Biderman Explains The Bullish Market Ponzi

Tyler Durden's picture




 

"All markets trade their way to Perdition" is how TrimTabs' CEO Charles Biderman concludes a rather clear and factually full exposition of the reason we have gone up and the reality of why a drop is inevitable. Between the outsize number of investment vehicles relative to investable assets, the trend bias that every wealth manager seems stuck with that we will grow our way out of this mess (which Biderman suggests means a long-term rate of 5-10% GDP growth for the US - which seems obviously beyond our reach). He takes on the irony of the Wall Street vs Main Street arguments and warns of the inevitable plunge in the stock market (further believing that the winner of the next election is irrelevant given the cash vs special needs imbalance that exists). The US economy, if marked to market, is broke. Take home pay for all taxpayers is now only $6.2tn, down from $7tn at its peak in 07, and additionally we have created $5tn of new debt since the start of QE1 and owe a PV of $50tn in 'unfunded' liabilities leaving the future looking quite grim in his view. Perdition indeed appears to be looming given the Fed's far from sanguine view of reality.

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Thu, 01/26/2012 - 14:27 | 2100313 DoChenRollingBearing
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I have always respected TrimTabs.  Take home pay $800 bn LESS than in 2007.  LOTS more debt.

 

YIKES!  Guess it's time to buy more gold...

Thu, 01/26/2012 - 14:37 | 2100360 Silver Bug
Silver Bug's picture

The only way the stock market won't go into free fall is if they continue QE to infinity. Wall street knows this, therefore we will see QE to infinity, at the expense of the tax payers of course. That take home pay is going to get even smaller as the years go on.

 

http://ericsprott.blogspot.com/

Thu, 01/26/2012 - 15:11 | 2100483 derek_vineyard
derek_vineyard's picture

5 year TIPS -1%+

10 year TIPS recently turned negative

you can have a guaranteed loss in government backed treasuries or you buy other assets----that IS the game, msft chooses to lose a few % a year with its billions  rather than invest their cash before the collapse

0.25% federal funds as far as the eye can see??????  this is an EPIC CRISIS...uncharted waters, unheard of

Thu, 01/26/2012 - 15:18 | 2100505 tarsubil
tarsubil's picture

Man is this sobering. Good thing it is pint night and I have a well stocked fridge at home.

Thu, 01/26/2012 - 15:19 | 2100509 JR
JR's picture

Yes, and msft, as well as the Fed, must be expecting EPIC CRISIS straight ahead .

Thu, 01/26/2012 - 16:07 | 2100673 sunny
sunny's picture

EPIC CRISIS??

Serious question.  There will be a major announcement near the end of February from Euroland where there are hints of a huge --like 10 to 100 Trillion euro-- print over the next several years to "stabilize" the European scene.  Merkel is scared silly thinking that if the EU crashes and it is seen as Germany's fault it will be WWII all over again, she'll go along.  So let's say that there is a mind-boggling print in the EU.  Benny, not to be outdone, either covertly or overtly, pumps, say, 10+ Trillion dollars into various high frequency trading banks and hedge funds with specific instructions to keep the indices up.   He's already pumped 7 Trillion into the system under the table/blanket of TARP, no reason for him to hold back now.  Anyway, who is to stop him?  This is possible as sheeple don't now the difference between being rich and being wealthy.   What will happen to world markets?  Crash or fly??   I figure that would be good for at least a 12 month rally to new Dow/SP highs, irrespective of what happens to bonds and employment.  Experts will scream and cry and demand an end to the Fed and no one will lift a finger to stop Benny or the ECB.  Invest accordingly.

sunny

Thu, 01/26/2012 - 17:00 | 2100821 gaoptimize
gaoptimize's picture

And what estimate of inflation do you think TIPS will protect you from?  John Williams' at ShadowStats?  I think my wife's gold and silver Valkyrie cups provide better protection.

Thu, 01/26/2012 - 16:50 | 2100790 Xkwisetly Paneful
Xkwisetly Paneful's picture

It is the only thing that sent the commodities skyward too as evidenced by the free fall after the last QE ended.  I think exactly two members of the herd posted as much in advance while 90% of the posts were advocating continued buying AU, AG et al but I can't count.

Thu, 01/26/2012 - 17:49 | 2100957 Robsabi
Robsabi's picture

Actually, gold rose almost 20% (from around 1600 to 1900) at the start of the last big dip at the end of July, 2011, QE2 having ended just 4 weeks before, on July 1. True, that was in response to the panic that started at that time, but since then at its worst, gold only gave back those gains, falling back to just below 1600, and now of course it's back up over 1700.

So while the forces in effect after QE2 probably have buffeted the price of gold around, it hasn't actually been in a free fall from the levels it was at during QE2, and in fact is at a higher price right now than it reached at any time during QE2, or any of the QE action before that.

So, at least when it come to gold, the "zerohedge herd" was right, and the "two members" you highlight were basically wrong.

Thu, 01/26/2012 - 15:18 | 2100503 HD
HD's picture

Nothing wrong with a little debt...I mean for every trillion we put on the sovereign platinum debt card - we get 500 airline advantage miles!*

 

*Subject to availability and black out dates. Not valid to escape societal collapse. 

Thu, 01/26/2012 - 17:08 | 2100841 Marco
Marco's picture

No, you get a couple hundred million dollar worth of oil you couldn't otherwise afford (the rest goes to the cronies).

Thu, 01/26/2012 - 16:08 | 2100558 cranky-old-geezer
cranky-old-geezer's picture

 

 

Take home pay $800 bn LESS than in 2007. 

Actually it's $2,960 billion less when stated in '07 dollars, because USD has lost 40% of its value since '07.

13% drop in take-home pay since '07.

48% drop in take-home purchasing power since '07.

THAT'S why America is in a depression, not recession.

[BTW RoboTard and other stock market bulls out there, today's 12,800 DOW is 7,680 in '07 dollars ..a 45% loss since '07's 14,000 top.]

[...and today's $1,700 gold is $1,020 in '07 dollars ...a 10% gain since '07's $924 close.]

Thu, 01/26/2012 - 16:46 | 2100776 Xkwisetly Paneful
Xkwisetly Paneful's picture

No better way to keep the commoners down than skyhigh food and gas prices coupled with declining wages.  Next a littany of tax hikes. Zero upward mobility.  Using the governments to maintain their place in the world all the while yapping about giving a shit about the poor and middle class is their playbook. The only endgame is wretchedness and oppression with the greatest degrees of magnitude effecting the bottom up.

Wait till the avg peasant has to go buy corn after the obvious upcoming massive dilution of paper currency.

Fri, 01/27/2012 - 00:08 | 2101665 Cursive
Cursive's picture

@cranky-old-geezer

Well said.  This should be a ZH post of its own.

Thu, 01/26/2012 - 18:56 | 2101113 AbelCatalyst
AbelCatalyst's picture

 

Long live Math!!  

It is an absolute impossibility to manipulate, spin, print, or destroy Math!!  Deep beneath the outward economy Math is doing it's work - an unrelenting, dispassionate force of reality.  Math works slowly at first, building pressure, but there will reach a moment in time when a tipping point will be reached and Math with have His day!!  

Long Live Math!!! 

Fri, 01/27/2012 - 00:10 | 2101666 Cadavre
Cadavre's picture

YIKES!  Guess it's time to buy more gold.

Do they manipulate gold? Sell it - sell it now - sell the house, sell the car, sell the kids, sell the wife  - sell the frog the dog the gerbil `an move ur ass to an abandoned offshore oil rig cause Milt's ghostly prostate is `bout to open full on for one last blast golden shower USD trickle down and flush the remaining soured contents of St. Friedman's incontinent bladder from a fast approaching QE Storm!

If the culmination of god's work requires the entire global structure to collapse, so be it: As long as the dollar carry carries the ticks to even more rapturous highs till the lipsticked well poked pig can't squirm no more.

FOG of War setup:
Anything and everything to scare up oil and tear up the dollar (they're still pitching global warming carry fer chris sakes)! The "threat of closing the "Straits" was the best news the HFT Dollar Carry Boyz have had for a long time.  We now witness a "should be mothballed" carrier steaming into the Persian gulf. What's that about? Anyone see dead people sailing to a last port of call to be an all hands aboard target for coup counting freedom hating dolphins as the big floating museum weighs astride Hormuth with bright red white blue bullseyes painting the soft spots and takes 3 in the flanks? It happen a couple of times before, and the response, as always, is hush hush and on the QT. When you be GI you be nothing more than one collateral damage loss leader unit for the War Usury's marketing department. It be little surprise to open eyes when  the hypno-tube ray blasts rashes of frenzied tongue talking for more genocide in the name of Freedom and the recently minced Pesrian Gulf chum that used to be someones son, someones mother, someones brother or father. Jes one more "just cause" for jez one one more frenzied blood bath dance into barbarianism.

USD reserve status cold shouldered as bilateral trade agreements begin to erupt. Right now India Russia, China Iran and others will trade with non USD credits. EU delays 6 months and Iran say f* it - we ain't gonna ship you any now or later and calls the EU's blusterous girlie bluff. The Esteemed Der Berskank freezes rates (how might one freeze nothing?) and the Wallies foam in anticipation of EOY boneruses.

And what the f* is Bidermen storying with this video?

Watched listened. Noodled it weren't one of them one of them SNL parodies. The guy playing Biderman in the vid is not wearing an off the shelf suit  .. obviously it must be Mr. B ... soo ... then, seeping from the ether a whispered phrase of Bartokish dissonance from hell shepherds the moment through spinning plastic wavy lined design vortices ending at grainy scene from Apocalypse Now (scene here) , where Brando's character asks Sheen's character, "Are my methods unsound?". Sheen's reply, " I see no method .. at all.".

Humble narrator see no message at all, either, in the subject vid, At least no new message. Do love Biderman's ration of rage asserting wall street and DC as being distinct entities separated by some invisible ethical forcefield. An old testament gypsy pop culture honor among thieves thing-a-ma-bobby  ... right - shit - another thief is a thief's largest demographic.

After laying the foundation for his premise. Wall Street is not DC, Biderman concludes the collapse is the pimp's fault, and not the whores. Anybody remember when the republic didn't have a Goldman alumnus as Der DoT Kapo? Do no one `member when DoD was headed by a public servant and not some War Industry butt boy?

Formula for good economy: Eat drink and be merry for tomorrow you will die (raw material for fusion center Soylent Green factories - no doubt).

Fri, 01/27/2012 - 00:48 | 2101714 tsx500
tsx500's picture

got it.

Thu, 01/26/2012 - 14:31 | 2100325 TruthInSunshine
TruthInSunshine's picture

Fake Plastic Trees wasn't just an alternative hit by Radiohead, it was a brilliant Orwellian missive about the future Ponzi, all things included - especially unicorn equity slot machines - with one trillion percent more ponizification than before, and even with new, plastic/polymer fiat (replacing paper fiatski):

Canada's new plastic $100 bill is all tricked out - latimes.com

 

*When all fiat goes plastic, the rabble will be very cold. That shit doesn't burn.

Thu, 01/26/2012 - 14:48 | 2100393 stirners_ghost
stirners_ghost's picture

 

But gravity always wins

Thu, 01/26/2012 - 18:47 | 2101095 AbelCatalyst
AbelCatalyst's picture

True...  So does Math!!

Thu, 01/26/2012 - 15:26 | 2100539 calgal
calgal's picture

omigod that video is hilarious....it looks like a hocus pocus magick trick....all it needs is a cape, a wand and a wabbit!!!

 

Thu, 01/26/2012 - 14:30 | 2100330 Eireann go Brach
Eireann go Brach's picture

If the great Charles Ponzi was still alive today, he would be Obama's Treasury Secretary!

Thu, 01/26/2012 - 14:31 | 2100334 The Deleuzian
The Deleuzian's picture

Looking for a big correction in equities...Probably means the S&P will be 1400!

Thu, 01/26/2012 - 14:31 | 2100335 Cdad
Cdad's picture

 Between the outsize number of investment vehicles relative to investable assets,

Oh so dead on!  And as I have often said, when ETFs can print infinite "creation units" on a finite set of underlying stocks, you have to sit back and admire the size and scope of the Wall Street criminal syndicate's Ponzi scheme.

Thu, 01/26/2012 - 15:33 | 2100563 blindfaith
blindfaith's picture

 

 

 

Hummm...you try and tell that to the 401k, mutual fund investing crowd who honestly ( sarc) believe THAT is their retirement and Social Security is NOT, and the 401k will be there and SS will not.

Thu, 01/26/2012 - 14:33 | 2100342 Uptown
Uptown's picture

To all those Spanish kids out there,

"Oro, putas"

Thu, 01/26/2012 - 14:57 | 2100437 gmrpeabody
gmrpeabody's picture

BTFD putazzz...

Thu, 01/26/2012 - 16:42 | 2100771 DoChenRollingBearing
DoChenRollingBearing's picture

CLCB (Compra La Carajada Bajada), putaz!

Thu, 01/26/2012 - 14:33 | 2100343 Jason T
Jason T's picture

per·di·tion

  http://sp.dictionary.com/en/i/dictionary/newserp/Sprite_Serp.png); background-attachment: scroll; background-origin: initial; background-clip: initial; background-color: transparent; width: 20px; height: 19px; cursor: pointer; display: inline-block; padding-left: 3px; background-position: -619px -478px; background-repeat: repeat repeat;"> [per-dish-uhhttp://sp.dictionary.com/en/i/dictionary/newserp/Sprite_Serp.png); background-attachment: scroll; background-origin: initial; background-clip: initial; background-color: transparent; background-position: -491px -482px; background-repeat: repeat repeat;" src="http://sp.dictionary.com/dictstatic/dictionary/graphics/luna/thinsp.png" border="0" alt="" />n] http://sp.dictionary.com/en/i/dictionary/newserp/Sprite_Serp.png); background-attachment: scroll; background-origin: initial; background-clip: initial; background-color: transparent; background-position: -491px -482px; background-repeat: repeat repeat;" src="http://sp.dictionary.com/dictstatic/g/d/dictionary_questionbutton_defaul..." border="0" alt="" /> Show IPA noun
1.
a state of final spiritual ruin; loss  of the soul; damnation. 2.
the future state of the wicked. 3.
hell def. 1 . 4.
utter destruction or ruin. 5.
Obsolete loss. F@#K

Thu, 01/26/2012 - 14:33 | 2100344 mcarthur
mcarthur's picture

5-10% GDP growth is certainly achievable if you are talking nominal and not real.  All problems will be "solved" with a healthy dose of Zimbabwe inflation. 

Thu, 01/26/2012 - 14:52 | 2100420 inkarri9
inkarri9's picture

Didn't Ben say that the inflation target was 2%?  I also believe that former US Comptroller General, David Walker said we would need double digit growth for decades to "grow" our way out of our mess.

Thu, 01/26/2012 - 15:01 | 2100450 EscapeKey
EscapeKey's picture

Before you know it, the CPI weights will be adjusted to suggest we're going through "deflation".

By then, the food component will probably be negative.

Thu, 01/26/2012 - 15:05 | 2100469 Everybodys All ...
Everybodys All American's picture

I seriously doubt we will ever see that kind of growth again because of the fact that out debt refy cost's are so high. A certain amount of gdp is lost to this every year for debt refinance.

I just can't ever conceive it.

Thu, 01/26/2012 - 15:36 | 2100575 blindfaith
blindfaith's picture

 

 

 

I have said many time on ZH, made up and imaginary numbers don't lie.  The problem is trying to keep up with the lies once they get this far out of control.

Thu, 01/26/2012 - 14:35 | 2100345 Waterfallsparkles
Waterfallsparkles's picture

I guess you can only blow hot air in the balloon for so long before it pops.

Thu, 01/26/2012 - 14:35 | 2100351 The Deleuzian
The Deleuzian's picture

Dude hit it on the head...More money's been made inventing new 'vehicles' to buy/sell than companies themselves...

Thu, 01/26/2012 - 14:37 | 2100359 lynnybee
lynnybee's picture

i don't know who i like better, Mr. Biderman or Dr. Faber ...... how i love a tell-it-like-it-is , no nonsense, basic kind of guy !

Thu, 01/26/2012 - 14:46 | 2100401 Gimp
Gimp's picture

Unfortunatley both will be ignored in the history books after the collapse

Thu, 01/26/2012 - 17:20 | 2100877 grid-b-gone
grid-b-gone's picture

Just like the last collapse, no one can see this one coming.

Thu, 01/26/2012 - 14:39 | 2100370 Sudden Debt
Sudden Debt's picture

THE EMPIRE HAS WON! DEATHSTAR IS IN POSSITION!

 

Thu, 01/26/2012 - 14:39 | 2100373 evolutionx
evolutionx's picture

HYPERINFLATION WILL DRIVE GOLD TO UNTHINKABLE HEIGHTS

We now live in a world where governments print worthless pieces of paper to buy other worthless pieces of paper that combined with worthless derivatives, finance assets whose values are totally dependent on all these worthless debt instruments.  Thus most of these assets are also worth-less.

 

more:

http://www.mmnews.de/index.php/english-news/7063-hyperinflation-will-drive-gold-to-unthinkable-heights

Thu, 01/26/2012 - 14:41 | 2100379 carbonmutant
carbonmutant's picture

The trick is to make sure" perdition" is someone else's problem...

Thu, 01/26/2012 - 14:42 | 2100387 Cdad
Cdad's picture

Done and done...unborn American generations to come.

Thu, 01/26/2012 - 14:43 | 2100388 Truffle_Shuffle
Truffle_Shuffle's picture

Lets just get the confiscation of the world's assets over already......I need to fucking move on.

Cue the false flag Alien Invasion.

Thu, 01/26/2012 - 14:44 | 2100395 Gimp
Gimp's picture

Biderman will not be getting invites from CNBS or Bloomberg anytime soon with that negative outlook!

Bring on the pom-poms quick....Becky

Thu, 01/26/2012 - 14:53 | 2100416 tempo
tempo's picture

How many of us buy AAPL products for our kids?? How many of understand or care that AAPL executives are worse than the slave traders/owners of the 1850s?? Check out www.marke-ticker.org post today for a description of the living hell that the AAPL/Foxconn workers face...60 hour work week for $2.20/hr;70,000 person workforce living in dorms.. 20 people per 3 room apt (3000 room dorms). Workers faced with poor ventilation and little or no protective health gear or regulations. Aluminium dust explosions causing deaths. Obama claims America doesn't produce the workers AAPL needs. Well many of the Foxconn workers have PHds and work in danger workplaces as slaves. Thats Obama's view of hope and change for America. Thats our future. How many of us own AAPL stock and don't give a damn about the foxconn workers?? Recently Foxconn announced it needed 1000 Industrial Engineering for its factory. This would have taken 3 or 4 years in the US colleges to fill the demand (most graduates would never work at a dirty factory)...Foxconn found the need technical expertise in 3 weeks. For the 99%, this is the life our grandchildren face.

Thu, 01/26/2012 - 14:56 | 2100433 Truffle_Shuffle
Truffle_Shuffle's picture

Imagine the world if all used our collective power as investors and consumers for the greater good.  The problem isn't one specific company or one specific person.  The problem is us, which includes you and me. 

Thu, 01/26/2012 - 15:00 | 2100448 azzhatter
azzhatter's picture

And all the jackoff plantation owners like Jeffrey Immelt will tell you "at least they are better off than when they had no job"

Every one of these fuckwads should be forced to eat aluminum dust 3 meals a day

 

May every member of the oligarchy get a horrible form of ass cancer and die a painful hideous death

Thu, 01/26/2012 - 15:09 | 2100481 EscapeKey
EscapeKey's picture

This morning on Sky News, they trumpeted that Subway would create 6,000 new jobs in the UK.

Uh yeah, but they'll all be sucky low-entry jobs.

Thu, 01/26/2012 - 15:19 | 2100504 blu
blu's picture

Here in California some spin-meister was trying to explain how the proposed high-speed rail project would create 1 million jobs.

It sounds insane, because it is: Those are jobs counted as job-years. One job for one year for one guy. Then if you then figure the project is a 20 years deal you get 20 times the "jobs" out of it than you would if you counted open positions.

If it was me, I would have probably just strangled the guy on the spot.

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