"We Should See Massive Fed Intervention" - What Tudor Jones Said 29 Years Ago After Black Monday Crash

Tyler Durden's picture

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

Of course Bill Griffeth asks should we buy this dip... Tudor Jones replies - so ironically on this 29th anniversary of the Black Monday collapse in the US equity market -

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

But Tudor-Jones cautions:

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

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

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

Wise words for near record highs...

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buzzsaw99's picture

fuck that. this market can't and won't go down.

knukles's picture

Yeah, but wasn't Bill Griffith cute back then!?!?!?!?
Look a hanging chad!

 

El Vaquero's picture

Break out the DOW 10,000,000,000,000 hats!

sun tzu's picture

Market goes up 300% and no bubble. Market goes down 2% and the Fed needs to step in and buy stocks. 

brada1013567's picture

Didn't Greenspan fix that

Cluster_Frak's picture

When we suspected a massive market correction after 2 suprime Bear Sterns funds failed in 2007, my boss at CBOT told me "Don't worry. Fed will bail everyone out" Fuckin' genius!!!

Escrava Isaura's picture

Because your boss understood that US is state capitalism. America elites know that if you live the markets at the mercy of true capitalism Americans would be eating of soup kitchens.

 

 

Mtnrunnr's picture

Nah dude. The magical missing GDP and money supply (2 trillion? I think) that was injected via fed intervention is, guess what, literally the exact same amount of $ that corporations used to buy back their own shares. If the market crashed we'd be just as poor but creative destruction would allow us to reform the market and make it more efficient, as opposed to mergers and consolidation that make the market less efficient.

Your Creator's picture

where are venezuelans eating?

Hohum's picture

I was 21 back then.  Didn't pay much attention to the stock market.  Life was better.

1stepcloser's picture

I was 17.  A Senior in high school and always high as fuck...banging anything that walked.  I'm shocked I made it out of 87/88.   God damn the 80s were great..

Nobody For President's picture

Ha! Kid.

You have no idea how fantastic the 60s were.

Not that I actually remember the latter part of them much...

King Tut's picture
King Tut (not verified) 1stepcloser Oct 19, 2016 7:17 PM

Class of '88- all I wanted out of life was a red 5.7L IROC Z

DavidC's picture

Wasn't all that before the Fed had interest rates at or near zero and without 'assets' of over $4.5 trillion sitting on its books?

DavidC

Escrava Isaura's picture

Fed running $4.5 trillion on his book?

The private sector is over $60 trillion on their book.

 

sun tzu's picture

Private sector doesn't get to print money

King Tut's picture
King Tut (not verified) sun tzu Oct 19, 2016 7:19 PM

The private sector gets to borrow at extremely low rates and buy back stawks thanks to the Fed

Turin Turambar's picture

When fiat is created ex nihilo, $4.5 trillion is a drop in the bucket.  :-(

cognitive dissident's picture

where it ALL began, children...

illuminatus's picture

The next crisis will be a currency crisis.

Creative_Destruct's picture

And so, on October 19th, 1987,  Greenspan got the first big dose of the limelight he'd long desired (per the earlier observations of his mentor, Ayn Rand) which encouraged his subsequent long-term market pleasing behavior of proping up and creating serial-bubbles with easy money. Everybody liked easy Al the drunken money party-pal. This date should truely "live in infamy."

Cluster_Frak's picture

Greenspan really fucked baby boomers much earlier with the Greenspan Commission on Social Security and instead of investing the money he used it to cover the budget deficit. If only these assholes invested SS in the stock market, life would be beautiful.

Escrava Isaura's picture

Because both are running a Ponzi scheme.

Of course Wall Street is running a much bigger Ponzi scheme.

 

RaceToTheBottom's picture

Greenspam, sold his ethics a long time ago.  Now he is concerned with Historical Revisionism.

 

Mtnrunnr's picture

Greenspan's dissertation was on how overvalued and dangerous stocks are and how loose monetary policy blows financial bubbles... Whoops.

Creative_Destruct's picture

Yep. He talked good sense as an academic and then sold-out and succumbed to the temptation of celebrity.... and, as a result, may have initiated the final downfall of Western Civilization, which is still playing out. 

Should have followed the examples of Volker and McChesney Martin.

And the Fed itself should be shackled to a narrow emergency liquidity function AT THE MOST, instead of this control-freak stupidity of trying to pick the perfect interest rate, control inflation, and maximize employment.

1777's picture

Downturns are great at purging weaker companies from the free market. They were bailed out because they had been taken over by our now overlords and of course they could not fail!

Jason T's picture

Max Kaiser ... 

Squid Viscous's picture

nice stache on Bill, he must have been trolling the West Village gay bars with reckless abandon back then, maybe even met Tudor Jones for a rusty trombone later on that night?

rodguy911's picture

Paul Tudor Jones has had a beautiful bayside estate down here,Islamorada, for years but is selling it

to go back to West PalmBeach.

He will be missed,great people excellent rep in town here.

HIs opinon will always have value to me.

pebblewriter's picture

It's weird, seeing all those carbon-based traders in the video.

conraddobler's picture

I remember 87 being a senior in college who was going to be a stock broker and BAM!

Turns out would of been awesome timing but that was back before most people had a clue to how deep this fiat rabbit hole would ultimately go.

I mean if you had studied any good history you should of known but that was pre internet and no one in school mentioned jack shit about it.

Funny that no?

Seasmoke's picture

Gold and Silver went thru the roof. - Paul Tudor Jones

Lord Ariok's picture

To all my fellow Zerohedgers. IF you want out of the markets or any capital asset, even an entire stock portfolio, real estate, anything up to $4,999,999. I have access to the only lender in the nation that will lend against an installment contract, coupled together with 3 long term escrows and an SBLC for a lump sum of 93.5% of the total sales price to defer capital gains tax for 30 years. It is a 0% interest loan for 30 years. This not a 1031 exchange or deferred sales trust. If you see the writing on the wall I have 100% legal way to deffer capital gains. email me at themoneyguild at gmail.com. It is a 1912 pre creation of the Federal Reserve tax loophole. Minimum is $500k or its not worth our time. 

Lord ArioK

hedgiex's picture

Throwing the kitchen sinks at the markets until the election is over. What is so difficult to see in this small window of opportunity, the safety net for markets to sustain is firmly in place as of now. PTJ is playing on the fear of investors. This means that he is still playing and I suspect not with the cockiness that the cream in Wall Street is unprepared.

This is not Science so get rid of mental latches to Oct 19 or whatever distractions. Just focus on who is going to foot the bill for the debris. You can bet from history that it is not going to be the 1% Predators.