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Won't Get Fooled Again...

Tyler Durden's picture


Via Peter Tchir of TF Market Advisors

Today feels just like it did in 2008. We had almost as many manic up days back then as crazy down days. Remember how we were saved when Fannie and Freddie got put into conservatorship? Remember how all was good when AIG was taken over by the government? Then we sold off the day that TARP failed, but rallied when it passed? Though by the time it was signed into law, the market was already selling off again? Or that weekend when the TARP infusions were made? That suddenly TARP was available to shore up the capital of banks? And the FDIC put in the Temporary Loan Guaranty Program so that banks could issue bonds guaranteed by the FDIC and that the depositor insurance amount was increased?

How many other "announcements" and programs saved the world? GS and MS were given bank holding company status. Insurance was provided for money market funds. CP backstop facilities were put in place. Yet the only thing that seemed to work, was time. Lehman was not the problem - Lehman was just a small part of the problem. Pretending that stocks weren't relatively stable for a couple of weeks after Lehman is just fooling yourself. Pretending that the stock market responded to all the government programs is really fooling yourself. TARP came in October and stocks were above 1100. They bottomed below 700 in March the following year.

I didn't include the QE1 dates. They are more interesting. QE1 was announced on November 25th and increased the size on March 18th, 2009. It was for GSE and Mortgage debt. Now those programs seemed to be able to stop the slide and drive the market as a whole up. QE1 made sense to me. Everyone around the desk was talking about how cheap credit looked, but everyone was still being forced to de-lever. Very few investors thought corporate bonds were expensive back then, most people though they were cheap, but couldn't take the risk.

QE1 alleviated pressure in the market and investors were able to take some risk. QE2 had less of an impact. The ECB has already been buying bonds, but at this stage I cannot find any investor who wants to buy PIIGS bonds but can't. Not everyone thinks they are CHEAP but don't have the capacity to buy them. That was the situation when QE1 was launched, and that is why it worked. Europe can add to their purchase programs, but it won't have the impact people want it to, because this isn't a liquidity crisis. There is plenty of liquidity out there. This is a crisis of rational, intelligent, greed oriented investors who just can't get comfortable that the problems in the PIIGS are resolvable. Buying some debt won't change that, all it will do is shift the risk further into the core making the crisis worse rather than better.

I have had about 50 people tell me how positive the events of the weekend are. How positive talk about using EIB and levering the EFSF funds are. The main point they make is that "Europe is finally getting it" or something to that extent. Ugh, I say. Europe has missed the point and had the market as ready as possible to deal with a Greek default, and is now setting itself up to be hurt much more by failure. I have had about 5 serious credit guys argue that these plans won't solve much if anything, are difficult to implement for a variety of reasons, and that it would result in downgrades if it did.

HYG is up just over 0.5% this week. The Italian 5 year bond closed on Friday at a yield of 4.96%, today it is at 4.95%. The 3 month EUR/USD basis swap is better, down from 104.75 to 100.25. This had been 82 back on the day the globally co-ordinated swap lines had been put in place. Greek 2 year bonds closed at 48.96 and are up to 49.15. CDS indices have moved more in line with stocks, but that is where the shorts are. One very smart trader pointed out that near the end of the day, MAIN went from a tight of 186.5 to close the day at 191. Still 5 tighter on the day, but well off the tights. During that time, European stocks such as the DAX went from 5580 to close at 5630, so there was no equity driven reason for the weakness in MAIN. Maybe credit just started to realize that the backdoor tricks to increase the size of EFSF are unlikely to work, and that the guy with the credit card (Germany) seems reluctant to let everyone use it. Maybe they actually like being AAA!


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Tue, 09/27/2011 - 13:54 | 1715511 Segestan
Segestan's picture

If Germany lets the losers lose, than they will all gang bang Germany.

Tue, 09/27/2011 - 13:56 | 1715514 kurzdump
kurzdump's picture

I guess Germany is already used to getting gang banged.

Tue, 09/27/2011 - 14:00 | 1715533 UGrev
UGrev's picture

Ich tu dir weh

Tue, 09/27/2011 - 14:15 | 1715618 redpill
redpill's picture

Up 300 points because of rumors Germany will prostrate itself further to the terminally ill Eurozone?

When this fake market finally goes tits up it's sure going to be an interesting movie to watch. 

Tue, 09/27/2011 - 14:39 | 1715709 oogs66
oogs66's picture

i never thought we would see the 2008 lows, but with actions like this, I am scared we will.  they are being so short sighted and just plain stupid

Tue, 09/27/2011 - 14:40 | 1715712 DoChenRollingBearing
DoChenRollingBearing's picture

@ redpill

Green.  Yes.

The fake market has been fooling with us for much longer than I would have guessed way back in 2007 (when the first obvious dominos started falling: Bear Stearns hedge funds).  Stock up on popcorn!  The movie may be long, but it will be interesting.

Tue, 09/27/2011 - 14:49 | 1715753 rocker
rocker's picture

Too many fools keep trying to buy it.  They will keep this up until the buyers dry up.

Only then is when we can capitulate.

Until then listen to the sound of the squid sucking the life out of the stupids who buy in.

Tue, 09/27/2011 - 14:55 | 1715776 SheepDog-One
SheepDog-One's picture

Up +300 and +500 for the week, due to ignoring Germany's own words that they are not backstopping bad Greek debt at all....oh nevermind all that SURELY they really mean they WILL so lets rally %5-10% in a few days time!

Tue, 09/27/2011 - 20:54 | 1716957 BlackholeDivestment
BlackholeDivestment's picture

...what, did the German image of the Whore ''not'' just ...fall out the saddle drunk and now it just ''happens'' to be embracing the Lion of Babylon (The Beast) with the right hand labor is defiled? Lol.

Tue, 09/27/2011 - 14:23 | 1715648 Cast Iron Skillet
Cast Iron Skillet's picture

Tut mir nicht Leid

Tue, 09/27/2011 - 13:59 | 1715530 ratso
ratso's picture

Despite how Tyler feels this is not 2008.  Conflating that crisis with this one doesn't shed any light indeed it just adds confusion.  The EU will eventually stumble into decisions that have to be made for everyone's well being.  

Tue, 09/27/2011 - 14:33 | 1715687 W T Effington
W T Effington's picture

Exactly how can taking on more debt that will never be paid back further everyone's well being? Politics meet mathematics. You are about to be destroyed.

Tue, 09/27/2011 - 14:56 | 1715784 SheepDog-One
SheepDog-One's picture

LOL ratso dream on...they will ONLY get more insane from here on out.

Tue, 09/27/2011 - 14:52 | 1715766 americanspirit
americanspirit's picture

With what?

Tue, 09/27/2011 - 15:28 | 1715907 WVO Biker
WVO Biker's picture

I am nearly flat everything and refrained from chasing anything and it was a decent day.

Then I wanted to watch some Flamenco - Rumba


Tue, 09/27/2011 - 13:59 | 1715526 Dick Darlington
Dick Darlington's picture

Again, thanks Peter for the great job!

Tue, 09/27/2011 - 13:59 | 1715527 Libertarians fo...
Libertarians for Prosperity's picture



There's an old saying in Tennessee, I know it's in Texas, probably in Tennessee....fool me once.....shame on....  shame on you....  you fool me, can't get fooled again....

Tue, 09/27/2011 - 14:04 | 1715555 fuu
fuu's picture

Hey you can take this avatar if you want.

Tue, 09/27/2011 - 14:24 | 1715650 DoChenRollingBearing
DoChenRollingBearing's picture

@ Libertarians

Actually you and we CAN get fooled again.  Never forget that.  TPTB and human psychology can make remarkably BAD things happen to those even paying attention.

Tue, 09/27/2011 - 14:50 | 1715758 DosZap
DosZap's picture

Libertarians fo...

Dude get it right......................and your Texan?

Fool me once, shame on you, fool me twice ,shame on me.

Tue, 09/27/2011 - 16:29 | 1716158 Smithovsky
Tue, 09/27/2011 - 18:06 | 1716489 GeoffreyT
GeoffreyT's picture

Wow... +1000 for unintended irony. The form used by Libertarians for Prosperity is a Dubya quote - possibly the most famous Dubya quote, although it competes with such otehr gems as "Putting food on your family" and "Is our children children learning?".


You do know who Dubya is, right? He's that Brokeback-Brushcutter guy: he played Jake Gyllenhall to Tony Blair's Heath Ledger.



Tue, 09/27/2011 - 18:34 | 1716567 macholatte
macholatte's picture

see the You Tube link above

Tue, 09/27/2011 - 14:02 | 1715528 Smithovsky
Smithovsky's picture

dax below 5k again next week?

Tue, 09/27/2011 - 14:00 | 1715534 Vincent Vega
Vincent Vega's picture

Germany will cave and go along with 'the plan.'

Tue, 09/27/2011 - 14:07 | 1715579 oogs66
oogs66's picture

we might see the rating agencies put france and germany on watch negative the moment an actual press release comes far this is all just complete speculation that there is anything real

Tue, 09/27/2011 - 21:12 | 1716998 Ned Zeppelin
Ned Zeppelin's picture

I say, predict, prognosticate that this Euro SIV nonsense is not real at all. Complete horseshit, and get out of the way when Greece actually defaults. Any minute now I think. The Eurozone is not as completely controlled by the banksters as the US, but it's close.  

Oh, and fuck Timmah. 

Tue, 09/27/2011 - 14:32 | 1715682 kito
kito's picture

germany will absolutely NOT cave. they have stared into the eyes of the hyperinflation beast and dare not come across it again. some countries do actually learn their lesson. you underestimate the will of germany. the german people are highly rational/logical and understand what is happening-- and they actually DO have influence over their elected officials.

europe has zero chance of printing/spending their way out of their mess. the only spending by germany will be done to protect their own banks and infrastructure.  

Tue, 09/27/2011 - 14:56 | 1715779 americanspirit
americanspirit's picture

Germany has an intelligent population AND an honest judiciary. Those two points set them completely apart from most other European countries, and from the US BTW. German politicans hold office only as long as they act in the German people's interest, which is why the next set of elections is going to completely clean house.

Tue, 09/27/2011 - 14:59 | 1715795 kito
kito's picture

agreed american spirit, agreed. tis the end of the piigs. 

Tue, 09/27/2011 - 16:27 | 1716155 NoClueSneaker
NoClueSneaker's picture

Scheuble farts for 30 yrs in the verious gov. stools. He never ever did something in the interest of the german ppl, except for those of upper 3%.

Demonstrations of judicative honesty are numberous, not at least the decision of Constitutional Court in favour for money grabers - two weeks ago.

Looting of the populace and the EU-neighbours in turbo-mode is the main feature of Deutschland GmbH, especially in the last 20 yrs.

Gov. of SPD was unfortunatelly the champ of the scam. No hope.

You describe Germany from 1966-1982. No such thing anymore.




Tue, 09/27/2011 - 14:58 | 1715793 SheepDog-One
SheepDog-One's picture

I agree, what on earth would Germany agree to shoot themselves in the head for? People are just delusional these days, certain someone somewhere will surely pay the tab and make the bad man go away. Dream on.

Tue, 09/27/2011 - 15:02 | 1715808 DosZap
DosZap's picture


100% agree, on the German left out one MORE thing they are, STUBBORN.

Tue, 09/27/2011 - 14:00 | 1715535 agent default
agent default's picture

If Germany lets the losers lose, there may be a breakup of the Eurozone and of the European union, so you go back to currency controls and tariffs locking up trade and you are left with a unified Germany, looking for room to expand its economy, and then... well it always goes to shit from there.  Always has always will.

Tue, 09/27/2011 - 21:13 | 1717005 Ned Zeppelin
Ned Zeppelin's picture


Tue, 09/27/2011 - 14:01 | 1715539 SparkySC
SparkySC's picture

DOOOOOM and GLOOOOOOOM as markets  explode again.


This site costs followers a lot of opportunity as they keep their faithful frozen with fear.




Tue, 09/27/2011 - 14:20 | 1715638 clones2
clones2's picture

Oh yeah... Definitely very SAFE and STABLE markets these days.... /sarc

Tue, 09/27/2011 - 14:29 | 1715663 Vincent Vega
Vincent Vega's picture

Let me guess, Sparky, you have been long on the up days and short on the down days. Please enthral us all with your financial acumen...make a call right now on a stock, bond, market, currency, or outcome that we here on ZH can follow to see how you do.

Tue, 09/27/2011 - 14:41 | 1715720 oogs66
oogs66's picture

one thing this site had right, is do the opposite of whatever Biggs is doing.  Anyone want to bet he has been adding to his 20% exposure on this rally?

Tue, 09/27/2011 - 14:41 | 1715723 kito
kito's picture

OFF WITH THE TROLLS HEAD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! HOW DARE HE RUIN OUR BLEAK OUTLOOK OF THE WORLD!!!!!!!!!!!!!!!!!!!!

Tue, 09/27/2011 - 14:54 | 1715773 Belarus
Belarus's picture

Who are you speaking for, sparky? I mean, seriously, this site has the most useful data of's your problem if you're unable to intrepret it because you have spiraled down to new nadirs of morbid dumbness with the rest of America. This I'd say would make it a *sparky* problem. And if you are unable to comprehend, why the fuck are you here? Go hire a money manager dumbass--one of the likes of a Kyle Bass that knows what he is doing. Nevermind that non-sense, no decent money manager in his right mind would allow you in as a partner.  

Tue, 09/27/2011 - 14:59 | 1715797 SheepDog-One
SheepDog-One's picture

'Markets explode' oh you havent seen anything yet wait till the shit actually hits the fan and the wheels fall off this hyped up death contraption at full speed.

Tue, 09/27/2011 - 18:19 | 1716520 swissbene
swissbene's picture

fear can be a healthy instinct when danger is present.  heightened awareness and focused behavior are productive responses as opposed to paralysis.

as concerns investing, this site provides more consistently useful information/analysis than other sources in my personal experience.

if by opportunity cost sparky means that it is useful to spend time not thinking about {economics, politics, finance} then agreed.  i have found it useful to moderate my own zh consumption despite visceral urges to keep reading*.

i do credit the articles and many members of the community here for improving my own investment performance.

@my man in amsterdam, fwiw will share some specific tactics:

a. buy dec 120 spy puts into large bs equity run-ups eg yesterday/today

b. take profits often eg on the afternoon slide, but build toward core position for meltdowns

c. pick a few large cap industry leaders with healthy dividend and wait for attractive valuation usually on days when markets get trounced (i like msft, intc, csco, mrk, rds.a -- though not at current prices)

d. sell out of the money calls on (c) to make a nice return if price jumps and some cash in the mean time.  calls + dividends make a pretty good yield

e. buy pm preferably on dips/manipulations (which are well documented here)

f. on PM price runs, buy some gld/etc puts according to taste (i like jan 160 gld at the moment)

g. diversify with respect to currency.  the SNB thing really surprised me.  cant get fooled again :)

h. moderation and patience -- this market is nuts and frequently presents good trades, but there will be more good trades for some time to come i expect

i. scared to death of bonds & will not touch them

i am not at all a pro -- so this is just in the spirit of sharing.  i personally like the approach of having chips on all sides in the current environment.  so one is indeed long the up days and short the down days.  add more of whichever chips are priced well when a given move takes place.

Tue, 09/27/2011 - 21:15 | 1717008 Ned Zeppelin
Ned Zeppelin's picture

Go spread your nonsense elsewhere. Only on ZH do you get the real story, not the B*llshit nonsense folks like you are paid to proselytize.   Enjoy your losses. 

Tue, 09/27/2011 - 14:02 | 1715546 Wolferl
Wolferl's picture

I guess that German chief justice Voßkuhle said on German TV on Monday that there has to be a national referendum for the ESM. This means no ESM at all.

Tue, 09/27/2011 - 14:04 | 1715552 knukles
knukles's picture

The bankrupt countries will all contribute more fiat currency to purchase the equity layer in a newly established CDO/SPV which will in turn buy the bankrupt countries and country's bank's debts which will serve as collateral for the debt to be issued by the SPV which will hold the bankrupt paper issued by the bankrupt banks and countries debt obligations. which will be purchased by the same bankrupt countries and banks which are already bankrupt.

Oh yeah, now I get it!
World saved by the same people who got us into the mess.

Tue, 09/27/2011 - 14:04 | 1715553 Tsar Pointless
Tsar Pointless's picture

Do you folks get out in to the "real world" even once in a blue moon?

NOBODY is talking about this stuff. The proles, the serfs, they've been conditioned. They are told to not worry, everything is under control.

The people in charge are in charge and taking care of things.

No need to wake up from your NFL-induced slumber.

OK, computer?

Tue, 09/27/2011 - 14:23 | 1715644 Belarus
Belarus's picture

It's exactly whty USD is safe right now. It won't become unsafe again until China pulls away from our debt in a meaningful way or the HP printers are pummeled by the volume. Until then, it's only accumulate for physical time. Back up the truck will come.

Tue, 09/27/2011 - 15:01 | 1715803 SheepDog-One
SheepDog-One's picture

Right, theyve got the peasants right where they want them, not suspecting a things, for the greatest shearing and butchering of all time!

Tue, 09/27/2011 - 14:04 | 1715561 Belarus
Belarus's picture

This is worse than 2008. The Dow will either be down 90+% to 500 or it will go to 30,000. Hyperinflation is a bitch. Yeah, I know, we're deflating....and that's exactly why we will hyperinflate. Long term deflation offset by confetti over the long haul will do it.

Tue, 09/27/2011 - 14:10 | 1715589 PAPA ROACH
Tue, 09/27/2011 - 14:13 | 1715607 Zola
Zola's picture

When are we finally going to get rid of these IDIOTS buying every dip in sight in the equity markets ?? Do they think there will be investors stupid enough to unwind their shorts ???

Tue, 09/27/2011 - 14:20 | 1715634 Belarus
Belarus's picture

When CNBC becomes a survivalist channel. Until then, expect the non-sense to continue. Oh, at the upper end range of 1225 on the S + P 500 is when it falls apart again, then it's back down toward the 1100 range. Then another Liesman rumor will be then promptly dissimanted. 

Tue, 09/27/2011 - 14:32 | 1715681 Stoploss
Stoploss's picture

1207 is the ceiling, that is the 50 dma, were pretty much there.

Tue, 09/27/2011 - 17:16 | 1716324 oogs66
oogs66's picture

They have become a soap opera already so survival channel next seems obvious :)

Tue, 09/27/2011 - 14:22 | 1715643 clones2
clones2's picture

Who said the markets were ever RATIONAL?  That's mistake #1...

Tue, 09/27/2011 - 15:02 | 1715807 SheepDog-One
SheepDog-One's picture

By 'these idiots buying every dip in sight' I assume you mean the FED?

Tue, 09/27/2011 - 14:16 | 1715611 kahunabear
kahunabear's picture

Meet the new debt, same as the old debt. But, yeah, the Germans want to be Tim's Bitchez!

Also, too many weak shorts, had to happen.

Tue, 09/27/2011 - 14:18 | 1715628 apu123
apu123's picture

I agree that the public has no idea about what is going on, I also think that our politicians are just about as clueless or in on it.  I have tried multiple times to bring the HFT issue up with my state reps and I either get a long pause on the phone or a "HFT? Huh what's that? remember to vote for us, bye bye now!"

The fed reminds me of an Adam Sandler movie, "Big Daddy" where Sandler gets custody of this kid who pees and barfs all over the place.  Rather than clean it up Sandler just papers the mess over with a newspaper.  Kind of like Bernake trying to paper over the economic mess with fiat dollars.  Problem solved.


Tue, 09/27/2011 - 14:19 | 1715632 ivars
ivars's picture

New oil (Brent Crude 1M) price prediction 2011-2013:

Tue, 09/27/2011 - 14:27 | 1715665 Racer
Racer's picture

The guy with the credit card doesn't want it used...

how about pensioners and poor people not wanting their money used to fund banksters, they should have a say in the matter instead of it being stolen from them

Tue, 09/27/2011 - 14:44 | 1715733 oogs66
oogs66's picture

referendums!  how Merkel can vote for continuing when she has been losing in every mini election is bordering on criminal

Tue, 09/27/2011 - 15:06 | 1715827 DosZap
DosZap's picture


Merkel, has alas...............bought her OWN rope.

Tue, 09/27/2011 - 14:30 | 1715675 fdisk
fdisk's picture

"Today feels just like it did in 2008"

Yeah, DOW 15k by Year End, but I would short S&P at close just to

make sure :)

Tue, 09/27/2011 - 15:03 | 1715816 SheepDog-One
SheepDog-One's picture

No in 2008 they were calling for DOW 36,000....there was even a book about it.

Tue, 09/27/2011 - 14:38 | 1715705 Racer
Racer's picture
Fed's Fisher says US must restore its economic vitality, sees 'rays of sunshine' on the economy


Is he on mind altering drugs?

Tue, 09/27/2011 - 14:44 | 1715731 adr
adr's picture

Using free money to bid a $10 stock up to $150 in the hopes some 50 year old retard will give you $150 on your assurances the stock will go to $300 in a year does not make a market. It makes it a snake oil con game.

Where is the growth going to come from to justify the price targets of so many stocks. Green Mountain has gone up to a point where they need to sell virtually every singleperson in America a Keurig machine to justify the stock price. It isn't going to happen. Netflix is dead in the water with the focus on streaming. If you get anywhere near the number of people needed to justify the level of revenue indicated by the stock, even after the selloff, the internet would come to a grinding halt. Not to mention bandwidth caps that kill any chance of streaming more than 5 movies a month.

When you mention these realities to traders they just shrug and call you an idiot. They say you just don't understand the complexities of the market. I say they don't understand basic math. 

It is amazing how we created a system where they have figured out a way to  make money a few hundred ways on a piece of paper givien out by a company thatcan lose millions of dollars and yet be valued at a few billion allowng them to borrow millions more that continues to be lost year after year.

Tue, 09/27/2011 - 15:07 | 1715834 fdisk
fdisk's picture

"Where is the growth going to come from to justify
the price targets of so many stocks."

What? You saying Asia, India, China, Russia, have no growth?
Is that what you mean? Emerging markets are smoking.

Nobody have to justify anything. If anyone willing to pay for GOLD

1600$ and for some stock $300/share, that be it, nobody pushing them

to buy anything.

Tue, 09/27/2011 - 16:02 | 1716080 W T Effington
W T Effington's picture

They are smoking because they are on fire. China will implode because of debt/ we wont end up paying them for those treasuries they hold. Russia's economy is hurting and will hurt more as energy tanks. India may be the most stable of them all until our depression drops wages down to parity with theirs. Then jobs will begin to come back .Inflation is why gold is high. Stocks are high because the fed wanted them high. It appears as though they have reached a line they will not cross. Surprising, but that is what it appears to be. Without more intervention, stocks will drop to 1980's levels.

Tue, 09/27/2011 - 14:44 | 1715734 youngman
youngman's picture

Can Germany survive with fewer exports....probably....would it be worse if they bailied out the Euro...yes it would...because exports would still be its better to cut the cord now rather than making it a bigger problem and your future competitors stronger..

Tue, 09/27/2011 - 14:50 | 1715760 Zola
Zola's picture

Adr, you are absolutely right . Tyler has had many pieces about how relative value has been killed by free money . You illustrate another example of that.

Tue, 09/27/2011 - 14:56 | 1715782 mberry8870
mberry8870's picture

Tue, 09/27/2011 - 15:08 | 1715836 Seasmoke
Seasmoke's picture

i do remember when goldman and morgan stanley were made into banks in less than 24 hours......still cant find any of their branches however

Tue, 09/27/2011 - 15:28 | 1715908 Chappy
Chappy's picture

Time to start dollar cost averaging your shorts. I've been shorting the bank stocks each time they rally 5% or so.  Just don't commit too much and hope for short squeezes so you can add to your position.  Easy money in a volatile environment.


Tue, 09/27/2011 - 21:18 | 1717019 swissbene
swissbene's picture

definitely agree on this approach though personally lack the nerve to target banks (learned hard lesson in 2009).

why short vs puts?  just curious...

Tue, 09/27/2011 - 15:44 | 1715995 Shizzmoney
Shizzmoney's picture

Everytime an ECB or Fed Reserve banker opens their mouth, I can't help but think of the poor suckers of Jonestown who were the ones drinking the "Kool-Aid" going, "Man, what ever you added to this is really good!"

Tue, 09/27/2011 - 15:48 | 1716019 marcusfenix
marcusfenix's picture

market watch has an investor alert up that simply states " investors betting on Europe"

I find it hard to believe that investors are really that stupid

kind of like if somebody had went to vegas in 1996 and bet the farm on Bruno beating Tyson after Tyson destroyed him in their previous meeting.

all things being reasonably constant why would one expect a different result the second time around? Bruno was the same, Tyson was the same and they had both aged equally, so one could reasonably expect the same result, which is exactly what happened, Bruno lasted for I think it was four rounds.

same principle here, throwing large sums of money at banks to solve systemic economic issues has been done before (a lot more than twice) and it has failed spectacularly every single time. yet here they are about to try it again and investors are betting on it "working" this time around, as if this time will be any different.


what amazes me the most about all the trillions that have been stolen from taxpayers, or printed to the detriment of those same taxpayers and sunk into various bailouts, stimulus programs and QE's is that none of it, as far as I can tell, actually went towards  the one thing that might actually help...

paying down debt.

instead they just keep creating more of the one the thing the world is already drowning in, or implement policies that devalue the interments by which debt is settled.  now it looks like Europe is about to embark on just such a voyage and investors are betting on it?

to paraphrase what another commenter on ZH said not that long ago-

there are 2 ways to deal with debt

1. pay it off

2. default

any bets on which option the western world is headed towards?




Tue, 09/27/2011 - 23:26 | 1717317 jonjon831983
jonjon831983's picture

Thx, I like the quick historical re-cap of 2008/2009.

Wed, 09/28/2011 - 00:53 | 1717437 drawswell
drawswell's picture

Can someone explain "capitulation" to me? I always hate when I hear them say that. (I also can't stand when people say "the devil is in the details" for some reason)

I mean, I understand the concept of capitulation, but really, isn't it nutty to think that people will jump back in the market just because they finally realize how bad it really is? Especially with all the structual problems now?

It's like, hey, did the passengers on the Titanic finally "capitulate" to the fact they were sinking after a few hours? "Hey, you know, look,I think we're sinking..."

However, to leave on a positive note, perhaps they will straighten this mess out...

(I also, while I'm on the subject of rhetoric, really hate when people say "closure". UGGHHH, I hate that.)

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