Biderman on Dow 6000

Tyler Durden's picture

The storm clouds gathering behind Charles Biderman, CEO of TrimTabs, are a perfect analogy for his fascinating treatise on the key to long term bull markets and why the Dow will be cut in half. Bringing together the critical fundamental driver of P/E multiples - income growth in his view - and the historically most critical secular shift of this fundamental driver - communications breakthroughs, Biderman remains calm (for once) in his explanation for why the current low levels of income growth mean that should a new reality of less Fed exuberance (or a belief in less Fed exuberance) occur, the Dow will go to 6000 as he sees little evidence of technological innovations of the scale needed to lead the next 25 years secular bull market.

 

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vmromk's picture

Dow 6000 can't come soon enough.

LongSoupLine's picture

git out yer popcorn...Mark Fischer about to come on CNBS to "defend" himself.

 

edit: Fisher just said it was simply a "bookkeeping error"...LMFAO!

Hober Mallow's picture

C'mmon!!

The breakthrough is Facebook and Twitter and IPhones.

clones2's picture

Mistake #1 -  Trying to use historical valuations for the market...  These #'s are totally disregarded by the market, I mean computers...

Mistake #2 - Assuming the FED will ever stop pumping in trillions of dollars worth of liquidity...

tickhound's picture

You'd think, at SOME point, da bernank would at least TRY to make equity movements LOOK real. 

If I had DA POWA!!!... I'd at least throw in a 2% correction entry point bitchez, ONCE in a fucking while... I mean JEEEEEEEEEEZ.

malek's picture

#2 - Oh, they will stop pumping in trillions of dollars worth of liquidity! The only question is if they will then start pumping in quadrillions of dollars worth of liquidity instead, or not...

banksterhater's picture

99% is CHATBOARDS, it isn't people buying something. Wait til they charge for it. You are delusional.

VanceEva1's picture

my classmate's sister makes $82 hourly on the internet. She has been out of work for 10 months but last month her income was $17192 just working on the internet for a few hours. Read more on this site ....  http://qr.net/h7eu

banksterhater's picture

yea, and you reached in your ass and pulled out a bunch of thousand dollar bills!

DormRoom's picture

Western civilizations should look to Easter Island as a case study for a closed loop system (global laissez faire capitalism). 

If laissez faire capitalism use up its resources (middle class) without replenishing it, your society will die off (lack of consumers=death of consumer society).

 

new case study: Greece & Spain with youth unemployment ~50%.

bpj's picture

A mythical island where everyone makes a living taking in each others laundry.

pods's picture

And you cannot leave out Godzilla!

blunderdog's picture

No, no, FIRE is where it's at.  We're all either going to be bankers, insurance salesmen, or real-estate brokers.

BobPaulson's picture

The Jared Diamond angle on this was deforestation killed them. Even when they saw it coming, they chose to ignore the implications. My superficial interpretation of the analysis was that it was a feudal theology that killed them, not laissez faire capitalism. I would say our crony not-so-capitalist system that is regressing away from science and rationalism could easily bring on our annihilation.

Real capitalism with some legal framework to penalize externalizing costs to the planet/environment would be great, but the latter condition may be impossible, given how selfish and prone to optimistic denial humans are.

The scary part of the Easter Island story is how when the Dutch made contact with them, their language was similar enough to polynesian interpreters on the Dutch ships to be able to communicate with them immediately. They had regressed into a startling barbarism very similar to The Road.

Spastica Rex's picture

How would "real capitalism," especially in regards to its requirement for growth, function in a resource limited environment like Easter Island? I'm not challenging you; I'm just curious.

BobPaulson's picture

Perhaps I didn't formulate that ideal with enough clarity. I meant primarily that what happened on EI was deforestation and that the government there was a feudal system with strong religious undertones, not laissez faire capitalism.

Then I meant to critique the use of the word capitalism, since like communism, we've never seen either in action on earth before. So I was implying that "real capitalism" with supply and demand and large open free markets has many excellent characteristics, but empire building stongmen (or women) never like it because it doesn't allow them to corrupt and influence peddle.

tmosley's picture

You do know that Easter Island natives had no concept of "property", instead following local chiefs who wanted nothing more than their personal fame and fortune, right?

You do know that if Easter Island had had laissez faire capitalism, the landowners wouldn't have allowed the trees to be wiped out, as they were a valuable resource, right?

You do know that we don't have anything even closely resembling global laissez faire capitalism, right?  

You do know that you can't have laissez faire when you build your entire global monetary system on a foundation of monetary intervention by central bankers, right?

You do know that your whole thesis is thus based on absolute bullshit, right?

Spastica Rex's picture

Again, I'm just curious; is the key here to survival the power of "landowners?" I mean in regards to Easter Island.

malek's picture

Playing dumb, are we? Ever heard of property ownership? And that pretty much everything else is based on it plus enforcing property rights?

Spastica Rex's picture

No, I'm not playing dumb, jackass. Explain how capitalism works in a closed system like Easter Island. Or fuck off.

malek's picture

You are really stupid. "Closed system" - now I only wait for you to bring up the Second law of thermodynamics here...

What do you think would have happened if the previously existing trees on Easter Island would have been owned between a bunch of people, and not by one "king" or "highpriest" or whatever they had?

sunny's picture

Dow 6000 will never happen.  Bernanke will print so fast that inflation alone will drive the markets higher, even if the dollar is totally trashed in the process.  Who is to stop him?  Obama?  Mit?  Someone else?

sunny

Ahwooga's picture

Im not saying you're necessarily wrong, but the fact that this assumption is so universally entrenched and accepted worries me. The widespread level of confidence in continued and extended printing should be of concern to any ambivalent observer. 

resurger's picture

 

 

Anyone who has put faith in the FED shall be FUCKED!

please read hoodwinked by John Perkins...

i say DOW to 37,000, no its going to 100,000K.

When i asked my father (who was a sheep) how did you lose your money?

he told me, i didnt see it coming, nobody have seen that coming!!!!

good luck

 

P.S: the QE Effect is wearing off btw, its like when you sniff blow for the first time you get the ultimate kick, but then it becomes normal

untill it drops you fucking dead.

so the next time when they announce a QE "What else is fucking new"

but imagine they say no QE!

 

Spastica Rex's picture

I don't think so. I think those who fall in line with the restructuring will likely do very well. It's a limited set of people who can make this choice, and the number will continually shrink. This is the collapse, but it's only a collapse for those who haven't made it into the escape pods. I think everybody will be screwed eventually, but that's pretty far in the future, IMO. Growth will continue, but it will only be measured for a smaller and smaller subset of the world's population.  The American peasantry will continue to do OK for a while, maybe substituting boxed mac and cheese for Big Macs more often.

resurger's picture

you remind of Paul Krugman...

Long Hope

Spastica Rex's picture

No, I personally have zero hope. Call me kindling.

Vince Clortho's picture

Obama?  <que laughter>

Mitt? <que even more laughter>

Bernanke will dam well do what the criminal sociopaths that run the predatory world-wide wealth transfer tell him to do.

Mitt and Obama are lower level puppets in the real scheme of things.

BooMushroom's picture

The Dow Jones can be whatever TPTB want it to be. They need simply change the companies, or the number thereof. So the Dow will be what the Street wants it to be.

Born-Again Bankster's picture

I think DOW 6000 is a pipe dream.  While I understand the house of cards, I also understand the lengths central banks will go to defend their empire.  I think DOW 6000 will come in the form of DOW 15,000 combined with the value of the underlying dollars supporting it declining quietly by 35% over the next 5 years.  Of course, the Fed will maintain everything is fine with a mild increase to 2.1% inflation and might even throw in a war with Iran to mask the printing...again.  Sigh.

catacl1sm's picture

<---- This is Bullish

<---- This is Bulshit

 

Zero Govt's picture

the DOW is going to 1,200 (circa 2016-2017)

Biderman hasn't calibrated for TSHTF by the bucket (Trillion) load

Debt imploding doesn't just destroy debtors, it wipes out the creditors too (double dastardly disaster)

Looking for no counterparty risk? ...grab some Gold and Silver, the only assets you can sit your arse safely on

tickhound's picture

Reminder:  "Banks can handle a 50% reduction in equities" as per the STRESS test.

Careless Whisper's picture

The Careless Whisper LOLZ Of The Day & Threadjacking

From the John Goodman DUI Manslaughter trial;

Black outlined a different story. Goodman wasn't drunk, he told jurors. Rather, his car's computer system malfunctioned causing it to surge forward.

His forehead slammed into the windshield on impact, Black said, causing a concussion that left Goodman dazed and disoriented. He then walked away to look for help, found a barn belonging to an acquaintance, and drank liquor he found there to relieve the pain from his injuries.

Remember this is FloriDUH

http://www.palmbeachpost.com/news/crime/john-goodmans-dui-manslaughter-trial-continues-today-testimony-2236641.html

 

sIewie the pi-rat's picture

what about the part where he hoped for a miracle that somehow the person came back to life

 

http://news.google.com/newspapers?id=Op8gAAAAIBAJ&sjid=lWgFAAAAIBAJ&pg=1...

 

The Swedish Chef's picture

Correlation doesn´t imply causality. It´s nice when you find stuff that matches but that doesn´t mean they are connected.


Hobbleknee's picture

Yeah, the China-miracle-would-not-be-possible-without-broadband argument seemed kind of weak.

The Swedish Chef's picture

But lets play with the thought... According to this logic, smartphones and tablets, coupled with the incorporation of internet shopping in to peoples lifes on a real scale (as opposed to the dotcom bubbbles fantasy future) must mean we´re in for the mother of all bull runs. We all now this is not the case...

 

Or haven´t IPhones and Kindles reached Sausalito yet?

Piranhanoia's picture

maybe SinoForest x1000?   The world became aware of China and invested for the first time, right?

Captain Kink's picture

How can the Dow go to 6000 if AAPL is going to 1000?! /sarc

Exhaustion gap TODAY on the stock that can do no wrong? Get yer puts now.

dmger14's picture

Can't stocks be nominally higher simply due to money creation?  Why does speculation on levels of stocks give no consideration to all the recent and future QE that is needed to prop up the ponzi's corpse?

 

The Swedish Chef's picture

Who the fuck junked this post?!? 

Ahwooga's picture

Not me. But I think the opposite is the case and that rather than no consideration being given to money printing with regard to specualtion on stock levels its almost ALL consideration on the assumption of continued and further printing. The thing that anyone bullish and/or long the market should be thinking about is what happens IF the money creation stops. Not saying it will but as I alluded to above, there is a more or less universal assumption that they will keep going. What if?

The Swedish Chef's picture

The printing CAN´T stop. The very idea is that a ponzi scheme collapses when new money ceases to flow in and the modern world of finance is very much like a ponzi. 

 

IF the printing press was to stop suddenly, The Benank would receive some very angry calls from his masters. Unless thay have been given time to exit the market, in which case we´ll have a massive drop in equities even before the printers grind to a halt.

Ahwooga's picture

Broadly I agree, and that is the most likely outcome. My concern about being or getting long is that that is the assumption that EVERYONE is working with, and as we all know, Mister Market likes to fuck the largest number of people he can at any one time.

dmger14's picture

This is my point, that the printing will continue and prices will remain high with no Dow 6,000.  Even if printing were to stop, would prices fall by 50% or more with all the already-created money still in the system? We haven't heard a peep about an exit strategy and mopping up liquidity in well over a year.  Even if the fed did try to soak up the liquidity, what do they have of value to sell, treasury trash and toxic assets that are even more toxic?  I can surely see a market crash like last summer to spur an overt QE to bring maximum effect come election time, but then a bubble reflation once again and no Dow 6,000.