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It's Bear Hunting Season

Submitted by Tyler Durden on 02/20/2012 14:50 -0400

From Peter Tchir of TF Market Advisors

It's Bear Hunting Season

The capitulation of the bears continues.

In this zerohedge article, Janjuah says the market is so rigged its hard to offer meaningful insights . It is a very good read.

In this weekend’s Barrons, the Alan Abelson column looked like it had been written by Abby Joseph Cohen (or some other permabull).

The ECB and Fed seemed to have pushed Roubini and others into the capitulation. As a rough guess, only about 3 of the up days this year had anything to do with earnings and economic data (the NFP day being the most obvious). The rest were all induced by some political or central bank action. Frankly I’m surprised we weren’t up more in Europe today with the Chinese Bank Reserve Ratio getting cut.

At any moment we should get details of all the next steps for the Greek bailouts. We will get to see the ECB swap, the PSI proposal, and retroactive collective action clauses. It will be interesting to see how that works. After the Greek default (yes, bondholders giving up 50% of their notional is a default), it will be interesting to see how Greece does. Hopefully they will actually spend some time trying to figure out alternative ways to finance themselves than the ever more onerous bailout packages from the Troika.

The market feels like it is trading long. It felt very ugly on Thursday morning, and with additional capitulation by the above mentioned bears (and others) more people have committed to the market. Will this finally chase new money into the market? Somehow I doubt it. Will Apple add another $100 billion of market cap in less than 2 months? HYG didn’t get any new assets all of last week, and JNK, which did attract assets over the course of the week, had its first day of outflows. How much money is really still on the sidelines? And how much good new and money printing is already built in? We will find out, but Friday’s small rally was a bit disappointing, and Europe’s relatively small gains today also seem underwhelming. Maybe we need the deal to actually hit the tape to rally? Or maybe that is going to be the sell the news event, especially if there is really strong resistance to PSI.

US data has been better, but we wait to see if the weather was a bigger influence than the bulls believe. Chinese data remains sluggish, and that is if you actually believe it. European data has been fairly weak, and I’m not sure that whatever the Troika and Greece agree to, does anything to reduce the risk of recession, and if anything the currency strength won’t help.

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Mon, 02/20/2012 - 14:54 | 2178130 Ancona

Bailouts are bullish.......right?

Mon, 02/20/2012 - 14:58 | 2178154 Ahmeexnal

Wake me up when it's banker&politician hunting season.

Mon, 02/20/2012 - 15:00 | 2178158 kito

@ancona---rhetorical questions are not necessary............

Mon, 02/20/2012 - 15:10 | 2178195 Ancona

Actually.........that's correct.

Mon, 02/20/2012 - 16:29 | 2178377 Id fight Gandhi

Apparently sovereign defaults are bullish. Or it's all priced in. Or where else are you gonna put your money.

Always a fucking reason to be bullish.

Mon, 02/20/2012 - 14:56 | 2178136 OldPhart

Surprised to see so few comments.

Mon, 02/20/2012 - 15:00 | 2178162 It is a bargin ...

Thought that a lot lately about ZH, complaintism(?) has set in and lets be fair why the fuck would'nt it, this shit drags you down like a drunk in a pub, only so much can be said the rest will just happen

Mon, 02/20/2012 - 15:02 | 2178168 Ahmeexnal

So few comments today. Everyone must be at the RP support march:
http://www.prisonplanet.com/live-video-troops-march-on-white-house-in-su...

Mon, 02/20/2012 - 16:09 | 2178350 fuu

Banker holiday. The shills are not at work today.

Mon, 02/20/2012 - 15:02 | 2178170 q99x2

Change your handle. We can't breathe.

Mon, 02/20/2012 - 15:45 | 2178295 OldPhart

Would OldShart be better?

Mon, 02/20/2012 - 16:34 | 2178392 Id fight Gandhi

I'm burnt out and won't trade this market. Bet there's many feeling the same. Sick of the lies. BS everyday and you know it'll all crash on some idle afternoon. But when? Never know with central planning.

Mon, 02/20/2012 - 14:57 | 2178148 Zola

Anyway, the only obvious thing that is forecastable for sure is that all these gains and then some will evaporate when the down move comes. The BS rally from 850 onwards on SPX will give and then some.

Mon, 02/20/2012 - 14:57 | 2178150 DutchTreat

No comments on ZH seems like the last proof I need to become very bearish...

Mon, 02/20/2012 - 14:58 | 2178152 IndicaTive

Not one dime of my retirement money is going into equities or bonds. They can hold it hostage in the Guaranteed [to lose money] Fund until I can get it out. Fuck them. Silver.

Mon, 02/20/2012 - 15:02 | 2178169 fonzannoon

What do you think the guaranteed fund is invested in?

Mon, 02/20/2012 - 15:09 | 2178189 IndicaTive

I know what it's invested in. Best I can do. Am I missing something?

Mon, 02/20/2012 - 15:12 | 2178202 fonzannoon

all I meant was that the guaranteed account is in bonds which you seemed to indicate you wanted no part of. But as to your point that in the given situation it is the best you can do, you are absolutely right. It is and I don't mean to say you are incorrect or ignorant. I would guess you are certainly not contributing into the plan anymore.

Mon, 02/20/2012 - 15:17 | 2178214 IndicaTive

30% corp. bonds. I contribute only up to the match. Throwing good money after bad? Perhaps. Rest now goes to PMs.

Mon, 02/20/2012 - 15:07 | 2178173 LawsofPhysics

LOL! Someone forgot that bears know how to hibernate. Depending on how many PMs your bed happens to be made of, bears are sleeping quite soundly. The only bets I made so far this year was that 1) the devils we know (big banks and big companies) will do well (simply becasue fraud will remain unprosecuted via new "rules" these perps make- see JPM/MF global) and 2) energy prices will continue to climb through mid march at the very least. regardless of more war (which will be positive for energy and commodities) the rest of the world is moving on about its busness and still demands energy and commodities, America and the dollar becoming less relevant at an increasing rate.

Mon, 02/20/2012 - 15:08 | 2178174 Bam_Man

The so-called "market" will continue to grind higher on vapor volume until the end of the 2nd quarter. By then WTI will be $125/bbl and retail gasoline around $4.75/gallon in most markets. Then down she goes. Fed and ECB announce more asset purchases in Sep/October and everything rallies again (maybe). Same as last year. A complete business cycle compressed into one calendar year. The cycle repeats and becomes more volatile with each iteration until total deflationary/inflationary collapse.

Mon, 02/20/2012 - 15:12 | 2178205 fonzannoon

I think you nailed it Bam man

Mon, 02/20/2012 - 15:07 | 2178185 Yen Cross

All we get to see is how the PSI is going to get hosed, after the ECB pulled a "HITLER", on Friday! Now on the wires, they want PSI to take even deeper HAIRCuts! I agree! F..k any and all sovereign bonds. I noticed Italian and French yields are down. I wonder who is buying that worthless TOILET TISSUE! /sarc

Mon, 02/20/2012 - 15:08 | 2178187 loveyajimbo

Yes, a 50% haircut IS a default, but the dog turds will keep dancing this BS dance so as not to trigger the CDS bomb... which would probably take down many of the zombie banks... mark to model my arsehole.

Mon, 02/20/2012 - 15:09 | 2178188 the grateful un...

the bigger the problem the bigger the solution, the bigger the solution means more money for wall street. the problem is we're running out of problems, europe looks like it has been solved, now the japanese are in trouble sort of, time to let out a little more radioactivity from fuckashima. and perhaps iran could provide a bigger problem, but they don't even have the bomb, much less the delivery system, or the desire to launch a first strike. the phony electronic asset printing machine is a lot like the hollywood violent graphic film business, after a while audiences just get full up with this stuff (which has nothing at all to do with the real lives, so its increasingly hard to stay interested in things like stocks and bonds, and uber violent hd films because neither one has any relevancy other than entertainment, which is why booyah jim (speaking of alan abelson who once accused him of self puffery) still continues. you trade in your stock profits for some, drum roll please, entertainment? what's the point? the only way to create asset value is to ride the bear market down into the bottomless pit of despair. then at least you can claim whats left of real assets, rather than spend it on phony schemes to heighten you sensual awareness of crap that doesn't exist, like an opium laced dream.

Mon, 02/20/2012 - 15:11 | 2178197 max2205

FOOD FOR GREECE:

The world's first "test-tube" meat, a hamburger made from a cow's stem cells, will be produced this fall, Dutch scientist Mark Post told a major science conference.

Post's aim is to invent an efficient way to produce skeletal muscle tissue in a laboratory that exactly mimics meat, and eventually replace the entire meat-animal industry.

PHOTOS: 10 Ways Science is Using Human-Animal Hybrids

The ingredients for his first burger are "still in a laboratory phase," he said, but by fall "we have committed ourselves to make a couple of thousand of small tissues, and then assemble them into a hamburger."

Mon, 02/20/2012 - 15:11 | 2178200 max2205

Or IMF BURGER

Mon, 02/20/2012 - 15:17 | 2178215 slewie the pi-rat

even doug noland got a whiff of that honey pot, peterT!

aNewBullMarket?

i like the first sentence: This week I was compelled to respond to a vicious rumor that I’d turned bullish.

and: There may be little new in the market backdrop, yet we must recognize that the policy backdrop has changed profoundly though, perhaps, subtly. The nature of policy responses has evolved and escalated; measures have become overwhelming, preemptive and essentially unbounded.

he drops the resin bag and fires one at the head: We are now into the fourth year of previously unimaginable stimulus. Considering zero rates, massive Federal Reserve monetization and unconscionable deficit spending, economic performance has been abysmal.

then: I don’t see how such dissimilar economic structures (and social and political systems), say between Italy and Germany, are consistent with a common currency. LTRO only buys time. China is, as well, an accident in the making.

you go ahead and read it yourself, ok?

i don't want to spoil anybody's "happy ending"

Mon, 02/20/2012 - 18:54 | 2178922 the grateful un...

i read noland every week, though mostly he avoids stating the obvious, he is at least willing to admit that the tricks the central bankers have been doing have some effect, (it would be crass to pretend they did not, but some like bob prechter refuse to give the devil their due) and i essentially like his take on "moneyness", a difficult problem to define. we know that all the magic wands bernanke waves aren't creating money, so much as as taking debt problems off balance sheet, which is where i expect the Fed to go with its balance sheet. the history of these things suggests that when zero down credit no longer works as well as collateral, that collateral wins, and lenders, at least consumer credit lenders, have in the past simply bypassed available easy credit, such as in a home loan, for cash down payments, in other words buyers who have some skin in the game. in other words you can buy that new furniture and no payment until 2013!!!, but only if you have the money in the bank. moneyness is credit worthiness, and it applies to countries too

Mon, 02/20/2012 - 15:23 | 2178236 machineh

Given that Greece is merely a passive conduit for funneling official financing to banks -- and that such official financing is being supplied directly through other channels such as LTRO -- the market may not really care about the outcome of the Greek crisis.

ZH readers do care about the ugly precedents being set. But all the market sees is another injection of coordinated liquidity -- a la Russia 1998, Asia 1997, Mexico 1994, and all the way back to the 1970s when the Global Fiat Ponzi charade began.

Much as I hate to say it -- because the euro's structural defects are a big, big deal -- markets are likely to just blow right through next month with only limited turbulence, regardless of the Greek outcome.

Ronald Reagan said, 'I paid for this microphone.' Well, we're paying for this 'price keeping operation' in sovereign bond markets, and by extension, equities. Short it, and you might end up paying twice.

Mon, 02/20/2012 - 16:00 | 2178330 bk1037

As we all know, what they are developing in Greece will be a template and 'solution' for sovereign debt issues throughout civilization. I predict that once the CAC issue becomes better known, it may well prove to be either the undoing of the Greek government bond market or bond markets everywhere.

http://www.businessweek.com/news/2012-02-18/greek-government-said-to-pre...

Here we have a government mandating that if you (the bondholder) do not agree to a voluntary debt swap with major haircut, they will force you to adopt their terms through specially crafted legislation. In order, play ball or you will be forced to play ball. This is being softly referred to as a CAC, but it looks to me that this term bastardizes the intent of what a collective action clause is supposed to be, and forces major haircuts on all in the name of fairness. If there are bondholders who agree with 50-70% haircuts, you can bet it's because they may have some connection to the government or the misguided belief they will get some of their principal back down the road. Combined with the fact that the ECB quietly swapped out their bonds at face value before anyone else adds up to not passing the smell test.

This will never show up in any financial statements as tax revenue but it has very much the same effect in reducing government liability. It takes the easy way out as the government sets the rules and forces compliance. One way or the other, the government money machine will get most individual assets, but this is quite baldfaced. After reading the link, I for one will never again invest in government bonds in any variety. Plan for some or most of the principal to be converted to revenue enhancement/liability reduction assets with this plan referred to as PSI and CAC.

Once others get wise as to what is being cooked up and to be applied in other crisis cases in the PIIGS and elsewhere, the government bond market credibility will escalate its unraveling. Why would anyone give the government money in this manner, you are not going to get your principal back most likely? All it takes is legislation to write off/write down the debt by decree and sovereign debt issue solved or mitigated. No way for me to be one of those upcoming victims.

Mon, 02/20/2012 - 16:27 | 2178374 oldman

There is no market!

Who cares about news when individual investors are absent? Machines don't care about news----maybe there is only one machine and every hft plays there. Where's Dorothy when we need her?

We are just a bunch of stupid sissies----living in the past and waiting for the future. If you have your position ---just sit tight---your turn will come.

I'm a little angry about this stuff because I have been waiting so long---just talking to this oldman.

Besides, if the machines don't take delivery at these prices----someone will---some stupid central bank or banks----

eventually, ronald mcdonald will die

And Carter was the only american president to ever wait----the only one that understood when you are the biggest and the bravest and richest----you can afford to wait and not get your people killed unnecessarily or piss away all of youir money

i lost faith in him then and voted against him for ronald mcdonald out of shame for his 'lack of courage'. For this reason I forfeited my right to vote and will never vote again; i'm too dumb to vote.

thanks for the space and outlet for expressing my shame om

Mon, 02/20/2012 - 16:34 | 2178394 Elmo The Great