Biderman On April's Equity Inflection Point As Fed's Front-Loading Fades

Tyler Durden's picture

The Fed has undertaken the same front-loading of the US economy for three years in a row (QE1, QE2, and Operation Twist) and each of the three times the performance of the US equity market to this sudden flush of liquidity has been almost identical in terms of velocity (speed and direction) - even though the underlying macroeconomic impact has been lesser and lesser as we pointed out here earlier. What is also most notable is that as we head into April (as Biderman reminds us, a typically positive 'flow' month for US equities given the tax-based moves and quarter-start) we are nearing what has been the inflection point in the previous two pump-and-hope episodes. While sounding eerily bullish in the very short-term, Charles is critically clear that he expects the short-lived nature of money-printing's impact on the market economy to fade rapidly as he fully expects the government agencies to revise their growth expectations more in line with his 'fact'-based growth expectations which are considerably lower. Though he notes the timing of the election may mean more of a sustained 'hope', the fact that in 2012 (starting Nov2011) equity performance is better now than the previous two Fed-infused rallies is perhaps why corporate insider-selling is so dominating insider-buying now through March. The avuncular antagonist concludes with his expectations that once the April surge is done with (which it may already have done today?) he fully expects the stock market to give up all its first quarter gains (and need we remind you that high yield credit is sending the very same signals of concern that it did in Q2 of the previous 2 rallies). 

The last three Fed-infused rallies - fourth month fade...



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TooBearish's picture

Central Planning works - got it? now BTFD unitl it stops working...

Pladizow's picture

How many licks does it take to get to the center of a Black Hole Supernova?

Bump, Set ........

Tsar Pointless's picture

Not today, bitchez!

"S&P near multi-year highs" is all you need to know.

Now go play with yourselves, Muppets.

Pretorian's picture

He is switching on heavy stuff,cannabis cant help, he cant take any more of FED shit !

ekm's picture

Well, let's stop and think.

Primary Dealer X or Pension Fund X buys stocks. What is the reason:

1) Cash flow = dividend= sharing of profits from selling real goods to real people.

2) Capital appreciation = selling to Suckers

Now let's assume Primary Dealer X or Pension Fund X purchased a shitload of BAC. Can anybody tell me what BAC offers? Here is my take:

1) Cash flow = kiss my ass

2) Selling to Suckers = kiss my ass twice

Hence Primary Dealer X or Pension Fund X is forced to keep buying BAC in order to hold up the price until they own all BAC.

Hence, Bear Stearns, Lehman, MF Global, next........

junkyardjack's picture

Wait I thought everyone was leaving the stock market, what is he talking about people buying ETFs? No one is in the market remember

DavidC's picture

They're trying their damnedest with Apple today. Keep that up and the market stays up.


disabledvet's picture

I agree the news is weather or not the bond vigilantes can call out the Fed. (FYI I'm the only one of those guys still alive..and flat broke to prove it.) Until that happens I really have no idea what this guy is talking about.

PontifexMaximus's picture

Déjà-vu. Big yawn, again and again? Why is he not accepting that the fed is the ultra power and that they are forced to make the market moving, they have no other choice.

DavidC's picture

Because the Fed is leveraged up over 50 to 1 and when it blows (as it will) the Fed is toast, as I've said in a number of comments over the last week.


CvlDobd's picture

So you are the fed expert yet didn't even notice Tyler was talking about a bond sell off last week and not stocks?

Caveat emptor with your advice.

DavidC's picture

I'm not sure of your point. I didn't say I'm the Fed expert nor do I claim to be, all I was doing was pointing out the leverage of the Fed (greater than most, if not all, of the TBTFs in 2007/8).

With regard to Tyler, again I'm not sure what you're saying. Yes, I did notice that Tyler noted a bond sell off last week (I read most of the postings on ZH).


Sam Clemons's picture

How does leverage matter to a bank that is unaccountable, unauditable, and can create its own money?  Just curious.

debtor of last resort's picture

First things first

Axes of oil

then we'll see

Shizzmoney's picture

The bigger they are.....


DavidC's picture

Apple currently going stupid.


fiddler_on_the_roof's picture

Biderman !!!! Hahaha. He was telling people to sell S&P in summer June 2009.

Listen to him and lose money.

bnbdnb's picture

His thesis was correct. The fed broke the thesis in QE.

DavidC's picture


People keep saying the same about Graham Summer's Phoenix Capital articles and the same applies. The Fed has broken the market and it WILL come back to bite it on the bum.


bnbdnb's picture

The election is too far out. Crash now, QE recovery by November.

Boilermaker's picture

Everyone realizes how utter pathetic this has become....right?

DavidC's picture

And Apple at 3% up on the day - yeah, right....


junkyardjack's picture

+3% is a fade, it could have been 50% with their earnings potential

slewie the pi-rat's picture

short-term bullish

maybe what? 4-6 more weeks, here...???

and pony tail is long, but cautious...

ok, so please adjust all casino strategies as applicable, BiCheZ!

another month0this is gonna be worse than rabies in the local skunkery...  sheeesh!

Chief_Illiniwek's picture

Does that shirt indicate that Charles has a role in the remake of Saturday Night Fever?

Yardfarmer's picture

here on the high plains of colorado maybe we're just paranoid but i've noticed in three separate local grocery stores the usually well stocked shelves are showing some noticeable voids. my wife just heard one of the clerks telling another that some supplies are getting "temporarily" stressed and that they expect more of the same. hmmmm...

BlackholeDivestment's picture

That's it. Affectionately, Biderman's nickname is ''Chuckles''. Lol.