The Gap Between Reality And Consensus Is Growing Fast

Tyler Durden's picture


With today's less than stellar consumer confidence number and continued path of missed expectations on key macro data over the past few weeks, it is perhaps wondrous that our brain-trust of analysts and economists continue to forecast higher expectations across the board. While this may not come as a surprise to readers used to comprehending the magic of the Birinyi ruler's extrapolation and the inevitable and clockwork 'miss' of turning points of any and every educated talking-heads model, this chart from Deutsche Bank's asset allocation group should contextualize where we are actually versus where LaVorgna and friends see us going. The sad truth is - we have seen this play out again and again and as the printing-press-pressure drives up asset prices (providing confirmation bias upon anchoring bias for any and every economist or long-only manager quoting the 'recovery' or decoupling), the truth is that as prices (and expectations) distend from value and actual reality, the central bank's efforts to 'maintain' the status quo simply create a larger and larger vacuum for asset prices to fall through when sad reality is finally peeked.


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Tue, 03/27/2012 - 11:11 | 2294306 Jason T
Jason T's picture

Just look at both the price of gasoline and the amount of gasoline delivered to gas stations year over year.  I see nothing but collapse. 

Tue, 03/27/2012 - 11:19 | 2294332 banksterhater
banksterhater's picture

gasoline hit 3-yr low demand, crude 15- yr, but I dissagree- ave Joe has a clue yet, or will ever care to know most truths in the USA.

Tue, 03/27/2012 - 11:32 | 2294373 LawsofPhysics
LawsofPhysics's picture

Yep, but then again the U.S. and the dollar are becoming less relevant every day.  No one cares about U.S. demand, its a world eCONomy now, what is world demand?

Tue, 03/27/2012 - 11:45 | 2294448 Jason T
Jason T's picture

It's a world economy and the weight is shifting from the West to the East.  

Tue, 03/27/2012 - 16:40 | 2295554 MiddletonRobert3
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my roomate's sister makes $85 hourly on the computer. She has been fired from work for 6 months but last month her paycheck was $16158 just working on the computer for a few hours. Read more here .....

Tue, 03/27/2012 - 11:59 | 2294527 CPL
CPL's picture


That's because we are four years past peak oil.  Month by month, production slip after production slip.  There's this months news on output.


To those deluded enough to believe that the energy sector is doing just fine, make all the excuses you wish to, but I hope you prepared yourselves.

Tue, 03/27/2012 - 12:42 | 2294727 hardcleareye
hardcleareye's picture

"Since 2004 world oil production has remained within 5% of its peak despite historically high prices (see Figure 1)."

"The combination of increasingly difficult-to-extract conventional oil combined with depleting supergiant and giant oil fields, some of which have been producing for seven decades, has led the International Energy Agency (IEA) to declare in late 2010 that the peak of conventional oil production occurred in 2006 (IEA, 2010)."

"Global Oil Risks in the Early 21st Century

Posted by JoulesBurn on March 26, 2012"


Tue, 03/27/2012 - 13:14 | 2294842 TMT
TMT's picture

Perhaps you are more of an energy expert than me, but I don't believe this "peak oil" shit.  They've been saying this for decades.  I won't believe we've hit peak oil until I see rigs and fracking outside my window.  There's a ton of energy under our feet, it's just the enviro-nazis have prevented us from tapping it.

Tue, 03/27/2012 - 16:24 | 2295483 OpenThePodBayDoorHAL
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I'll stop by your house someday for a glass of water...Oops! There's flames shooting out of your taps

Tue, 03/27/2012 - 11:12 | 2294309 Jlmadyson
Jlmadyson's picture

There is no question about it and average joe is catching on every day.

The fall to earth will be epic.

Tue, 03/27/2012 - 11:31 | 2294367 jus_lite_reading
jus_lite_reading's picture

You see, people like us who have known and have been warning what is about to take place have been doing so for at least 4 years now... the average Joe did not believe or want to believe until it hit him personally... now they are catching on and there is a mass enlightenment taking place... thus they tighten the rope in preperation

Tue, 03/27/2012 - 11:52 | 2294492 Cognitive Dissonance
Cognitive Dissonance's picture

"The fall to earth will be epic."

It's not the fall.......but the sudden stop that kills ya.

Just sayin'

Tue, 03/27/2012 - 12:30 | 2294667 banksterhater
banksterhater's picture

wrong. The ave Joe is now thinking about getting his meager savings into The Market.

Tue, 03/27/2012 - 12:43 | 2294718 HarryM
HarryM's picture

With all the bad news -  the market is trading even today.

I'm expecting Dow+150 tomorrow

Tue, 03/27/2012 - 13:16 | 2294854 TMT
TMT's picture

If I had to guess I would say about 3% of people actually get it.  Of my friends and family, who are of average intelligence and somewhat informed, have no fucking clue.  I talk to business associates and they are totally clueless.

Yes, the % of people who get it is growing, but way way way too low.

Tue, 03/27/2012 - 16:11 | 2295430 Western
Western's picture

3% is supposed to be the magic number. It's a point of no return for the information spreading (ie. tptb cannot stop it now).

Wed, 03/28/2012 - 04:08 | 2296624 bluebare
bluebare's picture

The critical mass of launching an irreversible social change could be useful information to some fight club members. Obviously, with regard to reform of fiscal policy, we are nowhere close to that number and it is my opinion that the information provided here is incorrect by a factor of at least five.  3% fads spring up and die all the time.  The actual number and the speed of a transformational movement varies widely depending upon the social influence of the opinion leaders enlisted into the change and the talents and tactics used by the vanguard.  Transformational movements are exceedingly difficult to carry out and rarely succeed.

Tue, 03/27/2012 - 11:12 | 2294311 BLOTTO
BLOTTO's picture

Reality is their illusion

Their fiction is the reality.

Tue, 03/27/2012 - 11:35 | 2294394 tekhneek
tekhneek's picture

"They got lies so big
They don't make a noise
They tell 'em so well
Like a secret disease
That makes you go numb"

- Frank Zappa

Tue, 03/27/2012 - 11:37 | 2294313 Village Smithy
Village Smithy's picture

Funny how the consensus is rarely below the actual. And as far as that vacuum for prices to fall through look at housing, 4 years and tens of thousands in depreciating value on the avg. home and still no one stepping in. That's a vacuum.

Tue, 03/27/2012 - 11:15 | 2294319 t_kAyk
t_kAyk's picture

I am fairly sure that this system is nothing more than a hallucination brought on by mass quantities of bad hopium.  We escaped from reality some time ago... 

Tue, 03/27/2012 - 11:16 | 2294324 Bansters-in-my-...
Bansters-in-my- feces's picture


That's so ,so.....60'ish.

Tue, 03/27/2012 - 11:31 | 2294369 Ralph Spoilsport
Ralph Spoilsport's picture

I've always believed that reality is for people who can't face drugs.

Tue, 03/27/2012 - 11:17 | 2294325 Everybodys All ...
Everybodys All American's picture

I suspect that this "new reality" is brought to you by Bernanke and if he has to buy every last stock in the market I would not put it past him to do just that in order to keep his reality alive. 

Tue, 03/27/2012 - 12:01 | 2294543 SeattleBruce
SeattleBruce's picture

Even for the chairsatan, that will be a tough task to pull off - and just one mistake, just one 'pop' somewhere along the house of cards, and not even all the kings men will put him/it back together again.  That's the thing about gravity and reality.

Tue, 03/27/2012 - 11:24 | 2294344 apberusdisvet
apberusdisvet's picture

Question:  if all the average folk investors still in the market were to scream at the top of their lungs, would anyone hear?

Answer:  Unlikely since reality hits like a 2X4 to the head causing instant deafness.

Tue, 03/27/2012 - 11:34 | 2294384 LawsofPhysics
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probably not.  Mutual fund outflows have only increased as the market has gone higher and this is where most of the 401ks are.

Tue, 03/27/2012 - 14:55 | 2295123 The trend is yo...
The trend is your friend's picture

I have contacts at the TBTF's.  If you have under 250k in investments, you are not worthy of a financial advisor.  you get routed to the call center wher recent college grads are licensed to give invemtment advise without any real world experience (most of them anyway).  I have been told more and more indivduals are still rolling over their 401k's and liquidating at least 25-50% IMMEDIATELY and in many cases prematurely just to make ends meet.  I believe this is where we are getting the monthly outflows from

Tue, 03/27/2012 - 11:26 | 2294351 banksterhater
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Funny how we haven't heard a word about the CMBS coming due 2012-13, apparantly the Fed took 1/2 the toxic commercial loans off the banks, and it was BofA that loaded their CMBS into those derivitives they unloaded on the FDIC, so this is the plan for all the banks? Off-load CMBS & other toxic waste AS DERIVATIVES to the FDIC, then hand over to Treasury, where they "go away"? I don't expect the rental housing GSE plan to go well, the hedgefunds will lose their asses managing hundreds of sf homes, dealing with tenants (squatters for going on 5 yrs) individually will prove to be a trying experience, I had rentals once.

Tue, 03/27/2012 - 11:33 | 2294381 haskelslocal
haskelslocal's picture

This is precisely why banks are opening up so many strip mall satelite banks. They own the property paper, so might as well use some of the freshly printed money to fill the storefronts.


Tue, 03/27/2012 - 12:33 | 2294680 banksterhater
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wife said our local mall "North County Fair" has plastered empty spaces' windows with cheerful full-height  opaque posters.Tiny "space avail" in corner.

Tue, 03/27/2012 - 13:20 | 2294864 TMT
TMT's picture

If you want to make your head spin, look into the FDIC's loss share program.  It's the biggest fucking scam ever - and just like all other fed programs it's for TPTB and screws the little guy.

Tue, 03/27/2012 - 11:28 | 2294356 TahoeBilly2012
TahoeBilly2012's picture

That's why I never took an office job and skied every powder day I could. All those little work slaves...never gonna see retirement or a fly rod like they hoped...

Tue, 03/27/2012 - 12:41 | 2294724 HarryM
HarryM's picture

"Life" - you can't take it with you when you go

Tue, 03/27/2012 - 11:31 | 2294357 haskelslocal
haskelslocal's picture

Doesn't this article ignore acceptance of inflation?

Have $100 to buy 10 items and each item is $10.

Double the supply of money and $200 will be $20 for each item, yet there will be a period of variance within a state of ballancing and reballancing.

What do you get? Illusion of growth wrapped in devaluation. Payroll will remain the same and buying power will erode.

As long as the movement is not out of sync and doesn't move to fast, both the psyche and the reality will balance so there will be be perhaps no price fall vacuum.  


Tue, 03/27/2012 - 11:35 | 2294390 I should be working
I should be working's picture

Yes let's use the financial system to manipulate asset prices higher in the hopes that the resulting inflation will be mistaken for growth.  

I don't see any problem with that, it worked great in 2008 and 2000.

Tue, 03/27/2012 - 11:28 | 2294359 Equites
Equites's picture

Sometimes it's just funny to recall that former bankers are now whitewashing their colar crimes by working for central banks now - which they used to piss upon - stating that Bob Marley wasn't the only one singing about how "everything is gonna be allright." Don't worry, Obama, Ben and the Octopus: Three Little Birds!

Tue, 03/27/2012 - 11:31 | 2294368 poor fella
poor fella's picture

Want a really good show, watch the interview from last night with Birinyi's skinny blond hussy on Bloomberg (I think with Maryam Namazee). Good Lord, dumber than a box of rocks! Seriously. I wouldn't let this chick touch my penny jar! Perfect icon of a Wall Street money manager.

Shit like this, "It's gone up 40%, and people don't like it. That's why we like it, it's sort of a contrarian view, but it can go higher. We recommend it."

Ahh here it is:   (warning!! your stomach may wretch)


Tue, 03/27/2012 - 11:37 | 2294406 poor fella
poor fella's picture

OMG. Just watched it again.

She's a broken replicant! You can see the words "blink now" crossing her terminal.

Tue, 03/27/2012 - 11:48 | 2294466 LaLiLuLeLo
LaLiLuLeLo's picture

WOW that was painful

Tue, 03/27/2012 - 12:18 | 2294610 kridkrid
kridkrid's picture

ha... she said "rationable"- and people in the background couldn't not laughl... about 1:39 of the clip... pure gold.  We're soooooooooo focked.

Tue, 03/27/2012 - 12:37 | 2294688 hardcleareye
hardcleareye's picture

Let's see, Amanda Crumb graduated from Keene State College with a BS in Exercise Physiology in 2007... and what has she done in the last 4-5 years to qualify her to speak on the market?   Can't find her resume anywhere on the web! It is interesting that Birinyi doesn't post or list any of their analyst or executives resumes.

Are some men really so stupid that they fall of this shit? <sarc rhetorical question> 


Tue, 03/27/2012 - 12:35 | 2294689 trulyslide
trulyslide's picture

"1700 is 100% a possibility"

Tue, 03/27/2012 - 12:37 | 2294699 banksterhater
banksterhater's picture

Birinyi is one of Hall of Fame Pimp Asshole Sold My Soul.

Tue, 03/27/2012 - 12:40 | 2294721 Greater Fool
Greater Fool's picture

Well, this makes me feel a lot better about selling equities now.

Tue, 03/27/2012 - 12:49 | 2294751 Carl Spackler
Carl Spackler's picture

Wow. That was just awful.  You are not kidding.

Amanda Crumb, "We like how the markets looks."   Now is she saying that the market has a nice outfit on, or is she saying it is well rested and handsome?!?

Clearly, she is the epitome of a "muppet," and Goldman is looking to take all of the money of the clients of that firm at which she is employed.

How does someone with such little intellectual substance and wisdom get a portfolio managment job on Wall Street and then get paraded around on tv? Why broadcast such or is Bloomberg in dire need of ANY kind of content, no matter the quality?

I think her future is really in retail.

Tue, 03/27/2012 - 14:08 | 2294992 Crisismode
Crisismode's picture

Yeah. Her future's in retail alright.


As the cosmetics counter clerk at the local Macy's.



Tue, 03/27/2012 - 13:24 | 2294879 TMT
TMT's picture

Exhibit A showing how critical thinking is dead.  "it will go up because it has gone up"  WTF kind of logic is that.

Tue, 03/27/2012 - 17:16 | 2295667 EZ
EZ's picture

So she likes Hermes because its expensive and the business conditions she stated are negative?  Sounds very rationable..

Tue, 03/27/2012 - 11:33 | 2294374 search
search's picture

There were lines of Distention from the Duodenum, he died from what he ate. Seven before Fight Club. This bitch is toast. A Lie can only stretch as far as the stomach that swallows it.

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