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Medley Global Adivsors: Fed Would Curtail Asset Buying If Output Gap Closes Faster Than Expected

Tyler Durden's picture




 

Just a headline on Reuters, citing Medley Global Advisors:

  • FED WOULD CURTAIL ASSET BUYING IF COMPELLING EVIDENCE OUTPUT GAP CLOSING QUICKER THAN EXPECTED

Is the Warsh-Hoenig-Plosser-Fisher-Kocherlakota mutiny about to go nuclear? We will bring you the report if we see it.

 

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Thu, 11/11/2010 - 12:00 | 719460 jus_lite_reading
jus_lite_reading's picture

I doubt it, but if so, then that will certainly change the WHOLE picture!

Thu, 11/11/2010 - 12:03 | 719473 snowball777
snowball777's picture

More like change the location of the crash site.

Thu, 11/11/2010 - 12:36 | 719601 TBT or not TBT
TBT or not TBT's picture

Yup.

Thu, 11/11/2010 - 13:53 | 719800 Popo
Popo's picture

It certainly would. 

On the other hand, never underestimate the amount of pure theater that the Fed is capable of.

They are fully cognizant of their media profile at all times -- and fully in control of its appearance and intent.

 

 

Thu, 11/11/2010 - 12:02 | 719469 Dr. No
Dr. No's picture

Blarney:  a major tool of the fed.

Thu, 11/11/2010 - 12:03 | 719476 Turd Ferguson
Turd Ferguson's picture

Nothing but BS ahead of the G20.

QE has absolutely nothing to do with any sort of "output gap".

Fuck I get tired of being treated like an idiot all day by these assholes.

Thu, 11/11/2010 - 12:16 | 719519 HelluvaEngineer
HelluvaEngineer's picture

+1, LIARS.

Turd, your thoughts please.  I'm going into QE2 at 50% nosebleed P/E shorts, 50% PM's with focus on silver.  Not sure the wheels aren't going to fall off the cart soon.  Thoughts?

Thu, 11/11/2010 - 12:27 | 719571 Turd Ferguson
Turd Ferguson's picture

Man, I wouldn't fight the Fed on this one.

Yes, stock prices are a joke. Who cares? All that matters is that the Fed is giving $107B free fucking dollars to the PDs over the next month. Where do you think that money is going to go? The "market" is up 14% on $70B of POMO since late August. This is 50% more cash in half the time! It ain't going down. I can't see why someone, out of principle, would want to be short. Don't. The gains you make in PMs will be wiped out by your losses caused by being short equities.

Very much agreed on silver. Read Harvey every night.

http://harveyorgan.blogspot.com/

Thu, 11/11/2010 - 13:51 | 719795 HelluvaEngineer
HelluvaEngineer's picture

Thanks, Turd.  All good points.

Thu, 11/11/2010 - 16:15 | 720196 Turd Ferguson
Turd Ferguson's picture


Well, I did it.

At the urging of several fellow ZHers, I've started my blog. Mainly this will allow me to post charts so that anyone can see how I form my opinions.

http://tfmetalsreport.blogspot.com/

I look forward to any and all feedback. Thanks! TF

Thu, 11/11/2010 - 19:04 | 720574 Bananamerican
Bananamerican's picture

bookmarked

Sat, 11/13/2010 - 06:16 | 724416 Dismal Scientist
Dismal Scientist's picture

Jolly good. Look forward to reading.

Thu, 11/11/2010 - 12:40 | 719615 Ragnarok
Ragnarok's picture

QE true purpose is stopping the derivatives market from crashing, yes?

Thu, 11/11/2010 - 12:43 | 719622 morph
morph's picture

IMO yes

Thu, 11/11/2010 - 12:45 | 719625 SheepDog-One
SheepDog-One's picture

Thats bottom line for me too Turd, real sick of being treated like a complete moron by these ass hats on a daily basis. 'The economy has recovered'! Its a jet contrail'! ENOUGH BS!!!

One good thing about it- it's obviously extremely desperate last ditch tactics.

Thu, 11/11/2010 - 13:34 | 719750 hugolp
hugolp's picture

The very concept of "output gap" is stupid in itself.

Thu, 11/11/2010 - 13:36 | 719762 DonutBoy
DonutBoy's picture

Yes - exactly.  G20 cover - otherwise they just get rocks thrown out them for the whole meeting.

QE2 cannot be reigned back in because the banks would fail.

 

Fri, 11/12/2010 - 00:29 | 721272 Orly
Orly's picture

It is what I was trying to explain earlier: there can be no inflation without wage inflation.

You can demand-pull and supply-push all you want but the fact of the matter is there will be no inflation unless people can pay for it.  The closing of the output gap is the first sign of wage pressure.

:D

Thu, 11/11/2010 - 12:04 | 719478 firstdivision
firstdivision's picture

Even if the gap closes, the Fed knows that the feeding tube has to stay in.  Once the Fed backs away from the markets, back down everything will go.  Still no organic support for these levels.

Thu, 11/11/2010 - 13:36 | 719761 hugolp
hugolp's picture

They calculate the "output gap" based on some simulation of what they think it would be the optimal output. So if the gap closes and they want to print more, they just need to change some parameters of the simulation, and voila!! The gap is not closing anymore, run for the printing presses!!

Its all bullshit.

Thu, 11/11/2010 - 12:08 | 719495 Fractal Leverage
Fractal Leverage's picture

FED WOULD CURTAIL ASSET BUYING BY 1% IF COMPELLING EVIDENCE SHADOW INVENTORY CLOSING QUICKER THAN EXPECTED

 

Fix'd.

Thu, 11/11/2010 - 12:14 | 719512 Arius
Arius's picture

 

fisher seems unstable - i would not put too much stock on what he says...

Thu, 11/11/2010 - 12:15 | 719523 bugs_
bugs_'s picture

CEASE AND DESIST.

Thu, 11/11/2010 - 12:28 | 719576 goldmiddelfinger
goldmiddelfinger's picture

SPX down 15 percent this afternoon anyone?

Thu, 11/11/2010 - 12:39 | 719610 Turd Ferguson
Turd Ferguson's picture

Doubtful. Front-running of the impending, massive POMO will probably drag us back up to near even.

Thu, 11/11/2010 - 12:39 | 719609 magis00
magis00's picture

Coincidence Alert:  with this week being the week of Glenn Beck's focus on Soros, I read for the first time that Medley and Soros are bosom buddies of sorts.

 

I trust ZH to set the record straight on this one.

 

Is it so?

 

[Also, ever notice how patterns of recognition seem to spiral upward?  See also "Baader-Meinhof effect" (http://en.wikipedia.org/wiki/Baader-Meinhof_effect) ]

Fri, 11/12/2010 - 02:27 | 721427 i-dog
i-dog's picture

"Medley and Soros are bosom buddies of sorts"

Indeed, they are! That makes the Medley announcement a total Soros disinformation piece.

"Dr. Medley is Chairman of RHM Global, a political and geopolitical intelligence firm of proprietary news for the world’s largest hedge funds, banks, and family offices. He began building the intelligence network as one of the first partners at Soros Fund Management. He worked with Soros from 1986-2004. He built on that network by forming Medley Global Advisors in 1996, which became the global leader in private sector intelligence services. Dr. Medley sold MGA in 2005 to a consortium of investors."

 

Source: CFA Institute

 

Thu, 11/11/2010 - 12:50 | 719638 99er
99er's picture

Long Bond

Potential IH&S as investors flee the Euro in a "flight to safety."

http://99ercharts.blogspot.com/2010/11/30y_4641.html

http://www.zerohedge.com/forum/99er-charts

Thu, 11/11/2010 - 12:49 | 719642 max2205
max2205's picture

In which case Fed to buy equities directly. No prob

Thu, 11/11/2010 - 13:01 | 719669 DollarDive
DollarDive's picture

IMMEDIATE RELEASE :

BEN BERNANKE IS A COMPLETE MARKET MANIPULATOR AND IS NOT OBLIGATED TO DO ANYTHING THAT HE SAYS.  IF MARKETS DECLINE EXPECT JUICE.  IF MARKETS RALLY TOO FAR EXPECT REVERSE JUICE.

Thu, 11/11/2010 - 13:12 | 719700 CheapKUNGFU
CheapKUNGFU's picture

is that called un-juice?

All your juice are belong to us, make your time!

 

CKF

Thu, 11/11/2010 - 13:26 | 719732 FISD
FISD's picture

I think it's called anti-juice...kind of like anti-matter. Be sure to keep it away from the juice though.

Thu, 11/11/2010 - 13:19 | 719713 Barry McBear
Barry McBear's picture

Always nice to see the fed being open and transparent with Medley Advisors so that Medley's clients who pony up the 6-figure subscription fee can front run the market.

 

Thu, 11/11/2010 - 13:28 | 719734 the grateful un...
the grateful unemployed's picture

this all sounds like the Iraq war, (the financial crisis started as a preemptive move to keep Goldmans stock from tanking) with names for every campaign, QEI, the mother of all QE, QEII, the surge. And of course we all know that once the ball gets rollings, its really hard to stop, and decision by committee flies out the window.

Will there be flash crashes in Baghdad on Wall Street for years to come? probably. Troops (stimulus) on the ground, not in combat, but at the ready? Sure

And will the last (flash crash) still be lingering while the next bubble (war) is being hatched? 

Thu, 11/11/2010 - 13:34 | 719751 DR
DR's picture

"output gap is closing more quickly than expected"

Output gap in what? Unsalable McMansions, dead zone warehouses, empty retail sites, FIRE industry high rise office buildings vacancies-all waiting for the return of US consumption growth.

The US has an output gap in consumption capacity and this consumption ain't coming back.

Thu, 11/11/2010 - 14:03 | 719820 CheapKUNGFU
CheapKUNGFU's picture

my last girlfriend's output gap (her mouth) was only worth putting up with because she had a nice input gap...

Sorry, just in one of those laughable moods today where I wanna sell all my gold and buy shit stocks...

CKF

Thu, 11/11/2010 - 15:23 | 720009 sbenard
sbenard's picture

Could someone please point out to me where in the Fed's mandate that is says ANYTHING about the "output gap"?

Thu, 11/11/2010 - 23:34 | 721182 Buck Johnson
Buck Johnson's picture

Or it could be that something over the past 3 days done or said to them made the US govt. blink and are changing the tone of what they will do.  For this to come out like it did tells me someone is scared.

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