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FOMC Word For Word Changes

Tyler Durden's picture




 

From Nic Lenoir of ICAP

The key change in today's FOMC is the announcement of the reinvestment to keep constant balance of securities purchased by the Fed. While there have been a lot of talks about it, it was not priced in by the market. At a time when the political capital to increase the balance of the purchases is lacking, it's probably the only way for the Fed to boost the system, waiting for a confirmation of the inevitable economic rollover to start QE2 properly.

All other changes were mainly pertaining to revising the growth outlook lower, which is quite obvious given recent data and follows downward revisions by most economists on the street. [TD: except for the permabullnut gallery at BofA]

First you extend, then you pretend.

 

 

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Tue, 08/10/2010 - 15:03 | 513194 carbonmutant
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How to spin "It's not working!"...

I've always liked working with magic markers.

Tue, 08/10/2010 - 15:16 | 513288 Tarheel
Tarheel's picture

if the market is rallying this hard on non-news, then imagine how hard it would be rallying if they had raised rates or announced extensive quant easing!!

Tue, 08/10/2010 - 14:52 | 513200 wiskeyrunner
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Straight up straight down, in the blink of the eye. Same ole stuff over and over.

Tue, 08/10/2010 - 14:53 | 513204 Anonymouse
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That's a great way to review their statement.  Highlights well their change in emphasis (such as it is). Great idea Nic.  Thanks

Tue, 08/10/2010 - 14:53 | 513206 DonnieD
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"start Q2 properly" - Like waiting for my Fed sponsored 1% mortgage refi?!?!

Tue, 08/10/2010 - 14:58 | 513225 DosZap
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Fed sponsored 1% Re-Fi, makes no difference if your laid off...

Next on the agenda, is PLEASE stay in the homes FREE, just have to maintain them..Pretty Please?.

Tue, 08/10/2010 - 15:02 | 513242 DonnieD
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QE3 - Bernanke hires all unemployed Americans to be economists at the Fed and put out useless "research papers".

Is that better?

Tue, 08/10/2010 - 14:56 | 513212 SheepDog-One
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So Bernanke went thru 10 Sharpies this morning?

Tue, 08/10/2010 - 14:56 | 513214 asteroids
asteroids's picture

The FED is now trapped and is eating its own shit. Give the bears a few weeks to figure it out. Until then, we go nowhwere.

Tue, 08/10/2010 - 15:21 | 513315 Cognitive Dissonance
Cognitive Dissonance's picture

Worse than that, it's turned to cannibalism. They say human flesh tastes just like chicken. I wonder what Fed-on-a-stick will taste like.

Tue, 08/10/2010 - 15:44 | 513382 A_MacLaren
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Corndog-holio

Tue, 08/10/2010 - 14:55 | 513216 virgilcaine
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Not enough, the Economy is sick  but the mkt is priced for the V..

= sell.

Tue, 08/10/2010 - 15:02 | 513237 DosZap
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 "W""W",get the plane tickets.................Momma

Tue, 08/10/2010 - 14:59 | 513228 redarrow
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I just dontt get why the world keeps up with this nonsense. Why don't they just refuse to use dollars? I know its a reserve currency and all that. Really...would it be that hard to develop exchanges where the same resources and services are traded on non us denominated exchanges?

Tue, 08/10/2010 - 15:01 | 513241 SheepDog-One
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Like in Goodfellas the only explanation is 'It all real greaseball shit'.

Tue, 08/10/2010 - 15:01 | 513246 DosZap
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red,

Bro,they workin on it.................TBA

Tue, 08/10/2010 - 15:20 | 513303 Young
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What are they gonna use instead, the damn EUR? Sure let's peg to something ever shittier - or not!

Tue, 08/10/2010 - 15:51 | 513402 Lets Hang Parliament
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Sounds like the gold standard to moi!

Tue, 08/10/2010 - 14:59 | 513229 Dismal Scientist
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So what happens now ? Let me guess, we go up as the market now starts to properly price in QE2 ? I can feel the righteous anger of the shorts out there, in all shapes and sizes. Deflationist or hyperinflationist, you can all rejoice together in cursing TPTB.

It'll go down when you've been squeezed out, if you will persist in trying to fight.

 

Tue, 08/10/2010 - 14:59 | 513236 SheepDog-One
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But wait, they said Q/E was already priced in!

Tue, 08/10/2010 - 15:02 | 513238 Dismal Scientist
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Nah, that was QE's simpleton cousin. QE's big brutha is coming to get you...

Tue, 08/10/2010 - 14:58 | 513232 SheepDog-One
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Whore St media is desperately trying to find a way to spin this as 'good news' in any way, haven't heard a bit of sense yet as they desperately twist in the breeze. I think Erin said something about Bernanke flipping a crack rock to a couple big banks. WOW buy stocks huh?  What a P.O.S.

Tue, 08/10/2010 - 15:01 | 513239 virgilcaine
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Going to sell this mkt hard.. watch.

Tue, 08/10/2010 - 15:02 | 513248 SheepDog-One
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I think theyre going to pull the rug out hard too! Time to sweep the casino table clean again flash crash style, no ones ante-ing up this hand.

Tue, 08/10/2010 - 15:07 | 513265 Bear
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Is this after going up big time?

Tue, 08/10/2010 - 15:04 | 513250 Bankster T Cubed
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The Fed -  what a f**king joke

Tue, 08/10/2010 - 15:04 | 513253 Mitchman
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IMHO, this is a nice "holding action" by the FED.  The amount of money involved is peanuts in a $14 trillion economy and it's Bernanke's way of hitting the tennis ball back into the court of the politicians.  He wants to be remembered as not having made the situation any worse.

Tue, 08/10/2010 - 15:10 | 513274 SheepDog-One
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It aint anything near a $14 trillion economy anymore mate!

Tue, 08/10/2010 - 15:04 | 513254 ZackAttack
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Yes, because *obviously* the problem is that treasury and MBS prices are just too low.

Tue, 08/10/2010 - 15:07 | 513261 assumptionblindness
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You have got to love how they play with words...it's as if the FOMC took some lessons from people who write horoscopes.   

Tue, 08/10/2010 - 15:18 | 513299 Dr. Sandi
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You have got to love how they play with words...it's as if the FOMC took some lessons from people who write horoscopes.

Same guys, same technology.

Tue, 08/10/2010 - 15:17 | 513296 Amsterdammer
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Sheepdog has it right,14 trillion, an economy defined by the

current ceiling of its public debt,Lol

Tue, 08/10/2010 - 19:06 | 513899 Lux Fiat
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Read an article a while back that clearly explained how Gov't includes debt as growth in GDP.  If you net out debt from any growth it engendered (or lack thereof), you are short of $14t.  Many ZHers were probably already well aware of this, but at the time, it was new(s) to me.  If I can dig up the link, will post it.

Tue, 08/10/2010 - 15:22 | 513306 Hansel
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The Fed is going to rollover agency debt into longer term treasuries, but the 2 agencies, Fannie and Freddie, are having to borrow money from treasury to pay dividends.  So the Fed prints money to loan to treasury to pay to the agencies who then pay it back to the Fed.  WTF kinda shell game is this?

Tue, 08/10/2010 - 15:23 | 513320 Young
Young's picture

ZH music recommendations right now:

1. Muse - Uprising
2. In Flames - Mirrors truth
3. Bloodhound gang - The roof is on fire (for obvious reasons)

Enjoy brothers and sisters...

Tue, 08/10/2010 - 15:33 | 513346 ejmoosa
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Dear Ben,

I know you guys think you are really working hard and saving America.  You are not.

I don't give a damn what indicators you are looking at.  They do not matter.  The only two numbers you need to look at are from the BEA.  You know those guys, right?

Well, look at their report they just put out, specifically lines with GNP and Corporate Profitability.  Download the data, stick it into a spreadsheet(you can get one free on the internet), and have someone help you calculate what the precentage of profits relative to GNP is going back to 2000 or so.  Calculate this for a rolling "last four quarters" analysis. 

Now tell me what you notice Ben?  Yes, that it what I see as well.  When corporate profits were at their highest, we also had the fastest growing and most fully employed economy during that period. 

Wow, nearly 12 % in the four quarters ending the year in 2006.

Then, as the percentages fall, so does the economy and employment.

So Ben, are you doing everything to improve the profit picture for ALL American corporations?  Or just a handful of your buddies?  Because it's not working.

Restore the profits and you will restore the growth.

Let the tax cuts expire at the end of the year, and profits are certain to fall.  And all of us will be able to look at the BEA report and see it for ourselves. 

And please do not give us any bs about a 2 or 3 % increase in corporate taxes to having no effect on employment. 

Profitability fell three per cent and we loss 7 million jobs.  I for one, know better.

EJ

 

 

 

Tue, 08/10/2010 - 15:42 | 513378 Ned Zeppelin
Ned Zeppelin's picture

Love the doc compare to parse meaning from the chicken entrails.  Basically, this doesn't amount to a significant amount of money.  I also do not understand why this particular mechanism does anything beyond monetizing a comparatively small amount of Treasury debt.  So, to me, it is window dressing, ball to you CONgress, a "mezz step," if you will. 

Tue, 08/10/2010 - 18:21 | 513782 miker
miker's picture

There are some weird-ass comments that permeate this blog.  If you think this country is just going to fold up and devolve into anarchy, give it a second thought.  There are a lot of decent, law-observing citizens that have just been trying to earn a living.  The problem is our democracy has been asleep at the switch.  That will change.  I guarentee you that if things get significantly worse, there will be people (leaders) stepping up to the plate and guiding this nation forward.  All you commentors that talk about falling into the abyss and "going survival" are frankly, fucked up.  This country didn't get where it is now based on total stupidity.  Sure, you're right there is lots of moral decay and political decadence but there is alot of goodness among the populace.  Remember Lincoln....you can fool.....

Come on folks, let's tone down this doomsday rhetoric and come up with constructive ways to help move our country back.

Wed, 08/11/2010 - 00:40 | 514557 StychoKiller
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Most solutions I can think of involve Banksters and Politicians going to Leavenworth for long stretches of time -- see any of that happening?

Tue, 08/10/2010 - 19:40 | 513993 nmewn
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Pandora's Box.

Tue, 08/10/2010 - 21:16 | 514025 doublethink
doublethink's picture

Lost In Translation

First you extend, then you pretend...words that may not be interpreted well in Japanese and Chinese. Watch the Dow futures (YM) for some real entertainment tonight.

http://www.screencast.com/t/NDI0OWRmMD

Wed, 08/11/2010 - 00:45 | 514563 StychoKiller
StychoKiller's picture

First you extend, then you pretend

I took that statement to babelfish (alta Vista)

and translated it to Japanese, then took the result and translated it back to the following English:

"First it extends, and it shakes."

Next, did the same thing with Chinese:

"First you extend, then you disguise."

 

You must have relax.  You must try unwind!

 

Wed, 08/11/2010 - 01:23 | 514609 Unscarred
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This seems awfully busy.  Real Time Economics @ WSJ.com blogs does a nice job after each meeting:

Parsing the Fed: How the Statement Changed
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