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Ben Bernanke Has Created The Ultimate Bondsy Scheme

Tyler Durden's picture


Since January 2007, long-only equity funds have seen redemptions of $545 billion. In the same period bond funds have seen inflows of $630 billion. In the last few months, cumulative flows into equity funds have retraced all the way back to 1996. While every day is a QuEasy day for stocks, it seems the 'financial repression' is working as instead of getting everyone else to do the opposite of what the Fed is doing by making yields on other 'riskless' assets meaningless, all that the Fed has succeeded in doing, is getting everyone in the world to frontrun it in buying bonds. Period


Source: BofAML


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Fri, 07/13/2012 - 17:33 | 2614598 SolidSnake961
SolidSnake961's picture

maybe he is a genius for the us treasury

Fri, 07/13/2012 - 17:40 | 2614607 flacon
flacon's picture

He can't stop, but he can't continue for ever either. Is there another option in a binary decision? Yes or No?

Fri, 07/13/2012 - 17:41 | 2614609 Cheesy Bastard
Cheesy Bastard's picture


Fri, 07/13/2012 - 17:51 | 2614631 NotApplicable
NotApplicable's picture

Capitalism without capital.

Honestly, who knew?

Fri, 07/13/2012 - 18:03 | 2614654 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Crash the Fiat Bondsy - Buy Silver!


Fri, 07/13/2012 - 18:28 | 2614717 The Monkey
The Monkey's picture

Now, Lockhart is calling for action, if the economy doesn't improve. The Fed is setting up a magnificent top. If they punch in more stimulus before a correction, the S&P will lurch upward yet again, real interest rates will fall and the party will get another drunken leg.

One by one, the FOMC board members will cave. It doesn't look like any further deterioration in prices is required at all.

Welcome to 1928.

Fri, 07/13/2012 - 18:53 | 2614761 Aziz
Aziz's picture

Like in any bubble, there are just as many sellers as buyers.

Good for them; get out, and put it into gold. 

Fri, 07/13/2012 - 18:58 | 2614771 SilverTree
SilverTree's picture

Wine Me, Dine Me, 69 Me

Sat, 07/14/2012 - 02:43 | 2615300 mkkby
mkkby's picture

All I can say is when bond investors start heading for the exits, it's gonna be ONE HELLUVA SHOW.  Long popcorn and the deer in the headlights.

Sat, 07/14/2012 - 07:44 | 2615417 Harlequin001
Harlequin001's picture

Bond investors won't head for the door. Bond funds have a licence, which means they'll do as they're told by whoever is in charge.

This ends when the sheeple decide they've had enough and refuse to continue funding pension funds and 401K's from wages.

Bond fund money has to go somewhere and they're not allowed to buy pm's, so until then it will be one write down after another and no one could ever have seen this coming...

Fri, 07/13/2012 - 19:09 | 2614790 SWRichmond
SWRichmond's picture

all that the Fed has succeeded in doing, is getting everyone in the world to frontrun it in buying bonds. Period

Antal Fekete has repeatedly pointed out the role of 'risk free bond speculation' and the regime of constantly falling interest rates in capital destruction.

Fri, 07/13/2012 - 20:13 | 2614895 The Monkey
The Monkey's picture

We don't really know what will happen with the Fed's massive experiment. The U.S. is actually fairing pretty good under Bernanke.

If they turn the printers on, just like eveyone else, I'll be a buyer of the highest beta junk I can find. If the Fed encourages high leverage and high asset prices, the way to play it is with in the money calls on financials, crude and junk bond ETFs. Or, puts on levered short ETFs such as FAZ.

Like most everybody else, I think this is a silly destructive game, but we really don't have the last page of the book yet. Might as well sit back and let the free money come in. Seriously.

Fri, 07/13/2012 - 21:48 | 2615030 Harlequin001
Harlequin001's picture

'The U.S. is actually fairing pretty good under Bernanke.'

Can't help thinking that must be a bit like the Captain of the Titanic, "Full speed ahead, starry skies, calm seas, excellent view, and this is the best ship in the world this is...'

swiftly followed by "er, what the fuck was that?"

Sat, 07/14/2012 - 09:45 | 2615483 vast-dom
vast-dom's picture


Fri, 07/13/2012 - 21:07 | 2614964 disabledvet
disabledvet's picture

Club Fed is getting away with murder...without a doubt. But we will pay in the long run...and we already have the budget and trade deficits to go along with the last experiment along these lines. The irony that it is the responsible Europeans and Japanese that are getting annihilated in this environment should be lost on no one. "Respect pure evil" perhaps is the best approach. Still the theory that "muni debt should be bought because the market does nothing but go up" is not a good strategy in my view. Especially now that the bankruptcies are under way. The consequences of a massive implosion of the EU AND Japan will be felt here in the USA...but i still believe the weight will be felt heaviest on State and municipal finances. And of course with an extraordinary amount of force "waiting for a an excuse" surrounding the entirety of the ME and, well

Fri, 07/13/2012 - 21:12 | 2614972 Michael
Michael's picture

This guy has come to some of  the same conclusions I have made many years ago, arriving at it in different ways. Fascinating.

The Road to Roota Theory: Bix Weir

Fri, 07/13/2012 - 23:33 | 2615170 The Monkey
The Monkey's picture

They won't be able to hold the charade up forever. The bigger the top they create, the more likely it is that Bernanke will be out on his kiester. Hopefully, we can get someone who does not keep a crack pipe hidden in his droor.

Sat, 07/14/2012 - 07:16 | 2615401 andrewp111
andrewp111's picture

ZIRP is destroying the finances of States and Localities where unions are strong and pension benefits are high. ZIRP destroys anything that is dependent on interest income.

Sat, 07/14/2012 - 07:40 | 2615413 Harlequin001
Harlequin001's picture

buy gold then...

Fri, 07/13/2012 - 21:16 | 2614976 TrulyBelieving
TrulyBelieving's picture

Yea, well this ain't capitalism, and it's sure not a free market. What a disgrace these people are.

Fri, 07/13/2012 - 19:47 | 2614863 infinity8
infinity8's picture

The "maybe" is "the hook". I like to think Berstanke reads ZH and feels like an asshat after reading the scathing sentiment. . . but then, I come down, and I see him rubbing his hands together and giggling, thinking "I'm making them all Craaaaaaaazy!"

Fri, 07/13/2012 - 21:23 | 2614992 The Monkey
The Monkey's picture

They can't really come out and say, "Hey, we want to reduce the cost of capital to encourage greater credit growth. This will also ramp asset prices, so if I were you, I would be a buyer here."

Instead, we get Greenspan coming out with statements like, "Stocks are cheap. (wink wink).". Greenspan doesn't really know whether they are really cheap or not, but he is saying, "the Fed has your back, invest in stocks and we won't let you down.". Think about what that means. Neither Greenspan or the Fed control the entire world economy.

There used to be this idea that stocks and yes, even high yield bonds, came with risk. Now the only thing that has risk is being out of the market in cash.

Scary as shit. They want you to invest because lack of investor confidence in their eyes IS the problem, whereas I see the central banks continued backstops as the problem. If we did not have decades of risk bailout by the Fed we never would have had such an indebted manic society in the first place.

Fri, 07/13/2012 - 23:14 | 2615153 infinity8
infinity8's picture

Well, first of all, Greenspan is gone. Second, who is "they": They can't really come out and say, "Hey, we want to reduce the cost of capital to encourage greater credit growth. This will also ramp asset prices, so if I were you, I would be a buyer here."


Agree, scary as shit. The Fed is "independent". So, who's in charge? Mr. Pres. X says "do this" or "don't do that" - do the Fed doos or dont it? Oh checks and balances - you make it so hard to point a finger.

Sat, 07/14/2012 - 00:00 | 2615199 The Monkey
The Monkey's picture

"They" is the Fed. I mention Greenspan, because he is the one out there inviting speculators to be the greater fool. The only logic is that someone else will buy your security for a higher price, because the Fed has your back and has guaranteed a put for risk.

Americans have been suckered into a ponzi scheme fully backed by the Fed. Few are even trading fundamentals these days, just pile into high beta and wait for the Fed to burn the tires (they will).

Sat, 07/14/2012 - 10:55 | 2615588 The Monkey
The Monkey's picture

"They" is the Fed. Greenspans remarks on the stock market are sick. He is saying, "we are inviting you to speculate on stocks and commodities, and we will have your back."

That is really fucked up.

This idea that they will now hit the gas without any indication from the market that policy action is necessary is plain nuts. We'll end up with a gigantic bubble and once it pops are economy will be in shambles.

But, if we QE on soft employment data, I'll trade the bubble along with everyone else. 1929!!!

Fri, 07/13/2012 - 17:43 | 2614614 LeBalance
LeBalance's picture

the transcendence of the no / yes question is the VOID.  aka Ka-POOOOOOOM! /lol/

but being as this is a rigged theft, we all know the answer.

its the grinch!

are you a sheep?

do you still need, ever so badly, the fucking?

Sat, 07/14/2012 - 07:50 | 2615420 vmromk
vmromk's picture

Bernanke's day of reckoning is quickly approaching.

Fri, 07/13/2012 - 18:01 | 2614649 Al Huxley
Al Huxley's picture

And maybe he's Mickey Fucking Mouse in Fantasia.

Fri, 07/13/2012 - 18:13 | 2614686 tmosley
tmosley's picture

That was Calvin Coolidge.  Bernanke is just the most recent bucket wielding lunatic broom.

Also, the wizard and the apprentice are long dead.  No-one can stop this flood.

Fri, 07/13/2012 - 20:56 | 2614945 Al Gorerhythm
Al Gorerhythm's picture

Sic him boy.

Sat, 07/14/2012 - 00:07 | 2615208 ReactionToClose...
ReactionToClosedMinds's picture

what have you got against Calvin Coolidge?   There was disastrous inflation (serious stuff) and unemployment post-WW! with destroyed Europe and Europe looking to crucify an unrepentant but no wealth or industry Germany.   Arguably 1920 was worse (as was 1905/6) than 1931 (the real start of the Depression when Creditanstaldt started the massive global bank run).  Coolidge was a pretty good economic Prez ... unless you think the New Deal was not soft fascism .... 

Fri, 07/13/2012 - 18:04 | 2614656 vast-dom
vast-dom's picture

hey ty wouldn't it be called ULTIMATE BONDZI SCHEME?

Fri, 07/13/2012 - 17:34 | 2614600 vrabobabo
vrabobabo's picture

infinite zerorate

Fri, 07/13/2012 - 17:37 | 2614605 El
El's picture

And this helps them with their dual

Fri, 07/13/2012 - 17:43 | 2614615 Ignatius
Ignatius's picture

Right.  What the Fed is 'succeeding' in is fueling speculation.  The root of the problem is the dilema of saving in the primary medium of exchange, the reserve currency.  Saving in gold that is physical only, non-fractionalized and unambiguously owned solves the savings problem (the preservation of value over time).  See FOFOA for detailed analysis of these issues.

Fri, 07/13/2012 - 19:29 | 2614823 rufusbird
rufusbird's picture

Instead of a "Moving Target" we have a "Moving Mandate". What ever will keep the ponzi going and bring the most profits to the Money Center Banks.

Fri, 07/13/2012 - 21:25 | 2614994 TrulyBelieving
TrulyBelieving's picture

And rufusbird, 'whatever will keep the ponzi going and bring the most profits to the Money Center.' Literally whatever it takes is correct. That means there is absotulety no concern whatsoever about society. If it means serfdom for us or haulacaust, or war, or your very life, that price is not to much for these sociopaths.

Sat, 07/14/2012 - 05:27 | 2615363 rufusbird
rufusbird's picture

Quite chlling isn't it. "We need a prvate Army as big as our National Army" makes me think of brownshirts and bullys...

Fri, 07/13/2012 - 17:45 | 2614619 YesWeKahn
YesWeKahn's picture

Every thing bought has to be sold.

Fri, 07/13/2012 - 17:50 | 2614629 DUNTHAT
DUNTHAT's picture

What are the chances that they will sell those bonds over an orderly 3 year period like they purchased them???

Fri, 07/13/2012 - 17:55 | 2614635 cossack55
cossack55's picture

Probably about the same as the discount rate.

Sat, 07/14/2012 - 07:20 | 2615402 andrewp111
andrewp111's picture

The Fed will hold the bonds on its balance sheet to maturity. They will never be sold.

Fri, 07/13/2012 - 20:12 | 2614894 Bohm Squad
Bohm Squad's picture


Fri, 07/13/2012 - 20:33 | 2614915 greensnacks
Fri, 07/13/2012 - 22:43 | 2615101 cranky-old-geezer
cranky-old-geezer's picture



Yep, bond market is the last American ponzi bubble. When it pops, game over for America.

Fri, 07/13/2012 - 17:46 | 2614621 I should be working
I should be working's picture

Maybe the Bernank needs to raise interest rates, you know finish the bondsy scheme with a quick kick in the nuts.

Fri, 07/13/2012 - 19:16 | 2614623 alfred b.
alfred b.'s picture


  Next to Barnanke, Al Capone was a sweetheart!

  Buy physical gold and silver.


Fri, 07/13/2012 - 17:48 | 2614624 greensnacks
greensnacks's picture

Might this  be more of a function of the US being a safe haven for the EU disaster, than front running the fed?

Fri, 07/13/2012 - 20:29 | 2614911 Not Too Important
Not Too Important's picture

More of a gravy train for the bond banks. Is this money buying old issues or new?

Is buying newly issued municipal bonds in the US really any safer than buying Spanish or Italian muni bonds? Meredith was just a ahead of schedule, but on a long enough timeline . . .


Fri, 07/13/2012 - 17:48 | 2614626 fonzannoon
fonzannoon's picture

this has been good for pensions as what they lack in yield they are getting in total return. cant go on forever though. at some point they will be locking in negative interest rates which will eat into the total return.

Fri, 07/13/2012 - 17:53 | 2614632 NotApplicable
NotApplicable's picture

So, you're basically saying that this hasn't been good for pensions.

Fri, 07/13/2012 - 17:59 | 2614642 Al Huxley
Al Huxley's picture

Total return relies quite a bit on the greater fool theory - 'sure I'm getting -2% today, but I'll sell it tomorrow to somebody who'll accept -3%'.  This reminds me of something, I can't quite place it, I'm thinking back a little, let's see, 2005, 2006, 20-somethings on TV explaining the wonders of the real estate market...

Fri, 07/13/2012 - 18:03 | 2614655 fonzannoon
fonzannoon's picture

What I am saying is assuming they have been invested in treasuries they have probably been averaging what...7% a year in total return for the last 4-5 years? Am I saying this is ultimately a good thing? Of course not. Would I love to read "XYZ Pension plan dumps treasuries, buys physical gold". Of course. Will monkeys fly out of my ass first? Probably

Fri, 07/13/2012 - 20:25 | 2614907 Not Too Important
Not Too Important's picture

CalPERS hit 1.1% for 2011:

Stanford says CA needs to throw $200 to $350 billion into its' pension funds now to meet projections:

Probably get it from bullet-train revenue.

Fri, 07/13/2012 - 20:28 | 2614912 fonzannoon
fonzannoon's picture

Thats pretty funny that means Calpers was in the S&P last year not bonds. whoops.

Fri, 07/13/2012 - 18:10 | 2614673 fonzannoon
fonzannoon's picture

By the way that bullshit real estate bubble was built on the 50 somethings grey haired "experienced" real estate pro's selling the biggest shit sandwich in history to the 20 and 30 somethings.  Maybe a few 20 somethings got swept in but lets call a spade a spade.

Fri, 07/13/2012 - 18:43 | 2614742 Hype Alert
Hype Alert's picture

well, let's not forget the 50 something crowd that were sitting on a "mountain of cash" in their house and refinanced.

Fri, 07/13/2012 - 18:51 | 2614758 Bicycle Repairman
Bicycle Repairman's picture

Or 40 somethings that made one last trade up (double down) for that trophy house and got stuck.

Fri, 07/13/2012 - 18:54 | 2614764 fonzannoon
fonzannoon's picture

Ha I guess we are all in this together after all.

Fri, 07/13/2012 - 20:27 | 2614904 Cabreado
Cabreado's picture

"Ha I guess we are all in this together after all."

Very nicely said.

Fri, 07/13/2012 - 21:03 | 2614927 HardAssets
HardAssets's picture

Yeah, people did some dumb things. But all the propaganda told them it was a 'smart investment' to put their money in housing.  The tv 'news' said it and there were even freakin' 'flip this house' programs on the boob tube. Their accountants told them to buy housing in order to 'get the tax deductions' and everyone 'knew' that renting was 'throwing money down the drain.' Hell, they were offering no doc liar loans so anyone could do 'the smart move'. Housing price rises were a lock. And alot of boomers thought the rise in their house 'value' might even help fund a big chunk of their retirement.- - - People were being encouraged to do something that was pleasurable for them. . . consume housing.  Of course, many went for it.

In the meantime the Big Boys were turning all that mortgage garbage into all sorts of derivatives junk that they knew was gonna crash inevitably.  (At least, some of them knew.)

The public is called 'foolish', and that's true - - - while the financially sophisticated professional con men got bailed out since they were 'too big to fail'. And Paulson warned that there might be a crash with turmoil requiring tanks in the streets.

Personally, I didnt jump into the housing mania at the time. It didnt make sense to me , and I thought the crash was on the way. Sold a place and rented instead.  But things held up a helluva lot longer than I thought they would. For years. - - As time went by and housing continued to rise in price, I wondered if I had missed something, if I had made a big mistake.  I was considering buying again, right before the housing market crashed. But my conviction about being 'right' was severely tested. If the timing had been only a little different, I might have bought again - - right near the top of the market. I think the bulk of the blame for the housing bubble rests on the predator pros, not on the financially unsophisticated public.

The current treasury, fiat US dollar, US empire bubble might go on a helluva lot longer than people imagine too.  Then again, it could tumble next month. Who knows.

Fri, 07/13/2012 - 21:14 | 2614977 lotsoffun
lotsoffun's picture

the military is fairly massive.  saw it here on zh and it seems logical - depends on if iran can really sink a few us boats with rus/chi missles.  then it gets ugly.  otherwise, rule americana.



Fri, 07/13/2012 - 20:45 | 2614930 Cabreado
Cabreado's picture


You may want to recognize the 20, 30, and 40-something "real estate pro's" that are re-selling the same shit sandwich.

Keeping things in proper perspective, and identifying the real negative forces would be the way to go...

Fri, 07/13/2012 - 20:50 | 2614936 fonzannoon
fonzannoon's picture

Dude agreed. My sister is renting and she is getting bombed by everyone with the interest rate argument. Thse people are of ages and levels of stupidity.

Fri, 07/13/2012 - 21:11 | 2614971 lotsoffun
lotsoffun's picture

but, but, i thought rental properties were in???

did anybody mean to say that when unemployment (reported) goes back to 10%+ nobody can afford to rent?



Fri, 07/13/2012 - 23:52 | 2615190 cranky-old-geezer
cranky-old-geezer's picture



"homeless" is the new growing demographic.

Sat, 07/14/2012 - 00:10 | 2615209 ReactionToClose...
ReactionToClosedMinds's picture

no it was Henry Cisneros and Countrywide corrupting the system ... more so than 50 somethings ... but we all need our pinatas of choice ... me, I choose Cisneros and Chriss Dodd

Sat, 07/14/2012 - 12:26 | 2615794 Al Huxley
Al Huxley's picture

Yes, I didn't mean to suggest they caused or drove the bubble, but their participation at the end (I had 20-something co-workers quitting their jobs because they were going to make so much money flipping condo's) signalled the top.

Fri, 07/13/2012 - 17:49 | 2614628 francis_sawyer
francis_sawyer's picture

cue the equity rally...

Fri, 07/13/2012 - 17:55 | 2614634 Al Huxley
Al Huxley's picture

"...all that the Fed has succeeded in doing, is getting everyone in the world to frontrun it in buying bonds. Period"

Isn't that kind of the plan?

Fri, 07/13/2012 - 18:02 | 2614650 machineh
machineh's picture

'Mad Al' Greenspan cheered on the Tech bubble ... then yanked the rug out from under it.

'Mad Al' financed the Housing Bubble with low rates ... then Bernanke yanked the rug out from under it.

Now the Bernank has convinced the masses that bond prices only go up ... THEN ________________________.

Can you fill in the blank?

Sat, 07/14/2012 - 07:26 | 2615407 andrewp111
andrewp111's picture

Then the Bernank's successor will yank out the rug. He won't have to actually sell any of the bonds on the Fed's balance sheet, as they will remain to maturity. All he will have to do is to stop buying so much.

Bernanke's successor will be appointed in 2013 if Romney is elected and in 2017 if Obama gets re-elected.

Fri, 07/13/2012 - 18:25 | 2614707 Jones79
Jones79's picture

it's kind of brilliant in a way, but only insofar as the most powerful and fairly horribly indebted nation allows the broader market to do its dirty work for itself by reducing interest rates and allowing the cycle of debt issuance to continue while the rest of the world falls apart, US bonds being the safest and most logical and almost guaranteed to go up in value.  It's a nice little virtuous circle and the money is always coming back to US bonds at ever lower yields.  But no other debtor in the world has such propitioius repayment plan. 

Fri, 07/13/2012 - 19:24 | 2614808 newworldorder
newworldorder's picture

It is brilliant. Since there is only one client that the F$D is worried about - The US Government - it afords them the opportunity to hit 3 birds with one stone;

-  US Government is assured of long term borrowings at low interest rates to fund tax shortfalls.

-   Opens up their ledger for European assets and swaps - almost unlimited amounts.

-  Assures a steady income stream for Primary Dealers including China.

As long as trust remains in the system and each bond auction is covered, they can print to infinity without a rise in interest rates. The elegence of it is breathtaking. The financial perpetual fountain of youth has been discovered by Bennie at last.

Fri, 07/13/2012 - 21:03 | 2614959 sosoome
sosoome's picture

As long as trust remains in the system

always gotta be a catch

Fri, 07/13/2012 - 17:56 | 2614638 RobotTrader
RobotTrader's picture

All its going to take to get the Dow to rally 500 points in one day is:


1) More "central bank assistance" from the Fed to "calm fears about a global slowdown and provide a firm commitment to increase employment whatever the cost"

2) Jack Krugman appointed as interim economic advisor for President Obama

3) Joint communique from PBOC and BOJ to "prevent one - way markets" and to "punish speculators" betting against sovereign debt of developing nations.

Fri, 07/13/2012 - 18:04 | 2614659 machineh
machineh's picture

'Jack Krugman'

Dude, you are scaring me.

You mean to tell me that Paul Kurgman has an evil twin??!

Fri, 07/13/2012 - 18:15 | 2614691 AssFire
AssFire's picture

Jack is 90 years old and played Oscar in the odd ball couple...he would be better than Paul- no doubt

Fri, 07/13/2012 - 18:21 | 2614702 Melin
Melin's picture


Fri, 07/13/2012 - 19:31 | 2614827 smiler03
smiler03's picture

Robo is getting far too intelligent. I think the Tylers are blowing their cover...

Is that you TD?

Fri, 07/13/2012 - 19:54 | 2614870 Spastica Rex
Spastica Rex's picture

OMG. Is it possible???1??!?!??11!?

Fri, 07/13/2012 - 20:14 | 2614896 kito
kito's picture

spas, where is my sandwich....this is not honorable of you.........

Fri, 07/13/2012 - 20:40 | 2614924 Spastica Rex
Spastica Rex's picture

Hmmm... I know I owe you - how do I pay up? I want to do the honorable thing.

Fri, 07/13/2012 - 20:59 | 2614950 kito
kito's picture you can call them monday morning and place the order by phone. I'm sure they will take your credit card info :). Pick up for kito at 11am. Roasted red pepper, fresh mozzarella and grilled eggplant with balsamic dressing on italian sub. Good?

Fri, 07/13/2012 - 21:02 | 2614955 francis_sawyer
francis_sawyer's picture

I can't wait to see how many guys named 'kito' are going to be in Jerry's on Monday morning...

Fri, 07/13/2012 - 21:08 | 2614967 kito
kito's picture

You are going to rehypothecate my sandwich?? im eastern standard time btw

Fri, 07/13/2012 - 21:20 | 2614983 francis_sawyer
francis_sawyer's picture

Fuk yea~ :-) lol... I'm calling Jerry right now to tell him what I look like...


Good taste in sandwiches BTW...

Fri, 07/13/2012 - 21:27 | 2614999 Spastica Rex
Spastica Rex's picture

I sent you a contact request - I think I can send you a pm that way? I'll place the order and password protect it.

NJ is Eastern time?!

I'm a bum living on the West Coast and I normally get up at about 13:00 EDT.

Fri, 07/13/2012 - 21:21 | 2614986 Spastica Rex
Spastica Rex's picture

I will do my best.

Fri, 07/13/2012 - 21:32 | 2615008 francis_sawyer
francis_sawyer's picture

All your eggplant sandwiches are belong to us...

Fri, 07/13/2012 - 21:42 | 2615021 kito
kito's picture

Got it. Thanks. Francis trying to corzine my sandwich....when will this madness end?.....

Fri, 07/13/2012 - 21:42 | 2615022 kito
kito's picture

Got it. Thanks. Francis trying to corzine my sandwich....when will this madness end?.....

Fri, 07/13/2012 - 20:56 | 2614944 francis_sawyer
francis_sawyer's picture

 "OMG. Is it possible???1??!?!??11!?"


Come to think of it... I've never seen the two in a room together at the same time...

Fri, 07/13/2012 - 18:07 | 2614668 kito
kito's picture

right robo, except for that to happen, the dow would have to first fall 2000 points........

Fri, 07/13/2012 - 18:12 | 2614679 AssFire
AssFire's picture

All its going to take to get the Dow to rally 500 points in one day is:

4) DC gets blown off the face of the earth.


Fri, 07/13/2012 - 19:36 | 2614837 Chump
Chump's picture

Here is your +1.  Hell I'd buy a share of AAPL and a bottle of bubbly.

Fri, 07/13/2012 - 20:59 | 2614953 francis_sawyer
francis_sawyer's picture

5) Unplug all the HFT algos for a day... RobotTrader & MDB (being the only two humans trading stocks), ought to be good for calling the market up about 500 points (as long as it happened on Friday when they get their allowance money)...

Fri, 07/13/2012 - 18:13 | 2614687 knukles
knukles's picture

Jack Krugman.

'Nuff said

Fri, 07/13/2012 - 20:45 | 2614932 nmewn
nmewn's picture

It really is like chewing on glass

Fri, 07/13/2012 - 19:59 | 2614880 IMA5U
IMA5U's picture

The pain trade is up



Fri, 07/13/2012 - 21:03 | 2614958 lotsoffun
lotsoffun's picture

why you guys all getting on robo?  he's right.  i don't like it.  look today.  jpm 5 billion loss on top of 2 billion loss last quarter, after last quarter jamie promised, maybe another .5 billion loss, i have it under control.  memorys are short.  jamie was wrong.  so what?  must be the bottom.  has to be.  blue skys from now on.  anybody remember 2008?  merrill lynch.  8 billion lose, the same day citi 5 billion lose.  rockets to the moon!!!  it's over!  bottom.

what was that about the same mistakes over and over?  robo is right.  it's over, bottom is in.  housing, banking, manufacturing, shipping, jobs.

stocks are priceless and timeless.  gold is useless relic.  ask ben.  ask warren.  they have YOUR best interests in mind.


no comment on sarcasm if you don't get it.  but i am serious.  for some more period of time, robo is on.





Fri, 07/13/2012 - 18:04 | 2614661 kito
kito's picture

stale bread and water can only last so long before the POBW (prisoners of Bens war) start to revolt...........................

Fri, 07/13/2012 - 19:55 | 2614873 Spastica Rex
Spastica Rex's picture

The "revolutionaries" were pre-punked by Occupy. Controlled burning. Fuel is now spent.

Fri, 07/13/2012 - 20:47 | 2614934 nmewn
nmewn's picture

Up twinkles fella ;-)

Sat, 07/14/2012 - 05:13 | 2615355 ParkAveFlasher
ParkAveFlasher's picture

imo occupy was more a drill for enforcement, to model riot networks and prepare response, or guage broad sentiment, than an actual movemont.

Fri, 07/13/2012 - 18:06 | 2614664 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

....creating a low volume meltup.

The above should be the last sentence in Tyler's above article.

Fri, 07/13/2012 - 18:09 | 2614672 e_goldstein
e_goldstein's picture

Hope to god that it is the 'Ultimate' (i.e. last) scheme; but knowing the schiesters at the fed, it probably won't be.

Fri, 07/13/2012 - 18:10 | 2614676 arnaud263
arnaud263's picture

I wonder if Ben Bernanke is reading Zero Hedge

Fri, 07/13/2012 - 18:49 | 2614749 Likstane
Likstane's picture

If so, I'd like to invite him to the hood to hang out; maybe some blacktop chillin' with a forty and a blunt.  Maybe we could go for ride in my canoe later and I could show him where I lost my tradition.

Fri, 07/13/2012 - 20:56 | 2614946 lotsoffun
lotsoffun's picture

i live in a hood, in one sense or another.  i'm still alive.  bennie doesn't want to meet me.  or you.  or anybody except timmie and bammie.  or anybody that has a basic understanding of the theft going one.


Fri, 07/13/2012 - 18:11 | 2614678 adr
adr's picture

I could take $10k and invest in Apple on Monday. At the end of the day I could be up $500 or down $500. By the end of the week maybe I am sitting on a 15% gain and maybe I sit on a 10% loss.

Maybe I decide to play the long odds and bet on BAC. There could be some story at 3pm on Tuesday that gives me a 15% gain, or some story at 1:38am that tanks futures while I am sleeping and I wake up to find 20% of my money gone. Of course BAC did almost double from Christmas to New year's Day. I could be sitting on $20k before I know it.

Ask all the people who owned Netflix this time last year if they are happy. Ask everyone who bought Netflix in November if they are happy. You'll get completely different responses. 

That is why main street is scared as hell of Wall Street. There is no rationale, no reason as to why the market does what it does. If you claim to believe you know why the market tanks one day and rises the next, you are either actively tying to commit fraud, or just stupid. Only the programmers of the Algos know why a computer will execute a trade, but they probably don't know why it executed the next one.

Going to a Casino in Vegas will grant you the same odds as the stock market right now. At least in Vegas you have a heads up, knowing the place is trying to take your money. In fact I'd rather take my chance in Vegas. I've never lost more than $20 gambling. If I lose my first $20 I stop. If I win and start going up big, I quit if I lose twice in a row.

Fri, 07/13/2012 - 20:41 | 2614926 Spastica Rex
Spastica Rex's picture

Bravo/a. +1

Fri, 07/13/2012 - 20:59 | 2614952 nmewn
nmewn's picture

"Going to a Casino in Vegas will grant you the same odds as the stock market right now. At least in Vegas you have a heads up, knowing the place is trying to take your money."

lol...thats pretty much it.

At least at a casino they screen their employees for mental disorders and a criminal record before letting them deal, I think ;-)

The stock market today is a psychological basket case driven by planted rumors, algos and fear of being the one without a chair (or prozac) when the music stops. 

Fri, 07/13/2012 - 21:02 | 2614956 Absinthe Minded
Absinthe Minded's picture

Spot on. With the printing that is ongoing PM's are the only way to invest. I will gladly work the rest of my life building my PM stash to hopefully allow my children to have a normal life.

Fri, 07/13/2012 - 18:12 | 2614681 fonzannoon
fonzannoon's picture

The belief that the markets will fall to usher in QE is what is going to continually get people slaughtered. They may still do QE, and when they do the dow may still be at 13k. They will sell it by saying the dollar is "too strong" and it's not fair the the US has to be punished by other countries devaluing their currencies. The public will demand we weaken the currency in the name of fairness.

Fri, 07/13/2012 - 18:25 | 2614709 kito
kito's picture

sorry fonzanoon, but im not sure the public---if they were informed, which they are not--would be clamoring for a weaker dollar---this is a nation of importers---who will demand less purchasing power (than they already have) in the form of higher prices for oil, food, etc if the u.s. dollar weakens?????.................

Fri, 07/13/2012 - 18:31 | 2614722 fonzannoon
fonzannoon's picture

Kito as you know higher energy prices are a sign of a Robust economy. Just ask Larry Kudlow. By the way it won't be a "weak dollar". It will be because the dollar is TOO strong. All the media talk about is how strong the dollar is and how interest rates reflect that.

For the people who would be truly affected? The ones who this really crushes their way of living and causes them to go broke and homeless? They will run a 60 minutes piece on them every 8 or 9 months followed by 7 60 minutes pieces showing some rich guy giving one of those families 20 bucks.

Fri, 07/13/2012 - 18:44 | 2614744 kito
kito's picture

...larry kudlow?...turn off your tv!!!!!!!!!!!!!!!!!!!!!.........soooo the public will be unhappy with a strong currency that brings them prices that are TOO low?? you mean, they will revolt because those flatscreens and ipads and foreign vehicles and fruit and fish from south america will be too cheap for them to deal with???? and those vacations to europe will be just too cheap to handle?????.......ummm, fonz, not seeing where you are going with this...............

Fri, 07/13/2012 - 18:51 | 2614753 fonzannoon
fonzannoon's picture

Okay here is where I am going. You are arguing logic to someone else that is logical. All your points are fundamentally and economically correct. Now most of this crowd agrees with you and we are in the infantile minority. The majority of the crowd are made fun of and called sheep on here for a reason. They are totally clueless to your points regarding prices, currencies etc etc. and when they tune in for information they are spoonfed all the crap I am sarcastically saying. Have you tried discussing this stuff with the people around you? Maybe you travel in a different crowd but I basically do not discuss this stuff with the people around me because it is frowned upon as "anti American rhetoric". These people just do not and will not connect the dots the way you do. So there is no revolt coming. There is a slow bleed of the middle class. Reality sucks.

Fri, 07/13/2012 - 18:52 | 2614760 fonzannoon
fonzannoon's picture

By the way I live in NY metro so that is the crowd I am referring to. If you southerners are heading up here with a revolt please let me know and I will put on my fonzannon t shirt and hopefully will be shown some leneincy.

Fri, 07/13/2012 - 19:20 | 2614799 Yen Cross
Yen Cross's picture

 Allow me to " Spoon Feed" you. Technically you are correct, and fundamentally you are 100% wrong!  

  Ref; AAPL

Fri, 07/13/2012 - 19:23 | 2614804 fonzannoon
fonzannoon's picture

What about AAPL? AAPL is exactly my point. Look at AAPL. Imagine Yen, just imagine how great AAPL will be once we bring these jobs home! How are we going to bring these jobs home? Who knows but we are on the right path and these other countries currency wars against US will not be stoof for.

This is pure mind control plain and simple. The same people Kito thinks will rebel against QE and twist my balls and whatever else will be the ones demanding it. This will go down as the biggest self inflicted wound in history.

Fri, 07/13/2012 - 19:30 | 2614826 kito
kito's picture

are you kidding me fonz, you think the results of currency devaluation will sit well with the masses??????? forget whether the public will analyze it, etc before it happens.....they will FEEL IT after it in their pockets...they could give a rats ass about jobs coming home when the price of everthing starts going up....the strength of the dollar has been the one saving grace to consumers pockets during this fiasco.........and what right path do you speak of??? please tell me???.....the only right path we are on is the one that gets this system over with as quickly as possible so the country can then try to rebuild.....wont happen until the dust from the implosion settles................

Fri, 07/13/2012 - 19:39 | 2614833 fonzannoon
fonzannoon's picture

It absolutely won't sit well, and when it happens it will not be presented as the results of currency devaluation it will be presented as an attack (via currency) on America and everything we stand for. Like Marc Faber said, if it gets to that point there will be a war. It just won't be against the right people.

What percentage of people are getting some ridiculous pension or entitlement? Take that away from then in the name of "we need to start over fresh" and you better not turn your back.

It's going to breakdown eventually I just hope enough people get it when it does.

Fri, 07/13/2012 - 19:32 | 2614830 Yen Cross
Yen Cross's picture

fonzannoon   China is a net seller of usd. That means they are propping up the yuan. Regarding AAPL.

 If you build a superior product you will be rewarded for it. The usd has traditionallly been strong and our quality exports were still purchased. (value) It's only over the last 15-20 years that devaluing the usd , has been used to stimulate the economy.

 Where exactly has that gotten us? 8.2% unemployment and skyhigh commodity prices. Labor is the highest percentage of input costs, but commodities are priced in usd.

Fri, 07/13/2012 - 19:35 | 2614836 kito
kito's picture

yen, 8.2 percent unemployment???? shirley you jest..............

Fri, 07/13/2012 - 19:39 | 2614842 fonzannoon
fonzannoon's picture

Yeah agreed....8.2% my ass.

Fri, 07/13/2012 - 19:44 | 2614857 Yen Cross
Yen Cross's picture

Of course I jest!  Just like a China Man.

Fri, 07/13/2012 - 19:38 | 2614841 fonzannoon
fonzannoon's picture

Yen my simple point is don't be surprised to see the people demanding the thing that is making them sick and shunning the medicine.

Fri, 07/13/2012 - 19:55 | 2614869 Yen Cross
Yen Cross's picture

  Most of the people I speak with, are against any more Fed interference. The world economy is slowing as a whole. The system is flush with Fiat , in both Europe and the United States. This isn't a liquidity problem , it's a structural / credit problem. Hell JPM just sucked up 5b like a "HOBO on a ham sandwich"!

Fri, 07/13/2012 - 19:59 | 2614881 fonzannoon
fonzannoon's picture

Yen you know when you break it down we either default on our debt (this includes our debt to ourselves, pensions etc) or we inflate our way out. It's that simple.

People who don't want fed intervention may not understand the implications well enough.

Fri, 07/13/2012 - 20:33 | 2614914 Yen Cross
Yen Cross's picture

fonzannoon respectfully you are still missing the pretext of my post.  The world is awash in " FIAT".

  It is all about ( PONZI/ asset) allocation. Liquidity via M1-4  supply.

 Banks don't want to lend ( credit worthiness), and Corps. are hoarding their cash over uncertainty , ( tax laws/election) ect...

  Why do you think negative interest rates are in vogue, with (AAA rated ) paper in Europe?

Fri, 07/13/2012 - 20:47 | 2614919 fonzannoon
fonzannoon's picture

I will admit this much yen. I know the money has been printed. I also know it is not being filtered into the system. If it has it has not reached the people who actually need it in the form of anything other than another loan they can't pay back. I am not sure what the trigger will be that will send that money flooding in or when it will occur. Or if it will occur.


Fri, 07/13/2012 - 20:50 | 2614937 Yen Cross
Yen Cross's picture

 You realize , that term "printed" is antiquated ? Wouldn't it be great if you, or your family member could do a startup, with ZIRP policy in place now? 

  Banks have margins no? I'll bet a tech. margin of let's say 5% of "post tax profits" would work better than a Marquis @ your local Stadium?  Imagine the " word of mouth" advertising that would generate?

Fri, 07/13/2012 - 20:56 | 2614947 fonzannoon
fonzannoon's picture

lets not start with semantics. By the way I am self employed. I am doing okay too. I am doing even better now that I dropped my office and work from home. On my tiny scale I am deleveraging everything and trying to grab every nickel by cutting expenses. I have had some people offer me some loans to do whatever. I would rather get an std. ZIRP can go fk itself.

Fri, 07/13/2012 - 21:05 | 2614962 Yen Cross
Yen Cross's picture

 Good on ya! +1

Sat, 07/14/2012 - 14:43 | 2616140 earleflorida
earleflorida's picture

superior products become inferior without competition -- this is why all monopoly's blow themselves up -- they become so bloated from volatility, eventually having [cause and effect] a 'spontaneous corporate combustion event' 

* unless uncle sam brings em under the fold as with IBM, et.el

Fri, 07/13/2012 - 19:41 | 2614848 kito
kito's picture

@fonz, im also in the ny metro area, but i dont plan to be when it all falls apart.......and your shirt will be useless when the masses ravage the area, as the zhers who may recognize it wont be part of that herd, they will have hunkered down long before......................

Fri, 07/13/2012 - 19:44 | 2614856 fonzannoon
fonzannoon's picture

Yeah I hear you. I am sticking around. I thought about leaving but I don't think too many places will take us in when we are fleeing. I think Mexico in particular would have s boatload of fun at the border. These conversations are fun. I don't care that Yen thinks I am total putz. I probably am.

Fri, 07/13/2012 - 20:38 | 2614920 Absinthe Minded
Absinthe Minded's picture

Here in NH, actually watching FIght Club as I type this. I will watch this collapse somberly but also knowing I have a cattle farm up the street from me that will help sustain me and my family. We are a small town with like minded people. Everybody can pitch in and do their part. I pray we have a way of saving our country. I would love to just give my gold and silver to my kids when I pass on.

Fri, 07/13/2012 - 21:10 | 2614969 francis_sawyer
francis_sawyer's picture

The Absinthe would be much appreciated as well...

Fri, 07/13/2012 - 19:23 | 2614805 Yen Cross
Yen Cross's picture

 At the end of May, aud/usd was trading the .95 handle. DXY was 80. Currently aud/usd is trading on the 1.02 handle , and the dxy is 84.

   You might want to rethink those comments...

Fri, 07/13/2012 - 19:24 | 2614809 fonzannoon
fonzannoon's picture

Go walk down your street and find me 2 people who think " At the end of May, aud/usd was trading the .95 handle. DXY was 80. Currently aud/usd is trading on the 1.02 handle , and the dxy is 84" makes one fkin bit of sense.

Study the look on their face. Thats ignorance defined.

Fri, 07/13/2012 - 19:33 | 2614832 Chump
Chump's picture

Lol?  Where I live someone would call a mental hospital for me for speaking gibberish.

I don't think having a grasp of FX markets qualifies someone as ignorant or not.  There are far better ways to gauge someone's intelligence.

On a side note: do you trade?  If so, why?  Why does anyone contribute their time, money, and energy to these fake markets?  I know this hits close to home for a lot of folks at ZH, but it should.  Here is a site that details each and every way our economy is being destroyed by blood-sucking political and economic parasites, yet so many here make a living by playing along.  It's absurd.

Fri, 07/13/2012 - 19:41 | 2614847 fonzannoon
fonzannoon's picture

some of us don't really have a choice.

Fri, 07/13/2012 - 19:46 | 2614862 Chump
Chump's picture

You do what you have to do.

Fri, 07/13/2012 - 19:41 | 2614849 Yen Cross
Yen Cross's picture

I'm looking at it on my trading platform! May 31st trading low for aud/usd was .95795  May 21st dxy low was 81.06 unweighted.

  Close enough...

Fri, 07/13/2012 - 19:48 | 2614864 Yen Cross
Yen Cross's picture

 Go to your local gas station and see how many people think a soft dollar works for them.

Fri, 07/13/2012 - 19:57 | 2614875 fonzannoon
fonzannoon's picture

Go to your local union/pensioner meeting and tell them they are going to neet to take a major haircut on that pension.

Fri, 07/13/2012 - 20:10 | 2614889 Yen Cross
Yen Cross's picture

 I think the Bankruptcy Courts  have that task nailed down.  Fire all the Federal douchebag Pensioners that retire at 50, and tell them to get a Night Job! 

 Take all that slush money and defer it to Business lending and Startup/ Development grants & loans. I feel for the private sector Unions. They have already taken their haircuts.

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