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Groundhog Day: "I Woke Up This Morning After Horrible Economic News And First Question Was How Much Are Stocks Up"

Tyler Durden's picture




 

Any carbon-based trader "trading" today will surely agree with every word Bloomberg's Richard Breslow, a former FX trader and fund manager, said in his note this morning.

Fight the Real Dragon

The economic numbers released yesterday can best be described with a reference to wheels falling off the bus. And it wasn’t just retail sales and PPI in the U.S. but numbers from around the world, including China. So, of course, when I woke up this morning the obvious first question to ask was, how much are equities up? It remains a reality for trading that the biggest news overnight wasn’t the Bank of Korea rate decision nor the continued deterioration of East West relations but an article written by Jon Hilsenrath in the WSJ on the rapidly diminishing likelihood of a Fed hike in 2015.

Fed Funds futures have been consistently ahead of economists and Fed speak in doubting a rate hike. Comments by Richmond Fed’s Lacker yesterday that he doesn’t know if the Fed will raise rates in October didn’t even merit a rolling of the eyes. Futures are pricing in a 4% chance for October rather than zero, just to be polite. Governors Brainard and Tarullo joining the “conditions don’t merit a rate rise at this time” camp sounded positively statesmanlike.

Last night’s article matters because the Fed’s credibility has taken a hit from interminable public bickering. A number of investors have expressed the fear that a December move might be decided to fix the damage rather than on the merits. Rightly or wrongly, it is assumed that this piece was written with the benefit of some “on background” discussions.

Goosing risk may look good on paper and buy time. But it, quite apparently, has had diminishing effect on the real economy. Central banks need to spend more time publicly arguing the necessity for fiscal policy makers to do their part and not add to the public perception of government dysfunction.

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Thu, 10/15/2015 - 12:18 | 6671434 madcows
madcows's picture

Shit's bad.

I'm going to buy stocks today.

no lie.

Just BTFD.

Thu, 10/15/2015 - 12:23 | 6671455 TBT or not TBT
TBT or not TBT's picture

There's no asset price inflation. Move along.  

Thu, 10/15/2015 - 12:25 | 6671461 Son of Loki
Son of Loki's picture

Netflix is plunging 8%  -- blames cc chips:

 

Netflix has blamed poor US growth on those new credit cards with chips

 

http://finance.yahoo.com/news/netflix-just-blamed-poor-us-202709322.html

Thu, 10/15/2015 - 12:26 | 6671472 homebody
homebody's picture

Sure - now that Hitlary has set the new standard for truth telling - not

Thu, 10/15/2015 - 12:30 | 6671483 Son of Loki
Son of Loki's picture

I'm surprised it doesn't fall moar considering the poor quality and selections of their content...most movies rated 1 or 2 stars by independent web sites. However, i am thankful they did not blame "Global Warming."

Thu, 10/15/2015 - 12:51 | 6671566 Four chan
Four chan's picture

the new normal, am ramp pm tamp.

Thu, 10/15/2015 - 12:55 | 6671573 FlacoGee
FlacoGee's picture

Let me translate:  "Our business model works on endless recurring billing of customers who forget to cancel, can't find the time to cancel, etc.    Our model works like other recurring billing gold mines:  Amazon Prime, Porn sites, gym memberships, etc.    Anything that prevents/stops us from continuing to bill people who just pay the minimum balance on their credit cards will cause us great pain."

 

 

Thu, 10/15/2015 - 13:10 | 6671631 Pure Evil
Pure Evil's picture

Or, how bout a new meme where you agree to pay a monthly membership just by ordering any product from out catalog.

And, don't think about calling to cancel your membership cause we'll put you off or ignore you just like Comcast cable.

Thu, 10/15/2015 - 12:46 | 6671541 Hype Alert
Hype Alert's picture

The market is running into a problem.  When Mr. Market is asking for more Free Shit from the Fed, A) The Fed's at ZERO and B) what they've done doesn't create wealth and therefore hasn't worked.  Transfered wealth, yes.  Create it, no.

Thu, 10/15/2015 - 13:09 | 6671629 TheObsoleteMan
TheObsoleteMan's picture

Dudley {the REAL Fed chair} has already said that the FOMC would go to negative rates if economic indicators were to deteriorate to recession levels again.

Thu, 10/15/2015 - 13:12 | 6671639 Pure Evil
Pure Evil's picture

Um no.

They created wealth by transferring whatever wealth you had to their pockets.

Thu, 10/15/2015 - 20:22 | 6673451 Luckhasit
Luckhasit's picture

it's wealth he's had and wealth's he's creating.

Thu, 10/15/2015 - 12:23 | 6671457 Groundhog Day
Groundhog Day's picture

Groundhog day indeed!

Thu, 10/15/2015 - 12:42 | 6671526 SILVERGEDDON
SILVERGEDDON's picture

One constant is always constant, day in, day out. 

Paper burns, motherfuckers, paper burns.

If you can't grow food on it, live in it, or cast it into bullets for vampires, it is pretty much a totally fucking worthless expenditure of investment capital.

Coming sooner than you think.  

Thu, 10/15/2015 - 15:48 | 6672410 JuliaS
JuliaS's picture

If you remove the horse and the cart goes faster - you're rolling downhill.

Thu, 10/15/2015 - 16:47 | 6672695 PlayMoney
PlayMoney's picture

Didn't raies in September and stocks fell. Likely not to raise in December and stocks rise, on shit data nonetheless. I'm cornfused on manipulation patterns, wish they would make up their minds. Just when i think bad news isn't good anymore....SMACK!

Thu, 10/15/2015 - 12:19 | 6671438 adr
adr's picture

Yesterday was down, so today should be up.

 

Thu, 10/15/2015 - 12:21 | 6671447 KnuckleDragger-X
KnuckleDragger-X's picture

Wall St. will still be pushing up the market when there's nothing left but smoking rubble......

Thu, 10/15/2015 - 12:24 | 6671465 Ghost of PartysOver
Ghost of PartysOver's picture

Yep.  Or until the Banks, uh sharks, start eating their own.

Thu, 10/15/2015 - 12:25 | 6671469 Gilnut
Gilnut's picture

Bad news is good news...........until is isn't anymore.  At some point in time, and I have no f'n clue when that'll be, the bad news will turn into bad news, and when that happens it's Game Over.

Thu, 10/15/2015 - 12:33 | 6671490 venturen
venturen's picture

The FED is basically a $0 whore/crack dealer....Wall Street needs it fix and to F$@K people! The FED serves that purpose

Thu, 10/15/2015 - 12:29 | 6671464 homebody
homebody's picture

no work, no productivity, - what else would one do, play video war games or play wall street.  Life can not be too real for the children.

Thu, 10/15/2015 - 12:30 | 6671481 NoWayJose
NoWayJose's picture

Rumor on Social Security announcing no increase for next year because inflation is 'too low' -- however, they also are planning a 30% increase in Medicare premiums (due to what, I ask, if it is NOT inflation"?

Thu, 10/15/2015 - 15:08 | 6672196 AGuy
AGuy's picture

"Rumor on Social Security announcing no increase for next year because inflation is 'too low' -- however, they also are planning a 30% increase in Medicare premiums (due to what, I ask, if it is NOT inflation"?"

Medicare outlays are increasing because the boomers are retiring in mass. More participants = more cash outflows. Medicare inflation is probably flat since the Gov't capped and reduced medical payments to doctors. As far as SS increases: Also because SS is now, and permanently running in the red as outlays exceed revenue. This should get worse every year since more and more boomers are retireing or starting to collect SS (some boomers are working and collecting)

The FICA (ie SS Payroll tax) may also increase from 12.4 to 15.4 (Depending on the pending Budget debate). I think the Medicare portion will remain unchanged at 2.9%. If the SS tax is increased the total payroll tax would increase to 18.3%. My guess is that they do raise it, since SS is now in the red. They will probably need to increase FiCA about 2 to 3% every two years to accomidate the retiring boomers. Assuming FICA continues to adjust to boomers retiring, it would top out between 31% to 37% in 2029, unless there is a mass boomer die off. Medicare will also have to increase substantially too. FYI: Gen-X & Millenials will merge into a single generation: Generation F*CKED!

Thu, 10/15/2015 - 12:34 | 6671494 SheepDog-One
SheepDog-One's picture

Like Dudley just said, we don't even need 'real' inflation to raise rates, fake whatever will do just fine....now spin the wheel! Lets make a deal! You lettin it all ride on red or black!

Thu, 10/15/2015 - 12:35 | 6671498 cpnscarlet
cpnscarlet's picture

Gold's run for the last ten days may mean that we have broken the REAL cycle...FED's ability to tell lies. PMs bitchez

Thu, 10/15/2015 - 12:57 | 6671579 Dark Daze
Dark Daze's picture

Well, it gold is trading on technicals, which I doubt, we have already reached the peak of the measured move from the previous low. Question is will it continue to move or will some Fed mouthpiece come out and scupper it with bullshit talk of a rate hike. The boyz need to pay their coke bill after all.

Thu, 10/15/2015 - 12:39 | 6671510 PrimalScream
PrimalScream's picture

BUT WHY ...

would you expect that stock prices have anything to do with an expected stream of earnings?

OR the state of the US economy

OR the real profit margins of companies?

Because we're living in an era where "debt doesn't matter" ...

RIGHT??!!

Thu, 10/15/2015 - 12:38 | 6671512 CosmicDebris
CosmicDebris's picture

I am not a trader and I'm a fledgeling at understanding how the markets really work, but my magic ball that I have been honing over these many years is telling me tomorrow will be in the red. In the last few months my predictions, though general in nature ("way red, really green, totally fucked today, etc.") have been true almost every time. I just sort of snatch it out of the air. Don't ask me how. Some days I feel like Neo, boringly fending off the strongest softeware driven agent with my perfect martial arts. It's hard being number one. Lol.

Seriously, though. Red tomorrow. Hope I just didnt jinx my near perfect, as of late, record.

Thu, 10/15/2015 - 12:48 | 6671549 Pareto
Pareto's picture

+1 Because you wouldn't want to share the same many and various labels that Gartman has earned - would ya?  Red it is.

Thu, 10/15/2015 - 12:40 | 6671522 SoDamnMad
SoDamnMad's picture

cpnscarlet

I wish but I fear they are sucking us in for another corrordinated smackdown. I won't sell even a gram though.

Thu, 10/15/2015 - 12:41 | 6671524 world_debt_slave
world_debt_slave's picture

LOL

Thu, 10/15/2015 - 12:50 | 6671559 Seal
Seal's picture

Naked shorts on VIX = +++Skew

Thu, 10/15/2015 - 12:57 | 6671586 cheech_wizard
cheech_wizard's picture

You know, back when I was in Nam during the Tet offensive... I remember it like it was yesterday. One of the Cong got close enough to toss a grenade into our foxhole, but due to the quick thinking of my tennis playing sargeant, he promptly whipped out his tennis racket, and elegantly back-handed that grenade right into the midst of that advancing horde of blood-thirsty gooks. We had to kneel instead of laying flat in that foxhole due to the copious amounts of blood spilt over the course of the next fifteen minutes. True Story!

Standard Disclaimer: I will never be able to lie as convincingly to the muppets as the members of the Federal Reserve.

Thu, 10/15/2015 - 13:12 | 6671641 buzzsaw99
buzzsaw99's picture

The sea was angry that day my friends, like an old man trying to send back soup in a deli... [/George Costanza trade]

Thu, 10/15/2015 - 13:08 | 6671621 hcho3
hcho3's picture

Netflix valuation is still above 220. No problem there. 

Thu, 10/15/2015 - 13:20 | 6671676 TheObsoleteMan
TheObsoleteMan's picture

Ever heard of Pavlov's Dog? Operant Conditioning is the scientific name for it. BTFD has worked since 2009, and it will be that way for sometime. Ask any psychologist, once habituation has occurred, it is hard to break. They knew what they were doing when they were conducting this experiment on traders.

Thu, 10/15/2015 - 13:39 | 6671764 PTR
PTR's picture

Internet classics.

Buy the dip!

https://www.youtube.com/watch?v=0akBdQa55b4

Thu, 10/15/2015 - 14:15 | 6671919 White Mountains
White Mountains's picture

AU, AG. BTC, Beans, bullets, band-aids, skills, tools, garden, health, family, tribe.

Do NOT follow this link or you will be banned from the site!