Biderman On The Fed: "They Control The Market, We Play With Their Money"

Tyler Durden's picture

The pastel-wearing President of TrimTabs proffers an entirely non-perfunctory prose explaining why he believes we are now due for a stock market decline. Echoing our thoughts, Charles notes that "It's the Federal Reserve that controls the market, it's their money, they're the boss, we play with their money that they print or stop printing". Sadly true (especially for all the highly-paid economists and strategists out there), the pre-2009 drivers of equity performance (specifically new or excess savings) are no longer so; since the initial QE1 this has not been the case and providing us with a thoughtful history of equity market valuations relative to the various QE-efforts over the past few years - especially when compared to income growth and/or macro-economic data - provides just the color required to comprehend this essentially a obvious thread of reality that merely  four years ago would have been denigrated to the tin-foil-hat-wearers of the world. Real-time data says that wages and salaries are barely growing above inflation, Europe is a disaster, and the emerging nations are seeing slowing growth; without the Fed's new money where will cash come from to drive stock prices higher?



And for a little more clarity - here is our overlay of the three stimuli from The Fed so far - showing the similar paths and the April tops in each series... It seems clear now that the self-limiting process of money-creation stalls out in the same periodicity as liquidity spills out into unintended places and 'governs' any real-economy growth expectations via margin compression for corporates (raw materials/energy) or consumer-spending (energy/food)... The similarities in both size and speed of move post Fed stimulus is incredible.

Chart: Bloomberg

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vmromk's picture

I say plain and simple.....FUCK YOU Bernanke !

It's going to be a fucking riot when your giant Ponzi collapses and king Obama is looking for a scapegoat and they haul your worthless ass to prison.

That should wipe that quivering smirk off your pompous face.

fightthepower's picture

Yes sir! Fuck you Bernanke, you evil tool of the Rothschilds!

The Big Ching-aso's picture



I'm hoping there's safety in being collectively phucked.

Michael's picture

I hope there'll be enough of us to turn the banksters off in time before they completely destroy us all.

Thanks Biderman.

AldousHuxley's picture

of course Fed controls the market. Market is mostly money supply multiplied by risk levels in the market.

bernanke is god.


but god has been captured by politicians.


Obama told god to print more money for his re-election so that he doesn't have to make hard political decisions.


God obliged.

French Frog's picture

I wonder how many bears will sadly get roasted again this time on the assumption that:

.2012 will be like 2010/11

."sell in May and go away"

.Tom Demark and countless other commentators are yet again calling a top (when you don't have to put your own money where your mouth is, that's the easiest job to do & you even get re-invited on cnbc/bloomberg 2-3 months later to say the same again - just long enough for most people to have forgotten your previous call)

only for the market to make new high in the coming weeks?

 .....For the 'Junker': I purposedly put 'sadly' in bold & italic to show that I deplore this state of affairs but there's no hiding the fact that it's the bears that have been on the receiving end of many spankings and not the bulls in the last 3 years....

theTribster's picture

That should wipe that quivering smirk off your pompous face

Damn, I'd so love to see that. Him being carted off in an orange jumpsuit, hand and legcuffed. He is, without a doubt, the most arrogant peice of shit I've ever had to look at and listen to. Arrogant, Ignorant and Powerful - sounds like George Bush doesn't it?

Fuck You Bernanke! and Fuck You too Bush! (take your pick).

Bear's picture

No more like Obama ... Yale, Harvard ... Summers, Bernache-in-the-ass, Obama, Krugman, etc, etc. ... see the pattern ... yes maybe Bush too

AldousHuxley's picture

easy to blame obama.

but as soon as you get rid of one, another liar will pop up.


best solution is to educate dumbass voters not to buy into lies, but that takes years of education and turnign the TV off to study math and science logic instead of creative poetry.


obama and Bush do what the populace wants them to do to stay in power. bribe them with cheap crap in the short term.

fonzannoon's picture

stocks will not sell off this time because it it so glaringly obvious another stimulus package will be announced and no one wants to miss it.

bernanke's worst nightmare's picture

There will be no additional QE.  Ben wrote the paper on how QE does not work.  The Fed has employed the program not to help the economy or unemployment but because it has been profitable for them to do so.  It is no longer profitable.  They'd be throwing money into the ever widening European black hole.  Ben has kept the market up on hopium since QE2 ended through Twist so that the Fed can withdraw with a profit.  Remember Ben's own statement on how the Fed can support asset prices by simply "credibly threatening to do so" (to QE).  Russell 2000 at 500 by October 2012.

Big Slick's picture

QE in time to save incumbants' collective a$$e$ before election day.  I make it Sept/Oct. 

CORRECTION: QE in time to TRY to save incumbants....


narapoiddyslexia's picture

And what about the Eclectica fellow who was here yesterday? Seemed like TD was ok with him? No? What was his name? Hugh something?

Big Slick's picture

You're thinking of Hugh G. Rection

bernanke's worst nightmare's picture

@big slick - not a chance.  No QE until the US indexes bottom out and/or Europe bottoms out, say March 2013. 

Big Slick's picture

I see your point... and might argue that the bottom could come earlier... however these things DO seem to need time to develop, unless.... (Mr. Bernanke meet Mr. cliff)

RiotActing's picture

You act as if Presidents are actually "elected". Silly fool... Obama's a lock...

AldousHuxley's picture

ding ding ding.....


June or July for QE3.5 to juice the market in time for October / November.


Fed has been compromised. But then why even have Fed then? Let politicians just print themselves on demand.

Also why even pay bankster bonuses on wall st. for performance when it is just Fed pumping everything?

fonzannoon's picture

There will be more LSAP purchases. Whether they are mortgage bonds or treasuries does not matter. People on here miss the impact of the media....why do you think there have been a million articles recently about how Ben is a genius and how correct he was. This will be followed up with articles about how the recovery was blossoming until _ fill in the blank (Europe etc.) derailed it. If they can convince enough people to think we were on the right path then it will give them the green light to continue. All it does is buy time...but why collapse today when you can collapse tomorrow?

HD's picture

I have little doubt the Fed will buy MBS - I think it's too little, too late but that seems to be central bankers in the nutshell.

The question is if those purchases will actually hold the market up - which seems unlikely at this point. The street front runs everything the fed does of late, so QE is priced in as a given.

Then again, common sense has not served me well in the past few years, so God only knows.

Sam Clemons's picture

Remind me why an entity that can print its own money cares about turning a profit?

Nachdenken's picture

Needs profits to keep printing.   Are we getting this  right ?

TWSceptic's picture

There will be a QE, if you think there won't be you are very naive.

DeadFred's picture

QE or not depends mostly whether 'they' want Obamney or Obamney to be president next term. Obamney is sure to take over if the DOW, the only sign of recovery has taken a nose dive because everyone will be sick and tired of Obamney's failed promises. On the other hand if the market is hitting new highs Obamney will be able resell the hope and change thing and will beat Obamney in a landslide.

AldousHuxley's picture

obama = banking bailout via foreclosure subsidies and wall st. bonuses via dotcom2.0 IPOs

romney = banking deregulation and special treatment for hedge fund / private equity partner capital gains tax


banks win either way




fonzannoon's picture

it's the same reason oil, gold, silver etc. refuse to sell off.

shuckster's picture

May 5th 2012, global strike against the parasitic class

Big Slick's picture

People who can still watch Modern Family uninterrupted will not strike.

destiny's picture

So will it be in the EU...just wait until Spain, Italy, France and acolytes bite the dust.   The french elections are a total fiasco, no Robespierre to save the country this time around, with 10% unemployment, no growth foreseen for a while....more unemployment coming ahead ! Capitalism is doomed.

So.....what else is new doc ?

Nachdenken's picture

Germany will never surrender.

Cursive's picture

So, to sum up Mr. Biderman's point to the more simple minded readers (looking at you Paul Krugman), the Fed's solution for massive flooding was to turn on every fire house it could reach.

Cabreado's picture

I'll take a shot of pastel with a boatload of truth anytime.


FinalCollapse's picture

Bernanki and all Fed governors are nasty parasites that destroy our economy. They run their printers as if there were no tomorrow and in process of doing it they suck all blood/wealth from society and transfer it to their buddies - 0.01% of the richest.

Fuck them. They will burn in hell - ovens are already prepared and fired up there and waiting for these assholes. Soon.

XtraBullish's picture

I love Biderman - he is awesome telling Wall Street what it hates to hear. Without the Fed's counterfeiting machine, the Primary Dealers wouldn't have the open credit card to juice stocks, corner bonds and trash the p.m.'s...welcome to capitalism at its fucking worst.

Big Slick's picture

I recently discovered Biderman and really enjoy him too - 36' interview on Chris Martenson's site

Here is a great video short (~5') of Biderman explaining how to invest 'with the house.'

Basically, he's looking for companies using cash from increasing cash flow to buy back shares and reduce their float (and obviously by NOT increasing debt).  Great example of how Biderman just boils things down to their base clarity and base concept.

His new ETF (TTFS) follows companies that track in these three manners.

In a recent article Biderman explains how a canary in the QE Fed coal mine will be the reduction of companies' buy backs of their own stock.  Savvy corporate insiders (the 'house') will recognize long before you and I will WHEN the money will be stopping and cease buy back operations.

Worth reading!  2pp

BTW buy backs for S&P 500 were $404 Billion in 2011 ($1.7 Billion/day!!!)... on track to be $550 Billion in 2012 ($2.3 Billion/day!).  When the news hits that QE is over (asymmetrically you WILL NOT hear it first), the corporates will leave the restaurant first (leaving others with the bill).  End of updraft... begin the downdraft.  Biderman suggests that decreasing buybacks will be a clue that this is occurring.  He sees an end to QE possibly resulting in DJIA @ 6,000.


BandGap's picture

This is precisely what was happening before the US entered WW2.

All this stimulus and still unemployment stays the same and GDP remains weak. This is like a diet of sugar that provides energy but has no nutritional value to assist in growth.

AssFire's picture

The track marks cover Ben's veins...and he needs another fix.

Anarchyteez's picture

July 5th, May 5th, whateva! Let's just get this John Galt day started allfucking ready. No work and no buying shit! Stop the motor!

gwar5's picture

Rickards: The window for QE 3 is May June July time frame, August at the outside. Closer to the election will be perceived as too political to help Obama, December is too late.

Fitzwilson: We're actually already doing QE 24/7 for deficit spending. Stimulus QE 3 is Quantitative Spewing.

bobert's picture

Gary A. Shilling predicts the 10 year @ 1.5% and the 30 year @ 2.5%. I believe he is correct.

The S&P 500 will likely slip to 1257 prior to the announcement of QE III and yes stocks will get juiced in time to elect our standing president.

Kind of boring really.

The excitement starts mid November 2012. Obama reality takes hold, fiscal cliff looms, and don't forget the Mayan effect.

navy62802's picture

Biderman rollin doobies again. Haha.

insanelysane's picture

I don't know what this guy is talking about, it's not the FED, the market fundamentals are outstanding!  <sarc>

undercover brother's picture

biderman seems like a dweeb, but he's right.   it would really be a good old fashioned miracle if the fed gets the hell out of the markets and allows them to finally seek their own levels. 

Jack Burton's picture

Bernanke is a whore to wall-street. Or Bernanke is wall-street's whore. No matter how you look at it, Bernanke is a whore to the 1%. They hold most of the stocks in their accounts, everytime the whore Bernanke prints a few trillion to juice stock markets, most of those stock gains go to the 1%. It is really very simple. Now, you might say that in a free market the 1% has worked harder, is smarter, more productive and really worthy by virtue of their bigger contributions to economic growth. Worthy of being the winners in the whore Bernanke's game of money printing and liquidity injections into the equity markets. After all, this is how free markets work. The hard working 1% gain, while the lazy 99% who do nothing of value should not benefit from money printing. In fact being useless eaters, the 99% should lose income via inflation in necessities and via zirp stealing any interest income on their savings.

My conclusion is Bernanke is working to make capitalism work. Reward the job creators, who are the 1% and punish the useless eaters who are the overpaid and underworked American workers. The Chinese provide the new labor force for the 1%. Chinese work hard and work for much much less. Thus again the 1% who are the job creators should and do reap the benefits of their extraordinary hard work via cheaper labor costs by sending the jobs to China.

In all this Bernanke is doing god's work, the work of keeping free market capitalism on track and functioning as it should. In a competitive market place a whore like Bernanke is the juice that keeps the free, open and fair markets functioning. His money printing benefits those who deaserve and earn the benefits.


Big Slick's picture

First - welcome to ZH, Jack.

Second - I don't think the 1%/99% thing plays anymore... at least since the rapes, shootings, and Hepatitus in tent city.  Honestly, the paradigm needs to be refined.  People's eyes glaze over.

lasvegaspersona's picture


Bernacke is the Fed's whore. Truman fired two Fed chairmen before he got the results he wanted. The Fed has not pretended to be independent since then. He may not do what Obama asks at this point because the next presedent may get pissed...remember when Perry threatened him?...He will do what the govt tells him to do ultimately....which is just one sure there is enough money to run the ever more bloated central know that organization that keeps the GDP up by SPENDING

SmoothCoolSmoke's picture

The Sugar Longs are just Big Govt socailists.   They just want more liquid from the Fed teat.  They beg for it while they de-ride folks on food stamps.  Yes they are no different.   Hypocrit MFers.