Quote :

"The S & P is gonna get killed without QE"

So? And why hasn't it already? We've known for a month or more it was ending. We got a confirmation this week that nothing else was planned to be coming in its place. The bank stocks have looked sickly for months, the S&P is down 6% in 2 months, interest rates are easing back, and commodities have eased. I'd say everyone has been and will continue to price no QE into their portfolio but it doesn't look to be hysteria. Will we get some herd panic selling in the next month or so after fits and starts at buying these dips? Probably. Is the market still slowly working through the excess of housing and growing slowly? Yes. Absent fed QE would the market still be working? Yes.

6/24/2011 5:49:36 AM

I don't think the market believes that QE is done. That's what I meant by "if they were going to stop they would have stopped a long time ago." The plan all along was that the economy would recover, and then they would tighten. That's not happening, and it never could have happened.

6/24/2011 11:22:33 AM

The market doesn't believe it is done yet it has sold off in the past 2 months?

Go ahead, come up with some other explanation.

The problem is, neither you or I or Keynes himself has any idea how much of this "recovery" is organic and how much of it is stimulus.

[Edited on June 24, 2011 at 12:05 PM. Reason : .]

6/24/2011 12:05:23 PM

I believe none of it was stimulus. The economy only got worse as the stimulus was spent, as theory would suggest would happen as the government borrowed heavily to spend wastefully.

The only defensible theory I accept for stimulus spending is as a mechanism for allowing the Federal Reserve to print more money than they otherwise could. But I don't accept this as sufficient, as any limit to the Federal Reserve's printing press is self imposed. If the money supply is truly insufficient to maintain economic activity, the Federal Reserve can just mail each of us a check for $1000, printing money as necessary to honor them. There is no technical need for the Federal Treasury to play intermediary.

6/25/2011 1:26:16 AM

Quote :

"I believe none of it was stimulus. The economy only got worse as the stimulus was spent, as theory would suggest would happen as the government borrowed heavily to spend wastefully. "

Facts not in evidence. Worse over what time period? By what metrics? Again, we'll never know if the initial shock would have been deeper with the recovery faster (what I tend to believe would have happened) or any other scenario. But to say the economy got worse over the past 2 years is a flat out refusal to accept reality.

6/25/2011 8:26:09 AM

great article

Quote :

"Inevitable Catastrophe: The Fruits Of Moral Hazard On A Global Scale Insulate participants from risk with policies like the Bernanke Put and you guarantee destruction of both the market and institutional legitimacy. Identify the common characteristic of these three statements: 1. The Federal Reserve will never let the stock market decline, i.e. the "Bernanke put" 2. The Chinese government will never let property prices decline 3. The European Central Bank will never let Greece default The answer of course is moral hazard: a person who is insulated from risk will have an insatiable appetite for risky bets because any gains will be theirs to keep but any losses will be covered by the central bank or government. The global financial authorities’ success in propping up assets (stocks in the U.S., real estate in China, banks in Europe, etc.) over the past three years has strengthened this asymmetric disregard for systemic risk into a dangerously quasi-religious faith that central banks and governments have essentially unlimited power to keep asset prices aloft via printing money, manipulation of markets and financialization of their economies. What happens if markets crumble despite massive, sustained central bank and government intervention? The institutions that created moral hazard will be revealed as false gods, and that faith will be destroyed. This loss of faith in the transparent functioning of markets will trigger what I call the delegitimization of both the markets and the institutions which have essentially promised a permanent upward bias in assets. We can see the global scale of this central bank-cnetral State induced moral hazard in the tight correlation of all markets: the stock exchanges rise and fall in near-perfect unison, oil and gold rise and fall in parallel with equities, and so on. As I have noted before, beneath the surface there is really only one trade in the entire global marketplace: all assets on one side and the U.S. dollar on the other. Correlation is not causation, of course, but it is more than peculiar that every decline in global equities is matched by a concurrent rise in the dollar. Transparent, independent markets do not move in lockstep. The campaign to prop up all asset classes with implicit guarantees of intervention has completely insulated institutions and punters who believe that the Bernanke Put and the Chinese government's equivalent prop under real estate is not just policy but a guarantee of god-like power. Thus the gains from gargantuan speculative bets are yours to keep, and any losses will be made good by the central bank or government. This is the ideal recipe for misallocation of capital and speculative derangement on an unprecedented scale. Moral hazard is the ultimate perverse incentive: it rewards all that is unproductive and risky and punishes long-term investment and prudent risk assessment. A second feature of the global central bank's moral hazard is the necessity to punish any punters who dare to bet against the banks' manipulations. Thus Fed Chairman Bernanke could opine that oil would decline and presto-magico, a "surprise" release of oil by central authorities occurs the next day. This second feature of central bank manipulation leaves a market devoid of short sellers and thus of any buyers as markets crumble. Once trust is lost, it cannot be won back. Once participants' faith in the markets and in the god-like power of central bank intervention is crushed, the markets will lose participation on a grand scale. The authorities' favorite game, goosing asset prices to create an illusion of recovery and rising wealth, will be revealed as a global fraud. Announcements of future interventions will be scornfully dismissed and thus they will have lost their power to prop up the markets. All of this flows from the very nature of moral hazard: insulate participants from risk and give them unlimited leverage and "free money" to play with, and what you eventually end up with is catastrophe. There is no other possible end state. "

6/25/2011 8:22:04 PM

Greece riots streaming here: http://www.zerohedge.com/article/streaming-video-syntagma-square-first-day-greek-general-strike

This is getting pretty violent. I've been watching the stream for a while. They've got 5,000 cops deployed, and they're using tear gas liberally

6/28/2011 4:27:01 PM

Riots are cool and all, but I just have one question...is the market still crashing?

6/28/2011 5:13:50 PM

Actually yes the treasury bond market just had one of its biggest moves down ever because of two straight days of unsubscribed auctions.

On top of that there is almost zero volume in stocks. This could get ugly

6/29/2011 3:39:26 PM

Dude, you're flat on the year...get the fuck outta here until you bring that score up.

6/29/2011 7:15:32 PM

I think the point is owning stocks right know is kinda like picking up nickles infront of a steamroller. Take away all the HFT and algos the real volume is even worse. Very thin markets. The biggest US equity index option trader blew out this morning, heard it was a $150million margin call, he traded bigger and often head to head with the houses, GS now has his position. Who knows what they are gonna do with it, should make for an interesting July.

6/29/2011 10:23:56 PM

Money markets coulda broken the buck yesterday. Record low yields on repos this is a nightmare

6/30/2011 8:57:30 AM

ahaha

7/1/2011 12:34:35 PM

WERE GOING DOWN NOW

7/8/2011 8:50:41 AM

Until the debt ceiling is raised in the next week or two and investor confidence soars a bit.

Sideways market for awhile.

* given the abysmal jobs report I'm surprised the drop wasn't more extreme this morning

[Edited on July 8, 2011 at 11:57 AM. Reason : X]

7/8/2011 11:56:53 AM

Christ

7/8/2011 12:16:56 PM

HOLY MOTHER OF GOD. DOW CRASHES 62 POINTS.

SELL EVERYTHING AND BUY CANNED GOODS AND AMUNITION.

7/8/2011 4:16:11 PM

Who actually gives a shit about the DJI? That's not the point. The point is that things are getting a lot worse and there's been literally zero headway in Congress when it comes to real solutions.

7/8/2011 4:20:28 PM

Is this thread not about the DJI?

Shit, my mistake.

7/8/2011 4:31:04 PM

The joke is that a high DJI somehow reflects a fundamentally sound economy, when that's clearly not the case.

7/8/2011 4:57:23 PM

Recall the fall rally to S&P 1580 ish in 2007 as Bear's two subprime funds were blowing out and the Bernank told us not to worry that subprime was contained. The rally of the past two weeks has been vertical in the face of bad news followed by worst news, kinda feels the same. Also the Goldman Sachs took a massive options portfolio (SP500 index options) from DBS Partners two WED ago on a margin call. The position they got was long gamma short a ton of back month vol. When you do not meet a margin call the clearing firm takes your position and it becomes theirs. This position scores huge in a sharp rally, since the Goldman Sachs had the position guess who keeps all the money the position made. Now what have we done for the last two weeks in a thinly traded holiday market? Rally, rally hard.
Also soon to be out of a job treasury secretary Timmy G went on the sunday political shows and told us that things are gonna be tough for a long time, almost like a kid learning there is no santa he looked like he had figured out all of the government efforts had resulted in nothing but a gutting of the public balance sheet. I think the real shit starts when the various monthly government checks dont show up. I give it 2 years max.

Ps The euro thing is fixed, we fixed the debt with more debt, nothing to see keep moving citizen.

7/10/2011 10:39:30 PM

Looks like a nice big head and shoulders for the s&p

7/11/2011 11:19:02 AM

bttt

8/4/2011 1:14:52 PM

Get those grad school apps in now! Here comes the double dip

8/4/2011 3:41:02 PM

Where is face to explain how doomed we all are?

[Edited on August 4, 2011 at 3:56 PM. Reason : ]

8/4/2011 3:56:10 PM

My decision to spend my career working on grant funded medical research at a state University feels like a damn good one right now.

8/4/2011 4:16:34 PM

Quote :

"My decision to spend my career working on grant funded medical research at a state University feels like a damn good one right now"

Education-Industrial Complex is second to last thing to go.

Military-Industrial is last.

8/4/2011 4:27:53 PM

I work for a financial company and I don't regret it.

8/4/2011 5:28:38 PM

Stick a fork in it. The stimulus failed.

8/5/2011 8:09:51 AM

Oh I'm here. Just really busy at work from all the emergency meetings this week.

Europe is done. Set a hard fail date for 2012 at the latest unless Germany decides to join the collapse by backstopping these clowns.

The USA will benefit quite a bit in the short term from the ultra low rates and dollar strengthening from Euro collapse. Then, we're next. Isn't that exciting?!

8/5/2011 2:38:27 PM

Omfg dow...seven thou???

8/6/2011 4:32:45 AM

Wow, if you have 10 minutes to burn, page 1 and page 2 of this thread make it really clear who does and who doesn't understand economics.

Just beautiful insight

8/8/2011 2:15:58 PM

Yeah, here's my favorite quote:

There has been a 30 year bull market in treasuries. That bull market is over. Rates will only rise from this point on. - face 2/8/2011

8/8/2011 6:24:45 PM

Grasping for straws like always Kris .

The treasury run up is an emergency flight to safety, but its only temporary while the euro disintegrates.

Once Europe goes bankrupt there will be a chaotic scramble out of the next domino the dollar.

You will see the 30 year treasury yield explode soon enough.

If you look at the numbers the dollar has actually done horribly in the past week barely regaining any of its massive recent losses.

8/8/2011 11:05:09 PM

You really dont have to go back far in this thread to see the part where i tell you to sell stocks before they crash.

8/8/2011 11:52:22 PM

Quote :

"The treasury run up is an emergency flight to safety, but its only temporary while the euro disintegrates."

What does that have to do with you being INCREDIBLY wrong?

Quote :

"You really dont have to go back far in this thread to see the part where i tell you to sell stocks before they crash."

You've been saying that for as long as you've been posting under that alias, in fact you even said it before the earlier bull market. If you always call heads it only means you'll be right half the time, it doesn't mean that the coin should always be heads and it is only tails due to market manipulation.

8/9/2011 7:54:04 AM

Kris just stop man. You've proven over and over that you know nothing.

We went all the way back to the March '09 lows yesterday priced in gold.

The market was down almost 10% priced in dollars YTD.

I fucking told you it would happen and it did.

Riots have been moving from 3rd world countries to Europe to milwaukee.

It's fucking coming, open your eyes dude.

I don't care about you, but what if you mislead other people into thinking everything is going to be okay?? No guilt or remorse??

[Edited on August 9, 2011 at 10:43 AM. Reason : a]

8/9/2011 10:38:05 AM

Yeah I'm pretty sure the race riots in Mlwaukee werent related to the market. Nor were the London riots.

8/9/2011 10:56:44 AM

No, they are related to the extreme poverty that is a side effect of the global meltdown we are about to experience

8/9/2011 11:00:20 AM

You can whine and try to say "oh you were wrong bc you said this was going to happen all along so who cares if you were eventually proven right" but that makes no sense.

Bottom line is 20 months worth of stock market gains just got erased in 3 weeks.

You ignored economics that said things were continually getting worse and hid behind illusory stock prices.

Me on the other hand I stayed long the rally until almost the bitter end and then when I realized the economy was getting so bad off that people couldn't continue selling their stocks at fantasy values anymore, I fucking sold out and bought gold and watched it soar while you are losing your Ass.


Home prices are at 2002 levels. If you called the bubble in 2005 you weren't wrong, you were just early.

In this case not only was I right, I pretty much nailed the timing within a few weeks and profited.

So eat a huge sac of testichips you little man.

8/9/2011 2:17:12 PM

If I'm not fighting looters in a Mad Max-esque anarchy by the end of the year I'm going to be severely disappointed, face.

8/9/2011 2:45:04 PM

That isn't supposed to happen this year that's 2016 or so.

Europe has to default first which will actually put the brakes on our crash for a bit thanks to dollar strengthening and lower interest rates and cheaper commodities

8/9/2011 3:52:51 PM

You know who won't default! The Vatican!

8/9/2011 3:56:39 PM

Quote :

" I pretty much nailed the timing within a few weeks and profited"

What? You've been calling for this crash for many months now.

8/9/2011 5:17:14 PM

Quote :

"I stayed long the rally until almost the bitter end"

Bullshit. You've consistently been saying sell for years now, you've never been anything but short on the market.

8/9/2011 5:27:43 PM

Okay first of all this is not the ultimate crash I'm calling for. When it comes in ~5 years it will be utter chaos.

This was simply a short term correction because stock prices were pure fantasy.

How can you possibly say I didn't get the timing right? I let you know literally a few weeks ago that I was selling all stocks to avoid the crash.

You guys are flat out wrong here. Read the thread.

[Edited on August 9, 2011 at 5:28 PM. Reason : a]

8/9/2011 5:28:07 PM

You've said that for years

8/9/2011 5:28:45 PM

AND I WAS RIGHT.

God you are an idiot.

8/9/2011 5:29:31 PM

If you only ever say buy, you'll be right sometimes and wrong sometimes

If you only ever say sell, you'll be right sometimes and wrong sometimes

8/9/2011 5:37:23 PM

Eat a dick.

Quote :

" QE2 wasn't the training wheels for the bike, it was the fucking wheels. "

5/18/2011

Quote :

" What happens when liquidity vanishes from an overleveraged system? Assets plunge, equity disappears. POOF. Then there you are staring into the abyss holding an empty bag."

5/19/11

Quote :

" Kris, you should have more respect for someone who is trying to help people. Your attempts at humor by making disparaging remarks about me typically fail. Because you can never refute my statements you try to undermine my credibility. That's a common defense mechanism but its not necessary in this case. My advice would be to stop taking things personally, and listen to my advice before its too late. I can lead you to the water but I can't force you to drink. For everyone else's sake and safety please don't attempt to undermine how serious this crisis may become. "

6/2/11

Quote :

" Do you have any fucking idea how leveraged our system is right now? Any clue? The Federal Reserve's balance sheet is leveraged at 50x! The banks are about as bloated as they were pre-crisis. Do you know what the fuck is about to happen? Chaos. POOF. Wipeout. When you combine massive leverage and and a liquidity drought you get chaos. Our only option is to proceed with QE3. Otherwise it's fucking lights out, period. Our central planning is playing the role of God here. They can make this market go face down ass up if they want. Do you not get it? "

6/3/11

Quote :

" I don't know when the Fed will announce QE 3. How the hell could I possibly know that? They will do it when stocks start falling rapidly. Stocks will go down as these companies equity approaches zero. "

6/3/11

Quote :

" Right now I'm moving into cash because we are in a deflationary crash in assets. Part 2 is the inflation tsunami when they print the money and devalue the currency"

6/10/2011




And the grandaddy of them all.

Quote :

" Now, QE 2 is coming to an end and I positioned myself for the resuming deflationary asset crash. The stock market is overvalued by a good bit probably at least 20-25% if not more. In this environment the last fucking place I want to be is commodities which could drop twice that if left alone. In a deflationary crash typically you want to be in cash and long term bonds. You want to be as far away from commodities, high beta stocks, etc as possible. In this particular crash you want to be as far away from banks as possible also because they are likely insolvent and I don't know if the political will exists for another round of bailouts (though I certainly wouldn't put it past our government). "

6/10/11

Quote :

" Crying won't help you praying won't do you no good. When the Levee breaks mama you got to move. Going down. Going down now. Going down. Just keep singing that in your head as you witness wealth destruction "

6/13/11

Quote :

" No liquidity with massive leverage. Big things fall hard. There's a reason American bank stocks are getting crushed, it's because ZERO isn't off the table yet for their stocks."

6/17/11

Quote :

" The Europacalypse is here. I don't want to be long when we hit that air pocket to S&p 1,000 (or below...)"

6/19/11

Quote :

" That report yesterday that 50% of money market funds are comprised of European debt is one of the scariest thing's I've ever read. So just where the fuck are we supposed to keep our money in 401k's that don't have gold and silver funds. This is seriously going to be epic."

6/22/11

Quote :

"I just capitulated. Sold everything but my gold and gold miners."

6/10/11

Quote :

"The main thing is, my 0% yielding mmkt fun performed great today. It beat the Dow by 200 points. I learned the hard way from 2008 that if I can preserve my capital during a market crash, that I can buy stuff back cheap and get outsized returns. So why keep it in the market now if you know it'll go down in the near/intermediate term?"

6/15/11

Quote :

"There's just no reason to be in the market right now."

6/23/11

Quote :

"Just don't understand the mindset behind owning stocks during a crash"

6/24/11

Quote :

"Last week was bizarre I gotta admit. All the economic news was bad and the market went on a tear. I guess short term a lot of people thought it was oversold. Its possible the recession has already begun why are we buying stocks"

7/5/11

Quote :

"Oh my fucking god. Shut it down before this baby collapses."

7/8/11

Quote :

"It's starting to look like this last rally was the bulls final push. They've been trying to keep the market up for so long now I just doubt they have a whole lot left in the tank. Ready to capitulate? Since we look like we're facing a horrible growth environment during that time frame there's really no reason to own stocks now since we know they have to be cheaper later. "

7/11/11

Quote :

"ships taking water Lieutenant"

7/11/11

Quote :

"Market crashes, a new stockholder cries. his shares fall to the floor. The confusion sets in. Oh now feel it coming back again"

7/12/11

Quote :

"Ultimately the market has to go down in terms of gold because we are in a liquidity crisis."

7/15/11

Quote :

"Oh baby BAC is getting ever so close to going under."

7/22/11

Quote :

"Check it, you know how I be this week the market can't do without qe3, hey market tell me how my gold tastes"

7/29/11

Quote :

"The debt ceiling is certainly affecting "risk on/risk off" to an extent. But the real concern is the fact that Q2 2011 might have signalled the start of the recession. Q1 GDP just got revised down to 0.4% so you know Q2 will get revised downward once they take the overinflated inventory predictions down. Whether it actually goes negative or not is largely immaterial. But if we're getting near zero growth right now then you cant expect corporate profits not to stagnate, in which case stock prices must come down."

7/29/11

Quote :

"Ignore the crash at your peril suckers"

8/1/11

Quote :

"Why not just take a sledgehammer to the nuts instead? "

8/2/11

Quote :

"Why not just sell the stocks before they go down and buy them back when they are lower? You know that way you don't have to wait a decade to breakeven..."

8/5/11



[Edited on August 9, 2011 at 5:59 PM. Reason : a]

[Edited on August 9, 2011 at 6:00 PM. Reason : a]

8/9/2011 5:56:26 PM