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Fed Confirms First FX Market Intervention In 11 Years As Effects Start To Fizzle

Tyler Durden's picture





 

And just as the Fed confirms its first direct currency intervention since 2000 (who knew NYU interns could multi-task so well between stocks, bonds and FX, incidentally today's POMO is a lethargic $1-2 billoin monetization of TIPS), the USDJPY takes its first dip below 81 since the "Honda" Accord announcement last night. According to several sources the Fed spent 50 million in USDJPY purchases. Alas that will not be enough. And with the USDJPY continuing to leak lower, take back what we said about the multi-tasking efficiency of 25 year old FRBNY interns-cum-world tyrants in waiting.

The attached charts shows why the Honda Accord (as it has now been tentatively named) will need many more steroid injections, which according to Nomura have already cost the ECB at least $5 billion.

Perhaps it is time to ask why Japan (and the central banking cartel) has spent almost half a trillion dollars to preserve capital markets instead of giving that money to the millions of earthquake disaster victims...

From AP:

The New York Federal Reserve Bank is confirming that it has intervened in currency markets for the first time in more than a decade.

The disclosure by the U.S. came a day after the Group of Seven major industrialized nations pledged in a statement to join in a coordinated effort to weaken the Japanese yen. The yen has surged in the last week to post-war record levels following the Japanese earthquake and tsunami.

A spokesman at the New York Fed, which operates as the agent of the U.S. Treasury in currency operations, confirmed that it had intervened. The last time the U.S. government intervened in currency markets was the fall of 2000 when it sold dollars and bought euros to bolster the fledgling European currency.

The spokesman, who spoke on condition of anonymity because of the sensitivity of the operation, refused to provide any details on the amounts of the intervention or what currencies were involved.

 

 


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Fri, 03/18/2011 - 09:59 | Link to Comment Boilermaker
Boilermaker's picture

In all seriousness...is this even in-line with US law?  Not that laws matter anymore...but...???

Fri, 03/18/2011 - 10:04 | Link to Comment falak pema
falak pema's picture

Wow! one hell off a spike! Are you telling me BCE, and EU people contributed 5 billion to this shark bite by the surrogates of the mega-rich???

Fri, 03/18/2011 - 10:03 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

The Fed and the Primary Dealers ARE the law.

 

Off with their FED!  Off with their FED!

Fri, 03/18/2011 - 10:13 | Link to Comment nope-1004
nope-1004's picture

First FX Market Intervention In 11 Years

 

Ha!  I never laughed so hard.  Was the sarcasm intended Tyler?

 

Fri, 03/18/2011 - 10:21 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

He missed two words in that sentence I believe.

First OPENLY ANNOUNCED FX Intervention in 11 Years. 

There, better.

Fri, 03/18/2011 - 10:30 | Link to Comment nope-1004
nope-1004's picture

It is painfully clear that the current economic system does not jive with human needs.  Markets are no longer free to operate.  Earthquake and tsunami victims are not given direct aid, rather, the global elites are given rate resets above a "certain level" so they can unwind their carry trade.

This "system" we operate in, run by selfish elites and paid off gov't schills, is so far removed from reality that you can see basic human needs go unmet even in the middle of a disaster.

 

Fri, 03/18/2011 - 10:36 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Indeed.  Hopefully the FED protest will gather some steam on the 28th.  I'll be decked out in protective clothing at the Cleveland FED, expecting retaliation by the guards.  Mind you, I will be peaceful, but will resist arrest with force.  Wife has me bail money ready and a number to a good funeral director (in the case of police brutality causing my death - bad heart and all).  Chances are this protest will be ignored, as has been the case in the past, but I am willing to try one more time. 

Fri, 03/18/2011 - 10:34 | Link to Comment long juan silver
long juan silver's picture

It was considered inarticulate to state:

"Our inventory of kitchen sinks has been exhausted"

Fri, 03/18/2011 - 10:37 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

+ 81.5800 Japanese yen

Fri, 03/18/2011 - 10:10 | Link to Comment Mad Max
Mad Max's picture

Not that laws matter anymore

You understand the reality - why are you asking?  I mean, after Obama recently went 180 on his campaign promise to end Gitmo and abolish military tribunals - the same ones he had labeled as blatantly unconstitutional while campaigning - did you mistakenly think that the rule of law was making a comeback?

The US is going full banana.

Fri, 03/18/2011 - 10:49 | Link to Comment Drachma
Drachma's picture

Never go full banana.

Fri, 03/18/2011 - 11:10 | Link to Comment LongSoupLine
LongSoupLine's picture

Full bananard?

Fri, 03/18/2011 - 10:44 | Link to Comment whatsinaname
whatsinaname's picture

Ignorant about this but what would be the Fed's mechanism to strengthen the USD versus the Yen ? And I guess would it not be to the Fed's disliking anyways ?

Fri, 03/18/2011 - 10:00 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Excellent article

Fri, 03/18/2011 - 11:28 | Link to Comment whatsinaname
whatsinaname's picture

Why is the www.enviroreporter.com site run by the freelancer not working >

Too many hits today ?

Fri, 03/18/2011 - 09:59 | Link to Comment nobusiness
nobusiness's picture

The Bankers only save their friends and family not the citizens.  If you don't own financial assets you do not exist.

Fri, 03/18/2011 - 11:19 | Link to Comment bbaez
bbaez's picture

Would voting out all Incumbents help?

Fri, 03/18/2011 - 09:59 | Link to Comment Racer
Racer's picture

Wouldn't it be more appropriate to call it the Fukushima Accord, or a slightly different spelling?

Fri, 03/18/2011 - 10:01 | Link to Comment nobusiness
nobusiness's picture

The FU Accord would be appropriate

Fri, 03/18/2011 - 10:06 | Link to Comment Debtless
Debtless's picture

+/- 81

Fri, 03/18/2011 - 10:12 | Link to Comment Mad Max
Mad Max's picture

Fuk U I'm eating.

Brought to you by Carl's Jr.

Fri, 03/18/2011 - 09:59 | Link to Comment bob_dabolina
bob_dabolina's picture

Can we rename the Fed FEDCO in honor of the second most dishonest entity on planet earth.

Fri, 03/18/2011 - 10:06 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Second.  All in favor?????

Fri, 03/18/2011 - 10:08 | Link to Comment ReallySparky
ReallySparky's picture

I.

Fri, 03/18/2011 - 10:11 | Link to Comment Mad Max
Mad Max's picture

What's the most dishonest entity?  Are you considering Obama an entity?

Fri, 03/18/2011 - 10:00 | Link to Comment jesse livermoore
jesse livermoore's picture

Steve liesman says this good policy

Fri, 03/18/2011 - 10:02 | Link to Comment etrader
etrader's picture

Its only good for the re-pat orders that need to be triggered @ 81 or better ;-)

 

Fri, 03/18/2011 - 10:11 | Link to Comment Boilermaker
Boilermaker's picture

Exactly, an escape route for the big money...as usual.

Fri, 03/18/2011 - 10:01 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

Fizzle my bizzelz!

Fri, 03/18/2011 - 09:59 | Link to Comment americanspirit
americanspirit's picture

People are expendible - assets must be preserved.

 

Fri, 03/18/2011 - 10:00 | Link to Comment e_u_r_o
e_u_r_o's picture

wtf, I remember ZH saying OMG "very troubling" that BOJ hadnt intervened etc

Fri, 03/18/2011 - 10:08 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Very troubling as the carry trade, good ol' Mrs. Watanabe, would have spelled yet another marshal law threat against the US?   

Fri, 03/18/2011 - 10:35 | Link to Comment e_u_r_o
e_u_r_o's picture

oh

Fri, 03/18/2011 - 10:01 | Link to Comment Racer
Racer's picture

And the US moan and complain about China intervening in currency?????

Fri, 03/18/2011 - 10:02 | Link to Comment DeweyLeon
DeweyLeon's picture

"Honda" accords...

lol, the gallows humor on this site second to none.

Fri, 03/18/2011 - 10:02 | Link to Comment pendragon
pendragon's picture

good to see the german taxpayer is picking up the tab for this one as well...

Fri, 03/18/2011 - 10:01 | Link to Comment Quinvarius
Quinvarius's picture

I am sure that was the 1st one in ten years.  LOL.

Fri, 03/18/2011 - 10:02 | Link to Comment jesse livermoore
jesse livermoore's picture

these are not the droids you are looking for....................

Fri, 03/18/2011 - 10:03 | Link to Comment morph
morph's picture

Perhaps it is time to ask why Japan (and the central banking cartel) has spent almost half a trillion dollars to preserve capital markets instead of giving that money to the millions of earthquake disaster victims...

 

This is the one point I never understand about the entire financial system.  

Fri, 03/18/2011 - 10:06 | Link to Comment sabra1
sabra1's picture

because the elite want to reduce the population! the more that die , the better. those tsa scanners are not for security reasons. it's there to radiate you!

Fri, 03/18/2011 - 10:08 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Ah yes, of course the short answer is; "they are not kosher"

Fri, 03/18/2011 - 10:40 | Link to Comment AG BCN
AG BCN's picture

Your doing well if it's just one point.

Fri, 03/18/2011 - 14:05 | Link to Comment NotApplicable
NotApplicable's picture

If I point out that the entire system is a collection of criminal cartels, does that help clear things up?

Fri, 03/18/2011 - 10:05 | Link to Comment virgilcaine
virgilcaine's picture

Dimon is in Tokyo.. twisting arms.

Fri, 03/18/2011 - 10:41 | Link to Comment AG BCN
AG BCN's picture

And faking concern / sympathy.

Fri, 03/18/2011 - 10:06 | Link to Comment TruthInSunshine
TruthInSunshine's picture

5 billion is Chump Change. That's Goldman Sachs' (tax subsidized) bonus pool for what?...1 1/2 months?

Fri, 03/18/2011 - 10:41 | Link to Comment NumberNone
NumberNone's picture

Ahh yes our friends at GS...rated Netflix a screaming buy 'To Da Moon', sucked in the unwitting, and there has been non-stop dumping since. 

http://www.businessweek.com/ap/financialnews/D9LVPMPG1.htm

Fri, 03/18/2011 - 10:05 | Link to Comment Tense INDIAN
Tense INDIAN's picture

start folding up ur India  PUTS:

 

http://markettechnicals-jonak.blogspot.com/

 

 

Fri, 03/18/2011 - 10:05 | Link to Comment Revolution_star...
Revolution_starts_now's picture

"The spokesman, who spoke on condition of anonymity because of the sensitivity of the operation, refused to provide any details on the amounts of the intervention or what currencies were involved."

Bernie Madoff rule number 1, "you can't operate an effective ponzi scheme if every knows it a ponzi scheme."

Fri, 03/18/2011 - 10:13 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Bernie Madoff, watching news coverage of The Honda Accord and all of The Bernank's tactics from his prison recreation area, was overheard by fellow inmates as saying:

"Oh, this guy is good."

Fri, 03/18/2011 - 12:08 | Link to Comment cswjr
cswjr's picture

They oughta stick Madoff in with Martin Armstrong.  That'd be some kind of interesting prison cell banter.

Fri, 03/18/2011 - 14:07 | Link to Comment NotApplicable
NotApplicable's picture

Word has it that Armstrong has actually been released.

Fri, 03/18/2011 - 10:05 | Link to Comment pendragon
pendragon's picture

so the fed is doing eveything in its power to weaken the dollar via qe and then theyre intervening in the fx mkts buying usd. 

Fri, 03/18/2011 - 10:05 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Just another example of why paper is, and will always be, bad for your soul.

Fri, 03/18/2011 - 10:07 | Link to Comment buzzsaw99
buzzsaw99's picture

the fed does what the squid tells it to do.

Fri, 03/18/2011 - 10:05 | Link to Comment jomama
jomama's picture

'Perhaps it is time to ask why Japan (and the central banking cartel) has spent almost half a trillion dollars to preserve capital markets instead of giving that money to the millions of earthquake disaster victims...'

ZH asks this question every day, which is why I am so drawn to this site.  Long live ZH, down with the global banking cartel.  It is only a matter of time now...

Fri, 03/18/2011 - 10:07 | Link to Comment Jason T
Jason T's picture

Gas prices are up..gasoline that is.

Fri, 03/18/2011 - 10:16 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

Yes, and why?

What percentage of gasoline is comprised of tax?

Who needs tax revenues? Badly.

Fri, 03/18/2011 - 14:16 | Link to Comment NotApplicable
NotApplicable's picture

Gas tax rates are set per gallon, not a percentage of market price like normal sales tax.

Fri, 03/18/2011 - 10:06 | Link to Comment John Law Lives
John Law Lives's picture

So much for peace in Libya:

http://ca.news.yahoo.com/government-attack-libyas-misrata-kills-25-docto...

"25 DEAD IN BOMBARDMENT BY GADDAFI FORCES"

 

Fri, 03/18/2011 - 10:07 | Link to Comment Tulli
Tulli's picture

Tyler,

Indeed "Perhaps it is time to ask why Japan (and the central banking cartel) has spent almost half a trillion dollars to preserve capital markets instead of giving that money to the millions of earthquake disaster victims..."


Yes, that is the exact question that must be asked.

My mind boggles at these numbers. It also boggles for knowing that the cartel was allowed to dump whatever risk they were / are still holding into the central bank of Japan.

This is absolutely criminal. 

Yet again we see the cartel taking in inordinate risk, only to see it fail, and then dumping the outcome on to the people.

According to wikipedia, Japan has about 120 mn inhabitants. Divide those 500 BN US$  by the number of inhabitants and you get the bill: 4.1 Million US$ per inhabitant is what the Central Bank of Japan gave the cartel.

Furthermore, think about what will happen with that cash - in the hands of the cartel, it wil be used to start new bubbles elsewhere, and a relatively small part of it will end up being consumed / invested. 

However, if each Japanese inhabitant would be given 4.1 Million US$, think of all the savings, investment, consumption and reconstruction that would come of that.

This is beyond criminal, it is insane. 

Fri, 03/18/2011 - 10:15 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Check your math retard,  500,000,000,000 (U.S. dollars) divided by 120,000,000 (inhabitants) equals $4,166 dollars per inhabitant.  For that matter, if you can't do math how did you get to post in the first place? 

Fri, 03/18/2011 - 10:57 | Link to Comment MakeMineADouble
MakeMineADouble's picture

Abacus bitchez!

Fri, 03/18/2011 - 10:18 | Link to Comment pendragon
pendragon's picture

im afraid your maths looks a bit off... your sentiment is right though. paying all that cash to the soro's of this world. some lesseons are never learned

Fri, 03/18/2011 - 10:14 | Link to Comment tmosley
tmosley's picture

Check your math.

500 billion/120 million=4166

Fri, 03/18/2011 - 10:21 | Link to Comment FeralSerf
FeralSerf's picture

You seem to have a problem of magnitude.

Try $4,167 and see if that works better -- still not insignifcant.

Fri, 03/18/2011 - 10:07 | Link to Comment Cdad
Cdad's picture

Fuck it....I'm buying silver.  I have no idea why...but just know that when people start buying silver, it goes ape shit nuts into Blythe Masters [BM].  I'm sorry...I suck at the silver trade...so you guys should look out.

Considering just how insane everything is right now, with competing devaluations, professional government lying, radiation, desert tyrants...and on and on.

There...my solution...long silver, short Apple [which is breaking down BTW].

 

Fri, 03/18/2011 - 10:29 | Link to Comment IQ 145
IQ 145's picture

 Stopped out yesterday at 1.400 on my EUR/USD short ; back in today at 1.4112 at 9;15 CDT; feeling stubborn. It's a market that loves to reverse off of spikes; and it;s about time; may be completely wrong, of course.

Fri, 03/18/2011 - 10:36 | Link to Comment pendragon
pendragon's picture

glutton for punishment. looks like the ecb are going to hike next month regardless.

Fri, 03/18/2011 - 10:09 | Link to Comment falak pema
falak pema's picture

Soon they won't have any 'sheeple' to borrow from. The Trilateral will be bone dry and China hocked in banking/commodity/ investment bubble.But it won't stop them from printing all the way to kingdom come...brave new world.

Fri, 03/18/2011 - 10:11 | Link to Comment RockyR
RockyR's picture

markets?  what markets?

Fri, 03/18/2011 - 10:09 | Link to Comment Verum
Verum's picture

The fookuz accord

Fri, 03/18/2011 - 10:10 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I am opting for the restrained trade, as painful as that may be, for I am not a gambler, and to invest in anything so hopelessy (Hopiumlessly?) rigged as these markets, a gambler one must be.

Fri, 03/18/2011 - 10:12 | Link to Comment sudzee
sudzee's picture

All G7 currencies spinning round the bowl. The big flush beginning.

Fri, 03/18/2011 - 10:12 | Link to Comment Critical Path
Critical Path's picture

Fed Confirms First FX Market Intervention in 11 years

 

...and I confirm that I am officially calling bullshit.

 

In all seriousness though, who the fuck do these guys think they're fooling?  Yeah yeah, I know...

Fri, 03/18/2011 - 10:14 | Link to Comment Debtless
Debtless's picture

It's just a giant game of monopoly - whereby the opponent has a copier - so he never runs out of money. He'll never lose, and you'll never win...so the only sane response is to get up and walk away as the next chump sits down to play. BTW - he also copies his 'get out of jail' cards too. 

Fri, 03/18/2011 - 10:13 | Link to Comment Dick Darlington
Dick Darlington's picture

Seems that ECB is doing some multitasking also. Hearing they started to monetize Portuguese govt bonds today and judging by the price action in spanish bonds I wouldn't be surprised if ECB is buying those too. After all, Bank of Spain reported today that bad loans in banking sector rose again in Q4 and are on the highest level since 1995. They also reported that debt of Spain's regions rose again to 115,5 billion from 87,7 billion year earlier. That's not positive at all and it should put pressure on spanish debt but the price action is exactly the opposite...

Fri, 03/18/2011 - 10:14 | Link to Comment primefool
primefool's picture

Very very strange Yen movements. Now that a floor has kinda been supplied by the CBs ( fairly infrequent occurance this coordinated interv.) - at , say 80.

Yen will continue to be the low yielding currency even as other CBs start to tighten. A natural carry currency. Admittedly the carry trades are probably quite wounded and wont get back on the field easily.

On the fundamental side there is nothing I can think of that is Yen positive. BOJ likely to monetize huge amounts of debt to rebuild etc. private savings are already spoken for.

 

Fri, 03/18/2011 - 10:17 | Link to Comment AldoHux_IV
AldoHux_IV's picture

Central bankers are scum because they seek only to protect the scum that are bankers.  It's quite clear that they waste fake currency only to preserve a false sense of reality while the rest of the world is falling apart-- forget that this so called 'money' could've done some good, these assholes have done nothing but made things worse.

The time is now to end the madness and dissolve these cancerous institutions.

Fri, 03/18/2011 - 10:35 | Link to Comment buzzsaw99
buzzsaw99's picture

central bankers care only about protecting the very wealthy.

Fri, 03/18/2011 - 10:26 | Link to Comment foxman
foxman's picture

Always worth repeating.

 

"I realized from a very early stage that the market is a whole rigged job. There's no chance that investors have in this market."

"The whole government is a Ponzi scheme."

--B Madoff

 

Fri, 03/18/2011 - 10:34 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

You must know by now,without banks,we would all die instantly.

 

Fri, 03/18/2011 - 10:38 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Bullshit.  My family and our like minded neighbors would be just fine.  Of course, we have land, precious metals and the ability to feed and clothe ourselves for quite some time.  Someone please hit the reset button already.  If you were a poor sucker in L.A. county, well that might be a different story.

Fri, 03/18/2011 - 10:38 | Link to Comment Dr Hackenbush
Dr Hackenbush's picture

as if injecting bank reserves with trillions is not considered FX intervention

Fri, 03/18/2011 - 14:27 | Link to Comment NotApplicable
NotApplicable's picture

Perhaps according to your definition.

The Fed? Well... let's just say they have a way with words.

Fri, 03/18/2011 - 10:46 | Link to Comment spanish inquisition
spanish inquisition's picture

So .. game on?.. pound the Yen down under 80 during the day. Position for an intervention overnight.

Fri, 03/18/2011 - 10:49 | Link to Comment Happy Days
Happy Days's picture

I wonder if this might be the new and improved "Pledge of Allegiance"? I pledge allegiance to the flag of the united Socialist States of America, and to the oligarchy, for which it stands, one nation, under the Federal Reserve, with serfdom and injustice for all.

Fri, 03/18/2011 - 10:50 | Link to Comment Agent P
Agent P's picture

"...incidentally today's POMO is a lethargic $1-2 billoin monetization of TIPS"

They must be worried about inflation.

 

Fri, 03/18/2011 - 11:22 | Link to Comment Money_for_Nothing
Money_for_Nothing's picture

If the Yen strenthens then a whole bunch of dollar/euro positions would have to be cashed in to repay the carry trade Yen. This would be very deflationary. So the carry trade is really just another word for the Dole.

 

Fri, 03/18/2011 - 11:40 | Link to Comment GerritB
GerritB's picture

Interesting link: tying the dots together:

 

http://www.leap2020.eu/geab-n-53-is-available-global-systemic-crisis-sec...

 

 

Fri, 03/18/2011 - 13:33 | Link to Comment Matte_Black
Matte_Black's picture

Wow, great link. Thx...

Fri, 03/18/2011 - 11:48 | Link to Comment virgilcaine
virgilcaine's picture

How to unwind a carry trade for fun and proft..think the Boj would have woken up by now. They are being used as a Holding Co.. for WS spec profits. Going on decade 3 of zero Growth in Japan.  The land that time forgot..will probably see Mothra flying soon.

That was their peak.. when the Great Godzilla vs Mothra movies were made.!

Do NOT follow this link or you will be banned from the site!