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Russ Certo: "The Fed Just Basically Announced Recession"

Tyler Durden's picture


From Gleacher's Russ Certo"

Market Commentary

I have never seen such bearish language used out of the Fed.  Words or phrases like inflation “moderated”, indicators suggest “deterioration”, spending has “flattened out”, growth is “considerably” lower and “downside” risks to economic outlook.  Further, the veracity of the statement that the “Fed is to keep rates at record lows AT LEAST through Mid-2013 is perhaps most shocking and powerful.  The Fed understands the gravity of the words it chooses and the consequent extrapolation from the Fed watching and analytic community. 

The Fed just basically announced “recession” and has consequently lowered rates REAL TIME and even set parameters for negative rates.  There was some empirical analysis PRIOR to S&P downgrade which suggested historical tendency (not tendency forecasts) of rates to be 50 bps to 70 bps lower after an industrial sovereign downgrade like Japan, Canada, Australia and others.  We were surprised at all the news conferences harping on the political save egg on face conclusions of lower rates yesterday.  Many, not all, were looking for it.  We are humble given volatility as no one has the answers. 

Today, the curve originally ratcheted steeper as the front end extrapolated the 2013 language and by contrast the long end was left behind.  The market, I think, then realized that this is a deflation/recession announcement by the Fed and it really is constructive for the long end.  Until the equity response. 

The equity response is positive as the Fed is FORCING grandmas and anyone who relies on a fixed income into alternative higher yielding asset classes.  Dividend paying stocks look delicious.  Convertibles, OMG, as you get a higher yielding fixed income instrument with a free equity option?  EQUITIES and other perpetual assets that are being discounted by these rates.  Pension funds use the lower rates to discount valuations. 

Congratulations, the 10 year note finally nearly achieved that 2% metric.  2yrs are trading along with repo and near overnight funding at 16 bps earlier.   

So, the trade is to be long equities and that is the third  leg of the bond trade.  They got rinsed on initial steepener, then surged on deflation/recession reality, now crater on dis-intermediation from the asset class. 

New QE’s ironically haven’t been kind to the bond market and I’m wondering what our creditors are thinking as they are spending reserves in effort of futility to WEAKEN their currencies.  The BOJ spent $50 billion dollars recently.  The Swiss franc was up 6.5% on the trading session earlier.  How are these central banks feeling about the Fed creating these conditions.  Look at Canadian and Aussi right now.  We talked about subsidizing other asset classes.  Let’s just hope it works.  Russ


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Tue, 08/09/2011 - 16:04 | 1543663 augie
augie's picture

I need to buy stock in anti-acids. 

Tue, 08/09/2011 - 16:08 | 1543680 Cleanclog
Cleanclog's picture


Tue, 08/09/2011 - 16:13 | 1543713 Popo
Popo's picture

Stupid pills.


I need some to understand this post.   The Fed priced in a depression,   offered zero stimulus except some jawboning...  and the OP says the trade is to be long equities.


Yeah... better pass me the stupid pills.  I'm still not seeing it.

Tue, 08/09/2011 - 16:39 | 1543848 Dr. Porkchop
Dr. Porkchop's picture

I think the gist of it is that bonds will be paying shit, forcing people into equities.

Tue, 08/09/2011 - 16:56 | 1543937 SheepDog-One
SheepDog-One's picture

Thats saying you have only 2 choices, bonds, or stocks. Ridiculous.

Tue, 08/09/2011 - 19:10 | 1544496 Thomas
Thomas's picture

That's especially true when grandma really doesn't have a choice. They are not forcing grandma to take a risk. They are forcing her to bend over and suffer Death by Bongo. Those fucking assholes. Normally I try to keep it tame, but I would put the Fed in front of a firing squad if I had my say. Send Bernanke back to Princeton. Those goddamned wankers at Princeton deserve him anyway. (They just stole a couple of my colleagues with their ill-gotten gains in their endowment. I am still pissed at them for that.)

Tue, 08/09/2011 - 19:12 | 1544504 Thomas
Thomas's picture

Just in case we forget, the Steinhardt blast is a classic...

Tue, 08/09/2011 - 17:09 | 1543995 SheepDog-One
SheepDog-One's picture

Big bottles of stupid pills needed to 'understand' at all whats going on now. I guess the logic is 'Just get in there and buy stocks left and right'...see my primitive brain just doesnt get that.

Tue, 08/09/2011 - 17:23 | 1544057 kito
kito's picture

@popo  --have to give you a a click of the imaginary up arrow button that no longer exists on zh.

so now, no QE has the same effect as QE, which is to raise equities, which we should all be in. 

why do i belong to this site again?

Tue, 08/09/2011 - 18:07 | 1544240 taraxias
taraxias's picture

huge hat tip

Tue, 08/09/2011 - 20:45 | 1544763 Boop
Boop's picture

I think Tyler just likes to merely entertain us sometimes.

Tue, 08/09/2011 - 16:05 | 1543667 ads56
ads56's picture

idiot website costs me thousands today you fear mongering bastards

Tue, 08/09/2011 - 16:09 | 1543685 MajorityRules.
MajorityRules.'s picture

bahahaha man, thats exactly whats going on here. and then the last post is BUY STOCKS...

Tue, 08/09/2011 - 16:37 | 1543833 SheepDog-One
SheepDog-One's picture

Buy stocks, nevermind the dollar is in its death throes. As long as markets close 'green' thats all that matters.

Tue, 08/09/2011 - 18:04 | 1544227 warchopper
warchopper's picture

The time to go short isn't when it's time to go short. 


when are the muni downgrades coming? can't be too far away from more cities going bankrupt.

Tue, 08/09/2011 - 16:11 | 1543687 dwdollar
dwdollar's picture

Bear markets have some of the highest percentage gain rallies.

Tue, 08/09/2011 - 16:09 | 1543691 MajorityRules.
MajorityRules.'s picture

sry about the thousands btw man.

Tue, 08/09/2011 - 16:10 | 1543694 Derpin USA
Derpin USA's picture

You mad, brah?

Wed, 08/10/2011 - 04:08 | 1545400 ZeroPower
ZeroPower's picture

le mad

Tue, 08/09/2011 - 16:10 | 1543695 homersimpson
homersimpson's picture

Obviously you didn't complain when you shorted yesterday, right?

Tue, 08/09/2011 - 16:12 | 1543705 SMG
SMG's picture

You should be afraid, the global economy is on the verge of collapse.   Exact date and time is unknown by us peons, but you can be sure it's going to happen.  So the Plunge Protection Team juiced the market today, that is not the fault of this site.   You should be angry at the Oligarchs who pull the strings of the world financial system these days.  They are the ones who engineered the phony rally we had today.  If you really want a better world help overthrow them and stop blaming this site.

You get more truth at this Zero Hedge than any other website in the whole world. This site is awesome.

Tue, 08/09/2011 - 16:15 | 1543720 trav7777
trav7777's picture

the REAL economy is NOT on the verge of collapse.  The financial economy IS.  And they are holding everyone else by the nuts.

There is no reason your car won't run if the dollar vaporizes tomorrow.

Tue, 08/09/2011 - 16:18 | 1543732 Derpin USA
Derpin USA's picture

Because the real economy doesn't use the dollar as a means of exchange and its disappearance wouldn't herald a complete grinding halt to economic activity.

You trollin, brah?

Tue, 08/09/2011 - 16:28 | 1543794 Smiddywesson
Smiddywesson's picture

Maybe it's because people have a lot of cash laying around and won't go hungry when the ATMs stop working, eh Trav?

Or employees won't show up when they go unpaid?

Or shelves will go empty in 3 days when trucks don't run.

The real economy runs on trust.  If you go down to your local Walmart and just explain that you really do have money, the manager will extend you credit, just like the local store owners did during the Depression, right?

Tue, 08/09/2011 - 16:42 | 1543873 Spitzer
Spitzer's picture

Trav is right.

The millionaires and billionaires will sterilize their savings by buying gold and assets with minimal currency risk, not by emptying store shelves.

The peasants might get a one day bank holiday to straighten a few things out but otherwise it might not be as bad as you think.

Tue, 08/09/2011 - 17:07 | 1543989 Ahmeexnal
Ahmeexnal's picture

Who needs the USD?

Or the GBP for that matter.

Just look at the large number of flat screen TVs and other numerous items that people aquired the past 3 days in Londonistan and other cities in the UK. 

No fiat money involved in those transactions.  Pure old fashioned barter. 

That monetary system will soon begin in pretty much...the whole world.


Tue, 08/09/2011 - 16:57 | 1543942 BeetJuice
BeetJuice's picture

No, Trav is right.

The Bank holiday? At that time the banks did close, and people went to the movies paying in script.

The government would of course nationalize the trucking companies and sent out the military to deliver foodstuffs.

In short, yes, capitalism would break down, but capitalism is in the end a political, social system, a human institution that will be quickly replaced when it fails to serve its purposes any more.

Tue, 08/09/2011 - 21:46 | 1544926 Bicycle Repairman
Bicycle Repairman's picture

So capitalism and markets become a thing of the past and the USA enters its Soviet phase?

Wed, 08/10/2011 - 15:46 | 1547783 gangland
gangland's picture

us (US as in us) enters human phase ...the naive hope

Tue, 08/09/2011 - 16:29 | 1543799 MachoMan
MachoMan's picture

If the dollar died (and I think it will be a quick death...  not that it won't take a long time to get there, but when we do...), then I would expect, at the very least a short to medium term massive increase in price volatility, supply shortgages, and a shaking out of non-productive jobs (with a smaller decline in "productive" jobs).  Grind to a halt, I don't know, but certainly not anything pleasant (hence why we can willingly kick the can).  Between the two sides, I'd say yours was closer...

Tue, 08/09/2011 - 17:09 | 1543993 Ahmeexnal
Ahmeexnal's picture

When the dollar dies, everyone and their dead grandpa will celebrate by going out on a shopping spree like the Londoners have been doing for the last 4 days.

Tue, 08/09/2011 - 17:39 | 1544119 kito
kito's picture

derpin youve been here a handful of weeks, travs been here almost two years, whos the one that might be trollin?

Tue, 08/09/2011 - 16:33 | 1543819 Smiddywesson
Smiddywesson's picture

I'd be interested to hear your notion of the real economy Trav.  Is it all the people who were working in housing realted jobs, all the contractors and sales people and loan originators, is that the real economy because they lost their jobs.

Is it the 85% of new college grads living in mom's basement?

Is it the millions of people in jail?  The two million in the military?  The gazillion working for the USG?

How about all the people on pensions or disability, are they going to keep the economy humming along when the dollar collapses?

Where is the economy that won't be affected by the collapse of the USD? Because I don't see much of an economy before that collapse.

Tue, 08/09/2011 - 16:41 | 1543863 Dick Fitz
Dick Fitz's picture

True, Trav, to a point. If the dollar collapsed the homes wouldn't be destroyed, the roads wouldn't fall apart overnight, and the food in your pantry would spoil, and the gas at the station would still be in the tanks.

But, getting more food/gas/electricity would require a FAST adoption of some form of currency. Gold would be the natural choice, but that would mean millions of citizens would be flat broke. Millions would be out of jobs.

Who is going to buy clothes, or eat in restaurants, or do anything that requires discretionary spending when there is chaos and uncertainty?

A full reset/breakdown of the fiat system is necessary, but it won't be pretty!

Tue, 08/09/2011 - 16:52 | 1543902 Smiddywesson
Smiddywesson's picture

But, getting more food/gas/electricity would require a FAST adoption of some form of currency. Gold would be the natural choice, but that would mean millions of citizens would be flat broke.

Ding!!! We have a winner, and Dick gets the prize.  Yes indeedy, when we switch to the new currency "backed" by gold, which two entitites hold all the gold and will become solvent?  The big banks and the soverign governments who impoverished themselves bailing them out.  they even bailed foreign banks out, because everyone in the club benefits from this scam.

They don't have to tax you to ruin you.  They are not stacking gold, under the most harsh financial conditions, out of a sense of fear or tradition.  The new gold standard will be a massive stealth tax scam where the value of their gold goes up exponentially, which is just another way of saying the value of everything else goes down (hence, just another form of taxation, like inflating paper was over the last 100 years.)

They are the chief holders of gold, so they will be the chief winners.  Everyone thinks gold is a panacea.  They don't have to seize your IRA, or even the paltry amounts of gold we hold.  Wait until the reality sets in.  All they have to do is manipulate the value of gold up and they have already won. 

This is what I call A Gold Standard To Die For.  All that is staying their hand is they are still keeping prices relatively low and acumulating.

Tue, 08/09/2011 - 17:50 | 1544168 kito
kito's picture

the dollar will have collapsed before most of society knows it. they will wake up and sdrs will be in their accounts. most of the problems occur well before and leading up to the actual collapse. 

Tue, 08/09/2011 - 17:25 | 1544069 theotheri
theotheri's picture

Eat shit racist bastard. You fuckhead.

Tue, 08/09/2011 - 19:16 | 1544524 Manthong
Manthong's picture

"There is no reason your car won't run if the dollar vaporizes tomorrow."

Your car won't run if you don't have a job to make money to pay for repairs or gas.

And you won't be driving far if the mobs are in the street yanking drivers out of their cars and beating them.

Tue, 08/09/2011 - 21:43 | 1544915 Bicycle Repairman
Bicycle Repairman's picture

"There is no reason your car won't run if the dollar vaporizes tomorrow."

As long as gas is available and affordable.

Tue, 08/09/2011 - 16:12 | 1543709 d00daa
d00daa's picture

hahahahaha you got whipsawed!  don't play with the big boys on fomc day, could you not see this reversal coming??

they're going to pump this suckers rally, ride the bounce into resistance, short, rinse and repeat.  we're just at the start of a bear market in equities, after a 20-25% crash across the board over two weeks.  did you seriously not believe we were going to bounce at some point??

and believe me, they're not done fleecing longs yet either.  just be patient, play the counter-trend rally or if you can't stomach that, wait to short against resistance.  it's that simple, we're getting at least one more big down leg on this sucker.

Tue, 08/09/2011 - 16:13 | 1543711 RobertJ
RobertJ's picture

Don't blame the site for your poor execution.  Bears make money, Bulls make money, Pigs got slaughtered.  You obviously got piggish on one of the sell offs instead of taking your money and running!

Tue, 08/09/2011 - 16:22 | 1543756 LFMayor
LFMayor's picture

They should have never given you ijits money in the first place.  Go Weep.

Tue, 08/09/2011 - 16:22 | 1543758 Things that go bump
Things that go bump's picture

Gimme a break.  Even I knew there was going to be a bounce today.  

Tue, 08/09/2011 - 16:23 | 1543766 Smiddywesson
Smiddywesson's picture

You are kidding, right?

You have three choices:

  1. Stop playing the paper game, move to PMs for the win
  2. Play the paper game, win, but still lose everything when the system crashes.
  3. Lose the paper game and get it over with fast.

Unfortunately, you chose option number 3.  Would you like to play again?  Playing the paper game requires you to perfectly time the trade, and perfectly time the end of the system.  That's not easy.

You know, I give up, it's the web sites fault.  Buy!!!!!!

Tue, 08/09/2011 - 16:30 | 1543803 El Viejo
El Viejo's picture

They are not fear mongers they are cynics. (and damn proud of it) Didn't you see Bloomberg screen. (On same screen: Dow up over 400 and: US economy weaker) Maybe you should have read earlier post:

The economy is the dog and the market is the tail.

Tue, 08/09/2011 - 16:38 | 1543838 SheepDog-One
SheepDog-One's picture

LOL ads56 you deserve it.

Tue, 08/09/2011 - 16:50 | 1543905 Whatta
Whatta's picture

thimk for yourself?

I use zh as my bearcase scenario,  I use cnbc and some other blogs as bullcase scenario...and know between the two cases lies (closer to) the truth.

just sayin...

Tue, 08/09/2011 - 17:38 | 1544122 navy62802
navy62802's picture

If you're trying to make quick bucks in this market, you should expect to take a few on the nose. The real money will be made by holding out until the market bottoms. There will be many massive gains and losses on the way to the bottom because investors don't know where to go to find the quick bucks right now ... only the moneymasters do. For an example, go back and look at all of the MASSIVE RECORD SETTING point swings that happened in October 2008. Then realize that the market bottomed out five months later and another 20-25% lower. Early 2009 was where the money was made for us hoi polloi.

Tue, 08/09/2011 - 19:13 | 1544511 Thomas
Thomas's picture

Grow up. You can't just read the web; you need to think.

Tue, 08/09/2011 - 16:05 | 1543670 Eagle Keeper
Eagle Keeper's picture

Alright, who the hell was doing the buying?!?!?!?

Tue, 08/09/2011 - 17:54 | 1544155 navy62802
navy62802's picture

It was just a bunch of people on their Scottrade and eTrade accounts who were overcome with exuberance after the Fed's announcement this afternoon! How else would you get a 612 point (5.8%) rally in 78 minutes? Hahaha.

Tue, 08/09/2011 - 16:05 | 1543671 Cleanclog
Cleanclog's picture

So . . . reach for yield or preserve capital?  The war continues.

Tue, 08/09/2011 - 16:07 | 1543675 Spitzer
Spitzer's picture

Get out of the treasury bubble and get out of currency risk. Buy stocks and gold.

Tue, 08/09/2011 - 16:16 | 1543723 d00daa
d00daa's picture

if you attempt to play anything more than a counter-trend rally here you will get decimated.

Tue, 08/09/2011 - 16:46 | 1543887 Spitzer
Spitzer's picture

I am not playing anything. I am just keeping my positions in gold and in anything without currency risk like stocks.

Tue, 08/09/2011 - 17:06 | 1543985 SheepDog-One
SheepDog-One's picture

How do stocks have no currency risk?

Tue, 08/09/2011 - 16:39 | 1543847 SheepDog-One
SheepDog-One's picture

Buy stocks with the hope they might rise and somewhat offset the collapsing dollar....yea good luck to you but no thanks Im out of the Cuckoos Nest.

Tue, 08/09/2011 - 16:58 | 1543946 Spitzer
Spitzer's picture

and where are you going ?

Tue, 08/09/2011 - 17:05 | 1543980 SheepDog-One
SheepDog-One's picture

Im perfectly set putting my money not into stocks and bonds but into PM's and my self sustaining farmland. Gee cant anyone think past the box theyve built?

Tue, 08/09/2011 - 18:21 | 1544287 Spitzer
Spitzer's picture

I am loaded with PMs too but you might miss a spike in mining stocks. Farmland was bid up by credit too, it still is in Cnada.

How do stocks have currency risk ?

Tue, 08/09/2011 - 16:52 | 1543913 Flakmeister
Flakmeister's picture

El Paso Pref. C convertible is currently hanging a for sale sign.... Hecla Conv. Pref. B has been rock solid in this mess... Snarfed 100 shares of MCP Pref A at 93.50... today CHK pref D has been more volatile is also cheap

All the above yield in excess of ~5.5% and have all the upside of an equity.... You cannot put everything into PMs when your clients rely on some cash flow to live on....


Tue, 08/09/2011 - 16:08 | 1543678 gangland
gangland's picture



Tue, 08/09/2011 - 16:12 | 1543708 mtomato2
mtomato2's picture

Obviously, you're not a bowler.

Tue, 08/09/2011 - 17:03 | 1543969 caerus
caerus's picture

i don't need your fuckin' sympathy, man...i need my fucking johnson!

What do you need that for, dude?

Tue, 08/09/2011 - 16:09 | 1543679 Eagle Keeper
Eagle Keeper's picture

Still, nothing has been fixed. We will someday realize this like they are in London....

Tue, 08/09/2011 - 16:09 | 1543692 nah
nah's picture

libya london pakistan iran siam who gets the blame


surely not the chinese labor parity globalists and their contracts


gotta be the tea party and them half niggers types think they got us by the balls

Tue, 08/09/2011 - 16:10 | 1543693 Hedgetard55
Hedgetard55's picture

So, who was surprised that

Ben will ZIRP forever? Poor suckers forced out of money markets and bonds into stocks will get killed in long run.

Tue, 08/09/2011 - 16:10 | 1543698 gangland
gangland's picture

The man is a sex offender. With a record. Spent six months in Chino for exposing himself to an eight-year-old.

Tue, 08/09/2011 - 16:17 | 1543725 mtomato2
mtomato2's picture
You said it, man. Nobody fucks with the Jesus.
Tue, 08/09/2011 - 16:28 | 1543790 gangland
gangland's picture

; )

Tue, 08/09/2011 - 18:35 | 1544347 JW n FL
JW n FL's picture

I will pull the trigger untill it click!


You said it man!

Tue, 08/09/2011 - 16:29 | 1543800 Scalaris
Scalaris's picture

+ 1 trained marmot

Tue, 08/09/2011 - 16:13 | 1543712 Eagle Keeper
Eagle Keeper's picture

Yeah, but how do you maintain ZIRP when inflation hits?

Tue, 08/09/2011 - 16:52 | 1543920 SheepDog-One
SheepDog-One's picture

Everyone not holding gold will be left holding worthless dollars. End of story.

Tue, 08/09/2011 - 16:10 | 1543697 Milton Waddams
Milton Waddams's picture

fed announced recession so naturally it was time for stocks to begin discounting a recovery

Tue, 08/09/2011 - 16:11 | 1543700 mberry8870
mberry8870's picture

The final attempt to suck the last victims into the scheme.

Tue, 08/09/2011 - 16:11 | 1543701 unionbroker
unionbroker's picture

one buyer do not get in the way oops sorry two buyers the second one was anybody unlucky enough to be still short

Tue, 08/09/2011 - 16:12 | 1543707 jtmo3
jtmo3's picture

Ahhh.that explains the rocket ride on the dow...shit economy. Now I understand. To bad nothing else understood the message like gold or commodities, or treasuries or...

Tue, 08/09/2011 - 16:14 | 1543714 Hansel
Hansel's picture

Dear Traders of 2-year and 5-year U.S. treasuries,

You're fired.


Teh Bernank

Tue, 08/09/2011 - 16:14 | 1543716 macholatte
macholatte's picture

For the past few days I have been having some difficulties gaining access to ZH and holding it. Maybe it's my computer system. Is anyone else having problems?


Tue, 08/09/2011 - 16:30 | 1543801 Vincent Vega
Vincent Vega's picture

Yes. I have had trouble and seen others post that they have too. Possibly too much traffic trying to access the site??? Afterall, it is the best palce to find out what's what.

Tue, 08/09/2011 - 16:33 | 1543817 El Viejo
El Viejo's picture


Tue, 08/09/2011 - 16:37 | 1543834 Things that go bump
Things that go bump's picture

I've been having similar problems.  I think there has been greater than usual traffic on the site, what with all the excitement going on.  I can't get the site at all, or I can't access the comments section.  I have had similar problems very occasionally on high traffic days, and there have been some changes in format on ZH as well, which may account for a few glitches.  Just be patient.  I imagine everything will calm down soon.  Unless the S really does HTF.  

Tue, 08/09/2011 - 16:14 | 1543718 espirit
espirit's picture

Trashing the dollah was which choice? 1, 2, or 3?

Backing up the truck now to buy more $Silver.

Tue, 08/09/2011 - 16:14 | 1543719 Archimedes
Archimedes's picture

Deflationary Depression is back on. Stocks rise for a few weeks / months and then the final crash breaking through to new lows.....

Tue, 08/09/2011 - 16:15 | 1543721 unionbroker
unionbroker's picture

you could see it all day the market had to go higher any time it weakened out came the broom. oil down $2.00 Chevron up $3.50 go figure but dont stand in the way

Tue, 08/09/2011 - 16:18 | 1543727 d00daa
d00daa's picture

you all are crazy if you think this will materialize into anything more than a counter-trend rally..  fucker had to bounce at some point.

the bear is just getting warmed up...

Tue, 08/09/2011 - 16:42 | 1543868 SheepDog-One
SheepDog-One's picture

No doubt. Anyone who thinks with a confirmed recession and a trash dollar that stocks just hit rock bottom and will now rocket straight up are roadkill. Probably wont even hold till market open tomorrow.

Tue, 08/09/2011 - 20:27 | 1544705 TwelfthVulture
TwelfthVulture's picture

No doubt many shorts covering after a week of solid profits had something to do with it.  Lots of volume past week.  Lots of volume today, also.  In the past year, a 400 point rally may have gotten you 75, 80% of average daily volume.  Plus, gold rallied into close.  And, the big rally was such a stick save in the last hour, hard to believe.  May be wrong, but short at open tomorrow.

Tue, 08/09/2011 - 16:20 | 1543742 Sudden Debt
Sudden Debt's picture

we'll every country in the world can destroy it's own currency to protect their economy of defaltion and go into inflation mode.....


I bet they're sweating bullets right now in the white house. No way they can cover this comming shitstorm up untill after the elections.


Tue, 08/09/2011 - 16:58 | 1543947 SheepDog-One
SheepDog-One's picture

Thats what I conclude as well, things are going to get bad fast, there will be no party until the end of next year NO fukin way! The shitsunami is heading in fast.

Tue, 08/09/2011 - 16:24 | 1543746 Cursive
Cursive's picture

Russ Certo > Peter Tschir

Tue, 08/09/2011 - 16:23 | 1543757 unionbroker
unionbroker's picture

you dont argue with a semi coming at you down a one way street in the wrong direction you just get out of the way untill it goes by

Tue, 08/09/2011 - 16:23 | 1543759 LookingWithAmazement
LookingWithAmazement's picture

As I've predicted many times recently: a massive run INTO the T-bonds is going on. Forget about the doomprophets (like Gonzalo Lira), who asked the supposedly retoric question: "Who will buy the new bonds after the debt ceiling?" Well, we know the answer now: the usual suspects.

Tue, 08/09/2011 - 16:48 | 1543894 SheepDog-One
SheepDog-One's picture

Hurry and buy more bonds based in worthless dollars. Yipee.

Tue, 08/09/2011 - 17:08 | 1543991 LookingWithAmazement
LookingWithAmazement's picture

For many it's the best option apparently. Or "least worse".

Tue, 08/09/2011 - 16:24 | 1543764 oogs66
oogs66's picture

rally on garth, rally on wayne....economy in recession but risk on for now...crazy...but its been crazy for awhile

Tue, 08/09/2011 - 16:23 | 1543767 JPM Hater001
JPM Hater001's picture

Wow, so how long does ketchup last?  Just cant dream of running out during the collapse.

This was the dead cat bounce.  Sometimes, when dropped from high enough or tossed down with force, it will bounce twice.  Of course no one buys this mornings Bond parade nor do I buy this end of market close up some ridiculous +430 without someone driving the steam engine. 


Watch tomorrows headline: "Markets Rally on Feds Mixed Message"...Only you are mixed friend.  Only you.

Tue, 08/09/2011 - 16:24 | 1543775 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

*****Mark Cuban Opined, Wall Street Doesn't Know What Business It Is In

""Wall Street is a (Computer) platform. It’s a platform to be exploited by every technological and intellectual means possible.....""

*****OT: Psychological Short Film

The Creek...

Tue, 08/09/2011 - 16:31 | 1543784 Bob
Bob's picture

Fuckin a, Dylan Ratigan has been doing Howard Beale for the last 20 minutes.  His guests are just sitting there staring, looking like they're listening, Ratigan is apologizing intermittently for losing his temper before returning to yelling in outrageous honesty. 

I've never seen anything like this.  A public figure in the corporate media just going beserk with honesty. 

Ratigan, you the bomb. 

Tue, 08/09/2011 - 16:48 | 1543892 macholatte
macholatte's picture

is this the clip you're talking about?

Tue, 08/09/2011 - 16:54 | 1543932 Bob
Bob's picture

I got suckered into that one! 

No, that's not it.  Maybe I'll stay focused long enough to find it somewhere in the next 24 hours.  That was some beautifully crazy shit. 

Tue, 08/09/2011 - 19:40 | 1544518 Bob
Bob's picture

I see the link was well-named.  Thanks.  In retrospect, there was a subtle element of Scarface in his rant as well.  Too bad the video is only the climactic 5 MINUTES . . . that was fucking great. 

I'm gonna have to watch tomorrow.  He could be in the same groove!  And he could be on "vacation" . . . 

Wed, 08/10/2011 - 01:20 | 1545261 TruthInSunshine
TruthInSunshine's picture

Guys, shoot that to Tyler.

I don't always agree with Ratigan, but the man has been on a rip of truth lately that is epic, and unrivaled by any other talking head in the MSM or on cable news networks.

I'm waiting for them to try and shut Dylan Ratigan down, actually.

Tyler needs to post that video and give Ratigan some exposure that he richly deserves for having big balls and speaking the truth on a CNBC associate/sister network.

Wed, 08/10/2011 - 15:42 | 1547770 macholatte
macholatte's picture

thanks Stax for finding the clip and thanks Bob for being a good sport.


Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.
Winston Churchill


To sit back hoping that someday, some way, someone will make things right is to go on feeding the crocodile, hoping he will eat you last - but eat you he will.
Ronald Reagan

We can't have special interests sitting shotgun. We gotta have middle class families up in front. We don't mind the Republicans joining us. They can come for the ride, but they gotta sit in back.
Barack Obama

Tue, 08/09/2011 - 16:33 | 1543816 JW n FL
Tue, 08/09/2011 - 16:34 | 1543823 march52011
march52011's picture

Dead cat bounce my ass.

More like PPT.

... I don't know how you guys could get into the paper game.

There is just far too much manipulation.

The DOW rallied for...NO REASON AT ALL!

"Hints of QE"....whatever.....a 400 point surge in the last hour?

I will continue stacking PHYSICAL Au and Ag.

Tue, 08/09/2011 - 16:44 | 1543880 SheepDog-One
SheepDog-One's picture

Yep, I wouldnt care if the DOW rallied 5,000 points in 3 seconds, Im never touching this shit either way EVER again!

Tue, 08/09/2011 - 16:34 | 1543827 Cdad
Cdad's picture

When all else fails...force granny into the market.  Ah, the benefits of central planning.  Grannies everywhere celebrating by purchasing extra Efferdent and doing hits on the beer bong while their teeth soak...and watching the Netflix ticker.

Brilliant!  Why didn't we think of this whole Banana Tree Republic a century ago?


Tue, 08/09/2011 - 16:46 | 1543889 SheepDog-One
SheepDog-One's picture

Such a simple formula, why didnt someone think of it decades ago? Just have banks release tea leaf statements that you should buy stocks in a confirmed recession, really a depression worst we've ever seen....DOW up +490 in minutes. Totaly sane, rational world, relax.

Tue, 08/09/2011 - 16:38 | 1543846 Grand Supercycle
Grand Supercycle's picture

Equity counter trend short covering rally begins from very oversold levels.

Tue, 08/09/2011 - 16:42 | 1543866 Smiddywesson
Smiddywesson's picture

The second mouse gets the cheese.  It was destined to bounce to shake off all the market timers trying to sell the top. 

Tue, 08/09/2011 - 16:42 | 1543871 LookingWithAmazement
LookingWithAmazement's picture

The motto of today: recession - buy stocks!

Tue, 08/09/2011 - 16:45 | 1543884 slackrabbit
slackrabbit's picture


I think Ben just said he was going to play with himself for two years.

I.e Do nothing

Tue, 08/09/2011 - 16:55 | 1543936 Joseph Jones
Joseph Jones's picture

Borrowing money is fine. 

An entire economy based on borrowing, that can not function without constantly deeper and deeper debt out as far as the eye can see, telling people they have the "right" to do nothing all day while you and I feed, cloth, and shelter them, is an economy called "Titanic".  We all know the end of that story.

I don't want the many helpless slobs I know dependent on food stamps and federal aid to die in the street.  I don't want people I know to die from losing their Rx. 

Doens't mean it ain't gonna happen.  Doesn't mean the ruling class did not set this all up on purpose and this was not preplanned by some incredibly evil humans.

We got the government we deserved.  Lenin or whoever was right that we'd all vote ourselves into debt oblivion.  Plato was right that a republic form of government is only one step above fascism.


Tue, 08/09/2011 - 17:16 | 1544009 kevinearick
kevinearick's picture

Mr. Black's Theory in action.

Bifurcation can be ugly, depending upon perspective.

"recession - buy stocks."

Tue, 08/09/2011 - 17:21 | 1544052 theotheri
theotheri's picture

Fuck you guys are negative.  The statement basically saved our asses for a while and brought the markets back from the brink.  Why the fuck is that bad news?

Hurray for Ben!  Hurray for BHO.  Now STFU and be happy to live in America for 1 fucking day!

Tue, 08/09/2011 - 17:33 | 1544094 itchy eyes
itchy eyes's picture

They are happy. You'll know it when they're really angry.

Tue, 08/09/2011 - 18:30 | 1544323 UGrev
UGrev's picture

Would be nice to live in a non --corrupt, fully manipulated, sky-net infested, plutocracy..  if this fucker crashes, there's hope that what rises from the proverbial ashes will be more like it was intended to be. You know.. a Republican Form Of Government with a Constitution that's adhered to as the words are read not as they are interpreted and gee, dad, can we have some people with morals representing OUR interests instead of there's?  
So while you say be happy to live in America for 1 fucking day.. I say, let me know when America shows up, because this aint it, brother.. this aint it. (pardon the use of "aint".. just seemed to fit).  

Tue, 08/09/2011 - 17:36 | 1544108 theotheri
theotheri's picture

Don't misunderstand me- I dove in last night at the close and BTFD and I share most of the critical sentiments here towards The Street and of course the incompetence and self-dealing in DC but c'mon! Millions of completely innocent and hardworking US peeps are watching their nest eggs get decimated right before your eyes- have some compassion people!

Tue, 08/09/2011 - 17:42 | 1544138 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

"The Fed just basically announced “recession” "

Um, what other option was there? I'd amend that to say "more recession", "enhanced recession", etc. Since we keep bailing out derivatives bets for corrupt banks and starting more foreign wars (where are we, 6 or 7 now?), of course there are no other alternatives to sinking this ship. We only "redefine the waterline" to try and keep the passengers calm.

Tue, 08/09/2011 - 17:58 | 1544204 franzpick
franzpick's picture

Today the perception of the upcoming depression came into clearer focus, and the realization may be spreading that there will only be a very few established equities with branded products that will enable the payment of dividends during the unending 60 year credit collapse.

In a collapsing earnings and dividend environment, the risk on, risk off equity-bond strategy may evolve into a chase for coupon and dividend yield.  In the '30s, money poured into gold stocks because they could deliver a dividend while most other corporate entities could not, and my guess has been that entities that can print the coupon payment or maintain their dividend will be bid surprisingly higher as the markets discount ever lower coupon and yield rates during the depression.

PG as an example, at 60 today, with a yield of 3.50%, might become attractive at 120 with a yield of 1.75%, if it appears that that dividend can be maintained during the ongoing or worsening depression.

I have WAG'd that in the depression I see unfolding, the 30 year bond will go to 200 because the coupon, while not 'earned', can and will be printed and paid, and money will chase it for the small but secure yield.  I may not live long enough to collect on that bet, but then maybe being around in the proposed collapse may not be that desireable.

Just some early considerations of drastic changes that could occur as a credit-expansion-based growth economy makes the painful adjustment to the much-reduced earnings and 1-2% yield corporate environment, and the even lessor yield treasury returns that accompany the depression.


Tue, 08/09/2011 - 18:03 | 1544226 Rynak
Rynak's picture

Well, what is the surprise here?

"Get down, so that i have an excuse for pumping you up!"


Tue, 08/09/2011 - 18:06 | 1544236 taraxias
taraxias's picture

huge hat tip

Tue, 08/09/2011 - 18:11 | 1544250 honestann
honestann's picture

In gold we trust.

In silver we trust.

In reality we trust.

To escape from the predators-that-be and predator-class in every way possible is our only practical and sane recourse.  They will not get our cooperation, support, sanction or precious metals no way, no how, never.  They destroyed the world and we refuse to accept any more of the consequences of their actions than we can possibly avoid.  In other words, up theirs!  All of them.

Tue, 08/09/2011 - 18:16 | 1544271 FunkyOldGeezer
FunkyOldGeezer's picture

Oh to be an American 'investor' in the PMs. You have no currency risk over and above the Dollar's decline. Sigh!



Wed, 08/10/2011 - 00:21 | 1545214 ManufacturedOpinion
ManufacturedOpinion's picture

Here's a little trick I learned from the government:  When you don't like the measurement, just CHANGE THE DENOMINATOR !!

ie - start measuring your PM's on OUNCES, instead of dollars.

There.  Isn't that much better?




The only thing the USA manufactures these days is YOUR OPINION !!

Tue, 08/09/2011 - 20:32 | 1544731 topcallingtroll
topcallingtroll's picture

The troll finally agrees there is no way out except to buy gold. that means you better sell

i was convinced last week ewz was the way to go. shuda shorted the fucker instead.

Tue, 08/09/2011 - 20:53 | 1544790 gwar5
gwar5's picture


While I have a vested interest in low interest rates, as do many, this is still madness.

Tue, 08/09/2011 - 21:07 | 1544822 web bot
web bot's picture

I'd appreciate it if anyone can point me to a framework to understand what is happing in Silver. I have seen enough evidence of blatant manipulation and know that it is going on, but am unsure of the dynamics that's currently driving pricing. I don't buy the decoupling-from-gold story. Silver's decline compared to the decline of the DOW was minimal, so it did not suffer the same downdraft.

Silver seems to be modestly inversely correlated to the USD with some impact to industrial use. That seems to be the metrics that justify recent movements. I'm also hearing that Sovereign nations are going directly to mining companies, bypassing exchanges to secure silver.


Tue, 08/09/2011 - 22:03 | 1544965 Iceobar
Iceobar's picture

Thankfully, there are still 'traditional' investments.....;>)

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