Dallas Fed's Fisher Stunner: Admits Worries Fed Has Created Nothing But Bubbles

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Tue, 10/19/2010 - 13:07 | 661726 NOTW777
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"I have begun to wonder"


what took so long 

Tue, 10/19/2010 - 13:20 | 661773 unwashedmass
unwashedmass's picture


you really have to wonder about these guys...i mean, we're going to have millions of seniors eating cat food in cold houses this winter .... because "there is no inflation"....that the Fed will admit to....

so the SS is smaller than ever

and the CDs they depended on are paying nothing,

and have the potential to literally evaporate before their eyes....

You wonder how guys like Fischer can possibly justify what they are doing.....


Tue, 10/19/2010 - 13:30 | 661815 Shameful
Shameful's picture

They have the same morality as a Dimon, a Paulson, a Fuld, or a Blankfein.  There is no moral question for them.  Even if such thoughts would emerge they would be defeated with "They have it coming, if they there were smarter then they would speak out or stop me".  We cannot try to put morality on our "betters", morality is for us not them, just like laws.

Wed, 10/20/2010 - 06:50 | 663715 Diggintunnels
Diggintunnels's picture

And that is the true nature of the FED and the assholes who run it.  The thinking goes something like this: We will punish those who do not buy the assets we tell you to and you will obey or suffer the consequences. 

A wise man once said "If the America people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered."


Tue, 10/19/2010 - 16:12 | 662449 chopper read
chopper read's picture

simply to give this speech reeks of incompetence.  Is he an intern learning on-the-job? 

He'll probably write a book when he retires about the whole fiasco and make millions.  talk about the follies of privilege.

Tue, 10/19/2010 - 13:43 | 661866 midtowng
midtowng's picture

Looks like the Fed has been living in a bubble, not just blowing them.

Tue, 10/19/2010 - 13:44 | 661870 B9K9
B9K9's picture

They have always known. It's laughable to presume that those who excel in advanced mathematics (a prerequisite for any post-grad economics degree) are ignorant about the underlying nature of compound interest.

The really interesting aspect of this story are the macro level implications. That is, consider the Condor's job focused on open source intelligence. Now, let us use this model here - why are these kinds of stories now appearing? Who is authorizing their release? To what purpose do they serve?

I have long asserted that the power-elite can make money only two ways: (a) lending; or (b) repossession. Moderate inflation drives (a), while deflation engages (b). In no case does currency destruction via hyper-inflation enter into their P&L models.

Since organic loan growth driven by moderate (or extreme as the present case may be) monetary/fiscal stimulus has proven to be a failure, that only leaves option (b). In order for option B to be utilized towards maximum effect, it needs the herd to be driven off a cliff. That is the role of the captured media.

OK, back to square one: why are these kinds of reports now surfacing? When that paid whore Cramer begins to question outloud about some very basic assumptions, you might be inclined to think the top has been signaled.

Tue, 10/19/2010 - 14:04 | 661951 Larry Darrell
Larry Darrell's picture

I thought about this while driving last week and thinking about the possibilities of QE2.  The following occurred to me:

They like their power, and since they have been outright stealing in broad daylight as of late via the "market" with no repercussions, why would they not continue to do so.  They have been cashing in on the POMO, HFT, etc. ramp job (witness the insider selling to buying ratios).  Why would they actually follow through with QE2 now.  It would have the adverse effect of crushing the purchasing power of their newly acquired gains.  And since they know that QE2 is "priced in" but not coming, just switch sides and short the market to make more gains on the way down.  And if in fact "retail" is out and leaving quickly, then where are all of the recent new highs in short positions coming from.

It's really quite easy when you think like they do. Manipulate market higher through rumor of debasement coming, cash in at the top, don't debase the currency, and cash in on the way down through shorting.

Tue, 10/19/2010 - 14:19 | 662038 hedgeless_horseman
hedgeless_horseman's picture

And who is going to say anything?  Nobody.  That is who.

Tue, 10/19/2010 - 15:17 | 662248 TheJudge2012
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If they don't follow thru with a substantial degree of QE2, it will then be harder for them to manipulate the market based on their hints.

Tue, 10/19/2010 - 15:40 | 662331 the rookie cynic
the rookie cynic's picture

This is an interesting hypothesis to me. Let's think out loud for a second.

In the context of deflationary macro-environment (which is the dominant theme), the Fed has essentially created a mini-bubble of inflation in commodities and stocks (minor theme). The "market" is a mini-bubble they can expand and contract at will with POMO, HFT, QE1, etc. at will.

All the talk of QE2 could be a massive head fake (or a head and shoulder fake if you're technically inclined). If they postpone further easing, the markets collapse, and the Big Boys can short all the way down on a wave of crashing equities and a concentration of wealth in the dollar.

They can dance in time, while the rest of us stumble over our feet, because we don't exactly which tune they're gonna play next, but they DO.

Just a thought.


Tue, 10/19/2010 - 21:55 | 663221 MacHoolahan
MacHoolahan's picture

Nothing too mad there rookie... The bulk redistribution of wealth to the hyper-rich relies on the mis-allocation of effort, time, resources, worry, blood, etc.... by the masses. That way nothing is "earned" for the long term - it was all a bubble, "he worked hard but it was doomed", "they lost their savings in the crash" etc... etc...

Keeps the treasure flowing one way,


Tue, 10/19/2010 - 17:03 | 662666 Future Jim
Future Jim's picture

"In no case does currency destruction via hyper-inflation enter into their P&L models."

Have you considered that the fed could buy government debt, and then the government could spend this money in way that transfers it to the "power-elite" - such as government contracts or bailouts? This may cause inflation or even hyper-inflation. Everyone's dollars would be worth less because there would be so many more dollars, but a big percentage of the number of dollars would have been transferred to the "power-elite". The result would be repossesion/confiscation through inflation. The "power-elite" would have taken some of the value from each of our dollars.

Tue, 10/19/2010 - 13:57 | 661913 High Plains Drifter
High Plains Drifter's picture

Mea culpa  just doesn't cut it at this point.

Tue, 10/19/2010 - 16:46 | 662574 chopper read
chopper read's picture

i feel certain that they are well aware that bloggers are calling for their heads (literally).  CIA is all over these chat rooms relaying information to the executive branch.  President communicates with Fed Chairman.  Out comes the damage control ("we're only human just like you") rhetoric.  

If Ron Paul's voice begins to gain traction amongst the elderly as it relates to a Fed audit, then it may just happen; they definitely do not want this.  In fact, the 'put back' to BofA is likely in preperation for this event, and an admission that they cannot re-inflate the value of the toxic MBSs on their balance sheet.   

Tue, 10/19/2010 - 13:08 | 661729 mynhair
mynhair's picture

Note to Fed:  Suicide is painless.

Tue, 10/19/2010 - 13:11 | 661737 SDRII
SDRII's picture

that would require honor

Tue, 10/19/2010 - 14:24 | 662065 tmosley
tmosley's picture

Where's Hannibal when you need him?

           Hannibal - Hanging Scene         

Tue, 10/19/2010 - 14:11 | 661988 midtowng
midtowng's picture

I want to hear more about this:

"if it were to prove out that the reduction of long-term rates engendered by Fed policy had been used to unwittingly underwrite investment and job creation abroad"

Tue, 10/19/2010 - 13:08 | 661730 NOTW777
NOTW777's picture

We are still the best-looking horse in the glue factory.”


more like the one with the biggest gov't liars

Tue, 10/19/2010 - 13:09 | 661731 RobotTrader
RobotTrader's picture

They are forcing investors out of commodities and trying to get the mo-mo players to jump back into banks, retail, and REITs.

It is the only way to avoid hyperinflation, boost consumer sentiment, and get the "Perpetual Positive Feedback Loop" going once again.

So easy for the PPT to manipulate price action by chart painting.

Tue, 10/19/2010 - 13:31 | 661822 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

How well will this work?  If it works even minutely, for how long?  There is not even any monie on the sidelines, what does the President's Working Group on Financial Markets expect?

Tue, 10/19/2010 - 14:00 | 661908 B9K9
B9K9's picture

On & on we go about how the Fed is plotting to destroy the very essence of its being, the global reserve status of the $USD. It could possibly work if the $USD didn't happen to be a store of wealth, as well as a unit of account. Even then, currency destruction could possibly work if the store of wealth was primarily held by US citizens.

Unfortunately for the hyper-inflation thesis, military control of critical ME oil reserves requires a moderately stable dollar. In addition, unless we just want to tear off the mask and admit to the world that we're no different than Nazi Germany by proceeding directly to naked conquest/occupation, we need a stable dollar as a means of exchange to induce oil producers to take our paper without too much fuss and continue the charade for the consuming public.

People who view the Fed in a vacuum, as if they have no other considerations than that of merely raping US citizens (which of course they have zero compunction), fail to take into account the larger macro picture.

I feel like a broken record, but our national policies, including a subset, the monetary regime, are all about OIL. No oil, no civilization - it's really that simple.

Tue, 10/19/2010 - 14:04 | 661946 Shameful
Shameful's picture

But how can they keep the dollar stable?  Let us assume that they decide to stop printing, no more money.  How on can the budget be brought into line?  The level of austerity it would require would send people rioting, even Americans.  Particularly since virtually all cuts would be on the social side as we need the military to protect the ME oil.  So that leaves us with a Treasury default.  Such a default would have vastly negative effects on the trust based dollar as well as funding the military machine.  How can they pull off what would be revolt level austerity, and not lose any confidence in the dollar?

I understand you are saying they have to, ok I'm game how can they pull it off?

Tue, 10/19/2010 - 14:39 | 662154 SheepDog-One
SheepDog-One's picture

'The level of austerity would send even americans to rioting'...these idiots better hope like hell they dont riot. Because if AMERICANS start rioting all over the place its a far different game than Greece or France riots.

Tue, 10/19/2010 - 14:52 | 662189 Shameful
Shameful's picture

That's just it.  The level of austerity is basically no services no SS or other goodies from Uncle Sugar, he will need it all for the corporate welfare and military empire.  So I KNOW that a lot of us young folks are pissed at the social security system.  Now take away the payments to our parents and grandparents but force us to keep paying in and that will dial up our anger to say nothing of our elders.  They would need the military to suppress the people, and without going totally evil, like laying siege to cities and burning out civilians they won't be able to suppress them.  And remember most cops are locally funded, so they would be going down as well and I have to assume that cops don't want to be robbed either.

Now Americans are totally passive but if you yank away all of their goodies and back them into a corner, what can be expected?  Have to ask what is safer; acting like a tyrant in the ME to seize oil, or fight a rioting America in a tyrannical way?

Now with the hyper inflation scenario it's a lot more confusing to the general populace as seen in Weimar and much easier to scapegoat people.  In that scenario it's much easier to scape goat "evil speculators" or "dirty foreigners" then doing that when troops have to put down protests about cuts.  And it's not like they would not profit from a hyper event, after all the big boys touch the money first, when it spends like real money.

Tue, 10/19/2010 - 14:50 | 662184 uno
uno's picture

Why not Mexico or Venezuela oil instead.  There is so many false flags with

both, the cartels in Mexico, and Russia saying it is giving nukes to Venezuel.

Also, Cuba would make a nice base for the Air Force and Navy and location

for a major refinery and storage.  Also the oil in the Gulf is better (sweeter) than the ME.

Also makes for an easier sell to the US public and a heads up to South America.

Good for the US oil corporations, NAFTA etc...

I believe we (US) could make up for the amount we get out of the ME, don't

have the latest stats, will have to go look for them.

Tue, 10/19/2010 - 14:56 | 662196 Marla And Me
Marla And Me's picture

Looks like B9K9's views are well reasoned:


The MIC runs the show.  Like the author said, until the benefits of controlling oil start creating diminishing marginal returns, it will be the ultimate game in town...

Tue, 10/19/2010 - 15:45 | 662352 Assetman
Assetman's picture

Or perhaps...

B9K9 = Charles Hugh Smith

Trick or Treat!

Tue, 10/19/2010 - 15:28 | 662311 -273
-273's picture

No oil, no civilization - it's really that simple.


Nothing resembling our current one anyway. Oil is not going to run out anytime soon, it will however come up short of demand, and then shorter, and shorter. How this plays out remains to be seen, but at that point monetary policy will most likely have even less effect.

I thought Fisher spoke some truths, and posed some interesting questions as you yourself have too.

Tue, 10/19/2010 - 14:32 | 662110 SheepDog-One
SheepDog-One's picture

RIGHT yea ignite the degenerate alcoholic gambler trait in bankrupt american unemployed folks again....its REALLY gonna work! Sure! HASTA work! Long live BubbleMania, all hail!

Tue, 10/19/2010 - 14:34 | 662119 SheepDog-One
SheepDog-One's picture

HA RoboTrader so much for these idiots 'Animal Spirits' nonsense and their believe in their Pied Piper ability to control what people do! As usual, they overestimate their own abilities and underestimate everyone else!
When someone has been ripped off in a certain casino, they dont go back, ever!

Tue, 10/19/2010 - 13:10 | 661736 SDRII
SDRII's picture

as thatcher said - don't go wobbly on me

Tue, 10/19/2010 - 13:13 | 661748 merehuman
merehuman's picture

Fed. i will gladly help out and lend you my very sharp swords. No need to return and you have ALL my interest

Tue, 10/19/2010 - 13:17 | 661760 99er
Tue, 10/19/2010 - 13:46 | 661875 firstdivision
firstdivision's picture

Very solid resistence at 1163 there.

Tue, 10/19/2010 - 13:18 | 661767 Tortfeasor
Tortfeasor's picture

He's not a voting member, is he?  Thought he was an alternate.

Tue, 10/19/2010 - 18:15 | 662884 NotApplicable
NotApplicable's picture

Has a voting member ever come out against the boss's plan?

Tue, 10/19/2010 - 18:31 | 662922 Rainman
Rainman's picture

Throughout the period 1930-33.

Tue, 10/19/2010 - 13:20 | 661772 LeBalance
LeBalance's picture

It would be "luvly" for William Banzai to edit this Lawrence Welk Video:

"I am forever blowing bubbles" as Lawrence introduces the members of his

orchestra.  William might edit some strategic faces into the video and change the narrative slightly.


Tue, 10/19/2010 - 13:20 | 661774 Ms. Erable
Ms. Erable's picture

That's right, get 'Mercans back to work - the coffers are running dry, and they're running out of other countries to fleece. Ponzi be needin' new suckas.

Tue, 10/19/2010 - 13:21 | 661779 TooBearish
TooBearish's picture

Fisher's ducktail hair style is tell - all business up front, party in the back.....

Tue, 10/19/2010 - 13:35 | 661781 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Good cop/bad cop...who cares, if King Fischer had worried, why did he not do something about it sooner?  Sort of like the Chinese raising rates; we will see how much time that buys.  His tone sounds like he is about to ride into the sunset; like someone said above, it would be honorable to face the day, but these people have none.

I still think my time line is right in target, November 15th.  A couple weeks after the elections for everyone to figure out playing musical chairs while the Titanic is sinking is moot.  They should have all gone and gotten a life boat.

Tue, 10/19/2010 - 13:33 | 661789 bada boom
bada boom's picture

"A great many baby boomers or older cohorts who played by the rules, saved their money and migrated over time, as prudent investment counselors advise, to short- to intermediate-dated, fixed-income instruments are earning extremely low nominal and real returns on their savings."

Well, just to take the other side, what about all the Gen X'ers and others who played by the rules of investing in stocks and buying houses like so many financial advisers suggested.

Rules, there are no rules, just fools.

Tue, 10/19/2010 - 13:25 | 661791 lsbumblebee
lsbumblebee's picture

"I never imagined the consequences, ya see. That's why I'm a Federal Reserve policymaker."

- Richard "Numskulled" Fisher

Tue, 10/19/2010 - 13:25 | 661792 threefingerscam
threefingerscam's picture

"adding Fisher to the Shirakawa, Hildebrand suicide watch,"

LOL TD, u r 2 funny

Tue, 10/19/2010 - 13:31 | 661819 truont
truont's picture


 "A great many baby boomers or older cohorts who played by the rules, saved their money and migrated over time, as prudent investment counselors advise, to short- to intermediate-dated, fixed-income instruments are earning extremely low nominal and real returns on their savings. Further reductions in rates earned on savings will hardly endear the Fed to this portion of the population."

Ah, I see the reason for the disconnect between the Dallas FED and the FOMC.

Dallas FED's Fisher seems to think that the FED is accountable to the people of this nation.

Silly Fisher--the FED is not accountable to the people.  It's a shell company for an international cabal of banksters who want to run the world.  Someone missed the memo.

Someone send Fisher a copy of the Creature from Jekyll Island or something.

I wish we had more idealists like Fisher in the Federal Reserve system...

Tue, 10/19/2010 - 14:16 | 662018 Bob
Bob's picture

That's the funny thing here--Fisher comes off as an idealist!  You can imagine how much pull he has if he talks like that at Fed parties. 

Tue, 10/19/2010 - 18:40 | 662943 Rainman
Rainman's picture

yeah, that good looking horse at the glue factory story must be a real knee-slapper. 

Tue, 10/19/2010 - 18:16 | 662894 NotApplicable
NotApplicable's picture

Meh, file it under "controlled dissent" and walk away.

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