Biderman and Bianco talk levitated stock prices and the ‘black swan’


Jim Bianco talks about Fed and Obama Administrations goals to keep stock prices levitated so they can keep spending what they want to spend. Also, what Jim and Charles likely and unlikely black swan events that will end the stock and bond market bull run.


4 Responses to Biderman and Bianco talk levitated stock prices and the ‘black swan’

  1. Jb on January 15, 2013 at 1:59 pm

    Mr. Biderman,

    I’m curious if consider rising energy costs in your forward thinking. For example, the Greeks are cutting down their forests because they can’t afford to pay the heating bill. American ‘energy independence’ built on tight oil is a sham with a near term horizon. Gasoline is moving into a wedge pattern of price consumers can afford vs. cost to produce. And the UK isn’t preparing to send troops to the Falklands because the weather is lovely this time of year.

    Thank you; I enjoy your video blog.

  2. Andrew Trites on January 15, 2013 at 2:07 pm

    Both have good points. I guess the next conversation is, ‘how does one navigate between now and April?’ An expected answer will be Bidermans market picks as an aid.

    My real concern is when we know that the bottom has been hit. Of course we will have hyperinflation, whether it is through money printing or dollar dumping. Will the Americans abandon their dollar at some point? Whether it be the people or the government. How will a devalued dollar affect the internet market? Currently, we are seeing ‘garage sales’ accross the country with people who are trying to make payments. If things get worse how much of the economy will be working off record? The bottom doesn’t seem so simple to me.

    • Ed_B on January 20, 2013 at 5:28 am

      I agree, Andrew. Neither a top nor a bottom is in any way simple. It can’t be, else lots of people would be correctly calling when they occur and they aren’t.

      The US stock market is not what so many of us have known for the past 2, 3, or 4 decades. We no longer have a free market because the Fed and many in the Gov have decided that they know better than the market how things should be done, so they implement policies that distort and manipulate the market until they perceive it as working correctly. Unfortunately for them and for us, they do not know better than the market and their efforts will cause many more problems than they solve. They remind me of a bunch of baboons who have found a nuclear warhead and are fascinated at all the pretty blinking lights inside its case. They simply cannot resist poking this and tweaking that. All of them are totally and blissfully unaware of the extreme danger they are in and will remain that way until it goes BOOM!

      The primary problem today, as I see it anyway, is that the Western economies and Japan, which is modeled on the US economy, are all failing. They are failing for many reasons but chief among them is that they are all suffering from a toxic over-dose of government. Far too many precious resources are being dumped into the insatiable maw of government, which doesn’t really produce anything. At the same time, productive businesses are being licensed, taxed, and regulated to death, while being strangled for capital. There is no capital available because 1) FedZilla has his head in the public trough and won’t stop consuming everything in sight; and 2) the Fed has brought interest rates so low while real inflation surges and very few Americans are now saving any money. This leaves insufficient capital for businesses to be created, to expand, to buy necessary parts and equipment, and to hire new workers. This looks a lot like an economic death spiral because not one single thing is being done about it to actually address the problem. The solution to this, however, is actually simple. Cut government spending by 50% and prioritize what money the government can have to that which is truly necessary and not merely wanted. Additional cuts may be needed but this would be a good start. If we do not do this, and sooner rather than later, FedZilla WILL consume this nation until nothing remains. So will the other monsters in the EU, UK, and Japan.

  3. pigeon on January 15, 2013 at 8:12 pm

    I always enjoy you talking with Jim. Today I just have one small quibble with him, that his remarks on alleged riots in southern Europe appear somewhat exaggerated to me. So far protests have been remarkably peaceful contrary to what some archive pictures of the MSM would want you to believe. But that may change in 2013 since the depression is so deep and widespread that real social unrest and resurfacing nationalism don’t seem unlikely. To me that would make another black swan event. So far the markets believe that the eurozone crisis is principally solved. And that might even be true unless political upheaval invalidates the current concept of dealing with the crisis. The eurozone as a whole has one great advantage compared to the US in that it runs a small current account surplus. If it succeeds in dealing with the internal imbalances via austerity and increased competitiveness of the south, then even the strategy of printing money to buy the necessary time might prove to be the correct strategy. And on that front a lot of progress has been made even though that is not yet reflected in the growth numbers. But if at one point in time the people of say Spain or Greece refuse to take the tough medicine or the people of Germany decide they don’t want to write off their current account surpluses of EUR 1 trillion that they have accumulated over the last ten years then we are back to square one and even beyond that and the markets will see their very lows of 2003 again.

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Charles BidermanCharles Biderman is the Chairman of TrimTabs Investment Research and Portfolio Manager of the TrimTabs Float Shrink ETF (TTFS)

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