This page has been archived and commenting is disabled.
Bernanke Confirms That The Key Goal Of The Fed, And QE2, Is To Boost Stock Prices
So much for the Fed's two mythical mandates of promoting "maximum employment" and maintaining "price stability." First, we had Bernanke's predecessor Greenspan confirming in late July on Meet the Press what everyone knows: namely that the primary goal of the Fed is merely to encourage higher stock prices: "if the stock market continues higher it will do more to stimulate the economy than any other measure we have discussed here." And now, courtesy of an Op-Ed by the current chairman, we get confirmation, again, just three months later, from the current chairman, that the Fed cares mostly about stimulating high stock prices, solely to create the completely artificial illusion of "wealth" for the few, the proud, the shareholders, and the banking oligarchy.
Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
See, the thing is Bernanke is absolutely right... when it comes to a few hundred thousand "consumers" (out of over 330 million). One group of Americans whose wealth is tied into the equity value of any given company, typically insiders, are more than happy to take advantage of this massive surge in artificial stock valuations. This last week for example they took over 660 million advantages worth. We repeatedly demonstrate that the ratio of insider selling to buying is now beyond grotesque. In the past week alone it hit over 400 (and was over 2,300 a few weeks ago) - see chart at bottom of post. So yes, those for whom Bernanke's "easing" is working, are taking advantage of it. As for the other group of beneficiaries, the ones who are going to receive over $100 billion in bonuses this year, well: they already literally own Bernanke, so we are not too worried about them either.
As for everyone else, tough luck. Since for 99% of America, surging prices will not be offset by any appreciation in their meager stock holding, nor will deteriorating employment prospects, declining home values, and a recessionary relapse in the economy provoke Americans to actually part with their increasingly meager capital as confirmed by the 26th sequential outflow from US retail mutual funds. In other words, the bulk of America has nothing to look forward to except encroaching poverty, and retirement fund balances substantiated by nothing than fraudulent, FASB-endorsed, stock valuations.
Furthermore, when Bernanke said that: "our earlier use of this policy approach had little effect on the amount
of currency in circulation or on other broad measures of the money
supply, such as bank deposits" he was only kidding, as the following chart of M2, whose primary component are precisely bank deposits and savings, demonstrates:
Furthermore, by adding that "Nor did [QE] result in higher inflation", Bernanke probably did not have this chart in mind:
But lying and scheming is nothing new to the Chairman. As we showed earlier, Bernanke lied under oath to Congress. Why should he start telling the truth now? Additionally, when all those who are chasing stock momentum higher are piggybacking on the "frontrun the Fed" trade, are benefiting, why should they voice disapproval with a strategy that is helping them, if only until such time as the market experiences another massive, and this time terminal, crash... No matter how destructive it is for everyone else.
At the end of the day, it is a question of time: when the people of America realize that all those who are selling on the chart below are doing so at the expense of 99% of American population, and are also sentencing the country to a fate of debt-based insolvency, the time will come. The time will be one of a violent overthrow of the Fed.
Until then, America, for some odd reason believing it has achieved some atual change in the political arena, can just continue to bend over, and take the Fed's daily dose of lies, wealth transfer, and involuntary indebtedness, like a flock of very docile sheep, which has its iPad and iPhone. After all, who needs anything more.
Update: it took Jan Hatzius about 15 minutes to respond to our, and certainly others', interpretation:
Federal Reserve Chairman Ben Bernanke published an article in Thursday's Washington Post, available on the paper's website this evening. The article constitutes a forceful justification of the $600 billion in longer-term Treasury purchases announced earlier today. Bernanke says that the easing in financial conditions -- specifically the drop in long-term interest rates and the increase in stock prices -- that began as investors anticipated further Fed action will boost spending, and this boost, "in a virtuous circle, will support further economic expansion." He does not mention the dollar as a channel of transmission for QE2, probably because he does not want to be seen -- either by the Treasury (which is responsible for dollar policy) or by foreign policymakers -- as pursuing an overtly weak dollar policy. Bernanke also argues that concerns about substantially higher inflation are unfounded because the Fed has both the means and the will to keep inflation low and stable over time.
We do not see significant implications for monetary policy from the article. Some will argue that it seeks to justify targeting asset prices and that this is an inappropriate objective of monetary policy. We think this is a misinterpretation/overinterpretation of both Mr. Bernanke's analysis and, more importantly, the policy itself. While Fed asset purchases are intended to work via their effects on asset prices, that is not the same as setting specific targets for those prices.
»
- 29235 reads
- Printer-friendly version
- Send to friend
- advertisements -
http://www.youtube.com/watch?v=zs4TnQCyn50
Benny "Bubbles" Bernanke the bankster's best buddy:
http://www.youtube.com/watch?v=vdED3rVgIu4
"I will try again to blow a bubble that will last all day!"
the owners of the means of production get higher value for their harware??
Was waiting for markets response to Election and QE2. During US trading, not much. However, overseas, it's meltup. Dollar slide. Commodities meltup.
Time to deploy cash into a combination of stocks and commodity ETFs.
Have already accumulated physical metals.
Been watching it too.
It's unfortunate we have to play the stock game by their irrational rules.
Set the alarm clock for the first week of December...that should be enough time for them to get it to the trough of B ;-)
What are you talking about, the recovery is underway! /end sarcasm
On a more serious note, they did a number on gold yesterday I hope some people got in before the 25$ shoot up this AM
Could someone please explain to me how increasing the money supply can lead us out of recession/depression when the fundamental problem is that leveraged asset values are out of whack with fundamentals, because the fractional reserve banking system has goosed their price?
For a recovery, either the asset prices have to come down (further deflation) or the cost of unleveraged goods (commodities, labour) has to rise (inflation)... or a mix of both. They're not allowing much deflation, so we're left with inflation.
How can people like Bernanke not see this? Or is it purely because he's primarily interested in meeting the needs of his shareholders (the private commercial banks), and he doesn't give a flying fuck about the economy as a whole?
Am I missing something here?
I saw what I thought was a very nice explanation for how the US$ will collapse in the ft, written by one "Viji Varghese":
I apologise if it's a bit long but I'd love the people here to comment on its logic:
"Lets face the facts here. This government's debt is 100% of GDP and the bloodletting has no end in sight. With a yearly fiscal budget shortfall of about 10% the Fed is purchasing TREASURIES in order to cover the shortfall on the government balance sheet. Thus they are fulfilling two objectives; one, help the government maintain aggregate supply levels (price of goods and services) and two, support asset prices in order to prevent any further deflationary erosion ( Like Realestate). So in the Feds calculations if you stabilize aggregate supply levels and prevent erosion of assets values you in turn would create an economic recovery, right?! WRONG!!Now follow closely to what I am about to say. We have never recovered from the September 2008 crash. All this talk about a “double dip” is a moot point as we never clawed our way from the first dip. The economy is as it has been for the last two years; heading down, no matter what all the talking heads on radio and TV say. For you see in trying to perform the same techniques which were applied with the crash of 1929 and 1933; the Fed has exhausted its cache of stimulus tools. They have done nothing and they have nothing left. After pumping trillions into stimulus plans, and trillions to improve balance sheets of the “Too Big to Fail” banks they have accomplished one thing; they have UNDERMINED TREASURIES!!
Treasuries are the very threads that is holding this economy together and now these policies have metamorphosed them into the NEW AND IMPROVED TOXIC ASSET!! Every world economy knows that they are overvalued, they know that their yields are mediocre and still no one in the main stream talking head shows ever rails against or even exposes them. The whole world cart blanche walks on eggshells around treasuries as if it were a Financial Nuke with a trip wire trigger and a timer. A bomb if you will....which IT IS.
History shows us a pattern when and how this financial Hiroshima goes off. It begins like this:
There will be a slight and sudden rise in a price of a necessary commodity like Oil
This will send tremors through the treasury yields, Treasury Mangers will sell off their allocations and go into the commodity (e.g. Oil) in order to grab a profit. I guarantee that they will sell treasuries as it's the primary asset that many of them can sell.
This will trigger the Fed to step in and buy the dumped Treasuries as they are trying to stave off deflation by keeping low yields and cheaply funded. (Quantative Easing) The Fed knows that the Bond Market senses a “Treasury Bubble” and once again they turn on the printing press to buy every treasury in sight to calm the markets and create asset price stability
The Zombie “Too Big to Fail” Banksters smell blood in the water and begin to dump their obscene amount of treasury notes. You see these living dead institutions were never nationalized but got the best parts of nationalization; total liquidity (stimulus money) and easing of accounting and regulatory rules. The flip side was the Fed required that they purchase US treasuries. You see buying up of the treasuries allowed their balance sheets to look well funded and monetized, all the while hiding the toxic assets that were being siphoned off their books by the Fed since 2008.
The Panic sets in...Asset managers are not stupid they know the US is in much worse shape than Greece. They know that there is a “Treasury Bubble”. So when these mangers see the mass buying of treasuries by the Fed, and the mass dumping by the Zombie Banks, it will be their signal to get out of Dodge!!
The Zombie To Big To Fails and Asset Managers that have dumped their toxic treasuries will look for a place to park their new found cash. Now where might you think they can put all that new cash into? COMMODITIES. Commodities of all types will shoot to the moon. From precious and industrial metals, Oil, food staples will all skyrocket in price, catching the American public with their pants down. Commodities will be the only safe haven to go to and this is when the American public will get it's first taste of hyperinflation and it will taste like gasoline when the price of oil surges passed $150 a barrel in one week equating to $10 a gallon gas!!
Commodities SOARS and DOLLAR COLLAPSE ensues. The sell off of assets in purchase of commodities will be ballistic. People will unload homes, cars, personal belongings all once thought important for real assets like Gold, Silver, Food, Weapons, and Oil. In hyperinflation your $400,000 house will be worth $60,000 or 70 pieces of silver, for your house will not be able to help you buy things you need, while a commodity like gold and silver can.
Most of all the government can't stop it."
I should add that I don't agree with his statement
For you see in trying to perform the same techniques which were applied with the crash of 1929 and 1933; the Fed has exhausted its cache of stimulus tools
but that's not material to his analysis overall
Now Now Guys and Gals. Elliott Wave's Robert Prechter and Co. says the Fed does not matter.
He's calling for a out right short, again, just like he did in February of 2010.
How did that butt head call go. Oh, by the way, short silver @$17.00. He did that call too. Yup.
Someday he may have his day in the sun...whatever collapse does happen will not be when everyone has a specific date circled on their calendar.
Even a broken clock is correct twice a day.
...Ace quote.
Prechter is nothing but a two-bit con artist and snake oil salesman.
I don't think so. I think he just makes the mistake of calling top and bottoms. This crap is going to work right on cue via larger cycles - just that the noise at lesser intervals becomes more chaotic and harder to predict. Prechter just underestimated the incredible level of manipulation we are seeing on the shorter time frame.
You better wake up and realize how Prechter's EW cost me over 100K. He is a scumbag who sells fear. He does not know nothing about the markets. He says, "The Fed only matters to the markets for a couple of days". And has repeatedly said so. He does not trade his own calls. No conviction. Just another Ponzi Scam. Risk free news letters, I think not. This bastard, with All his employees belong in jail with Bernie Madoff. Did I make myself clear.
He is the ultimate wealth destroyer, but profits all the same. Yup. He Profits. You don't. But he will sell you shit.
in a virtuous circle
isn't anyone gonna comment on this?
Why Not ??? I ask ???
More like a flat spin. And then (the Golden) Goose will hit his head on the canopy while ejecting and die.
The title of Chapter 1 is "A license to Print Money" and starts off with a quick story from a play written a century prior called "Faust" by a famous German Poet named Goethe. In his play, there is a scene where the Emperor, who sold his soul to the Devil, Mephistopheles, is lacking money and asks the Devil to create it. The Devil accepts this task and a prototype note is created and multiplied a thousand times by magicians overnight. The Chancellor then gives the Emperor the note that has turned an ill into a good.
The authors go on to write on pg. 42 from this book:
At what point did Prechter go into your bank account and lose your money? The dude gives advice (wrong advice in my opinion) but YOU pushed the buy/sell button. Take responsibility for your own actions. That's what's screwed up with America, no one wants to take responsibility and instead wants to blame someone else and have someone else pay for it.
Amen
+1000
Right, so we should keep paying attention to him even though he has been wrong on every call.
Come on. The guy is just pissed that he lost a bunch of money heeding the words of a flim flam man. The point is that Prechter is wrong, big time, and paying attention to him will lose you money, just like Bernie Madoff.
I bought more physical silver at $17 and am certainly glad that I did.
I certainly would not let Prechter's calls influence what I do.
Who didn't know that silver was probably going higher, along with most other commodities, with QE2 all but a sure thing.
IMO, this QE2 is a window of opportunity for those still in stocks to get out. The insider sell to buy ratio is a good indicator of what those in a position to know think about the future prospects of their own companies/stocks.
I am happy to say, I bought lots of metals before and after a 17 dollar tag on silver.
It is why my friends call me the mineral man. Have many kinds of stuff from the earth.
Rhodium has always been another favorite. Still cheap.
Do you watch CNBS? Blame them too. Do you read the WSJ, Barrons, IBD? Sue them!
Look in the mirror. Quit being a victim of life, grow a pair of balls and move on. Real traders and real men take responsibility for themselves, not point fingers.
Most market trading approaches including Elliott depend on one thing, ummmm.....a market. This is no market. It's manipulation at the highest levels and at the micro levels (HFT). The only people who have advantage now are the politically/money connected and HFT computers. (soros, gross etc...) The rest of us have to read between the lines and zig when the talking heads are saying zag.
HFT is reported to be 40-70+% of the volume. They don't care about any fundamental anaylsis or what any underlying company is doing, but only micro short term techncial movement. If this keeps up, the market can become nearly disconnected from reality and take a life of its own to defy gravity.
I agree, its like trying to solve a 50000000th order differential equation, 4999999999 of which are manipulative and unpredictable (to us).
hard to tell
after all the fed initial buy program ended that march.
You know I can't post what I think because I'd get arrested. At least he confirms the worst of trickle down economics. make the wealthy more wealthy and make everyobe else poorer.
why can't he just crawl into some hole
where he belongs. I got to get out of this f"ing country. he actually believes this stuff which sickens me. But he is paid to do so.
Could these fuckers do this with Glass Steagall in place? My ass is on fire.
Ben says stocks, beeches. Are we surprised here?
As for myself, I've been saying I'll take mine with silver.
Ben says he is authorized by his dual "Man Date". Hey Barney, we got a job for ya. Yup.
+100
The test is this: are the newly elected T-Party congressmen and women 4 real, will they join Ron Paul, or will they be reminded who provided the campaign contributions and will guarantee future employment?
I know a few of you Fed assholes read zh... So let me say this loud and clear: fuck you.
make a duet...FUCK YOU
Triple.... Fuck You
i have a feeling that there will be no dissenters to the "fuck you"
FFFFFFFFF…..UU.....UU......CCCCC…....KK.......KK
FF.................UU.....UU...CC........CC….KK…..KK
FF.................UU.....UU..CC.................KK..KK
FFFFFFFF…....UU.....UU..CC.................KK.KK
FF.................UU.....UU..CC.................KKKK
FF.................UU.....UU..CC.................KK.KK
FF.................UU.....UU..CC.................KK..KK
FF.................UU.....UU…CC........CC….KK....KK
FF.................UUUUUU……CCCCC……..KK…....KK YOU
Now that is old-school. +600 billion .
Dont hurt'em Seth!
Beware men in suits. May all Central bankers self immolate. the sooner the better.
Or... http://en.wikipedia.org/wiki/Human_sacrifice_in_Aztec_culture
Awesome! +1T Zimbabwe Pounds. Oh, that's a quarter. Sorry.
Well said!
Here's to you Ben Shalom Bukkake
....................../´¯/)....................,/¯../
.................../..../
............./´¯/'...'/´¯¯`·¸
........../'/.../..../......./¨¯\
........('(...´...´.... ¯~/'...')
.........\.................'...../
..........''...\.......... _.·´
............\..............(
..............\.............\...
wow. that is cool. reminds me of the old Digital Equipment Corporation line printers! The one that had the telephone cradle that squawked and squealed as you made phone connection.
Those were much better days than the corrpupt socialist shit hole into which this country has devolved
Quadriple, wait, hope you never meet me anywhere and make the mistake of saying you work for the FED. You will not enjoy my response and it won't be verbal.
http://www.youtube.com/watch?v=pc0mxOXbWIU&ob
We all do S7k. If you pay taxes in the good ole USA you work for the FED.
Quadruple FUCK YOU!
Lets make it a chorus, Fed FUCK YOU!
There's an app for that if you haven't seen it before - http://www.youtube.com/watch?v=-6Fpoebz2LE
want to vent? read the couple of Bernanke lovers in this thread. What fuckin' tools...
http://seekingalpha.com/news/market_currents/post/60207?v=1288823418&
This one's the best:
The 4th-14th Nov Obama, Hilary Clinton, Geithner, Bernanke, and all minions will be leaving for a tour of India and Asia… At the same time planning will be occurring for the G20 meeting…In other words they meet to have a meeting…This meeting will be about the currency crisis and trade; mostly between China and America…Either the Chinese Yuan or the American Dollar will be in trouble…
Bruiser, am hearing @ Maxkeisers site 80,000 elites are having a one day party world wide at 80 locations. Interesting coincidences. Oh and the huge insider selling added to that i wonder if something wicked our way comes while the major assholes are out of town. I heard 40 airplanes and a fighter wing escort. That aint cheap!
$200 million per day, for 10 days. Nice little vacation for Michelle and the girls, and 3000 government personnel.
***edit: I can't find corroboration for that story so it's probably a rumor.
Read about this a few days ago:
http://www.dailymail.co.uk/news/worldnews/article-1325075/Obama-India-vi...
http://www.batangastoday.com/pres-obama-visit-to-india-will-cost-200-mil...
Also read an article that he would be accompanied by 250 top CEOs but can't find that right now.
http://www.zerohedge.com/article/irrelevant-election-results-start-trickle-visualization-100-years-government-lies-and-their-#comment-694562
Referendum time ;-)
According to the website for the Fed bank of Atlanta, Bernanke, Fed officers and others will be celebrating in Jekyll Island, Georgia this weekend the 100th anniversary of the invention of the Fed.
This guy sounds like a winner. But the one thing that stood out (don't ask why) is that he argues "End the mortgage interest tax deduction."
For some reason, that alone makes me want to spit.
Right on brother....Doubling Down on the Double Dip: FUCK YOU!!!
I have been saying the same thing for months. The Fed is targeting the STOCK MARKET ... peroid !! With $5+ Billion/day in buying power, why would anyone try to short this market?
Almost 50% of people own stocks, so there is a definite wealth effect being generated here. The trick will be to know when to get out with the gains. This will all end someday, but that day could be another year off. For now, party on Garth, lots more upside to stocks here.
i think that is not right. it *will get ugly as soon as the us stocks et al (chicken) in foreign hands get sold off (come home to roost) with the vola in eur/usd it simply makes no sense holding anything usd denominated outside the us. sadly we are all currency traders today. and to the party on, better one year early than one day late.
That's the kind of bullshit Bernanke wants you to believe.
As a matter of fact, there is no "wealth effect" here but a "transfer of wealth effect".
First, where is the evidence that printing 600 billion out of thin air increases the net worth of Americans? So why not print 600 trillion, Americans will be so phenomenaly richer, No?
Money printing does increase stock market valuations but that money is going from one pocket to another, not increasing the net wealth.
You say that 50% of Americans own stocks, but that is not the whole strory : look at the way this is distributed :
http://www.levyinstitute.org/pubs/wp_589.pdf
(check table 9, page 52)
The top 1% wealthiest households own 50% of all stocks and mutual funds
The next 9% own 40% of all stocks and mutual funds
The "bottom" 90% own only 10% of all stocks and mutual funds
(And those numbers include 401Ks, pension accounts, etc...)
So assuming all this 600 billion goes in higher stock valuations :
. 300 billion will go to the top 1 million households, or $300,000 per household
. 240 billion will go to the next 9 million household, or $27,000 per household
. 60 billion will go to the rest 100 million households, or $600 per household
But as the money is just coming out of thin air, all households will end up paying for it via inflation in cost of living expenses, ie paying $5400 per household in the years to come.
The net result is a transfer of wealth :
The wealthiest 1 million will increase their net wealth by $295,000
The next 9 million wealthiest will increase their net wealth by $22,000
and the rest 100 million households will see their net wealth decrease by $4,800 as a consequence of this nonsense.
The only purpose of quantitative easing is to continue to increase the wealth of the richest Americans at the expense of the rest. Because the poor own literally nothing (or are in negative wealth territory), it's really the looting of the middle class by the richest that is taking place in an accelerated way. How long will this continue before the people become conscious of what is going on and revolt?
This "wealth effect" argument puts a veneer on his real intention: subsidizing the financial system at the expense of everyone else.
Loan demand, i.e. mortage demand is going nowhere for a while. Thus the Fed turns on the money spigot.
The saddest part? Inflation isn't going to pick up lending in housing. Households have no collateral left to make a downpayment. Inflation only makes this worse. He knows this.
Next Wednesday at 2:30 PM. Dress casually.
Anyone know if the House or Senate can remove this bastard from office?
No, but they can rescind their charter.
Better late than never.
the problem with CONgress is they are nearly all lawyers, professional, trained wordsmiths to come up with multi-thousand page documents meant to deceive and hide their true intentions. They are not real people serving America. There are NO CPA's in the Senate and maybe a few in the house. 2/3 of the senate are freakin lawyers, over half of the house are freakin lawyers! Nobody knows shit about finance and these idiots, traitors, insiders are controlling and spending TRILLIONS of OUR money. They are scared to do anything w/ the "financial gurus" in the fed/treasury. They couldn't spot the difference between a 401k and forumula 409 cleaner.
Politicians can only wait for things to get to crisis level, then they can act w/out voter repercussion since if things go wrong they can just say they did the best they could. No politician has the balls to take preventative action, save the newly minted tea party candidates, but too little, too late.
Bullshit. They are trying to bouy up pension funds and other retirement accounts in both stocks and credit markets along with driving rates low to avoid additional debt beat downs. This is just "extend and pretend." Nothing more. Its a giant gamble now, absent any real ability to cram additional debt into the system here (or engineer inflation that works fast enough to not blow everyones eyeballs out), that Europe will be sucked into a massive black hole or China will explode or whatever... maybe Katla covers the Earth in ash.
Yup. It's a huge gamble for sure. Because the mechanisms that worked in the old pre-crash economy don't function so well or at all in the new. It's like trying to redline an engine with a borked transmission: you won't even spin the wheels much.
It comes down to the this: the marginal cost of achieving a tenth of a point of GDP is increasing by the day thanks to the Fed's Trillions. And the risk of a crash if they ever shut off the money spigot rises by the day also. See my other comments below.
I never thought I'd get caught in the "liquidity trap." Yet here we are. - Ned
This is why the PM's will be as good as Gold. No pun intended. This is nothing more or less than a complete devaluation of the dollar. The difference is, the corporations like GE who live in a world of fraundulent quarterly reports with footnotes up the butt will go down with the dollar. And should. The bad part is the Fed has no respect for honest savers of dollars. None at all. Bernanke just took a shit on Grandma.
Exactly. Only option left (which they won't discuss) is devaluation to both "reflate" by discouraging saving and to stimulate exports (or at least, they hope) and rebalance the huge offshoring of US business and jobs which their policy since the 1980s actually encouraged.
So PMs will be Golden. My guess is they'll outperform even the dollar trade since they'll hedge out the risk of runaway inflation and a crumbling economy.
Yeah it is extend and pretend...but how many baby boomers are ready to retire and live on their hard-earned and meticulously saved IRAs, pension funds and mutuals? They believed the American dream of 9-5 work, buying a home. raising a family and saving for retirement. We all know them and few of us wish them the nightmare of finding out their dream retirement is a scam.
Normal.dotm 0 0 1 33 192 Home 1 1 235 12.0 Normal.dotm 0 0 1 33 192 Home 1 1 235 12.0 0 false 18 pt 18 pt 0 0 false false false 0 false 18 pt 18 pt 0 0 false false false
In the bed of the pickup:
Arch
Crawford
Robert
"Shampoo" McHugh
Karl
Denninger
Mish
Shedlock
Nouriel
Roubini
Tom
O'Brien, Larry Pesavento, David White, at TFNN.com
and
assorted other bears....
Driver of the truck:
Robert
Prechter
You forgot your tits, I think they scraped the pavement at the very end. The one who went across the side walk Very messy.
OK. After a rum and coke (a few of them actually)... that is seriously funny. I know these guys are going to be made whole at some point. Just early to the party... but it sure feels like the Fed "extend and pretend" seems to go on like the energizer bunny on a speedball.
edit.. for the truly mistaken... not funny in the sense of reality for the people in that truck... funny only in the sense of the post of course... just had to add that statement for the record.
... Paul B. Farrell, My vxx bet over the last 3 weeks after I dumped rimm at 44', John Hussman was riding shotgun ...
Update = Nic Lenoir
Rosie is in there, too.
POMO: Resistance Is Futile....
Don't forget Jeffrey Fucking Sachs
Johnny Bravo was short the s&p,gold before sep ...
Were any of those guys hurt?
That is a stunt, right?.........kind of like the new POMO at $27.5 Billion per week.
Makes a big impression.
Best Robo post ever.
I think I saw Steve Keen in there as well.
I can't wait to see what the response will be from middle and lower class America now that The Fed admits in very easy to understand language that they are taking the people's money and giving it to the investment banks so they can give it to the multi-national corporations to elevate their stock prices. Oh, yeah...and so that the multi-nationals will also spend more and create jobs in America! The same multi-national corporations who harvested the manufacturing base in America and exported those middle class jobs (and our standard of living) to Asia, Mexico, etc.
Wake up, Zombies!!!
You're dead and don't even know it.
Beautiful work, Tyler.
The NY Times is worried it won't be enough. Shocker
The NYT is losing readership faster than readers digest.
The leadership under Obama is a joke.They assume that if the banks and the stock markets are doing well the country is doing well.That is totally wrong,what does America produce anymore,if you don,t have industries you don,t create stable wealth and you don,t have employment.In short you have rich and poor with very little inbetween.Globalisation makes your competitors stronger and your own country poorer,once the tipping point comes your competitors trade amongst themselves and say bye,bye.A parasite economy dependent on scraping off financial interest off the international banking system (which is bankrupt),no wonder you don,t see many real people in American politics anymore because they are too busy trying to earn a living.Politicians are more interested in Civil Rights and Points of Law than in creating new industries and new wealth,it pays better and for years they have got away with it.QE just shows the mindset that the problems are financial instead of structual with no sense of national,strategic investment in the future.Until the mindset changes America will get nearer and nearer to collapse.600 Billion for Wall Street and the Spivs who have sold their nation down the river,a disgrace.
When they explained to Obama that everyone's pension and 401K was in the market, and that mot Americans were now professional capital owners of the world, that sold him on the project.
There will be no progress unless the middle class stops participating in this chimera of a democracy. Maybe somewhere in that massive pool of unemployed there will be an awakening.
Barney Frank is still in charge.
What's likely to trigger the market sell-off is a stampede out of the dollar, which I would have to believe is quite possible. Once the rest of the world takes a look at the fucking games that are being played in the US, there's no way that any sane, rational person will want dollars or UST's. Once that inflection point is reached, Benny Boy can start running POMO at $5 billion every minute and still won't matter.
These fucking idiots are destroying our monetary system.
right on cnbcsucks!
Seems to be working fine so far. Take a sip and buy some
Is Rush Limbaugh - a regular reader of this site nowadays - a "fucking idiot"? He says "they are doing it on purpose". He is correct. TPTB calculate that it will be much easier to globalize a smoking ruin than a coherant nation with a strong middle class. As to this, we shall see.
I too believe he is correct (and not just Rush Limbaugh is saying this) - Bernanke's ultimate goal is to kill the middle class while committing the greatest wealth transfer crime in history.
The market won't crash. Study any hyperinflation throughout history. Wealth inequality will rocket in the next couple years as the US becomes more of a banana republic.
And don't think your "Tea Party" heros will lift a finger to stop it.
It will be stopped, you can count on that. Years? This won't last years. Months...maybe.
Ben learned at the knee of his alter ego, Big Al. And Big Al has said repeatedly since 3/09 that raising stock prices "liquifies" markets. What he's saying is the Fed uses the stock market as a discount window for non-bank corporations. With Fed support, they can issue endless secondary equity (as they did in record amounts in 09), and use the rising values to enable raising cash in the (junk) bond market. In theory at least, the cash they raise should serve to help boost Capex and slowly slowly wend its way to boosting employment.
Well of course we all know what's really happening. With demand hampered by constrained consumers and huge overcapacity in most industries, most companies are just hoarding the cash, and using it for raising executive bonuses to even more outrageous levels, stock buybacks and dividend programs which benefit insider stock holders and a few hedge funds, and oh yeah investing overseas. No one ever said the money had to be used in the US of A.
So what we have is a grossly inefficient and flawed system for monetary stimulus. What it lacks in economic efficiency it makes up for in ego-massaging since the Fed still considers the DJIA as America's badge of honor. So it buys us ego!
Here's what the end result will be going forward: for every $Billion the Fed POMOs, 1/10th will boost stocks, and of that 1/1000th will be used to boost domestic capex and employment. The results so far speak for themselves. Pumping more money into corporate coffers WILL NOT result in greater capex and employment in an environment of overcapacity, low demand and big overseas competition. What will be achieved for sh*t sure are overpriced stocks and a bubble market. They'll have to come up with new metrics to make stocks seem reasonably priced. Maybe we'll go back to the dot.com days when someone thought of pricing stocks in terms of "eyeballs" (non-unique page views of a homepage on the net). So you can make one safe bet: we'll have another huge crash when the party lights go out and the Fed begins to tighten.
But the Fed CAN'T tighten. If the Fed tightens it takes the banks and the Treasury down the toilet.
That, friend, is the crux of the issue going forward. There'll be hell to pay even if they just shut off the money spigot for a minute, let alone tighten. But that presents unusual problems that the Fed has never encountered: what if inflation takes off? What if foreign entities demand more interest on Treasuries? Even a whiff of tightening would send the stock market careening off a cliff from gross overvaluation combined with huge unaddressed economic problems.
Anyone willing to examine this further? Not only did some shadowy agency backed by GOLD try to pump billions into the British economy, but a Lord admited to LAUNDERING MONEY!
Fuck me this is unreal.
http://www.antipope.org/charlie/blog-static/2010/11/conspiracy-theories....
Did somebody just try to buy the British government? By Charlie Stross(Hat tip to [REDACTED] over on LJ for spotting this one ...)
(DUE TO THE HEAVY LOAD WE'RE CURRENTLY EXPERIENCING, (90,000 page views/hour — just slightly more than this blog usually gets), comment posting may be slow (or fail completely). — cs.)
Hansard is the official printed transcript of the proceedings of the houses of parliament — in other words, the working log of the British government.
It is an authoritative primary source, and records every speech made in the House of Commons and the House of Lords. Interestingly, it also records words spoken under parliamentary privilege.
So when an eminent member of the House of Lords stands up six hours into a debate and blows the gaff on a shadowy foreign Foundation making a bid to buy the British state, and this is recorded in Hansard, one tends to sit up and take notice. And one takes even more notice when His Lordship tip-toes around actually naming the Foundation in question, especially after the throw-away about money-laundering for the IRA on behalf of the Bank of England. Parliamentary privilege only stretches so far, it seems, and Foundation X is beyond its reach. I'm going to quote at length below the cut — if you want to read the original, search for "1 Nov 2010 : Column 1538" which is where things begin to tip-toe into Robert Ludlum territory.
(NB: The venue is the House of Lords, at 10:42pm on November 1st, 2010.)
I am left rubbing my eyes.
Did a not-obviously-insane member of the government — a corporate troubleshooter and Conservative life peer — really just stand up in the House of Lords and announce that a shadowy Foundation (that might or might not represent the Vatican) was offering the British government an investment of umpty-billion pounds in order to reboot the economy — free, gratis, with no strings attached?
Or am I just imagining the "no strings attached" clause?
( Link to HANSARD)
http://www.publications.parliament.uk/pa/ld201011/ldhansrd/text/101101-0...
Link to REDDIT discussion which includes various scandals and possible ties into the "shadowy" group)
http://www.reddit.com/r/WTF/comments/e0mc7/did_somebody_just_try_to_buy_...
The British gov't is already bought and paid for, like ours. As to the rest, I'd take this exchange seriously if it had occured in the House of Commons; the House of Lords is a sandbox.
Heh, well.
I guess the Illuminati is real. How bout them apples?
It is indeed. Try having a look at this. These might be the jokers in question.
http://www.unoitc.org/
http://verydemotivational.memebase.com/2010/11/03/demotivational-posters... Very, very fitting.
http://www.thelastcanary.blogspot.com
No shit Sherlock! Reflate & Inflate!!!
leo stop complaining, JKS closed above 39
You know, even a juggler gets tired at some point and has to stop his act. When does this circus end? The Fed's track record for being spot on is not quite up to par. After 16 years of trading, I am walking away. I can't be a part of this criminal business any longer. Good-bye.
http://www.youtube.com/watch?v=Xbp6umQT58A&feature=player_embedded
I've acknowledged the above for quite some time, but I've never actually seen it so briefly explained. I think I'm going to quit it soon as well. The vultures can have it. I hope they enjoy picking off every last bit of meat from the skeleton of the once great American economy.
Slavery never went out of style. Some just finding better ways to propagate it. I realized that when I could own no land nor perform any paid labor nor buy no goods without the government extracting tribute that we are nothing more then revenue centers. For when we evade these payments to our masters they unleash their enforcers. And naturally the revenue agents are more feared by the masses then the other enforcers.
we are nothing more then revenue centers
Bingo.
For when we evade these payments to our masters they unleash their enforcers
It's not that bad, sheesh.
Ben Shalom is a twiddler, and the only assets he can twiddle are stocks and bonds.
The big asset crash is housing- or credit via mortgages.
He can't save that market because it was in a bubble. Which is why even his interventionist baloney only goes into a relatively small market called stocks.
So, whatever asshole. In the end, you and your previous asshole Greenspan destroyed a real asset called real estate and it will take 30 years to unwind the colossal nonsense.
And if people cannot borrow off the largest asset class, then the banks lost their credit bubble- irrevocably.
bernanke is driving the banks to own an asset class it can control via short squeezes, insider trading and computer manipulation. It is 80 x smaller than the bond market and it's easy. And every time a sucker sells the market, State street just clamps on the stock and holds it. Read DeBeers supply squeeze. They create a market in a worthless asset class by hoarding it and injecting just enough.
The whole market is rigged and I advise going long or leaving. Bernanke thinks controlling asset values is protecting American interests but he is a treasonous shill for the oligarchical class.
Good stuff TD.
Oh, it's so painful. I swear... I'm going grey.
Eat some rosemary.
I have an idea. Instead of Bernanke masturbating his small member in the mirror, just give the taxpayer 20grand each. That's how it gets into the economy.
oh, you don't give a shit about the taxpayer- just bank reserves?
Ron Paul- run this douche over...
If Chairman Ron gives Chairman Ben too much trouble, he will discover the wherabouts of Judge Crater.
Ben bernake is an enemy of the People of the United States and should be removed brom office by WHATEVER MEANS NECESSARY fot the safety of the United States Citizenry.
I cannot believe this fucking putz. It's is not like 25% devaluation of my dollars in my savings account was en ough for this prick, he just sent out another 20% devaluation!
NOW why is this idiot choosing $6000 billion when everybody that has half a clue states the if he is gonna do it it needs to be LARGE like say 1-3 TRILLIN DOLLARS!!!
He comes out with a measly $600 Billion???
That amount was the "last fleecing" he knew he couls get away with. Too bad there are so many extradition nations, there Benny, becaus I have personally written 20 letters to congressional committe heads proposed to audit your sorry fucking ass, and to put you in jail for your mis deeds agains the United States to assist your fucking criminal banker friends.
You were worried about "ionflation" and now in the end it is to "prop up stock market". YOU FUCKING ASSHOLE BEN!!! I want you TO FUCKING DIE and I hope it is a HORRIBLE and PAINFUL DEATH!!!
You are now the most hated man in the world. My bet is that there are not too many countries that will be happy to take you in when you are officially delcared the criminal you are/
FUCK YOU BEN BERNAKE and again DIE YOU FUCKING BITCH!
600 bill is neither fish nor fowl. It's a stillborn Keynesian mutant.
What it does do is make BANKs happy enough to not crash the stock market.
And it's low enough so the Chinese don't hack Goldman Sachs and flush their reserves.
What can I say, except any shit head who runs the FED will do the same. They exist for banks only
Dow 36,009 it is. Awesome.
I pray that something bad happens to this asshole before he does the another QE.
Why? Ben is part of the gang that can't shoot straight. His track record is 100% - always wrong. He wants inflation, and I don't think he gets it. I think he gets system collapse...which will force fixing a lot of problems, like debt default and a new currency backed by Gold and Silver.
FT.com is reporting that Spencer Bachus is worried about GS and JPM's profits and he is going to kill Volcker rule. Son of a swine(ftr) and bitch(mtr). Bombard that motherfucker with emails. Asshole.
Fed may circle back to mortgage-backed securities
1 november 2010, (MarketWatch)
http://www.marketwatch.com/story/fed-may-turn-to-mortgage-backed-securities-2010-11-01
Excerpt:
Strategists at Nomura Securities said in a report:
THE U.S. CENTRAL BANK’S ALREADY BUYING INTERMEDIATE-TERM TREASURY BONDS AS IT RCYCLES CASH FROM ITS MATURING MORTGAGE HOLDINGS.
THOSE PURCHASES COULD TOTAL NEARLY $490 BILLION IN THE NEXT 12 MONTHS
SINCE IT ANNOUNCED THAT PROGRAM IN AUGUST, THE FED’S BOUGHT ABOUT $64.8 BILLION
The forex market is also direct target. Why did the JPY sink before the Fed announcement?
DO SOMETHING! Here is the email form that you can write to the Fed RES BOG and GIVE THEM HELL!! Also REPORT these criminals to your new congressmen. These criminals need to go or need to be lined up against a wall. Write them OFTEN!
http://www.federalreserve.gov/feedback.cfm
Here is what I wrote to them:
Amen. Good one. But they have very thick skin like hippopotamus.
Do Something! Buy a farm! Grow your own Food, Stop playing in their system (which includes appealing to them to fix it).
Sorry, that's just how I see it.
You fucked Americans. Americans have a knack for "fucking you back", just ask the Democrats.
By this logic, we fucked the Republicans 2 years ago.
this is a giant green light to load calls on risk assets such as AAPL
good thing i did not wait for the green light
The Federal Reserve just handed congress a perfect Scapegoat for the economic crises: the Federal Reserve. Only arrogant idiots at the FED would put themselves in this position. The Tea Party and new GOP congress as well as the chapped and still smarting Democrat congressmen are lloking for a demon, none better than the FED.
Write letters, and name names, and Benny will be gone and POMO revoked as ell as QE. Open the books and let American see what they are paying for.
POMO the public........its on your credit card, dummy.
The Vatican must be watching this one closely........lol.
Benron is only buying time. I've gone from worrying about he economy (fait accompli) to worring abut our society. Young people who can't find work, don't make babies. Just ask Japan. Without a quick change, the future of our Republic (yeah, I know, it's an Empire in many respects) is fading fast.
~Cursive
"Money isn't everything and soon it may be nothing."
benron is putting his tiny dick as far up your ass as he can get it and keep it there. Period.
Ever heard the term, "pushing on a string?"
As I recall, the PERCEPTION of hyperinflation was just as important as real inflation- so said Bernanke.
So, if the hyperinflation worrywarts panic and start flaming fears of devaluation Ben would cum in his skirt- that's what he wants.
The pinhead thinks that scaring goldbugs and Weinmar experts into believing he has real power will create asset inflation.
If you look at m3 , the market, oil or sales, GDP it is clear that money velocity crashed and the wealth effect crashed. Trillions have been lost in credit, derivatives and asset values. Those are not returning.
600 bill compared to 100 trillion in lost value?
Basically, Bernanke is recapitalizing the banks and the wealthy ONLY.
He saved their keisters and now the top 8% of wealthiest have made more income than ever compared to a net loss for everyone else. As you recall, the super rich were screwed in 2008 and Lost bizzilions.
It's all rigged and a sham- and Glenn Beck is falling for the hologram.
Now I really regret voting for Bernanke.
Federal Lampoon
That would make you a senator and that can't be right. If you were a senator you would be neck deep in payoffs and whores at this time of night!
Chairman Greenspan started this crap with the Asian bailout of LTCM. We need the DeLorean to go back to the future.
You can't expect these guys to admit that their hedging/quant models are smoke and mirrors do ya?
I mean, with fiduciary duties on the line, they could see actual tennis-court and sauna jailtime...in New Jersey!
Has ANYONE in either political party (or all three) criticized QE2?
Question 2: The Congress theoretically could stop QE2 by amending the federal reserve act, short of outlawing the Fed. Has anyone ever brought this up? I guess that's forbidden as it would make the Congress appear responsible.
Question 3: If the "Fed" ends up with, let's say 5 trillion in losses on their books at the end of the day, couldn't an American citizen make the legal argument that the Fed's shareholders (banks) are responsible for those losses, not the American people? The Fed's 2008 buyouts weren't mandated by the Congress, neither is this round. How would you make that argument?
My guess is that once it gets to the point where the Fed has $5T of losses then it won't really matter what debts Americans owe anymore.
Anyways, they will always double down rather than take the loss. It's like a casino pulling a Martingale method on its own tables.
Good analogy! I guess my question is best asked like this: who is currently the legal party ultimately responsible for the liabilities on the federal reserve's balance sheet?
The shareholders of the federal reserve banks or...the united states inc. Anyone know how these accounts are titled and such? These actions are not mandated by any part of the government that I'm aware of, although they are vaguely authorized by federal statute.
I would argue the liabilities are owned by the bank shareholders. The U.S. government should pay China on our obligations, but perhaps we can work something else out with the banks who put us in this position...
"Has ANYONE in either political party (or all three) criticized QE2?"
Yes
http://thehill.com/blogs/on-the-money/banking-financial-institutions/127...
""The Fed’s actions will lead to inflation and undermine the purchasing power of an already vulnerable middle class," said Rep. Cathy McMorris Rodgers (R-Wash.). "Instead of facilitating President Obama’s spend-and-borrow addiction, the Federal Reserve needs to protect the integrity of the dollar."
Can someone please educate my dumb-ass...since when has it been the charter of the Fed to stimulate Markets by using Inflationary tools...and openly admit it??????
So am I to believe that even the Fed, now, openly admits to market making...market manipulation?????
"some people just want to watch the world burn"...fuck-it, me too, save me a seat.
I guess everyone agrees that anything to avoid deflation is worth it and that would be vaguely covered in the federal reserve act's dual mandate, here price stability. Although the full employment mandate was clearly violated in 2008 when the Fed didn't allow the bondholders to fail and the system to clear. The kept bankers employed at the expense of college graduates for the next decade or more, just like Japan.
So, yes, they violated their statutory mandate but the mandate is all conjecture, as the bankers like.