Fed Damage Control Courtesy Of Elizabeth Duke (Update: And Dennis "Have My Cake And Eat It Too" Lockhart)

Tyler Durden's picture

Apparently what the Fed thought was sufficiently well "telegraphed" to the market, was "telegraphed" only to Goldman, and maybe a few others. Here is how the Fed is now doing some serious late day damage control before Asia opens, with backtracking courtesy of Fed Board member Elizabeth Duke.

  • DUKE: DON'T EXPECT THURS DECISN TO LEAD TO TIGHTER FIN CONDTNS
  • DUKE: DISC WINDOW CHANGES ONLY A REVERSAL OF SPREAD REDUCTN
  • DUKE: EXPECT BNKS TO USE PRIV SOURCES FOR NORML FUNDNG
  • DUKE: CONTINUE TO EXPECT NO LOSS ON CREDIT TO BEAR STEARNS, AIG
  • DUKE: IF HAD TO REDO, WOULD VOTE AGAIN TO MAKE LOAN TO AIG
  • DUKE: PLEASED TALF WORKED, MORE PLEASED 'BECOMING UNNECESSARY'
  • DUKE: ECON BY NO MEANS NEARLY AS STRONG 'AS WE'D LIKE'
  • DUKE: EXPECT BNKS TO ONLY USE PRIM CRED AS BACKUP FUNDS SOURCE
  • DUKE: DISC WINDOW MOVES DON'T SIGNAL MON POL OUTLOOK CHANGE
  • DUKE: FED RETURNING TO NORMAL DISCOUNT OPERATIONS
  • DUKE: THURS DECISN FURTHER NORMALIZN OF FED LENDING FACILITIES

What is most amazing, is that the truth bid-to-cover on her 11 statements is at most 10%.

Update: here are some musings from Dennis Lockhart on the topic of how one can have their cake and eat it too:

LOCKHART: MON POL REMAINS ACCOMMODATVE;NEEDED FOR RECOV
LOCKHART: DISC RATE HIKE NOT MEAN TIGHTENING IMMINENT

LOCKHART: STRONG Q4 GDP PERFORMANCE PROBABLY NOT SUSTAINABLE
LOCKHART: UNCERTAINTY MEANS NO IMPROVEMENT EXPECTD IN CAP SPEND
LOCKHART: COMM R-ESTATE,DEFICIT POSE UNCERTAINTIES FOR BIZ INV
LOCKHART: AT UNCERTAIN JUNCTURE; MUST WATCH INDICATRS GOING FWD
LOCKHART: HSG SECTOR IN MIXED STATE; SOME ENCOURAGING NEWS
LOCKHART: DON'T EXPECT MUCH INVENTORY EFFECT IN 2010 GDP GRWTH
LOCKHART: PREDICTS 'VERY SLOW RECOVERY' IN UNEMP MARKET
LOCKHART: FORECASTING LOWER GROWTH, MORE GRADUAL RECOVERY
LOCKHART: U.S RECOV IN 'TRANSITIONAL PHASE';POSITVE SIGNS
LOCKHART: FED FACILITIES WIND-DOWN SHOW FIN SYS STRESS ABATED
LOCKHART: THURSDAY FED ACTION REMOVAL OF FINCL CRISIS FACILITY
LOCKHART: CONFIDENT FED HAS NECESSARY TOOLS, CAPACITY TO ACT
LOCKHART: MON POL IN THE COMING YEAR 'MUST BE NIMBLE'