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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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Mon, 04/30/2012 - 21:16 | 2387096 vmromk
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.

Mon, 04/30/2012 - 21:27 | 2387137 fightthepower
fightthepower's picture

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

Mon, 04/30/2012 - 21:46 | 2387167 The Big Ching-aso
The Big Ching-aso's picture

 

 

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

Tue, 05/01/2012 - 01:23 | 2387474 Michael
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.

Tue, 05/01/2012 - 01:57 | 2387491 AldousHuxley
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.

Tue, 05/01/2012 - 09:32 | 2387600 French Frog
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....

Mon, 04/30/2012 - 23:18 | 2387350 theTribster
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).

Mon, 04/30/2012 - 23:38 | 2387381 Bear
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

Tue, 05/01/2012 - 02:07 | 2387500 AldousHuxley
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.

Mon, 04/30/2012 - 21:20 | 2387116 fonzannoon
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.

Mon, 04/30/2012 - 21:28 | 2387140 bernanke's wors...
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.

Mon, 04/30/2012 - 21:42 | 2387171 Comay Mierda
Comay Mierda's picture

ZIRP = QE to infinity

 

Mon, 04/30/2012 - 22:02 | 2387199 Big Slick
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....

 

Mon, 04/30/2012 - 22:14 | 2387220 narapoiddyslexia
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?

Mon, 04/30/2012 - 22:29 | 2387243 Big Slick
Big Slick's picture

You're thinking of Hugh G. Rection

Mon, 04/30/2012 - 22:28 | 2387241 bernanke's wors...
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. 

Mon, 04/30/2012 - 22:33 | 2387249 Big Slick
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)

Tue, 05/01/2012 - 00:19 | 2387424 RiotActing
RiotActing's picture

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

Tue, 05/01/2012 - 02:17 | 2387507 AldousHuxley
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?

Mon, 04/30/2012 - 21:59 | 2387196 fonzannoon
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?

Mon, 04/30/2012 - 23:42 | 2387387 HD
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.

Mon, 04/30/2012 - 23:45 | 2387391 Sam Clemons
Sam Clemons's picture

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

Tue, 05/01/2012 - 06:41 | 2387611 Nachdenken
Nachdenken's picture

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

Tue, 05/01/2012 - 00:22 | 2387429 TWSceptic
TWSceptic's picture

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

Tue, 05/01/2012 - 01:03 | 2387462 DeadFred
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.

Tue, 05/01/2012 - 02:31 | 2387518 AldousHuxley
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

 

 

 

Mon, 04/30/2012 - 21:23 | 2387125 fonzannoon
fonzannoon's picture

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

Mon, 04/30/2012 - 21:23 | 2387126 shuckster
shuckster's picture

May 5th 2012, global strike against the parasitic class

Mon, 04/30/2012 - 22:06 | 2387210 Big Slick
Big Slick's picture

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

Mon, 04/30/2012 - 21:24 | 2387127 destiny
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 ?

Tue, 05/01/2012 - 06:42 | 2387614 Nachdenken
Nachdenken's picture

Germany will never surrender.

Mon, 04/30/2012 - 21:25 | 2387131 Cursive
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.

Mon, 04/30/2012 - 21:26 | 2387134 chump666
chump666's picture

Excellent.

Mon, 04/30/2012 - 21:28 | 2387141 Cabreado
Cabreado's picture

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

 

Mon, 04/30/2012 - 21:29 | 2387143 FinalCollapse
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.

Mon, 04/30/2012 - 21:31 | 2387147 XtraBullish
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.

Mon, 04/30/2012 - 22:17 | 2387191 Big Slick
Big Slick's picture

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

http://www.chrismartenson.com/blog/charles-biderman-problem-rigged-markets/73098

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

http://trimtabs.com/blog/2011/12/22/how-to-invest-with-the-house-for-the-long-term/

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.

http://www.marketwatch.com/story/money-moves-5-doomsayers-are-making-now-2012-03-23

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.

 

Mon, 04/30/2012 - 21:36 | 2387161 BandGap
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.

Mon, 04/30/2012 - 21:38 | 2387162 AssFire
AssFire's picture

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

Mon, 04/30/2012 - 21:51 | 2387183 Anarchyteez
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!

Mon, 04/30/2012 - 21:53 | 2387186 gwar5
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.

Mon, 04/30/2012 - 21:55 | 2387188 bobert
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.

Mon, 04/30/2012 - 21:55 | 2387190 navy62802
navy62802's picture

Biderman rollin doobies again. Haha.

Mon, 04/30/2012 - 21:57 | 2387193 insanelysane
insanelysane's picture

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

Mon, 04/30/2012 - 22:17 | 2387214 undercover brother
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. 

Mon, 04/30/2012 - 22:16 | 2387224 Jack Burton
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.

 

Mon, 04/30/2012 - 22:26 | 2387235 Big Slick
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.

Tue, 05/01/2012 - 00:08 | 2387416 lasvegaspersona
lasvegaspersona's picture

Jack

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 thing...be sure there is enough money to run the ever more bloated central government....you know that organization that keeps the GDP up by SPENDING

Mon, 04/30/2012 - 23:04 | 2387324 SmoothCoolSmoke
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.

Mon, 04/30/2012 - 23:08 | 2387335 Atomizer
Atomizer's picture

 

 


When money changers continue to pretend that fiat injection solves all problems, lack of liquidity and price controls become unmanageable. How you ask? High employment tainted with lack of production digs into the pockets of discretional spending [Impulse buying habits]. I support [sarc] the Obama government. His endeavors will eventually topple big government, because there will be no more revenue to collect for supporting the system…..May I bestow the powers of our 'monetary priesthood' Bernanke to embark QE3 upon the mortals in saving this collective society.  

Visualizes Chairsatan raising his magic wand and whispering ritual Banging The Door chants….  

And now a word from our sponsor. 

Pentti Hakkarainen: The growth outlook and the challenge of financial stability

http://www.bis.org/review/r120430h.pdf?frames=0

Mon, 04/30/2012 - 23:22 | 2387356 mophead
mophead's picture

Well, everyone is still bearish on the stocks. Based on this Biderman video I think it's safe to say: stocks will go up on no QE. Watch and see.

Mon, 04/30/2012 - 23:31 | 2387369 Swarmee
Swarmee's picture

I have some real problems with this chart; first of all there is absolutely NO x axis scaling labeled. What is the time scale here? You bothered to draw vertical dashed lines as though those periods were comparable but without a label it's meaningless, are we even comparing the same time frames?
Second, for both the green and black plots there is a recovery to even level and ABOVE the April top well before the periods of intervention as labeled. So for some, apparently long, period of time BEFORE the interventions the market recovered to ABOVE the tops as listed.
What is my takeaway supposed to be? That the market recovered on it's own before the QE events? How then does that prove QE was responsible?

This is a huge hole in the logic of this post and I am a ZH reader who accepts the default position here, but honestly this type of lazy half-assed data does more to refute the ZH line of thinking than to support it. What am I missing here? Or is this graph as miserable as I read it?

And for Euclid's sake, I don't care your premise, LABEL ALL GRAPH AXES!

Mon, 04/30/2012 - 23:41 | 2387385 Atomizer
Atomizer's picture

Steve Keen bits. So tell me how your technical stock models look?

Just Banking Presentation Edinburgh 2012

Tue, 05/01/2012 - 01:48 | 2387484 cynicalskeptic
cynicalskeptic's picture

"wages and salaries are barely growing above inflation".......  

 Really?   For who - the bankers and Wall Street?   'cause it sure ain't happening for anyone else - even with the bogus 'official' inflation numbers

Tue, 05/01/2012 - 02:14 | 2387504 q99x2
q99x2's picture

If a private banking institution known as the FED has taken over the free markets of the US of A then that is treason. Bring the FED in for financial terrorism. They're taking the our taxes to Wall Street; wasting the money on themselves. And, they ain't going anywhere except to visit Madoff. What's going on?

Tue, 05/01/2012 - 06:14 | 2387597 falak pema
falak pema's picture

Europe has become a disaster ...

True, but as collateral to the 2008 provoked collapse of capitalism whereby ALL fisrt world banks went bankrupt, and ALL governments bailed them out by transferring private debt to government and central bank balance sheets. Just remember the 2008 wind down which has only been PARTIALLY marked to market from MODEL, is a 12 T write off. After the 6T write off of 2001 hitech meltdown. The upcoming write down if the financial bubble explodes will be another 12T to 15T worldwide. Unsustainable collapse leading to a depression unlike ALL others...

Since then, in 2008,  as the banksta ponzi has been allowed to flourish to generate even more debt via funny money, the Eurocrats like the FED/Congress have retrenched into DENIAL mode. And its got bigger n bigger n bigger the "funny money" pile; as has got bigger and bigger, the stress on the Energy pipeline, aka real wealth. As the BRICS now guzzle more n more of the REAL economy, they will one day HAVE to pull the plug on the FUNNY MONEY creation of first world "NOW drowning in private/public debt" economy. Its just a question of time...

Then the first world has three options, aka DC/WS cabal, inheritors of Pax AMericana, as lead GLOBAL players :

1° WW3--- Go after BRICS and CHindia construct, (that ironically the USA has itself created),  to continue control of the real wealth, notably energy. Possible, but unlikely as China is no paper tiger and the USA MIC is no unlimited mlitary power machine as the past history of its third world wars have proven. It is running out of financial money to fund such enterprise on sustainable basis like it did with Japan/Far East after WW2 and MacArthur days.

2° Let the funny money economy IMPLODE. Then the OLigarchy or what survives of it will try and rehash their world power from their Tax Paradise stashed wealth as Transnational MOguls USING WORLD WIDE CENTRAL PLANNING TECHNIQUES TO BULID A NEW WORLD ORDER. This means total mayhem in first world to 99% population with the unfathomable backlash of populist reaction. SO this NWO will be a heterogeneous construct, as BRIC Oligarchs could have different agendas from first world Oligarchs.

3° DEBT cum ENERGY crisis brings on same result of first world debt collapse. Each nation state then goes of the global grid and heads towards LOCAL econoomic constructs, totally decoupled to a world centralised construct, aka concted today since 1973 Pax Americana petrodollar cum Reaganomics outsourced model. 

Take your pick we have three scenarios for this  world, as the funny monet shit storm will unwind; one day.

PS : If Eurozone has become a disaster its because they didn't realise the size of the financial ponzi, all hatched since 1990-2000 days in WS/City, post big bang, and it caught them totally on the defensive; in their Keynesian mould of governance to boot! 

 

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