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Are We Running Out Of Greater Fools?
The scale, speed, and time of the equity rally of the last five months or so echoes loudly the post-Jackson Hole rally in 2010 (from AUG10 to FEB11) and while the aggregate money pumpers of the world have done their best to keep the pedal to the metal (gold?), we worry that just as before we are running out of greater fools to buy assets at the margin in the hope that they will be first through the gates when the spigot gets turned off (or at minimum turned down). Sentiment is peaking, the number of bulls in the AAII survey is rolling over (just like in DEC10/JAN11), the number of bearish respondents is troughing (just like in DEC10) and the ratio of Bulls to Bears (having approached record highs) is now rolling over (just like in DEC10/JAN11). With energy prices surging (as they did in Q4 2010/ Q1 2011) and expectations high for the next round of gross money-printing (forget supposedly better US fundamentals, QE3 is here any minute apparently and LTRO 2 will be enough to build a real Death Star), we fear once again that hope has exceeded its credibility and with financials showing some cracks in their armor (in credit for sure and now in stocks too), perhaps the less-than-greatest fools are leaving the building early.
The upper pane shows the 'scale invariance' of the Jackson Hole QE rally (green arrows) relative to the current Twist/LTRO/Global pump-and-dump rally. It also shows (red arcs) the similar rolling over of the Bullish/Bearish Ratio of the AAII readings.
The middle pane shows the Bullish sentiment rolling over.
The lower pane shows the Bearish sentiment rising.
Of course, we could be facing the double-bluff of the contrarian contrarianist but given the previous experience, we suspect not.
Chart: Bloomberg
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Fuck you Bernanke!
Even Doug Kass is short now.
I'd like to call to order the secret meeting of those hanging out.
I motion we are a long way from running out of fools!
I 2nd that motion. As long as the public fool (school) system exists, more fools wil graduate each year.
Home school your children.
So, what does this mean? Should we buy gold?
Yah, but goddamn fools can only have so much money.
unless the fool is named ben.
It is giving me deja vu....2010 was my first experience reading Zerohedge, no financial commentary has compared since.
Is it time to que Cramer screaming BUY PG AT 35, Buy PG at 35 RIGHT MEOW!
see could have made about 50 grand right there!
Timmy will be back in the the ESF to buy the fucking dip once again. God how history repeats.
Hnnnnnggggg brraaiiiinnssss bbbuuyyy AAAPPPLLL nnnnggggg
shareholder meeting
High oil will fuel more buying...uhhh....because it's bullish!!!
Everybody loves higher energy...yepper
buy buy buy!!!
you can fool some of the people some of the time , but you cant fool all the people all of the time..
Jim Cramer was on GMA again yesterday (yes, he was on two days in a row) saying it was still a good time to buy stocks. He wouldn't lie to me.
No, as a former money manager and long-term trader, he is not purposely lying to folks. Now whether he is considering all the risks, particularly (at least he's honest about this) the deficit is another story. He gets no more money whether the market explodes or tanks.
'
never forget that Cramer the momo-chasing clown told his viewers to buy NFLX at $295...
I have a bridge to sell you in Brooklyn...
The surest bellweather of sentiment frothing to a blow-off is smoke pouring from the speculator's 'opium den'... SLV.
Mmmm,... opium den
Legalize it
The majority of trading is done by computers today, no?
Ever play a computer heads up in Limit Poker (they have the machine in Vegas at the Bellagio)? The AI is smart, but still dumb enough to check call with Queen hi on the river, with no diamond, on a AdTd7d9dJs board.
There is no shortage of "greater fools" in this country - 50 years of "dumbing down" has made sure of that.
It is "greater fools with money" that are in short supply.
or at least "greater fools with available credit left to blow"
The ONLY way to play this is to ride it for all it's worth with sliding puts on the S&P. I can see this being pumped up to 1500 - believe it or not, serious folks on CNBC were calling for an S&P of 1575 that would imply an enormous Dow. How this can occur with skyrocketing gas prices and massive debt was never explained.
Isn't it about half-past PM margin hikes?
we should be getting real close ... must-smack-down-the-evil-speculators
Are We Running Out Of Greater Fools?
Last i checked Bubble Ben is still at the Fed, Mervyn 'never right' King still steers the Bank of England, Count Draghi captains the sinking ECB and some lunatics are pissing funny-money away at the Bank of Switzerland and Japan like a counterfeit digital tsunami
Nope, the greatest fools are still running this show (sham)
I plan on selling everything at the top to Robotrader ;)
lol my plan too.
pretty colors
not sure...
...they keep showing up here to blog...
Yea, that's a great thesis.
That said, they're going to pump the living shit out of the market anyway. Frankly, there's no way to know what's legit and what isn't anymore on any level. In other words, they can and will do whatever they please and it doesn't have to make any sense at all.
Stop applying old rules to a new game. And this is nothing more than a game.
Dow heading to around 14,000 by September or October. Because it is politically expedient.
Total Petroleum usage down 7.25% from week in 2011. 4week average down 6.7% from last year.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=wrpupus2&f=4
America and the dollar continue to become less relevant than ever, what does that chart look like for the BRICs?
19,035,000 barrels per day for week ending 02/18/2011, 18,054,000 for week ending 02/17/2012. How much of this is:
Warm winter - less heating oil fills?
Fleet MPG increase?
Demand destruction from high prices (a prelude to less road trips equals less consumer spending)?
Pump and dump...rinse and repeat.....
Dangerous territory here. I would not underestimate the ability of central bankers to deal with any weakness in key indicators, including the stock market by using QE-whatever. However, they do not give a crap about gold, and it's usefulness to them in my opinion is only as a decoy to send investors back to bonds and stocks. To that end, they may intercede (again) to slow forward momentum of gold and silver.
This is nothing new of course, and the precious metals markets are so small compared to the aligned interests in other markets, that they are always subject to manipulation in the short run. Long term I am extremely bullish on gold and silver, but short term I am cautious, and would buy on the omnipresent dips in precious metals. One thing we can always be certain of: central bankers have tools, and therefore they MUST use them. Currency will continue to be increased, supplemented and nudged, directly and indirectly until this economy and others are creating new and relatively high paying jobs, and that isn't coming any time soon.
I also always try to remember one thing-gold and silver aren't just commodities, they are money. And we should all want to be saving money, shouldn't we?
Incredibly, my husband's brother and his wife are still all in the market. We've managed to get in and out and avoid the last two market dumps because we're in an industry that is an pretty good early indicator of when things are about to go bad. The brother-in-law specifically asked to know the next time we got out. So my husband told him when we got out many months ago. The two of them talked yesterday, and it turns out they're still in. All discussion of why they ought to be out was rebuffed. They've finally recovered what they lost from the last crump.
As for PMs? The brother-in-law and wife thought that over and decided we're nuts.
The fact that most people think PM's are crazy OR they like the idea and just don't execute is why there is still a long term great opportunity to accumulate them.
"To the unwise, wisdom is foolishness."
I've given up trying to convince family members and friends. There is so much to explain (starting with "a dollar bill isn't money, it's a note - which means a debt"), that people's eyes glaze over long before you get to a tipping point. They all know that something is wrong, but can't make the leap to the fact that something could be so wrong that it'll change the way they live.
@Jena
I applaud your efforts. But you have to be careful. These people will start hating you when (not if) the poop hits the rotary impeller. Don't harp on them, tell them one because you're nice, twice because they are family. Beyond that, they are adults and can make their own, ill informed decisions.
Not everybody wants to be educated. That is what the banksters are counting on. Head in the sand syndrome.
All of you are right. I stay out of it, most especially because they are in-laws. My husband was sure that since they had asked for his guidance they would have acted on it. (I know I can write about them here because this is the last place they'll stumble upon.) I asked him if they used the line about being informed because they watch a broad spectrum of TV news: MSNBC, CNN, FOX. "How did you KNOW?!?" And the brother-in-law says that the media all claim the recovery is in full swing! Yay!
We've kept quiet about navigating the market successfully because we know that most people have not. What made my husband the most irritated was when his brother said something about how 'You can't just go in and out of the market -- you'd have to pay taxes on the profit!' (Soooo... better to lose your shirt than get out and pay a small percentage in tax while you sit on the sidelines?) Penny wise and pound foolish.
The media has been trying to get the suckers to buy into the 'Rally.' Best time in years to buy stocks. Fewer and fewer suckers out there. Who will buy equities before the bottom drops out?
and the ratio of Bulls to Bears (having approached record highs) is now rolling over (just like in DEC10/JAN11).......
Bulls and Bears; so dichotomous; We need a third category, how about "people who just don't care and are out of this sham of a market".
The EUR/USD looks like QE3 will be announced any minute now :) Must be on the back of those fugly Euroland GDP revisions this morning. Winning The Future :)))))
Hell yes people are panicking - there is a class of high net worths who are LPs in a range of funds and they're dying for liquidity to feather the nest that we all built years ago. Those suckers will be begging their masters alongside the rest for a crumb of bread.
Sing it with me.. Mine eyes have seen the Glory of the Coming of the Lord, He hath trampled out the vintage where the grapes of wrath are stored....
Oh, forgot, "patriotism" is a sign of disobedience.
Here is the problem stated one simple equation:
1 printing press > fools
Of course, we could be facing the double-bluff of the contrarian contrarianist but given the previous experience, we suspect not.
Dialectics in "The Princess Bride" (Which cup has the poison)
http://www.youtube.com/watch?v=E2y40U2LvKY
I don't think it's easy to say. Yes, were nothing else to happen of signifigance I think we'd be headed for a decline, but the market has been so news sensitive that another good employment report or other good news could send the market up some more. On the other hand maybe Apple's dividend news will send the market spiraling downward regardless of what that news is.
But the reported $852 quadrillion dollars to build a real Death Star is only the cost of the steel alone, see http://www.centives.net/S/2012/how-much-would-it-cost-to-build-the-death...
So transporting if away from the earths field of gravity and into space, mounting the steel structure, and all other parts are not yet included.
And even after you built it, how are you going to propel 1.08x1015 tonnes of steel away from the sun's gravity, to visit other solar systems?
Yes, fact is, it would cost well over 1 and a half quintillion dollars to build a death star.
But what's a few hundred quadrillion between central bankers???
just another check drawn against our grandchidrens backs.
The certainty with which the major financial news outlets are selling the nattative that we are in a recovery ensures that a financial recovery is largely priced into the market. This, reenforced by an ever rising market, are responsible for the extreme bullish mood. What happens when it begins to become apparent that reality isn't going to live up to the narrative.