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Is A Thunderous Flock Of Black Swans Imminent, Or The "Price Stability" Redux

Tyler Durden's picture


Update per commentary feedback: time to rebrand the Black Swan to The Black Loch Ness Monster.

For today's chart of the day we once again look to Bloomberg, which has compiled a fascinating dataset looking at the frequency of 4 sigma+ events in the S&P500 since 1951. The trend is unmistakable, as is that the cumulative total now looks glaringly like a swan itself (paging William Banzai). What is also glaringly obvious is that all those claiming central planning under a monetary authority leads to market stability need to have their head examined: what the central bankers of the world do is merely push back ever more disastrous events into the future. Sorry: physics can not be circumvented with a printer, and a crash deferred today, is double the crash that can not be deferred tomorrow. Yet for all their brain power, all those Hewlett Packard fans in the Marriner Eccles building still can not comprehend this one so simple fact.


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Fri, 08/19/2011 - 09:11 | 1576693 snowball777
snowball777's picture

Nessie, bitchez!

Fri, 08/19/2011 - 09:13 | 1576701 Stumpy
Stumpy's picture

Yep, same thing here!

Fri, 08/19/2011 - 10:05 | 1576949 Pladizow
Pladizow's picture

"You can ignore reality, but you cant ignore the consequences of ignoring reality" - Ayn Rand

Fri, 08/19/2011 - 10:16 | 1576987 nodhannum
nodhannum's picture

And I can't ignore your avatar...makes me feel like a young child or teenager!

Fri, 08/19/2011 - 10:39 | 1577162 Raymond Reason
Raymond Reason's picture

Chavez, bitchez. 

Fri, 08/19/2011 - 10:39 | 1577170 falak pema
falak pema's picture

Its called a weiner moment. Or corn dog if you prefer.

Fri, 08/19/2011 - 09:34 | 1576797 Stax Edwards
Stax Edwards's picture

Clever.  I agree ;)

Fri, 08/19/2011 - 09:57 | 1576923 TruthInSunshine
TruthInSunshine's picture


Fri, 08/19/2011 - 10:05 | 1576947 TheFourthStooge-ing
TheFourthStooge-ing's picture

+ about tree fiddy


Fri, 08/19/2011 - 12:30 | 1577793 Pain Train
Pain Train's picture

For the record (and I'm not hatin' but the distinction is important), a black swan is an UNFORSEEN event with tremendous effects. It is NOT simply a big, bad event. It's being misused a bit on this site.


Fri, 08/19/2011 - 14:28 | 1578302 faustian bargain
faustian bargain's picture

Just because we see it here, doesn't mean everyone else in the world does as well.

After all, who are we? Me personally, I'm nobody. If I am made aware of some upcoming event, and can deal with it, sure it's not a black swan to me; but that won't prevent the country from collapsing if it's a big enough event.

The color of the swan is dependent on the awareness of the viewer.

Fri, 08/19/2011 - 14:41 | 1578360 cartonero
cartonero's picture

The color of the swan is dependent on the awareness of the viewer.

Exactly.  What the turkey experiences as a black swan event is entirely expected by the farmer.

Fri, 08/19/2011 - 09:11 | 1576695 BlackholeDivestment
BlackholeDivestment's picture

...just wait for the lone nuke gunman from space, Krugman. That's gonna be the big swan dive.

Fri, 08/19/2011 - 09:28 | 1576778 -Michelle-
-Michelle-'s picture

I'm starting to think they know something we don't.  Did you see NASA's latest "report?"

Fri, 08/19/2011 - 10:16 | 1576986 john39
john39's picture

who needs an alien invasion (fake or otherwise), when war is just about to break out in the ME?

Fri, 08/19/2011 - 14:20 | 1578263 andybev01
andybev01's picture

"just about"


Where have you been?

Fri, 08/19/2011 - 09:11 | 1576696 Stumpy
Stumpy's picture

I see the loch Ness monster.

Fri, 08/19/2011 - 09:14 | 1576705 Village Smithy
Village Smithy's picture

Do you really want to trust your savings to a system that is trending like this? This is the best graphic representation of why buy and hold is dead. Now what happens to the multi-billion dollar buy and hold industry? BAC's lay-offs are only the beginning.

Fri, 08/19/2011 - 10:40 | 1577177 smlbizman
smlbizman's picture

there are somethings i know and somethings i don't...can someone use crayons and explain this to me


Fri, 08/19/2011 - 11:26 | 1577446 Diogenes
Diogenes's picture

There are storms that happen all the time. There are real bad storms that happen every few years. Then there is "the perfect storm" that only comes along once in a century.

The above graph shows how oftena "perfect storm" happens in the stock market. Notice how at the start, they happen once in a while but lately, all the time. That is because of the efforts by governments to PREVENT them from happening.

To put it another way, if you don't want the pot to boil over you can try strapping the lid down but if you do that without turning off the heat, it will blow anyway and take the whole kitchen with it.

Fri, 08/19/2011 - 12:12 | 1577687 smlbizman
smlbizman's picture

thanks diogenes......

Fri, 08/19/2011 - 12:18 | 1577713 Diogenes
Diogenes's picture

Slight correction... when I said prevent them from happening, what I should have said was cover them up and pretend nothing was wrong, instead of fixing the problem.

The new banking and stock market laws enacted in the thirties actually worked, until they were abandoned. Now the idea seems to be lie and deny, extend and pretend and everything will be OK.

Fri, 08/19/2011 - 11:26 | 1577454 Diogenes
Diogenes's picture

There are storms that happen all the time. There are real bad storms that happen every few years. Then there is "the perfect storm" that only comes along once in a century.

The above graph shows how oftena "perfect storm" happens in the stock market. Notice how at the start, they happen once in a while but lately, all the time. That is because of the efforts by governments to PREVENT them from happening.

To put it another way, if you don't want the pot to boil over you can try strapping the lid down but if you do that without turning off the heat, it will blow anyway and take the whole kitchen with it.

Fri, 08/19/2011 - 09:14 | 1576706 ZackLo
ZackLo's picture

Did you guys hear the news???!?!  HP is giving up it's computer business up to strictly dedicate it's time to printing for the FED! Now that's what I call sustainability!

Fri, 08/19/2011 - 09:14 | 1576707 H. Perowne
H. Perowne's picture

"It is difficult to get a man to understand something, when his salary depends on his not understanding it."

-Upton Sinclair

Fri, 08/19/2011 - 09:53 | 1576903 Raymond Reason
Raymond Reason's picture

Indeed.  One of the greatest un-understood truths of all time. 

Fri, 08/19/2011 - 09:14 | 1576709 Calls and Putz
Calls and Putz's picture

All those derivatives never elimanted risk, they merely postponed it.

Fri, 08/19/2011 - 09:25 | 1576762 firstdivision
firstdivision's picture

They also amplified the risks, along with shifting the risk from firm risk to systemic risk. MAD, the risk manamgement kind.

Fri, 08/19/2011 - 09:30 | 1576784 Oh regional Indian
Oh regional Indian's picture

Excellent points, yours and Putz's above. 

This is sympathetic resonance of the bridge busting kind. And it's just begun.


Fri, 08/19/2011 - 11:56 | 1577611 LawsofPhysics
LawsofPhysics's picture

Yep.  We will all be farmers shortly.  Glad I am hedged accordingly.

Fri, 08/19/2011 - 09:40 | 1576826 Nascent_Variable
Nascent_Variable's picture

Not only have the banksters destabilized the markets by printing FRN bandaids for bulletwounds in the economy, they've ensured that the inevitable bust will result in nuclear fallout when the "invest rich quick" derivatives market implodes.

I just hope they have the common decency to jump off their roofs this time.

Fri, 08/19/2011 - 09:47 | 1576873 Byte Me
Byte Me's picture

Postpone -- check

Amplify -- check

Morph risk -- check

But remember, nice fees were charged for quid-pro-quos, parasitic draining of capital enacted as an undeclared tax upon productive economies. This is necessary for a few MOTUs to award really fat bonuses to a chosen few.

So nothing changes then.

Fri, 08/19/2011 - 09:14 | 1576710 snowball777
snowball777's picture

"If you act, as you think..."

Fri, 08/19/2011 - 09:18 | 1576728 Version 7
Version 7's picture

"...that's called seriousness."

Fri, 08/19/2011 - 09:27 | 1576772 JW n FL
Fri, 08/19/2011 - 09:15 | 1576711 HellFish
HellFish's picture

So this would be worse than a black swan - a Black Loch Ness Monster?

Fri, 08/19/2011 - 09:31 | 1576788 Oh regional Indian
Oh regional Indian's picture

Actually we can call it the Black Lot Less Monster.

After it's done, you'll be worth a Lot Less.



Fri, 08/19/2011 - 09:34 | 1576796 JW n FL
JW n FL's picture

The first shipment of Iranian crude oil has been sold on Iran's international oil bourse on the Persian Gulf island of Kish, an Iranian official says.

Mohammad Reza Khajenasiri, the chief supervisor of bourses and markets in Iran's Bourse Organization, said that a shipment of 500,000 barrels of heavy crude oil were offered at the Kish Commodity Exchange on Thursday and were traded at USD 105.49 per barrel, Mehr News Agency reported.

Fri, 08/19/2011 - 10:01 | 1576938 doggings
doggings's picture

I thought they werent selling for USD?

Fri, 08/19/2011 - 10:13 | 1576979 Raymond Reason
Raymond Reason's picture

Yes, I thought that was the whole point.  It could be that they are reporting the story in dollar equivalents as disrespect. 

Fri, 08/19/2011 - 11:17 | 1577309 JW n FL
JW n FL's picture


India has paid around 1.4 Billion US$ to Iran as part payment of its long over dues payments for oil exports thereby ending the long standing impasse in India -Iran oil relations.

India has followed and independent foreign policy and has not succumbed to any kind of pressure from the US on braking trade ties with Iran.

India imports oil worth $12 billion annually from Iran ,but India and Iran relations is not about oil alone.



You idiots should listen when I speak, instead of runing your fucking ignorant mouths.

Fri, 08/19/2011 - 11:27 | 1577457 Bam_Man
Bam_Man's picture

It was actually priced in Qwatloos.

Fri, 08/19/2011 - 09:41 | 1576832 Seer
Seer's picture

A Flying Black Loch Ness Monster!

Fri, 08/19/2011 - 09:15 | 1576712 hugovanderbubble
hugovanderbubble's picture

The Trigger is Societe Generale.


and Italian Generali Ass."-"

Fri, 08/19/2011 - 09:15 | 1576714 somethingelse
somethingelse's picture

1950's: Rockin' Robin

1960's:  The Byrds, Blackbird

1970's: The Eagles, Freebird, Fly like an Eagle

1980's:  Flock of Seagulls

1990's: The Crow, Counting Crows, The Black Crows

2000's:  hawks v. doves

2010's:  black swans

Fri, 08/19/2011 - 09:18 | 1576729 SheepDog-One
SheepDog-One's picture

2011: The Shithawks.

Fri, 08/19/2011 - 09:21 | 1576743 ZippyDooDah
ZippyDooDah's picture

Black Bens' Swan Dive.

Fri, 08/19/2011 - 09:45 | 1576858 Miss Expectations
Miss Expectations's picture

This farmer has about 200 hens, but no rooster and he wants chicks. So, he goes down the road to the next farmer and asks if he has a rooster.

The other farmer says, "Yeah, I've got this great rooster, named Randy; he'll service every chicken you've got. No problem."

Well, Randy the rooster is a lot of money, but the farmer decides he'd be worth it. So, he buys Randy.

The farmer takes Randy home and sets him down in the barnyard, giving the rooster a pep talk...

"Randy, I want you to pace yourself now. You've got a lot of chickens to service here and you cost me a lot of money and I'll need you to do a good job. So, take your time and have some fun," the farmer said with a chuckle.

Randy seemed to understand, so the farmer points towards the hen house and Randy took off like a shot ~WHAM~ He nails every hen on there THREE or FOUR times and the farmer is just shocked.

Randy runs out of the hen house and sees a flock of geese down by the lake ~WHAM~ He gets all the geese.

Randy's up in the pigpen. He's in with the cows. Randy is jumping on every animal the farmer owns.

The farmer is distraught, worried that his expensive rooster won't even last the day.

Sure enough, the farmer goes to bed and wakes up the next day to find Randy in the middle of the yard looking like he is dead from exhaustion.

Buzzards are circling overhead. The farmer, saddened by the loss of such a colorful animal, shakes his head and says, "Oh, Randy, I told you to pace yourself. I tried to get you to slow down, now look what you've done to yourself."

Randy opens one eye, nods towards the sky and say's, "Shhh. They're getting closer..."

Fri, 08/19/2011 - 10:37 | 1577148 falak pema
falak pema's picture

the spirit of dsk lives on...never say die!

Fri, 08/19/2011 - 10:20 | 1577009 Freebird
Freebird's picture

( Cough )

Fri, 08/19/2011 - 09:34 | 1576793 falak pema
falak pema's picture

armageddonisheagles, schweinweiner's swan song, valhallawalkyriegulls.

Fri, 08/19/2011 - 11:32 | 1577492 Diogenes
Diogenes's picture

armageddon addahere

Fri, 08/19/2011 - 09:20 | 1576715 TruthInSunshine
TruthInSunshine's picture



Bananas&Bubbles BezelbubBernank has managed to bring back the plagues from the bible.

666 Sigma Events Under The Bernank!

ChairSatan Bernank is Rosemary's Baby.

Locust swarms, bitchez!

Fri, 08/19/2011 - 09:16 | 1576717 rwe2late
rwe2late's picture

 I am unable to find the quote for proper attribution, but not so long ago,

a ZeroHedge commentator described

a flock of black swans as an "AFLOCKALYPSE" !

Fri, 08/19/2011 - 09:17 | 1576720 SheepDog-One
SheepDog-One's picture

Those arent black swans, its worse....theyre Shithawks.

Fri, 08/19/2011 - 09:17 | 1576722 pepperspray
pepperspray's picture

And Dad still talks about 87 being a big deal.

Fri, 08/19/2011 - 09:17 | 1576725 dwdollar
dwdollar's picture

Don't forget the four horsemen.

Fri, 08/19/2011 - 09:31 | 1576789 JW n FL
JW n FL's picture

pale horse at the ready!

Fri, 08/19/2011 - 09:18 | 1576726 Sambo
Sambo's picture


For the chart, you should have used a background of black instead of white.

I am sure WB7 will use the right colors from his palette.


Fri, 08/19/2011 - 09:18 | 1576730 alexwest
alexwest's picture

what scares me is not spx/nsdq..

ITS FUCKING   DAX INDEX.. for long time 200avg was pretty suppport line.. this montn DAX went through like knife into butter...

DAX fell form top already almost 30%.. so applyying   to spx/nsdq its 100% guaranteed we will see spx under 1000..


but look today at DAX, it broke 5500 line .. giant 7,500-6.500-5.500 h/s  pattern... i dont see bottom YET....

its scary out there ...



Fri, 08/19/2011 - 09:27 | 1576770 Everybodys All ...
Everybodys All American's picture


Fri, 08/19/2011 - 09:27 | 1576773 slaughterer
slaughterer's picture

Once 5500 is broken, 4900 is support, then 4300.

You are correct in assuming DAX is a leading indicator for ES. 

DAX is trully frightening, as the gonzo German credit risk departments are amping the fright front.   

Fri, 08/19/2011 - 09:42 | 1576840 ReactionToClose...
ReactionToClosedMinds's picture

as  thought weeks ago ... the CHF surge was canary in coal mine .... German flight ala 30s.

Amerikans and most Asia would not think of CHF as mega-haven the way financial Europe does .... Italy yes ..... Germany absolutely, benelux, yes, France, margianlly yes at its most cynical core .. and therre are a lot of savvy cynics in France......

interesting ? is there any one new to the Swiss haven club .... Russia (EEuro tycoons etc)?   or Middle East ....

Fri, 08/19/2011 - 09:31 | 1576786 Dr. Engali
Dr. Engali's picture

I've been watching the Dax closely it's unbelievable to see what they've done to themselves. I point it out in the office daily, that and gold but they seem clueless as to what is going on. All I hear is the mantra.....over the long term.

Fri, 08/19/2011 - 09:34 | 1576800 SheepDog-One
SheepDog-One's picture

Over the long term, the survival rate for everything drops to zero.

Fri, 08/19/2011 - 09:42 | 1576843 Silver Dreamer
Silver Dreamer's picture

Yeah, I was laughing at a person yesterday within my office for daring to bring up dollar cost averaging.  Another co-worker was wondering if he should cash out his 401K.  He was told, "You're too young.  Just leave it in there.  You'll be fine... over the long run."  I told the guy to cash it out for preps and PM's.  They laughed at me.  When this shit collapses, we'll see who's laughing.

Fri, 08/19/2011 - 13:02 | 1577944 Vendetta
Vendetta's picture

I took half of my 401k a year ago out as a loan (max I could) and plunged it into physical silver at $18/oz (in addition to other 'monies' invested some years ago), up +233%.  You have my permission to tell him that

Fri, 08/19/2011 - 09:43 | 1576848 disabledvet
disabledvet's picture

Wont get that here cuz it dont fit the stry line. Euro is sound money but EU is a plethora of banana republics now. States control gold while banks get obliterated. Need opposite: banks with gold states with zippo. USA however has global reserve currency and far more importantly gold standard of debt which we ARE ISSUING! Europe is NOT issuing debt but instead is simply destroying credit ratings of all member states by refusing to "do it the American way." if they ever realize their error and i don't think they ever will it's already way, way, WAY too late. "pride cometh before the fall."

Fri, 08/19/2011 - 09:18 | 1576733 mikmid
mikmid's picture

The Fed is shooting for reverse 6 sigma quaility.

Fri, 08/19/2011 - 11:44 | 1577563 TruthInSunshine
TruthInSunshine's picture

+ 1

The Bernank has a black belt in reverse6  sigma quality.

Fri, 08/19/2011 - 09:21 | 1576734 obelisks
obelisks's picture

has anyone seen this story ? You cant even trust the Republicans to do the right thing
any more..... they are all WEASELS  Dems and Reps they are all raping the sheeple...........bring on the revolution !

" Exclusive: Goldman Sachs VP Changed His Name, Now Advances Goldman Lobbying Interests As Top Staffer To Darrell Issa "

Fri, 08/19/2011 - 09:21 | 1576748 alexwest
alexwest's picture

yet saw on market-ticker..





Fri, 08/19/2011 - 09:53 | 1576897 citta vritti
citta vritti's picture

How apt for an ex- from vampire squid:

Haller tells TPM that he changed his name after his employment at Goldman Sachs to honor his Translyvanian heritage. In his comment, he did not dispute that he worked on Issa’s letter to bank regulators.

Fri, 08/19/2011 - 10:29 | 1577048 Use of Weapons
Use of Weapons's picture

Too much fluff in this story:

#1 VP isn't a powerful position in GS - most departments have multiple VPs (only tier 3 in the strata)

#2 Name change was a family (sister as well) thing - backstory of Nazi oppression, yadda yadd. He's a chosen one, we get it.

#3 He left GS under... hmm. Rumour mill is saying "let go" - let's presume he wasn't delivering, so had to find a niche in the softer world, however his bio is pure  econ Gov > GS > Gov

#4 He's working for the most corrupt Congressman out there, urging him to put out pro-Bank (GS) in particular legislation that GS have spent a lot of campaign donations enabling


Aka - GS has already spent the money getting people friendly to their aims elected, everyone knows the pay off is pro GS legislation, and they know of an ex-employee who can hold a corrupt polito's hand over how to draft the legislation who is looking for an easier gig than front-line. The point is - #1 & #2 make the story have an air of "MKUltra", when they're not tied to the story at all (the hooks, if you like - linkbait for the stupid) - the real deal is that this shit goes on every single day, and no-one bats a fucking eyelid. If you really think he was hiding this (it was all public domain stuff), then you're fucking naive as shit. Wake the fuck up.


The lesson of the Iraq war is - people are so fucking numb now, that even when you've 1.5-2million peons protesting, you can still go to war on a fake dossier - and you get rewarded for it:

Ex-defence minister joins arms firm behind MoD £1.5bn overspend

And no-one will raise more than a minor grumble or cynical nod over it. The eight virtues are weeping, and the only arete left is that of theft. But let's not be naive at the same time & get all pavlov, ok?





If you think they hide this stuff these days, you need educating. This wasn't a secret OP, it was business as usual. If you're irked, remove the congressman who is happy to prostitute his office - I think there's 5/6ths of the house with a criminal record now, isn't there?

Fri, 08/19/2011 - 11:15 | 1577386 JW n FL
JW n FL's picture


yet saw on market-ticker..








what he said!


Fri, 08/19/2011 - 11:39 | 1577538 flattrader
flattrader's picture

Can't trust the Tea Party either--

Tea Party Senators Marco Rubio And Ron Johnson Selected

Their Chiefs Of Staff From Same K Street Lobbying Firm

In December, ThinkProgress first reported that at least 13 new Republican lawmakers had hired corporate lobbyists as their chiefs of staff. An investigation published by The Hill’s Kevin Bogardus and Rachel Leven reveals that a large number of corporate lobbyists have left lucrative jobs on K Street to manage the staff for important committees and top Republican politicians.


One notable revelation from The Hill story relates to the fact that well-paid corporate lobbyists now occupy key positions at the House Energy and Commerce Committee, which oversees pivotal healthcare and energy regulations. Another interesting fact is that a single corporate lobbying firm, called Navigators Global, has its lobbyists running the offices of Sens. Marco Rubio (R-FL) and Ron Johnson (R-WI). The two Tea Party politicians apparently thought that influence-peddlers from the same firm would best advance their interests:

Cesar Conda made $376,000 from Navigators Global in salary last year, according to his financial disclosure report. He is now Sen. Marco Rubio’s (R-Fla.) chief of staff.

Conda’s former colleague at Navigators, Don Kent, now chief of staff to Sen. Ron Johnson (R-Wis.), made more than $227,000 in his bonus and salary last year from the firm.

Fri, 08/19/2011 - 09:20 | 1576738 oogs66
oogs66's picture

hft's????  maybe they should be banned?  and sub penny quotes....

Fri, 08/19/2011 - 09:24 | 1576740 HedgeYourself
Fri, 08/19/2011 - 09:21 | 1576742 Henry Krinkle
Henry Krinkle's picture

They know exactly what's up. All they are trying to do is not have it happen under their watch.

Fri, 08/19/2011 - 09:21 | 1576747 Version 7
Version 7's picture

Everything that should be going up is going down. Everything that should be going down is going up. grebmoolB.

Fri, 08/19/2011 - 11:37 | 1577524 Diogenes
Diogenes's picture

Everything that should not be going on is going on.

Everything that should be going on is not going on.

Fri, 08/19/2011 - 09:23 | 1576752 virgilcaine
virgilcaine's picture

Congrats to all Bears. stay short .

Fri, 08/19/2011 - 09:24 | 1576756 monopoly
monopoly's picture

This is really starting to get ugly. And as much as I am invested in gold, I really do not like parabola curves. They never end well. But not selling any.

Fri, 08/19/2011 - 09:37 | 1576808 ViewfromUnderth...
ViewfromUndertheBridge's picture

Check out Jim Sinclair's/Jesse Livermore's Golden Angels...the Square of the Numbers...there is one at $12,544... and as Jim has been saying for long time parabolic rises kick in after $1,764.

Fri, 08/19/2011 - 10:13 | 1576976 scatterbrains
scatterbrains's picture

I saw what you did there... your saying  grains will sell for about $25 a piece.. still plenty of time to load up via ebay for those of you below the poverty level and dont want to be left behind.

Fri, 08/19/2011 - 09:38 | 1576813 Dr. Engali
Dr. Engali's picture

Yeah this move makes me uneasy too. I'd like to see some sort of shakeout take place.

Fri, 08/19/2011 - 09:24 | 1576757 WoodMizer
WoodMizer's picture

is rule 48 gonna become the nyse's mornig constiuional?

Fri, 08/19/2011 - 09:26 | 1576769 Version 7
Version 7's picture

Until they open only on weekends

Fri, 08/19/2011 - 09:25 | 1576763 e_goldstein
e_goldstein's picture


Fri, 08/19/2011 - 09:26 | 1576765 mayhem_korner
mayhem_korner's picture

Fractals shred sigma.

Bring your torches!  Bring your pitchforks!  Slay the polyloglinearweibullexpogaussasaurus!

Fri, 08/19/2011 - 09:26 | 1576766 PaperBear
PaperBear's picture

SocGen may need a state bailout ? I say go ahead. I can own their silver call covered warrants and force SocGen to go into the futures market and hedge their risk by increasing their long position as silver’s fiat price rises. People like me will also benefit from the state bailout not just the bankers.

Fri, 08/19/2011 - 09:27 | 1576771 Turkey
Turkey's picture

Link please?  I'm failing at finding on my own.  I AM A FAILURE, at finding bloomberg graphs.

Fri, 08/19/2011 - 09:35 | 1576774 mayhem_korner
mayhem_korner's picture

How many 4-sigma events would constitute a 4-sigma event?

Mr. Owl, how many licks does it take to get to the tootsie roll center of a tootsie pop...

Let's see...ah-One...Two...Three...

Fri, 08/19/2011 - 10:20 | 1577006 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

The world -- may never know...

Fri, 08/19/2011 - 09:39 | 1576775 tom
tom's picture

I don't believe these are black swans. These are just plain old ordinary black crows doing what any farmboy could have predicted plain old ordinary black crows would do. But yes, stay short folks.

Fri, 08/19/2011 - 09:30 | 1576780 RobotTrader
RobotTrader's picture

VIX is probably going to hit 50 today.

Fri, 08/19/2011 - 09:37 | 1576809 slaughterer
slaughterer's picture

VIX 50?  That is what they want you to believe.  Reality is, market crash is postponed till next week.  Risk on Friday! Read the opening technicals on the SPY and ES.  Yesterday was head-fake.  Slaughterer going in leveraged long for today.   

Fri, 08/19/2011 - 09:39 | 1576817 Version 7
Version 7's picture

Got fired already

Fri, 08/19/2011 - 09:42 | 1576845 Stumpy
Stumpy's picture

Futures don't look so well...

Fri, 08/19/2011 - 09:45 | 1576862 SheepDog-One
SheepDog-One's picture

'VIX'...hey hows that all-in long at 12,700 thing workin out Robo?

Fri, 08/19/2011 - 09:31 | 1576787 ViewfromUnderth...
ViewfromUndertheBridge's picture

I'm gonna pull out a copy of Schumpeter's book I read 40 years ago where he talks about the massively increasing volatility that would indicate the end.

One of his many measures was that speculators that no-one had ever heard of would emerge with fantastic fortunes made almost overnight...that made me pretty relaxed because I always planned to be that guy.

I'd better get my skates on...

Fri, 08/19/2011 - 09:53 | 1576894 ReactionToClose...
ReactionToClosedMinds's picture

for everyone here .... just read Schumpeter's classic Capitalism, Democracy & Socialism .... most concentrated idea/concept bookk ever read ... prophetic in way not used to buying into as cynic.

Not an easy read as he writes in oblique, exceedingly polite indirect way common for early 20th century ... but the thoughts .... so many ..... at least 30-40 major thoughts, etc. versus usualy 2-5 in any good nonfiction book

this begs odd timing now of Jackson Hole ... by fortuitous chance ..... Germany, China & Ben.

Not sure Team 44 may have a future considering what they may have to entertain ..... one mighty reversal ..... Wall St patrons of Team 44 (Goldie, JPM MS, et all) may have to trow them over the side to survive




Fri, 08/19/2011 - 09:34 | 1576792 mayhem_korner
mayhem_korner's picture

(more N. Peart channeling)

/cue drum intro/

One humanoid escapee
One android on the run
Seeking freedom beneath a lonely desert sun

Trying to change its program
Trying to change the mode...crack the code
Images conflicting into data overload

1 0 0 1 0 0 1
1 0 0 1 0 0 1
In distress
1 0 0 1 0 0

Memory banks unloading
Bytes break into bits

Unit One's in trouble and it's scared out of its wits

Guidance systems break down
A struggle to exist
To resist
A pulse of dying power in a clenching plastic fist

It replays each of the days
A hundred years of routines
Bows its head and prays
To the mother of all machines


Fri, 08/19/2011 - 09:34 | 1576794 Yes_Questions
Yes_Questions's picture

Swan, looks like Lochness Monsta!

Wantn' his tree fiddy!

Fri, 08/19/2011 - 09:34 | 1576795 HomelessCEO
HomelessCEO's picture

Is there any data from pre-1950 that might hint of socio-political upheaval?

In particular, I'm thinking of the market instability leading up the the Civil War. Perhaps you could use the price of gold or silver and plot 4+ sigma events in these metals over the course of American History, and see if there's any correlation to big events.

Fri, 08/19/2011 - 09:38 | 1576811 SheepDog-One
SheepDog-One's picture

And just think, before the civil war, who even cared a bit about 'markets'? Now everyones entire living comes from the markets in one way or another. 

Who will fire the first shot heard 'round the world, the 401K Bathrobe Brigades from their free 'Hover'rounds?

Fri, 08/19/2011 - 09:48 | 1576876 HomelessCEO
HomelessCEO's picture

Back then gold was the market, which is why I think it would be an interesting chart, provided the data is available and trustworthy.

Fri, 08/19/2011 - 11:41 | 1577551 Diogenes
Diogenes's picture

Back then at least as many people cared about "markets" but they were markets for agricultural products, gold, silver, and paper bank notes. There were as many sharks trying to manipulate the markets and run bank scams as today, but today they are organized world wide.

Fri, 08/19/2011 - 09:40 | 1576825 Caviar Emptor
Caviar Emptor's picture

Don't need to look much further than the Great Depresion: In the 1932 election, the Socialist and Communist Parties had candidates on ballot in the US. Combined they got over a million votes (out of a total 39 million votes). That should give you some idea

Fri, 08/19/2011 - 09:41 | 1576837 lieutenantjohnchard
lieutenantjohnchard's picture

i always read and reread allan nevins' ordeal of the union part one. deals quite a bit with the 1850's but there are more dis-similarities than similarities. congress didn't work then and doesn't now, of course. and obama and buchanan are similar in their inability to lead. just a couple of quick thoughts although i know you know what the bulk of the 1850's were about.

Fri, 08/19/2011 - 09:36 | 1576801 lieutenantjohnchard
lieutenantjohnchard's picture

i think more and more folks are beginning to understand how matters were during the 1930's depression.

Fri, 08/19/2011 - 09:36 | 1576802 Caviar Emptor
Caviar Emptor's picture

Shockingly, tonight on television in front of the nation and the world, the President turns into a black swan as he tries to calm roiled markets: 

Ladies and Gentlemen, The President of the United States:

"Citizens of the World, my fellow Americans....I quackingly want to reassure you all that the quack in today's markets will qauckly...I mean quickly...hal themselves so that we can all get quackin' again...I mean QUACK! What am I saying?  QUACK! QUACK! 

Fri, 08/19/2011 - 09:41 | 1576833 SheepDog-One
SheepDog-One's picture

Look out! The Shithawks are comin home to roost!

Fri, 08/19/2011 - 09:59 | 1576932 Silver Dreamer
Silver Dreamer's picture

He doesn't have the grace.  If he turns into anything, it will be Daffy Duck.

Fri, 08/19/2011 - 09:37 | 1576807 Jack Sheet
Jack Sheet's picture

Apologies for a statistics lecture, but:  the term "sigma" implies a Gaussian (normal) distribution of deviations of prcies from the "mean", the latter also being a Gaussian concept. It is patently obvious that we do not have a normal distribution of the deviations and therefore no probabilistic conclusions can be drawn from supposedly "x sigma" events. Arguably therefore, Gaussian sigma should be abandoned and something not assuming a normal distribution should be used in its place, like a percentile. The deviations themselves should be exmained for their distribution properties.

Fri, 08/19/2011 - 09:40 | 1576823 SheepDog-One
SheepDog-One's picture

Just require a correct CAPTCHA answer for all market trades, entire problem solved.

'Oh, but then we cant perform our HFT sub-penny trades 5,000x a minute!'....yea exactly.

Fri, 08/19/2011 - 09:59 | 1576931 ReactionToClose...
ReactionToClosedMinds's picture

exactly ...... financial world misuses terms & concepts for misguided probablistic assessments.   But everything needs a dynamic ... and there are plenty of decades building coiled springs aropund .... so even if the 'sigma' concept might be misused or understood ... it might get covered in the 100 year avalanche waiting for it's gunshot to start the pebbles rolling ...,.

Fri, 08/19/2011 - 10:03 | 1576941 Ricky Bobby
Ricky Bobby's picture

I would say that most on ZH understand this, so when they point out the sigma moves it is a subtle barb pointed at many of models used by our so called financial elite. Summed up by the standard defense "How could we have known?” Models and theories serving the interests of the Oligarch not the interest of truth.

Fri, 08/19/2011 - 09:40 | 1576828 Stumpy
Stumpy's picture

Here comes the greeeeeeeeen!

Fri, 08/19/2011 - 10:18 | 1576996 slaughterer
slaughterer's picture

Slaughterer riding the green ES rocket today on his one-day bull trade.  Going up, up, up.  I think I see Robo riding next to me.  

Fri, 08/19/2011 - 09:41 | 1576836 LookingWithAmazement
LookingWithAmazement's picture

Good day today on the markets, will end green.

Fri, 08/19/2011 - 09:45 | 1576860 Moneyswirth
Moneyswirth's picture

No volume

Fri, 08/19/2011 - 09:46 | 1576867 Moneyswirth
Moneyswirth's picture

HPQ down 22% 


Fri, 08/19/2011 - 11:38 | 1577527 Bam_Man
Bam_Man's picture

Somewhere Carly Fiorina is smiling.

Fri, 08/19/2011 - 09:48 | 1576870 virgilcaine
virgilcaine's picture

Bears are going to rip this weak ecb intervention attempt..they really are in full panic mode. 

Fri, 08/19/2011 - 09:50 | 1576883 tom
tom's picture

Somebody just plumped up a fair bit of coin to ramp the S&P by 15 points in 15 minutes. Already gave back up halft that as I type. The way I see it, the more longs come in at these prices, the less gunpowder they will have 50, 100 and more points lower. Come and get it, longs, come and get it.

Fri, 08/19/2011 - 09:50 | 1576884 Sudden Debt
Sudden Debt's picture


Logic tells me today everything should crash... logic.... HA!


Fri, 08/19/2011 - 09:50 | 1576885 adr
adr's picture

The market is going green. The BS stocks like Salesforce, Lulu, and others are up pretty strog. The PPT is in full effect buying stocks after the initial open showed another massive move down.

Nobody in thier right mind would be buying these stocks. Only the government would be stupid enough to buy Baidu.

What I don't get is why all the correct moves like oil trading down happen overnight. Right before the open the Euro jumped 30 cents. 

Oh yeah the US markets aren't traded by rational beings, only by the WOPR.

Fri, 08/19/2011 - 10:01 | 1576937 ReactionToClose...
ReactionToClosedMinds's picture

please please ... someong do the ultimate eye-opening takedown of Salesforce .....


there is a reason Marc Faber maintains this as a short candidate

Fri, 08/19/2011 - 10:16 | 1576989 slaughterer
slaughterer's picture

Overnight futures = fact

Regular day trading session = fiction

Just the opposite of 2008, BTW.  

Fri, 08/19/2011 - 09:51 | 1576889 lieutenantjohnchard
lieutenantjohnchard's picture

if market does rally today wonder how many brave souls will take home for the weekend their merchandise?

Fri, 08/19/2011 - 09:53 | 1576904 DeltaDawn
DeltaDawn's picture

Me thinks vultures are next.

Fri, 08/19/2011 - 09:54 | 1576906 PaperBear
PaperBear's picture

The move of silver that was interrupted back on May 1st will resume with greater force.

Fri, 08/19/2011 - 09:56 | 1576915 Whoa Dammit
Whoa Dammit's picture

Tyler said:  

"Yet for all their brain power, all those Hewlett Packard fans in the Marriner Eccles building still can not comprehend this one so simple fact."

That's because:

"Real stupidity beats artificial intelligence every time." 

Terry Pratchett

Fri, 08/19/2011 - 09:57 | 1576917 Jovil
Jovil's picture

Living through a currency devaluation and how to cope

In 1976 I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion.

One morning, as my wife and I were on a trip driving on the highway, we heard a national message from the President of Mexico, Luis Echevarria, one of the most corrupt presidents in Mexican history. “It is a lie that we are going to devalue the peso,” he said.

Read more

Fri, 08/19/2011 - 14:36 | 1578331 andybev01
andybev01's picture

Deja fuckin' vu.

Fri, 08/19/2011 - 10:06 | 1576953 xynz
xynz's picture

Your fundamentally flawed analysis betrays your bias. The sudden rise in Black Swans is not because  "central bankers of the world....merely push back ever more disastrous events into the future" or because of " central planning under a monetary authority".

Prior to the reforms of the New Deal, Black Swan upheavals were quite common:1819, 1825, 1837, 1847, 1857, 1866, 1873, 1884, 1890 1893, 1896, 1901, 1907, 1929.

After the Great Depression, and the market reforms of the New Deal, we had an unprecedented period of nearly 4 decades of relative peace.  The Black Swans began to flock about a half a decade after the neoliberals from the Chicago School started taking control of the global economy. Your chart clearly demonstrates that their deregulation efforts have been producing Black Swans with increasing frequency.

We are harvesting the bitter fruits from a 30 year orgy of deregulation which climaxed with the  Gramm-Leach-Bliley Act and the Commodity Futures Modernization Act of 2000

There are so many people on this board who want to blame central banking, public unions, income taxes, government spending and government regulation for our current crisis. But they conveniently ignore the fact that we experienced much worse and more frequent crises well before the advent of central banking, public unions, income taxes, significant government spending and regulation.

Fri, 08/19/2011 - 11:34 | 1577503 Oh regional Indian
Oh regional Indian's picture

xy, while well intentioned, I think you might be missing the bigger picture here.

While we may not have had finaicial cirses every decade, we have had a major war every decade, some lasting close to a decade last century onwards. Add to that the numerous, new ways that the oligarchy found, through regulatory capture, militaristic colonialism and finally Computers..... add a bought and paid for media (I think AP and Reuters were bought early last century, yes?)......

Now panics are created precisely as per the Model (Club of Rome). no need to overdo things right? 

Just food for thought and looking at the bigger picture.


Fri, 08/19/2011 - 12:18 | 1577714 dcb
dcb's picture

the central bankers are part of that neo liberal movement my friend, but your analysis is more correct

Fri, 08/19/2011 - 21:04 | 1579759 xynz
xynz's picture

Yes, many central banksters are indeed members of the neoliberal movement. But not all central bankers are created equal.


CF: Paul Volker vs Milton Friedman, Alan Greenspan and The Bernanke.

Fri, 08/19/2011 - 12:26 | 1577766 dcb
dcb's picture

I notice it due to a rise of leverage/credit in the market and society, along the lines of the thoughts of minsky

Fri, 08/19/2011 - 10:07 | 1576960 Sathington Willougby
Sathington Willougby's picture


Rick Perry and Bank of Amigo will fix this.

Fri, 08/19/2011 - 10:09 | 1576965 spanish inquisition
spanish inquisition's picture

The Fed is not concerned at this point with the economy per se, but providing cover and time for the ground floor investors to position themselves.

So when you start a fiat system, other people want in (politicians, industry and financials) on the scam. The growth needed to support the long con starts outstripping natural sustainable growth as more people pile in the bus. The theory of economics does not factor in the exponential increasing cost of corruption that forms the bubble that shall not be popped. Additional growth is fueled by war, it is inefficient but supports the current fiat structure.  (After you can no longer pull forward consumer growth or legislate growth to feed the monster, destroy and rebuild). Matches up pretty well with the above graph

Fri, 08/19/2011 - 10:16 | 1576985 High Plains Drifter
High Plains Drifter's picture

the rumors that will not die. looks like rick "the dick" perry has some tall explaining to do. talk about going viral......and perry i guess thought he was just going to skate in on goal and put the puck in the net, unmolested......if this keeps up, perry's national ambitions are dead before they even began.......ha ha ha ha ..........

Fri, 08/19/2011 - 10:26 | 1577038 overmedicatedun...
overmedicatedundersexed's picture

dow s&p and naz all positive..who knew?

Fri, 08/19/2011 - 10:28 | 1577069 smore
smore's picture

That Log Cabin is pretty crowded already.  Closeted gay pols generally go Republican for the cover, obviously.  Real tough guys - my ass!

Fri, 08/19/2011 - 10:47 | 1577234 High Plains Drifter
High Plains Drifter's picture

what pisses me off is that he portrays himself as being a tall , tough guy texas type yet he has a secret side. i mean, who knew? i live in this state, and i didn't know anything about it. people in austin have known evidently. to tell you the truth, i don't vote and i don't keep up much with politicians. but since he has gone national now, stuff is starting to come out on him. it is as you say. it appears for the most part, the gayness takes place mostly in the republican party and the skirt chasing mainly is a democrat thing, ala clinton etc. frankly i don't give a damn about what a man does in his private life, but it is a tad too much when this man, goes to prayer rallies and portrays himself as a good Christian man to fool the Christian right wing zionist faction.

Fri, 08/19/2011 - 11:36 | 1577521 smore
smore's picture

I agree, it's the hypocrisy.  Playing against type.  Once a cheerleader, always a cheerleader, though!

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