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Unexpectedly Managed Expectations
Submitted by Peter Tchir Of TF Market Advisors
Unexpectedly Managed Expectations
Have the central bankers and politicians run to the rescue so often that no investor is willing to bet that they won't bail the market out again? Does everyone now fully expect a bailout at every sign of weakness?
Bernanke in particular had been a fan of managing expectations. But has he managed them so much that all that is left is disappointment when he underestimates how much is already built in?
Have expectations of a bailout become their own worst enemy? After the stories late last week that preparations were bring made in case of a Greek default some politicians may have been worried how the market would react today. They have to be relieved at the relatively decent performance.
I believe the market is only being supported by the expectation of more bailouts. I also believe that some politicians may see today's action as a sign that a Greek default is largely built in. I'm not sure whether that is ironic or a paradox but I am pretty sure the markets relative strength today is setting itself up for a big disappointment and the market will be shocked when Greece defaults and politicians will be shocked it wasn't priced in.
You know the first time someone plays poker they are afraid to bluff. The second time they decide bluffing is great. By the third time they are so confused about who is bluffing and when that they might as well just hand their chips to the best player at the table and save everyone the time and effort or taking the chips. I think the central bankers and governments have gotten so confused they are bluffing with a few low off suit cards and don't even realize the cards are face up. A few polite people are choosing to ignore the cards. The governments and central bankers may still win but it will all come down to the luck of the draw since the odds are stacked against them.
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GAME OVER....BITCHEZ
Klaatu Barada Nikto.
"KLAATU...BARADA...NIKTO!"
http://m.youtube.com/#/watch?v=Eun7SmpNr1I
The old 'problem-reaction-solution' the elites used to play to control all this will no longer work and they know it.
Fight the Fed, bitchez!
Try and print gold, bitchez
http://azizonomics.com/2011/09/10/can-bernanke-print-gold/
There's no money out there. Vice gambling and alchahol are cratering.
Rockstar games is releasing 105 million dollar games into a world without any cash.
The world is trying to create on thing and one thing only. Debt is sacred and nothing else and I MEAN NOTHING else is.
The only activity is government backstopped, whether FHA loans with 3.5% down on cheap homes (to people with 500-580 FICO score, too), or government construction-MIC-banking-bail out projects/contracts/etc.
The private sector is deleveraging rapidly.
There is little demand for loans, and there is little willingness for creditors to loan money (given how few credit worthy borrowers exist and the still falling asset values of many of things, such as homes, that secure such loans).
There is also no clarity as to how bad things will get or how long the toxic troubles will last.
The biggest tell as to where things are headed is that governments and central banks are losing the CONfidence game (especially when more and more people are waking up to the real state of the economy, and not paying attention to the cooked books of the BLS or government data).
Without CONfidence, all Ponzis have already begun to enter the process of collapse. It's all a matter of timing from here forward.
Great post. But the thing is it seems that tons of people in a whole bunch of business sectors have sucker written all over their face. Are they going to hopelessly indebt them and then push them around. Are they going to let them fail and then take over the business sectors.
I mean what. Donald Trump is up to filing bankruptcy every other year. Are they just going to keep letting him? Are they going to make everything bankrupt entities like the airlines with some sort of weirdo fucking institution stuck up their ass. Baby gropers for airlines. Voyeristic fucknuts for computers. etc etc.
On the subject of managing expectations [or massaging them as the case may be], tonight on Kudlow, an appearance from Mr. Thomas Lee of JP Morgan:
"This [current market] situation reminds me of 1998. We are two years into a default...." Huh?
Really. Mr. Lee? Exactly who was defaulting between 1996--1998? In 1998, the market was in the midst of one of the largest rallies in its history. Times were good. Our deepest fear were...the impending Y2K situation...and whether or not it was okay that President Bubba copped a Beej from a young WH intern. Tech was booming and folks were comparatively care free. Iran did not have nukes, the US had kicked Sadam's ass. Gasoline was about $1.50 per gallon.
So I ask...how is today anything like 1998?
And these Wall Street criminals have for decades been touted as the smartest amongst us. Well, no wonder everyone thinks average Joe is an idiot...if this is his presumed intellectual superior.
Dude. The market just cratered in 2000. It was called the tech bubble. It probably took 4 years. 1996 things were getting really full of shit, 1999 companies were stalking customers who were trying to cancel services.
Yeah...that was 2000. That wasn't the time period Mr. Thomas Lee was referring to. He was trying to shape the expectation of a wildly ramping market and blissful time in equity land...by comparing today with 1998.
What...we cannot even track calendar years on this site tonight?
Ok. I see what you are saying.
i agree about CONfidence.. that is the thing about hyperinflation, it is not a financial phenomenon, but a social one.
here is my problem with the article above. it assumes that central bankers don't know what is going on, or that they are naive to how bad the problems are.. mostly, it assumes that they are not in control of the situation.
i disagree. we are being hurdled towards the final social cataclysm that will bring in a New World Order. this was very much planned; in fact, the plan has been in existence for over a century (and the cabal in power for much longer than that). since babel, the dream has always been about global domination. the mistake is to think that if we are going down (and we are, without a doubt going down), that this implies a lack of control. it does not. suggested reading; "Tragedy and Hope", C. Quigley. there are tons more to substantiate the grand conspiracy.
the reasonable man in this environment is a survivalist.
also, i would say that the reasonable man should be thinking about his principles right now, and figuring out what he is ready to die for.
But who bluffs the ones who bluff the bluffers?
Answer: Cdad
Malikai
caerus
fold!
Warren Bluffet?
Would you believe me if I told you that they are all the same person?
Wynn 10% under new 52 wk highs?!
Lots of stocks, and in fact indexes, are only down 10%-15% from ALL TIME record highs....many stocks well over their all time highs....and yet LOOK at this situation with everyone in total panic that we need more free money printed in the trillions to support it, indexes whipsawying 3% daily based upon ridiculous rumors...its all set to totaly collapse.
RELEASE THE KRAKEN!
Hmmm. I wonder if Bernanke will go all in next week? All those to save; the Messiah, Timmie, the banksters here, the banksters there. And the money will come from.......?
Oh Benny Boy
Oh Benny Boy the banks, the banks are calling,
Goldman Sachs and Morgan Stanley too.
They must be eased for all their stocks are falling
Oh Benny boy whatever will you do.
Oh Benny Boy unemployment rates are rising,
as anger builds among the middle class
The mood in Congress is most uncompromising,
and real reform has little chance to pass.
Oh Benny Boy, in Europe they are crying,
as the EU goes slowly down the drain.
While back at home the housing sectors dying,
Oh Benny Boy how will you spread the pain.
Oh just print more, don’t worry ‘bout inflation.
A rising tide will surely lift all boats.
and anyway the Banksters down on Wall Street
must have cash so they can pay for votes.
we need to get serious and start serious talks about how to write-off most of the debts in the most honest way possible
You're joking, right?
john mauldin's piece came out today on goldSeek{ Preparing for a Credit Crisis } and he has more of a political analysis of the EU situ than just the econom aspects. US, too!
i found it a worthwhile read
he's back to muddling thru, but maybe a bumpy ride. according to him, [if i understand him correctly] under present treaty law, unless and until amended/changed there is no way for a nation to withdraw from the EU and no way for the EU to expel a member
but he does talk about defaults and how much they might "cost" under a coupla diff scenarios
he then shows a graph/chart of a huge spike in foreign reverse repos @ the FED, bigger, already than 2008/9
this is not dissimilar to the TOMO article molecool kept putting up the link for, this morning, and like the earlier piece, no exact dates are given for the data and it's kinda hard to tell, exactly, when the spike is a-happening due to the time scale on the x-axis, and neither article said when the data was for, just showed the graphs
why is this important to slewie? well, if that spike is current, it just might mean that the FED has swapped Ts for euros w/ the SNB, withdrawing liquidity (and maybe providing some sterilization for the SNB for a few weeks?) but, frankly, i'm in such a locus on the zH learning curve, i'm not even remotely confident that is even a "rational" statement, ok?
nobody else seems to know wtf is going on w/ this, including j. mauldin so i'll just run that up the flagpole and see if anybody salutes it
if not, fine, we'll know more later. maybe
the other idea he develops seems to be (again, slewie's interpretation, ok?) what wld happen under dodd-frank in the event of another credit crisis a`la '08, doesn't like dodd-frank and thinks the republican might want to pass a new law to deal w/ insolvency in a better way
really. check it out
there are laws against murder, but people commit it.....i think relying on law to say some country can't exit the euro is a bit of a stretch
hey, oogs!
pls don't "deflect" what i'm saying, ok?
i didn't say a country couldn't exit the euro (and neither did mauldin); i said (as per j.m.) they could not, under present treaty law, either leave the european union or get booted outa the EU
but thank you for misunderstanding and taking a 1-sentence pot-shot at what took me over an hour to read, digest, and write, there, toy-boy!
why doncha take some time and read the freaking article before you go off on another disinfo vector, ok? if you can think straight today, that is...
The central banksters have been doing nothing but 'breaking laws' daily for years....laws mean nothing to them.
again, if you'd care to look at what he wrote, the link is there
perhaps you will understand it differently, but as far as i could tell, he is writing about the confederation of the (previously?) sovereign states of the european union: that the EU can't kick members out and a member state cannot leave the EU
p'raps you find that statement is somehow abt banking, but the banks are not involved. they can go on breaking or following laws. i agree with that, SD1
but that isn't what i'm talking about. where the EU staying together is concerned i'm not talking abt the euro and i'm not talking about the banks
if you don't want to hit the link and spend a few minutes seeing what he wrote, that's fine w/ me. really.
the trout is a fish, too. and there is a teeter-totter on the playground. but i'm not talking about those things, either, and i think it's pretty funny that people can't think straight about the EU being a confederation of european nations or states, not a currency and not a league of CBs
but if you think it is, i'm certainly not gonna be able to change your mind, any more than i could change oogs' mind that the EU is a currency...
OK. You first.
The bankster overlords will never take a loss or write down debt of the peasants.
The rules of the game keep changing, even when the cards are facing up...
Wall Street doing what it does best...namely, destroying the credibility of everything it touches. It is a necessary part of preparing the markets to plunge.
Theyve got to ensure everyone is bankrupt before collapsing the system, so that everyone is then helpless to them and unable to fight back.
Wall Street isn't preparing the markets to plunge, the global depression will take care of that, eventually.
Governments desire power NOT value - they will bail out ANY & EVERYONE provided some version of the status quo exists - The markets will also tolerate continued bailouts EVEN IF THEY ARE SUBOPTIMUM because the power structure will 'trade' fiat for power & traders want more fiat to exchange for positions du jour - The end game comes when the middle & lower classes no longer accept the socialized losses - until then, trade on!
That is spot on. Best reasoning of the year.
Well, other than differentiating desire and value*, it sure is.
(*I'd say that governments desire power because they value it.)
Agreed - excellent.
They can create that paper shit at the expense of the working and middle classes until it comes out of their ears.
'they' hold a lot of real assets and will inflate away any chance of bankruptcy - the elites cant lose
remember that whole "moral hazard" argument that was made in the long distant past? yea, i dont remember it either
Never heard of it. Does it have anything to do with a functional economy?
I agree with Peter. It seems the US market is nowhere near the drop percentage of the DAX et al because of the moral hazard that has been created by the Fed. That could mean QE3 will have a markedly smaller effect on asset prices.
No one wants to be short. Bears like Doug Kass and Phil Davis are bullish due to intervention expectations or the "world is not that bad" beliefs.
ECRI is dropping quickly and hit -6.2 last week. Laksman Achuthan, in another great interview, says that short, medium, and long leading indicators are all still pointing downward. No official recession call yet, but leaning that direction according to him.
http://www.businesscycle.com/#
The central banks can't win. This is a mathematical proof, and not an opinion.
Even if the ECB, Fed, BOJ & PBOC printed enough fiat to offset the great deleveraging, it would produce a political backlash and grassroots uprising strong enough to destabilize even many developed nations.
What is the EU going to do? Are they really expecting to stretch Germany so thinly that it can cover the whole of the toxic, smoldering black holes of money pits that are EU Members' balance sheets (this isn't even possible without putting Germany into an all out depression)?
Does anyone legitimately believe that China will or can bail out even an Italy or Spain, given its own economic problems, which are mounting quickly, on their domestic front (and given that Italy & Spain contribute little to China's export absorption)?
Well TIS, you've identified the counter-balancing forces. My guess? They will certainly print enough (one currency at a time) to cover yesterday's IOUs. The idea of political backlash though... well, that will be further counterbalanced via war, terrorism, two-party politics, and any other number of fear-mongering ideas that can be used to continue the enslavement of the sheeple.
Besides, when a nation breaks/destabilizes, what is really being destroyed, but ideas?
Collective aswer-no... The reserve banks are helpless. It's just that no one is willing to put their ass on the line to say when. And WHEN is everything. Time(ing) is money.
...and the ensuing dollar weakness would immediately become a dollar crisis here in the US...which would cause instant additional inflation [as the Street continues to be positioned for inflation]...which would consume any and all positive effects desired by the monetizer in chief Ben Bernanke. Sell Jawboning. Buy inflation assets IF and WHEN Ben takes the QE3 suicide pill. I suspect it will never come.
Fight the Fed!
End the Fed!
Fuck the Fed:
http://www.youtube.com/watch?v=-6Fpoebz2LE
bennie ain't bluffing. He has a mitt full of old maid cards and the dealer's wild.
go fish bitchez!
do you have any infinitys?
I got one: Human Stupidity!
A few choice CB's have been surreptitiously obtaining Phys AU will win, and big...but not anytme soon. The game is not even close to over. Strap yourself in for another 10 years of slow, teeth grinding malaise, accompanied by black swans that have the effect of blackflies.
Ben won't 'face up' to anything
Perhaps the idea isn't to have Germany strong but Germany weak? Maybe this whole drill is an effort to bring the strong down to the level of the weak in order to have a more symetrical collapse?
What better way to instigate a solution than when all the players are on the same page? Just wondering?
Now you know not only why we've had two world wars, but at least one more.
Forced egalatarianism, FTW!
While Bernanke slept.....(and his global central banker friends too).....
While they were busy fighting battles in far flung lands and building up the walls against the barbarians,
they completely missed the fact that Rome is broke and the citizens INside the wall are ready to rebel. Bottom line: the more they bail, the more monetary stimulus they create, the higher global prices go for raw materials and consumer staples. But real incomes and personal net worth are sinking in the quicksand. ANd the broker governments become, the less they can help to make up the gap: they're going into austerity and laying off workers, cutting retirement benefits, the social safety net, healthcare and research spending.
So biflation bites hard. All Western developed countries will feel it. But the developing world even more. And it will eventually reach all the way around to the China and the Asian economies and bite them too.
The citizens of Rome are not ZH'rs.
No rebellion...
(except maybe the gov employees)
Sorry, I call the Arab spring, the British riots, the Israel mass demonstrations, the Bahrain hunger strikes, the Yemen civil war, the Greece riots, and the impending coup-d'etats in East Europe a rebellion. And we're only just warming up. US? Just wait till grocery bills cost more than college tuition. The Philly curfews will seem tame
I have always maintained the opinion that it will take hunger before the sheeple do a damn thing in the US.
Just wait until the SNAP cards suddenly dont work at Walmart, people will go bananas. People are already rioting at the smallest things, crime is up, assaults are up, people go ballistic if McDonalds is out of Chicken Nuggets. I mean, seriously the US will now run on printing money in order to pay people, maybe HALF the country, to just eat and live?
Not for much longer.
Theres something seriously wrong here, theyre just delaying for some pre-determined date or event to go down.
Caviar,
46 million on food stamps and cimbing as needed. Food price controls for the foreseeable future (years) plus nascar/roller derby/cheap pharma and illegal drugs = sleepy USA. Greece rioted because they can't print their own money, Yemen was alphabet agency orchestrated, the Brits were set up by their officials to divest themselves of more of their rights.
I'm sticking with 10 years of slow pain degradation until the oli's have milked the upper middle and lower class rich of all their wealth.
There's more booty to abscond with! Can't let it collapse yet.
I'm of the view that deflation is the current reigning champion, despite the action in the ring.
they have the program in where the banks can traxe in teh debt with the ecb for more than the default price, therefore, it's a no brainer trade, and they can let greece dafault. once more the tax payer gets screwed.
Of course they will bail out the markets. the ECb has/is getting rid of everyone who is against the buy bac programs. clearing the way.
The only reason bernake has is job is the bernanke put. It's all wall streets doing, it isn't on his record of being right. He doesn't do the bail out, he will be forced to leave, and someone whowill do the bailout will be in.
On the ecb they picked a Godlman guy as the mnext cheif. you thinkk he's not going to bail out the bans, give me a break.
lOOK THEY PICK FORM A CERTAIN POOL OF PEOPLE WHICH MEANS DESPITE DIFFERENT PEOPLE THE POLICY OUTLOO WILL BE THE SAME. aLL THE MARETS HAVE TO DO IS KEEP DROPPING THINGS, UNTIL THE CENTRAL BANS CAPITULATE.
are your hands broken or do you have really big fingers and a small phone?
Right, and the taxpayer who has no money will continue to pay endlessly for their ass raping so that 'the sure thing trade' just goes on, Im sure.
How does that work exactly? Robbing broke people to pay the rich? Does it end well? Or even go on much longer at all?
The Conspiracy of Like Minds. No need for a plan.
I would have used the drug resistance analogy.
And why don't they bail out the ordinary person?
No, that can't happen in this sort of scam... end game where the snakes are eating each others tails because they have no food left
...the image of the snake eating it's tail is also the image of the prophetic strong delusion, mad cow ...Bitchez. http://www.youtube.com/watch?v=2aHwS5toApw
Well said Tyler.
"The Carnival Is Over"
http://www.youtube.com/watch?v=LtNFQ7RJbaQ
By their wisdom, they have become fools. To think that they could print money out of nothing is absurd. The piper is coming to get paid. This madness only survives because the financial world, from banker to consumer, is mired in addiction. I don't know if I could have been any more sarcastic in "Fiat Addiction Update 09/12/2011". With a little help from my friends, I'll find a way.
http://georgesblogforum.wordpress.com/2011/09/12/fiat-addiction-update-09122011/
The adage if you don't see the patsy ... its all of us.
it's the plan the elite reptilian overlords have poisoned man, with drugs and entertainment, modern electronic aids and TV's emit brain dysfunction waves, giant heating zones are warming the earth up to better suit a reptilian life form..homosexual rights are to lessen human populations as are continuous wars..the crash of economies is on going as krugman knows the first ships land soon so the world economies will not be able to fight the landings ..they live..
sarc off.
Yep exactly, they got a LOT of people dumbed down to lower than sheep believing in Govt God always there to rescue them and to just keep 'consuming', but a lot they dont have.
They Live too.
it would seem to me you are only responsible for what you believe, me for myself, and so on.
you did read what peter "buy-a-vowel" tchir is saying about expectations of a bailout v. actual greek default maybe not being "priced in", the analogy of the poker game with all shitty hands and the luck of the draw, right, SD1?
Don't know how much it is costing the Fed to prop this market up but I can'yt wait til the whole thing implodes so we can get on with some realistic asset pricing.
This addiction to false hope is amazing in its pervasiveness.
Bernank is what we used to call 'Up Shit Creek without a paddle'.
Party's over, but the music is really loud and the bar is still open.
Well, DUH!
He's not playing with his own money and the other players pay him off, or get him fired, if he didn't do what he is supposed to do.
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