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The Stock Ramp Is Just More Deja Vu "Insanity" Warns Morgan Stanley

Tyler Durden's picture





 

When Morgan Stanley now agrees with most of what Zero Hedge has been saying (especially when it earlier announced that a short covering rally in the EURUSD is imminent, as we have been warning for the past two weeks), it may be time to get concerned. From Morgan Stanley: "Most investors I speak with concur with the view that growth is likely to be below trend for the next several years thanks to deleveraging and a more stringent regulatory environment. However, there is quite a bit of excitement over the probability of QE3 being implemented at some point during 2Q. Exhibit 5 shows just how excited stock investors seem to be getting over this prospect, especially in relation to their fixed income peers. But, this is almost always the case when animal spirits get going. The last time I pointed out such a divergence (October of last year), the SPX had a swift 10% correction over the proceeding 3 weeks. I have no idea whether we are likely to get such a correctly immediately, but I sure can’t rule it out and I am pretty confident you won’t be able to get out of the way unscathed. Just  another reason for why I want to be paired off right now." Also, this time will never be different: "Didn’t we learn anything from the Japanese experience of the past 20 years! I might be more on board with the program if I thought we were making real progress on the things that matter for sustainable organic growth. Unfortunately, I just don’t see it."

Morgan Stanley's Mike Wilson

Insanity

Wasn’t it just a year ago that we had the exact same set-up? Growth was slowing, Greece was close to default and there was unrest in Middle East. I guess one could argue China is no longer tightening policy and Europe is closer to the end of their crisis. On the other hand, earnings growth in the US is now decelerating and likely to get worse over the next several quarters. Furthermore, the political environment in the US has rarely been more charged and bipartisan than it is today. The S&P500 is trading almost exactly where it was at this time last year, but with a lower multiple. This is the direct result of higher earnings in 2011 than 2010 but with the prospect of lower growth going forward. This makes sense to me. Most investors I speak with concur with the view that growth is likely to be below trend for the next several years thanks to deleveraging and a more stringent regulatory environment. However, there is quite a bit of excitement over the probability of QE3 being implemented at some point during 2Q. Exhibit 5 shows just how excited stock investors seem to be getting over this prospect, especially in relation to their fixed income peers. But, this is almost always the case when animal spirits get going. The last time I pointed out such a divergence (October of last year), the SPX had a swift 10% correction over the proceeding 3 weeks. I have no idea whether we are likely to get such a correctly immediately, but I sure can’t rule it out and I am pretty confident you won’t be able to get out of the way unscathed. Just  another reason for why I want to be paired off right now.

I’d like to end this week’s note with a quote from Albert Einstein who said “Insanity is doing the same thing over and over again expecting a different outcome.” I feel like this is exactly where we are today with respect to the policy choices being made all over the world. Do we really think the result of QE3 is going to be any different than QE2? Or that the second European LTRO is going to end up resolving Europe’s solvency problems simply because the Fed is now supporting a larger effort via its open swaps line? Didn’t we learn anything from the Japanese experience of the past 20 years! I might be more on board with the program if I thought we were making real progress on the things that matter for sustainable organic growth. Unfortunately, I just don’t see it. While I am watching many things to determine if the facts are actually changing, there is one metric in particular that has to turn for me to get more constructive fundamentally. I am talking about personal income growth excluding government transfers. Until this shows some signs of life, I will remain highly skeptical that additional policy stimulus will end differently than what we have recently experienced. Exhibit 6 tells the sad story of our current plight and how this current rally will likely end. Until then, I will look forward to my next lunch with Adam Parker.

 


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Fri, 01/20/2012 - 13:26 | Link to Comment the grateful un...
the grateful unemployed's picture

that should be "What the HELL is this?"

Fri, 01/20/2012 - 13:51 | Link to Comment Vaiman
Vaiman's picture

This is freakin insane!!  As per CNBC

Greece, Creditors Near Debt Swap Deal With 70% Loss

Might as well give them squat cause that's what they are offering them!

Fri, 01/20/2012 - 14:11 | Link to Comment Rynak
Rynak's picture

"this" is not even adjusted for real inflation....

Fri, 01/20/2012 - 14:43 | Link to Comment slaughterer
slaughterer's picture

Insanity or not: As a bear, I will need to order large quantities of adult diapers if ES cracks 1320.  

Fri, 01/20/2012 - 14:57 | Link to Comment Hober Mallow
Hober Mallow's picture

Be brave, just a bit more and you will be rewarded on your shorts

Fri, 01/20/2012 - 15:26 | Link to Comment bigun
bigun's picture

hope ur not highly levered cuz... "the markets can stay irrational longer than you can stay solvent" -some famous dude

Fri, 01/20/2012 - 19:38 | Link to Comment ucsbcanuck
ucsbcanuck's picture

Keynes was the famous dude

Sat, 01/21/2012 - 03:37 | Link to Comment resurger
resurger's picture

Bears are going to party soon

Fri, 01/20/2012 - 13:28 | Link to Comment ekm
ekm's picture

Too bad. They are going to fire Mike Wilson now.

This is group insanity, pure and simple. I hope Mike still keeps his job.

Fri, 01/20/2012 - 13:52 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

ekm,

 

so true, so true...."the nail that sticks out gets hammered down!" Japanese proverb....in amerika we say "smell ya later"

 

It's like my kids, who know everything, just ask, "this time is different".

 

50% bulls in the AAII...sure glad to see Mike, who obviously isnt a young 20 sumptin (not like that is a bad thing!) and he's been here before....not to mention THAT IS WHAT RESEARCH IS ABOUT.....PERIOD.

 

people pay for The Street bullshit.....whoo-hoo! Im 23 and know what R squared and CAPM is!! Im a fucking genius!

Fri, 01/20/2012 - 13:28 | Link to Comment Chuck Bone
Chuck Bone's picture

The real insanity is the accelerated rate of debt growth creating lower marginal GDP returns, both in the US and abroad. This is the view from inside an exponential function. It cannot sustain, and when the debt accumulation finally stops, it'll be at least a 10% hit to GDP.

Fri, 01/20/2012 - 13:37 | Link to Comment Spacemoose
Spacemoose's picture

and worse than that, the 10% hit will be to REAL GDP and not the phoney government inflated GDP.  in other words, multiples of 10% in the world of real things.

Fri, 01/20/2012 - 13:46 | Link to Comment trebuchet
trebuchet's picture

This source reporting details of the PSI bond deal in detail:

http://www.athensnews.gr/portal/1/52461

Fri, 01/20/2012 - 14:07 | Link to Comment trebuchet
trebuchet's picture

The last para IIF asking for additional sweetener to get "voluntary" participation for 14.5bn march 20 bond holders. 

those are the holdouts.....

 

Fri, 01/20/2012 - 15:03 | Link to Comment Nobody For President
Nobody For President's picture

Interesting:

"Firstly, Papademos has reportedly agreed to change the jurisdiction of the new bonds from Greek law - which covers the bulk of privately held Greek bonds (over 190bn euros) - into English law.   English law overwhelmingly favours the bondholders rather than the debtor in any claim arising from a possible future credit crisis, haircut or default of Greece, while at the same time ensuring that the bonds will remain denominated in the currency in which they are issued (euro) in case the country is forced to exit the eurozone or the currency union collapses." Looks like the graceful exit for Greece is getting set up nicely...
Fri, 01/20/2012 - 14:08 | Link to Comment Manthong
Manthong's picture

QE3 is over.  The propaganda policy with big and little lies, intervention both covert and overt, as well as all the swaps on both sides of the pond provided enough juice to boost confidence and buoy the markets even in the face of credit rating smackdowns. The Chinese helped with their usual spate of fudged numbers.

Maybe they can extend the charade a bit longer without a zilion or two in new funny money, but they probably need a good excuse now in the the form of a correction to pull another trigger.

A good enough sized correction and renewed fears of Armegeddon will be enough to cow the pansies in Congress to giving the White House golf pro his next trillion and to loose the hounds of printing at the Fed. 

Fri, 01/20/2012 - 13:29 | Link to Comment Stax Edwards
Stax Edwards's picture

Hmmm, you mean MS is short? (Doubles down long)

Fri, 01/20/2012 - 13:31 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Wait a second, I thought MS was "in the club".  

Fri, 01/20/2012 - 13:37 | Link to Comment francis_sawyer
francis_sawyer's picture

two is company... three is a crowd...

Now - rethink whether MS is "in the club" or not...

Fri, 01/20/2012 - 13:31 | Link to Comment Dr. Engali
Dr. Engali's picture

MS....yes the world is insane , but buy stocks anyway so we can get paid.

Fri, 01/20/2012 - 13:33 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

"Didn’t we learn anything from the Japanese experience of the past 20 years! I might be more on board with the program if I thought we were making real progress on the things that matter for sustainable organic growth. Unfortunately, I just don’t see it."

"We" haven't obviously since "we" bailed out "your" bank you douchenozzle.

Fri, 01/20/2012 - 13:36 | Link to Comment SheepDog-One
SheepDog-One's picture

'My God...its madness...havent we LEARNED anything from our past'?....says MS as they open their sack wide for more QE free money bailouts.

Fri, 01/20/2012 - 13:39 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Right on SheepDog

Fri, 01/20/2012 - 14:07 | Link to Comment Bohemian Clubber
Bohemian Clubber's picture

LOL sounds like the wolf speaking to the red little riding hood...

Fri, 01/20/2012 - 13:39 | Link to Comment SheepDog-One
SheepDog-One's picture

WOW its crazy seeing the complete unicorn rainbow S&P decoupling from everything. 200 S&P points are nothing but ether. And the craziest part is S&P used to LAG the others, now looks down on everything from a balloon.

Fri, 01/20/2012 - 13:40 | Link to Comment CvlDobd
CvlDobd's picture

I think they broke the spirit of many bears with the global central bank coordinated BS after Thanksgiving. that's where the decoupling started in earnest.

That Monday they broke me. Depending on how we close today I may have to close my XLK short.

Fri, 01/20/2012 - 13:43 | Link to Comment SheepDog-One
SheepDog-One's picture

If thats true and all shorts/bears have given up, then next to be creamed will be the bulls, just like last time we were at DOW 12,700 and lost 1,200 points in a week. Cant perform a short squeeze rally with no shorts around.

Fri, 01/20/2012 - 13:46 | Link to Comment Caviar Emptor
Caviar Emptor's picture

We got a slew of global CB coordinated bailouts/liquidity injections just this week a long with some fiscla juice: PBOC, ECB, IMF (ie Fed), US debt ceiling to get raised imminently, million mortgage writedowns underwritten by Treasury

Fri, 01/20/2012 - 13:52 | Link to Comment Captain Kink
Captain Kink's picture

Exactly.  Be long...S&P 1350-1370 within 60 days. Sorry, Y'all.

Bring the Junk.

Fri, 01/20/2012 - 14:03 | Link to Comment Stax Edwards
Stax Edwards's picture

Right there with you CK, get ur chips on the table fools

Fri, 01/20/2012 - 16:29 | Link to Comment Captain Kink
Captain Kink's picture

let me go out on a very flimsy limb (technical analysis): S&P will revisit (albeit briefly) all time highs this calendar year. The upside for short ZHers is that Silver, now going to lead gold, will be 35+ in short order...and then higher still, to new highs... Same for gold. It's the liquidity that will drive it. Funny money everywhere! Or is that Foney Munny?

Fri, 01/20/2012 - 15:49 | Link to Comment Captain Kink
Captain Kink's picture

And get long mortgages! DMO, DLTNX, etc

Fri, 01/20/2012 - 14:40 | Link to Comment poor fella
poor fella's picture

No worries. Patience and lack of emotion towards the casino is best.

I picture Geithner flying a parasail screaming "HELL YEAH!" right before the updraft disappears and he loses lift entirely.

ratchet ratchet ratchet COLLAPSE ratchet ratchet ratchet COLLAPSE ratchet ratchet ratchet _____?

Fri, 01/20/2012 - 18:53 | Link to Comment lotsoffun
lotsoffun's picture

this is instant gratification generation.  why wait 60 days, when that passes in two weeks?

you going to go short on it??

 

Fri, 01/20/2012 - 13:43 | Link to Comment Caviar Emptor
Caviar Emptor's picture

One thing Faber got right: stocks are acting as an inflation hedge. One thing he got wrong: bonds are not a bubble. They're acting as a deflation hedge. That's got Biflation written all over it. MS covers both those concepts in this report. But they're calling for an imminent, long-term reversal in the trend. But there's no change whatever in the policies which global central banks are pursuing. The band plays on.....

Fri, 01/20/2012 - 14:01 | Link to Comment Cdad
Cdad's picture

Dog,

Clear signs that the "melt up" "Santa Rally" "Year End" "Mutual Fund Monday" "Turn Around Tuesday" "Rotation" equity rally has already hit its peak and gone.

As has been the case for weeks now, individual equities are being carefully sold across all the sectors...as the Roach Motel [SPY] and other index ETFs hold up th appearance of market stability.  Truly stunning that anyone really thinks equities are a buy here...or that buyers will emerge from somewhere to take criminal syndicate Wall Street bankers out of their positions.

Broken market doing the fully monty today...clearly.  

Fri, 01/20/2012 - 13:36 | Link to Comment Irish66
Irish66's picture

"What is This"....my checking account

Fri, 01/20/2012 - 14:40 | Link to Comment andybev01
Fri, 01/20/2012 - 13:36 | Link to Comment SeverinSlade
SeverinSlade's picture

Bernanke announcing QE3 with the S&P over 1300 and "encouraging" (laugh) US economic data...That's a good one.

Fri, 01/20/2012 - 13:44 | Link to Comment SheepDog-One
SheepDog-One's picture

Theyre happy to let everyone believe in it.

Fri, 01/20/2012 - 13:46 | Link to Comment alien-IQ
alien-IQ's picture

announcing QE 3 with the SP over 1300 would be laughable...if they cared what the people of this country thought. However...that is far from the case.

QE 3 with the SP at these lofty levels would mean maximum pain for the peasants and maximum pleasure for the oligarchs.

Who do you think will get their way?

Fri, 01/20/2012 - 13:59 | Link to Comment SeverinSlade
SeverinSlade's picture

As I've pointed out before though, Bernanke launching QE3 at these levels will be seen as a villain who only cares about Wall Street (which is true but the idiot Sheeple don't know that).  Bernanke must be seen as a hero (repeat Time's Man of the Year)?

Fri, 01/20/2012 - 15:53 | Link to Comment catacl1sm
catacl1sm's picture

The Fed only has to hint that QE will resume 'IF' things turn sour.

Sat, 01/21/2012 - 03:36 | Link to Comment resurger
resurger's picture

Exactly! they can not QE3 if the economy is doing great... the only pretext for the QE would be if there is a nice crash coming on the way..

 

be patient, its going to come sooner than you would expect.

Fri, 01/20/2012 - 13:37 | Link to Comment barliman
barliman's picture

 

Hmmmm, let's start a new internet meme ....

" Didn’t we learn anything from _________?"

 Fill in the blank! Like so:

" Didn’t we learn anything from the last two times the Fed did a headfake and only 'jawboned' about QE3?"

Of course not! That's the beauty of hopium!

barliman

Fri, 01/20/2012 - 13:46 | Link to Comment LouisDega
LouisDega's picture

Stock ramp is Deja vu... Hmmm.. Will this be the topic in this weeks exiting episode of Things that make you go Hmmm?

Fri, 01/20/2012 - 13:39 | Link to Comment TzaristBondHolder
TzaristBondHolder's picture

Not just insanity but madness.  The bank stocks are priced as low as 0.3 to book (in the case with BAC) - isn't it easier to review and adjust the book as the market clearly disagrees with the book value...

Fri, 01/20/2012 - 13:40 | Link to Comment zerotohero
zerotohero's picture

Every cloud has a silver lining - just bought 50oz of maple leafs yesterday.......BITCHEZ.

Fri, 01/20/2012 - 13:41 | Link to Comment alien-IQ
alien-IQ's picture

but that's all it is, a lining. take away that lining and what you have is a cloud...a very dark, dangerous cloud.

Fri, 01/20/2012 - 13:48 | Link to Comment zerotohero
zerotohero's picture

At least the silver is hard and physical - the rest yes just an illusion that has been fed to us for decades.

Fri, 01/20/2012 - 13:53 | Link to Comment KlausK
KlausK's picture

Right you are. Enjoy.

Fri, 01/20/2012 - 13:40 | Link to Comment alien-IQ
alien-IQ's picture

That personal income chart says it all. Wow.

Fri, 01/20/2012 - 13:45 | Link to Comment SheepDog-One
SheepDog-One's picture

Hey as long as stocks are green, thats all that matters! Or something.

Fri, 01/20/2012 - 13:45 | Link to Comment dick cheneys ghost
Fri, 01/20/2012 - 13:46 | Link to Comment bbq on whitehou...
bbq on whitehouse lawn's picture

You want growth, removal all copyright and patent law.  Of course it would all be braught back again only to sifle growth once more.

 

Fri, 01/20/2012 - 13:52 | Link to Comment Everybodys All ...
Everybodys All American's picture

I'd bet they are taking a look at the US Treasury interest rate swaps they have been co-opted/coerced/forced to buy from the Fed and saying omg.

Fri, 01/20/2012 - 13:54 | Link to Comment Mr. Anonymous
Mr. Anonymous's picture

'Blah blah blah, the sky is falling'. 

-Zero Hedge, circa 2008-2012. 

I have been an avid reader of this blog since its inception.  I have considered the future, and my own life, by a prism and outlook formed in no small part by Zero Hedge's postings.  None of the super doom has come true and, thus, this all appears to be nothing more than well-played pessimism porn generated for advertising money.  At the very least, the markets can stay extraordinarily irrational longer than you, Bob Janjuah, Rosie, Phoenix Capital and, now, Morgan Stanley, can stay solvent.  If anything DOES happen, it will take years, they'll print money, do what it takes and we'll all be in wheelchairs eating soft foods before the end is nigh.  If then.

What a waste of time all these years of reading doomer posts has been.

Wake me up apres deluge.

Fri, 01/20/2012 - 13:56 | Link to Comment KlausK
KlausK's picture

The trick is not to get addicted to the concept of imminent doom.

Fri, 01/20/2012 - 14:02 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Too late he already has. Many people visit here to read simple narratives like " The Euro is finished" but few have patience for the twists and turns. Linear thinkers. Lots of Nassim's turkey's out there.

Fri, 01/20/2012 - 13:58 | Link to Comment zerotohero
zerotohero's picture

I know - tis true but its a great hobby! I live my life the way I always have but I also prepare a little bit here and there for the "GREAT AND AWESOME COLLAPSE" should it ever really transpire. I use to collect custom pocketknives....now instead I use that money to buy silver and the odd gold. Gotta have a hobby my Dad use to say.

Fri, 01/20/2012 - 13:59 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

Keep believing that Nancy.. night night

Fri, 01/20/2012 - 14:39 | Link to Comment LouisDega
LouisDega's picture

Heres a good way to confirm the end is near. Listen outside when you get up in the morning. If you dont hear the birds, The garbage truck  or the school bus picking up the kids for school anymore, The end is near. 

Fri, 01/20/2012 - 15:14 | Link to Comment marcusfenix
marcusfenix's picture

ultimately the doomers are right, regardless what what flavor of doomer one might be it all will end, that is inevitable.

"the last sound on earth will be that of the oceans boiling as our own sun, the source of all life, destroys us"or something to that effect.

that's the grand finale regardless of whether or not humans and all our inventions, plans and aspirations (for good or evil) technologies, systems and societies make it long enough to see that ultimate fate. history says we probably won't as it is periodically riddled with mass extinction events due to a variety of calamities that we are in no better position to head off then the life forms that were wiped out before us. add to that the human factor and there is always the possibility that we will through a variety of means, bring about our own extinction long before nature, or god or whatever force one chooses to believe drives the universe had it scheduled to check off the cosmic "to do" list.

it never was a question of if, but simply when. same thing with this much anticipated systemic economic collapse, like any system it's fate is to degrade over time, which is exactly what it is doing now and has been for quite some time, and ultimately it will implode on itself. though our normalcy bias and our very brief life span on this Earth might lead us to believe we will not see such a radical and disruptive change to the world as we know it, that doesn't mean that it can't happen tomorrow, next week, or in the next decade. the only constant in the universe is change and often that change is not a pleasant one, history, even recent history shows of this repeatedly. no human invention endures forever, in fact most of them don't last long at all, so why should this be any different? especially now that the global economy is saturated with a destructive, cancerous element, that being debt on a scale never before scene and riddled with corruption, greed, stupidity, conflict and selfishness. all this making it the poster child for the oft used term "unsustainable".

ZH puts it perfectly, " on a long enough time line the survival rate for everyone drops to zero" that applies to all our inventions as well including fiat global economies. it all ends, and we just might live to the end of this particular human construct, assuming that a giant meteor doesn't smash into us, or we get fried by a large scale CME first.

 

 

Fri, 01/20/2012 - 20:09 | Link to Comment ucsbcanuck
ucsbcanuck's picture

Dude - I don't believe in ALL the doomer stuff written here as well. I believe in reality and facts - I got involved in the market just after the first QE in 2009, made some money and jumped out, because quite frankly, if the Fed printing money was the only thing keeping the US economy afloat that's a bad sign. I thought it was temporary, but it turns out that it's now the Bernanke put.

Be rational for a minute - of course all the doomer stuff isn't going to happen. At some level we do have a functioning real economy composed of various groups of people who demand goods and services and those who supply goods and services. So yeah, all the doomer stuff rationally doesn't make sense. The question is: What is the value of this real economy? What is the value of the equity market based on this real economy.

Look at everything around you - Obama borrowing USD 5 trillion, 47 million Americans on food stamps, more Americans below the poverty line than ever before, more people leaving the labour force than ever before, ave duration of unemployment gone up, quality jobs being replaced with seasonal or temp jobs. People are underwater on their mortgages and straining under massive debt.

Exhibit 6 says it all really - income is shrinking. So where is all this optimism coming from? Are people really THAT hopped up on hopium? And given that incomes are falling, how will the economy keep going? More debt? More subprime auto loans? That got us into this mess in the first place?

Then there is Europe which is itself falling apart. China is going through a real estate bubble crash.

This market's foundations are based on nothing more than a house of sand. How are shares like SBUX and WFM growing?

 

Sat, 01/21/2012 - 03:31 | Link to Comment resurger
resurger's picture

Would you right the same if the markets were down you fucking asshole?

You have to understand that the only thing keeping the U.S up is teh printing press.

One day i will lauff at you suckers, be patient, your loss will come..

 

Fri, 01/20/2012 - 13:59 | Link to Comment razorthin
razorthin's picture

Silver insanity today, bichez

Fri, 01/20/2012 - 21:05 | Link to Comment Captain Kink
Captain Kink's picture

sane or insane, get on it!

Fri, 01/20/2012 - 13:59 | Link to Comment Caviar Emptor
Caviar Emptor's picture

 

PORT HARCOURT (Reuters) - Gunmen kidnapped an American working for Marubeni Corp in Nigeria's oil-rich Niger Delta region on Friday, killing his driver and demanding a 50 million naira ($310,300) ransom, police and a security source said.

http://www.chicagotribune.com/news/sns-rt-us-nigeria-kidnappingtre80j1g7...


Fri, 01/20/2012 - 14:03 | Link to Comment Randall Cabot
Randall Cabot's picture

A EUR/USD short covering rally means a US equities selloff? That's what Goldman said yesterday...and now MS. What happened to the coupling?

P.S.  Enough of that "definition of insanity" quote from that fraud einstein.

Fri, 01/20/2012 - 14:00 | Link to Comment clones2
clones2's picture

Unfortunately... bonds are looking very weak.  Down through the 50dma which is ready to roll over.   Bonds look ripe to pullback...rates will head a little higher...

That money will likely head in to equities... at least for the short term. 

Falling bond prices and MBS QE3 could rally the market... FWIW

Fri, 01/20/2012 - 14:07 | Link to Comment OutofEQ
OutofEQ's picture

This is a "one handed monkey recovery"

http://blog.moneymanagedproperly.com/?p=817

 

Fri, 01/20/2012 - 14:10 | Link to Comment ferret
ferret's picture

The market is taking off because Bernanke opened up the swap lines,  European investors now have dollars that they are investing in our stock markets.  Has nothing to do with anything else.

Fri, 01/20/2012 - 14:12 | Link to Comment RobotTrader
RobotTrader's picture

Silver is taking off like a scalded dog.

 

If the SLV rally continues, that means the Dow is more likely to be headed to 15,000, not 8,000.

Since silver is hands down one of the most "riskiest" assets to own, which implodes the fastest during a "risk off" event.....

That means silver is probably telling us that new highs across the board are on the way in stocks and commodities in general.

Fri, 01/20/2012 - 14:19 | Link to Comment razorthin
razorthin's picture

Not reflected today, but $US is pointing down hard - on the verge of a free-fall if it takes out the 50 day MA.  So yes, you might be right on equities too.  Inflation's inflation.

Fri, 01/20/2012 - 15:22 | Link to Comment the grateful un...
the grateful unemployed's picture

SLV is a suckers rally, how do I know, posters like yourself are suddenly jumping up and down

Fri, 01/20/2012 - 14:14 | Link to Comment monopoly
monopoly's picture

I just do not see more obvious QE with the DOW at 12,000 and spoos over 1,250. It is all better now, right. This was a good post and I am all cash except for physical. Just have 0 interest no matter if it ramps or dumps. Had good miner profits in 2011 but let them all slip away. Down about 5% for the year, but fully charged and ready with plenty of capital.

Miners are sick, and I am never not in the miners except for now. Maybe gold has another leg down, maybe not. Never affects my physical and I buy more on every dump. Just gotta wait for the right pitch. There is nothing in my state to give me that warm and fuzzy feeling. Nothing has changed and the politics of this planet are nothing but destructive. So play the charts, hope for the ramp or the dump. I will be sitting and watching with my stash. At some point we will have a clear signal and that pitch that I am waiting for will arrive. 

Why play this rigged broken casino for a few pennies. Good chance to lose what you win, or win what you lose. Only one that profits is your broker. Patience, all, patience. It will work out. Just make sure you have the capital to take advantage of it. And if you are on margin, you are probably reading the wrong blog here at Zero Hedge.

0 + physical.

Fri, 01/20/2012 - 14:19 | Link to Comment yogibear
yogibear's picture

LOL, explain why there are more Salvation Army stores and used furniture/goods store popping up? People are realizing they can get very good quality goods for a fraction of new. Second hand clothes are also cheaper.

I see a lot of 20 somethings now buying used clothes. With all that school debt the bankers loaded the kids up with I can understand why.

Fri, 01/20/2012 - 14:30 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture
this silver ramp isn't More Deja Vu "Insanity" tho, BiCheZ!

 

Fri, 01/20/2012 - 14:35 | Link to Comment you enjoy myself
you enjoy myself's picture

hey, does anyone remember if today is supposed to be our token bi-weekly down day?  cause it looks like we're going to finish down a point or two, which means its clear for another week of daily 5-10 gains.

Fri, 01/20/2012 - 14:49 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

It's been two weeks.

The ramp is driven by the HFT folks who have been told QE is coming via 0% inflation and via the new array of board Fed governors who replaced the few hawks on the board.

This ramp is a bet on QE, and we already saw that QE2 generated nothing more than 0.4% GDP in 2011 Q1.  QE doesn't work, Bernanke may very well know it now, and the board may split.  If it does, he'll resign.

Think the market will go up on that news?

Fri, 01/20/2012 - 15:17 | Link to Comment Village Smithy
Village Smithy's picture

Good insight CO. As much as we like to malign Bernake (deservedly so) he's not stupid. Already commodities have started to drift higher and he knows that inflation will kill this economy. Besides that he has another problem, if the market goes much higher his Treasury bubble is going to pop and that would be a very slippery slope.

Fri, 01/20/2012 - 14:52 | Link to Comment holmes
holmes's picture

I've got to move the left side of my browser off of the display so I don't barf looking at that horse's mouth on Obama's wife.

Tyler, please get some other display ads.

Fri, 01/20/2012 - 17:08 | Link to Comment andybev01
andybev01's picture

Install Firefox & the ad-block plug in.

Stave off any guilt by donating to ZH.

Fri, 01/20/2012 - 15:06 | Link to Comment Georgesblog
Georgesblog's picture

Of course, it's insanity. It's the tried and true Wealth Transfer Machine, at work. Inflate the bubble, then pop it. One reaps the harvest, the other the debt. The rich get richer, the poor get out with their skin, if they're fortunate. The unfortunate get debt slavery.

 http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Fri, 01/20/2012 - 15:11 | Link to Comment Chappy
Chappy's picture

I thought a huge eurusd short covering spree would jack up the EUR and jack up the market.  Is Tyler warning of another surge up with this warning?  Help, I'm so confused !?! I can't read between the lines :(

Fri, 01/20/2012 - 15:31 | Link to Comment the grateful un...
the grateful unemployed's picture

Faber said it, bonds are finis, buy equities. remember a lot of this is blind money, pension funds, etc. the stock market is like a cattle market, as long as people need to put paper to work.

there is no risk in the stock market, with QE3 waiting to put a floor under stocks and propel Obummer to a second term, (I can hear his acceptance speech, And the economy is improving, and the stock market is up!)

and should the market go down, well everyone is in the same boat, including commodities and PM. on the upside all you can hope to do is match inflation but that's better than nothing for a money manager.

the news doesn't matter, the Euro doesn't matter, the dollar doesn't matter. this is getting eerily close to post 2008 when junk stocks levitated faster than quality. is it sustainable? only in a deeply perverse way, because they're putting on this wizard of oz show, at the expense of the real economy. once america figures that out its game over for all the pols, but that's still quite a ways off.

Sat, 01/21/2012 - 11:56 | Link to Comment roy10
roy10's picture

There will be no QE3. You can't do QE3 when the market is up 20% in a month.

Sat, 01/21/2012 - 13:48 | Link to Comment the grateful un...
the grateful unemployed's picture

one) jawbone the market higher on the hopes of QE3

two) when the market starts to fall because there is no QE3 then come to the aid of the market

three) state your reasons : the world will end if we don't

Fri, 01/20/2012 - 15:57 | Link to Comment Hohum
Hohum's picture

In the modern world: growth = F(debt)

Fri, 01/20/2012 - 16:05 | Link to Comment q99x2
q99x2's picture

Time to roto till the grandparent's backyard in prep for the Spring planting season - again.

Fri, 01/20/2012 - 17:09 | Link to Comment andybev01
andybev01's picture

...you're planting your grandparents?

Fri, 01/20/2012 - 17:52 | Link to Comment roy10
roy10's picture

Didn't MS just lose a few hundred million on their prop trading this quarter? They're probably a better contrarian indicator.

Sat, 01/21/2012 - 03:19 | Link to Comment Dorky
Dorky's picture

“Insanity is doing the same thing over and over again expecting a different outcome.”

Don't forget insanity can also be associated with analysis that always try to extrapolate into the distant future in one straight line.

Looking at the Exhibit 6 chart on personal income, it seems that it has bottomed and that another bullish trend is near.

Instead the article borders on insanity by suggesting the market may continue to decline for another few more years.

This itself is insanity by suggesting that a decline will lead to further decline, or chains of declines into perpetuity, as I understood from the article.

Sat, 01/21/2012 - 03:23 | Link to Comment Dorky
Dorky's picture

Stupid Mike Wilson.

Another dirty tactic by the banking syndicate to make people panic.

Sat, 01/21/2012 - 10:54 | Link to Comment AbbeBrel
AbbeBrel's picture

Hey it is better than getting raped in the shower by some Sane Husky at Poop State.   Could be worse.  You could get raped instead at Ball U.

Sun, 01/22/2012 - 14:58 | Link to Comment TraderTimm
TraderTimm's picture

I know it is the height of folly to rely on simple chart-reading in this day and age of ping-ponging HFT floating prices higher in a vapor-volume market, but I have to say the S&P 500 is sure looking like a large ascending wedge to me on the longer-term charts.

This implies in a 'normal' market that we're due for another 'slight' decline of 40 - 50 points before winding up for the final ascent to the apex - then we'll get a nice gut-wrenching (for the longs) descent to ~1150's or so, depending on how many HFT firms pull their boxes as the market goes bidless.

....

Or we could see another last-ditch attempt by PPT and whoever has the broom handle on the big green 'buy' button ramp us to the stars. I'd prefer the decline, though.

 

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