Biderman Blasts The Bernanke Put And Questions QE-Hopers

Tyler Durden's picture

Scoffing at the smugness of a CNBC talking head suggesting he is long-term bullish because of the Bernanke Put, TrimTabs' CEO Charles Biderman empirically analyses the effects of QEs-past and just as we have noted again and again - highlights the fact that without at least a 15% drop in stocks, Bernanke will not ride to the rescue. Based on his analysis of wage and salary growth, he believes the US economy is now starting to contract in line with what is going on in Europe and the rest of the emerging world. Earlier this year in the US, portfolio managers hoped and prayed that what looked like rapid growth was real, "It Wasnt!" and, as we have noted, Charles adds that with earnings season starting we will see future guidance cut and this will kick the leg out from the bullish stool - leaving only the hope for another QE flush to save us. However, with the effects of Bernanke's beneficence diminishing with each round, he suspects that we will be lucky to see a 10% rally on NEW QE.

 

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Mr. Fix's picture

A nice history lesson......

gmrpeabody's picture

But..., but... who's gonna pay for all our deficits?

Precious's picture

Bernanke is irrelevant.  He already refinanced.  

The only direction for the political scum from here is war.  Make your peace with your sons and daughters.

Mr Lennon Hendrix's picture

The above arguement (Tyler's and Biderman's) is irrelevent, yes, because Bernanke is irrelevent.  The Central Banks of the world have already flooded the seas of fiat so that all finance will drown.  There is more of this cash than ever before, and all that needs to happen is for it to be, once again, leveraged up to balance the liabilities they have created from the masive debt issuance.

It matters not about symantics of SP 800 or this or that.  The Central Banks continue to POMO, they continue to twist, their PDs continue to be their proxies, and the world continues to sink into the flood that has engulfed us all.

This is why it is so important to take back the real money supply.  Let the bankers have their fiat.  Don't wait for them to figure out that gold is money and they are using it on the balance sheets anyway.  Take back your right to sound money.

Buy silver.  Buy silver because it to is money, and everyone can afford it.  If we take back the money supply it will force the banks to lift their shorts.  It will force industry to pay more for the metal to use it for worthless crap like cell phones.  It will force the status quo to recognize the house of finance and economics is built on straw, because it will set fire to the fiat hous of cards.

Take back your rights - take back your money.

Buy Silver!

Precious's picture

"Peace on earth would mean the end of civilization as we know it."  - Joseph Heller

Popo's picture

Next time we get a 15% bump on QE... then a 10% bump ... then 5%  and at some point we get an afternoon ramp and and end of day collapse, and everyone shorts into the ramp.

We're geting close to that.  The end game is near and Bernanke knows it.   And I don't personally think he'll QE before the election anyway -- which is why the next crash is going to hurt much more than just 15%.

Mr Lennon Hendrix's picture

Everyone thinks that stocks are what will lose value here on out if there is no majikal QE (even as POMO auctions continue).  What about bonds?  Fiat?  Why wouldn't people pull out of cash?

Fiat is the weakest link.  Fiat has no intrinsic value, and it is merely an IOU - a promise to pay.  Fiat will be the big loser when this economic experiment is done.

Silver Bug's picture

It is QE to infinity, it is only a matter of time.

 

http://ericsprott.blogspot.ca/

Spitzer's picture

The real reason why Warren Buffet will always be wrong on gold. And it has nothing to do with QE or central banks or anything. Just basic arithmetic.

, interest and  dividends and earnings growth are nominal gains which are progressively self diminishing. The more nominal gains you make, the more medium of exchange you pile up which has to be reinvested again for even more nominal gains. Not only is your new nominal gains competing with other savers nominal gains but your very own present nominal gains will be competing with your future nominal gains. This can only lead to ever higher asset prices and ever lower yields on everything until it reaches its mathematical limit and explodes. 

Full article http://freegoldobserver.blogspot.ca/2012/07/warren-buffet-and-his-gold-d...

Rahm's picture

Long time no see Spitzer!!!

Cognitive Dissonance's picture

More snark from Biderman. Just once I would like to actually see that damn telephone pole behind Biderman. $10 says there's an ugly transformer perched on top covered in bird droppings.

Whatcha hiding Charles?  :>)

<humor>

RacerX's picture

Those aren't actually power lines you see in the picture behind him, but cables straight from the Market Gods.. to which he is directly connected.

I like Mr. Biderman, but yes sometimes he's a bit snarky. Gotta give him credit for calling it like he sees it tho.

Cognitive Dissonance's picture

I have great respect for Biderman and his desire to speak truth to power. But........his snark just empowers his critics to dismiss him...plus it tends to turn off the average Joe.

So in a sense Biderman is also talking his book, talking to his client base. Nuttin' wrong with that I might add. Just calling it as I see it as well. :)

Jake88's picture

you've appropriately named yourself.

derek_vineyard's picture

Just like zero hedge's paying contributors.  Touting themselves, because their words speak louder than their predictions.

Turin Turambar's picture

Personally, I love Biderman's snarky attitude.  He calls it like he sees it, and those of differing opinion don't pay any attention to him anyway.  He kind of reminds me of me.  LOL  When I'm right and know it and am debating some dunderhead, I'm very snarky.  LOL  Oh well, I never said I was perfect.  Besides, I'm sick and tired of the "useful idiots" destroying the country and limiting my liberty.  They are deserving of scorn.

Nonexistent Uninvented God's picture

All it would take is some heart attack inducing earthshattering event to take place while he was recording, something like an original idea popping into his head. As he falls to the floor clutching his chest muttering "so this is what being insightful is lllliiii" you'll get a clear view.

Cognitive Dissonance's picture

Unfortunately there are only so many ways to call a fraud a fraud before you instill in people (and in yourself) a sense of hopelessness and helplessness.

It is sometimes called disaster or compassion fatigue or Secondary Traumatic Stress Disorder and I suspect it applies not only to Biderman but to nearly all of us here at ZH. I believe it is the reason so many of the ZH veterans no longer leave comments and just lurk.

derek_vineyard's picture

Good point.   Once they get the ZHers to capitulate, its game over.

Cognitive Dissonance's picture

You might be interested in a piece I posted on Zero Hedge back in January of 2011 titled "Where Have All the Zero Hedge Veterans Gone, Long Time passing?"

derek_vineyard's picture

Cog Dis--

I stopped talking money and markets with all friends.

Cognitive Dissonance's picture

It is extremely difficult being a contrarian in a sea of uniformity and complacency. In many ways the Ponzi uses Shock and Awe, essentially fear, to keep the masses in line. When someone like you or I comes along shouting warnings from any handy roof top, in effect we become the boogie men to those who wish the externally applied pain would just go away.

Those who are subjugated, beaten down and repressed, often by their own willing compliance, know deep down inside that they do so. In order to remain in denial they will squelch the dissenter rather than their own tormentor(s). Consider for a moment why the abused and beaten wife remains with her husband, and will often defend her husband's actions in public, while secretly wishing to get away, to flee. Stockholm Syndrome comes to mind as well as Abused Spouse Syndrome.

Even if you disagree with Naomi Kline's view of the world and/or just dislike her politics, at least consider reading her enlightening tome "The Shock Doctrine: The Rise of Disaster Capitalism." The methods outlined in that book are being used against us today.

Time to wake up Neo.

NumNutt's picture

Your correct in all your reasoning Cognitive. I stopped posting for a couple of reasons, but primarily because I see about 60% of the newbies have no fucking clue what they are talking about, or just want to tell some one to go fuck themselves. I am also at the same point in that I don't discuss these topics with other people anymore.  At this point in the game people either understand what is going on and are making their own plans, or they are fools that still follow the MSM, in which case it is pointless to try and tell them anything. I am here everyday, ZH is the first thing I read in the morning, and the last thing I read before I go to bed....Keep your ammo dry, and your gold close.

WhyDoesItHurtWhen iPee's picture

All of your Puts are belong to us.

Shizzmoney's picture

I love the fact that Charles' reasoning is directly related to stagnating and lower wage levels for the working class. 

Progressives should maybe, you know, take a few notes (and Charles is a Republican!).  Ironically, you also never hear either Mitt OR Barack talks about this; just about new "job creation".  Maybe someone should tell them that if the jobs that are being "created" can't pay for rent, food, mortgage/credit card/student loan debt, thats basically the same as a Plantation Owner in the 1820s touting how he's "employed" the entire nation of Nigeria.

How short minded are stock investment managers, btw.  Despite declinging returns after QEs, they just don't care that the next round (the "4 Horsemen", as I call them), will crush their dreams, even after making 10-20% stock gains as Charles prognosticates.

gmrpeabody's picture

"Plantation Owner in the 1820s touting how he's "employed" the entire nation of Nigeria."

ROFLMA... +100

debtor of last resort's picture

Deployed.

 

Fixed it for you.

 

Job creation with lower wages as a constant factor is slavery.

Cow's picture

So, if you can't support yourself with your new sociology degree, massive student loan debt and massive cc debt for all the "stuff" you had to have, then it is your employer's fault?

Shizzmoney's picture

If you can't understand why the sociology degree, and all other degrees, are so expensive (for example, PUBLIC school tuition is up 600% in the last 6 years), why rents are rising, and why young familes (often encouraged by the religion they grow up in to "mutiply") can't afford to buy a home............

.....then you probably don't understand how extractive the construct of our Central Banking system is.  It's has nothing to do with government policy, left or right.  The Neos on both sides have increased debt since JFK got a bullet in his head.

Just because one has money to employ, does not mean he's in control (or its his fault), and why wages are low. 

Even in the end, the Employer (unless you are a huge multinational like GE, GS, Halliburton, etc.) takes orders from those who control the spigot.  This article, "The Jobless Class of 2012", proves it.

http://blogs.smartmoney.com/advice/2012/07/06/the-jobless-class-of-2012/

But keep hating on liberal arts degrees, though.  Really fucking constructive conversation that's going to turn the nation around.  let's just blame each other instead of the actual bankers who are sucking the nation dry like it was Monica Lewinsky underneath the table at a Clinton fundraiser.

 

Turin Turambar's picture

The unspoken truth is that an Unhampered Market Economy (wish we had one) is about the satisfaction of the ends of the human actors in the economy.  Nothing about it is about jobs.  Jobs are a by-product of the manufacture and delivery of consumer goods.

Statists love to push that rope:  It's all about JOBS baby! 

Economic illiterates.

Village Smithy's picture

Whether or not Bernanke actually does QE is anyone's guess, but what is fact is that it has diminishing returns in the markets but far more importantly in the real economy. the only thing not diminishing is the amount of debt that it piles up and the size of bankster bonuses that it provides.

goforgin's picture

Best Biderman video! It's coherent and well reasoned, but, there won't be another QE because global economy is about to take off.

No surprise that dummkofs on ZH don't like it.

 

--goforgin

The Big Ching-aso's picture

 

 

Acid and bath salts is nuthin' to mess with son.

Vergeltung's picture

wow, you're pretty sharp there, ain't cha?

pods's picture

When you say take off, do you mean take off like a rocket?

Or take off like an Italian 3 month vacation?

Jake88's picture

Dude you don't need any more gin. Better not go for gin.

Turin Turambar's picture

Yeah, I just hate it when the Fed telegraphs another QE.  Since I don't work for JPM, it's the best I can do for "inside info" on when to go long in the face of overwhelmingly bad economic news.  Yeah, I hate what it is doing to the dollar and our country, but since I can't do anything about it, I can certainly use the info to put me and my family on a firm financial foundation, so we survive the "medicine" these idiots are prescribing.

battlestargalactica's picture

Show me the way
To the next whiskey bar
Oh, don't ask why
Oh, don't ask why

For if we don't find
The next whiskey bar
I tell you we must die
I tell you we must die
I tell you, I tell you
I tell you we must die

 

-'Alabama Song', The Doors

Biggieshort's picture

I think this time around the Fed may have problems using the defibrillator.

 

http://www.youtube.com/watch?v=JjIXwkX1e48

TheCanadianAustrian's picture

ZeroHedge continues to bring up the catch-22 situation, where Bernanke won't announce QE unless stocks drop, but that stocks won't drop because the market knows that if they do, QE will come.

ZeroHedge seems to imply that the markets must allow stocks to drop before they get what they want.

But it doesn't work that way.

By convincing the market that they'll step in if things deteriorate, the Fed has effectively put a floor under this market. Unless and until the market believes that the Fed willl never step in (and the Fed has done everything it can to destroy this belief), the market cannot sell off to the degree that Bernanke would like in order to make QE3 less likely to be the final straw to break the dollar's back.

Bernanke has created a game of chicken that he can't win. He thinks he's created a brilliant exit strategy where he can simply dangle the carrot in front of the market and lead it to recovery without ever feeding the carrot (QE3) to the market.

But this strategy may ultimately be his undoing. Here is why: This Pavlovian strategy combined with his promise to backstop any medium-sized market drop has created a perverse environment where if Bernanke holds off on debt monetization to the point that banks start failing, the market may actually rally in response, and rally in a huge way, because they know that a massive market bailout is imminent. Then Bernanke will be faced with the decision of letting banks fail, or engaging in massive QE / bailouts with the S&P at ~1500. The markets will not price in the possibility of Bernanke doing the former.

The market didn't know in 2008 what it knows today. Expecting the market to respond in exactly the same way to a BOA or JPM failure as it did to Lehman is foolish and naive.

This is where I disagree with the ZeroHedge consensus. The markets will win the game of chicken, not the fed.

fonzannoon's picture

These big banks will place massive short bets on themselves and laugh all the way to bankruptcy. They will then take their paper profits and buy hard assets and profit from the real printing that will take place after their demise. That would be my plan anyway.

eclectic syncretist's picture

Another possibility is that market participants begin to realize just how low the Fed's ammo is, and how difficult it will be for them to prop the markets up with the little ammo they have left.

Accepting a loan doesn't automatically translate into huge profits down the road (unless you allow accounting fraud and are willing to accept runaway inflation).  Remember, the Fed's real purpose is to loan the government imaginary credit with no expectation of ever getting paid back (the taxpayer funded interest is real enough for the banksters), and to keep the banks in business distributing their "bills of credit" that most people nowadays mistakenly refer to as "money".

Debt-Is-Not-Money's picture

The banksters refer to them as "bills of credit" but they are really "bills of debt" and Debt Is Not Money!

The Swedish Chef's picture

Give the community some credit. In every article about negative market action you´ll find at least someone commenting the bad circumstance with one word: "Bullish!"

 

And banks will not fail. Regardless of what the S&P500, DIJA or NASDAQ is at, Bernanke will come to the rescue.

TheCanadianAustrian's picture

Well, usually the "Bullish!" quips are meant as serious in the context of short-term, hopium-driven markets, and sarcastic in the context of long-term, fundamentally-driven markets.

I'm actually serious about US bank failures being bullish for the markets, both in the short and long term, and based on fundamentals. But I'm only bullish in nominal terms, not in real terms.

Shizzmoney's picture

And banks will not fail. Regardless of what the S&P500, DIJA or NASDAQ is at, Bernanke will come to the rescue.

Why do we even vote, then?

Americans are idiots, I forgot.

Toolshed's picture

You appear to be failing to take the rest of the world into account in your theory. Global events could easily make any actions by the Fed absolutely futile. If (when) the Eurozone blows up, do you actually think the Fed can save the USA from the severe consequences? Not likely. How do you think Bernanke will react to a first strike against the USA by say.........China? The USA does not exist in a vacuum and decoupling is a laughable fairy tale.

TheCanadianAustrian's picture

Any actions by the Fed are already futile, regardless of global events. My post is alluding to the ultimate collapse of the US dollar and bond market. I have no idea how your comments about "decoupling" or "first strike" relate to anything I said. If, by "first strike", you mean China selling off their dollars, then that's an inflationary scenario which would prompt QE which is doubly bullish for equities. Again, I can't figure out what you're disagreeing with.