April FOMC Minutes: Fed To Raise Rates Before Selling Assets, Q1 Economic Weakness Blamed On Weather, Inflation "Transitory"

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Wed, 05/18/2011 - 14:11 | 1288059 bigdumbnugly
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Participants viewed the weakness in first-quarter economic growth as likely to be largely transitory, influenced by unusually severe weather, increases in energy and other commodity prices, and lower-than-expected defense spending. As a result, they saw  economic growth picking up later this year.


well, spring is here, they've smacked down commodity prices with all they've got, and it appears more military actions against whoever are in the offing...


Wed, 05/18/2011 - 14:22 | 1288150 TheTmfreak
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It was probably the weather that gave Strauss-Kahn HIV too i'm guessin'. Seems to me that the weather is causin' all sorts of problems these days...

Wed, 05/18/2011 - 15:25 | 1288467 ABG LINE
ABG LINE's picture

And probably the "chemtrails" over NYC.


Wed, 05/18/2011 - 14:33 | 1288192 101 years and c...
101 years and counting's picture

and, they'll blame japan and high fuel prices for the weakness in Q2....which, of course, is all transitory.

someone should tell the bankers that their freedom is transitory.


Wed, 05/18/2011 - 16:09 | 1288635 goldfreak
goldfreak's picture

life is transitory

Wed, 05/18/2011 - 14:32 | 1288204 DutchZeroPrinter
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I believe them when they say weak growth is transitory. Next there won't be growth, it will be a non-transitory collapse.

Wed, 05/18/2011 - 14:12 | 1288062 Gubbmint Cheese
Gubbmint Cheese's picture

growth expected next quarter... no wait.. next quarter.. no.. wait.. next quarter..

next quarter we promise..


Wed, 05/18/2011 - 14:18 | 1288113 TheTmfreak
TheTmfreak's picture

I was thinking the same thing. When are they going to start being pessimistic with any of their damn expectations? I guess I don't want to see what happens when that happens.... (QE zillion)

Wed, 05/18/2011 - 14:18 | 1288127 oogs66
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every quarter they underestimate inflation and overestimate growth but no one cares!

Wed, 05/18/2011 - 14:56 | 1288308 Missiondweller
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I remember CNBC pounding the table that "green shoots" in the economy were here (back in 2009)!

Wed, 05/18/2011 - 14:12 | 1288064 legal eagle
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Yes, blame it on reduced defense spending!  LMFAO

Wed, 05/18/2011 - 14:22 | 1288134 TheTmfreak
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Makes absolutely no fucking sense. They're speaking gibberish at this point.

Wed, 05/18/2011 - 14:37 | 1288211 Hugh G Rection
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Defense Spending has been reduced, military spending is now on offense.


Why should I believe anything the FOMC says???

Wed, 05/18/2011 - 14:39 | 1288220 TheTmfreak
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Because it is in print.

Wed, 05/18/2011 - 15:06 | 1288346 legal eagle
legal eagle's picture

That made me laugh!

Wed, 05/18/2011 - 14:50 | 1288286 Keri at Bankste...
Keri at Bankster Report's picture

Exactly.  And other poster said "every quarter they underestimate inflation and overestimate growth but no one cares!"  They are ALWAYS wrong, and no one cares!

When has the Fed been right?

It is a pretty sweet job: imagine a gig where you could be constantly wrong, costing your employer trillions, and running the company into the ground, and in return you get another appointment, more authority, daily praise and heralding of your scholarly expertise and erudition, and a license to write long documents of gibberish.  

Wed, 05/18/2011 - 14:12 | 1288065 BillyTheBlade
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This can't be good for commodities.....or the economy.

Wed, 05/18/2011 - 14:14 | 1288082 firstdivision
firstdivision's picture

Lots of people about to be caught on the wrong side of the commodity trades this summer...guess who will make out like bandits on it though

Wed, 05/18/2011 - 14:17 | 1288105 Id fight Gandhi
Id fight Gandhi's picture

Commodities will collapse with stocks.I have no doubt in this.

Metals will fall too, but the dying dollar with save them.

Wed, 05/18/2011 - 14:20 | 1288141 LawsofPhysics
LawsofPhysics's picture

my puts?

Wed, 05/18/2011 - 14:10 | 1288069 SpeakerFTD
SpeakerFTD's picture

Bernanke's world:


Good news -   "I did it"

Bad News  - "Transitory"

Wed, 05/18/2011 - 14:22 | 1288135 oogs66
oogs66's picture

maybe he was an MD at an investment bank since that is their motto too

Wed, 05/18/2011 - 14:10 | 1288070 firstdivision
firstdivision's picture

"However, inflation was expected to recede over the medium term, as food and energy prices were anticipated to decelerate"

How about those decelerating commodity prices today, Ben?

Wed, 05/18/2011 - 14:50 | 1288275 Whatta
Whatta's picture

Is his definition of deceleration the same as mine? When I decelerate my truck, I go less fast, but am still going in the same direction. Sooo, food and energy are still going to rise and rise and rise, just not doubling every few months?

Stagflation is still what that sounds like to me.

Wed, 05/18/2011 - 14:10 | 1288071 NOTW777
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is the lying transitory?

Wed, 05/18/2011 - 14:20 | 1288122 Id fight Gandhi
Id fight Gandhi's picture

Who junked you over that? We know they lie. We all talk about it daily here. Were like a bunch of old ladies in a sewing circle with gossip.

Wed, 05/18/2011 - 14:21 | 1288147 Cleanclog
Cleanclog's picture

But it's transparent lying, so that's okay, right?

ZIRP until we want to sell assets.  That's the rule.

Wed, 05/18/2011 - 14:48 | 1288266 pazmaker
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some on here have personal junkers...I call them secret admirers.. they junk one no matter what one says.

Wed, 05/18/2011 - 15:45 | 1288540 fuu
fuu's picture

They junk you because they love you.


“Although most participants continued to see the risks to their outlooks for economic growth as being broadly balanced, a number now judged those risks to be tilted to the downside.”

Thu, 05/19/2011 - 01:27 | 1290427 StychoKiller
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Women only get restraining orders to prove how much they love you...:>D

Wed, 05/18/2011 - 14:13 | 1288073 slaughterer
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Any hints of the form QE3 will take in the minutes?  I cannot find them at first glance. 

Wed, 05/18/2011 - 14:21 | 1288128 firstdivision
firstdivision's picture

It is written in invisible ink, that will only reveal itself if you wipe your ass with it. 

Wed, 05/18/2011 - 14:34 | 1288197 strannick
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Wed, 05/18/2011 - 14:14 | 1288074 TruthInSunshine
TruthInSunshine's picture

No matter what they say, ding dong, QE in even a semi-recognizable form, is dead.

The bell tolls for QEx.

ZIRP for as long as Bernanke can take the heat - which may only be a matter of months, at this point.

I do wish Jim Rickards would get to the task of modeling how much more in treasuries reinvestment of interest income and principal from maturing MBS and other paper would net in terms of buying power for the Fed, because I think he's well off the mark with what he casually threw out months ago.

Wed, 05/18/2011 - 15:16 | 1288401 Bay of Pigs
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So you're saying the FED will do absolutely nothing as everything in sight collapses and burns to the ground? That is remarkable considering what they have done so far. That means total financial and economic annihilation on that call Mr. Sunshine.

Wed, 05/18/2011 - 15:54 | 1288493 TruthInSunshine
TruthInSunshine's picture

First, you are presuming a bit much by saying "as everything in sight collapses and burns to the ground," no?

That sounds EXACTLY like something that Bernanke, Paulson and Geithner all would have told Congress would happen had TARP-TALF not been passed immediately, no?

Did I say that will happen? I don't even know what you mean by that. Are you talking literally? Give me some scale.

Second, I didn't say the Fed would do "nothing."What I did say, in a manner, is that Bernanke is pretty much out of ammo, and will keep ZIRP or near ZIRP applied, until the negative feedback loop is too powerful. When will that be? I don't know, but it will happen.

If stoppage of QE equals, to quote your exact words, "total financial and economic annihilation," then the continuation of ZIRP is not going to heal that which ails us (it's a catch 22 type predicament).

Wed, 05/18/2011 - 16:03 | 1288618 Bay of Pigs
Bay of Pigs's picture

Fair enough. Maybe a bit over the top on my part. I agree with you that ultimately there will be a Reckoning Day. I just assume the FED (and Congress) will kick the can down the road as far as they possibly can. To me, it means more QE, not less. Trillions more.

Thu, 05/19/2011 - 01:30 | 1290430 StychoKiller
StychoKiller's picture

What the Fed is trying to prevent:  http://larouchepac.com/node/11319

Physics and Mathematics WILL win in the end! :>(

Wed, 05/18/2011 - 16:15 | 1288668 trav7777
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a lot of people who missed out shorting in 08 and want to make money off of that or else missed out on the 09-11 runup and are jealous.

The Fed has a print button in everyone's office now, lots of swaps and other mechanisms by which they will introduce credit or currency if the system locks up.  The CBs ARE the interbank lending market now.  If they actually back out, their own paper will implode.

Because the money supply is debt and need be repaid, ALL dollars in existence (save a few based on gold) will be vaporized, still leaving a massive interest repayment on the former money supply which cannot be paid.

In the absence of FRNs, some other form of money or transactional currency will manifest itself.  We already have seen this in the form of barter coupons and scrip in various communities.  Precious FRNs *lose* their ability to serve as money.  In such a situation, FRNs only have worth to stave off insolvency and takeover by bankers.

Wed, 05/18/2011 - 14:13 | 1288077 Racer
Racer's picture

'sub-prime is well contained' type of minutes

Wed, 05/18/2011 - 14:11 | 1288083 legal eagle
legal eagle's picture

My guess is we are close, maybe a week away, from a low in PMs for the year.

Wed, 05/18/2011 - 14:16 | 1288098 slow_roast
slow_roast's picture

guess?  great, not enough of those floating around are there?

Wed, 05/18/2011 - 14:16 | 1288101 slaughterer
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05-18 14:08: Fed says most on FOMC said QE3 unlikely without big change in outlook Feed this text into the scanners of about 2,000 HFT algos and see where it directs the market.
Wed, 05/18/2011 - 14:15 | 1288089 slow_roast
slow_roast's picture

Now the lemmings are buying before wandering off the cliff.  QE3 not coming for at least a quarter.  Deflating the commodity sector isn't so difficult as most will find out in the next few months.

Wed, 05/18/2011 - 14:15 | 1288111 slaughterer
slaughterer's picture

C'mon market, let's have a symbolic sell-off pissy fit.   The Bernanke did not come with your QE3 porridge today.

Wed, 05/18/2011 - 14:44 | 1288265 dracos_ghost
dracos_ghost's picture

Yeah, I'm surprised Jim Cramer isn't banging the table screaming "They know nothing,NOTHING!!! Without QE3 hedge fund douchebags won't make their bonuses and buy another private island."

Wed, 05/18/2011 - 14:15 | 1288115 Jack Mehoff
Jack Mehoff's picture

No Press Conference?

Wed, 05/18/2011 - 14:54 | 1288304 Keri at Bankste...
Keri at Bankster Report's picture

Aha! Good point.  Every time he speaks on camera, it is like a B-12 shot for commodites and PM's.

So, no---no press conference.

Wed, 05/18/2011 - 14:16 | 1288116 Lets Hang Parliament
Lets Hang Parliament's picture
"Fed To Raise Rates Before Selling Assets"

That's it then 0.5% forever!

Wed, 05/18/2011 - 14:19 | 1288120 Dick Darlington
Dick Darlington's picture
05-18 14:10: Markets are yet to find direction post the Fed minutes, which showed that the Fed started to debate policy normalisation But it's good that "markets" rose 1% in advance of the Bernank propaganda pages. Just in case.
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