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The Miracle On Ice
From Peter Tchir of TF Market Advisors
The Miracle On Ice
One of the Greatest Sports Moments of the 20th Century. What made it amazing was that a bunch of American amateurs defeated a team of Soviets that were amateur in name only.
The Soviet Union, whatever the ideals of communism were, had given up on them. Individuals with special talents were given special rewards. It wasn't just the sports teams, it was the elite and politically connected who were given special treatment. The Soviet Union retreated further and further from the ideals of communism into some shambles of a system that was neither communist, nor socialist, nor capitalistic, but had elements of each. Ultimately it failed because pretending to be one thing, while practicing another philosophy doesn't work for long.
The AIG moment was the first time that the US threw any pretense of real capitalism out the window. Bear Stearns at least was done by JPM with government help. Fannie and Freddie were taken over, but they were always quasi government entities. It was AIG that was truly special. The government didn't even attempt to see if the banks had managed their exposures at all. The government didn't even care if they had. They panicked and saved the banks from their own folly - they didn't give capitalism a chance. The US has never truly recovered from that. The entire system looks to government support more and more. Since AIG the Fed has been running at least one massive easing program or another constantly. The government is lurching from spending program to spending program to keep the economy churning.
At the first signs of weakness we beg for the FED or ECB or the government to do something big and fast. The European credit crisis seemed a final chance to put some capitalism back into capitalism. To allow dumb decisions to pay the price for failure. To reward the institutions that had properly navigated through the risks. There was even a brief moment when it looked like Germany would do that - would force those who failed to pay the price and support those who had taken the best steps. But now with Dexia bailed out and some super SIV on the way, it looks like we are once again heading down a path of not allowing failure - in fact we are once again rewarding failure and living beyond your means. It isn't communism, but it certainly doesn't fit any classic definition of capitalism.
I am not sure how high stocks can go on the basis of more debt being piled on more debt by the same people who have too much debt. Maybe this round of "all-in" fiscal and monetary irresponsibility will take us to new highs. In any case I don't think we will have fond memories of the "Miracle in Cannes" since no proposals so far do anything to fix the cause of the problem. In fact as those people in society without stocks and without assets realize the government is doing everything it can to push those prices ever further out of their reach, and doing nothing to punish those who were wrong, the disillusionment may give rise to stronger emotions. The "occupy" movement may not know what it wants, it may even disappear after the first snow fall, but more people do have to question a financial system that claims to be managed properly, but is never tested.
I heard one great line with the market cap of Hermes passed that of SocGen earlier this year. And that was the fact that SocGen might have a smaller market cap than Hermes, but their employees don't need a discount to shop there.
Another interesting story is what I'm hearing from people at the trumanfactor about Spanish banks and how closely they follow the rules. Earlier this summer banks were paying high interest to attract deposits. The government, for some reason, decided that was not sending a good message, so they imposed taxes on these deposits. I don't agree with the government, but that is what they did. The banks, clearly chastened have done nothing, right? No, now instead of paying high rates on deposits, they pay high rates on IOU's. And these are the beneficiaries of the tax dollars going to the bailouts? Wonderful.
We could use another Lehman before it is too late.
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"the markets can stay irrational longer than you can stay solvent" --Keynes
If you trade, you follow the herd. But the herd movement must be consistent with economic laws in the long run. If you look @ the SPX chart in late 2008, no one had priced in a sub-prime collapse, and day traders were holding limp dicks, as the markets imploded.
There is atleast one black swan out there. Hedgefunds are picking up pennies in front of a steam roller. I do not want to be in risk with that knowledge. But I'm just a college student, and not back-stopped by taxpayers, or a pension fund.
p.s. Isn't the FEd - ECB swap lines a means for European banks to circumvent FX markets. If a Euro bank wants USD, they can go to the ECB, which gets it directly from the FED, thereby bypassing markets. So the USD-EURO seems to be a false signal. The USD should be lot stronger than it appears, and the EURO a lot weaker.
Sheer insanity. The built-up negative sociopathic market charge is untenable. This motherfucker is going to snap soon. No matter the hopium flavoured Kool-Aide hellavu drug wet rotting moist bananas pavlovian delusion button-pressing QE slinging madness....
"The markets can't stay insolvent or irrational longer than forever."
~Me
dude last year's shorters were decapitated for not believing in the bernanke put. ptobably the same is gonna hapen this year. next year maybe it wil snap maybe it won't... who knows?
End point for SP: 1249... re-ordenning numbers...1492, year of America's discover... and the new Europe's turning point ...come back to origin... as Berlusconi escapes to another planet hi hi hi
I am sure that the FED and ECB are one and the same...report to the same boss. The ECB/Euro is just another ploy to improve and make more efficient their grip on the worlds wealth, and Germany is the sucker (at least German workers and industrialists).
The whole banking system today is an insult, but the swap lines between central banks are beyond belief. But hey, how can any of us really understand or explain the problem so may as well just sit back and hope that something good happens. Let's go shopping at Costco.
i remember someone (posted here) was "crazy" enough to short FAZ going into the weekend. It is not my cup of tea. But dude, wasn't that a "great" and gutsy move!
I suspect the market is going to squeeze the "shorts" move into this weekend. Next week could be a good start to load some TZA or BGZ
on thin ice
Ice 9.
Smurfs on Ice. Greedy Smurf is performing the death drop flying spin.
The Governments(like Spain's in the example) will never allow any solutions, 4 any solution would mean the end of the current world order with the new world order nothing like what they want
and by 'governments' I don't mean the (s)elected puppets ofc
Debt slavery is what 'they' want and they will not let go of what you owe them at any price, this is exactly what the system was designed for and it runs at full steam now, this 'party' won't end till you hang the people who are putting the drugs in the punch bowl
Peter, I so share your frustration and hope for a Lehman moment myself. It's one big bailout orgy right now and nothing can come of it. I've been short and lost big but recently decided to play along. It does not make sense at all, but it is what it is. I do not dare keep my longs past Wednesday because it could be a 'sell the news' event or genuily disappoint. I think we might be able to touch 200day sma, but after that I remain fearful. Thanks for your great posts
BTW: I grew up in The Netherlands, we skate a lot. Speed is what can keep you going on thin ice.. once you slow down, it will break... The momentum is definily bullish right now, but as soon as that cedes, watch out!
..............when the cocaine wears off you gots to skate on over to the sidelines for a bump.......
Apparently, very high, they just keep moving up. Not being in the rally isn't providing a very nice feeling and it can only be vindicated if a crash does come and I am not in, but I am ok with that perspective. Keeping my powder dry until I can see the white of their eyes!
All the shills are saying how marvelous this super low tide is and that everyone should be out picking up sea shells while they can. Don't worry, you can outrun a tsunami.
That is basically what is going to happen isn't it. When things start to fall apart, sell off, fail....it will be wide and high tsunami that will wash miles inland, and destroy everything in its path. Even our littl shills here who think they can time their out running of a tsunami.
Watch out for this 'EFSF announcement', theres a reason for 2 months of carrot and stick delays and daily rumors and speeches with giggling PM's after 'no decision' summits...they cant deliver jack-shit. I think a lot of people will get whipsawed hard, its just once again time to pay up. Shearing time. Remember the huge run-up into the US debt ceiling resolution, as soon as that hit it caught everyone by surprise with a big sell off.
It's all it is dog. They have been using the machines to pump it up and bring the money in and when they hit the magic number it's KABOOM...See you don't want to be ya and another TRILLION gets extracted out. Nothing but robbery if you ask me. Just remember there are always a few big winners at the Casino however in the end the house never loses and always comes out on top. Just look at how many times this year alone we have put the 11,000 Dow hat on and then had to take it back off. Like you and I have pointed out many times, we have finally reached the DOW highs of OCT 1999 once again. Nothing but a head fake to rob every day dreamer and 401ker of their retirement. Just remember that gambling is a disease, just like the alcoholic that needs a drink these fools keep coming back with their next bets. Pretty sad if you ask me that they prey on peoples addictions for the sole purpose of self gain.
'We could use another Lehman before it is too late.'
Now Lehman would be a best case scenario?
Hope for a Lehman event, that's your best idea?
peter
a)this is nowhere near 'all in'
b)the amount of digital capital out there is so gargantuan that a few leveraged players can take equities (or any securities) higher or lower to point of rendering fundamental analysis useless in the short term.
I am quite sure there is a story as to why equities continue to ramp in face of what looks like death knell for Europe, but we won;'t know it until well after the fact.
I have visions of the system going down and millions of people are staring at the screens trying to make their few grand of paper profits for the day shorting equities... The game is larger, much larger, now than correctly calling the direction of ES
According to IBD, NYSE volume is down 40% today from Friday.
No-volume ramping into the sell the news EFSF announcement mid week, just like the big ramping into the US debt ceiling 'resolution' euphoria all is solved rally which turned out to be a big market tank.
...I heard one great line with the market cap of Hermes passed that of SocGen earlier this year. And that was the fact that SocGen might have a smaller market cap than Hermes, but their employees don't need a discount to shop there....
On a lighter tone :
Small dikks can be better endowed with juices and be repeat performers... I think that's the Socgen punch line about being outdikked by Hermes.
I'm not taking sides in this super hot debate. As I have no position on Socgen or Hermes stock.
Its more for the lady investors in male stock to comment on.
This market is a bitch from hell and we're being forced to make love to her. Unfortunately it's becoming harder and harder to keep it up.
Leverage cuts both ways. Right now it is slashing the shorts. Someday soon it will be the bulls turn.
I guess y'all refuse to see it. More debt, more printing especiallly since most of it is channelled through WS means higher stock prices. It's a symptom of the disease like higher fever is a sign of impending death from pneumonia. Just means the beneficiaries of Fed largess have so much cash to toss around they'll fling it at anything and hope something sticks. But make no mistake, it's a symptom of a grave illness. It means that the underlying economy will never regain former momentum and will undergo more legs down with bounces in between, the pattern we've actually witnessed since the 1980s. The bounces will get shorter and lower. But the price of stocks merely reflects the biflationary forces at work which are undermining the US economic system. Buying power will continue to get decimated, and the one-trick pony Fed will be seduced into thinking that more money is the cure for that every time. And wealth will get even more concentrated, median real incomes will drop further along with tax revenues and so on an so on.
Only gold can protect what wealth and savings you have. It never loses buying power over time, Rather than a speculative bet on hyperinflation it will become increasingly viewed once again as the ideal hedge against declining buying power of any paper denominated in dollars.
The thing that freaks me out about gold, at least in the near-term, is that it's perfectly correlated with equity prices at the moment. Market goes up, gold goes up. Market goes down, gold goes down.
The question is,"Who are the buyers?" I read yesterday's interview with Dalia and he was right on about being in touch with reality. We all know this thing cannot sustain itself, so the questions before us are: 1. What are the steps the fools will continue to follow to kick the can down the road, and, 2. Will there ever be the political will to admit to the real problem and manage it or will we come to a crisis moment and implode? Question one is for the really smart people. Question two can be answered by anyone.
http://www.paulchefurka.ca/Population.html#Overshoot
People are going to die, it is inevitable. But this result is "unacceptable" so we refuse to accept it. We lie, pretend, inflate, bailout, kick the can, delay the inevitable. Eventually reality will assert itself.
Is it still considered a market if it goes either up or down all based on how the conected insiders manipulate it with the help of their conected government friends and blessing of their regulator agencies? Why not just give every authority to price every good and employ every person to the Western Governments via Soviet Style and stop the charade? We should just go full Soviet and get it over with.
I voted 5 stars. I am ready for this grand deception to be over with. There comes a time when the truth, and doing what's right, matters more than some illusion of stock market wealth or paper money. The unvarnished truth will allow us the dignity of economic death and then our re-birth. That these greedy bastards have managed to lie to us this long is evidence that they will never stop. Most likely, we will have to stop them. http://thecivillibertarian.blogspot.com/2011/10/last-hard-line.html
I read ZH, I love the analysis, articles and comments. I fully anticipate the equity markets to look over and see the credit markets and do an about face massive correction. And every day I end up feeling like the DJIA/NASDAQ is wearing plaid, the world governments are the police officers and I'm the grizzly.
http://www.youtube.com/watch?v=8Qz1sXJsCWw
hey TD... have you posted anything about another potential downgrade lurking?
http://abcnews.go.com/blogs/business/2011/10/merrill-lynch-warns-of-anot...
Read about this yesterday from some other sources... surprised not to see it here - maybe I missed it though, things move pretty fast here.
Keep up the good work!
"The "occupy" movement may not know what it wants,,,"
It's quite clear, since the beginning, "One citizen, one vote, one dollar."
"it may even disappear after the first snow fall,,,,"
No kidding. But like Staus and Howe said, catalysts are precursors to the final crisis. The Tea Party got momentum then died (Where did Sara's bus tour go?). OWS has the momentum now, but yes may die in the winter. I feel that what comes out of the Winter will be bigger, with more momentum then either. What it is, where it will be, whom will pretend to control it, I don't know and neither do you.
Again, more intellectual masterbation.
They want the impossible. They want exponential growth to go on forever. They want there to be no dieoff.
The miracle on ice...
It brings to mind the role of miracles since time immemorial to save humanity and the role of deceit used by some zealots to achieve their hidden aims; by concocting the conditions of a false miracle involving skating on very thin ice...
To explain my point; imagine the father of the EUro as the Machiavelli of this provoked pseudo miracle : Jacques Delors.
He invented the Euro as a Trojan horse to promote the one thing that was historically impossible on a continent with a thousand year history of wars : bring about federation that he as his mentors, Mendes France and Jean Monnet, had as political dream since European Armageddon. How to achieve this dream? Use the Euro Trojan horse! Not as a monetary instrument but as an instrument of POLITICAL construct.
17 nations got sucked in between 1993 and 2004 hoping to eat off its uber-alles monetary gravy train, not understanding that the more they partook of this feast the more they were politically entrapped into the final scheme of federation.
And what would it take at the end of the bunga feast for the run away, intemperate party to wake up?
A mega crisis as of today...Only way out now in this cul de sac?
Inevitable FEDERATION or world wide bust!!!
Machiavelli has us now where he wanted us all, shitting hot conkers on very thin ice!!!
No where to go no where to run except to federation!!!
Well played Machiavelli! Great long term play to achieve Jean Monnet's dream!
Such is human nature, promise them a free ride and they jump in. Now its uphill climb to achieve miracle or its BUST!
I am so confused....this is the strangest market I have ever seen....and the strangest actions by politicians...we are now allowing LTV´s of unlimited amounts in the USA.....WTF....the EURO is strong....the DOLLAR is strong.....we are selling another 90 billion in debt this week....
and gold and silver are weak?????
We need to track the weight of the Merkel/ Sarkosy meeting members....as all they are doing is eating good food and wine on our dime I bet....PT Barnum was right....
Don't fret Pete. It will come out in the wash, as it always has.
The money changers for now are doing brisk business in the temple.
Bailouts are wealth transfer plan and simple . Transfer losses of fascist insiders to the citizen. There is noway the politicos will side with the citizen over fascist corruption and theft , they will change laws and priint what ever it takes to paper over the fraud .
Good article ..only matter I'd disagree with the author is regards bailouts being capitalist. Bailouts very simply and very obviously are corruption.
It's Govt and corporates leaning on each other in nothing like a free market stylee. It is corruption so in your face plain as day obvious we don't recognise it as such as we all have an image corruption includes cloak and daggers behind the scenes in secret. Actually most corruption is in public domain, such as the criminal market rigging of Gold a few weeks ago by Benny and his fellow crooks in central Banks around the rotten globe.
So obvious even the crusaders against Gold price corruption and the cartels, GATA, have said and done nothing about it
Govt is the biggest pick-pocket and thief in society. The most violent gang or institution. The biggest liar and cheat. What's not to see about reality, are the window dressing labels confusing ya?!!
No one mentions the enomously huge profits these banks reaped the last 20 years in international banking; i.e., lending hundreds billions to countries thru the Euromarket and charging steep up-front fees.
These loan sofficers never seemd to care hwo or when or whether these nations would be able to pay back. Now these lenders want the losses shifter to the citizens who never had any of the profits during the good times.
I hope someone writes a ZH article on this situation. Michael Moffitt addresses this in his 1983 book but these international banking schemes 9profits) seem absent in the media. How about listing the Mega-Bank Profits and Bonuses the last decade, for example. The ask these loan officers to disgorge the Fat Bonuses (or at least chip in) toward their failed loans.
Sounds reasonable.
"The "occupy" movement may not know what it wants, it may even disappear after the first snow fall,"
Try looking at this first
https://sites.google.com/site/the99percentdeclaration/
Posted on 10/07/2011
Remember the huge run-up into the US debt ceiling resolution, as soon as that hit it caught everyone by surprise with a big sell off.
Same happened with Lehman/Bear Stern fiasco - market was doing GREAT until the crash hit.
The bigger the gains, the harder the fall, I say. Greece/BOA (prob Greece before) will be the trigger. Maybe even more US Debt-default shenanegians around Thanksgiving.
I think many of us would like to see some "fundamental" reason for a pullback....but alas....do you really think "they" will allow a lowered wealth effect going into the holiday shopping season....every cliche in the book can be quoted here, at the end of the day non-insuder traders are the weak hand and "they" know it, even some have said here that "oh well, I'll just go with it....", because they know they will get pummeled trying to fight the vapor rally, so why not join in, as long as the Fed leutenants (sp) keep being paraded about with QE speak etc etc, watch for Wednesdays EU announcement saying another meeting has been scheduled for next week, keeping everyone in risk, if its working why change it? The EU leaders chuckling, is AT us, not in spite of us........I would even venture to say that "they" have figured out how to game ZH to their favor........I know, blasphemy!
CNBS just broke 'possibility of QE3...'
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