Soft Furry Landing

This is my favorite cartoon in a long time:

Bad_news_bear_market

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  1. College Kid Ted commented on Jul 11

    Good thing CNBC called it a “Cub Market”, I hear that cubs are softer and furrier than bears.

  2. wunsacon commented on Jul 11

    Who brought popcorn?

  3. DL commented on Jul 11

    During 2009, there may not be a whole lot of capital gains for Obama to tax.

  4. HCF commented on Jul 11

    Anyone else here think that this bear market / recession would end a whole lot faster if the Fed stopped constantly putting an artificial floor under the market. Some companies will die… It’s is the rule of a dog eat dog world!

    =)

  5. Martin commented on Jul 11

    Where is Stephen Colbert? If we had only listened to his warning about bears!!!!

  6. Chief Tomahawk commented on Jul 11

    Wow. Cramer just emerged to launch a short squeeze.

  7. DC commented on Jul 11

    It occurred to me today (though BR and half the readers probably thought of it a year ago) that capitulation may occur as much when the shorts stop shorting or start covering as when the longs wave the white flag.

    Regardless of your opinion of the uptick rule, it existed in every prior bear market in modern times. Without it the dynamics of the equation have significantly changed, haven’t they?

  8. AGG commented on Jul 11

    The PPT went into action at 2:30 P.M. They were late today. They usually start at 2:00 P.M. They way they jacked things up for a brief moment, an awsome amount of our money must have been spent to scare the shorts. Watch to see which “administration official” is hoarse in the next few days; that will be the guy who was threatening some people’s nuts over the phone or in person.

  9. ben commented on Jul 11

    Pretty funny cartoon.

    Did CNBC seriously call this a cub market? Is that for real? Who the hell said that? Did Burnett then follow up with a silver lining?

    DC,

    You bring up a good point. The lack of uptick rule has to be having an impact here.

  10. mhm commented on Jul 11

    The never ending money stream coming out of discount window has to stop someday… that seems inflationary since every time it opens the dollar value compared to other currencies drop. Correct me if I’m wrong.

  11. Mike in NoLA commented on Jul 11

    The Cub market was called by someone from JPM. Since it was good news at this point, they played it up with the usual graphics, etc.

    Looks like “Lend ’em” Ben Bernanke has struck again. The answer to crises caused by easy money is more easy money. Until…

  12. Jay Andrew Allen commented on Jul 11

    Watch to see which “administration official” is hoarse in the next few days; that will be the guy who was threatening some people’s nuts over the phone or in person.

    Maybe they called in Jesse Jackson to help them with that…

  13. DL commented on Jul 11

    mhm @ 3:39:55 PM

    “The never ending money stream coming out of the discount window … seems inflationary since every time it opens the dollar value compared to other currencies drop.”

    As for the Fed funds being at 2%, this is definitely inflationary. But there is also the matter of the various auction facilities (i.e., “cash for trash”). Kudlow recently asked one of the former Fed governors (Lyle Gramley, I think) about whether this auction facility business is inflationary; the former Fed governor insisted that it isn’t. He may be right about this; but the presence of the auction facility eliminates (in my opinion) a deflationary force that would otherwise be there.

  14. republicans suck commented on Jul 11

    Good thing we invaded Iraq and spent $500 Billion.

    Way to go GOP! We’re proud of you. 8 years and you fucked EVERYTHING up.

  15. HCF commented on Jul 11

    To be fair, you can’t just blame Republicans. Pretty much all of our politicians suck.

    Instead of putting this country on the right path, they’re either waging war, getting serviced by high-priced hookers or fellow bathroom goers, getting rent controlled housing or sweetheart mortgage deals, or building bridges to nowhere.

    We really need term limits in all wings of the Federal government. Otherwise we have imperial families running Washington. How are the Bushes, Clintons, Kennedys, etc. that much different from Russian oligarchs? I guess in theory, they could be voted out, if we as the populace weren’t idiots…

  16. Steve Barry commented on Jul 11

    Fed denies discount window rumor. Put the rumor mongerers in jail!!! They hurt the innocent shorts.

    Now market will tank AH and setup Black Monday…of course unless the Fed now decides to open the window given the reaction to the rumor.

  17. SteveC commented on Jul 11

    Bernanke to the market: “Back off. I’ve got a printing press and I know how to use it!”

  18. Douglas Watts commented on Jul 11

    is that a dent in my head or a mental recession ?

  19. Steve Barry commented on Jul 11

    Let’s think this through…Fed now knows market would rise on opening discount window…yet they say they are not discussing it. Are they saying “screw you market?” I doubt it. Are they saying “not even the Fed can handle this one?” Hmmmm.

  20. hello commented on Jul 11

    waiting to read about the big picture traffic report :)

    Either this will be a bottom or next week’s going to be armageddon week.

    cheers

  21. mhm commented on Jul 11

    DL,

    Thanks. I agree the “cash for trash” is non-deflationary because the paper has its value restored to the original by the will of the Fed (via swap).

    But the discount window has to be funded prior to lending. What are the options for funding it? If the fund comes via treasury auction it is clearly inflationary.

  22. OmegaShogun commented on Jul 11

    Seems like the Government is between a rock and a hard place right now. What would the disaster scenario be if they actually let Freddie and Fannie fall on its face?

  23. Jay commented on Jul 11

    Watch out for Fed Shenanigans Monday morning before the open !!!!!!

  24. John commented on Jul 11

    HCF:
    A classic bit of spread the blame. Politics as a trade aint perfect and particularly not in the incredibly complex system we have in the US where so many conflicting interests have to be balanced. But when it comes to stacking up records give me Bubba’s over Dubya’s anyday. Unlike most Americans I’m not fixated on Bubba’s zipper problems which are totally irrelevant to his ability to make the system work. When he left office the country was basking in eight years of huge growth in wealth and jobs, budget surpluses and at peace around the world. The couple of conflicts that occurred on his watch cost relatively little and enhanced the reputation of the US. Compare that with the last eight years. And what is this obsession with sex here. Most of the most effective rulers (think Catherine II, Lloyd George, Kemal Ataturk, Kennedy) were more than a little interested in sex.

  25. Chief Tomahawk commented on Jul 11

    Wow! Not one, but TWO VERY BEARISH guests tonight on Kudlow’s show…

    *Joe Battipaglia, market strategist, Stifel Nicolaus
    *Don Luskin, chief investment officer, Trend Macro
    *Jerry Bowyer, chief economist, Benchmark Financial Network
    *Michael Pento, Delta Global Advisors, senior market strategist

    I wonder whether even Jerry Bowyer has enough canned material to hog camera time when Larry pitches it to him to “ice the puck”? And Luskin, I think Joe B. wanted a piece of him last time.

  26. wisedup commented on Jul 11

    News Flash from the Fed.

    To order to ensure an orderly market and sufficient capital flows, the discount window will, starting next week, be open to the average investor. Equities that are now under water can be used as collateral for securing a revolving Federal loan in an amount equivalent to the original amount paid for the shares as stated by the investor. The investor will receive the Feds’ new US of A emergency notes, printed on one side of old Wall Street papers, the denominations run to 8 figures to lighten the load on the investor’s pockets.

  27. ndk commented on Jul 11

    We really need term limits in all wings of the Federal government. Otherwise we have imperial families running Washington.

    You do realize this would only encourage imperial families to have more sex so they could just rotate kids in and out, right?

  28. Dead Liberty commented on Jul 11

    America is dying. What delusional, nonsense story can I tell myself to live in the same dreamland as those who think this is a normal business cycle?

  29. Marcus Aurelius commented on Jul 11

    I love how the Republican voters keep saying it’s both parties’ fault. That’s bullshit. It’s the Republicans’ (or conservatives, or right-wing, or neocons – whatever the hell they call themselves) fault.

    I’m no fan of the Democrats, but the Republicans have ruined this country six ways to Sunday – and they needed no help from the Dems to do it.

    Don’t make me write a list.

  30. Marcus Aurelius commented on Jul 11

    I love how the Republican voters keep saying it’s both parties’ fault. That’s bullshit. It’s the Republicans’ (or conservatives, or right-wing, or neocons – whatever the hell they call themselves) fault.

    I’m no fan of the Democrats, but the Republicans have ruined this country six ways to Sunday – and they needed no help from the Dems to do it.

    Don’t make me write a list.

  31. Marcus Aurelius commented on Jul 11

    I love how the Republican voters keep saying it’s both parties’ fault. That’s bullshit. It’s the Republicans’ (or conservatives, or right-wing, or neocons – whatever the hell they call themselves) fault.

    I’m no fan of the Democrats, but the Republicans have ruined this country six ways to Sunday – and they needed no help from the Dems to do it.

    Don’t make me write a list.

  32. Marcus Aurelius commented on Jul 11

    I love how the Republican voters keep saying it’s both parties’ fault. That’s bullshit. It’s the Republicans’ (or conservatives, or right-wing, or neocons – whatever the hell they call themselves) fault.

    I’m no fan of the Democrats, but the Republicans have ruined this country six ways to Sunday – and they needed no help from the Dems to do it.

    Don’t make me write a list.

  33. johnnyvee commented on Jul 11

    I just heard that the Fed took IndyMac over.

  34. Winston Munn commented on Jul 11

    You’ll know the bottom is in when magazines targeting women headline articles like: “101 Breadline Games To Keep The Kids Amused”, and “Soup Kitchen Savvy”.

  35. tranchefoot commented on Jul 11

    Well, the bears in that comic sure look happy at least.

  36. Dead Liberty commented on Jul 11

    Marcus:

    I agreed with this until the last Congressional election.

    The Dems have either backed Bush or stood down for him the entire way.

    I dont know if he “needed” the Dems, but he sure got their help and their silence.

    Where is the counterforce to this madness? There is none. Not in DC anyway.

  37. HCF commented on Jul 11

    The problem with the Republican party is that we’ve been hijacked by the neo-cons, the ultra-hawks, and the religious nut-jobs.

    Very few small government, libertarian types which was the beauty of the party, imho.

    Yes, I was the one to say “You can’t just blame the Republicans.” And I stand by the fact that both parties bear blame. It’s just that most of the crap right now is because of the recent Republican dominated Congress and Presidency.

    Admit it, when it’s all Democrats in charge, we are just as effed up as when it’s all Republicans….

    But there’s no getting around this: Dubya is the WORST president we’ve had since the Great Depression. Despite my intial opposition to him, I have to admit that Bill Clinton was pretty damn good…

    The current leadership is an embarrassment to not only the party, but more importantly, to the country as a whole.

  38. leftback commented on Jul 11

    What a week. What makes this market so treacherous has been the relentless interference by Treasury and the Fed. Be careful out there on Monday – who knows what this crew of blundering incompetents will do next?

    Larry was just banging on about oil and Iran and Israel, but it’s just NOT supply and demand or even geopolitics this week – oil is being used as a leveraged play against the $, which was completely buried by the Fannie/Freddie bailout talk.

    Thursday’s oil spike – somebody at NYMEX knew what was coming out of Washington – and they hit the button just before 2.45 on Thursday – nothing to do with Nigeria, someone tipped them off about the bailout. Hmm, I wonder which big bank’s trading desk is long crude?

  39. Jay commented on Jul 11

    Watching Don Luskin reminded me of that movie, Weekend at Bernie’s.

  40. Winston Munn commented on Jul 11

    Quote of the decade (so far):

    “Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

    U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president’s Council of Economic Advisers, in testimony to Congress’s Joint Economic Committee. But these increases, he said, ‘largely reflect strong economic fundamentals,’ such as strong growth in jobs, incomes and the number of new households.”

    Washington Post, October 27, 2005

  41. Steve Barry commented on Jul 11

    I kind of watched Kudlow with one eye and ear tonight…but what came from Luskin was he has not been wrong…it’s just the bears have been right. Oh and he was right not to buy financials.

  42. Michael Donnelly commented on Jul 11

    OMG that is funny. Can I post it to my blog?

    Mike

  43. RobJ commented on Jul 11

    I’d rather do Oedipus one better and jab needles in both eyes and ears than watch/listen to that hack Luskin. What an ass.
    Kudlow appears to be convinced his own bullshit, but Luskin reminds me of Dan Akroyd’s responses to Jane Curtin (i.e., the bear case). What a hack. Who invests money with him?

  44. hat commented on Jul 12

    Truth and real numbers seem to be less scary for Banks board members as Banks Ceo s are being fired at a hasty pace in July.
    Just take note

  45. hat commented on Jul 12

    Truth and real numbers seem to be less scary for Banks board members as Banks Ceo s are being fired at a hasty pace in July.
    Just take note

  46. Jim commented on Jul 12

    Well, the bears in that comic sure look happy at least.

    That’s because:

    1. The weather is gorgeous.

    2. They’re outside in it and naked.

    3. No one is making them feel self-conscious about their pudgy bodies.

    4. They are unworried about having enough money to retire on.

  47. leftback commented on Jul 12

    Barry,

    Apologies in advance for a long post here. Forgive me if I am preaching to the choir, I know you have commented previously on how the Fed eased too far – but things are chaotic right now, and I wanted to put this out to see if anyone else is on board with this:

    Dr Bernanke needs to put down the textbooks on the Great Depression and even the papers on Japan, at least for the time being. The difference between those events and where we are now is obvious: the $ is the world’s reserve currency, and the best way to stabilize the world financial system here is to support the $. By lowering rates too far, the Fed has created new imbalances and additional instability that is threatening to spiral out of control.

    Much attention is paid to the stock market when the credit markets are almost always ahead of the game, and in many ways are far more important. The Treasury market is sending a message to Dr. Bernanke – it has just produced its own ~15 bp rate hike. He needs to pay attention.

    We hear a lot about moral hazard from commentators. Here is a serious moral hazard for the Fed to consider: the hot money in the commodity markets is creating a situation where people in poor countries are going to starve while people on limited incomes in the USA are in danger of freezing to death this winter. There is an obvious solution.

    A 25 bp or even a 50 bp hike right here pops the commodity bubble, as the laws of supply and demand would be allowed to determine price, and those markets would be restored to their normal state very quickly by the rapid exit of leveraged players.

    At the same time, the hot money would be allowed to find its natural homes within the equity and credit markets. Such a modest change in rates would do little damage to solvent institutions, while those that are insolvent cannot be helped. As for the housing market, it is frozen anyway, so this would have little effect. The process of asset price discovery will continue.

    A small hike here would probably restore confidence very quickly and does not rule out easing later if required. It’s important to have perspective – please save lives, not bankers.

  48. Wes Mantooth commented on Jul 12

    “…but what came from Luskin was he has not been wrong…it’s just the bears have been right. Oh and he was right not to buy financials.”

    Yeah, Luskin made a great call to avoid financials after they were already crushed. I hear he’s advising his clients to short IndyMac next.

  49. Joe Eifrid commented on Jul 12

    The Constitution provides checks and balances among the three branches of the federal government. The authors of the Constitution expected the greater power to lie with Congress and it has been theorized that that is one reason they are described in Article One. Congress writes and passes legislation, not the President. The President leads the country and fights for legislation that he believes to be in the best interest of the Country as a whole.

    Looking at it this way we see that Democrats currently have 54% (289) of the members of both houses. The Republicans have 46% (249) of the membership – Independents count just 2 members. Certainly the Democrats have control.

    So who is to blame? Both parties in my opinion. Neither side wants to introduce legislation that although needed, my not be seen as favorable to the electorate. So the choice is made – should I as a Congressman do what is right, or do what will get me re-elected. We know what choice they made.

    Most of you here are giving the President way too much credit to where we are today. It is the Congress that is to be blamed.

  50. Todd commented on Jul 12

    Interest post, Leftback. I have no faith in Ben Bernanke whatsoever; he is just another Bush hack in the never-ending line of Bush hacks. Bernanke has either been lying to us or shown he has little ability to forecast future inflation and economic growth with his mindset stuck in a pre-globalized economic world, either of which is pretty damn scary for a Federal Reserve Chairman. He appears to be as deep a thinker as President George W. Bush.

    This from The Cunning Realist on Ben Bernake’s views of the economy and inflation dating back to 2005. I dare anybody to show me a reason that this guy is telling us the truth.

    http://cunningrealist.blogspot.com/2008/03/credibility-watch.html

    -THE CUNNING REALIST-

    AN OASIS IN A WORLD OF HACKS, HUSTLERS, AND HIRED SPIN
    Monday, March 03, 2008
    Credibility Watch
    Core inflation has been relatively low in recent months and longer-term inflation expectations remain contained.

    -Federal Reserve statement 11/1/05

    FOMC participants project that the growth in economic activity should moderate to a pace close to that of the growth of potential both this year and next. Should that moderation occur as anticipated, it should help to limit inflation pressures over time…the economy should continue to expand at a solid and sustainable pace and core inflation should decline from its recent level over the medium term…our baseline forecast is for moderating inflation.

    -Ben Bernanke 7/19/06

    Core inflation is expected to slow gradually from its recent level…

    -Ben Bernanke 11/28/06

    Core inflation, which is a better measure of the underlying inflation trend than overall inflation, seems likely to moderate gradually over time.

    -Ben Bernanke 3/28/07

    With long-term inflation expectations contained, futures prices suggesting that investors expect energy and other commodity prices to flatten out, and pressures in both labor and product markets likely to ease modestly, core inflation should edge a bit lower, on net, over the remainder of this year and next year.

    -Ben Bernanke 7/18/07

    The Committee expects inflation to moderate in coming quarters…

    -Federal Reserve statement 1/22/08

    The Committee expects inflation to moderate in coming quarters…

    -Federal Reserve statement 1/30/08

    Higher costs for such basics as food and energy left wholesale inflation rising at the fastest pace in a quarter-century…Over the past 12 months, wholesale prices rose by 7.4 percent, the largest yearly gain since late 1981…Core wholesale inflation, which excludes food and energy, posted a 0.4% increase, the biggest increase in 11 months and double what analysts had expected.

    -AP 2/26/08

    posted by The Cunning Realist at Monday, March 03, 2008

  51. Todd commented on Jul 12

    Joe Eifrid writes: Looking at it this way we see that Democrats currently have 54% (289) of the members of both houses. The Republicans have 46% (249) of the membership – Independents count just 2 members. Certainly the Democrats have control.

    So who is to blame? Both parties in my opinion. Neither side wants to introduce legislation that although needed, my not be seen as favorable to the electorate. So the choice is made – should I as a Congressman do what is right, or do what will get me re-elected. We know what choice they made.
    ————-
    While I agree that the Democrats have offered us nothing and and have undoubtedly been playing politics to win in 2008 at a very dangerous economic time, the Republicans controlled everything for 6 years. E-V-E-R-Y-T-H-I-N-G. The seeds of this economic decline have been planted in the first 6 years of the Bush Administration and a Congress entirely controlled by Republicans.

    How can you ignore that and think both parties equally share the blame?

  52. Joe Eifrid commented on Jul 12

    The United States Senate requires a supermajority of 60 percent to move to a vote through a cloture motion, which closes debate on a bill or nomination, thus ending a filibuster by a minority of members. In current practice, the mere threat of a filibuster prevents passing almost any measure that has less than 60 percent agreement in the Senate.

    During the 6 years that the Republicans controlled both houses the Democrats used the filibuster to stop any bills of substance that they were not in favor of. So, did the Republicans really have control? Not really in my opinion.

    I say we are doomed no matter who is in charge. Be careful of what you wish for. Whoever takes the President election this fall will be blamed 4 years from now for the worse depression in our Country’s history. What ever party is in control could see set backs that may takes a decade or so to recover from.

    But, I can’t really blame either side. It is the individual that keeps sending these same old tired corrupt asses back to Washington. I mean really, Senator Byrd? Kennedy? Helms? (When he was still alive). How about Maxine Waters? ( The Congress women that wants to nationalize oil refiners.) How could a majority in any district keep sending that women back to Washington?

    Everything that Bush has gotten passed in the last 7+ years he had to have Democrats to support him as he could not do it alone with only Republicans. The blame has to go to both sides and us voters for not sending our best to Washington, but more those that are well connected to the political party.

    Joe Eifrid

  53. NotMe commented on Jul 15

    This is rich coming from someone who voted for Bush twice. Those tired old corrupt asses like Kennedy & Byrd at least voted against this obscene and costly war based on a pack of lies which the poster supports. A war that’s dragging our economy in the tank. I’ll take the wise old asses of Kennedy and Byrd any day over the incredibly dumb asses named Bush & Cheney.

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