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Chart Of The Year: The Fed Has Doubled The S&P Admits... The Fed

Tyler Durden's picture





 

Prepare to have your minds blown courtesy of what is easily the most astounding chart we have seen in a long, long time, prepared by the economists at the, drumroll, New York Fed, which finds that absent what the Fed calls "Pre-FOMC Announcement Drift", or the move in the S&P in the 24 hours preceding FOMC announcements, the S&P 500 would be at or below 600 points, compared to its current level over 1300. The reason for the divergence: the combined impact of cumulative returns of in the S&P on days before, of, and after FOMC announcements. But, but, fundamental, technical, coffee grinds, Finance 101, Oprah Winfrey, Jim Cramer and Econ 101 analysis (in declining order of relevance and increasing order of voodoo) all tell us this is im-po-ssible? Because if the Fed is right about the Fed induced drift, it is all about, you guessed it, easy money. 

Here it is, black pixels on white LCD, straight from Simon "Harry" Potter henchmen's mouth:

We show that since 1994, more than 80 percent of the equity premium on U.S. stocks has been earned over the twenty-four hours preceding scheduled Federal Open Market Committee (FOMC) announcements (which occur only eight times a year)—a phenomenon we call the pre-FOMC announcement “drift.”

We are fairly certain one can come up with many other names for this "phenomenon." It goes on:

Our findings suggest that the pre-FOMC announcement drift may be key to understanding the equity premium puzzle since 1994. However, at this point, the drift remains a puzzle.

Not a puzzle. Just go into sub-basement C and keep staring at the Heidelberg Mainstream 80, Web-fed Rotary Printer until the puzzle solves itself.

Full paper:

The Puzzling Pre-FOMC Announcement “Drift”

David Lucca and Emanuel Moench

For many years, economists have struggled to explain the “equity premium puzzle”—the fact that the average return on stocks is larger than what would be expected to compensate for their riskiness. In this post, which draws on our recent New York Fed staff report, we deepen the puzzle further. We show that since 1994, more than 80 percent of the equity premium on U.S. stocks has been earned over the twenty-four hours preceding scheduled Federal Open Market Committee (FOMC) announcements (which occur only eight times a year)—a phenomenon we call the pre-FOMC announcement “drift.”

    The equity premium is usually measured as the difference between the average return on the stock market and the yield on short-term government bonds. Previous research on the size of the premium finds that it is too large for plausible levels of risk aversion (see Mehra [2008] for a review).

The Drift: A First Take

The pre-FOMC announcement drift is best summarized in the chart below, which provides two main takeaways:

  1. Since 1994, there has been a large and statistically significant excess return on equities on days of scheduled FOMC announcements.
  2. This return is earned ahead of the announcement, so it is not related to the immediate realization of monetary policy actions.

Returns-on-sp-500

    The chart shows average cumulative returns on the S&P 500 stock market index over different three-day windows. The solid black line displays the average cumulative return starting at the market’s opening on the day before each scheduled FOMC announcement to the market’s close on the day after each announcement. Our sample period starts in 1994, when the Federal Reserve began announcing its target for the federal funds rate regularly at around 2:15 p.m., and ends in 2011. (For a list of announcement dates, see the FOMC calendars.) The shaded blue area displays the 95 percent confidence intervals around the average cumulative returns—a measure of statistical uncertainty around the average return. We see from the chart that equity valuations tend to rise in the afternoon of the day before FOMC announcements and rise even more sharply on the morning of FOMC announcement days. The vertical red line indicates 2:15 p.m. Eastern time (ET), which is when the FOMC statement is typically released. Following the announcement, equity prices may fluctuate widely, but on balance, they end the day at about their 2 p.m. level, 50 basis points higher than when the market opened on the day before the FOMC announcement.

    How do these returns compare with returns on all other days over the sample period? The dashed black line, which represents the average cumulative return over all other three-day windows, shows that returns hover around zero. This implies that since 1994, returns are essentially flat if the three-day windows around scheduled FOMC announcement days are excluded.

A Deeper Look through Regression Analysis

The previous chart showed stock returns without accounting for dividends or the return on riskless alternative investments. In the table below, we account for these factors in a regression analysis by considering the return, including dividends (in percent), on the S&P 500 index in excess of the daily yield on a one-month Treasury bill rate, which is a measure of a risk-free rate. We regress this “excess return” on a constant and on a “dummy” variable, equal to 1 on days of FOMC announcements.

Table

    The coefficient on the constant (second row) measures the average return on non-FOMC days, while the coefficient on the FOMC dummy (top row) is the differential mean return on FOMC days. In the first column, we regress close-to-close stock returns and see that excess returns on FOMC days average about 33 basis points, compared with an average excess return of about 1 basis point on all other days. As seen in the previous chart, this return is essentially earned ahead of the announcement—hence our label of a pre-FOMC announcement drift. Indeed, in the third column we see a return of about 49 basis points during a

2 p.m.-to-2 p.m. window, while the FOMC releases its statement at 2:15 p.m. ET. In the second column, we repeat the regression using the close-to-close returns from 1970 to 1993, which is prior to when the Fed released its policy decisions right after each meeting, and see that essentially no such premium exists. The bottom rows of the table decompose the annual excess return of the S&P 500 index over Treasury bills on the return earned on FOMC days and the return earned on all other days. As shown in the third column, the return on the twenty-four-hour period ahead of the FOMC announcement cumulated to about 3.9 percent per year, compared with only about 90 basis points on all other days. In other words, more than 80 percent of the annual equity premium has been earned over the twenty-four hours preceding scheduled FOMC announcements, which occur only eight times per year.

    The chart below visualizes this return decomposition. It shows the S&P 500 index level along with an S&P 500 index that one would have obtained when excluding from the sample returns on all 2 p.m.-to-2 p.m. windows ahead of scheduled FOMC announcements. In a nutshell, the figure shows that in the sample period the bulk of the rise in U.S. stock prices has been earned in the twenty-four hours preceding scheduled U.S. monetary policy announcements.

Sp-with-and-without

An International Perspective
Does this striking result apply only to U.S. stocks? While we do not find similar responses of major international stock indexes ahead of their respective central bank monetary policy announcements, we observe that several indexes do display a pre-FOMC announcement drift, as the chart below shows. Cumulative returns rise for the British FTSE 100, German DAX, French CAC 40, Swiss SMI, Spanish IBEX, and Canadian TSE index when each exchange is open for trading over windows of time around each FOMC announcement in our sample.

International

Potential Explanations

One might expect similar patterns to be evident also in other major asset classes, such as short-and long-term fixed-income instruments and exchange rates. Surprisingly, though, we don’t find any differential returns for these assets on FOMC days compared with other days. In other words, the pre-FOMC drift is restricted to equities. Further, we don’t find analogous drifts ahead of other macroeconomic news releases, such as the employment report, GDP and initial claims, among many others. The effect is therefore restricted to FOMC, rather than other macroeconomic, announcements. In the Staff Report, we attempt to account for standard measures considered in the economic literature that proxy for different sources of risk, such as volatility and liquidity, but they also fail to explain the return. Finally, we consider alternative theories that feature political risk, investors with capacity constraints in processing information, as well as models where stock market participation varies over time. Although these theories can help qualitatively explain the existence of a price drift ahead of FOMC announcements, they are counterfactual in some dimension of the empirical evidence.

    Our findings suggest that the pre-FOMC announcement drift may be key to understanding the equity premium puzzle since 1994. However, at this point, the drift remains a puzzle.

 


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Wed, 07/11/2012 - 09:01 | Link to Comment Crispy
Crispy's picture

 

Nice confimation of rigged mkts...

Lets see the same overlay with gold.

Wed, 07/11/2012 - 09:06 | Link to Comment Leopold B. Scotch
Leopold B. Scotch's picture

Bingo!

Wed, 07/11/2012 - 09:08 | Link to Comment SheepRevolution
SheepRevolution's picture

"They’ll get it . . . they’ll get it all from you sooner or later cause they own this fuckin' place. It’s a big club and YOU AIN'T IN IT! You and I are not in The big club. By the way, it’s the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table has tilted folks. The game is rigged and nobody seems to notice. Nobody seems to care."

 

George Carlin, 1937-2008.

Wed, 07/11/2012 - 09:38 | Link to Comment tmosley
tmosley's picture

Is it just me, or does it seem like everything is coming to a head this morning?

Wed, 07/11/2012 - 10:10 | Link to Comment Jay Gould Esq.
Jay Gould Esq.'s picture

Lest we forget, that Heidelberg Mainstream 80 is going to require several tons of Crane high-durability cotton/pulp substrate banknote paper for the likely prodidigious quantities of future intaglio printing to ensue, for S&P "price targets" must be met.

Wed, 07/11/2012 - 10:22 | Link to Comment FEDbuster
FEDbuster's picture

Ah the good ole days, when the Bureau of Printing and Engraving actually needed paper and ink......

Now all the FED needs is a titanium keyboard and some extra zero keys.

Wed, 07/11/2012 - 10:40 | Link to Comment Pinto Currency
Pinto Currency's picture

 

The equity markets run like crazy during inflationary periods such as experienced in Weimar Germany and Zimbabwe.

Watch the markets take-off after an initial dip as the realization of increasing currency debasement grows.

Wed, 07/11/2012 - 10:56 | Link to Comment FEDbuster
FEDbuster's picture

I have read that Zimbabwe Stock Market had some 200%+ up days.  I am still a Zimbabwe multi-trillionaire from the good ole days.

Wed, 07/11/2012 - 11:51 | Link to Comment BigJim
BigJim's picture

Potential Explanations

blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah. blah blah blah fucking blah.

How about - we (the 'Fed') pre-release the FOMC minutes to our owners, the TBTF banks? You know, the ones with 101% profitable trading days?

Thu, 07/12/2012 - 03:25 | Link to Comment Muppet of the U...
Muppet of the Universe's picture

Senor Jim, the case you are envisioning: someone is told to buy the market before the FOMC meeting.  Someone who suckles at the Fed's teet.

Second, the bank or hedge fund keeps doing it.  Larger at first, then slower after a while.  This may have been how this, cancerous market tumor (one of many), started.

Eventually driven and motivated traders, who are constantly looking for an edge, will notice.  I promise you that, whoever wrote this piece, has known, or knows someone who has known, about this phenomenon for a LOOONG time.  As the Fed's role as central planner grows, more people take notice.  So, do you really have a choice?  Are you selling or buying into the fedday announcement? 

Now let me ask you a fun one.  What does the Fed have to gain from this??  perhaps artificially holding up the market...

But this is where this article becomes the con job...  They really don't show you what happens after Fed Day, 1-3 days after, & in absence of outliers like QE.

 

The bulk of that price movement?  Isn't wild fed printing like the Durden wants you to believe.  Get that childish notion out of your head.  It's traders, hedge funds, bankers - anticipating the climb.  & I bet you, if you do research, you'll find more information than what is shown here, which is solely "24" hours before...  jeeze what a round number.

 

 

Personally I think that it is the attempt to get a good seat on the QE bus.  But also, it is undoubtedly, an attempt to btfd...  Now if you bought before everyone else going into Fed Day, and they came out with QE?  Who is sitting large?  (What does that spell?  P&D)  You see, so many of you forget, this wasn't ever really a... system for financing industry.  It was a system for tanking corporations into behemoths.  & along the way, it became a casino.  A racket.  Truly, it is nothing more than a game.  Take my word for it- I was a professional gamer.

Thu, 07/12/2012 - 02:58 | Link to Comment Muppet of the U...
Muppet of the Universe's picture

edit: delete

Wed, 07/11/2012 - 10:39 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

One would wish but as long as the NYFD has THE BIGGEST BOTS ON THE BLOCK.....we will drift endlessly with no solution.

 

I can feel the ice chunk breaking up.... slowly but shirley.....just sit back and watch

Wed, 07/11/2012 - 09:41 | Link to Comment StormShadow
StormShadow's picture

RIP, George. You were so ahead of your time. Didn't fully appreciate you in life as I was on blue pills then. With your passing I began taking red pills and now realize just how funny, and dead on serious, you were.

Wed, 07/11/2012 - 09:52 | Link to Comment laomei
laomei's picture

Guy has always spoken the truth, and the really really really sad thing is that most of the audience just saw him as some sort of stand up comic.  I mean, really, how sad is that? He wasn't making jokes, he was speaking the dead honest truth and the reaction? Laughter.

Wed, 07/11/2012 - 10:16 | Link to Comment Oh regional Indian
Oh regional Indian's picture

No surprise there Laomei. It's an old trick. Mkae people laugh about the serious business, and then they can never ever take it seriously.

Case in point? Jon Stewart and the Daily Show.

ori

Wed, 07/11/2012 - 10:17 | Link to Comment laomei
laomei's picture

Stewart's a shill and has lines he'll never cross... because he's a shill.

Wed, 07/11/2012 - 10:43 | Link to Comment blabam
blabam's picture

Let's not forget Bill Hicks.

Wed, 07/11/2012 - 11:00 | Link to Comment DaveyJones
DaveyJones's picture

the guy that follows him (Colbert) pushes a little farther but is still under clear corporate control and still playing the political party games.  

Wed, 07/11/2012 - 10:57 | Link to Comment DaveyJones
DaveyJones's picture

comedy is tragedy with a change of wardrobe

Carlin was a master of philosophy and language

Wed, 07/11/2012 - 11:08 | Link to Comment Cathartes Aura
Cathartes Aura's picture

ahh, so true DaveyJones - in both philosophy and the words used to describe the awareness that arises from seeing the world through an unique perspective, we have our "seers" and wise folk.

language can be used to obfuscate - but also simply describe the absence of emperor attire.

Wed, 07/11/2012 - 10:56 | Link to Comment Cathartes Aura
Cathartes Aura's picture

while Carlin may have been "serious" in his perspective, and message - stand up social commentary pokes fun at the absurdity of culture taking itself  "seriously" - when we see the absolute bullshit - as Carlin would say - of culture as it's presented to us, in all it's spangles, pom poms and glitter, jumping and waving for your undivided attentions. . .

then we're freed from ever taking it seriously again. . . voila! hilarious!

Wed, 07/11/2012 - 09:15 | Link to Comment Big Slick
Big Slick's picture

While not exactly what you request wrt gold, Martenson had a great piece in March about the seemingly rigged gold market:

http://www.zerohedge.com/news/chris-martenson-explains-how-gold-manipulated-and-why-thats-okay

"...results of a simple 'buy and hold' investment in gold over the past ten years vs. a more active (and clever) strategy that both shorts gold during the daily hours and then buys gold long for the overnight session... "

"... if one simply bought gold and held it only during the open and close of the US daily fix, one would have lost 70% of one’s money during the same period of time [10 years] that gold rose in price by more than 500%

(I don't know how to post graphs so go to the story to see)

Talk about downward pressure by someone!

Wed, 07/11/2012 - 09:26 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

Don't you morons even know our Federal Reserve's dual mandate!? I must be dealing with a bunch of RETARDS. The Federals Reserve was comissioned by congress to pursue their dual mandate for MAXIMUM EMPLOYMENT AND PRICE STABILITY. Only a bunch of total MORONS wouldn't want high employment and stable prices.

Wed, 07/11/2012 - 09:41 | Link to Comment sdmjake
sdmjake's picture

Boy they sure are doing a good job with that employment thing... U-6 is currently running 15% unemployment.
That price stability thing ain't so good either. Have you been living under a rock for the last decade? What dollar price stability are you seeing?
I think everyone here would like 'max employment & price stability'. But the Fed Reserve sure doesn't have the ability to provide it! Only morons think they do

Wed, 07/11/2012 - 09:50 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

Looks like you didn't even bother to check their official site

http://www.federalreserve.gov/faqs/money_12848.htm

I QUOTE: "The Congress established the statutory objectives for monetary policy--maximum employment, stable prices, and moderate long-term interest rates--in the Federal Reserve Act."

Are you happy now? LOL. Don't libertarians ever get tired of getting completely owned?

Wed, 07/11/2012 - 09:56 | Link to Comment LawsofPhysics
LawsofPhysics's picture

MDB is arguing in favor of ending the Fed, what is this world coming to? Now we all know something is definitely wrong.

Wed, 07/11/2012 - 10:06 | Link to Comment derek_vineyard
derek_vineyard's picture

http://www.ssa.gov/OACT/STATS/cpiw.html

prices are within limits for last 4 years---good job, ben & co.

Wed, 07/11/2012 - 10:12 | Link to Comment Stoploss
Stoploss's picture

All mandates have been broken.

All mandate breaking liars shall hang by the neck until dead, as per the United States Constitution.

Wed, 07/11/2012 - 11:03 | Link to Comment punxsutawney phil
punxsutawney phil's picture

Wow dude, you read the FED site and believed it?  First of all..The Federal Reserve Act has been amended by some 200 subsequent laws of Congress.  The FOMC was not created till 1930, 17 years after the Act was created.  You shithead... the latest mandate was added during the 1970s, the Federal Reserve Act was amended to require the Board and the FOMC "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates" (Section 2A)

 

They make it up as they go along. 

 

Original title:  Full title An Act To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.

Wed, 07/11/2012 - 17:59 | Link to Comment DaveyJones
DaveyJones's picture

...and even with that, they are not promoting their "policy goals" 

"The goals of monetary policy are spelled out in the Federal Reserve Act, which specifies that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates." Stable prices in the long run are a precondition for maximum sustainable output growth and employment as well as moderate long-term interest rates. When prices are stable and believed likely to remain so, the prices of goods, services, materials, and labor are undistorted by inf lation and serve as clearer signals and guides to the efficient allocation of resources and thus contribute to higher standards of living. Moreover, stable prices foster saving and capital formation, because when the risk of erosion of asset values resulting from inf lation—and the need to guard against such losses—are minimized, households are encouraged to save more and businesses are encouraged to invest more."

 

the only thing they are promoting (now) is their own ass saving interest and trying (ultimately unsuccesfully) to control the cost of borrowing while inflating to try to save the value of the asset holding 1% and lower the real price of debt payment   

Wed, 07/11/2012 - 11:38 | Link to Comment shovelhead
shovelhead's picture

I agree MDB.

People are too dumb to realize what a good deal the Fed is with their dual mandate.

You get TWO hot steaming piles of dung for one low price.

Free market WIN.

Wed, 07/11/2012 - 11:45 | Link to Comment AnAnonymous
AnAnonymous's picture

I QUOTE: "The Congress established the statutory objectives for monetary policy--maximum employment, stable prices, and moderate long-term interest rates--in the Federal Reserve Act."

______________________

Should make it a trial mandate.

Wed, 07/11/2012 - 10:08 | Link to Comment SMG
SMG's picture

The real Federal Reserve mandate is to protect the Illuminati Oligarchy's banks, companies, and interests, and assist them in obtaining more and more control. 

Those other mandates are just a lie to keep the public pacified.

When there's blood in the street, make sure the pitchforks are pointed in the right direction. 

Wed, 07/11/2012 - 10:09 | Link to Comment aldante
aldante's picture

I want to take your avatar from behind.

Wed, 07/11/2012 - 09:50 | Link to Comment Top_Kill
Top_Kill's picture

You have to be kidding me. Are you just pushing peoples buttons for a rise. Where on that chart do you see STABILITY YOU FUCKING MORON? Please see the charts on all commodities and point to the stability.

Wed, 07/11/2012 - 10:02 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

Those prices would have been a lot LESS stable if our Federal Reserve bank had not pursued their dual mandate. Did you ever take that into account???

Thu, 07/12/2012 - 22:29 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

The only dual mandate is

a) pocket money from the printing

b) send money to buddies to pocket from the printing

I don't like that mandate very much.

Wed, 07/11/2012 - 09:54 | Link to Comment NeedleDickTheBu...
NeedleDickTheBugFucker's picture

If MDB did not exist, it would be necessary to invent him.

Wed, 07/11/2012 - 10:27 | Link to Comment FEDbuster
FEDbuster's picture

The sad truth is he does exist in the form of Obama's Council of Economic Advisors.

Wed, 07/11/2012 - 10:17 | Link to Comment slyhill
slyhill's picture

They certianly stabilized the price of money for the PD's.

Wed, 07/11/2012 - 11:11 | Link to Comment PiratePawpaw
PiratePawpaw's picture

I have seen this before; It's that new "sarcasm" thing all the kids are into. But dont worry, it's just a fad. It will never catch on.

 

"However, at this point, the drift remains a puzzle".....Really?! Morons found...

Thu, 07/12/2012 - 22:50 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Pushing up prices for gas, food and rent by printing money actually reduces employment. People just turn to barter, stored goods and credit without working as well as welfare, foodstamps and such then leave the country if they figure out the problem before running out jof supplies

Wed, 07/11/2012 - 09:36 | Link to Comment vast-dom
vast-dom's picture

beyond disgusting. who can i fucking sue? a class lawsuit from this info alone could get the ball rolling.

Wed, 07/11/2012 - 09:48 | Link to Comment OmNamah
OmNamah's picture

Indian markets broke out of its long term downward trendlines...so are silver and gold showing sign of bottomming out...Treasuries are showing signs of topping.....can this be possible that we have new bull market beginning now and here....i don know how...i don know why....prices are telling....

 

c for yourself the charts   www.bubbleshort.blogspot.in

Wed, 07/11/2012 - 13:20 | Link to Comment max2205
max2205's picture

Yakaey yack, don't talk back

 

Love and kisses,

 

BenBro

Wed, 07/11/2012 - 13:27 | Link to Comment Clayton Bigsby
Clayton Bigsby's picture

Well what the fuck am I getting this CFA for?  Front-run the Fed and get paid.  That shit is all me, son....

Wed, 07/11/2012 - 09:02 | Link to Comment negative rates
negative rates's picture

2 negatives make a positive, and 3 left turns makes a right turn, but 2 wrongs still don't make one write.

Wed, 07/11/2012 - 09:13 | Link to Comment cahadjis
cahadjis's picture

or right even

Wed, 07/11/2012 - 09:21 | Link to Comment Yes_Questions
Yes_Questions's picture

 

 

Rite!

Wed, 07/11/2012 - 09:25 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Food stamps, disability payments, corporate subsidies, medical care are now rights, so not make wrongs a right too - for the corporate banking ologopoly that is.

Wed, 07/11/2012 - 10:36 | Link to Comment ATG
ATG's picture

Dr Rich Wadd says:

Keep buying until the peanut gallery turns bullish...

Wed, 07/11/2012 - 09:30 | Link to Comment Cthonic
Cthonic's picture

For good measure, as a collection of fermions in hilbert space, really need to spin left seven times.

Wed, 07/11/2012 - 09:38 | Link to Comment Big Slick
Big Slick's picture

also... S&P at 0 in 2008 (first graph) suggests effect from Higgs boson was ignored in this analysis

Wed, 07/11/2012 - 09:39 | Link to Comment DeadFred
DeadFred's picture

And in one dimensional space a left turn is the same as a right turn.

This post quite clearly demonstrates that if you print money and give it to people for free so they can buy stocks with it the market will go up.

All that and the NYSE index is still about to make a death cross. I'm guessing the FOMC minutes are about to show details of unexpected dovish sentiment (articles written last week) that will rally the market this afternoon. Just about every index is sitting on the 50dma so the pressure is on.

Wed, 07/11/2012 - 18:19 | Link to Comment HungrySeagull
HungrySeagull's picture

Has it been 50DMA ALREADY!?

Wed, 07/11/2012 - 09:02 | Link to Comment swissaustrian
swissaustrian's picture

I wanna see a chart of gold and silver without the FOMC impact

Wed, 07/11/2012 - 09:12 | Link to Comment Sudden Debt
Sudden Debt's picture

current prices would look like a flatline and would & should be prices would look like a picture of the Himalaya

Wed, 07/11/2012 - 09:21 | Link to Comment Big Slick
Big Slick's picture

swissaustrian: Adressing your request, see my comment above about similar dynamics of the gold market - I link to a great Chris Martenson piece that is a must read

http://www.zerohedge.com/news/chris-martenson-explains-how-gold-manipulated-and-why-thats-okay

While not implying gold price supression is by the Fed, there looks to be long term (>10 years) intra-day suppression of gold by an entity with considerable weight to affect such dowward pressure

 

Wed, 07/11/2012 - 09:58 | Link to Comment swissaustrian
swissaustrian's picture

Yes, there is a German author, called Dimitri Speck, who has been writing about this for 10+ years. He published a book called "Geheime Goldpolitik" (secret gold politics). I've posted an English summary here:

http://www.pmbug.com/forum/f2/intraday-gold-price-manipulation-10-am-et-...

Wed, 07/11/2012 - 09:54 | Link to Comment eclectic syncretist
eclectic syncretist's picture

i wanna see a similar chart covering years when the Fed wasn't being so accomadative, like when interest rates were being jacked up to 15% in the 80's. 

Notice that the effect has been ZERO SINCE THE 2008 CRASH and the Fed exhausted it's rate cut bullets.

Perhaps they are just trying to sucker people in with this crap.

Anyone wanting an explanation need only consider an overlay with this chart, the absence of which in the NY Fed article demonstrates it's disingenuousnous, and that it is up to something it doesn't want you to know about with this article.

http://www.moneycafe.com/library/fedfundsratehistory.htm

The upshot of it all is since the fed is out of interest rate bullets and can only raise rates, you can expect this trend to either be gone or reverse itself from here.  Why they would suggest this as a trading strategy now should be properly investigated.  I will personally fade it.  Wouldn't be surprised if they intend to crash the market.

Wed, 07/11/2012 - 10:23 | Link to Comment unununium
unununium's picture

Bingo.

More important to the fed than moving markets is making us believe it has the power to move markets.

That explains this piece 100%.

Wed, 07/11/2012 - 09:02 | Link to Comment mrktwtch2
mrktwtch2's picture

i think we hit 1320 on the spx today boys..

Wed, 07/11/2012 - 09:34 | Link to Comment Ratscam
Wed, 07/11/2012 - 09:52 | Link to Comment Mr_Wonderful
Mr_Wonderful's picture

Currently distribution phase in an overbought market.

Wed, 07/11/2012 - 09:02 | Link to Comment Seize Mars
Seize Mars's picture

Why is anyone playing this game?

Wed, 07/11/2012 - 09:03 | Link to Comment sickofthepunx
sickofthepunx's picture

because there is money to be made.

Wed, 07/11/2012 - 09:10 | Link to Comment Leopold B. Scotch
Leopold B. Scotch's picture

Because the law says this is the only way to play, on the authorities' approved / even playing field.

 

(Not me, per say... But most are too stupidly believing that the government actually looks out for them.  They'll be the first to believe people are inherently greedy and need to be regulated, but then defer all sensible due diligence on their own behalf because they trust the flunkies in Govt will do it for them... When those same flunkies are as prone to be as self-interested / greedy as anyone else, but also have the benefit of monopolized economic function... Nothing like no competition to really get you to work extra hard... We all know how well that works out.)

Wed, 07/11/2012 - 10:14 | Link to Comment Paul Atreides
Paul Atreides's picture

By playing the game in a attempt to make money you are giving the corruption approval. Get some morals and put them ahead of your greed.

Wed, 07/11/2012 - 09:15 | Link to Comment Sudden Debt
Sudden Debt's picture

ask your banker where your money is right now and you'll know...

Wed, 07/11/2012 - 09:35 | Link to Comment dwayne elizando
dwayne elizando's picture

I play this game because I'm mostly accustomed to abuse by authority figures. Mostly.

Wed, 07/11/2012 - 09:02 | Link to Comment midgetrannyporn
midgetrannyporn's picture

puzzle?

Wed, 07/11/2012 - 09:13 | Link to Comment LULZBank
LULZBank's picture

Yes, all of that study and analysis was done, just to find out that its a puzzle.

And it will get even more puzzling eventually.

Wed, 07/11/2012 - 09:15 | Link to Comment Yes_Questions
Yes_Questions's picture

 

 

The answer is 42.

Wed, 07/11/2012 - 09:44 | Link to Comment 5880
5880's picture

The "question" and the "answer" can't exist in the same universe

Damn Golgafrinchins...

Thu, 07/12/2012 - 18:47 | Link to Comment HungrySeagull
HungrySeagull's picture

The number that matters to the group inside the Cube comes from the retard "Two"

Wed, 07/11/2012 - 10:02 | Link to Comment midgetrannyporn
midgetrannyporn's picture

At least it isn't a conundrum, I hate those. ;)

Wed, 07/11/2012 - 09:02 | Link to Comment realtick
realtick's picture

What the Fed gives the Fed can take away.

Wed, 07/11/2012 - 09:07 | Link to Comment kaa1016
kaa1016's picture

In otherwords, they are using psy ops in order to tell people that QE3 is needed solely for the purpose of pushing the S&P higher and nothing else. They're saying if you want a higher stock market, then you need us to do QE3, or at the very least have the anticipation of QE3 at every meeting from now until the charrade is over...

Wed, 07/11/2012 - 09:45 | Link to Comment 5880
5880's picture

+1 million

Wed, 07/11/2012 - 09:08 | Link to Comment battlestargalactica
battlestargalactica's picture

"Brother, Can You Spare a Dime," lyrics by Yip Harburg, music by Jay Gorney (1931)

They used to tell me I was building a dream, and so I followed the mob,
When there was earth to plow, or guns to bear, I was always there right on the job.
They used to tell me I was building a dream, with peace and glory ahead,
Why should I be standing in line, just waiting for bread?

 

Once I built a railroad, I made it run, made it race against time.
Once I built a railroad; now it's done. Brother, can you spare a dime?
Once I built a tower, up to the sun, brick, and rivet, and lime;
Once I built a tower, now it's done. Brother, can you spare a dime?

 

Once in khaki suits, gee we looked swell,
Full of that Yankee Doodly Dum,
Half a million boots went slogging through Hell,
And I was the kid with the drum!

 

Say, don't you remember, they called me Al; it was Al all the time.
Why don't you remember, I'm your pal? Buddy, can you spare a dime?

 

Once in khaki suits, gee we looked swell,
Full of that Yankee Doodly Dum,
Half a million boots went slogging through Hell,
And I was the kid with the drum!

 

Say, don't you remember, they called me Al; it was Al all the time.
Say, don't you remember, I'm your pal? Buddy, can you spare a dime?
Wed, 07/11/2012 - 09:20 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

Everyone knows the tune....thanks for posting the lyrics......interesting!

 

I think we, or GenX, really got a subtle dose of bitterness from the first depression from cartoons that were made in the 50s-60s by older folks....Just subtle culture through Bugs Bunny....

 

thanks

Wed, 07/11/2012 - 10:01 | Link to Comment battlestargalactica
battlestargalactica's picture

GENERATIONAL CHARACTERISTICS chart- a good read...

 

http://www.acct.org/GENERATIONAL%20CHARACTERISTICS.pdf

Right there with you. My grandparents made sure we kids knew, KNEW, what it is like in the great depression and not to trust banks. Even in the 1970s, my grandfather kept a coffee can of silver dollars and a stash of coffee, sugar, salt, whiskey and a revolver in a storage locker in the basement. He was a musician in the speak-easys of Chicago and ran with a pretty rough crowd before getting into farming. What an amazing life...

All those Warner Brothers cartoons, like the ones with Bogart and CCC references gave us a chance to understand just how bad things were. Timeless allegories, IMHO.

Our Gen X bitterness is completely rational. Christ- I though the Cold War was bad. Remember our movies- Red Dawn, Back to the Future, Secret of My Success, Breakfast Club. Our icons were the outcasts, the loners, the different and their struggle against the system. Fighting the good fight... Where has that construct gone? You see anything like that all being taught to kids today? Nope.

We've had to deal with the meglomaniacal Boomers for years, now the lah-lah-land Gen Y kids are breaking our balls on a daily basis with their disconnection from physical space reality, from historical lessons pre-90s, from common sense, and from any application or appreciation of actual, real world skills like basic carpentry, auto repair, cooking, etc. I try to manage these kids... And I've literally made them cry by asking simple, rational questions that were critical of them because it was perceived as an attack or unfair... Because they 'tried' and 'wasnt that enough?'

Ugh. Im ranting. Bottomline- were doomed.

Wed, 07/11/2012 - 18:27 | Link to Comment HungrySeagull
HungrySeagull's picture

You forgot "Wargames"

When it comes to packing theaters that is.

The mall we had were 20 screens and 15 played this film standing room only. Counted each person going in.

And of course the Trek films. The first was a bore and the rest were somewhat better with the III (Kahn) was one of the good ones.

Just about all the original Cartoons of the era is now disallowed as being too racist, too culturally divisive and so on so forth.

As far as the secret stores of stuff and guns, that goes on to this day.

Wed, 07/11/2012 - 09:21 | Link to Comment Crispy
Crispy's picture

Heavy stuff  and apparently timeless.

Wed, 07/11/2012 - 10:19 | Link to Comment bahaar
bahaar's picture

Thanks to FOMC inteentions, dime has become a dollar.  Someone has to re-write those lyrics.

 

Wed, 07/11/2012 - 09:08 | Link to Comment dwayne elizando
dwayne elizando's picture

FOMC. Movin markets since '94. Now if they'd recognize we'd be better off without them.

Wed, 07/11/2012 - 09:08 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

our findings support the thesis that daytime is when the sun is up.

Wed, 07/11/2012 - 09:15 | Link to Comment LULZBank
LULZBank's picture

Sounds like my university thesis, where I did all the research and surveys just to find out what I had already known (established, actually) from the start.

Wed, 07/11/2012 - 09:11 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Hmmmmm. Intresting they should announce this.  Sounds like a "last call".

Wed, 07/11/2012 - 09:13 | Link to Comment Yes_Questions
Yes_Questions's picture

 

 

Puzzle? Its just bids pushing up prices in an environment of anticipated FED action?

 

This does't seem like a puzzle.  What am I missing.

Wed, 07/11/2012 - 09:13 | Link to Comment disabledvet
disabledvet's picture

gravity is the weakest of forces...and so it is with the ability of the Fed to "push the equity market higher." i do agree the Fed and more importantly COMMERCIAL BANKS have given cash no place other to "hide" other than in equities. Consider it a form of "democratization" i guess but what should be asked is not whether "the Fed wants higher equity prices" (they do) but whether the trade-offs involved in creating such policies are..."worth it." Stating that "the Fed manipulates the market higher" is too simplistic because it doesn't ask if the goal in and of itself is a good thing in and of itself. So we now know that "banks run the country"...this is not news, nor has it been for all of the USA ever since 2008. Are we better off for it? First glance says "catastrophe" as state and municipal finances have been totally WRECKED with no interest whatsoever in fixing that "minor issue." As we proceed down the path of "a wave of muni defaults" the question must therefore become "how's the taxpayer doing?" If we're talking real estate i fail to see how the good 'ol USA avoids a second collapse in this space. Foreclosure fraud strikes at the very heart of the ethos of "Bailout Nation" as it still is incapable of stating what the OWNERSHIP STAKE is in the most real of assets (physical property.) Well...how do i collect taxes on something nobody owns but i can "give" to my political cronies? And the answer to me of course is "you can't. And no rise in equity prices can make up for this fact."

Wed, 07/11/2012 - 09:14 | Link to Comment blueridgeviews
blueridgeviews's picture

I believe without the Fed's manipulation of the markets, the S&P500 would still be around 700.

Wed, 07/11/2012 - 09:16 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

I still dont think this is too conclusive....it's a lot of assumption....

While I doubt it not, you are comparing these days as if we are in a vacuum where there are no other issues....

Of course they are trying to fight the inevitable 'precipitate' of our civilization, but you cant fight it.

Still really happy things are finally breaking up....the ice chunk is moving! People are getting pissed.....

something has to give!

Wed, 07/11/2012 - 09:17 | Link to Comment LULZBank
LULZBank's picture

You can tell when a statistician is trying to bullshit you. Lot of charts and regressions and no conclusive conclusion.

Wed, 07/11/2012 - 09:22 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

Baffled with bullshit.

 

I dont' see anything conclusive in that report they spent millions on creating. Nothing.

 

In a vacuum that is right, but there are other currents out there besides the Fed....we dont live in theory

Wed, 07/11/2012 - 09:25 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

people get paid for research papers like this..why rain on the parade, after all how much of gov is just guys doing this day in and day out..they must be surprised that anyone is reading it.

Wed, 07/11/2012 - 09:17 | Link to Comment Bay Area Guy
Bay Area Guy's picture

You have to love the fact that the first three stories on ZH, at least when I read them, dealt with FOMC manipulation of the market, LIBOR manipulation of the market and the BLS leaking market moving data which, by definition, is a manipulation of the market.

Tell me the story again about how the US markets are bastions of the free market system.  Maybe, just maybe, if these idiots would actually LET the market be a free and level playing field, some of our problems could actually be addressed?  God, what am I thinking?  This is America.  We just don't do that.

Wed, 07/11/2012 - 09:21 | Link to Comment Everybodys All ...
Everybodys All American's picture

ppt

Wed, 07/11/2012 - 09:24 | Link to Comment Yes_Questions
Yes_Questions's picture

 

 

Puzzle Protection Team

 

 

Wed, 07/11/2012 - 09:21 | Link to Comment Anjum
Anjum's picture

What intrigues me ... apart from being equally funny and completely unrealistic .. is that the first chart shows S&P would have been at ZERO in 2008 excluding pre-FOMC returns !

Wed, 07/11/2012 - 09:28 | Link to Comment Big Slick
Big Slick's picture

Indeed!  The I think that there needed to be some sort of normalization for this calculation, (e.g., for the new decreased index value 24 hours prior to FOMC, or some sort of logarithmic accounting)

S&P at 0 in 2008 is strong evidence that the analysis is flawed

Wed, 07/11/2012 - 09:32 | Link to Comment Big Slick
Big Slick's picture

...either that or Henry Paulson was right and he saved the world \sarc\

Wed, 07/11/2012 - 09:35 | Link to Comment fuu
fuu's picture

Flash Crash to 0 sounds about right without some backstop.

Wed, 07/11/2012 - 09:39 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Easy money goes easy and fast

Wed, 07/11/2012 - 10:08 | Link to Comment tmosley
tmosley's picture

No bid, no offer, bitchez.

Wed, 07/11/2012 - 11:08 | Link to Comment ProtectiveFather
ProtectiveFather's picture

Great point.

Wed, 07/11/2012 - 09:22 | Link to Comment Zola
Zola's picture

SPX @ 0 in 2009 ??? Hahhaha....

Wed, 07/11/2012 - 12:40 | Link to Comment blunderdog
blunderdog's picture

I think it might even have dipped a bit negative.  Heh.

Wed, 07/11/2012 - 09:22 | Link to Comment Racer
Racer's picture

The 'market' = the Fed = the 'market' = the Fed

Wed, 07/11/2012 - 09:22 | Link to Comment Meesohaawnee
Meesohaawnee's picture

but but. .. cramer says its all about earnings.

Wed, 07/11/2012 - 09:25 | Link to Comment Jason T
Jason T's picture

LaRouche say's we're out of food.. http://larouchepac.com/node/23310

"We don't have the food supplies to maintain the population of the United States itself, right now!" Lyndon LaRouche said this July 7. We are now well into the principal crop season of North America, and it's a catastrophe. Drought persists in the entire southwestern part of the continent, but also dryness and heat have struck a multi-state zone in the U.S. Cornbelt. The weather impact, the decades of anti-improvements, plus the barring of any food reserves under WTO rules, means hunger and famine. A few updates from Mexico and the U.S. document the scale of this emergency.

...
Wed, 07/11/2012 - 09:30 | Link to Comment sabra1
sabra1's picture

i'm working on a recipe for Shake 'N Bake People! DEEELICIOUS!!!

Wed, 07/11/2012 - 09:42 | Link to Comment Big Slick
Big Slick's picture

We're not out of food.  I was just at McDonalds and they had plenty of McMuffins left.

 

Wed, 07/11/2012 - 09:45 | Link to Comment LFMayor
LFMayor's picture

Wendigo Meats, LLC.  

Wed, 07/11/2012 - 11:22 | Link to Comment ProtectiveFather
ProtectiveFather's picture

Sounds like Malthus.

Wed, 07/11/2012 - 09:27 | Link to Comment CitizenPete
CitizenPete's picture

Stupidity Index is high and evidently correlated to the FOMC Drift

Wed, 07/11/2012 - 09:30 | Link to Comment RagnarDanneskjold
RagnarDanneskjold's picture

Mark it zero.

Wed, 07/11/2012 - 09:43 | Link to Comment Big Slick
Big Slick's picture

This is not the FOMC, there are rules.  Mark it zero!

Wed, 07/11/2012 - 09:30 | Link to Comment Agent P
Agent P's picture

Where's that "Mission Accomplished" banner?

Wed, 07/11/2012 - 09:32 | Link to Comment Xanthias
Xanthias's picture

According to Potter the market would have tanked to 0 in 2/09 without FOMC anticipation.  Now I'm sure lunatics are running the asylum.

Wed, 07/11/2012 - 09:37 | Link to Comment johnnymustardseed
johnnymustardseed's picture

Why can't the sheeple figure out that ALL markets are rigged? They have convinced people that owning a stock that has a price to earnings of 15 is a bargin.... you fucking kidding me. They will fleece the sheep until they have accumulated all the wealth and them they will shit on them. Why aren't people screaming about a FED funds rate to Primary dealers of a quarter of one percent??? By the way half of those dealers are foreign banks. This will not end until they have use real money to play their games.

Primary Dealers  (THE FED IS BAILING OUT THE WORLD) Look at the foreign banks on this list!!!

Bank of Nova Scotia
BMO Capital Markets Corp.
BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities
Daiwa Capital Markets .
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies & Company, Inc.
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Mizuho Securities
Morgan Stanley & Co. LLC
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
SG Americas Securities, LLC
UBS Securities LLC.

Wed, 07/11/2012 - 09:38 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

This now on Yahoo:Around the world, the single narrative of collapse has taken hold," says Ed Dempsey, chief investment officer at Pension Partners. "Everyone is positioned for collapse."

Interestingly, the other side of this panic-like flight to quality is being matched by a panic-like flight from stocks. In fact, in a note to clients today, Stifel Nicolaus' David Lutz writes ''asset allocators at major retail firms have their equity weighting the lowest in over 15 years - well below 2009 levels which was a big mistake."

Wed, 07/11/2012 - 09:41 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Are you so surprised? Didnt they convince an entire generation or two that smoking was not bad for you? They studied the methods of Joseph Goebbels. All day long MSM spouts how things are better, improving, healing, better than ever in some ways....all...day...long.

Wed, 07/11/2012 - 09:48 | Link to Comment Big Slick
Big Slick's picture

I just got back from a year-long voyage. Why isn't MF Global on the list anymore :)  

(Better call Johnny.  See how my account is doing)

 

Wed, 07/11/2012 - 09:42 | Link to Comment Caviar Emptor
Caviar Emptor's picture

How many times have we all here on ZH said it: the stock market is (my words) a proxy for monetary policy? Period.

This has big implications: a stock market in a capitalist economy should serve the purpose of channeliing...wait for it....Capital! In the most effective way so as to encourage....wait for it.....Enterprise! By placing.......wait for it.....Capital at risk.

What in the above paragraph still applies today???
Nothing.

And there you have the answer: the Fed and others have engineered an economy that is no longer capitalist. That is the net result of reckless monetary policy supported by it's evil twin, the corporate-welfare state.

In brief, there is no further need for a stock market in the American economy. It serves no useful purpose except as a stash for all the mountains of printed money that would otherwise cause much more inflation and as an illicit way to boost compensation for those who are close to the money spigot. Put another way, it's a waste disposal for Ponzi money

Wed, 07/11/2012 - 10:17 | Link to Comment Zero Debt
Zero Debt's picture

A stock market is an excellent idea in its basic incarnation: allocate scarce capital by sourcing from the widest possible range of investors, allowing risks, gains and losses to be shared and information to be utilized efficiently in pricing. However, most people would be better off with earning fixed interest in a simple savings account with stable or falling prices in the general economy, which would outpace a market of quality shares with dividends reinvested were it not for the expansion of the money supply. I believe most pension schemes based on equities and bonds are in fact unnecessary. Stock investment should be left to those qualified to analyze fundamentals whereas savers should not be forced to take excessive risks in stocks for mundane savings needs such as retirement or insurance. Investing the general public into equities leads to massive information asymmetries which will be exploited, leading to an avoidable loss of trust in markets.

Monetary policy itself is increasingly becoming a proxy for criminal activity, wealth grabs, global war funding, robbery, power grabs, lack of transparency, corruption, and the merger of state and corporate power across business sectors where the state is a front for the corporations, which should be labeled as various degrees of crony capitalism, corporatism, statism and fascism.

In that context, capitalism is what you teach students, along with basic skills needed to take and follow orders, which is delivered through a collectivist channel called mass education that lacks personalization, mentoring, customized feedback and tutoring that would help to build distinct and fully emotionally developed and mature citizens, so that they understand just enough to be useful tools and corporate drones but not enough to rise above meager sheeple status and ask any problematic questions which would put the spotlight on the flaws in the system. Add to this a hedonistic streak which encourages consumption, indulgement, short-sightedness and a focus on personalities rather than systems thinking and the ability to appreciate feedback dynamics such as described in The Fifth Discipline, leading to the success of Hegellian dialectics and an easily manipulated public fed by mainstream media outlet propaganda constantly in search for sensationalist stories based on bipolar conflicts and hedonistic slogans lacking long term thinking.

Wed, 07/11/2012 - 10:57 | Link to Comment Crack-up Boom
Crack-up Boom's picture

You go, ZD!  Great rant!

Wed, 07/11/2012 - 09:41 | Link to Comment mayhem
mayhem's picture

They tried to slip that by

Wed, 07/11/2012 - 09:43 | Link to Comment LFMayor
LFMayor's picture

David Frum is the sort of limp wristed milquetoast that dabs the end of his pee pee with a square of toliet paper after he makes tinkles.

Wed, 07/11/2012 - 09:45 | Link to Comment David Wooten
David Wooten's picture

What this shows is that one should never be short right before an FOMC meeting.

Wed, 07/11/2012 - 09:50 | Link to Comment Inthemix96
Inthemix96's picture

The markets are rigged?  Is that what you may be implying here?

Fuck off, I wouldnt have it said that our fine upstanding peers of honourable gentlemen would do such a ghastly thing.

Rigging the fucking markets?  Piss off, next you lot will be telling folk like me, bastions of our societies, that women are allowed to vote.  Bunch of piss taking jokers.

:-)

Wed, 07/11/2012 - 09:50 | Link to Comment GeorgeHayduke
GeorgeHayduke's picture

Welfare for stockholders, pensioneers, Wall Street parasite, etc...

The funny things is you can bet most of the folks who own stocks and have pensions think of themselves as so far above welfare people.

Wed, 07/11/2012 - 09:53 | Link to Comment SheepDog-One
SheepDog-One's picture

So anyone in the market over S&P600 is just there banking on FED intervention. WOW!

Wed, 07/11/2012 - 09:55 | Link to Comment YesWeKahn
YesWeKahn's picture

His model is flawed. Without FED, SP would have been negative in 2009.

Wed, 07/11/2012 - 09:57 | Link to Comment Dead Canary
Dead Canary's picture

"Ask not what your profits can do for you, but what you can do for your profits."

Ferengi Rules Of Acquisition #89

Wed, 07/11/2012 - 09:57 | Link to Comment Mr_Wonderful
Mr_Wonderful's picture

Hmm, Chinese Premier says building more ghost cities is key to stabilizing China growth.

Wed, 07/11/2012 - 10:16 | Link to Comment Inthemix96
Inthemix96's picture

Well of course it is mr wonderful,

Some of the jokers here on ZH believe that empty cities, full of no one to work or live in them, or anyone to keep up the maintenance, or normal folk who can afford to buy the properties, is somehow a bad thing?

Could you just imagine the thrill of being the only person around you for fucking miles and miles and miles?

Sounds like fucking bliss where I come from

Wed, 07/11/2012 - 10:27 | Link to Comment Mr_Wonderful
Mr_Wonderful's picture

The Chinese have been exporting this ghost town concept. There´s a massive one in Angola which they built for oil. Problem is there are no buyers of the apartments. In Angola there is no middle class, only the very poor and very rich.

Wed, 07/11/2012 - 10:34 | Link to Comment Inthemix96
Inthemix96's picture

I know mate, bit tongue in cheek there.  Its not funny which ever way you look at it.

The whole world is rigged against the normal folk, and still we do nothing about it at all.  If only more folk would look behind the curtain and see whats there.  Nothing, sweet fuck all, we have been gamed, good and proper.

Wed, 07/11/2012 - 10:06 | Link to Comment mirac
mirac's picture

Are you guys sure that chart wasn't created by Wayne Fontana and the Mindbenders?

Wed, 07/11/2012 - 10:10 | Link to Comment orangegeek
orangegeek's picture

And primary wave 3 down is pending/underway for all you elliott wavers.

 

http://bullandbearmash.com/index/sp-500/weekly/

Wed, 07/11/2012 - 10:18 | Link to Comment Mr_Wonderful
Mr_Wonderful's picture

I don´t think anything new will come out of the FED, this earnings season will be mostly ho-hum and for the rest of the year there will be the overhang of higher capital gains tax rates in the new year. Expect sideways action at best in coming months, probably downdraft.

Wed, 07/11/2012 - 10:17 | Link to Comment GNandGL
GNandGL's picture

So, without Fed manipulation through FOMC pre-announcements, the S&P 500 would have dropped below 0 in 2008??

Wed, 07/11/2012 - 10:37 | Link to Comment Mr_Wonderful
Mr_Wonderful's picture

From The Oracle:

"The market's stupid. It's moronic. It's imbecilic. Dumb as a bag of hammers and slow as molasses, which, alas, is your edge because anything that idiotic can be gamed by you at home," said Jim Cramer on CNBC's "Mad Money."

"If you listened to Alcoa, you knew to get out of Cummins and maybe a host of other industrials and had a chance to jump into what's safe," Cramer said. "But if you didn't listen, if you didn't do your homework as I suggest every night, then you're just as slow and just as idiotic as the market itself."

He´s pushing GIS, DG, ABT, ED, VZ.

 

Wed, 07/11/2012 - 10:42 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

This Centrally Planed Market

Wed, 07/11/2012 - 10:43 | Link to Comment digalert
digalert's picture

While reading this my eyes saw "drift" but my mind kept saying "grift". Am I losing my mind?

Wed, 07/11/2012 - 10:47 | Link to Comment FieldingMellish
FieldingMellish's picture

No but it is being taxed... heavily.

Wed, 07/11/2012 - 11:01 | Link to Comment ptoemmes
ptoemmes's picture

I think the Bloomie website headline: http://www.bloomberg.com/news/2012-07-11/u-s-stock-futures-climb-before-...

and the CNBS website headline: http://www.cnbc.com/id/48146705

are kind of telling.

 

Pete

 

Wed, 07/11/2012 - 11:07 | Link to Comment wagthetails
wagthetails's picture

you know, it really is amazing that the non-FOMC S&P red line actually looks exactly like how the past 10 years have felt.  things were booming in 2006-2008, but only due to massive leverage.  competition was still tight, margins on products were pressured.  This is really when Main St really wasn't booming anywhere near to the degree of Wall st...who's companies had access to capital markets. 

Additionally, not only is 600 amazing, but the overall trend seems to say eventually even lower than 600 is possible.  So much for the Fed not being concerned with wall St.  either that, or Wall St just figured out how to make money off the Fed

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