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"Market-Watching" Fed Watches Market Surge After Fearing Market Purge

Tyler Durden's picture




 

Having admitted that markets' drop played a key role in their decision-making process, the reflexivity of Central Bankers be like...

And to the outside world...

 

This will help to explain the stock market...

Welcome to The Farce... Dow +1050 Points off payrolls lows...

 

Stocks are the most overbought since the epic Bullard ramp from October 2014...

 

As The S&P pushes back to unchanged post-QE3...

*  *  *

This is what happened after the dovish FOMC Minutes...

 

Futures were weak overnight as China opened notably below expectations...

 

Leaving stocks all higher for the day (note early decoupling between Nasdaq and rest)...

 

The epic ramp continues to extend off the payrolls lows... just look at Small Caps!!

 

VIX fat-fingered in its usual "Signalling" way after FOMC Minutes...

 

The S&P broke above its 50-day moving average (and the figure 2000) as the post-FOMC Minutes buying frenmzy took hold... (and Dow tops 17k)

 

The S&P 500 is now above Goldman, BofA year-end revised price targets of 2000. Time to revise them higher again...

Since The September FOMC Statement, bonds & bullion remain the winners but stocks jerked up to near them today...

 

Treasury yields surged once again today (after an initial rally/drop in yields after FOMC Minutes)...

 

The USD slipped most of the day (led by AUD strength), then dumped and pumped on the FOMC Minutes...

 

Commodities were very volatile today with crude and silver trading somewhat chaotically...

 

Crude ramped back to yesterday's highs on OPEC comments about demand

 

And silver was dumped and dumped and pumped and dumped...

 

Charts: Bloomberg

Bonus Chart: We now know what happened to the record short-interest...

 

 

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Thu, 10/08/2015 - 16:08 | 6645998 JoeySandwiches
JoeySandwiches's picture

Everything is bullish again! All is well!

Thu, 10/08/2015 - 16:13 | 6646032 Big Beta Bill
Big Beta Bill's picture

The amount of volatility in the markets is starting to refect reality.  

Thu, 10/08/2015 - 16:53 | 6646285 TheRideNeverEnds
TheRideNeverEnds's picture

Everything except for gold that is.  

 

Thu, 10/08/2015 - 18:39 | 6646732 williambanzai7
williambanzai7's picture

SAVES YERSELVES

Thu, 10/08/2015 - 16:10 | 6646002 JustObserving
JustObserving's picture

The Fed is continuously manipulating markets higher for the wealth effect that sustains the hollowed out, jobs-deficient US economy.

More QE and NIRP are next.

Thu, 10/08/2015 - 16:11 | 6646020 stocktivity
stocktivity's picture

It's all Bullshit!!!  Should have bought the fucking dip 1000 points ago. Every day doom and gloom here and every day up and away. Same thing for 6 years now.  The Fed has your back.

Thu, 10/08/2015 - 16:17 | 6646057 Mark Mywords
Mark Mywords's picture

Yep. Completely, with the knife firmly stuck in it.

Thu, 10/08/2015 - 16:40 | 6646201 negative rates
negative rates's picture

And yep, the PRICE we pay for knives these days would astound some people suddenly.

Thu, 10/08/2015 - 16:56 | 6646295 ebworthen
ebworthen's picture

Exactly - bleeding us out, week by week, month by month, year by year.

Janet - make the circle complete - send me my damned check for $6 Million.

Thu, 10/08/2015 - 17:51 | 6646529 mrdenis
mrdenis's picture

....the check is in the mail 

Thu, 10/08/2015 - 18:09 | 6646595 Trips Trading
Trips Trading's picture

According to my research, markets move in cycles, of which the table of 7 days (5 trading days) plays an important role. For example, when the 21, 35, 42, 63 day cycle line up, it’s Time to get ready for a change in trend (S&P500).

http://tripstrading.com/2015/10/09/sp500-how-cycles-take-their-time/

Today, OCT 8, points at a 7, 21, 42, 119 and 154 day cycle (TripsTrading Cycle Model, TTCM).

Tomorrow and Saturday represent a Bradley Model Date, OCT 9 and 10.

If the total cycle lasts 63 days, the decline will last till OCT 26. The 1850 -30 Price Target is based on the Negative Reversal of SEP 30.

So the cycles seem lined up to change trend.

Thu, 10/08/2015 - 16:21 | 6646073 Mr. Schmilkies
Mr. Schmilkies's picture

Is there a Zero Hedge "opposite" website somewhere that the Fed runs?  You know, in bizzaro world?  I'd like to see comments from our opposites. 

Thu, 10/08/2015 - 16:34 | 6646159 playdoh
playdoh's picture

Federal Reserve propaganda can be found on CNBC

Also known as "Haw-Haw", as in the WWII mis-information news service

Thu, 10/08/2015 - 16:45 | 6646229 negative rates
negative rates's picture

Around here we call them financial cheerleaders, and nothing else.

Thu, 10/08/2015 - 17:36 | 6646455 Itch
Itch's picture

Just do the opposite of the proprietary ZH sentiment index and you'll be a rich bitch. You'll find it at reality.com

Thu, 10/08/2015 - 16:28 | 6646109 John Law Lives
John Law Lives's picture

ZH ain't a stock-picking site.  ZH reports what is happening.  Nobody in their right mind could have expected 6 years ago that central banks around the world would have gone full retard to such an extent.  What is happening is very alarming, and ZH is one of the very few sites to actually report this.

Thu, 10/08/2015 - 17:23 | 6646400 The Pope
The Pope's picture

 "Nobody in their right mind could have expected 6 years ago that central banks around the world would have gone full retard to such an extent."

 

I struggle with that one. One one hand, I totally agree with you. OTOH, now, having been presented with the insight that the 'full retard' which you refer to, is, and likely has been a behavior that these criminals knew they would resort to all along.

 

Sadly, it doesn't help eitrher way because now, even though it's 100% guaranteed that the structure is completely criminal, (& whether you're aware of it or not), we're all just puny rowboats in a seastorm.

Thu, 10/08/2015 - 16:35 | 6646170 negative rates
negative rates's picture

And if you like youR Bullshit, you can (kind of) keep youR Bullshit, we'll be slinging our shit behind your back.

Thu, 10/08/2015 - 18:25 | 6646667 inosent
inosent's picture

fwiw, ur right. the bears pretty much never get what they want. i had some longs @1880 and 1875 earlier this month. all this selling started too early. based on the 1929 model, the time to sell (if there is a serious rally to nose under current all time highs) would be mid October. but that last NFP report produced a classic reversal. big accts came back in. and for the moment have no reason to cover. it's too early.

Thu, 10/08/2015 - 16:12 | 6646026 bnbdnb
bnbdnb's picture

I would love to be in the room with the guys who know when to "pull it". A few hammer fists to the face should settle it.

Thu, 10/08/2015 - 16:36 | 6646175 playdoh
playdoh's picture

I was trading with them only 35 minutes ago; they send their regards.

Thu, 10/08/2015 - 16:14 | 6646037 Itshappening
Itshappening's picture

Oy vey. The correction is over filthy goyim. Buy the dip. You can trust me, Im a chosenite. If you dont listen youre an antisemite.

Thu, 10/08/2015 - 20:29 | 6647088 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

Love the hooknose avatar!

Thu, 10/08/2015 - 16:14 | 6646041 SheepDog-One
SheepDog-One's picture

Pavlovs market lapdogs have been trained well, buy buy buy we got your back with free money!

Thu, 10/08/2015 - 16:14 | 6646043 Keltner Channel Surf
Keltner Channel Surf's picture

“I’m QE No. 8, I Am”         from   “I’m Henry VIII, I Am”          by Herman’s Hermits

[When a parody becomes a reasonable forecast, it can’t be good …]

I'm QE No. 8, I am, QE the Eighth, I am, I am
I just squeezed the shorts next door
They’ve been buried seven times before
And every one was an enemy (enemy)
They shouldn’t try to short like that (like that)
I'm the eighth bull scam, I'm QE
QE the Eighth I am

Second verse, much like the first:

I'm QE No. 8, I am, QE the Eighth, I am, I am
I ensure the market’s green
By goosing stocks at 10:15
But 11:05 was my enemy (enemy!)
I shouldn’t have to stop like that (not like that)
I’m the eighth stop run, I’m QE
QE the Eighth I am

I'm QE No. 8, I am, QE the Eighth, I am, I am
I pad the profits of the banks next door
Who can sell their bonds for a little more
Then every last one buys equities (equities!)
That’s the whole point of this scam (lovely scam)
I’m their eighth windfall, I’m QE
QE the Eighth I am

Q-E, QE (QE), QE the Eighth, I am      Yeah!

Thu, 10/08/2015 - 16:17 | 6646044 thismarketisrigged
thismarketisrigged's picture

This ''market'' is such a fucking farce.

 

they just fucking  release news  so the algos can scan them and push the ''market'' higher on a daily basis. there was absolutely nothing in the fucking fed minutes that was a shock to anyone.

 

everyone knows there will never be a fucking rate hike again, everyone fucking knows the economy is beyond terrible, this shit is not surprising.

 

now all i fucking here is fucking cramer touting how everything is awesome, that jackass steve liesman with that ugly smile again, and all of the pieces of shits on cnbc who are fucking imbiciles ( except for santelli) with smiles on there faces like everything is fucking awesome again.

 

They can all go fuck themselves.

 

''market'' goes up 10 days in a row and no one wants to fucking take profits, yet when the ''market'' is down 2 days o so slightly, of course ''investors'' are buying the dip

Thu, 10/08/2015 - 16:22 | 6646074 Kaiser Sousa
Kaiser Sousa's picture

yeap...decided to let u offer the in depth wrap up today exclusively....

fake ass fucking rigged manipulated FRAUD MARKETS................

Thu, 10/08/2015 - 17:33 | 6646439 thismarketisrigged
thismarketisrigged's picture

thank you kaiser, i will gladly return the favor and let u do the wrap up tomm in what should be the same fucking shit as always.

 

''investors'' coming in to the by dip going into the weekend

Thu, 10/08/2015 - 17:57 | 6646551 playdoh
playdoh's picture

God forbid tomorrow is the day that earnings actually matter!  Good luck guys.

Thu, 10/08/2015 - 16:31 | 6646104 Renfield
Renfield's picture

Isn't a market. It's the Fed Confidence Index. That's all.

Worrying about the result on the FCI is like worrying about the 'unemployment' rate issued by the BLS. It's stupid and futile, a waste of time. It's like watching CNBC all the time and hating on their propaganda. You know it's a pack of lies, so don't watch it. What good does this do? What information can it possibly give you?

The only people who should care about those confidence index numbers are the poor slaves who have money invested there. Stop clinging to the remnants of the 20th century long after all that remains of its institutions are the shells. Look to the east, Russia and China, and follow the direction they set. They are the leaders now. They are setting up alternative systems, new trading blocks, their own manufacturing, ratings, banks, etc. That's what we should do too, instead of sitting around hoping for a bunch of Fed-rigged numbers to turn honest.

Only concern we should have with the confidence index is getting everything we own out of it, so we never have to look at it again.

Thu, 10/08/2015 - 16:31 | 6646139 Kaiser Sousa
Kaiser Sousa's picture

"instead of sitting around hoping for a bunch of Fed-rigged numbers to turn honest."

let me b the one to break it to ya...he' probalby aint doin that and neither am I...

its cool though...

Thu, 10/08/2015 - 16:17 | 6646059 restelle
restelle's picture

The Yo-Yo string has to break some time. 

Thu, 10/08/2015 - 16:20 | 6646067 FreeShitter
FreeShitter's picture

Dow 20k by thanksgiving.

Thu, 10/08/2015 - 16:33 | 6646152 walküre
walküre's picture

could be either 18k or 16k

either way.... who gives a shit unless you can play either with NIRP or OPM?

those of us in the real world who need to hollow out a living with a paycheque from real work have nothing to gain from it

Thu, 10/08/2015 - 16:41 | 6646206 Renfield
Renfield's picture

Who cares?

Thu, 10/08/2015 - 16:46 | 6646240 Osmium
Osmium's picture

I doubt it will take that long to get to 20k.

Thu, 10/08/2015 - 16:20 | 6646069 Amateur Society
Amateur Society's picture

This only amplifies the Gartman contrarian indicator. Time to go all in Dennis so we can get that lower low we're waiting for.

https://www.youtube.com/watch?v=dq6Q_uaJF4k

Thu, 10/08/2015 - 16:22 | 6646075 polo007
polo007's picture

According to Macquarie Research:

https://app.box.com/s/bh0unh5y596z3ktwi6rwivmsnuyhwl1r

Equities – irrational exuberance?

In our latest commentary we ask whether equities are appropriately assessing risks or whether higher FICC volatilities are more rational. Both cannot be right.

Are equities reflecting fundamentals? Most leading and trade indicators seem to be highlighting that despite aggressive monetary easing by 20+ central banks, deflationary pressures remain strong and growth rates in both DMs and EMs are rapidly slowing. In response, FICC are signalling an elevated level of risk.

However, equity investors seem to be assuming maintenance of ‘goldilocks’: low rates & ample liquidity; slow (but steady) growth and low (but positive) inflation.

Who is right? We argued here that most leading indicators have lost their informational value as private sector no longer has any LT visibility, and hence survey-based responses frequently send misleading signals. Given that FICC investors tend to be intensive macro data users, they are highly susceptible to whiplashes of false signals. As long as public sector continues to dominate macro outcomes, FICC investors are at the mercy of unpredictable shifts, driven by CBs rather than fundamental drivers. Therefore, our traditional assumption— that whenever there is a conflict between FICC and equities, the former is almost always right— might no longer hold, as FICC investors are now just as ‘blind’ as equity investors. Hence, equities just might be right.

However, we are concerned on two counts: (a) global economy continues to reside on a de-facto US$ standard and the US is not generating enough US$ to enable continuing global leveraging (absent strong recovery or QE4, supply of US$ is falling at ~5% clip); and (b) efficacy of conventional monetary policies seem to be largely exhausted. As global velocity of money declines, incremental QEs required to grow liquidity are on an ever increasing scale (~US$1.5tr+ in ’16 and escalating to infinity). Hence, there is a need to re-assess nature of QEs.

We doubt that the alternative of CBs abandoning desire to regulate and ‘smooth cycles” and letting deflationary business cycle to reset itself is on the cards.

If conventional QEs lost potency and aggravate global deflationary pressures, why do equities assume that lack of tightening and further QEs would guide economies towards ‘goldilocks’? We believe that it is a simple ‘Pavlovian reflex’. In the past, this relationship worked because QEs were generally successful in temporarily reducing deflationary pressures. However, short of massive rise in monetary stimulus, it seems that incremental changes would no longer be able to achieve such an outcome. Are we ready for more extreme policies? The next stage is likely to be CBs directly funding fiscal spending, investment and consumption. However, to accept such a radical shift requires ‘accidents’ and a severe slowdown. Over 12-18 months, chances of both are high but low over ST.

Hence in the ST (3-6 months) we anticipate neither aggressive QEs (with at best limited efficacy) nor extreme unconventional policies. Therefore, as investors progress into ’16, supply of US$ is likely to continue contracting, deflating global demand and constraining liquidity. This would lead to regular bouts of volatility rather than goldilocks and could easily reverse current equity euphoria.

Hence, we are reluctant to back weaker EMs, and continue to play ‘safe’ by emphasizing countries with trapped local liquidity, some flexibility of monetary & fiscal policies and countries that do not excessively rely on commodities. This continues to tilt us towards India, China, Philippines and Taiwan and away from Indonesia, Malaysia and Thailand. We also continue to emphasize our ‘Quality & Stability’and ‘Sustainable Dividends’ portfolios. When would be the time for our ‘Anti-Quality’ portfolio? Probably sometime later in ’16-17.

Thu, 10/08/2015 - 16:24 | 6646077 John Law Lives
John Law Lives's picture

Tylers, could you please stop calling the orchestrated wealth transfer tool a "market".  It is no market.  The Fed obviously wants the "market" to go up because its members know they have absolutely no way to actually "fix" the economy, and they are too proud to admit this... so they ease and/or jawbone away about easing and artificially inflate asset prices to give the appearance that they are actually competent at doing something.

Fvck this shiteshow to hell.

Thu, 10/08/2015 - 16:48 | 6646235 Renfield
Renfield's picture

<<Tylers, could you please stop calling the orchestrated wealth transfer tool a "market".  It is no market.>>

Seconded. It's just another arm of the MSM. Tyler could call it MSM, or Fed Confidence Index (FCI, my suggestion), but to differentiate between Dow, Nasdaq, VIX (FIX?) etc. at this point is like making distinctions between CNBC, MSNBC, Fox, and CBS. Why bother. It's all the MSM, and it's all the FCI. But it's annoying when people still call the MSM the 'news', and a word other than 'market' would be appropriate now, to stop dignifying the propaganda.

Bottom line, Fed has rigged its confidence index up today, and who cares how much or what their latest imaginary number is.

Anyone who gets frustrated with it, is spending too much time watching it. But I can see the frustration when friends and family do. That's the same frustration I experience every day -- I don't watch their garbage & wouldn't believe it if I did, but it's frustrating seeing so many sheep still falling for it, and still caring about it to the point they can't go without their daily MSM or FCI fix. I want to slap them sometimes -- Just pull the plug, man.

Thu, 10/08/2015 - 16:55 | 6646282 John Law Lives
John Law Lives's picture

I stopped watching MSM financial news programs long ago.  The only time I watch any MSM news program at all is when something really significant happens.  When I do watch, I often prefer the BBC to MSM outlets in the U.S.

Thu, 10/08/2015 - 16:22 | 6646080 Seasmoke
Seasmoke's picture

I really would like to know the logic of how Fed Dovish Minutes (which everyone already knew by the way) makes Gold price go down $10 in real time minutes. Can't even blame the USD today. Of all the obvious manipulation of Gold and Silver this one tops the cake. I can't believe I keep getting shocked by it. HANG THEM ALL !!!

Thu, 10/08/2015 - 16:50 | 6646269 negative rates
negative rates's picture

Check your cattle prod for short circuits, it might affect your heart at the worst time, like when you need it the most.

Thu, 10/08/2015 - 16:23 | 6646082 we built this city
we built this city's picture

Central Banks are not losing any control so far....

 

Market volume was high

Hyg was up again with nice volume

 

and Vix was slammed again....

 

Nobody is losing controll exept  the bears 

Thu, 10/08/2015 - 17:24 | 6646393 Keltner Channel Surf
Keltner Channel Surf's picture

Though bulls will point to sky-high Daily Stochastic levels, DMI, especially in the QQQs, is not high enough to suggest the ramp continues w/o substantial backfilling.  Could the opposite happen?  Of course, but I'd bet the big money was shorting the FOMC close, as they did HEAVILY just after the last 2 FOMC releases, which saw major downdrafts immediately occur (Aug 19, Sep 17).

Morning volume was pathetic, it all came post-Fed, largely due to all indices being PRECISELY at major Daily up-targets for re-shorting:  IWM and QQQ at the 50 DMA, SPY at the 200/2.5% envelope band, DIA at the Keltner top.  In fact, for some indices, like IWM, the final few 2-min candles, bearish pin-bars, had by far the highest volume of the afternoon, making the likelihood of a post-FOMC selloff after a low-volume pre-ramp, at least back to the 20 DMA's, rather high.

Thu, 10/08/2015 - 18:13 | 6646615 playdoh
playdoh's picture

+1  Just to add, I'd recently mentioned 'smart' money appeared to buy stocks. They were selling into the post-minutes ramp this afternoon.

Hoping that means we're lower by next Weds/Thurs and don't just continue to ES 2030. (Hell, there's time for both anyways.)

Thu, 10/08/2015 - 16:27 | 6646101 arbwhore
arbwhore's picture

GAP and Alcoa plunge after hours on earnings.

Thu, 10/08/2015 - 16:28 | 6646110 Vlad the Inhaler
Vlad the Inhaler's picture

Tomorrow the market goes to the moon!

Thu, 10/08/2015 - 16:31 | 6646136 khakuda
khakuda's picture

Yes, good news indeed for more gains.  Let's hope there's an earthquake, too!

Thu, 10/08/2015 - 17:36 | 6646453 moratar
moratar's picture

You mean USD goes to nothing. Sure gold will be 1 trillon USD so will 1 kg of bread.

Thu, 10/08/2015 - 16:32 | 6646143 John Law Lives
John Law Lives's picture

Earnings don't seem to matter in Fed Fantasyland.

FedFUBAR.

Thu, 10/08/2015 - 18:23 | 6646660 yogibear
yogibear's picture

LOL, buyback shares with ultra-cheap money. 

It's all Federal Reserve now. It's their mandate. 

Like Abeonomics. Mark to ever more fantasy.

Thu, 10/08/2015 - 16:32 | 6646145 Turin Turambar
Turin Turambar's picture

Please.  Have you learned nothing?  It's a buying oportunity for both!

Thu, 10/08/2015 - 16:32 | 6646147 Turin Turambar
Turin Turambar's picture

Please.  Have you learned nothing?  It's a buying oportunity for both!

Thu, 10/08/2015 - 18:24 | 6646666 yogibear
yogibear's picture

Overnight William Dudley and his gang of magical banksters will float the futures higher.

Thu, 10/08/2015 - 16:30 | 6646107 khakuda
khakuda's picture

It's like watching the movie Groundhog Day every day for the past 10 years.

To let a market decline of 5-10% change policy after a 200% increase in 7 years time speaks to the insanity.  A 50 point decline in the DJIA is a devastating crash in the eyes of the Fed.

Thu, 10/08/2015 - 16:37 | 6646183 FreeShitter
FreeShitter's picture

Juts buy cheap HIGH paying div stocks if you feel like a bear ;)

Thu, 10/08/2015 - 17:27 | 6646419 walküre
walküre's picture

Lots of Div. will get suspended or cut drastically as is the case with DB and other banks coming up.

Shareholders can sue if they wish. Let's see what VW bagholders are gonna get when the dust settles.

Thu, 10/08/2015 - 16:41 | 6646187 Grandad Grumps
Grandad Grumps's picture

What does this mean for earnings?

http://finance.yahoo.com/news/iranian-hackers-target-linkedin-154552043....

Are they serious? Iranians must be trending ... the weather is no longer trending.

Thu, 10/08/2015 - 20:21 | 6647060 Vuke
Vuke's picture

What the ?  Iranians attacking through Linkedin?  Who makes any use of Linkedin except those with time on their hands?

Thu, 10/08/2015 - 16:42 | 6646211 Soul Glow
Soul Glow's picture

NIRP here we come.  For the health of the State, you know.

Thu, 10/08/2015 - 16:44 | 6646226 Phillyguy
Phillyguy's picture

So now we have de facto Central Bank intervention anytime the stock market drops. If this is not state sponsored market manipulation, I don’t know what is. 

Thu, 10/08/2015 - 17:22 | 6646395 playdoh
playdoh's picture

Same old story, just with fewer tools these days. Fortunately, CBers are far from being the sharpest minds - as evidenced by the "rate hike" fiasco.

Thu, 10/08/2015 - 16:44 | 6646227 Ajax_USB_Port_R...
Ajax_USB_Port_Repair_Service_'s picture

The market is now at the stage were when it finally unwinds, it will not take days to destroy itself, but only an hour or two. Take a long lunch. Come back. Poof! Markets gone!

Thu, 10/08/2015 - 16:47 | 6646244 FranSix
FranSix's picture

Plenty of fish in the sea. Short sellers practically jumping into the net.

Thu, 10/08/2015 - 16:49 | 6646262 Bernoulli
Bernoulli's picture

F - U - C - K - I - N - G

F - A - R - C - E

But I am really thankful for every additional month of low prices for physical gold and silver.

Work hard - buy phyzzz

Thu, 10/08/2015 - 17:32 | 6646437 moratar
moratar's picture

Dude you are clueless. Silve is so much diferent than gold.

Gold = investing in market crash

Silver = investing in NO market crash.

If you buy both than no matter what happens you will lose :)

Silver is bound to production.

Gold is not.

Thu, 10/08/2015 - 17:37 | 6646459 walküre
walküre's picture

At least he's not keeping his cash under the mattress or worse yet, in a bank!

Fri, 10/09/2015 - 02:46 | 6647895 Bernoulli
Bernoulli's picture

1) You might have a point that silver and gold are "different" if you still believe in "markets", however (this might come as a surprise to you), many people don't anymore...

2) Since I don't believe in markets anymore, I enjoy exchanging paper money or bits/bytes into physical things (I am not "investing", FFS!!!)

3) Why silver? Looking at the money supply growth in the world compared to GDP and (real) asset growth, I think it is fair to expect some sort of massive worldwide currency crisis in the not too distant future; in that case silver coins could again be used as some form of money at least for some period of time; bottom line: SILVER IS MONEY

4) Why gold? GOLD IS WEALTH STORAGE since thousands of years (and in our days, it's also insurance against central bank madness)

This is my opinion at the moment. I'm happy to change it if someone comes up with convincing counter-arguments.

PS: According to your "logic", I hope you are not buying both bonds and stocks, because "no matter what happens you will lose"?!?

Sun, 10/11/2015 - 19:55 | 6656561 moratar
moratar's picture

I am not saying silver is bad, or gold is bad.

I just said those are oposite ways of investing.

If you belive in crash than pick gold.

If you belive in recovery then pick silver.

Also if markets totally collapse, EVERYTHING will be as valuable as it is usefull for surviving.

Gold and silver on their own are not usefull for survival.

So if you belive in total crash than choose ammo, guns, food or someting like that.

Thu, 10/08/2015 - 17:21 | 6646385 speconomist
speconomist's picture

Was the chart on short interest updated?

Thu, 10/08/2015 - 17:23 | 6646398 Don Sunset
Don Sunset's picture

Pumping the market certainly doesn't hurt the current outrageously high rent prices (and I enjoy the hell out of this).  However, overpriced RE and rent costs are w/o a doubt taking a toll on consumer spending.  That's reality and it will get worse. The stock market can be used to make money but it has no foundation based in truths or sound economic principles.   It will take a reset and tear down to fix it at this point.

Thu, 10/08/2015 - 17:35 | 6646446 walküre
walküre's picture

Consumer credit is trending lower which means that spending tomorrow's paycheque today is only an option for fewer and fewer Americans.

Agreed that the cost for a roof over the head and the overall increase in cost of living is really the biggest threat to all Western economies out there.

Thanks to a flood of ZIRP cash which has driven INFLATION in all things a person needs to live.

CBs and crooked governments are all responsible for this.

Thu, 10/08/2015 - 18:02 | 6646572 One World Mafia
One World Mafia's picture

It's a dichotomy.  The dollar's been bid on expectations of a stronger dollar with a rate hike.  The stock market collapses on supposedly serious talk of a rate hike, because it knows the economy can't handle it, and loves talk of no rate hike and expects more QE. 

Thu, 10/08/2015 - 18:17 | 6646634 besnook
besnook's picture

time to buy biotechs again. lol

Thu, 10/08/2015 - 18:35 | 6646703 What - me worry
What - me worry's picture

SNAFU - situation normal, all fucked up! Fed will keep the rates at zero until the big collapse!

Thu, 10/08/2015 - 20:15 | 6647035 HyeM
HyeM's picture

for the love of God, how long can they keep this crap up before the whole thing comes crashing on top of itself? 

Thu, 10/08/2015 - 23:41 | 6647627 polo007
polo007's picture

According to Bank of America Merrill Lynch:

https://app.box.com/s/0o21rzvo4bdff5ka4hk3lvd1d3fmower

The real cost of QE

QE was not a free lunch after all

Eight years after the crisis, we are still debating about the recovery and whether the Fed should hike from zero rates. The world economy is actually losing momentum. Things could have been worse, in our view, without aggressive central bank easing. However, we argue that relying too much on unconventional monetary policies could be a reason for market turmoil this year.

We should have known something was wrong

The Fed “taper tantrum” could have been the first signal that QE had gone too far. The second warning may have been the across-the-board EM sell-off that started in mid-2014, as QE tapering was coming to an end and the market started pricing Fed tightening, a sell-off that intensified substantially this year.

The point when things started going wrong

The Fed and other major central banks were the first to act when the global crisis started and we believe their actions helped avoid another great depression. However, at some point monetary easing appears to have become the “go to” policy tool to address every problem and risk in the economy, when action in other policy areas might have been more effective.

This is when market behavior started to change, reacting positively to bad news. Wall Street was increasingly deviating from Main Street, which in our view was not sustainable. We believe that excessive reliance on unconventional monetary policies has had side effects. We have been experiencing these side effects this year, and there may be more to come.

Now what?

The story of the year so far may be that of a negative feedback loop leading to a bad equilibrium. First, risk assets sold off expecting the Fed to tighten. Then, the sell-off went too far and started affecting the real economy, including in the US. Now, the Fed is not tightening as a result. However, postponing Fed tightening does not necessarily increase the demand for risk assets. This is a new regime, in which bad news is bad news. This is how it is supposed to be, but the adjustment back to normal has not been and is not going to be smooth, in our view.

In the very short term, risk assets could find support from oversold levels. We would be tactically short the four major G10 currencies, against almost everything else, as major central banks either stay on hold (Fed, BoE), or probably ease even further (ECB, BoJ). Our analytical tools also support this view.

However, our risk-on FX recommendations are only tactical. If the US data improves in the months ahead, the Fed will likely tighten and risk assets could sell off again. If the US data remains weak, or weakens even further, we would expect risk aversion, as the threshold for QE4 by the Fed is high—and even were it to be enacted, more QE may not be as effective.

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