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Fed To Raise Discount Rate Again (Or Very Nasty April Fool's By Bernanke)
Emergency announcement, just released by the Fed. Here comes the next step in the road to tightening.
Advance Notice of a Meeting under Expedited Procedures
It is anticipated that a closed meeting of the Board of Governors
of the Federal Reserve System at 11:30 a.m. on Monday, April 5, 2010,
will be held under expedited procedures, as set forth in section 26lb.7
of the Board's Rules Regarding Public Observation of Meetings, at the
Board's offices at 20th Street and C Streets, N.W., Washington, D.C.
The following items of official Board business are tentatively
scheduled to be considered at that meeting.
Meeting date: April 5, 2010
| Matters to be Considered: | |
|---|---|
| 1. | Review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks. |
A final announcement of matters considered under expedited procedures
will be available in the Board's Freedom of Information and Public
Affairs Offices and on the Board's Web site following the closed
meeting.
For more information please contact: Michelle Smith, Director, or Dave Skidmore, Assistant to the Board, Office of Board Members at 202-452-2955.
Supplementary Information: You may call 202-452-3206 beginning at approximately 5 p.m. two business days before this meeting for a recorded announcement
of any bank and bank holding company applications scheduled for the
meeting; or you may contact the Board's Web site at
http://www.federalreserve.gov for an electronic announcement about applications and other expedited items, as well as procedural and other information about the meeting.
h/t Teddy KGB
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Hmmm -- this wouldn't be connected with today's date, now, would it?
If it's an April Fools joke, why include that in the title? I'm confused.
not a joke, AFAICT
It's listed on the Fed's website. They did this in Feb before the last discount hike.
if this is real which it probably isnt it compounds what seems like a really problematic scenario to me
think back to post last jobs number - you know, the one where 100% of economists said we'd gain jobs (although fewer than we "should" because of weather) and then whoops we lost jobs. but then the coast is clear right? buy whatever low quality equity crap you can because you can look forward to a MASSIVE march jobs number, right?
well, here we are. and i am sure we print 300,000 or more tomorrow, i really am. but then what? think we do that again in april? how about may? whoops then june we fire all the census guys. what great shining beacon of "the recovery is intact" thesis do we latch onto then to jam the S&P up 29 of 30 days or whatever absurd thing has taken place.
in the interim what happens? does oil hit $100? $120? $150? does the 10 year rip to 4%? 4.5%? mortgages rates to 5.5%? 6%? then what? china raises first? the us raises first?
does any scenario look anything remotely like the dopey setup "the weather" allowed people a month ago?
that's what the floods were about?
"Emergency" announcement. Nice touch.
I would like to:
1) Pour gasoline on fed chairman's scrote.
2) Light on fire.
3) Kick in nuts to put it out.
Just kidding. APRIL FOOLS!
no you weren't. Deep down inside you know you wanna.
Tell us how you really feel about things next time. ; D
"Mr. Bernanke, would you like to be a farmer?"
(kicks Ben in the nuts)
"Have a couple achers"
STUFF happens right?
Collapse, QE 1, "recovery", End QE1", Collapse, QE 2, "recovery", End QE 2, Collapse, QE 3....World War III/Hyperinflation
I'd say your glass is half full my friend!
While I realize this is probably a joke, I do wonder what price oil has to hit before these guys go into quasi panic mode. Oil is now back above where it was in early 2008 when unemployment was half as high as it is now and there wasnt broad deleveraging going on.
Oil at $100 is gas above $3 and with all deference to the massive number of census jobs we will add tomorrow, gas above $3 will have people rioting on the white house lawn (20% of the population either out of work or working less than they need to pay bills, plenty of time to riot)
How about steel? The debasement of currency has allowed 100% increase in ore pricing and 60% increases in coal pricing - what do the steel guys do? immediately turn around and raise prices to Ford and GM (japanese steel guys in the press seekign 20% increases to the auto industry). Guess who swallows that? Ford a little bit, the consumer a lot.
How about copper? How economical is it to build a house with $4 copper? How about laying down internet cabling? Guess what, it matters.
So I am sure we will add 500,000 jobs tomorrow and monday 12 dopes from the fed will reiterate the need to have negative real interest rates until 2024, but in the meantime in the real world there is no progress being made and the cost of everything that matters to people is quietly going through the roof courtesy of this ingenious "recovery plan" which has been tried twice before in the last decade and failed spectacularly both times.
This time tho, it will absolutely get the job done.
You forgot /sarcasm off.
They are only trying to kick the can past November elections. If they keep the power structure unaltered then they win.
Although fuggetaboutit if you want to chime in on the political wild card this year you are more than welcome. Obviously your finger is on the pulse. Or with these a-holes their lack of pulse.
You heard about iron ore prices? Bad fucking news for the average American.
http://www.euractiv.com/en/trade/industry-groups-urge-eu-act-rising-iron...
Gasoline is already above $3/gallon in Socal.
In all seriousness, the Nerf Bucks crew has to be getting a little concerned about the situation in commodities, especially oil. I find the timing of Baracko's jawboning re: offshore drilling yesterday interesting. You'd think the prospect of increased future supply would have muted the strength in crude relative to the dollar weakening, instead it blasted off and gapped up and away today. $3 gas is where the cattle start getting nervous as well as having serious cost-push impacts up and down the supply chain. This might be a last ditch effort to talk down commodities without shooting hostages.
It's already $ 3.09 for reg in Cali.....has been over $3 for a couple weeks.
right and part of me really hopes they let it get to that point so we can put this school of thought to the test. the "the fed is inflating the market so everyone gets wealthy and feels great about things" thesis.
so the 20% of the population that isnt working or underworking, of which 50% of that 20% has been out of work for a year mind you -- when it cost $80 to fill your car and $3,000 a month to heat your home, will it matter that every dog crap stock in the market has quadrupled? thats the logic right, the fed is flooding money into asset markets so everyone feels weathier so when in turn they have to fork their entire paycheck over for bare essentials (which is already happenign actually, look at consumption data, all spending is already going to clothing, food and gas), it wont faze them at all because they are long a bunch of FNM and AIG in their ameritrade account???
well, we'll see. i have a funny feeling the line of logic that says no one minds that scenario because they are living on capital gains (which, obviously, will be taxed any second now) not gonna pan out so well
See, I don't think that's going to work psychologically. The average American has no savings and either no or little exposure to equities-- certainly not enough to feel "rich" whether stocks go up 70% or 70000%. The fact that consumer confidence has been wallowing in the crapper means that majority of the middle class no longer is taking cues from Wall Street-- not only are they much more concerned with personal job security, debt, etc, I think that there's some popular revulsion out there for the rally in the sense that people are annoyed/angry that the malefactors of great wealth keep "winning" while the middle class gets squeezed over and over again. To the extent that they're investing, it's in instruments that are focused on return of investment, not return on investment.
In short, no one is living off capital gains in other 98% of America. When gas is $3.50 with 20% underemployment this summer, perhaps the people of this country will start asking some harder questions of the Federal Reserve.
I guess we'll see just how much the "little people" count. And so will they.
Should be interestin'.
obviously they count for little. as for rioting on the white house lawn: one doesn't get to the lawn, maybe not to the sidewalks (last time i tried there were busses parked end to end around it). considering the truly shocking (more than gambling at rick's) screw job the working and middle classes of the u.s. have received and the viscerally disgusting, multi-dimensionally impractical and utterly corrupt sweetheart deal the rich have gotten, the lack of protest (even awareness) is astounding (to me). especially the young, who are receiving the most extreme and smug abuse.
Peak oil is real, and is here NOW!
First Bank Failure Friday of the new quarter coming on a half day market session for Good Friday. Tank a big bank....?? Fed meeting Monday on expedited procedures. FRBNY surprise disclosure of ML holdings yesterday.
If I was good at reading tea leaves, I'd be suspicious something unpleasant is afoot.
There was a reason Obama pissed off his leftist earth-biscuit base today by talking about allowing oil exploration off the East Coast. Of course it'll never happen, but he was doing it because he was told he had to do it. So I agree he was trying to talk down the price of oil.
If oil goes up, everything else goes up, and we have inflation, which with the SOMA 1.25+Trillion of IR sensitive debt, isn't a good thing.
He said it to allow cover for the red team to support Cap and Tax. They won't be happy till we have no equity, no jobs, and nothing left except epic debt. Can't wait till they start selling Fed land to the TBTF to cover our debts. Hell or use the Kelo decision to take land and hand it over to the oligarchs. Biggest robbery in human history and it's happening in broad daylight.
Can't wait for inflation and cap and tax for fuel prices. I hear $5+ a gallon gas is good for the economy...thank God I'm really close to where I work...
Good point, perch. Despite the lameness in thinking these boyz are bringing forth, you made a good read on illogical remedies to a complex problem. Like, uh, the near term oil futures market gives a shit about the prospect of a coastal pumping setup striking in 5+ years. The non end user trader's job is pumping barrel pricing for the summer driving season.
The only big gun USA has in its anti-inflation arsenal is release, or threat of release, of massive strategic reserves to burn up a lot of longs. Slow them down on the spec, which will only build with the spring thaw. Bush wouldn't do it ( oil-controlled guy ). Now the test goes to Obama, and he gets moved into this very transparent bluffing scheme.
I agree Rainman.
The discount rate is starting to look like some kind of Fed hand-puppet that they can use to parrot "strong dollar, strong dollar" without actually doing anything that would strengthen the dollar. Its a sign of weakness.
NOT AN APRIL FOOLS JOKE
Pardon the subject creep but this simply has to be shared.
Just in case you thought having the government in control of everything might not be that bad after all...
Check out Congressional buffoon Hank Johnson (a member of the armed services committee no less) expressing concern the other day to the commander of the Pacific Fleet that too many additional marines on Guam could cause that island to "tip over and capsize."
Story and embedded video here (money quote about 1min in)
http://washingtonscene.thehill.com/in-the-know/36-news/3169-rep-hank-joh...
Would it be too ironic to suggest that Admiral Willard deserves The Congressional Medal of Honor for his grace and unflappability while under assault?
It turns out that Hank Johnson has advanced Hepatitus C, which means he's prone to babbling nonsense because it's affected his mental faculties. Pelosi keeps him on the committee for some reason.
Surely there is a safer and more appropriate government job for such people than congressman.
Ah have you looked at Congress? He fits in just fine. Sure he is right around the median intelligence there as well. We should be ashamed of examples of "humanity" we elect to office. We would be better served by picking people randomly out of a phonebook. Hell we would be better served by picking randomly out of asylums and super max prisons.
I bet he still has the mental acuity necessary to figure out which way he's expected to vote!
For a while, the ancient Athenians did choose their leaders at random.
The problem with politicians is that they are self-selected. Remember those in high school & college who were the class presidents?
He's still smarter than the woman he replaced
He's a safe vote for the D's. Basically a zombie. Only thing better would be if he suddenly had to have his larynx removed.
oh.my.god. I couldn't even make it to the money quote. Painful to listen to. This man needs to be removed from office.
funny comment from The Hill:
Sorry to be stereotypical, but aren't most all of them (R or D) lacking any kind of mental faculty like this clown?
JHC. "Exremely unlikely"--they were hedging their explanation and somthing tells me it wasn't sarcasm.
quite interesting where Guam sits in the Pacific Ocean. does it exist on the board game of Risk? if not, it should. looks pretty like a pretty strategic island to occupy (if you can keep it from capsizing that is).
Ol' Hank may not be as foolish as it first appears.
inflation starting to kick in, now lets see Bens hawkface
Not sure how it could be a joke since it's listed at the Fed's site. They did this in Feb before the last discount hike.
I agree.
If the most powerful entity in the world feels comfortable joking about emergency Fed meetings as an April fools joke, we're all in very big trouble. When reporters chase Ben out of the bathroom stall to examine the color of his stool to help discern what's going to happen with interest rates, you think the Fed would joke?
Like I said earlier on another thread, CD, you bring a different take on almost everything I read by you. Bravo.
cue the headless chickens!
I think the Enron PR Meister is exercising her skills in a "Love Your Fed" campaign: See, they've got hearts, they've even got a sense of humor! They're as cool as Google (you saw GOOG's search page today.)
I bet they send out troups of comedians and circuses on barnstorming summer tours.
Just kidding. I agree, looks real.
And they could even raise the rate. I'm doubting it, but the speculation seems warranted.
"I bet they send out troups of comedians and circuses on barnstorming summer tours."
ha! brilliant idea!
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We appreciate your interest in the Federal Reserve System. Transparency is an important component to our mission, and your input is very important to us.
Hey, it only took Bloomberg a year and a half. That's virtually crystal clear!
Closed door meeting to discuss non-performing credit/derivatives, price of gold and revelations, price of oil, equity prices, their exit from MBS, and interest Rates. Not sure what makes it into the public record.
Your handle, dear sir. A demand? Or a prediction?
Apolypse now was from a movie in the early 80's:
http://www.youtube.com/watch?v=0qnfbekbSa0
Yeah it was something about a boat, dennis hopper going nuts in the jungle, ride of the valkyries, and 'the horror' said by that guy who played superman's dad.
I get the feeling MsC was speaking in jest. Just a feeling though.
Twas jest and AN knows me well enough to know I know. His handle just seems so suited to the topic at hand and on my mind these days.
Perhaps outfits are asking for delivery of gold,after recent revelations, and their nervous about it.
I remember these emergency meetings from before the first crash (Bearstearns, subsequent Hank the Yank Bazooka Paulson screaming at congress "it's gonna blow if you don't let us shower it with taxpayer money"). Then they were lowering rates at the give away window. They may even meet over the weekend if things get bad enough. Remember?
Also remeber folks got "bank holding status." Notice they can consider applications. I don't know crap regarding these matters, but it makes me wonder...
Just sayin'.
Everyone should just go all in physical gold and tell them to get phucked. I believe I am now a gold bug.
Officially for you:
http://swimyellowduck.com/assets/dolls_toys/gold-pram-6655.jpg
Or if this is more your speed:
http://dreamweaveristhere.com/HotGoldMammaBuggySnap.jpg
I am buggy too.
Nice!
Shit well all we needed was JC to officially be a gold bug. We got 'em now. Judgment day, smudgement day, John Conner's gonna fuck you up BS! Hi Ho Silver!
And I guess that **junk** status can be your commencement....welcome John, you are home.
I junked you because it took you awhile to figure it out. ;)
I'm in!
no offense taken. well I have always had some physical for insurance but I figured POG would get caught up in the final heart attack deflationary spiral before we enter hyperinflation. Now I think these idiots are ready to go straight to hyperinflation. What a bunch of jackals.
For the record, I am not completely convinced, but I will certainly add to my stash.
It's time to get ready for war. Bring it.
Now that you are on board, it's time to buy even more gold.
And then ammo...
I'd also suggest Kingdom of Norway bonds. I think these are stilled viewed as the safest in the markets and I think with good reason..
Why would they spook the UST market at the beginning of a heavy issuance week?
You must be new around here. Don't make me bring up the whole sheeple, animal meme again. Robo's got it nailed, it's all about scaring the wilderbeasts into the direction they want them to go (Equities crash, flight to safety - UST).
Bada-Bing, Botta-Boom!
(You're welcome for the assist.)
Why mess with the discount rate when you can manipulate the NFP, especially when the equity market is closed?
Don't forget the alligators. Or was it lions.
The meeting doesn't mean they'll DO anything. Even if they do, they'll wait until the end of the week after the auctions.
The Big Bang aside, I still believe raising the Discount will not matter much. Maybe a slight pullback, but damn this inflation is just gettin' started!
Isn't this stagflation? Prices of goods rising while assets and wages flat to down?
Right now we are in a period of stagflation, yes. To be precise I think that all the three arguments (inflation/deflation/stagflation) are correct as long as the situation that is discussed is solitary, this is why I find it humorous to argue only one side. Stagflation may be most appropriate for our current situation.
As far as future "wage" "increases", do not worry! People are going to make a "killing" on Facebook's Farmville! Virtual currentseas will save the day.
...only missing piece in the stagflation puzzle is flat/negative GDP without QE. That one is wearing a Fed mask for now.
So - PTB game plan would be???
Jawbone "really hard" about low rates for a while instead of "extended period of time"...without actually raising interest rates (discount window...whatever).
equity sell off - 5 to 10% correction? (soft landing) but Monday futures down big.
10yr T's yields back to 3.50 (and 30yr mortgages back under 5%)
dollar strengthens?
oil / gold get hammered?
This buys Fed another month or two...and then what cause there ain't no way them thar rates are 'bout to go up.
naked shorts by JPM and co aren't going to be so easy with the more likely threat that some will step up and call the bluff, this meeting is for "How the hell can we stop inflation now!?!?"
If the Discount Rate is raised by 50bps or more, it will send a shudder through the banksters. That easy money they have been playing with at the equity and junk bond casino may require some change in strategy...
BTW, Im calling Dave Skidmore tomorrow and telling him to get phucked.
"If" there is a big rush out of equity's and into treasury's--
I think gold miners will get sold down- and pull gold with it-"If"-it's a real panic--
At some point in the sell-off-miners should diverge then gold will catch a bid and run with the $--
When you see that divergence-"if" it happens-load the boat-
This is all based on gold miner performance of homestake fame--
I suspect--something like that will happen again--jmo
Nice April Fool's Day - love the KGB moniker on the bottom.
Think they knew the non-farm payrolls number before the "emergency meeting?
"Nice April Fool's Day - love the KGB moniker on the bottom."
Simon Johnson's was pretty good too... Head of The Squid Blankfeind for Time man of the year. Sadly, I became outraged until I kept reading and saw how slow I am... lol
The veiled comment about gold is really
interesting coming at the heels of the
investigation about position sizing.
This is starting to get veeery eenterestink.
Big bond auctions next week. They need to save the bond market at all costs for their plan to work. They will gladly sacrifice the equity market for a few days to do so. With everyone and their brother expecting 1220 + the trade may be too obvious. Plus, they need to get more shorts on board for the final squeeze.
http://www.federalreserve.gov/boarddocs/meetings/2010/20100315/advancedexp.htm
I'm only seeing a March 15th meeting announcement.
Document link....April 1 meeting...
http://www.federalreserve.gov/boarddocs/meetings/
Brings up the April 5 notice.
rt
And Geithner canceled an appearance in the Bronx tomorrow.
Can someone in D.C. monitor the pizza deliveries over the weekend?
Maybe they're gonna lower the discount rate.
+100
This doesn't have anything to do with folks in Europe suddenly buying Swiss Francs like there's some kind of crisis, does it?
Long-Term Unemployed Find It Pays Not To Work
http://articles.courant.com/2010-03-10/business/hc-work-penalty.artmar10_1_unemployment-work-unemployed
He said: "That's so stupid! Why are you penalizing people that are trying to help themselves?"
(Caciopoli, 46, unemployed)
"These issues have real-life consequences," he said.
Caciopoli is angry that Republicans and Democrats can't seem to cooperate to address the recession. "Congress needs to start working together and really starting thinking about the American people. I suggest a couple of them go live with a family that's going through this for two weeks, and then see if we have the bickering. Take off your suit and tie, put on your sweat pants and live this."
The fuse on the last crash in 2007-2008 was oil hitting 130 as speculators ran from equities into the commodities sector.
High oil=death of SUV market
Death of SUV=death of auto market
Death of auto market and high prices=death of outerburbia,McMansion commuting and revulsion of the long commute.
Death of McMansion in sub-suburbia = surplus in the housing market in bubble areas
Real Estate bubble popping=defaults on a massive scale and deflationary credit destruction and asset deflation.
So, if oil hits 100 again, this all happens again and it's a knife in the back of the McMansion commuter class and their playdough houses in the middle of nowhere. I suspect the USG will have to drop the oil price through jobs numbers,stock market falls or whatever. This will also drive investors back to toxic US debt.
Attempts to limit borrowing from the fed and simultaneously buying treasuries? Perhaps the banks have enough profits from that trade to start marking their real estate holdings to fair market value.
Is this even real??? Have I been had for April fools? Haven't heard a mention of this in any of the MSM?
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