In today’s Barron’s, Mike Santoli very politely and quietly, using language suitable for a family dinner, calls Charles Biderman out for his clueless commentary about secret government cabals:

“One conspiracy theory gaining undeserved traction on Wall Street lately holds that the Federal Reserve or another government entity might — or must — have been a buyer of stocks or stock futures during the run higher off the March lows.

A report by fund-flow research firm TrimTabs Investment Research a couple of weeks ago intensified the usual conspiracy chatter in the blogosphere and across trading desks, suggesting the Fed might be goosing stocks because publicly observable fund flows (via mutual funds, corporate buyback plans and insiders) seem not to be able to account for the 70% gain since the March bottom. Aside from the observation that theories that assign blame to unseen forces are inherently the laziest of all possible explanations, there are many problems with this assertion.

Fund flows don’t capture changes in positioning by hedge funds, mutual funds, pension funds, individual stock buyers, foreign capital and others. The fact that long-short hedge funds outperformed the Standard & Poor’s 500 both into the lows last year and for all of 2009 shows hedge funds went from substantially hedged/short in the deleveraging phase to very long.

More broadly, why would the Fed have to buy stocks, with all it has openly done to penalize risk aversion by adding reserves to the banking system, setting short rates at zero and buying credit products and Treasuries? The whole asset spectrum has fed off these initiatives.”
(emphasis added)

Mike is a nice guy, and way too polite to write anything nasty — so I will add what he is implying. Outside of fund flows, Biderman’s track record is mediocre at best.

Further, the rise of hedge funds, dark pools and private trading networks means that there is much less volume information available for fund flow analysis — which is TrimTab’s bread and butter research.

So its no surprise that Biderman missed the turn, and has remained on the wrong side of the market’s 70% rally. He has concocted a half-assed government conspiracy theory, rather than admit the error. That is weak.

The analytical faux pas has provided a few positives: 1) It reveals that the level of skepticism amongst the public is still high; 2) Its a way to measure someone’s investing IQ. If they bought into the nonsense of this theory, then pull your money/delete them from the blogroll/unsubscribe from the newsletter.

Worse than worthless, they will cost you money.

>

Previously:
TrimTabs: Its a Recession, and Its Already Over (Wrong) (April 2nd, 2008)
http://www.ritholtz.com/blog/2008/04/trimtabs-its-a-recession-and-its-already-over-wrong/

Trimtabs Continues to Abuse Withholding Data (April 23rd, 2008)
http://www.ritholtz.com/blog/2008/04/trimtabs-continues-to-abuse-withholding-data

Trimtabs: Americans have stopped saving (?!?) (January 2nd, 2009)
http://www.ritholtz.com/blog/2009/01/trimtabs-figures-out-that-americans-have-stopped-saving/

PPT: The President’s Working Group on Financial Markets (January 8th, 2010)
http://www.ritholtz.com/blog/2010/01/ppt-the-president’s-working-group-on-financial-markets/

Source:
Suspicious Minds
MICHAEL SANTOLI
Barron’s JANUARY 18, 2010
http://online.barrons.com/article/SB126359793047030055.html

Category: Psychology, Really, really bad calls, Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

80 Responses to “Barron’s Santoli: Biderman is Clueless”

  1. VennData says:

    Biderman’s a crackpot. He’s been spewing this “tin foil” hat nonsense like he’s the front of a Tea Party camera pan, from CNBC to his “mediocre” reports.

    An old hobby horse of Mike Santoli is the conspiracy crowd and their nonsensical innuendo.

    Maybe Biderman’s looking for a career change into that soft mortar between MSM and tablo-tainment.

  2. Robespierre says:

    I really have no idea if it happens. I can say this, however, every effort made to add transparency to the FED has encounter very strong resistance from the usual suspects (FED) and also from others I would not expect to resist (Obama). So in my book ALL government and quasi government entities involved in the financial markets are suspect. That political viw, however, does not preclude me to go long on a market as you seem to imply. Moreover, the fact that I suspect manipulation on the upside by the FED makes me want to go long even more. Having said that the easiest way to find out may be to ask Dr. Ben under oz if he knows if the FED is involved (directly, indirectly by prayer etc) with any equity market manipulation. Lets not forget that while the FED can manipulate the equity markets legally (as far as I can tell) it is still (for the time being .) illigal to lie under oz.

  3. krice2001 says:

    I have to agree with you Barry — “So its no surprise that Biderman missed the turn, and has remained on the wrong side of the market’s 70% rally. He has concocted a half-assed government conspiracy theory, rather than admit the error.”

    I think many who were so skeptical that missed out completely or nearly completely on the rally have gravitated to what ever theories they can as to why they sat this one out.

    It’s human nature and helps the ego, I suppose. I myself probably would have been in this camp if it weren’t for you, Barry. I’ve noted your ability to more or less non-ideolgically navigate the markets. And because of that I did not sell off but stuck with the market (albeit at a somewhat lower %).

  4. The problem is that our wetware works against us — investors have to be very wary of how the way their brains are wired, and what counter-productive foibles it tends towards.

    As i have noted in the past, Humans just aren’t built for the capital markets.

  5. MayorQuimby says:

    I’m a firm believer the gvmt was been heavily involved in manipulating the markets in March back when Obama made his “goo time to buy stock” call.

    Once AGAIN (sigh)…TPTB did this SAME THING back in ’29 and have EVERY REASON to do have done it again. TPTB manipulate jobs numbers, GDP etc. and if you think a society that cheers for athletes on steroids, models with boob jobs etc. (ends justify the means) WOULDN’T want the markets pumped (who cares how or why), you’re crazy.

    The sad truth however is that – high asset prices are NEVER a good thing unless you are the HOLDER of said assets. And who OWNS all the stock? TPTB, Pensions, unions, Buffet, etc. – PEOPLE THAT GET POLITICIANS ELECTED.

    Occam’s Razor folks….

  6. MayorQuimby says:

    …and I’m so disappointed in anyone that characterizes people as being bitter for having “missed out” on a rally. Sheesh. Look – if you’re only incentive to buy a WAY overvalued stock that pays no dividends is in the hopes that someone ELSE is foolish enough to overpay even MORE well – what can I tell you. My take on this whole market is this – people pay $115 for a pair of blue jeans in the hopes that someone else will give them $120 for the pair. It’s laughable.

    Check out the google video on game theory lessons where the professor auctions off a one-dollar bill for up to $2.

    ~~~

    BR: I didn’t say bitter — he engaging in a most human of behaviors — rationalizing his error.

  7. SS says:

    There is absolutely no evidence or serious reason – - except your statement that the FED has already done a lot – -.
    that this has not occurred. It would in no way constitute a conspiracy of any sorts if it did – - e.g., does not require dark rooms, cabals or even cigar smoke, simply periodic buying on the part of the FED. Flow of funds is a valid method of assessing the market and if it has been done correctly and has not yielded the right conclusion one must conclude as you appear to do if not the FED than the hedge funds have sufficient buying power to drive the market or even manipulate since they do communicate among each other. This would not necessarily constitute a cabal either, so one can’t refute it by simply shouting “conspiracy.” Both possibilities remain very real to me.

    SS

  8. franklin411 says:

    Isn’t ironic that the same kind of people who rabidly argue the idea that the government is too inept to efficiently administer any program that benefits Americans are the same kind of people who rabidly argue that the government is engaged in a master conspiracy of epic proportions that threatens our liberty to starve in a land of plenty?

  9. Theodore D. says:

    If someone earnestly believes the Gov did some manipulating during March then the way to prove them wrong is to show them how this is not the case. Saying they have a low IQ and throwing them under the rug doesn’t do much to show them the error of their thinking. I would agree any traction that this guy gets goes to the general publics belief that the Gov did some manipulation, and given the apparent popularity of this thinking isn’t it up to someone to prove them wrong? What better place then the blogosphere to do this!

    Please – try to explain how the Gov WAS NOT involved but pretend you aren’t writing for someone in the industry who is trying to justify losses to a client by endorsing a Gov conspiracy i.e. it wasn’t my fault, but engage those who question how unemployment can be so low, p/e ratios at record highs, no fundamental change in the economy since two summers ago, yet things seem to be buzzing right along in equities.

    ~~~

    BR: Your argument is an attempt at burden shifting. That is a fail.

    Biderman is claiming that the Govt/Fed has been secretly been buying stocks/futures to goose the market. It is up to HIM to PROVE this. HE HAS THE BURDEN OF PROVING THIS, not me. It is not incumbent upon us to DISPROVE every conspiracy theory. Extraordinary claims require extraordinary proof of their validity.

    Regardless, the argument that he cannot find the fund flows is easily explained by Santoli — the action has moved away from Mutual fund flows, and to dark pools and hedge funds.

    What Biderman has actually raised as an issue is why his analytical method — successful for 20 years — may be losing its validity . . .

  10. Transor Z says:

    [W]hy would the Fed have to buy stocks, with all it has openly done to penalize risk aversion by adding reserves to the banking system, setting short rates at zero and buying credit products and Treasuries? The whole asset spectrum has fed off these initiatives.

    Exactly. The Fed has been operating in plain sight. Just try to talk to everyday folks about Fed operations and see how quickly their eyes glaze over. Santoli’s position does not dismiss the possibility that the Fed has been trying to reinflate equities and other asset classes (ahem, housing) through ZIRP and QE. There’s your Occam’s Razor right there.

  11. call me ahab says:

    BR- alright- keep tooting your own horn and disparaging others- but be sure and tell us when the top is in- because you appear to be “all knowing”- at least in your own mind

    f411- some truth to your point- however- from a philosophical perspective- many do not believe in large government- not because it is inherently bad or inept but because it in the end squashes personal freedoms-

    where the government tells the people how it’s going to be- not the inverse

    ~~~

    BR: I am not tooting my horn — I am tooting Santoli’s.

    As to Biderman, I have been critical of some of the more outrageous indefendable things he has said over the years. He revealed himself to be a political hack when he referenced the inaugural as the “Obama Coronation.”

  12. GC says:

    Wow, that’s a pretty douchebaggy set of comments, Ahab

  13. Moby Trader says:

    Longtime lurker, but I had to make my 1st post to ask: “What the hell are you talking about Ahab?” How does ritholtz toot his own horn here? your comments are not only silly, they are based on crap in your own head, not on what was said here.

    I’m the head of a NY prop desk, and if any of my traders gave me an analysis like yours, I’d bounce their ass out into the street for being unqualified to sit on my desk. Rule #1: Never defend a losing trade, a bad analyst or a losing strategy. Understand why they are wrong, and don’t repeat their mistake.

    Ahab, clean out your desk, you’ve bee shit-canned.

  14. Steve Barry says:

    “The analytical faux pas has provided a few positives: 1) It reveals that the level of skepticism amongst the public is still high; 2) Its a way to measure someone’s investing IQ. If they bought into the nonsense of this theory, then pull your money/delete them from the blogroll/unsubscribe from the newsletter.”

    While his theory may be nonsense, so might be the rationale and underpinnings of this historic rally. I’m sure you read and respect David Rosenberg, who would agree with my assessment. He’s been wrong too…so have I. There is no shame in being wrong sometimes. I believe I was wrong because I never dreamed of how willing the Fed was to sell out future generations to bail out reckless banks. It won’t work…they are just whistling past a graveyard right now…we will either sink into deflation shortly or they are setting up an even bigger moral hazard that will result in a bigger crash next time. It is hard to predict the results of an insane experiment.

    As for level of skepticism being too high, the numbers certainly don’t back up that anecdotal conclusion. Have you seen II Bulls/Bears ratio??? Higher than the Dow 14,000 top, with all we now know about the credit overleveraging we still have and unthinkable state and local deficits. Almost every other sentiment indicator I look at is similarly very bullish…AAII, Nas100 Bulls…21 day total put/call is probably near decade lows.

    http://contactgotoguy.googlepages.com/Bull-Bear-ratio.html

    ~~~

    BR: I have discussed this with Dave (and others).

    Last weekend, I posted Lessons from Merrill Lynch; Dave appears to be ignoring his own Rule #8: Have respect for what the markets are telling you.

    However, there is a huge difference between having a credible methodology and occasionally getting it wrong, and being a hack. Being wrong is not only excusable, but expected. I am wrong constantly, and I expect to be wrong.

    On the other hand, allowing your personal biases to lose your client smoney is inexcusable IMO.

  15. dead hobo says:

    Then, someone explain why the “greatest stock buying opportunity of our generation” stopped at the same time the Fed’s $300B monetization scheme petered out at the end of Nov 2009? I know … some idiot will say “Show me some buy orders with Ben the Bubble’s name. You can’t so it never happened.” Perhaps we will see evidence of proof if the Fed ever get’s audited. I strongly suspect antics like this and probably worse are behind the Fed’s mandate for absolute secrecy.

    Re Barrons: They may be a traditional periodical to read, but they are not omniscient. In fact, they are always on all sides of an issue so they can sometimes say “they got it right”.

    Also, all sell siders must maintain the fantasy. It couldn’t be a pump. It must be great calls that come from genius. It’s also a circle the wagons technique to keep the rubes invested and keep the 1.5% – 2% account management fees intact. There goes the asset management industry if the Fed pump becomes common knowledge. Perhaps this is one of the bank runs Ben the Bubble is so afraid of?

    The spew is just a Wall Street jobs issue. Proof of a pump would mean the market is not a safe place and would cause a run on the stock market. Asset managers would go out of business and so would many of those who advertise in Barrons and on CNBC. Accounts under management would evaporate in value.

    So now the sell siders ignore overvalued P/E ratios and hunkered down consumers and spin whatever fantasy will keep the rubes invested for another week or longer. Maybe a miracle recovery will sneak in and create profits that support fantasy high stock prices.

  16. bsneath says:

    Certainly the Fed has been trying to reinflate equities – as well as all asset classes – because of the well known damage that deflation causes to an economy. Look no further than housing for an example. If the Federal Reserve directly purchased equities then this would be an example of “inept government” because it eventually would be uncovered and the Fed would suffer political consequences. Further there were other mechanisms that could be used.

    While I personally think the stock market’s rally was primarily due to QE, I can also imagine a “quid pro quo” between the United States and other nations with sovereign equity funds, perhaps China, Singapore, Middle East, etc., may have also occurred. For example, perhaps we agreed not to fight China on their currency devaluation policies in exchange for China’s agreement to purchase US equities. This would not be a conspiracy per se, but rather an agreement that both nations would see as being in their best interests at the time the agreement was made. Just a possibility….

  17. dead hobo says:

    Hint to Fed:

    If you want to get away with pumping the market, you should make it look realistic. Ben The Bubble claims to be a scholarly expert on economic stuff. If he want to get away with a market that is fraudulently supported in value, he should at least make the valuations realistic. And let something that looks like normal variation show up from time to time. I understand that predatory HFT algos make this more difficult than in the past, but you could at least try.

  18. call me ahab says:

    SB says-

    “I never dreamed of how willing the Fed was to sell out future generations to bail out reckless banks . . .we will either sink into deflation shortly or they are setting up an even bigger moral hazard that will result in a bigger crash next time. It is hard to predict the results of an insane experiment.”

    no doubt- BR however- vanity of vanities- will continue gnawing on that same old rag- “well I got the bottom call right”-

    he best beware of the oft quoted phrase- “what have you done for me lately”- because you cannot bask in your past glories forever

  19. Ignore the naysayers, and keep firing live ammo at the clowns.

    DJMT:

    Many market observers predict tops and bottoms, but few successfully get their timing right. Jeremy Grantham and Barry Ritholtz sit in the latter category, so when they offer their forecasts, investors would be wise to take note.

    Grantham, the chief investment strategist at GMO, predicted in March that a stimulus-fueled rally would lift the S&P 500 to 1000-1100. Now that his prediction has been fulfilled, he’s turned sour on the stock market and many facets of the economy.

    He blasts the continued employment of people like Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner (”like reappointing the Titanic’s captain for facilitating an orderly disembarkation,”) the home-buyer credit (”blatant vote-buying by Congress,”) overpaid executives (”unjust desserts”) and the “well-managed” auto industry.

    But he’s not surprised by the market rally.

    “The lessons, if any, are that low rates and generous liquidity are, if anything, a little more powerful than we thought,” he says.

    And even amid a “profound” failure of the financial system, and weak public leadership that missed problems like the housing bubble it should have seen, the biggest problem is that the banking system has simply gotten too large, Grantham says.

    “The only long-term hope of avoiding major recurrent crises is to make our financial system simpler, the units small enough that they can be allowed to fail, and, above all, to remove the intrinsically conflicted and dangerously risk-seeking hedge-fund heart from the banking system,” he says. “The rest is window dressing and wishful thinking.”

    So despite the low rates and liquidity, Grantham believes stocks at current levels are overvalued by about 25%. He doesn’t expect the S&P 500 will re-test the early-March low of 666, but does expect stocks to fall at least 15%.

    After two consecutive days of triple-digit declines, the Dow Jones Industrial Average has jumped all over the place on Tuesday, rising as much as 80 points while also falling as much as 30.

    Prior to today, stocks have dropped four out of the last five sessions, but major indexes are only 2% off last week’s 2009 highs.

    While it may not look like it right now, this rally may actually be wearing itself out, says Barry Ritholtz, CEO at FusionIQ.

    “I am now starting to pull in my horns a bit, as this rally looks to be getting a little tired and showing signs of technical deterioration,” he writes at The Big Picture.

    Ritholtz is a well-known contrarian who predicted in early March that a big bear-market rally was coming. He’s been bullish ever since, but now seems to be slightly changing his tune.

    Stocks may still hit new highs, but he sees a correction coming, albeit not as steep as Grantham’s prediction. Ritholtz, who sees stocks pulling back in the 5%-15% range over the next 60 days, lists five factors that make him more cautious.

    -Famed Market Timers Say Rally’s Getting Sleepy, Markettalk

    That was a 6% pullback before new highs — You are now just ahead of GMO in my book.

    ~~~

    BR: Thanks for the kind words, but I have a long way to go before I can even shine Grantham’s shows

  20. Dennis says:

    I agree — most pundits do not use rigorous logic, and lack a math/science background.

    Keep hammering away at nonsense where ever you find it!

  21. MayorQuimby says:

    Just look at this whole discussion! Step back and realize the absurdity of ALL OF THIS?!!!!

    The premise of equity-ownership is to OWN part of a company and PARTAKE in its profits.

    But that is NOT what goes on today. P/E, price to book, debt – all irrelevant.

    “TRADING” is an ends unto itself! No one EVER EVER EVER discusses cash-flow, valuations etc.

    “Trading” is supposed to be nicking a few pennies in between trades by INVESTORS.

    NO ONE ‘invests’ in our capital markets.

    EVERYONE merely speculates.

    When this thing collapses (and it will), you will ALL be so incredibly disgusted and sick of the entire system – you will likely walk away and not return for DECADES.

  22. call me ahab says:

    “On the other hand, allowing your personal biases to lose your client smoney is inexcusable IMO.”

    alright- that’s an excellent point-

    so sue me- sometimes you sound like “the all knowing” OZ

  23. dead hobo says:

    MayorQuimby Says:
    January 16th, 2010 at 11:11 am

    NO ONE ‘invests’ in our capital markets. … EVERYONE merely speculates.

    reply:
    ———–
    Yes! The market is 1/3 Sheeple, 1/3 predators, and 1/3 degenerate gamb*lers.

  24. flipspiceland says:

    The Government manipulating the markets is laughable.

    An investment house, closely tied to the admenstruation, indeed MANUFACTERED this one, is on the the other hand very seriously involved.

    WE can congratulate ourselves if we have been savvy enough to take TheBamster’s and Bufffets advice back in March and be joyful about the 70% uptick, (several thousand per cent if you bought CARS and DDRX among others) but to think that there is no manipulation of any kind by any group, very much allied with Geithner, Bernanke, Paulson, biltmore
    is sheer ostrich-in-the-sand hubris.

  25. alfred e says:

    Conspiracy? Fed inflating? Given our current environment, we’ll never know for sure. Simplest theory is someone inside pumped the market in a very sophisticated way. Probably someone with access to free money from the fed. Perhaps encouraged by the fed to do so, lest all those states and pension funds really crash and pull all of the economy down.

    There were too, too many days when uncharacteristic buying patterns emerged during the last few minutes of the day that reversed what had been a down day up to that point. Commenters on this blog were regularly commenting on when the PPT was going to show up.

    There’s something about the new algo’s, HFT, and computer to computer trades that feed speculative price increases more than decreases. Unbalanced.

    Will it crash? Stay tuned. Depends on whose money is on the table.

  26. Let’s be very specific about the charge:

    The accusation of Biderman was that the government was secretly buying stocks and futures to drive a market rally.

    We are not referring to what the Fed has been very PUBLICLY doing for the past 2 years. I have written (literally) chapter and verse on what Greenie did that contributed tot he collapse, and what Bernanke has done since.

    Distinguish between:

    PUBLIC vs PRIVATE
    WH vs FED
    ZIRP vs FUTURES BUYING

  27. b_thunder555@yahoo.com says:

    Does it matter if Gov”t and Fed are buying, or they simply green-lighted and/or encouraged the buying binge by the biggest banks? It’s a fact that Gov’tFed tried to extend the last Bull market with rate cuts, $600 rebates and temporary tax cuts. Now we have an extreme case of “haves” on Wall St. and “have nots” most everywhere else. Not only Wall Street has Fed’s free money, they have the ear of Geithner, and they know that the “Helicopter” Ben’s goal in life seems to be making everyone believe that the Fed did nothing wrong, and that the present balance of powers needs to be preserved (i.e. all power to TBTFs.)

    Again, does it matter if the Fed and/or US Treasury buying directly, or simply enabling and encouraging TBTFs to “help out?” You scratch my back, I’ll scratch yours? Nobody knows what Paulson discussed with the bankers in 2008, or Geithner with bankers in 2009, or what “the helicopter Ben” discusses with them as I’m typing this. I don’t really care if Biderman is “technically” correct – i.e. the Gov’t buys equities directly- i think he’s right in principle the market is being manipulated by some entity/entities that most people cannot pinpoint, but certain privileged companies can make trading profits 63 out of 64 day, most days over $50mil/day.

    It’s a fact hat the gov’t overtly manipulates the mortgage market and has been for a while. The Fed does the same for bond market with QE. Why would it be a stretch to believe that they can acquire equities? Or futures? Or provide interest-free cash to their biggest “partners” (in crime?) with implicit request to prop up the market?

  28. MayorQuimby says:

    Let’s be very specific in response.

    There is NO WAY you will EVER know the truth about this.

    What I know from NUMEROUS independent people on the street:

    1. YES, the Fed DOES intervene in the futures markets. They have for decades.
    2. NO, they are NOT the entire market and do NOT have enough clout or the ability to CREATE any sustained rally.
    3. YES the big banks DO (but not 70% – maybe 10 – 15% is all).

    So…TPTB are a smart, crafty bunch. They wanted to GRAB 2 decades of hedge fund guys, Jim Cramers etc. all as they were running out the door and said, “WAIT! Don’t leave! We fixed it!”

    So – the insiders (SAC, Goldman etc.) started buying at the 666 level in March. Slowly and cautiously, the hedge funds, bought. Once it had legs, the banks, TPTB, PPT, Fed didn’t need to do anything. ALL they needed to do – was let greed, nature and THOUSANDS OF PEOPLE that are USED TO PAYING WAY TOO MUCH for equities, take over and ‘do their thing’. They probably slammed on the bid in July as well when we had our 1st big lower low.

    And that was that.

    Now – everyone is:

    a: scared to short
    b: thinks .gov REALLY DOES have control of the markets (they don’t)
    c: thinks .gov has bailed out the entire economy

    The ENORMOUS danger in all of this is the following – all it will take is for the MARKET to realize that .gov DOESN’T have control of the situation (Fed QE, keeping rates low, GSE bailouts etc.). Once the MERE DOUBT enters the market, you WILL SEE people selling. Real selling.

    GAME THEORY. You CAN actually auction off a dollar for more than a dollar. The guy who pays $1.25 does so because he THINKS someone ELSE will pay $1.50 for it. So he can make 25% on the trade. But ALL TULIP MANIAS END one day.

    You MUST know what something is ‘worth’ in a very fundamental way (evan though value is always relative). The less you pay, the MORE YOU OWN, NOT how much % it went up in 9 months. OF COURSE that is unsustainable. It is all about OWNING STUFF. And you don’t want to own when there is a TON of downside risk. WS knows this. Main street does not. Main street is being GAMED.

  29. Steve Barry says:

    Here are the few proven facts related to the Presiden’ts Working Group:

    1) Formed in direct response to Black Monday Crash in Oct. 1987. That should give insight as to their mission.

    2) Their workings are very secretive…in fact Barry, financial professional and author, who I love because he usually has strong opinions and backs them up, admitted last week he has “no clue” what they do.

    3) Since the grouped formed, the 10 year normalized P/E of the market, which for 100 years never could exceed 25 times, has spent the last 15 years comfortably above 25, htting 50 in 2000.

    Those facts cannot be denied. My conclusion, and I have no smoking gun, but I’ll be a monkey’s uncle if they are not doing something secretly to prop the market.

  30. michaelismoe says:

    “GAME THEORY. You CAN actually auction off a dollar for more than a dollar. The guy who pays $1.25 does so because he THINKS someone ELSE will pay $1.50 for it. So he can make 25% on the trade. But ALL TULIP MANIAS END one day.”

    Actually if a guy buys a dollar for $1.25 in hopes of selling if for $1.50 he makes a 20% profit, not 25%

  31. MayorQuimby says:

    Oh yeah – another thing. There IS NO right or wrong in investing. It’s all shades of gray. Every year I hear tales of guys making 200% then 75% then 300% and yet 5 years later, they’re done. The market always favors owners and ONLY the owners that put hard work in and bought CHEAP. The owners don’t sell unless the fundamentals of a given company look weak or likely to be weak. You have to step back and think big picture. Since the whole country is slowly going bankrupt and since 200 years of wealth are being systematically destroyed in a couple of decades by a small group of ‘witch-doctor economists’ who are in fact pouring gas on the fire instead of water, I’d say – WHO CARES ABOUT STOCKS?!!!

    What good is having the sharpest tuxedo on HMS TITANIC?!

  32. this is exactly correct. Biderman fought the Fed and the Fed won. for someone whose entire raison d’etre is following the trickling streams of money flows, the gentleman missed the biggest flood of cash over the transom in world history.

    let me know when he turns bullish.

  33. foxmuldar says:

    Barrons:

    “A report by fund-flow research firm TrimTabs Investment Research a couple of weeks ago intensified the usual conspiracy chatter in the blogosphere and across trading desks, suggesting the Fed might be goosing stocks.”

    The Fed doesn’t need to be pumping stock continually, all they needed to do was get the ball rolling. If the Fed were able to pump money into the market like they did with the banks and AIG, then once the rebound took hold, the Fed could let the markets handle the rebound with the help of a constant mention of those nowhere to be seen green shoots. And of course we kept hearing on a daily basis from those geniuses on Wallstreet about those green shoots. So everyone kept piling on and once the snowball got rolling, the Fed could easily exit the game and let the feeding frenzy continue without their involvment.

    As for Mutual fund buying, at the time of the collapse, investors were taking what little they had left in those funds and moving them to money market funds or simply pulling out completely. Its much easier for a hedge fund to jump back in and continue to buy. If they are on the wrong side of the bet, they end up desoving their fund with the loss mainly to the investor. The manager simply takes his big cut and moves on perhaps to another fund.

    Considering what we saw with the government insider dealing with Goldman Sachs and the shady deals they gave to AIG, and the recent moves that gave Freddie and Fannie full backing on all their bad debt. Its understandable that folks have a bad taste in their mouth when it comes to the Fed. I agree its time to audit the Fed. Then maybe we would see just what if any manipulation took place.

    ~~~

    BR: Funny, all these things keep coming out — the AIG pass thru to GS, the massive bonuses, the SEC order shielding AIG, all of it.

    Yet no one can find a single stock trade from the PPT.

  34. MayorQuimby says:

    “all they needed to do was get the ball rolling.”

    EXACTLY!

  35. MayorQuimby says:

    One more thing (since I like to see myself talk lol):

    The top 1% OWN EVERYTHING – the companies, the exports, the political powers – EVERYTHING. When stuff gets CHEAP – that allows the BOTTOM 99% to buy in. Do you think Buffet, Immelt – all these arrogant ELITES want Joey Bagizeppilis owning the companies out there?! Hell no!

    When stuff is UNAFFORDABLE, the little guy can only get his hands on a few shares of a company. THIS IS HOW THEY KEEP CONTROL OF A SYSTEM THEY ALREADY OWN. They tax us, and the Fed prints NEW MONEY off that taxation and then hands it to banks to keep EVERYTHING OUT OF PRICE RANGE for the little guy. This keeps the inflation-bunny out in front of us all so we all have to keep chasing it in perpetuity and never ‘get ahead’. Chasing the inflation bunny is what keeps everything rolling and the system running. They can siphpon off our energy as we run (aka their profits). If everything collapses in price it means – REGIME CHANGE with regards to who controls THE WEALTH MECHANISMS of the country – the companies.

  36. dead hobo says:

    Show me this and I will drop the subject:

    * A stock market that is safe to buy and hold in. It maintains value because the stocks of the underlying companies adequately, on balance, reflect profits. This is not to say thieves, degenerates, and predators aren’t in there too. In this case, the latter trio doesn’t control the market, the former has significant influence. This is not to say there won’t be big drops, but they can be explained and fundamental economics can explain recovery.

    * Show me normal variation that has a historical appearance; meaning that jagged line that made people think fractals could model a market or the ones that would make an engineer who is evaluating a SPC model that the process is in control.

    * Show me a market where predatory HFT algos don’t create an upwards bias and a floor in markets with low volume.

    * Show me a market where massive cash inflows don’t appear from public sources and “somehow” be coincident with massive stock run ups that end when the cash flow ends. ZIRP is a pat, empty calorie answer for this but not for other aspects of market support. Somebody took that free money and pumped the market in a very methodical way. HFT algos are in maintenance mode and will put any new cash to efficient use if the market is low volume.

    * Show me a market where it is not ‘illegal’ to short sell unless you are running HFT algos. I used to hate the naked shorts and fear short sell bear raids. Ah, the nostalgia. What I would give to see one today.

    * Show me a market and economy that isn’t slowly being made to follow the Japanese model of zombie banks and institutions. Show me an economy where the TBTF group isn’t so obviously in control of the US Treasury (indirectly by being too clever for Uncle Stupid to comprehend).

  37. dead hobo says:

    BR: Funny, all these things keep coming out — the AIG pass thru to GS, the massive bonuses, the SEC order shielding AIG, all of it.

    Yet no one can find a single stock trade from the PPT.

    reply:
    ———–
    Audit the Fed and settle it once and for all. Right now the system has no credibility.

  38. call me ahab says:

    BR- check it out- Jesse’s Cafe ran w/ your idea- I guess imitation is the best form of flattery-

    http://jessescrossroadscafe.blogspot.com/2010/01/weekly-highlight-bankers-testify-to.html

  39. johnborchers says:

    I think he’s partially right. When the market was going down and Lehman was selling stock or preferred to try to fill the hole everytime the banking stocks were up. This was no accident. Everytime a bank has come out with bad news the market which may have been down ends up going the other way. It seems to be doing the same thing going forward. Any bad economonic news has the market going up.

    There’s no doubt in March 09 myself and many others went all in long back into the market just because it didn’t seem things were as bad as the market has priced. I think I ended up getting in somewhere near 3% of the bottom and I was just lucky it didn’t go lower.

    He’s wrong when it comes to measuring valuations of stock inflows. After all it only takes 1 share of a stock to be up 10% to make the value of that stock much higher although people do prefer to see even lots. If I bought a $20 stock at $22 and the market cap was $2B but the price ended up sticking at that $22 now the market cap is $2.2B and I only invested $200 more in the market. Now of course the markets are more liquid than this but the same pricipal works.

  40. johnborchers says:

    Dead Hobo: A Fed member Lockhart (spelling?) was out what was it Friday saying DON’T AUDIT THE FED but somewhat indirectly. The only reason this could be is if there is something to hide that would be bad for the regular market’s perception.

  41. cognos says:

    “Flows” dont cause price action. For every $1 buyer, there is always an exactly a $1 seller.

    So what does cause price action? ANS: expectations. It is really that simple.

    Did the Fed cause INTC to post $0.40 eps this Q? Intel’s q earnings number was 1000% YoY growth. Did it cause JPM to beat by 20% yest? Didnt JPM beat by 40% for Q4? The list goes on and on.

    Generally… the real earnings recovery looks pretty good (it looked dismal 1-yr ago). #s have consistently surprise to the upside since the silly MTM rules were lifted and banks stopped being forced liquidators. Since then HY credit and mortgage credit bond assets are UP 50-100%… so credit losses and foreclosure expectations also have improved massively.

    Further, leading indicators (do lagging indicators actually “indicate” anything?) have posted the best series of gains since 1992, or 1982 (hmm… two pretty good recoveries there). Leading indicators turned in April of 09. In the fall Goldman’s “global leading indictor” composite hit all-time highs.

    But, yeah… the Fed must be buying stocks and manipulating the market because otherwise YOU just missed 100% returns and YOU are not a good market predictor. Occam’s razor… that sounds about right.

  42. call me ahab says:

    cognos-

    you’re my contrarian indicator

  43. flipspiceland says:

    This argument is like herding cats.

    Those convinced that members of the government including the cabinet, cutpurses like Paulson and Geithner and members of agencies of the government like the FED, Bernanke and Greenspan are
    innocent of all charges regarding market manipulation are full of crap.

    Period.

  44. dead hobo says:

    flipspiceland Says:
    January 16th, 2010 at 1:46 pm

    This argument is like herding cats.

    Those convinced that members of the government including the cabinet, cutpurses like Paulson and Geithner and members of agencies of the government like the FED, Bernanke and Greenspan are
    innocent of all charges regarding market manipulation are full of crap.

    Period.

    reply:
    —————
    Respectfully disagree. I think Santoli and others are in sales pitch mode. The consumer advocate in me takes over and makes me Hulk out. The distraction is the Fed conspiracy ridicule. The real purpose is to keep people invested and protect margins.

  45. Transor Z says:

    “Flows” dont cause price action. For every $1 buyer, there is always an exactly a $1 seller.
    ———–

    Ever heard of the bid-ask spread? Liquidity? Market maker?

    Reading is fundamental, dude.

  46. Steve Barry says:

    I bet if the Fed came out tomorrow and said “audit us, we have nothing to hide”, the Dow would rise 1000 in a day. Will never happen though…That’s how much their every action moves the market…look at what happens when they make their policy statements…market gyrates wildly for hours. As they take on more and more steps to prop the economy, their effect will be even more magnified.

  47. flipspiceland says:

    @Steve Barry

    Even more, WHO is the FED? Some here act like the FED is some sort of non-entity, a robot, an amorphous being instead of a flesh and blood hoodlum, being run by a set of Sicilian-like Dons who
    know what the moves of the so-called FED are before they happen and profit immensely in doing so.

    But don’t tell the innocents here that. They might still believe in Santa and the Easter Bunny.

  48. John Clarke says:

    I think BR’s prior post last week (PPT…and comment section) nailed it down pretty good. Santoli is late to the Party.
    The ‘Manipulation” of the Equities Markets is going on in full view of the Public… Negative Real Interest rates, QE policies, FASB rule changes, accounting gimickry amongst the major comercial banks, First time homebuyer tax credits, Funny economic data released from the Federal Government.
    If you think these collective policies are going to continue to work… go long these (Overbought) markets and buy more on pull backs ( and Be Sure to stay tuned into CNBSH*t and believe in the “Resiliency of the Markets”).
    If you think these policies are going to do nothing more than create Equity Market Distortions/Dislocations/Stagflation… but most importantly continue to eat away (at whats left) of the Faith and Trust in these Financial Markets in the not too distant future, as I believe they will,.. then stay mostly in Cash (and/ or be very nimble) and wait it out.
    Either way we’re going to get that Big Pullback– stick with the Technicals and Indicators.
    I don’t mean this to sound like an Apathetic Response— “make money any way you can”– to what these Clowns at the Federal Reserve, Treasury, Regulatory Agencies, WallStreet Commercial Banks, and Congress in the last two Administrations are doing to this Country. Anyone wanting to Slam their foot up the Ass of most of these Sh*tBirds, or get a select few them in a room alone one after another– (Hell I’ll even make it fair and hand each one a baseball bat first)–can stand in line right behind me.
    Problem is until the majority of Americans’ 401(k’s) start turning back into 201(k’s), and Real Wealth continues to head south, no one is going to give much of a Sh*t.

  49. “Further, the rise of hedge funds, dark pools and private trading networks means that there is much less and less volume information available for fund flow analysis — which is TrimTab’s bread and butter research.”

    as above, that type of obtuseness, if he is, in fact, culpable of it, is inexcusable..

    peep would be better off ~”Walking around Blind, w/out a Cane”..

  50. Transor Z says:

    This is exactly how a democrat loses an election for Ted Kennedy’s seat in Massachusetts (47 seconds):
    http://www.youtube.com/watch?v=OmNpcMHwOa8&feature=player_embedded

  51. MayorQuimby says:

    Dead Hobo- Pls read my last 2 posts where I explain EXACTLY WHY they would do what they did:

    “Respectfully disagree. I think Santoli and others are in sales pitch mode. The consumer advocate in me takes over and makes me Hulk out. The distraction is the Fed conspiracy ridicule. The real purpose is to keep people invested and protect margins.”

    Then watch this: http://www.youtube.com/watch?v=acLW1vFO-2Q

    ONLY FOOLS THINK STOCKS ARE ABOUT TRADING AND MAKING A PETTY 30% or 2% or whatever. IT IS ABOUT OWNING THE WEALTH CREATION MECHANISM ITSELF – THE COMPANIES. TPTB DO NOT WANT TO SHARE CONTROL OF THE SYSTEM so…THEY DO NOT WANT TO GIVE YOU AN ENTRY POINT. IT’s AS SIMPLE AS THAT. AND THEY WILL USE YOUR FUTURE LABOR TO PRINT NEW MONEY AND SCREW YOU ALL TO KEEP EVERYTHING UNAFFORDABLE – HOUSES, CARS, EVERYTHING. BECAUSE THEY PROFIT FROM YOUR LABOR!!!!! YOU WORK FOR THEM!!!! WAKE UP and reform capitalism so we can heavy a healthy form of it! Fight goldbuggery and socialistic calls (both of which will be coming in short order)!

  52. jcate says:

    I’m a bit confused by the following statement:

    “Fund flows don’t capture changes in positioning by hedge funds, mutual funds, pension funds, individual stock buyers, foreign capital and others.” So, if the stock markets are up, something else must be down. What, pray tell is that far down? $6 trillion is a whole bunch of money.

    BR: Are you saying that dark pools, etc. have that kind of money to slosh around? Makes me think of my kid making waves in the bathtub. What a flood!

  53. cognos says:

    @TransorZ – Given that market makers are taking spreads from both buyers and sellers… how does this translate flows into price changes?

    If “equity investors” who are not market makers want to create an “out-flow” of 10% of their investment… do then market makers become L-T holders of 8% of the market?

    If market makers or more broadly “pricers” wanted to extract money from more naive “fund flows”, would not then price move AHEAD of flows… i.e. moving prices up in anticipation of inflows or down in anticipation of outflows. Only then to reverse (again.. dissecting from “flow” completely).

    Thinking is fundamental — things people talk about on CNBC are almost exclusively non-sense.

  54. cognos says:

    @Flipspiceland — “Fed is being run by a set of sicilian dons… but dont tell the people.”

    Uh… yeah, you’ve clearly never met a Fed guy. If the “sicilian dons” were all former professors at Princeton, Chicago, NYU, and MIT. Wore cheap suits and drove cheaper cars. And by “violent” they meant a including particularly firm language in a 1-page Fed release… then yes, right on.

    The Fed is boring. Its probably one of our best run govt agencies (and sometime that means a little secrecy). Dont make it more exciting than it is. Modern macro economics is pretty good (anyone seen a long-term inflation chart?) or the size of our homes and TVs? This recovery will continue to prove it.

  55. jcate says:

    cognos, there are some pretty colorful characters at MIT. Maybe not in economics, but certainly in other departments. Be careful with the generalizations.

  56. Mike C says:

    Check out the google video on game theory lessons where the professor auctions off a one-dollar bill for up to $2.

    Can’t find it. You got a link?

  57. cognos says:

    jcate – if you think MIT is “colorful” , as in “mafia like” — which was the point being stated and refuted– you clearly need to “be careful with generalizations”. I think: “incomprehensible”, “cerebral”, “dull”, all rank far far higher.

    People gravitate towards conspiracy theories because they want things to be exciting. Most of life… even really great things, exciting hedge funds or research labs or the best tech companies in the world or the Fed, treasury — are really pretty dull. Life is almost never a hollywood movie.

  58. Cognos,

    Psychopaths can appear calm while at the same time burning your house to the ground. Some can even giggle hysterically. A violent person is better measured by the outcome of their actions than they are by their demeanor.

    The Fed and its minions just spent the last five years putting the world through one of the worst economic periods of angst it has ever experienced which led to much literal mayhem on the streets of the world including murder suicides and the poverty rate going up. If that is not violent then what is?

    Also, on one of your other points, let’s say you have 10 shares of a company and all have been bought for $1. Now the 11th guy comes along and wants to buy a share. He has a dollar. He is probably not going to get that share. Only by increasing his ‘fund flows’ into the market to $1.20 will he get a share. If he only offers 80 cents and someone takes it then funds have flowed out of the market. They actually happened when the guy paid $1 for it and were realized when the next guy paid only 80 cents to him

  59. Theodore D. says:

    Self high five for getting BR to respond to my post. I’m pretty proud of myself even if he calls my argument “Fail,” and he uses the word like cool teenagers A La failblog.

    But funny thing is I’m not advocating the Massive government conspiracy. I was showing how you have a great chance to show people, via this blog, that it’s not a big conspiracy. So if you intend to convince them their belief is wrong you AUGHT to cater your argument to their beliefs, regardless how you feel about them. This isn’t always the case for all bad arguments, but when a belief is growing amongst the community at large it behooves you to do so, especially when you have such strong arguements that you can back up (which you do IMHO).

    Countering their argument STARTS with addressing their individual beliefs then countering, by offering an alternative theory (such as your theory – which you did a great job doing in your book, which I own). But if you FAIL to address their issues and just pound your chest harder and say I’m more right here is my story, you will not convince them because you aren’t addressing their individual points.

    I was more attacking your cheap shot and challenging you to do what you do best, show people what is going on in the economy. It even seems that a lot of your readers, at least the commentators, have a soft spot for Gov Conspiracy’s, so maybe address this by looking at each of their points, countering, then offering your explanation. Framing your argument as so might convince more people.

    As to your argument: You’re saying its not some crazy conspiracy, its XYZ and we know this. Problem is one of your “knowns” is dark pools. This is known-Unknown, (to steal a phrase). We don’t know the total effects of these – Hence the term DARK POOLS. So how can you replace Government Conspiracy with X,Y and Dark Pools? We don’t know enough to say, oh they are just responsible for A,B,C. We can’t know this, so how can they be used as a bastion of proof to disprove another belief?

    BTW – Just got back from a Scott Brown Call Center, the hype in MA is tangible, its EXCITING!

  60. SS says:

    WHERE’S THERE’S HEAT THERE’S FIRE!!!

    And when there is no argument the best way to win the discussion is to artfully attack the opponent as TD so eloquently put it just above my comment.

    The back and forth reminds me of the disdain of any one who did not accept that sub-prime would be contained in 2007. At the same time home prices were inflating across the spectrum and being sold with no money down. I think we must face the fact that we have no idea if the Fed or Hedge Funds entirely independently, are driving up the market. We know, I believe fairly conclusively from trim tabs data, that the public and foreigners have not been buying to any great degree. Someone else is. Is this person or set of persons colluding perhaps as innocently as through herd behavior or perhaps as duplicitously as through price fixing. We have no idea. But dismissing those who are concerned is no way to find out. Leibniz’s “best of all possible worlds” was over a long time ago, if it ever existed.

    SS

  61. jcate says:

    cognos, I wasn’t commenting on the “mafia” analogy, but the implication that professors from MIT etc. are “boring”. They cover the whole spectrum, just like any grouping of human beings.

  62. “BR: Funny, all these things keep coming out — the AIG pass thru to GS, the massive bonuses, the SEC order shielding AIG, all of it.

    Yet no one can find a single stock trade from the PPT.”

    as above, that type of obtuseness is inexcusable..

    peep would be better off ~”Walking around Blind, w/out a Cane”..

    ~~~

    BR: As I have noted, the Bush White House could not fire 9 US Attorneys for (illegal) political reasons, yet the government can drop 100s of billions (or even a trillion) in secret trades, with no proof ever being found.

    I find that incredible to believe . . .

  63. Boots or Hearts says:

    IMO This thread does lend (some) credence to the theory that the presence of ECN’s, off-exchange transactions, and “dark pools of liquidity” have the cumulative ability to diminish or undermine the utility of volume as a technical indicator. Perhaps this is why the market has been able to rally so far since late Feb/Early March 09 on diminishing volume.

    As for the PPT, I agree the Fed has openly acted, often in vain. What have they done in secrecy? I do not know, maybe things will come out later. The bottom in March was a move from extreme pessimism and oversold conditions, and we are moving to extremes in optimism. When do we get there? Obvious in hindsight I am certain.

  64. ZenRazor says:

    While it does not go to the point of Santoli’s argument, I think he is wrong that hedge funds are now “very long.” I typically review reports from 100 to 200 equity-focused hedge funds every month and my sample is nowhere near as net long as they were in 2007. Both gross and net exposures climbed steadily from the March lows through the third quarter, but net long exposure remains below what I would have considered normal from 2005 to 2007.

    More recently, both gross and net long exposures seemed to be falling in the last two months of the year. Hedge funds I routinely speak with seem increasingly skeptical of the bull’s strength, but it is probably more likely they were repositioning to protect performance fees going into year-end.

    As for Biderman, it appears he has just taken a shotgun to his own foot: either he is a wingnut or his work has no predictive merit. Why is he so being so public as he reloads and takes aim at his other foot?

  65. Darkness says:

    I feel like I wandered into the smoking room at Shady Rest Sanitarium.

    The market wants to be bullish. It takes any menial, questionable excuse and runs with it to act bullish. (This is in between spasms of girlish pink pinafore panicked sell-offs.) Toss in continuing free money and the accompanying leverage ratios it spawns and you get where we are now. The markets are not rational. They just aren’t. Can we bury that dead horse, at least? Even if three of four people here still get to believe they are Napoleon, we should get *some* collective learning out of this terrible experiment in central bank theory.

  66. thepigman says:

    It’s actually irrelevant whether Biderman is correct or not. WHOEVER is buying up here in
    historical Nosebleedville…. the Fed, agents of the Fed, banksters, dark pools, or hedgies….. is an idiot.

  67. Greg0658 says:

    I hangup on robocall wonks .. we people gotta get back control of the election and control of the government process
    “I understand the attacks .. control of the government is the best path to prosperity .. FOR Both Tribes .. which Tribe takes care of you .. imo one party cares for the management the other for blue collar workers MORE .. and I understand party soldiers needing to work for their side .. there doesn’t seem to be enough to go around anymore” me over @ youtube … choose your side wisely (sorta like V the Series)

    onT – the market is over my head but my pension managers relate .. I’m in the camp that the market system is an industry (a job for someone) and in the big picture of flows + – this way and that .. the market system took my banked work of promised future return and spent it in China and other foreign lands .. now its there not here … but alas – it was never there the instant I put it there .. yous callit ponzi

    Poof it’s gone! – South Park
    http://www.youtube.com/watch?v=RAKsMnAM8vk&feature=related

  68. Manolo says:

    Well, the take a way is simply that the level of information is crucial to understand the financial world. And you need to dig deep before you recognize the pattern of the mighty and powerful. Most will never get it, even after 30 years in this business. But do not be naive: there is more than meets the eye. Enough said. You don’t need neither conspiracy nor tin foil. Human nature, deadly greed and big money…just reality and a big lap of time.

  69. Greg0658 says:

    ps on robocalls .. little known fact .. answer the home phone like “hello .. Ritholtz Enterprises” usually gets a hangup from the other end

  70. Zero says:

    Speaking of Failblog — Zerohedge seems to be jumping the shark with this. They bought the Biderman conspiracy 100%.

    Why haven’t you dropped them from the blog roll ?

    http://www.zerohedge.com/article/trimtabs-asks-who-responsible-non-stop-market-rally-march-gives-some-suggestions

  71. BR: As I have noted, the Bush White House could not fire 9 US Attorneys for (illegal) political reasons, yet the government can drop 100s of billions (or even a trillion) in secret trades, with no proof ever being found.

    I find that incredible to believe . . .

    BR,

    as you know, we’re dealing with ~”things not in evidence”, with that, these, subsequent points:

    “…As for the PPT, I agree the Fed has openly acted, often in vain. What have they done in secrecy? I do not know, maybe things will come out later. The bottom in March was a move from extreme pessimism and oversold conditions, and we are moving to extremes in optimism. When do we get there? Obvious in hindsight I am certain.”–Boots or Hearts, above

    similiar to previous points you have made..

    and, “Well, the take a way is simply that the level of information is crucial to understand the financial world. And you need to dig deep before you recognize the pattern of the mighty and powerful. Most will never get it, even after 30 years in this business. But do not be naive: there is more than meets the eye. Enough said. You don’t need neither conspiracy nor tin foil. Human nature, deadly greed and big money…just reality and a big lap of time.”–Manolo, above.

    is similiar to where I’m coming from..
    ~~
    the upshot being, there are Risks inherent in this Market, at this Time, that are not, broadly, broached.

    With that, there are many moving parts to this, current, financial schema that, really, need to be fisked.

    that undertaking, said fisking, would be an additional ‘value-add’ to the Marketplace of Goods & Ideas..
    http://encyclopedia.thefreedictionary.com/Fisking

  72. Theodore D. says:

    I dropped ‘em. Once in a while they come out without something interesting. But their everyday commentary is silly.

  73. [...] When an analyst trade analysis for rank speculation.  (Big Picture) [...]

  74. cognos says:

    @ How…CommonMan –

    The market situation you describe is naively simplistic. First, this is not at all what TrimTab “FundFlows” measures. And Second, “what happens to the guy who gets my $1.20?” isnt that a stock fund outflow as he moves to cash? Again, net flows balance.

    As far as the Fed “putting the world through” this financial period — Do you know any real estate speculators? (I feel almost every silly amateur investor I know was on the “you cannot lose” trade). I guess I missed the Fed’s “Real Estate Speculator” course. I think blaming the Fed is mainly misplaced. They deserve some blame (plenty to go around) especially as lax bank regulators.

  75. R.D. says:

    IF SANTOLI and others parked their ignorant asses at the SnP pit CME and talked to some long time

    traders they may not have to fall off the turnip truck again. Santoli ,,and the rest of his ilk

    are so brilliant you could never convince them with names ,timelines , and numbers . I’ve tried,

    it’s not worth the time. They know all.

  76. GJR says:

    First off, Goldman Sachs owns a minority share in Trim Tabs. Bob Pisani notes this and even congratulates Biderman at the end of this short CNBC clip: http://www.youtube.com/watch?v=y1wRfGiK-8I

    The way I see it this is yet another attempt by GS (thru Biderman) to convince investors the stock market is safe. At the same time they have the bond markets being called into question. They want all the 401K investors to believe equities are safe and bonds risky, so they will (foolishly) move their bond allocations back over to equities. What better safety net than to believe the government will certainly keep this market afloat. Sorry, I believe we have all seen they won’t. If the PPT existed where were they last March?

  77. bdg123 says:

    Biderman has no idea what he is talking about. But then we knew that because he keeps using data that insiders are selling as a sign of impending doom. Yet he has only been collecting this statistic since 2004 as I recall. Insiders are selling because the wealthy in our society are unwinding. That means they’ll be selling when we hit the bottom of stocks …….. and into the bottom of stocks.

    I really hate this perspective that when someone can’t explain something it is conspiracy. That said, the Fed could easily be buying stocks. The BOJ is. Yet, the BOJ announced it. The Fed could be buying stocks and monetizing it as well. Who knows. Biderman doesn’t.

    If we could audit the Fed and all of its secret cabals…………

  78. HEHEHE says:

    There’s more evidence of the markets having been manipulated from May to September of this year than any other time in our history. Between the fund flows, the 2:30-3 pm daily bids, and the price performance of absolutely turdish areas of the market such as commercial REITS etc one would be a moron not to believe the government was involved not just indirectly via the easy money policies but playing a coordinated roles with several big banks in directing where that money was placed. Once the pump was primed, ie the March-April short squeeze, they could just sit back and prop the market when the technicals demanded they do so.

    Barry has every right to espouse what he believes but I think the foolishness is on his end of the spectrum. The March call was a great one. Having said that the explanation of what transpired after the initial short squeeze has the Feds hands written all over it.

  79. cognos says:

    Lets say the Fed did buy stocks… say $500B. Since they’d be up an average of 30%… thats $150B. I bet they’ll be up even more in 6-months as earnings continue to recover (have you conspiract theoriests noticed that at all?). Q4 GDP will come in positive. Leading indicators look much like a classic recovery (’82, ’92).

    So Fed will be up $300B on the economic crisis… in addition to spinning off $50B/yr to treasury from regular open market activities.

    Sounds like a job well-done! But… its fantasyland.