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Did The Market Remove Its Own QE Punchbowl?

Tyler Durden's picture


There are only three words that send a chill down the spine of Ben Bernanke - Ron, Paul, and Deflation. His life's work is devoted to the avoidance-at-all-costs of the latter (and probably the former in reality). As we discussed here two weeks ago, his actions in extreme monetary policy have all occurred at periods when the market's expectations of future rapid de- or dis-inflation have increased rapidly. As we noted then: without inflation break-evens dropping, the Bernanke put will not arrive; but the market in its infinitely efficient wisdom has created a self-defeating spiral of BTFD reflexive front-running on any rapid spike down in future inflation expectations - which implicitly sparks a non-dis-inflationary reaction and removes Bernanke's punchbowl for another day. This has occurred 4 times this year - with this week's early plunge being caught by Draghi and Hilsenrath - and with inflation break-evens almost at their highest in 10 months, it would appear the 'desperate-not-to-miss-the-life-giving-rally' market just removed its own blood supply.


Each time the inflation break-evens have cracked down hard towards 2.0%, Bernanke has stepped up bowl-in-hand and ladled out the yummy QE Kool-Aid; 2012 has seen 4 'mini-spikes' which have all been triggers for responsive equity buying to front-run Ben's-Bowl. But as is clear, the more this occurs, the less likely the bowl is to actually appear!


Data: Bloomberg


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Sun, 07/29/2012 - 17:50 | 2660886 agent default
agent default's picture

There is a difference between BTFD and catching falling knives,  as many will eventually find out about this QE rumor /HFT driven market.

Sun, 07/29/2012 - 18:04 | 2660919 veyron
veyron's picture

Too much USD chasing after too few real investments ...

Sun, 07/29/2012 - 18:38 | 2660973 RockyRacoon
RockyRacoon's picture

I guess the volume shows how many are still playing the game.  But profits are made at the margins.

Sun, 07/29/2012 - 19:00 | 2661013 engineertheeconomy
engineertheeconomy's picture

Money is created as credit, the National Debt is a hoax

Sun, 07/29/2012 - 19:52 | 2661093 The Monkey
The Monkey's picture

I disagree. When Hisengrath floated the stick save this week, it was locked in more easing was in the cards. The Fed knows the markets are in over their skis. After Italy and Spain dropped like rocks, Draghi pulled the emergency cord, and so did the Fed. Now at least one of them has to act to buy time, and it won't be the ECB.

Open market purchases are absolutely guaranteed at this point. Anything else you read on CNBC is just market makers trying to set the expectations bar lower.

Easy money coming up. Apparently speculators are in total control.

Make us happy Ben. You don't like it when we're in a bad mood.

Sun, 07/29/2012 - 20:30 | 2661141 Muppet of the U...
Muppet of the Universe's picture

Stop selling so hard you f'ing bastards I'm trying to btfd!  ;D

Mon, 07/30/2012 - 06:39 | 2661376 Muppet of the U...
Muppet of the Universe's picture

Seriously you fuckers are strait up crazy.  Calling for QE at 13000 dow, falling for whatever the drag miester or BBking says.  I mean don't get me wrong, I still bought at 6.

So I am wrong to criticize hypocritically, but I am tired of claims of QE, being tossed about as if words are as good as the actions themselves.

Truth be told, the markets are eclipsing expectations.  They are being kept afloat not just by expectations of QE (Only suckers think its coming).

The markets are operating as they should.  & eventually, the markets will reset and find fair market value.

But it is important that fair market value is found responsibly, and not wrecklessly. 

These markets are fragile, and there is no need to crash them when the reality, that QE isn't coming (for a while), sets in.

This is your home.  Treat it with respect.

Mon, 07/30/2012 - 09:36 | 2661977 CPL
CPL's picture

The home will be treated as a rental unit that is until private capital and ownership is respected.


You and I as investors aren't even a consideration.  We are chump change in comparison to people that can literally print money out of thin air.  The word self made millionaire doesn't even enter into the people running the show's vocabulary.  We are just something to fleece, butcher and then tax.  We aren't the target audience or even considered human in their eyes. 


230 people running the central banks are the only show in town.

Mon, 07/30/2012 - 23:28 | 2664103 The Monkey
The Monkey's picture

"(Only suckers think it's coming)"

We'll see about that.

Mon, 07/30/2012 - 03:30 | 2661653 All Risk No Reward
All Risk No Reward's picture

>>There are only three words that send a chill down the spine of Ben Bernanke - Ron, Paul, and Deflation. His life's work is devoted to the avoidance-at-all-costs of the latter<<

A word of advice - question the establishment narrative because they are almost always false.

Bernanke is all about increasing the power and wealth of those that put him into his position - Big Finance Capital (BFC).  BFC runs the Fed for its own ends.

While it is true that criminally blowing the world's largest credit bubble (they broke Section 2A of Fed Res Act) has been the ply up until now, DO NOT ASSUME it will continue to be forever.

The reason to blow the bubble is to bust all the debtors and take their chit.  It is elementary.

Think of it this way - Greenspan was a fan of Ayn Rand and followed her precepts... including no regulation of the Big Finance Capital corporate fronts.  When that all blew up and it would actually cost BFC to follow Rand's "let them fail" prescription, let's just say that Rand and her philosophy ended up in the trash can in short order.

You see, Greenspan never followed Rand, rather, that was the narrative used to cover the idea of no regulation for the criminal corporate fronts controlled by his ultimat bosses.

This con is sophisticated, but if you understand basic Econ 101 cost / benefit and the actual power structure (government borrower is SERVANT to the lender, especially when the lender's operatives staff the government).

That's not to say hyperinflation isn't the end game - it probably is.  But only when it benefits BFC as a book keeping exercise AFTER they've busted all the debtors they criminally created.

These people aren't idiots, they are very, very, very sophisticated criminals - which is why they have you by the ears as they work you over and there's nothing you can do but pretend the ravaging and ear pain you are getting is due to "cluelessness."

Mon, 07/30/2012 - 05:41 | 2661692 jeff montanye
jeff montanye's picture

but as john hussman notes, risk has probably not been removed from the financial markets or the economic cycle.

front running qe3 has become a dominant force in the markets.  at some point might we expect, after all the rumor buying, some news selling?

Sun, 07/29/2012 - 20:55 | 2661169 yogibear
yogibear's picture

Bernanke is guaranteed to QE as long as nobody stops him. Bernanke has to surprise the market with a much larger QE. As long as Bernanke keeps equities going up he perceives all the rest will follow with the wealth effect.

A surprise larger than expected QE would be a terrific boost for the commodities.  There is no turning back for Bernanke, he must buy Wall Street and investment losses with more and more printed money to prop everything up. Washington can keep pushing up debt limits higher and higher. 


Onward to a 30 trillion dollar debt limit make-believe  Keynesians. We'll how ridiculous the debt limit get until it fails under it's own weight.  


Sun, 07/29/2012 - 21:44 | 2661294 boogerbently
boogerbently's picture

" the more this occurs, the less likely the bowl is to actually appear!"

Quit complaining. A rally WITHOUT the added deficit is better than a rally WITH "printing".


Sun, 07/29/2012 - 22:33 | 2661363 Muppet of the U...
Muppet of the Universe's picture

I completely agree.  Just because the market is not being fed QE, doesn't mean we need to crash it. 

But it does mean we as speculators need to do our best to find fair value.

Now make what you want of that statement.

But understand it means this point can be found... responsibly.

Sun, 07/29/2012 - 21:51 | 2661308 The Monkey
The Monkey's picture

Look at how many doves there are on the FOMC. Last time around Yellen went so far to put a nice if editorial presentation of the "facts and data" available for everyone.

There is tremendous and growing dissent within the Fed because the policies are aweful. But, if they print a lot and move crude oil, there is some upside:

1) Payday for me.
2) Maybe Romney will get elected and kick the bastard out.

Sun, 07/29/2012 - 23:12 | 2661421 Jake88
Jake88's picture

you forget who works for who

Mon, 07/30/2012 - 00:06 | 2661540 The Monkey
The Monkey's picture

No, as a speculator I know they all work for me.

Sun, 07/29/2012 - 22:28 | 2661356 jeff montanye
jeff montanye's picture

i don't think bernanke believes the rising stock market has a significant wealth effect (it doesn't).  it is certainly playing for time, hoping to get lucky, avoiding pain to his masters.  what else the plan is eludes me.  but the wealth effect is minimal and well researched.  as john hussman notes:

The more troubling issue is that Fed papers on the effectiveness of QE focus almost singularly on the effect of QE on interest rates and risk premiums in the financial markets, with the notable absence of any analysis of the resulting effect on the real economy. This is like showing that squirting gas into an engine will make the engine run faster, without any concern for the fact that there is no transmission that connects the engine to the wheels. In a nutshell, the problem with QE is the lack of any material transmission mechanism from monetary interventions to real economic activity. This is a problem that the Fed should have recognized years ago, because there is strong and consistent historical evidence that real economic activity has very weak “elasticity” with respect to financial market fluctuations, particularly in equity values. Invariably, a 1% change in the value of the stock market is associated with a change of just 0.03-0.05% in GDP, and even that change is transitory. What the Fed has been doing is little but bubble-blowing, while at the same time driving the global financial system further from equilibrium rather than toward it.

Sun, 07/29/2012 - 22:58 | 2661394 The Monkey
The Monkey's picture

Don't kid yourself. Greenspan made a career juicing the markets and has said as much.


Sun, 07/29/2012 - 22:17 | 2661343 engineertheeconomy
engineertheeconomy's picture

Slap your monkey once for me. You fucking trolls are fucking pathetic

Sun, 07/29/2012 - 22:44 | 2661374 Skateboarder
Skateboarder's picture

Schrodingerian QE following the HeisenBen Uncertainty Principle.

I don't think a QE package < 1T will make a dent. This one's gonna have to be rather well-timed and significant - all know that you can't milk the QE cow to QE4/5/6. It makes 'em look even more incompetent than they already are.

Sun, 07/29/2012 - 22:42 | 2661378 The Monkey
The Monkey's picture

Why? Because we have been making bank on a government mandated wealth effect? What is wrong with that? I didn't come up with the horrible idea, I just trade it.

Mon, 07/30/2012 - 01:23 | 2661606 dexter bland
dexter bland's picture

Just as with inflation, the expectation of stimulus plays a major part in the outcome. Perhaps its more important than the stimulus itself, as investors buy up stocks and bonds in anticipation but, may turn around and become sellers when it is actually announced.

So perhaps instead of actually implementing QE3 they should instead commit to issuing vague statements and leaks about imminent stimulus for an "extended period", through 2014 or so, so we could pencil in a date for the market top.


Mon, 07/30/2012 - 02:09 | 2661627 The Monkey
The Monkey's picture

True. We don't know the size and timing until they launch the nukes. So, your left with long / short, changes in volatility, specific issues & lapping up any sentiment overshoots.

Sun, 07/29/2012 - 19:47 | 2661082 francis_sawyer
francis_sawyer's picture

I wasn't the one 2 junk you Rocky... But I'd say profits are 'booked' at the margins (not MADE)... In my world ~ there is a difference... But that's just me...

Sun, 07/29/2012 - 20:10 | 2661115 The Monkey
The Monkey's picture

The Fed (kindof) put the brakes on heavy duty QE for a while, just to keep us guessing. But it will be clear this week. They are out of options except to engineer a speculative bubble.

Sun, 07/29/2012 - 20:17 | 2661126 fonzannoon
fonzannoon's picture

Monkey what about the possibility that the fed says they want to see a little bit more information before they act. Then Friday you get a 150k on the NFP report? Then they bought themselves 3 more months of "needing more information".

Sun, 07/29/2012 - 21:55 | 2661316 The Monkey
The Monkey's picture

The clock is ticking, because we are nearing the election. They don't have 3 months unless the markets tanked hard. Best to put policy in place now.

Sun, 07/29/2012 - 23:16 | 2661430 Jake88
Jake88's picture

the fed put the brakes on QE because the Chinese are not going to buy our debt if we keep cheapening the dollar. We need them to buy our debt.

Mon, 07/30/2012 - 00:11 | 2661542 The Monkey
The Monkey's picture

I bought those long term treasuries foreigners were selling. Right when they were yielding 4.6% in 2011 and retail was panicking. Yet another great deal created by the Fed.

Sorry Mom and Dad.

Mon, 07/30/2012 - 01:31 | 2661185 RockyRacoon
RockyRacoon's picture

I wasn't the one 2 junk you Rocky... But I'd say profits are 'booked' at the margins (not MADE)... In my world ~ there is a difference... But that's just me...

You are 100% correct.  I'll be more precise in the future.  It ain't profit 'til you put it in your pocket.

Today is my 3 year ZH anniversary so I should have learned that by now.

Sun, 07/29/2012 - 21:30 | 2661242 gwiss
gwiss's picture

Bingo.  Perceived value of real assets has decreased faster than the volume of leveraged electronic money created on the back of those assets.  We haven't yet vaporized enough imaginary wealth for real assets to be valuable enough to once again start extending credit on them, which is why no organic recovery has occured.  Which is to say, total perceived value of real assets is declining at a faster rate than the money supply, which is a death spiral with no bottom.  This has occured because the central bank and government stopped imaginary wealth from being vaporized through bank failures, which would have allowed deflation to increase the perceived value of assets faster than business slowdown and selling into minimally bid markets could drop them.


Thus, we have oodles of cash with nowhere to go because everyone senses that all assets are overpriced, so it sloshes around with no exit desperately seeking yield until causality catches up with it and the imaginary wealth herd is thinned to a useful size.  In the mean time, the internet has allowed the market to become much more self aware then it ever was before, and it is learning faster and faster.  Thus, intervention breeds the failure of intervention, just as Hegel's dialectic would predict.  Question is, will the market ever drop?  Or, will it just go on believing while businesses all disappear, and we are left with a third world country with unusable infrastructure and the Dow still sitting at 13,000?

Sun, 07/29/2012 - 20:20 | 2661129 The Monkey
The Monkey's picture

Just make sure to review your charts. Speculative bubbles can go for a long time before they unwind.

600 billion should light everything green for weeks/months.

AND, makes for a great short at the end (just when retail has finally loaded up).

Ben "feed the wealthy speculator" Bernanke:

-- without a short-term, you don't get a long term (so we must print and satisfy the markets).
-- retail investors and the poor impacted by rising prices are unfortunate collateral damage.
-- the means justifies the ends because it is the wealthy professional investor that we cater to.

Sun, 07/29/2012 - 20:28 | 2661137 fonzannoon
fonzannoon's picture

i think we are heading into uncharted territory

Mon, 07/30/2012 - 00:39 | 2661576 bigkahuna
bigkahuna's picture

It does look uncharted right now. Eventually though, it is going to look like some event in the past. Yugoslavia was an example of a corrupt government printing money to finance war. It did not end well for them. It took 2 years for the wheels to come off after absurd inflation in the early 1990's. I know that the Dinar had nothing on the Dollar, however it does appear that is slowly changing. Once countries around the world reach some critical mass of transacting business in currencies other than the Dollar, things here in the US are going to start rhyming a little better with the examples of monetary disasters ala Yugoslavia, Weimar, Argentina. The whole process literally reaches critical mass and very quickly therafter - the crap REALLY starts hitting the fan. I mean we will be in a bad way the likes of which rarely seen in history with sickness, starvation, and brutality as the order of the day. Ask someone from Yugoslavia what happened on the streets there during the early 90's. That is very likely our future and I am not sure there is jack squat that can be done at this point to stop it.

Mon, 07/30/2012 - 01:08 | 2661593 The Monkey
The Monkey's picture

What's funny is that the price to avoid monetary perdition is not that high. Accept some deflation, higher unemployment for a lenghty period and a difficult fiscal consolidation. But, that would mean the party would have to end for a while. Politicians would have to administer hard medicine, etc.

Sun, 07/29/2012 - 17:52 | 2660893 ekm
ekm's picture

Absolutely. As I have expressed my thoughts in the past:

It used to be that retail were the suckers.

Now the traders are the suckers for FED and ECB. Sucker them into BTFD  with a speech right before a meeting and then justify no QE since the market is up.

Ah, those traders are so innocent, so pure, so virgins! I feel for them.

Sun, 07/29/2012 - 17:58 | 2660904 sessinpo
sessinpo's picture

Those traders are speculators. They just haven't been demonized because they aren't trading "certain" markets. If/when we get a short ban on equities like they have done sporadically in in Europe, those traders will be considered evil and part of the cause/problem of an equity melt down.

It happens in every market. When the house market crashed, house flippers became evil for driving home prices up to high to fast. Well a lot of house flippers also lost their shirts when the market collapsed. Same thing happens in energy. I can't beleive we haven't seen the same argument for the grain markets (corn specifically). The MSM and politicians are letting this one get by.

Sun, 07/29/2012 - 18:07 | 2660926 ekm
ekm's picture

Don't bother with MSM. 24/7 work for that little money. They will do whatever the boss tells them to do to have an income.

Who owns MSM? Do not even bother.

Sun, 07/29/2012 - 20:23 | 2661132 The Monkey
The Monkey's picture

I'll trade whatever the Fed gives me, and do it after the fact. They either overshoot (in which case I'm a buyer of the junk they are selling, because they have taken the risk), or they undershoot, in which case I'm a short seller.

It's a horrible policy, but they are in so deep, even the slightest correction these days sends shivers down their spines.

Sun, 07/29/2012 - 22:08 | 2661330 gjp
gjp's picture

Sad but very true

Sun, 07/29/2012 - 17:54 | 2660895 sessinpo
sessinpo's picture

And each additional jolt has had less effect. To compare it to a junky's situation, there are 3 scenarios.

1) Junky will go clean - no more debt. Immediate collapse of the markets.

2) Junky will get another dose from BB, but will less effect and junky will not be satisfied (QE failing). This has been the delay tactic of the FRB for years to avoid the inevitable. Junky is demanding more and more printing to keep that high, but BB is seeing it is not having the positive consequences intended.

3) BB will cut junky off and anger junky. Also immediate collapse.


All three lead to eventual collapse of the monetary system

Sun, 07/29/2012 - 18:59 | 2661011 Nadaclue
Nadaclue's picture

The Monetary system is in its death throngs. imho

There is a term for the event. TEOTMSAWKI (The End Of The Monetary System As We Know It.) which is a term that is becoming more and more frequent. Google shows 5,140 instances so far but I expect the term to become in the hundreds of thousands by the election.

I believe it started housing pop, and we are into to it at some unknown point with no way of predicting when it will end. There is little doubt in my mind though, that it will end.

I'm prepping for Q1, 2013 but I hope it lasts much longer, as it will give me more time to prep.

As the saying goes, "Better to be 5 years early than 2 minutes too late."

Sun, 07/29/2012 - 17:54 | 2660897 Shizzmoney
Shizzmoney's picture

This is the Market today:

Bad ECB/EZ news, EU banks shenanegians, and rising yields; market tanks.  Merkel/Draghi says something that they'll be ready to bail out and market rises.  Nothing happens and market tanks.  Rise, wash, repeat.

Bad US Economy news (i.e. Unemployment, Consumer Confidence, etc) TBTF banking shenanegians, and sinking Treasuries; market tanks.  Hilsenrath/Bernanke says something that they'll be ready to bail out/QE and market rises.  Nothing happens and market tanks.  Rise, wash, repeat.

This is why bubbles happen: because the markets are mostly rigged and don't tell the real health of the economy you and I live in.  It's just a huge betting parlor.

Sun, 07/29/2012 - 18:17 | 2660942 thad78
thad78's picture

Equating the markets & the economy is like comparing grapefruit & sofas-few simularities except the economy is bad & getting worse; the market is but a rigged gambling house & getting worse. Only thing in common is worse...

Sun, 07/29/2012 - 19:05 | 2661022 engineertheeconomy
engineertheeconomy's picture

The market is a freak show for people that don't have a life

Sun, 07/29/2012 - 21:58 | 2661318 grid-b-gone
grid-b-gone's picture

You know that rising market you bought into? You didn't make it go up. Someone made it go up for you.

Sun, 07/29/2012 - 17:55 | 2660898 trebuchet
trebuchet's picture

So Bernanke + CB puts have now worked as the market expectation is preventing its collapse........ things work, ... until they don't.


Sun, 07/29/2012 - 17:58 | 2660902 tbone654
tbone654's picture


Sun, 07/29/2012 - 18:00 | 2660908 sessinpo
sessinpo's picture

Buy The F***ing Dip

Sun, 07/29/2012 - 18:00 | 2660910 tbone654
tbone654's picture

thank you...

Sun, 07/29/2012 - 18:07 | 2660925 resurger
resurger's picture


Short The Fucking Top

Sun, 07/29/2012 - 18:42 | 2660979 RockyRacoon
RockyRacoon's picture

One can nearly always interpret the "F" in any acronym or initialism

Sun, 07/29/2012 - 18:52 | 2660998 Ray1968
Ray1968's picture


Sun, 07/29/2012 - 19:08 | 2661029 engineertheeconomy
engineertheeconomy's picture

Lol! Reminds me of that scene in "Lords of War" when Nicolas Cage wipes the Cocaine off the fucking mirror...

Sun, 07/29/2012 - 21:49 | 2661303 Need More Cowbell
Need More Cowbell's picture

That would be STFT - already checked that task off my todo list

Sun, 07/29/2012 - 17:59 | 2660903 This is the end
This is the end's picture

I guess you can pretend that the Bernank is using this as his reason for full QE onslaught. My guess is for as long as he is able he will try to use any indicator he can justify to continue to do his main work - preserve the TBTF banks. He will QE even when inflation is high, remember he has a twin mandate. When inflation is high and we do not have "full" employment guess which mandate Bernanke will choose to try and preserve. He has been enabling the federal government for the entire Obama administration by buying all of the debt they are creating. You cannot be more reckless and crazy than he has been unless you realize his only goal is to preserve the TBTF banks. Then what he is doing makes sense. QE1- QE5,677 has all been to help the big banks. The QEs were just excuses to buy the bad assets off of the big banks balance sheets. What a failure the Fed has been they can't even get the banks stock prices and profits to new highs! To review the failure:

Price stability: Oil from $30 to $140 back to $30 to $110 down to $75 back to $110 back to $75 (all in 6 years), grain prices near all time highs.

Full employment: at 8.3% officially, U6 at 15%

Economic recovery: Worst recovery from a recession since WWII coming out of the biggest recession since WWII (prior to this the larger the recession the larger the recovery)

Debt: $16 trillion in debt, adding $1.5 trillion each year and a president who never mentions it

Why do we let these UNELECTED, UACCOUNTABLE maniacs do such damage to our lives?


Sun, 07/29/2012 - 18:58 | 2661010 DeadFred
DeadFred's picture

"Why do we let these UNELECTED, UACCOUNTABLE maniacs do such damage to our lives?"

Because people with guns are backing them up.

Go try to write slogans in chalk on the sidewalk in front of the Fed building. I give you 30 seconds max before the nice government men come to dissuade you.

Sun, 07/29/2012 - 22:15 | 2661340 engineertheeconomy
engineertheeconomy's picture

Thats because he was an army of one. Do you know that the American People are the single largest army on this planet? We the people are an Armed Force to be reckoned with. You can arrest one person, but you can't arrest all of us.

Bring it on Bitchez!

Sun, 07/29/2012 - 22:50 | 2661383 fourchan
fourchan's picture

oh yea? never underestimate the powermad.

Sun, 07/29/2012 - 23:00 | 2661395 HardAssets
HardAssets's picture

We better sit down with the heavily armed guys wearing green - - and educate them on who they really serve when 'Serving Their Country'. The vast majority of them don't have a clue. USMC General Smedley Butler - twice Congressional Medal of Honor winner acknowledged this and wrote about it. Those military guys & gals who are in your family may even listen to you. Just present the facts, no embellishment necessary.

Sun, 07/29/2012 - 19:02 | 2661017 Jake88
Jake88's picture

Why not we let our elected unaccountable maniacs do so much damage to our lives. 

Sun, 07/29/2012 - 18:00 | 2660907 Snakeeyes
Snakeeyes's picture

Not sure if QE has any kck left for equities. We shall see when Ben the Bernank makes the announcement on Aug 1.

Sun, 07/29/2012 - 20:03 | 2661107 Offthebeach
Offthebeach's picture

FOMC= F**c Over ( the ) Muppets Committee

Sun, 07/29/2012 - 18:02 | 2660915 orangegeek
orangegeek's picture

We are already in deflationary times. 


Primary wave 3 is pending and there is little that the government can do to push this market much higher.

Sun, 07/29/2012 - 18:16 | 2660936 francis_sawyer
francis_sawyer's picture

P3 is coming folks!... It's a comin'... It's a comin!... (no ~ this time... REALLY!)...


(my name is 'Daneric' & I approve this message)

Sun, 07/29/2012 - 23:22 | 2661436 Jake88
Jake88's picture

yeah it has been no really this time for a couple of years now.

Sun, 07/29/2012 - 22:28 | 2661355 The Monkey
The Monkey's picture

Primary wave 3 has been coming for the last 20 years. It will still be coming 20 years from now.

Sun, 07/29/2012 - 18:03 | 2660916 Duke of Con Dao
Duke of Con Dao's picture

did you know that Hitler was the hardest working man in show business? 

or that the SA was the world's first version of Glee? Neither did I. 

so, see for yourself!  

YouTube - 'Nazi Party? Adolf Hitler... You Didn't Build That!' sez President Obama


el dukerino

Sun, 07/29/2012 - 18:05 | 2660921 This is the end
This is the end's picture

German finance minister "removes the punchbowl" of full QE monetization this weekend that caused the S&P to rally 60 points. Market reaction to that "bombshell"...... down 1 point. Market going to S&P 3000 by year end.

Sun, 07/29/2012 - 18:08 | 2660927 Muppet of the U...
Muppet of the Universe's picture

FEED ME BENJI.  @ 11-5 please!

Sun, 07/29/2012 - 18:11 | 2660931 XtraBullish
XtraBullish's picture

Miss, meet, beat - who gives a shit? You cannot short stocks that are denominated in a currency that is being debased if you are paying for heat, food and lodging in that same currency. Zimbabwe was a disaster but the shorts got BBQ'd (just as everyone in here is) because you CANNOT underestimate the replacement power of equities within an inflationary spiral. Every correction in equities/commodities is a bear market rally in CASH so I just sell the rallies in CASH because unlike stocks, no central bank that I know of is plunge-protecting the U.S. Dollar/CASH.

When the CNBC crowd starts panicking over the declining dollar while lamenting the charging stock market, THEN I'll get worried.

Sun, 07/29/2012 - 22:31 | 2661360 The Monkey
The Monkey's picture

Very well put, although soft commodities, crude and precious metals are even better.

Sun, 07/29/2012 - 18:13 | 2660932 nmewn
nmewn's picture

No debt binky?...waaahhh.

Sun, 07/29/2012 - 18:15 | 2660937 fonzannoon
fonzannoon's picture

If trhe ECB pulls the trigger and prints the ensuing drop in the euro is going to continue to hammer earnings in the US. Ben can't hold up the dow while the euro keeps dropping against it. He will have to beat down the dollar via eventual QE. It's a race to the bottom. Everyone loses.

Sun, 07/29/2012 - 18:24 | 2660955 ekm
ekm's picture

Based on what I've read and heard (I have plenty of time), China has refused to cheapen the currency vs both Euro and USD simultaneously and has threaten overt printing war.

So, Europe and USA are taking turns to cheapen their currency. It's an agreement.

Sun, 07/29/2012 - 18:51 | 2660997 miker
miker's picture

Good insight.  This is why I think there will be coordinated easing this week.  One of several reasons.  The other ones being that the ECB needs some "cover" and with coordianted, each country would not have to do as much but combined the total will probably be 1 Trillion. 

Sun, 07/29/2012 - 19:11 | 2661032 RiverRoad
RiverRoad's picture

Everything's coordinated; you can bet on that.

Sun, 07/29/2012 - 23:19 | 2661432 The Monkey
The Monkey's picture

Dollar easing is all that is needed to light the entire world green. While Germany is in "fuck you" mode, I don't see how the ECB can act accept to help expedite the ECM and jawbone.

Sun, 07/29/2012 - 22:34 | 2661365 The Monkey
The Monkey's picture

Long gold / short financials should work for that situation. Change the symmetry on price & sentiment.

Sun, 07/29/2012 - 18:17 | 2660941 fonzannoon
fonzannoon's picture

By the way Tyler I was surprised you did not go with "Did the market just put a turd in it's own punchbowl?"

Sun, 07/29/2012 - 18:20 | 2660946 DeadFred
DeadFred's picture

My take is that the election fix is now in: The Kenyan version of Obamney is going to be replaced by the other version. Last week the markets sat on support for two days, it would have taken the slightest push to drop it over the edge and get the pusher to dispense the QE goods this week. Instead we got a ramp based, supposedly, on empty words from an empty suit. Now the market will tank at the most inopportune time for Obama. When October rolls around the news magazines (or their E-replacements) will be running photos of Obama looking helplessly over the crashing market while Mitt looks determined. At that point the actual voting will just be a formality. I'm not looking forward to Mitt but at least we won't have Holder anymore.

Sun, 07/29/2012 - 18:27 | 2660960 Christoph830
Christoph830's picture

I'm with you Fred.  I think the Fed realizes that its arsenal is depleted and the only thing that can get us out of this economic rut is the restoration of confidence, which will only happen in a Romney presidency because the corporate world has a hard-on for him.  That, and he pretty much just gave Israel the go-ahead for an all out assault on Iran this weekend (aka the most palatable Reset Button justification available for the masses). 

Sun, 07/29/2012 - 18:55 | 2661003 miker
miker's picture

I disagree.  I think the corporate elites aren't crazy about either of them.  What they want is a president that can get something done with Congress.  Neither have great potential but probably Obama better than Romney.

Sun, 07/29/2012 - 20:13 | 2661119 Assetman
Assetman's picture

I think the coporate elites get what they ultimately want out of either one of Obamney.

Getting something done with Congress still remains a function of dealing with special interests and their $$$$.  A spilt control of Congress just means more money gets spent by the corporate elite.

Right now, the money flow indicates that Romney is the one that's favored.  That doesn't mean that Obama won't get his fair share, though... he's been a really good solidier, as a Democrat.


Sun, 07/29/2012 - 20:47 | 2661161 JR
JR's picture

Realistic counselors to an Obama Administration or to a Romney Administration realize that a close association to the actions of the state of Israel can be detrimental to their support in America and in other nations of the world.

If Israel’s policies on the settlements, its treatment of the Palestinians and its constant saber rattling and public relations efforts against Iran end up as an Israeli attack on Iran, it will be bad news for whoever is president of the U.S.  Because at this point the American people will awaken and say what is this?

I think all this war talk is hurting Romney. Why? Because there are millions of Americans who understand Israeli aggression and who understand that our association with Israel has been getting us into war. Some of these people are Republican votes. And the more Romney crawls on his hands and knees pandering to the Zionists, the more of these people he loses in November.

The propaganda of the Zionist organizations in America led by AIPAC and the legions of bought Congressman will not be enough for Americans who begin seeking the truth on what is happening in the Middle East. This seeking of truth especially will uncover the reasons why America went to war in Iraq, and why America is supporting the rebels in Syria and why America has a worldwide war on terror. The truth will become clear: the war on terror is the war on the enemies of Israel. And because of that, the American military is within the borders of many sovereign Middle Eastern countries fighting the enemies of Israel.

Americans have been characterized as pro-Israel and many are but with a very vague understanding of what’s going on in the Middle East.  But if a war should break out, the propaganda of the Zionists will not be enough to save Romney from a failed presidency; and if he keeps talking, IMO, it’s even doubtful he will be elected.

Sun, 07/29/2012 - 18:54 | 2661001 miker
miker's picture

I don't think Bernanke and Geithner would throw Obama under the bus.  He's a good boss for them.

Event though there is not much loyalty in DC, these guys are probably loyal to the President since he essentially let them do their thing.

Sun, 07/29/2012 - 19:06 | 2661027 DeadFred
DeadFred's picture

You may be right. I would like your version of the world to be correct, but I don't think Ben and Timmy are the real bosses. They're just the bus drivers. The bus route is set by others.

Sun, 07/29/2012 - 19:14 | 2661036 RiverRoad
RiverRoad's picture

Fer sure.  And Ben and Timmy would throw their own mothers under the bus if it came to that.

Sun, 07/29/2012 - 23:00 | 2661396 grid-b-gone
grid-b-gone's picture

Obama is closer to the printing press and holds the advantage of being able to secure (buy) votes through positional power, executive order, or by handing out U.S. dollars. 

Romney has been raising some serious campaign cash but it does not compare to Obama's 1.5 trillion of excess spending for each of the past three years. Obama may talk of fiscal restraint, but will not make any serious action toward it.

His stance on immigration was a pro-votes decision and is one of the few issues that clearly separates him from Romney. Abortion is another. In both cases, Obama gains more votes than Romney on these issues, but Romney absolutely needed to be conservative on these issues just to survive the primary season.

At some point, Obama will pull the G.W. Bush and allow offshore profits repatriation at 5% or less. This will spike the market, revive Apple, weaken the P/E expansion argument for the market to fall, and allow Bernanke to save QE until closer to the election. The move will stir up the "occupy" crowd, but they will be squelched by other vote-buying moves.

Look for Obama to take action to shore up underfunded public pension funds, or at least throw promises toward the issue. This move is one more in the consolidation of federal power vs. states and gives many conservative voters a reason to vote for Obama.

Pro-gun, anti-immigration, anti-abortion conservative voters will still vote for Obama if he makes a credible commitment to save public pensions on which they depend. 

Even the health care issue, which would have been an easy hot button for any other Republican candidate, is negated by Romney's history of similar private intrusion at the state level.

This is Obama's race to lose. He'll do it by buying votes with money voters themselves will need to pay back, but just like the destructive future promises made by Greek politicians, the eventual cost will happen after he has gotten the short-term goals he intended to secure.    

Sun, 07/29/2012 - 18:22 | 2660948 razorthin
razorthin's picture

So it appears one can get a Piled Higher and Deeper in economics by completely ignoring half of the economic cycle.  Talk about education price inflation.

Sun, 07/29/2012 - 18:23 | 2660950 Conrad Murray
Conrad Murray's picture

I've got 3 words for that piece of shit, "Guilty. Hang him"

Sun, 07/29/2012 - 18:24 | 2660952 RobotTrader
RobotTrader's picture

Right now, the Euro is open about unchanged, gold is up, which means probably a killer day in Asia today as emerging markets start catching up.

New Zealand just opened and it cleared 3,500.^NZ50&t=5d&l=on&z=m&q=l&c=

Sun, 07/29/2012 - 18:24 | 2660954 razorthin
razorthin's picture

Sure hope so.  I am still balls to the wall long in EM in the retirement account.

Sun, 07/29/2012 - 23:23 | 2661438 The Monkey
The Monkey's picture

That is probably a killer position heading into the week.

Sun, 07/29/2012 - 18:26 | 2660959 Duke of Con Dao
Duke of Con Dao's picture

are there a lot of Hitler lovers on this site? 

why are there so many thumbs down for this?  the Singing Brownshirts, c'mon that's FUNNY. 

YouTube - 'Nazi Party? Adolf Hitler... You Didn't Build That!' sez President Obama

Sun, 07/29/2012 - 18:30 | 2660961 Atomizer
Atomizer's picture

As long as this thrift spending administration can display stock market improvements by dollar debasement.. All is good.


Let’s blame Iran threatening to close the Strait of Hormuz for the rise in gasoline prices

Sun, 07/29/2012 - 23:10 | 2661418 cranky-old-geezer
cranky-old-geezer's picture



As long as this thrift spending administration can display stock market improvements by dollar debasement..

Yes, correct, recovery in stocks since '08 is from currency debasement.  No real gain at all.

In fact every seeming improvement in the economy since '08 is from currency debasement.  There's been no real improvement at all.

Sun, 07/29/2012 - 18:35 | 2660965 disabledvet
disabledvet's picture

You can't fight a Fed determined to inflate...and both the US and the ECB will not let the "fear of the word" deter them. The total collapse of Japanese equities and their economy going on 30 years will be avoided at all costs. The EZ has embraced the Japanese approach with such gusto it's hard not to think that it is the preference of the EZ to outdo Japan. "so far so good" if that's Europe's plan. To be taken seriously however...and this article is not to taken must factor in the deflationary impacts of deficit reduction which must occur in order for job creation to proceed. Strangely the Fed Chairman has never offered a "QE in exchange for deficit reduction" approach to dealing with the far larger menace of Congress and the Senate itself..let alone a war mongering White House.

Sun, 07/29/2012 - 18:36 | 2660971 TheSilverJournal
TheSilverJournal's picture

The fate of the market / the economy / the well being of man-kind is in the hands of one man who controls the printing press. What genius came up with this terrible system and how are there so many blind enough to support this garbage?

Sun, 07/29/2012 - 18:41 | 2660978 GMan_
GMan_'s picture

well, there goes my SPX puts. another week, another portfolio blown up by BTFD HFT.... tsk tsk.. 

Sun, 07/29/2012 - 19:24 | 2661048 DeadFred
DeadFred's picture

The SPX range is now about 1330 to 1405. That's a pretty big playground for you to play in. You should be able to make money. Don't go ultra-bear until this fantasy-based trend breaks.

Mon, 07/30/2012 - 00:28 | 2661572 The Monkey
The Monkey's picture

Own it brother. No one did this to you but yourself.

Sun, 07/29/2012 - 18:44 | 2660983 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

The markets front running the FED means that the FED has to front run the markets to stay ahead, which then pushes markets to front run the front running which then requires, etc.

Since quant life calls for computation, let's call it recursion.

Since human life calls for natural language and meaning, let's call it self reflexive.

How many levels deep are we in this morass?

Infinite regress has never been considered to be helpful.

Let the Bernank ponder that. If he dares to.

Sun, 07/29/2012 - 18:47 | 2660994 RiverRoad
RiverRoad's picture

It is fascinating.  Reminds me of the story about the lady who threw her dog out the (first floor) window every time he crapped on the rug.  One day she was amazed to see him crap on the rug and jump out the window!

Sun, 07/29/2012 - 19:37 | 2661068 HD
HD's picture

Excellent post mate.

Sun, 07/29/2012 - 20:38 | 2661151 TheSilverJournal
TheSilverJournal's picture

What happens when the window's permanently closed and there's no way for the dog to get outside? It's gonna get messy.

Sun, 07/29/2012 - 23:56 | 2661534 grid-b-gone
grid-b-gone's picture

It was already messy, so just shut the window after the dog jumps out. Seems like that dog was the source of the problem all along and the crap just a symptom. At least that's what we'll say if people ask what happened to him.

Let's just hope that God, door, window phenomenon only works the one way. 

Mon, 07/30/2012 - 10:14 | 2662097 emersonreturn
emersonreturn's picture

the problem isn't the dog, the window or door but the old woman!

Mon, 07/30/2012 - 06:44 | 2661720 sudzee
sudzee's picture

So old dogs CAN learn new tricks.

Sun, 07/29/2012 - 18:57 | 2661009 miker
miker's picture

Living in historic times.  Best to sit back and observe.  No one (not even the power brokers) know where this is going to land.

Sun, 07/29/2012 - 19:15 | 2661037 Cabreado
Cabreado's picture

"Best to sit back and observe."

Very powerful plan, Mike.

Sun, 07/29/2012 - 20:44 | 2661157 TheSilverJournal
TheSilverJournal's picture

Clearly, the best plan is bullets, beans, and bullion.

Mon, 07/30/2012 - 00:57 | 2661589 sqyntz
sqyntz's picture

beef bullion or chicken bullion?  you can always make soup with the beans

Mon, 07/30/2012 - 01:57 | 2661623 Gavrikon
Gavrikon's picture

Guns, Gold, and Groceries.  As an alternative plan.

Sun, 07/29/2012 - 20:46 | 2661159 miker
miker's picture

Sometimes the most powerful approach is to do nothing.

Sun, 07/29/2012 - 20:59 | 2661173 TheSilverJournal
TheSilverJournal's picture

Silver's going to go up at least 3,000% in real terms over the next few years. Buy it instead of dong nothing. 

Sun, 07/29/2012 - 19:22 | 2661043 RiverRoad
RiverRoad's picture

Mmmm......I think TPTB are doing their damndest to run this Ouija board their way.

Sun, 07/29/2012 - 19:05 | 2661024 LeisureSmith
LeisureSmith's picture

I know that Ron Paul is a peaceloving oldeschool Texas gentleman but i don't think it's too much to ask for him to leap out of his chair and roundhouse kick Bernake in the face from time to time. If nothing else just to establish that he bleeds red and not blue or some kind of molecular acid.

Sun, 07/29/2012 - 19:20 | 2661047 RiverRoad
RiverRoad's picture

Ron Paul already does that quite nicely, I think.

Sun, 07/29/2012 - 19:46 | 2661076 LeisureSmith
LeisureSmith's picture

You are right, i meant that only as a supplement to his total intellectual and retorical ownage over Bernanke off course.

Sun, 07/29/2012 - 20:03 | 2661106 Cabreado
Cabreado's picture

Yes he does, stretching his influence as far as he can.

So then, appropriate and righteous anger should be directed first at those who marginalize him.

But We are too far gone, when We no longer even remember what Congress is, let alone for what it was designed.

This will be our last great mistake.

Sun, 07/29/2012 - 22:38 | 2661371 FRBNYrCROOKS
FRBNYrCROOKS's picture

I am still going to vote for Ron Paul. I'll freak the pollsters out when there is no button and I'll have to ask for a write in ballot.

Sun, 07/29/2012 - 19:19 | 2661035 Atomizer
Atomizer's picture

 Wi, we na nann na ta tad ta to ba ba ba bailout ban ban banks or wa wa wa will ha ha ha ha a a a a a a nan na na security em em em emergency



Sun, 07/29/2012 - 19:52 | 2661054 EuroInhabitant
EuroInhabitant's picture

I love deflation. It pushes me to work harder, save more and spend less. This stimulates innovation and prosperity. That's why I love strong currencies, gold and silver above all of course, which give a just reward for my time and efforts as an employe. Weak currencies, governed by Keynesian clowns, are a fraud and an insult to anyone with even the slightest self-esteem.

Sun, 07/29/2012 - 19:28 | 2661056 Dapper Dan
Dapper Dan's picture

WHat is dis?

Domain report about According to our information this website is hosted on IP which is located in , Switzerland. The ISP currently hosting is Nine Internet Solutions AG. At this present time has a Google Pagerank of 6. We estimate that this site receives about 335,332 unique visitors per day which converts to a daily revenue stream of $1,070 USD. The overall value of might be around $756,637 USD. and is ZH? Copyright ©2009-2012 Media, LTD. All Rights Reserved. Familiarize yourself with our legal and use policies every time you engage the site: they're updated constantly without notice. Happy surfing.     Registrant: ABC Media Ltd P.O. Box 3 Sofia, Sofia 1784 BG
Sun, 07/29/2012 - 19:38 | 2661070 Atomizer
Atomizer's picture

Sweet dreams Dapper Dan.. :)

Sun, 07/29/2012 - 19:44 | 2661079 HD
HD's picture

Swiss have some of the better privacy laws so it makes sense. My VPN offers IPs all over the planet you can change at a click...

Sun, 07/29/2012 - 20:45 | 2661158 nmewn
nmewn's picture

Well known.

If our domestic news can catch up to speed I might consider going back to them for more abuse  ;-)

Mon, 07/30/2012 - 01:54 | 2661621 Gavrikon
Gavrikon's picture

"The overall value of might be around $756,637 USD . . ."

So, ZH is worth more than FB, right?  When we going public, Tyler?

Sun, 07/29/2012 - 19:50 | 2661088 dust to dust
dust to dust's picture

 A huge welcome to Dapper Dan. Keep it here brother. It is dissemination of pertinent information. Spread the WORD.

Sun, 07/29/2012 - 20:12 | 2661117 JamesBond
JamesBond's picture

game theory bitchez


Sun, 07/29/2012 - 20:31 | 2661142 q99x2
q99x2's picture

Up your Altucher Bernanke M'fer.

Sun, 07/29/2012 - 20:47 | 2661162 Divine Wind
Divine Wind's picture



Ya know, history shows that in difficult fiscal times caused by frivolity and poor stewardship of a nation's wealth, war is not far off.

Sun, 07/29/2012 - 20:49 | 2661163 Brother Sebastian
Brother Sebastian's picture

Benny-boy doesn't care about Paul, who has been neutralized.  The Dems will kill Paul's legislation and the Fed will never be audited.  And he isn't worried about deflation, either, mainly because his member banks can artificially create the $bucks needed to inflate the economy as required.  He's more concerned about perception, image (his own and the Fed's) and wealth generation for his masters.  The latter task is what really worries him.  Failure is unacceptable.  The poor guy must have terrible hemorrhoids (or, in his case, they're "assteroids").       

Sun, 07/29/2012 - 20:51 | 2661164 TrainWreck1
TrainWreck1's picture

The Olympics will restore confidence to the world economy and governments and everything.


Sun, 07/29/2012 - 21:10 | 2661186 francis_sawyer
francis_sawyer's picture

So ~ 'The Olympics' is kinda like 'HOPE & CHANGE' on steroids, right?


So far, the most AWE INSPIRING happening of the Olympic Games has been the request by First Lady (Michelle Obama) to sit in the 'family box' of Serena Williams at her opening tennis match...

I mean... If that doesn't inspire NATIONAL PRIDE, EQUALITY, & FRATERNITY... I don't know what does... "Finally ~ I'm proud of my country"...


Sun, 07/29/2012 - 21:05 | 2661180 dcb
dcb's picture

what I want to know is at 1:27 pm on friday, when we needed that little boost to get over that trend line, how much of the trading came from a single place. god forgive we ever talk manipulation, but there were a lof of bids at that exact crucial time to trigger a lot of buy orders. Huh!!!

Sun, 07/29/2012 - 21:05 | 2661181 yogibear
yogibear's picture

Commodities take a very nice spike upwards with the fed and ECB's annoucement as a much larger easing plan is annouced.

The US fed leaked the easing plan ahead to see how the markets would react.

Sun, 07/29/2012 - 21:07 | 2661184 icanhasbailout
icanhasbailout's picture

"Punchbowl"? I thought I heard "urinal"

Sun, 07/29/2012 - 21:36 | 2661287 XtraBullish
XtraBullish's picture

Policy will not change until Case-Shiller hits 250 thus moving all bankster collateral into the black...until then, short the living shit out of CASH/ESD/BP/JY and go extremely long EVERYTHING denominated in CASH. And never forget who the world's largest debtor nation is - "Oh-oh say can you see...???"

Mon, 07/30/2012 - 00:33 | 2661575 The Monkey
The Monkey's picture

Or, housing sucks ass again, and we take another leg down before hitting bottom.

Equally likely from my perspective. No effort to inflate would make me buy a house, only gold.

Sun, 07/29/2012 - 21:44 | 2661297 Hedgetard55
Hedgetard55's picture

Fuck if I know what that fucking prick at the FED does, but if they do ease, $5 gas ain't gonna help President Pakalolo one bit.

Sun, 07/29/2012 - 22:14 | 2661339 msjimmied
Sun, 07/29/2012 - 22:34 | 2661364 Pejorative Requiem
Pejorative Requiem's picture

Non-dis-inflationary........... I really got a chuckle out of that one. But the punch is being served by more than one master, and and the punch consumers drool at the ringing of many bells, not just Ben's. Upshod? The cost of basic food and energy is non-dis-rising, and both incomes and assets are non-dis lowering.

Sun, 07/29/2012 - 22:54 | 2661387 dolph9
dolph9's picture

Yes these are interesting times and at least it's been somewhat of a pleasure to observe them happen with you people.

In life you are born, compete, have a little fun, and then die.  If you are lucky you have some proud moments under the sun.

We gold people are going to shock everyone when we come out of the bunkers.

Sun, 07/29/2012 - 22:57 | 2661392 TrainWreck1
TrainWreck1's picture

For anything beyond temporary shelter, bunkers are tombs.


Sun, 07/29/2012 - 23:14 | 2661429 yogibear
yogibear's picture

"Nancy Pelosi epitomized the policy when she said that increasing unemployment checks would actually be good for the economy."

More people on food stamps, free rent (section 8), free cell phone, welfare. Why work? LOL, that should cause the defictit to ramp.

Sun, 07/29/2012 - 23:31 | 2661457 Reverse Split
Reverse Split's picture

The Bankers' Psalm:
The Federal Reserve is my Shepherd; I shall not want.
It maketh me to lie down in green papers
It leadeth me beside the stimulus.
It restoreth my capital:
It leadeth me in the paths of high risk for profit’s sake.

Yea, though I walk through the valley of the shadow of insolvency
I will fear no losses: For the Fed art with me;
Its interest rate and its printing press, they comfort me.
It preparest a bailout before me in the presence of mine creditors;
It annointest my head with bonuses; My pockets runneth over.

Surely Power and Privilege shall follow me all the days of my life,
And I will dwell in the House of the One Percent forever.

Do NOT follow this link or you will be banned from the site!