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Ben's in a Bind
If you were Ben Bernanke and wanted to prove to the world that the
policy of QE was working you would show this slide. This tracks the
change in the Fed balance sheet and the S&P.
What’s not to like about this? The total US stock market capitalization is up north of $4 trillion
in the past few years. A lot of folks got rich in the process. Millions
of 401k are fatter too. But it is also true that the vast majority of
American’s did not see much from this. Once again, the bulk of the $4T
is in the top 10%. The fellow who sent this to me said, “laying the S&P over the Fed Balance Sheet growth kind of turns one’s stomach”. That’s my reaction as well.
As much as he may like to, Bernanke can’t show this graph.
It will blow up in his face. He can’t show a positive correlation of QE
to higher stocks. If he does, somebody is going to show the next two
charts.
The first tracks the growth in the Fed Balance Sheet and the CRB. This
lines up even better than the stock chart. One look at this and you have
to conclude that QE = Inflation.
The state of housing is still the central issue today. It is much more
relevant to the health of the economy than high PE multiples. How did QE
do for this segment of the economy? Can you say "lousy"?
Case Shiller 20 City Home Price Index Seasonally Adjusted
For the vast majority of American’s QE has been a dismal failure. Stock
gains for the average guy were offset by losses in real estate. There
was no wealth affect there. For those with few stocks and a house it was
anther two-year loss in most cases. All savers lost as interest rates
were kept artificially low. At the same time the cost of everything
(except that IPad) is going up.
Sure the top 5% “fat-cats” got, well, fatter. I’ve always thought that the “trickle down” theory was, well, bullshit.
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So explain to me. When it stops and interest rates rise, won"t someone maybe in Congress or elsewhere, such as the Treasury, wonder why our national debt is soaring at an even accelerated rate? Maybe they will beg for QE III IV =====
If you say "done for Wall Street bonus season...." Strikes me as rather rarified. Anywho--"how big a bonus to pay for that...
It's nice to hear a Republican admit that "trickle down" economics is a pile of stinky crap---especially since the big proponents of "trickle down" were Republicans such as Reagan, Bush #41 and, Bush #43. And their economist hacks Martin Feldstein, Milton Freidman, Larry Lindsey (and Bruce Bartlett who now tries revisionist history and acts like he wasn't a distinguished member of the "trickle down" club). Let's not forget those who continue the "trickle down" lie---John Boehner, Sarah Palin, Eric Cantor, and Scott Walker.
But why just call it a "bullshit" Bruce??? Why not call it what it really is: Roughly 25 years of Republican Policy Failure.
"But why just call it a "bullshit" Bruce??? Why not call it what it really is: Roughly 25 years of Republican Policy Failure"
"Roughly 25 years of both political parties policy failure".
FIFY.
It's not a matter of Trickle Down/Supply Side or Demand Side economics. These are just terms used to confuse and split the public... Kind of like Quantitative Easing!
The current situation is the result of Keynesian Economics which clearly states that Central Bankers are gods and can fix everything by printing fiat.
But now I'm curious as to why all my Marxist, I mean Keynesian, economics professors vilified Reagan and Supply Side economics.
still caught up in R vs. D? This is elites vs everyone else. Obama's man pleaser is so full of bank cock he cant give a reasonable answer to shit w/ out a fucking teleprompter. Govt. is the failure, end of story
"Govt. is the failure, end of story"
Ah, no...
Government failed/is failing because of the system
Anything BIG is going to eventually fail, including the world BIG population (hint: "Capitalism," nor anything else is going to magically change this equation).
To sum up: BIG = FAIL
NOTE: edits all messed up, no scroll window :-(
let me rephrase slightly, the people in our govt are the failure.
BIG does not necessarily = FAIL
We are not in a Capitalist society as much as people want to say we are. We have so many fucking socialist programs in this country it is mind boggling. True Capitalism (not the crony bullshit we see today) is the lesser evil of all systems tried to date, imo.
True capitalism, true communist, true socialism, all paradises on Earth where they are true.
Disagreement with this requires a time bracket for the existence of true capitalism.
"We are not in a Capitalist society as much as people want to say we are. We have so many fucking socialist programs in this country it is mind boggling."
+ a 1.29 trillion dollar budget deficit.
That is, if we even had a budget last year...seems I recall we didn't ;-)
Exactly, both parties are up to their eyeballs in graft, bribery, and crony capitalism. They get the "people" to fight with each other over complete bullshit things like creationism, while the elites steal from right under our fucking noses.
But seriously, when the people of other countries rise up and say "no more" to their oppressors, the US will sometimes come to their aid (especially if the have oil) but when WE decide to rise up, who will come to our aid when the Apaches and drones are turned against us, the terrorists?
I am wishing that the majority in the military will not shoot on their own people, but who the fuck knows? This place has become such a fucking joke. All i know, is that i will not go down without a fight. Loaded to the gills w/ guns, ammo, water, stored food, and pm's. These govt mother fuckers better use that fucking dual citizenship and get their asses out of here because they will be targeted, along with the fucking thieving banksters!
btw, BK you have great posts. keep it up
Can we overlay a chart of citizens on food stamps with that chart?
Good idea. Would like to see it. Anyone got the #'s. My bet? It lines up very well. Scary.
That correlation is .9999
Pure
Blah, blah, blah. It all comes down to the "average" person getting fucked. Imagine that, the Laws of Nature do work in economics (hint; don't be average!).
Nice one. I too love how survival mechanics work in economics.
The graphs are brilliant.
Excellent charts.
Isn't the third chart one of the main reasons why the ramp up will continue?
Damn the torpedoes.
Let them eat Uncle Ben's Plastic Rice.
Thanks again Bruce, I knew this was the case but to see it in black and orange makes you shake your head.
IMO, QE will continue whether in the open or not. They may declare and ´end´ sometime, but that will just be more BS & smoke & mirrors. Printing money as far as my eyes can see.
Nominally agree. But if 'Caribbean Hedge Funds' start buying say $600+ billion Treasuries every 6 months someone might get wise, like anyone with a pulse. We are dealing with kinda really friggin huge numbers here. Would be like trying to hide a herd of elephants in a pre-school. So they could do it but any market participate who isn't functionally brain dead will watch it happening regardless and they would probably lose more credibility trying to do it that way, assuming such a thing is possible. So they can do it that way, but I think they would prefer to do it in such a way so as to appear less underhanded.
I don't know how many times I've thought that "There's no way people won't rebel over this one.", but it never comes, because they have a media that obediently ignores inconvenient facts.
I'm not sure it's that simple... who doesn't know that the fed is the largest holders of treasuries? This in and of itself is all you need to know. Now, the real question is, given we all know this, why doesn't anything happen? Well, I think one possiblity is our desire to ride the wave/frontrun the stimulus... but, another is that our efforts are insignificant compared to the forces we're up against (see generally, volume ramps). In other words, our query may end if we believe the former... but, if we believe the latter, then the imperative question becomes how long can it last? Apparently longer than we think...
Do you mean average folks on the street (sofa), or do you mean those who should have the need to know because they are in the market in some way? Either way the level of ignorance is astounding. Granted, part of it is pure pathological denial, but plenty nonetheless.
"Ben will have a have tough time defending QE."
Defend it from who? Surly not the anyone who is long the market. Besides, this implies that he isn't the omnipotent money god.
So when is Zimbabwe Ben up for reelection? Oh, wait he is appointed by the puppet pres and then confirmed by the band of looters known as the Senate. Truth is he has to defend it to Congress and the President, yeah not a hard sell there. Share the same owners, and he is funding their give aways with the press. No one has been able to tell me where the extra Treasury buying will come from at these yields when the Fed leaves the market.
We may rant rave and bitch but so long as the average person is in the dark then Zimbabwe Ben can do as he wishes. Blame the Libya war, blame the Japanese Crises, blame speculators. The MSM will back the diversion.
Today I read on Marketwatch Ben will be giving press confrences. Apparently every quarter. It is obvious ben thinks he is god. He feels responsible for saving the world economy. With this attitude, he feels no need to defend QE or anyother actions he takes.
Ben Bernanke is certainly not working at saving the world economy.
Mr.Bernanke is working at saving the US society.
Bernanke's plan is simple: he is monetizing the wealth of foreign countries so that the wealth can be imported to the US and appease the US society as consumption is the reason to be of the US citizen.
Bernanke is sacrificing the present and future of millions, maybe billions around the world in order to protect the US world order that allows the US in wallowing in consumption, main goal being to consume so that others can not consume.
double yawn
Be grateful to your elite they are efficient because that is not with this kind of reaction you would go anywhere on your personal merit.
No offense, but I think Ben doesn't give a shit what anybody thinks. He will just do it.
He obviously doesn't report to Congress or the Supreme Court. You think he cares what peon citizens think?
Who is going to stop him? Wanna try it? How does a 1,000 point DOW drop in a few minutes sound to you? Thought so...thanks, now let's rev up QE3.
Is QE only under attack? US citizens are on a robbery streak, emitting credits backed up by foreign wealth they buy.
Save the proverbial vocal tiny minority that allows the US to pretend they are questioning QE, the whole program is vastly and popularly supported by the US citizens.
Of course, the US citizens unload their responsibility on their government, that nasty wicked elite but the reality is they endorse and support QE.
yawn
Be grateful to your elite they are efficient because that is not with this kind of reaction you would go anywhere on your personal merit.
Opinions are like assholes. Everyone has one and they all stink. Yours however have a certain overpowering aroma, which compel me to comment.
I am grateful for my family. Everything else is fleeting, and beyond my control.
The only aroma it smelled was the breath from your yawn. Apparently, your family did a lot for you but did not teach you good manners. Expected from a US citizen who has everything he got because he was born on a certain land. No individual achievement.
And by the way, brush up your US exceptionalism story tale: the US government has no other power that the power it derives from the US People.
Source: the US itself.
Each US citizen by their own declaration is responsible of their government's actions.
After the revolution, when Ben is on the guillotine and they read out his crimes, tell him he's condemned to die and ask him if he has anything to say, he'll say:
"I guess I don't buy your premise."
we are in agreement. see my post below. ben has a god complex.
he is just the chairman. another puppet. why don't most here pay attention to the men behind the curtain, the people who own the FED? it couldn't be any more obvious, but most won't go there out of programming.
Why is it when you clowns start talking about puppet theater you conveniently forget to add any real details or substance, like names and/or groups. Its all innuendo and secrecy which is even more insidious than the meat puppets in the performance. I think you all would be doing the rest of the world a service if you just came out with your version of the truth so we may judge the hypothesis on its merits.
Most won't go there because ridiculous argument. Bernanke is doing what he learned to do from studies. He is trying to help, not hurt. He loves America. But it is mistake, and graphs show that.
People who think its big plan to create American slaves are not smart, your posts show us that. The ruling class learned is better to share wealth to keep peasants happy. But you want to think its about Jews, the lurking evil jews are out to get you, go hide your babies, your money, they will come and get you. oooooo
I agree he is a puppet. Which puts his god complex in conflict with the man behind the curtain. Like the mafia boss who cringes when a soldier gets his name in the newspaper, the man behind the curtain is questioning ben's newly anounced press conferences. With bens new fame, which he seems to enjoy, look for the FED et al to start getting a bit brighter spotlight. Many of them will feel uncomfortable in the new light. watch for reactions.
don't know. seems like a well orchestrated plan to me. once the damage and theft is complete, the FED will be folded up and discarded, and Ben will disappear. but what about the wealth that was stolen... its not in Ben's pocket, nor the U.S. government possession, or the sock puppet politicians who keep the public distracted. 1984 is a bit too real and "big brother" is not the government we have now... but the one that will soon replace it.
"once the damage and theft is complete, the FED will be folded up and discarded, and Ben will disappear."
FINALLY! Someone else sees what I saw a LONG time ago!
However, I 'm not necessarily seeing this so much as a big money grab so much as a big cover-up, a means to dispose of failing assets (purge before the new paradigm, though the same minds that brought us the old/current paradigm are totally incapable of coming up with anything that'll survive but for the shortest amount of time).
" though the same minds that brought us the old/current paradigm are totally incapable of coming up with anything that'll survive but for the shortest amount of time)."
I wish I could agree, but let's be honest. Even though ~100 years (1913 to present) isn't that long in the eyes of history, it is longer than current average human life, and that is the only number the game has to outlast in order to come back and repeat the fleecing.
After all,
"He who controls the past, controls the future. He who controls the present, controls the past." -- Rage Against the Machine (I think I got the lyrics correct ?)
money is just a means to an end. the real prize is power, and always has been. they have more money than anyone could ever need... and could always print or steal more anyway. when you control central banks around the world, money is joke.
Trickle down or golden shower?
More like a Cleveland steamer...