Brian Sack Hints What QE3 Will Look Like, Discloses The Fed Has 200% More Duration Risk Than Normal

Tyler Durden's picture

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Bay of Pigs's picture

Uh oh....Houston we have a.....

Herd Redirection Committee's picture

Duration risk... Isn't that like when you are scheduled to receive money incrementally over 30 years, but the money is due tp be paid in a lump sum, in 10 years?  And increases in interest rates will result in... Well, its either chaos or pure mayhem, IMO.  Wealth effect evaporates, the market would sell off, all those interest rate derivatives would be triggered, banks and the Fed would actually have to start paying interest...  The Fed's attempts to reduce the money supply would fail because the treasuries and other securities it holds at par could only fetch 65 cents on the dollar...  Am I missing anything?

Check out the latest from the Capital Research Institute "Selling Gold You Don't Have":

"...brings us to the title of this article: Selling gold you don’t have.  The reason for the title?  The CRI is fairly confident that the recent (July 19) bear raid on gold and silver was initiated by massive short selling, by a handful of hedge funds and Wall St banks.  Short selling means selling something you don’t have (or have borrowed) and then buying it back at a lower price.  Now, short selling is not illegal, or something to be feared.  It is a tool, and like any powerful tool it can be destructive if used incorrectly.  Short selling exposes one to unlimited potential losses, and it incurs borrowing costs.  Lastly, you sold to initiate your position, so you have to buy in order to close the trade.  So who ever has bet against gold and silver they have left themselves exposed to unlimited potential losses!  Unlike an equity investment, they can lose more money than the initial amount invested!  And when they close the trade it will push the price of gold and silver back up again! 

Remember when CRI said there are people who will do anything to make you sell your gold and silver?  Yep, yesterday was another one of those days! The key to preserving your wealth in this time of turmoil is to master your emotions, and yesterday was a perfect example of that.   In the time it has taken to write this article the price of silver has risen from $38.55 to over $39.40, retracing most of yesterday’s losses. "


drbill's picture

Calling it QE3 would have bad karma. Let's all try to guess what the next euphemism for money printing will be called.

JustPrintMoreDuh's picture

Spontaneous Currency Accumulation Management

Founders Keeper's picture



How 'bout...







Goldtoothchimp09's picture

Doctor Feelgood's snakeoil v. 3.0     "it will cause what ails you!"

Mr Lennon Hendrix's picture

With a picture of John D. Rockefeller's slithery smile on the bottle.

LibertyIn2010's picture




Kicking &



PrinceDraxx's picture

How about "Steerike Three! You're Outta here!"

TruthInSunshine's picture

Somewhat OT, a little bit ON Topic, but I dedicate this as the Official Song of The Bernank (think metaphorically):

  Weezer - Undone

Back on topic completely; I view all of this 'talk' as so much bullshit, just like the "there will be tanks in the Street/Martial Law if you don't give us a blank check for TARP immediately" so we can bail out the big boys on counterparty risk and their cesspool acquisitions of roach motel assets being spewed forth in 2008 by Hank The Tank Paulson, The Bernank & Timmay Break It Again Jeetner.

Global Hunter's picture

lying on the floor lying on the floor I've come undone...I hope that part is quite literally what is happening rather than a metaphor

TruthInSunshine's picture

If Americans were smart enough to call the bluff, they'd pull The Bernank's string of his sweater, and Obama and Geithner's, too (but especially Bernank's), and they'd see these guys as the Emperors with No Clothes that they truly are, and they'd rejoice.

Just...default. Really.


If most Americans knew even a fraction of truth about what the Fed is and who it serves, they'd be threatening their so called representatives that they're toast if they DON'T refuse to raise the debt ceiling or authorize any additional spending, even at the risk of having defaults and haircuts roll in.

nmewn's picture

"If most Americans knew even a fraction of truth about what the Fed is and who it serves, they'd be threatening their so called representatives that they're toast if they DON'T refuse to raise the debt ceiling or authorize any additional spending, even at the risk of having defaults and haircuts roll in."

Dats a fact.

They bring people up on RICO charges for a lot less.

Yen Cross's picture

  Ya mean those ECB, BIS,IMF things? +1

nmewn's picture

Exactly those things Yen.

They can no longer hide behind the veil of prudent finance with their decimation of popular mediums of exchange or any common good derived from their activities or any pleas to patriotism or any of the other devices used to sooth the populace.

They are simply parasites feeding off the labor of others.

Ricky Bobby's picture

OK peasants you see that mountain over there, well were going to turn it into a great monument to our God King. Of course you will have to chip rocks for 30 years. The priests at the temple say it is God's will, so be it.

gwar5's picture

They're the biggest criminals in world history hiding in plain sight.

slaughterer's picture

Does some genius hedge fund analyst here have the intelligence to predict what effect OpTwist will have on high-beta momo equities and commodities?  (The effect on Treasuries is rather easy to predict).  Please submit your predictions here right now.   

Founders Keeper's picture

[ much bullshit, just like the "there will be tanks in the Street/Martial Law if you don't give us a blank check for TARP..."]---TruthInSunshine

Actually, I think Hank was only slightly exaggerating. Martial Law was indeed a certainty. Just a surely as it will be a certainty again.

As for the bail-out programs, they were an historic heist. Bankers laughed all the way home. They're still laughing.


bob_dabolina's picture

They took a SOMA in Jacksons Hole and ended up with a twisted Sack

That's what I got out of it

buzzsaw99's picture

The bankers have been jamming it in Jackson's hole for a long time.

bob_dabolina's picture

I live in the Marriner Eccles Building on 20th St and Constitution Ave. My name is Ben Bernanke. I'm 57 years old. I believe in taking care of myself and a balanced diet and rigorous exercise routine. In the morning if my face is a little puffy I'll put on an ice pack while doing stomach crunches. I can do 1000 now. After I remove the ice pack I use a deep pore cleanser lotion. In the shower I use a water activated gel cleanser, then a honey almond body scrub, and on the face an exfoliating gel scrub. Then I apply an herb-mint facial mask which I leave on for 10 minutes while I prepare the rest of my routine. I always use an after shave lotion with little or no alcohol, because alcohol dries your face out and makes you look older. Then moisturizer, then an anti-aging eye balm followed by a final moisturizing protective lotion. There is an idea of a Ben Bernanke. Some kind of abstraction. But there is no real me. Only an entity. Something illusory. And though I can hide my cold gaze, and you can shake my hand and feel flesh gripping yours, and maybe you can even sense our lifestyles are probably comparable, I simply am not there 


AUD's picture

American Psycho?

I read almost the entire thing. There were a few bits I had to skip.

slaughterer's picture

Sack prefers the financial chain saws located in his trading desk to murder grandmas and grandpas. 

slaughterer's picture

Either "American Psycho" or "A Scanner Darkly"

SolidSnake961's picture

Jackson Hole Day should be a national holiday to celebrate a new QE of an era of temp. fake economic growth beginning and one ending

Mr Lennon Hendrix's picture

A toast......

[raises glass] ignorance.

Bay of Pigs's picture

Mr Jimi, what's your handle over there at Turd's?

You are posting aren't you?

Hedgetard55's picture

That sentence had my head spinning also. I guess he is saying that things would have been even worse w/o QE2?

Sack= Just another soldier ant for the Queen.

ChanceIs's picture

SOMA???  Isn't that what people in Huxley's "Brave New World" took instead of alcohol in order to dull the senses and be better able to ingore reality?  As I recall, there was no hangover.  They also decided that there needed to be certain numbers of brain surgeons, and certain numbers of trash collectors.  They adjusted the amount of oxygen available to the in-vitro fetuses so that their intelligence would be shaped accordingly.  Not so much oygen for the future trash collectors and even less for the soon to be Sectretarys of Treasury.

ebworthen's picture


I thought the reference to" SOMA was a joke.

Then I followed the link and found out it is:

"System Open Market Account (SOMA) portfolio"

You can't make this shit up.

I think they are rubbing it in our face.

slaughterer's picture

"soma" Derived from Gr. body. 

For US TV viewers of the 1960s: Cultural reference. "We are of the body" (Star Trek episode #?? on Landru, the outer-space cult).  Nice catch on the Huxley reference.  They must be laughing their a$$es off at the NY fed at putting this over on the American populace.  The greatest monetary joker club of history. 

kaiserhoff's picture

For many moons, some of us have been speculating about what will finally destroy the great ponzi.  The simplest explanation is usually the truth.

Ultimately, governments world wide desperately need inflation to reduce their crushing debt load.

The first whiff of inflation elevates short rates, resulting in an inverted yield curve and the death of all money changers, especially the Fed.

               Shit, meet fan;)

km4's picture

Meadows: Drop your socks and grab your cocks, we're going to a party. 
Buddusky: If this kid gets pussy out of this, I'll eat my fucking flat hat, man. 

The Last Detail (1973)

ziggy59's picture

More of TFFVP. this is the Fuckin Fed Viagra Program. Stays up even though it beee,

caerus's picture

A month is just about enough time for the ES to finish that right shoulder...

slaughterer's picture

When funds get tired of the "blow out earnings" (on lowered consensus expectations) shell game, and enough people are trapped in the post-earnings decline (see AAPL), then it is time for the right shoulder to be finished.   

ThroxxOfVron's picture

No mention of the FED's off balance sheet shenanigans; -such as the duration, notational amounts, and conditionality of the Swaptions that have been rumored to have been sold...

...& about those ML2 'Assets': when are those going to finally be divested ( a cold wind silently blows... ); and did the sales that were completed give Brian 'Ball' Sack any indication of what the M2M for those assets really are?

TruthInSunshine's picture

Maximus: Five thousand of my men are out there in the freezing mud. Three thousand of them are bloodied and cleaved. Two thousand will never leave this place. I will not believe that they fought and died for nothing.
Marcus Aurelius: And what would you believe?
Maximus: They fought for you and for Rome.
Marcus Aurelius: And what is Rome, Maximus?
Maximus: I've seen much of the rest of the world. It is brutal and cruel and dark, Rome is the light.
Marcus Aurelius: Yet you have never been there. You have not seen what it has become. I am dying, Maximus. When a man sees his end... he wants to know there was some purpose to his life. How will the world speak my name in years to come? Will I be known as the philosopher? The warrior? The tyrant...? Or will I be the emperor who gave Rome back her true self? There was once a dream that was Rome. You could only whisper it. Anything more than a whisper and it would vanish... it was so fragile. And I fear that it will not survive the winter.



Gracchus: Fear and wonder, a powerful combination.
Falco: You really think people are going to be seduced by that?
Gracchus: I think he knows what Rome is. Rome is the mob. Conjure magic for them and they'll be distracted. Take away their freedom and still they'll roar. The beating heart of Rome is not the marble of the senate, it's the sand of the coliseum. He'll bring them death - and they will love him for it.


Mr Lennon Hendrix's picture

Who runs this motha?

"Girls...we run this motha....yeah!  Girls!  Who run the world?  Girls!"

BS and Timmah sang and danced along to the tune while clinking glasses in celebration of buying up every asset, toxic and otherwise, in the known universe, before a variable collapse secured their status as BUYER OF LAST RESORT.

"Tuwn it up eye wub dith thong!"  Yelled Bawknee as he plopped himself on the love seat adjacent to Timmah's 8 bit Nintendo they used to run their PPT simulator.

"Girls!  Who run this motha!  Girls!  Who run this motha!"

There was no stopping them.  They had DC by the balls and Walled Street by the ears.  They were gods among grasshoppers.  Lords among field mice.

"Friday!"  Screamed BS over the music.  "Friday it all comes down.  Friday we own everything and nothing at the same time!"

"Weee!"  Giggled Timmah.  "TIMMAH!"

Bawknee waved his pointer fingers in the air with jubilation.  He was so happy he could be accepted by the great Alchemists of the Treaserve.

Girls....Who run this motha.....

Bay of Pigs's picture

Not hearing much about the doelarr lately. 74 and change? WTF?

Anyone seen Bob Rubin around?

Mr Lennon Hendrix's picture


I think that the main reason that the debt ceiling debate was juggled was to prop the doelarr.  If they had just raised the, I mean debt, then the doelarr would have fallen then.  Instead, they juggled and the dollar capitulated.  There might be a last gap but the doelarr is about to die.  Long live the doelarr!

sabra1's picture
  1. China HSBC flash PMI falls to 48.9 from June 50.1
Goldtoothchimp09's picture

For those of you who haven't already viewed  Keynes vs. Hayek -- round 2!!

gwar5's picture

Baby needs new shoes......  Operation Twist, Bitchez!

Thanks Tyler, ZHers will be among the first to know. 


centerline's picture

Someone correct me if I wrong, but wouldn't this be the perfect set up for foreign holdings to take the exits and pushing domestic funds in?  A perfect trap for dumb/desperate money such as municipal retirement funds?