment and low, stable inflation. Unfortunately, the job market remains quite weak; the national unemployment rate is nearly 10 percent, a large number of people can find only part-time work, and a substantial fraction of the unemployed have been out of work six months or longer. The heavy costs of unemployment include intense strains on family finances, more foreclosures and the loss of job skills. 

Today, most measures of underlying inflation are running somewhat below 2 percent, or a bit lower than the rate most Fed policymakers see as being most consistent with healthy economic growth in the long run. Although low inflation is generally good, inflation that is too low can pose risks to the economy--especially when the economy is struggling. In the most extreme case, very low inflation can morph into deflation (falling prices and wages), which can contribute to long periods of economic stagnation. 

Even absent such risks, low and falling inflation indicate that the economy has considerable spare capacity, implying that there is scope for monetary policy to support further gains in employment without risking economic overheating. The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed. With short-term interest rates already about as low as they can go, the FOMC agreed to deliver that support by purchasing additional longer-term securities, as it did in 2008 and 2009. The FOMC intends to buy an additional $600 billion of longer-term Treasury securities by mid-2011 and will continue to reinvest repayments of principal on its holdings of securities, as it has been doing since August. 

This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate this additional action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion. 

While they have been used successfully in the United States and elsewhere, purchases of longer-term securities are a less familiar monetary policy tool than cutting short-term interest rates. That is one reason the FOMC has been cautious, balancing the costs and benefits before acting. We will review the purchase program regularly to ensure it is working as intended and to assess whether adjustments are needed as economic conditions change. 

Although asset purchases are relatively unfamiliar as a tool of monetary policy, some concerns about this approach are overstated. Critics have, for example, worried that it will lead to excessive increases in the money supply and ultimately to significant increases in inflation. 

Our earlier use of this policy approach had little effect on the amount of currency in circulation or on other broad measures of the money supply, such as bank deposits. Nor did it result in higher inflation. We have made all necessary preparations, and we are confident that we have the tools to unwind these policies at the appropriate time. The Fed is committed to both parts of its dual mandate and will take all measures necessary to keep inflation low and stable. 

The Federal Reserve cannot solve all the economy's problems on its own. That will take time and the combined efforts of many parties, including the central bank, Congress, the administration, regulators and the private sector. But the Federal Reserve has a particular obligation to help promote increased employment and sustain price stability. Steps taken this week should help us fulfill that obligation.

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Pumpkin's picture

Is this news to someone?  No shit is what came to mind.

chancee's picture

Couldn't agree more!  I've been trading futures for 11 years and this has all been obvious to me, and should be obvious to anyone with a brain.  There was actually a more explicit paper written by a fed member on this very topic - buying S and P futures in a time of crisis - about twenty-five years ago, and I've been surprised it doesn't get more attention.  But there's absolutely no doubt that's what they've resorted to doing.

It probably didn't take them long to figure out how easy it is to push the market higher in the 21st centure when every single stock is programmed by algorithims to follow the ES.  Control the ES, you control the entire stock market.  All you have to do is look at the flash crash... the one thing everyone does agree on is that whatever happened, it started in the ES, and then in short order wrecked the entire market.  Every single stock and ETF followed the ES straight down...

'Corrections' like the one a few weeks ago are so fake it's hard to believe.  With the kind of dive the S and P took in such a short amount of time, there should have been some furious, panicked selling.  Not even close.  I traded that sellof tick for tick and it couldn't have been more orderly and predictable.  It was basically a bone thrown to all those complaining how long (and abnormal) it had been since the S and P touched the 200 day, etc.  Quick selloff to make it look real, then back to business.

So knowing all this, I've basically come to the conclusion we're not going to get the real crash until everything breaks again.  And I think when it does break next time, there will be nothing to stop it, and everyone planning on buying the S and P down at 666 will be screwed because it will get there fast, keep going, and meander around instead of bouncing for years.  But it will take all these Central Bank balance sheets blowing up and I'd say we could be five years away from that.  I think we have many iterations to still go through with our own fed before they finally blow up.  They'll do more QE.  They'll buy stocks outright.  They'll try everything.  Finally countries/people will dump their treasures.  Game over.

Gadfly's picture

Adding insult to injury:

"Obama Administration Shielded Banks From Criminal Prosecution, Admits Top Fed Official"

Read more:


Platypus's picture

What a long, boring and dumb post! This freaking guy busting about 23 years experience and talking poop. I would say instead of 23 years he has 1 year 23 times....yep sounds mora like it :)

hadriansnightmare's picture

Jefferson never said or wrote that.  Geez where in the world did you get that stupid internet quote?

How about...

Thomas Jefferson to John Taylor, May 28, 1816  He wrote, "And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

source that- fixed it for ya.

PN7's picture

Great article.  I am also glad to see "Kristina...Explorer, Scholar, Photographer" again.  If Tyler must give us ads, we need more ads like the Kristina ad.  Kristina, besides being a scholar etc., is also slightly cross-eyed which is a turn-on for me. The Kristina ad seemed to disappear for a few days and Kristina was replaced by some less delightful babe who was 'Sohpisticated and Educated' or something. The other babe did nothing for me.

joego1's picture

Criminals run the world God help us.

Wahooo's picture

I buy stocks and since there is only one buyer that buyer must be me. I wasn't aware of that, so I will not buy on Monday.

dexter_morgan's picture
I Am 100% Confident That Central Banks Are Buying S&P Futures

unfortunately if you say that in a room of 100 non ZH people 98 or 99 of them are going to wonder what you are talking about, and so what, is that a problem they think to themsellves.....

Clowns on Acid's picture

Of course the Fed has been the bid in the market for years now. Sue the Fed for damages.

Atomizer's picture

Who the fuck cares if you're buying your own debt.. You don't have any assets unless Captain Kangaroo Janet Yellen might release more QE to slither new inflation growth. 2.5 % expectation… Hahahahahahahaaa


Atomizer's picture

Go ahead and click on your World Bank situation.


Send me a American Greeting teardrop card. You fucked it up, not us.

Skyprince's picture

Although I believe a good deal of the article, credibility is damaged when using quotes not proven in fact.  Jefferson has got to be the most misquoted dead President in history!


Shawnee's picture

the date the fed stops buying futures will be.......................9/11/15. the end of the shemitah year, and oh what a time it will be!



TheFutureReset's picture

Protests like in Ferguso, and now NY, will continue to spread resulting in the final loss of confidence. The people are subdued for now, but growing protests put down by violence will crank the hypnosis of a majority of the people. 

wattsnotsaid's picture

Bloomberg reported on the first ever survery question of Central banks buying stocks Aug 25 2013. Missing was the US Fed's response.  Anyone know?

"Central banks, guardians of the world’s $11 trillion in foreign-exchange reserves, are buying stocks in record amounts as falling bond yields push even risk- averse investors toward equities.

In a survey of 60 central bankers this month by Central Banking Publications and Royal Bank of Scotland Group Plc, 23 percent said they own shares or plan to buy them. The Bank of Japan, holder of the second-biggest reserves, said April 4 it will more than double investments in equity exchange-traded funds to 3.5 trillion yen ($35.2 billion) by 2014. The Bank of Israel bought stocks for the first time last year while the Swiss National Bank and the Czech National Bank have boosted their holdings to at least 10 percent of reserves."

Ewtman's picture

EWT postulates that the endogenous mood of the herd, the crowd, moves markets, not the other way around. The government, and by extension the Fed, is the ultimate crowd. While the Fed's actions may be attempts to orchestrate control over the markets and influence crowd behavior, in the end that is not possible as the herd is always wrong at peaks.

Besides, it's a bubble on the verge of bursting magnificently...


SurlysonofaBitch's picture

This is the scariest article I have ever read on Zero Hedge. And, that's saying a hell of a lot. 

Chuck Knoblauch's picture

It means nothing is real except the NFL game you like to watch on the moron box.

AdvancingTime's picture

We are all in a giant washing machine that has as its goal washing away our wealth, the cycle will continue until finished or the machine breaks down. Americas hold much of their wealth in "intangible' assets and this makes us very vulnerable.

A recent article presented to me delved into the subject of high earning Americans and where their wealth came from. The really big earners in recent years have benefited greatly from the surging stock prices as much of their income has come from financial markets and gains in equities. Many people seem to think this is the hope of our future. When you have more than you need or want to put money away for a rainy day where do you store it?

If you rated people on a "wealth chart" by how many tangible assets they owned you might be shocked to find much of the wealth people own is in paper and this is full of risk. It could be said that "paper wealth" is merely a promise of future value. Unfortunately, this leaves much of society and many rich individuals vulnerable to rapid financial loss if the tides of fortune shift or if values rapidly change. More on the subject of how and where wealth is stored in the article below.

AdvancingTime's picture

 An unholy alliance of the Federal Reserve, the government, and the too big to fail has left those of us who question the validity of the recovery in a precarious position. For the big boys, its insider information and computer trading, this includes computing patterns that exploit where stops are placed, this improves their ability to wash the timid and weak bears out of their positions in this manipulated market.

Over the years we have witnessed the type of market reversal the big banks supported by the Fed can generate with a concerted effort to buy S&P 500 index futures at crucial support points. This has proved more than enough to turn the markets from red to green in the blink of an eye. The article below looks into why even if they are right bears should not be confident. The flip side is when this market finally breaks it will be bone crushing.

Dr. Gonzo's picture

Maybe we can back the new dollar from the current stock market bubble that's been pumped at the expence of current dollars? Just thinking out loud here. I wish we still had gold for money so we didn't have so many fucking problems from this intrinsically worthless irredemible currency.

voltrader66's picture

I don't see what your problem is? The FED is within it's mandate(as the world's largest HF) to participate in the market. Without the FED it would have been a very large sovereign or pension fund doing the same manipulation. Quit whining, learn the game and profit from it.

himaroid's picture

I do, I just know that the digital kind will go poof soon.

bobbydelgreco's picture

even by zh standards this is stupid those in charge are not so smart the equity run will end all of sudden when the absence of end demand is revealed when is that? i'm not smart enough to know 

jameswvu99's picture

This writer is a real brain surgeon, I thought he was going to tell us something useful, like the intricate details on how the Central banks are buying the markets.  It took this joker 5 years to figure this out?

estrategy's picture

Start using the #unFed hashtag on Twitter and see what happens when the masses unite.