"I’m Not Crazy, I’m Scared" - Why For One Trader, This Time It Is Different

Tyler Durden's picture

Bloomberg's Richard Breslow, author of "Trader's Notes" is painfully accurate with his latest take on the "markets."

I’m Not Crazy, I’m Scared

The SPX flirted with all-time highs. The Nasdaq Index made 15 year highs; Chinese equities, and so many other equity indices are flying. Bonds sold off this week, but the German 10-year yield is still ~17bps, the U.S. 10-year yield unable to get beyond 2%, and Greek bonds had a two-day rally that would be truly impressive if it wasn’t on volume that made it just an exercise moving wide bid/offer spreads, representing sentiment not trading.

The USD is selling off on the view that Greece is saved, the Fed is scared, and a “we can’t sit with positions because it never works” mentality. The only really new thing the market needs to digest is that commodities may be nearing a bottom

Happy days seemingly, but there have been some very discordant and troubling comments from the creme de la creme of smart - and big - investors.

Over the last three days, we have reported that some of the most important investment voices in the world are more than a little scared about the ravenous appetite for risk playing out in the market, and the fact that they have been ignored is beyond unnerving. Central banks are driving all investment decisions, and what this implies is that they are in this trade so  deeply that there is no obvious or practical exit.

Over the course of this week we have heard Larry Fink of Blackrock talking about the severe risks of investing in Europe; Bill Gross of Janus saying German bonds are the short trader’s dream; Pimco warning that markets have not addressed the potential of a Fed tightening (I remember 1994); the incoming CEO of Allianz, that TWO trillion dollar asset manager, saying, “We see generally meager growth prospects, political dangers and risks of a stock market crash.” Even Abby Cohen thinks it is a stock pickers world, not a buy anything and kick back world. And yet, the market didn’t even blink.

What is different this time?

Central Banks and their sovereign wealth funds have become the major players dominating market activity. One central banker after another has admitted they are fixated on market reaction to their comments and actions. They are relying on markets blessing their actions even though it was market dysfunction (and regulatory malfeasance) that brought us here. This is a dangerous situation. The focus must return to the REAL economy; we cannot trade our way out of past mistakes.

And we must look at commodities. One thing central bankers do, because forward curves drive all their forecasts, is extrapolate ad infinitum current trends into the future. No central bank in the world got oil right, and that is  arguably the most important commodity in the world. Well, oil has made new YTD highs. Why do you think TIPs auctions have been blowing off the shelves? If central bankers have this wrong, their forecasts are wrong, and the Fed, for one, will be way behind the curve. I posit that a lot of central bankers will be tacking right if Brent holds above $63.

So the big question to ponder is why all these very smart people who control trillions of dollars of assets don’t seem to be voting with their money. If the biggest fund managers and thought leaders of the world were radically changing their asset allocations, wouldn’t we see it? Not if central banks are all on the other side of the trade. Maybe they think they can just hold to maturity. A wise central banker told me I should learn to live with central banks being the dominant force in the market, whether I like it or not. I, unhappily, think he is right. Oh, how I wish Louis Rukeyser could get them on his couch.

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Headbanger's picture

What a surprise..

And anybody who says "thought leaders" is a douche ..

Goes with "win win" and "out of the box"...

Gmpx's picture

Forecast is knowing the future - not possible.

kliguy38's picture

Oh just relax and it'll feel good after awhile

SickDollar's picture

Now, “interbank” lending has gone into negative interest rates which is beyond lunacy.  Banks which are theoretically run by “smart” people are paying to lend and of course willfully being paid to borrow.  The only explanation I can come up with is that collateral has become so scarce that a short squeeze has resulted.  Any institution that needs collateral is forced to pay the market rate which now includes locking in a guaranteed loss.  Business in Europe has become so poor, no one can, much less wants to borrow anything.  “Debt saturation” is where we came from in 2007-08 and further down the rabbit hole to where we are now, inverted interest rates on ALL levels …now even between “pros”?

I view what is now happening as “eating into the bone”.  Debt has become so highly priced, locking in guaranteed losses is now seen as “wisdom”.  When viewed in history, the current mania will not be seen as a tribe or nation gone mad, it will be seen as the entire human population losing sight of their senses and allowing the lunatics to run the insane asylum.  I have no idea what the event will be to wake up the world but the event is out there and its realization will be akin to awakening from a nightmare in a cold sweat.

“Debt is better than money” is becoming the current belief in the world.  In fact, with negative interest rates it can be said the world now values debt greater than money.  This cannot be so because of the simple fact that actual paper notes can be held out of the system and not “discounted”.  How can owning debt today which promises less currency in the future be worth more than more currency today?  The fear of loss is so great that currency itself is being discounted versus debt.  If you think this through, it says “everything is worth nothing” because the currency itself is bad and losing confidence.  Maybe this is why we are seeing a push from all around the world to go “cashless” and fully digitize?  This would be closing and locking the only remaining door other than making precious metals illegal.  The only way for this to be “normal” is if the lunatics are running the asylum …they surely are!

pods's picture

Well, not sure if this is a sign of the Apocalypse, but I am starting to edit my Long Pig Cookbook.


BoredRoom's picture
BoredRoom (not verified) pods Apr 24, 2015 8:43 AM

'This Time It Is Different'


lol, normally I am on a site more than a few weeks before the hosts start using my quotes in their articles.

J S Bach's picture

"This Time It's Different".


Not for the perpetrators.  They'll get away with more lucre than ever before as they parachute themselves into the unholy land or some other devil's paradise far away from the fray which they caused.


And when the dust settles, the sheeple will willfully allow them back in to "fix" everything.



cnmcdee's picture

Debt is trading future real GDP for fiat worthless currency today.

Debt contracts economies do not be fooled by the stratospheric rise in stocks

If I wanted to control a nation I would lend them my fiat (which is worthless to me I can just go print some more).  Down the road once they are good and addicted to my fiat I would require their parks, their government buildings, a taxation on the people, there food,and I would have done it all with something that was worthless!

I would determine who ran their government and who came into power in the elections by merely threatening to withdraw my fiat.

I would make sure that my fiat was not linked to any other store of wealth such as gold or silver which might bring competition to my control over society.

There is nothing that I could not do as long as people borrowed my fiat it from my agent banks.

I could contract the economy at will, or cause it to grow,

TeamDepends's picture

When you cut and paste from Bill Holter, you should at least give him some credit.

weburke's picture

agree...links are good  to widen our reading.

Fun Facts's picture

"The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination practiced in past centuries.”

David Rockefeller, founder of the Trilateral Commission, in an address to a meeting of The Trilateral Commission, in June, 1991.

weburke's picture

ask david how and why nelson and john were killed.

Shaznardickleze the Doon's picture

Always kiss before you Fuck.

Or you're a Central Banker. 

nscholten's picture

The only way money comes into existence is thru debt.  Essentially, it seems, central banks have lowered the usury rates or cost to bring money(debt) into the system.

richinSpirit's picture

Not to point out the obvious or anything, but has anyone worked-out the process-flow diagram for what happens when we are given what is supposed to be...

A claim on the productive output of society

The placeholder for half-way through an exchange of things of value (which are also known as wealth)

Stable enough to store for a 100-years and be used then if needed

Earned by adding something of value to society (even if that is just a way to improve the productivity of society for some)

...has then been replaced by free, or even less-than-free, debt?

Well, other than how the God of the congregations of heaven is less-than-pleased when the gold of society is made-to-be-corrodible, debased, diluuted and is kept in piles by those who can and do durring the end times. This has been brought to my understanding in part by the beginning of chapter 6 of the second-covennant book of James; admittedly taken a bit out of context.

As far as I can tell, there is a difference between...

Working to produce a more productive society (and so enabling society to free up people to pursue other interests while having compassion for those during times of change)

Enabling the automation of control (in part through corporate capital-expenditures on automation investments)

Those with the same God from the books of the second-covennant exercising: Lovingkindness; Peace-that-supasses-understanding; Patience; Gentleness; Self-control

...and I believe the difference is in our intentions and also in our chosen leadership; charactor is a good definition of our intentions expressed through our time from one moment to the next, but methods can also demonstrate who's influence we exhibit. No doubt which of us knows who's leadership each of us decides to be under will get sorted out over time, but idividuals are not able to descern the intentions of other individuals, as those intentions are with God or not and God knows that because God has tried to tell us, as I-am-that-I-am that He knew ahead-of-time.

So again, who owns the Federal Reserve and other central banks, and how do we prove that? I don't know what any particular process-flow diagram might show, but I blame Lucifer for corrupting godly methods and for fighting God's-love with some corrupted form and application of pure reason. That is allowed. Until that is not.

LawsofPhysics's picture

Good post, but irrelevant. History is very clear on the outcome motherfucker.

doctor10's picture

If they pay you to hold the debt-they can post you as collateral AND hold the "debt" off the books accordingly.  A "win-win" for the bankers.


"in the land of the indebted,, the one with cash is king"

Smegley Wanxalot's picture

I know the future:  Money will be printed, we will be fucked.

1000yrdstare's picture

I know the future:  Money will be printed, we will be fucked.


True, but they are currently working on getting rid of that silly physical currency thing....

Thisson's picture

Everyone knows that part - now please tell us in what positition(s) it will occur?

asteroids's picture

If you are scared then you are crazy to still be in the trade. Go to cash. Oh, you think you can beat everyone else to the exit eh? Well, when the end comes and you ALL rush to the door, the implosion will be impressive.

glenlloyd's picture

I don't believe that this guy is a douche, 'thought leaders' is not the same as 'win win' 'out of the box' 'new paradigm' 'synergies' crap.


capital one's picture
capital one (not verified) Headbanger Apr 24, 2015 9:40 PM

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Rory_Breaker's picture

I'm not scared. I'm crazy.

VinceFostersGhost's picture



Fear is bad, shame is worse.

Arnold's picture

The only shame left is losing large proportions of other people's money.

(Unless you've got another position lined up.)

Smegley Wanxalot's picture

Such shame is offset if you skim enough for yourself in the process of losing someone else's money.

Bay Area Guy's picture

Corzine have any shame?  Oh, that's right.  He didn't lose other people's money.  He stole it.

Headbanger's picture


As I've said here before: Sanity is over rated.

It only makes you go crazy.

The Wizard's picture

In order to be sane in an insane world is to be insane.

Sages wife's picture

"It is no measure of success to be well adjusted to a profoundly sick society" - Krishnamurti

JuliaS's picture

There was some movie with Clive Owen, the title I don't remember. Anyway, there was a quote that went along the lines of:

"If people weren't hiding behind depression they'd have to face reality and reality is too god damn depressing."

GMadScientist's picture

Chillax, it's just Gross and Fink talking their books. Buy like a Chinese housewife!

mspgrandi's picture

Allianz asset management business isn't a wacky hedge fund , most of their funds or products are meant to track the index and portfolio managers are measured on how they perform against a particular index / risk . They ll never be contrarian but simply just buy what's in the index

Similar for pimco or Janus , if the fund mandate is to buy bunds they cannot short the fucking bunds ...

Mayb a 10% of all the assets held by Allianz are discretionary to the manager . But even there a portfolio manager is not a ceo . A pm will look to make money every day ( thus following the trend ) no to open major contrarian positions which will happen at some point but if it takes 12 months before market go his way he made no p&l whatsoever.

The only players who can revert this trends are major hedge funds , but again investors who gives money to funds expect to see monthly p&l and not major risky contrarian trades.

But at some point it will turn , and when it turns it will be chaos as everyone will turn at the same time and the exit door won't be big enough

GMadScientist's picture

"What this means is that far from being the short of a lifetime right now, Bunds are in fact quite the opposite, and their progression to the hard -0.20% floor across the curve is just a matter of time before everyone decides to frontrun the ECB's purchases over the next year. Because if the ECB will have no choice but to buy even more Bunds from the private market,then the sellers can demand any prices for these Bunds, up to and including the ECB's hard (for now) floor of -0.20%!"

Oh shit! It's turtles all the way down!

stant's picture

Being crazy makes life easier, it's getting that way that's hard

Moe Hamhead's picture

There's some time left.  The crash will be engineered to the election cycle.

With the message being: We need someone with experience in the Whitehouse to see us through these periloous days.

So, keep watching, it won't be immediate, but the timing will be carefully calculated.

VinceFostersGhost's picture



The phone rings at 3:00 o'clock in the morning.


We just gave a half of our uranium to the enemy, and you didn't see a damn dime of that money.

Smegley Wanxalot's picture

Don't worry - the enemy will be sending that uranium back in due time.

VinceFostersGhost's picture



I know this one. Duck and cover.

Captain Kink's picture

reminds me of when we were kids...  worrying over the russians nuking us, and the schools making sure they created scared, dependent future people.  My son came home today and told me he would be dead in twenty years because all the world's oceans will rise due to global warning, wiping out where everyone lives.  He said they showed a movie about it, and some kids were crying.  He is 10 and in fifth grade.  fucking pisses me off to no end.  I told him not to worry, they are pople who don't think for themselves and they have no idea what they are talking about.  thankfully, he still trusts his old man(47) more than his stupid ass fucking teachers.

GoldenGeezer's picture

Why do you think that Hitlery's "reset button" said overcharge in Russian. It was an inside joke, not a gaffe.

richinSpirit's picture

If so, you think maybe that is because we moved on from blowing things up next to uranium and sending that at people so changing ownership of some sends a different message? Which is worse...

 Turning our face before they might strike and offering something to strike with

Trying to let others know we may be pretty much done throwing uranium at others

Sharing the wealth that is uranium


No doubt there are other options, but...

corporatewhore's picture

I think you're onto something.

Probably trot out all the old trusted and true designers, using the old tried and true methods which won't work this time around

RushRoolz's picture

Oh absolutely. This is custom-made for Hillary. The "remember when Clinton was in office and you got double digit raises and your 401K went thru the roof" ads will appear soon and Hillary will be pitched as "experienced" which is a laugh. If it looks like they can't get her pushed thru, then the fall back is Jeb and gosh darn those rascally Republicans will be in charge when in fact it's just two sides of the same coin.


Dr. Engali's picture

I still don't believe Obama is leaving office. A good false flag and they will have "no choice" about suspending elections. There have already been a couple of trial balloons since 911 to judge the reaction of the American people. Remeber how Giuliani tried to stay in office after 911 and the sheeple thought it was for the best? It wasn't long after that when Bush talked about having to suspend the constitution if there was a national emergency.