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A Paralyzed Fed Defers Decision On Monetary Policy To Primary Dealers In An Act That Can Only Be Classified As Treason

Tyler Durden's picture




 

As if there was any doubt before which way the arrow of control, and particularly causality, points in America's financial system, the following stunner just released from Bloomberg confirms it once and for all. According to Rebecca Christie and Craig Torres, the New York Fed has issued a survey to Primary Dealers, which asks
for suggestions on the size of QE2 as well as the time over which it would be completed. It
also asks firms how often they anticipate the Fed will re-evaluate the program, and to estimate its ultimate size.
This is nothing short of a stunning indication of three things: i) that the Fed is most likely completely paralyzed due to the escalating confrontation between the Hawks and the Doves, and that not even Bernanke believes has has sufficient clout to prevent what Time magazine has dubbed a potential opening salvo into a chain of events that could lead to civil war: in effect Bernanke will use the PD's decision as a trump card to the Hawks and say the market will plunge unless at least this much money is printed, ii) that the Fed is effectively asking the Primary Dealers to act as underwriters on whatever announcement the Fed will come up with, and thus prop the market, and, most importantly, iii) that the PDs will most likely demand the highest possible amount, using Goldman's $2-4 trillion as a benchmark, and not only frontrun the ultimate issuance knowing full well what the syndicate of 18 will decide in advance of what the final amount will be, but will also ramp stocks on November 3 to make the actual QE announcement seem like a surprise. This also means that the Primary Dealers of America, which include among them such hedge funds as Goldman Sachs, such mortgage frauds as Bank of America, such insolvent foreign banks as Deutsche, RBS, UBS and RBS, and such middle-market excuses for banks as Jefferies, are now in control of US monetary, and as we explain below fiscal, policy.

It also means that the Fed has absolutely no confidence in its actions, and, more importantly, no confidence in how its actions will be perceived by the market which is why it is not only telegraphing its decision to the bankers, but is having its decision be dictated by them, an act so unconstitutional it would be seen as treason in any non-Banana republic! This is the last straw confirming that the only ones left trading the market are the Fed and the PDs, passing hot potatoes to each other, and the HFTs, churning the shit out of everything else to pretend someone is still trading.

And the saddest conclusion is that this is the definitive end of US capital markets: not only is the Fed's political subordination a moot point, but the Fed, and the middle class' purchasing power via the imminent dollar destruction that is sure to follow as the PDs seek to obliterate their underwater assets by raging inflation, is now effectively confirmed to be a bitch of Lloyd Blankfein and his posse.

The official explanation for this unprecedented incursion by the banking crime syndicate in US monetary policy is as follows:

Avoiding Disruption

Treasury officials say they want to avoid any disruption to the $8.5 trillion market in U.S. government debt, the world’s most liquid, as the Fed weighs restarting large-scale asset purchases. The Treasury also doesn’t want to give any impression to investors, particularly those based overseas, that it might be coordinating with the Fed to finance the national debt.

“Treasury debt-management decisions are designed to deliver the lowest cost of borrowing over time and are entirely independent from monetary-policy decisions made by the Federal Reserve,” Mary Miller, assistant secretary for financial markets, said in an e-mail to Bloomberg News yesterday. Before joining the Treasury last year, Miller was head of global fixed- income portfolio management at T. Rowe Price Group Inc. in Baltimore.

The Treasury is scheduled to hold its quarterly meetings with bond dealers tomorrow, ahead of the department’s Nov. 3 refunding announcement.

Fill in the blank: the Fed has essentially given PDs the option of $250BN, $500BN or $1 trillion in monetization over six months. It is now absolutely clear that the PDs will pick the biggest number possible... which incidentally amounts to $2 trillion per year, and is precisely what Goldman's downside case was, as we presented previously.

The New York Fed surveyed primary dealers required to bid in U.S. debt auctions. It asked dealers to estimate changes in nominal and real 10-year Treasury yields “if the purchases were announced and completed over a six-month period.” The amounts dealers can choose from are zero, $250 billion, $500 billion and $1 trillion.

Of course, since a $2 trillion purchase over 1 year means the Fed will have to monetize every single bond issued, the SOMA limit will have to be raised, another prediction we made months ago:

The Fed is unlikely to buy up the entire supply of new securities, although it may adjust its internal guidelines of how much it can hold of any given issue. The Fed limits itself to owning no more than 35 percent of any specific security it holds in its System Open Market Account, or SOMA.

“Our Treasury strategists point out it could also cause pricing distortions along the curve, if, for example, the Fed continues to target a 40 percent purchase concentration in the 6-10 year maturity bucket, as it has in its recent purchases,” analysts at JPMorgan Chase & Co., including Alex Roever, wrote in an Oct. 22 research report. The report predicts the Fed will buy about $250 billion a quarter during the easing campaign.

How about $500 billion?

And, incidentally, since the "independent" Treasury will be forced to issue more debt to fill all the demand for $2 trillion over the next 12 months, as there is not enough debt in the pipeline to fill $2TN worth of demand and prevent the entire curve pancaking at zero (i.e., the 30 year yielding precisely 0.001%) it also means that the government will be forced to come up with more deficit programs, which also means that primary dealers will now also determine US fiscal policy.

Which begs the question, why is anyone pretending that the political vote on November 3 matters at all?

Below are the 18 banks that, in a completely separate vote, will henceforth rule America, regardless of what particular puppets end up in the Congress and Senate:

BNP Paribas Securities Corp.
Banc of America Securities LLC
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies & Company, Inc.
J.P. Morgan Securities LLC
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
Nomura Securities International, Inc.
RBC Capital Markets Corporation
RBS Securities Inc.
UBS Securities LLC.

 

 

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Thu, 10/28/2010 - 00:32 | 682440 Mercury
Mercury's picture

Wow. Just wow.

Hi, Morgan? It's Ben, I'm thinking of a number...

Why doesn't Ben also ask which cusips the PDs would like him to buy too?

Thu, 10/28/2010 - 00:47 | 682477 Flatchestynerdette
Flatchestynerdette's picture

i grin at your comment ;-)

Thu, 10/28/2010 - 00:50 | 682487 66Sexy
66Sexy's picture

satan laughing, spreads his wings.

 

howz about, 666 billion... or 6.66 trillion.

Thu, 10/28/2010 - 01:37 | 682556 tomdub_1024
tomdub_1024's picture

about the 5 min mark...gotta love Ozzie...

http://www.youtube.com/watch?v=gbxfe7DMxVo

Thu, 10/28/2010 - 07:36 | 682798 Cruel Aid
Cruel Aid's picture

I relate, nice custom lefftie Tony's playing.

Thu, 10/28/2010 - 09:41 | 683044 chopper read
chopper read's picture

treating people just like pawns in chess

wait till their judgement day comes!

http://www.youtube.com/watch?v=gbxfe7DMxVo

Thu, 10/28/2010 - 08:36 | 682901 belsebub
belsebub's picture

Jesus (Anti)-Christ!!

Thu, 10/28/2010 - 09:27 | 683007 G-R-U-N-T
G-R-U-N-T's picture

Hey, at least Fraudzilla according to the Treasury is No "Systemic Risk" It's Official!

Hm....

http://online.wsj.com/article/SB2000142405270230344390457557874099701660...

 

Thu, 10/28/2010 - 09:42 | 683045 chopper read
chopper read's picture

A Treasury Department official said "there is no evidence of a systemic risk" from potential repurchases of flawed mortgages by U.S. banks.

wow. 

Thu, 10/28/2010 - 02:10 | 682598 theXman
theXman's picture

Time to give them a bona fide disruption -- END THE FED!

Thu, 10/28/2010 - 04:07 | 682672 scaleindependent
scaleindependent's picture

**** NEWS UPDATE 11/4/2010 *******

 

THE FED HAS ISSUED A SURVEY TO THE 18 PRIMARY DEALERS, REQUESTING FUTURE AUSTERITY DECREES ON UPCOMING NEW FISCAL YEAR 2011.

THE PRIMARY DEALERS HAVE STIPULATED THE FOLLOWING AUSTERITY MEASURES:

1. 401k's to be discharged by owner at age 70.

2. Dissolution of Welfare.

3. VA benefits to be cut in half.

4. Grand Canyon National Park to be sold to Las Vegas Sands, Inc.

5. Medicare rates to physicians, hospitals and health care workers to be cut by 35%

6. No payed sick leave.

7. No maternity leave.

8. The dissolution of the following US govt. services;  EPA, secretary of health and human services, Education, Veterans Affairs.

9. Pentagon budget to increase by 30%

10. National Guard budget to increase by 100% in urban areas to protect the peace.

11. The SCOTUS will hereby be named the MTOTUS.

12. Free Ipod Shuffle to all Americans!

 

13. Fill in the blank...

 

Thu, 10/28/2010 - 04:22 | 682691 goldfish1
goldfish1's picture

13. A Tyson breaded GMO "chicken" fillet in every pot.

Thu, 10/28/2010 - 10:22 | 683149 chopper read
chopper read's picture

+1

Thu, 10/28/2010 - 08:25 | 682876 Freewheelin Franklin
Freewheelin Franklin's picture

4. Can we get the Vegas Sands over here in AC to buy this monstrosity formerly known as Revel Entertainment, first?

 

http://en.wikipedia.org/wiki/Revel_Entertainment_Group

 

 

Thu, 10/28/2010 - 08:28 | 682882 SheepDog-One
SheepDog-One's picture

This is now advanced to the stage that actions must be taken to stop this entire operation, the whole damn thing must be brought down.

Thu, 10/28/2010 - 10:54 | 683263 downrodeo
downrodeo's picture

Sweet, i think people are starting to get serious about this. December 7th, 2010

 

http://www.facebook.com/event.php?eid=137793666269183&ref=mf

 

 

Thu, 10/28/2010 - 03:02 | 682633 iconoclast63
iconoclast63's picture

"If you choose not to decide, you still have made a choice."

Thu, 10/28/2010 - 07:47 | 682810 New_Meat
Thu, 10/28/2010 - 11:06 | 683301 chopper read
chopper read's picture

+2112. that song has been running through my head a lot lately.

Thu, 10/28/2010 - 04:10 | 682677 deKevelioc
deKevelioc's picture

Money for nothing and the chicks are free.

 

Thu, 10/28/2010 - 04:11 | 682682 deKevelioc
deKevelioc's picture

Money for nothing and the chicks are free.

Fri, 10/29/2010 - 13:06 | 686101 Randall Cabot
Randall Cabot's picture

checks. It checks for free, not chicks.

Thu, 10/28/2010 - 08:41 | 682919 aldousd
aldousd's picture

"Hi, Morgan? It's Ben, I'm thinking of a number..."

Party-line like it's 2008.

Thu, 10/28/2010 - 11:04 | 683292 NumberNone
NumberNone's picture

Picking a number out of the air worked for Paulson and Goldman Sachs before to the tune of $700 Billion.  Why lowball now?  Shoot for the freaking moon!  

Tue, 04/26/2011 - 13:28 | 1208274 william.smith61
Tue, 04/26/2011 - 13:31 | 1208275 william.smith61
william.smith61's picture

Air Fuel Ratio Sensor SWR, I followed your comments over at KD's site and found I usually agreed with you. That was a prescient article especially for it's time. 2 trillion stands on the Fed's balance sheet currently, add another $4 trillion and we do in fact arrive at $6 trillion. But that is most likely a low estimate, they will in fact be forced to further devalue the dollar, probably until it just snaps one day in a crisis of confidence. Again, you have stated this over and over in KD's site. Kudos.

Thu, 10/28/2010 - 00:31 | 682441 joe.schmuck
joe.schmuck's picture

Thomas Jefferson is spinning in his grave, sigh.

Thu, 10/28/2010 - 00:45 | 682472 flaunt
flaunt's picture

Finally got my zerohedge account approved!  Yay!

What I really wanted to say was I don't think TJ or any of the founders would be at all surprised were they alive today.  They wrote about what would inevitably happen while they were still breathing.  No, if you woke them out of their sleepy graves and told them what was happening they'd say, "what the hell did you expect," roll over, and go back to sleep.

 

Thu, 10/28/2010 - 00:57 | 682496 Howard_Beale
Howard_Beale's picture

It's not like this is the first time this has happened. Good read: 13 Bankers

Thu, 10/28/2010 - 01:04 | 682512 Unlawful Justice
Unlawful Justice's picture

I concur.

Thu, 10/28/2010 - 09:40 | 683041 packman
packman's picture

It's not like this is the first time this has happened. Good read: 13 Bankers

Haven't read it, but based on commentary - it's junk.  Its base premise is the same faulty premise made by those that created the Federal Reserve in the first place - that the corruption in the financial industry is the fault of free market capitalism; with the conclusion that it's up to government to keep the industry in check.

Well - we see now how that worked out.  Not so well.

 

Thu, 10/28/2010 - 09:51 | 683064 packman
packman's picture

It's ironic, BTW, that on the actual website of the 13 Bankers book, it presents the airline industry as an efficient example of how an industry should be managed by the government:

Over the last 50 years, the FAA, the airline manufacturers, and the airlines worked together to make a highly complex air travel system more efficient and much safer. If you’ve ever wondered why, in contrast, our financial regulators and banks made our financial system less efficient and much more dangerous, you should read this book.

Yet this is quite counter to one of the book's primary recommendations:

The alternative is to confront the power of Wall Street head on, which means breaking up the big banks and imposing hard limits on bank size so they can’t reassemble themselves.

(emphasis in original).

Hmmm - I'd be curious then to see Johnson and Kwak (authors of 13 Bankers) produce a list of what were the original larger airlines that the current airlines were split up from.  I'm not aware of such forced breakups.

In other words - size is not the issue at all.  Influence is.

 

Thu, 10/28/2010 - 13:37 | 683786 Geoff-UK
Geoff-UK's picture

Yeah, I subscribed to their feed until the weird feeling I got going there erupted into an "aha" moment of recognizing--wait a minute, these guys aren't free market, they're just arguing about who should be in charge!  Maybe they're sending out a copy of their resume with the book as they mail it to Ben Bernake...

 

"I can't stand this indecision,
Married with a lack of vision,
Everybody wants to rule the world..."

Thu, 10/28/2010 - 14:03 | 683867 i-dog
i-dog's picture

"presents the airline industry as an efficient example of how an industry should be managed by the government"

WTF?!  The US airline industry as a whole has NEVER made a profit since its inception!! The taxpayer subsidises it to support government's military objectives. JFC!

Thu, 10/28/2010 - 08:01 | 682831 Kopfjager
Kopfjager's picture

Well, maybe more than "what the hell did you expect."  More like, "and you just sat there and let it happen?" 

Thu, 10/28/2010 - 19:54 | 684817 Dave
Dave's picture

Hamilton may be suprised. He finally got what he wanted after all

those years getting his ass kicked by TJ and Madison.

Thu, 10/28/2010 - 00:31 | 682443 Charlie Bravo
Charlie Bravo's picture

Uh oh.

Charlie Bravo

Thu, 10/28/2010 - 01:05 | 682514 The LD
The LD's picture

Banana Republic...Confirmed!

Thu, 10/28/2010 - 00:32 | 682445 ebworthen
ebworthen's picture

If only, if only, the masses, the sheeple, would know the truth.

Thu, 10/28/2010 - 00:41 | 682462 Chito Campo
Chito Campo's picture

All that we see or seem is but a dream within a dream.

Thu, 10/28/2010 - 04:23 | 682694 goldfish1
goldfish1's picture

And what would "the people" of limited intelligence and education, do with "the truth"?

Thu, 10/28/2010 - 06:01 | 682710 Cognitive Dissonance
Cognitive Dissonance's picture

What are "we" here on ZH doing with "the truth"?

Thu, 10/28/2010 - 06:57 | 682775 i-dog
i-dog's picture

Hopefully, spreading it to as many family, friends and colleagues as will listen! (And even those who don't want to listen!). The depth of info here gives enough ammunition to answer the usual objections raised by the ignorant.

"From a tiny acorn, a mighty oak tree grows".

Thu, 10/28/2010 - 08:38 | 682909 Dangertime
Dangertime's picture

That will not help much.

 

Even during the revolutionary war, less than 10% of the citizens actively fought against the British.

 

Even if we were to wake up 10% of the population, which is probably a fairly accurate count at the moment, they would never be able to overcome the rest of the voters who "just do not get it".

 

Open revolt is the only solution.

Thu, 10/28/2010 - 08:55 | 682947 Cognitive Dissonance
Cognitive Dissonance's picture

Even during the revolutionary war, less than 10% of the citizens actively fought against the British.

But that doesn't mean that only those 10% were awake or aware of what was going on. And the comparison is useless anyway because there was a clear, and nearly equal, divide in the citizens between those who saw themselves as loyal British subjects and those who felt they were no longer bound by British law since they weren't represented in the making of British laws.

Even if we were to wake up 10% of the population, which is probably a fairly accurate count at the moment, they would never be able to overcome the rest of the voters who "just do not get it".

Please describe to me what you mean by "wake up" because even here on ZH there are plenty of people who are not "awake" to all that's going on. Don't judge ZH by the comment section when less than 8% of the people who read ZH comment on ZH.

I arrive at this percentage based upon the number of "reads" (as a contributor I see the "reads" number) of an article, which doesn't filter out people who return repeatedly to the article so the "reads" number is over stated, and the number of unique comments left. There might be 200 comments, but that doesn't mean there are 200 unique comments. Many people leave multiple comments.

Besides, people "just don't get it" because they don't wish to get it. They sleep not because they are ignorant, but because they are willfully ignorant. BIG difference.

Thu, 10/28/2010 - 12:19 | 683364 chopper read
chopper read's picture

Please describe to me what you mean by "wake up" because even here on ZH there are plenty of people who are not "awake" to all that's going on.

Besides, people "just don't get it" because they don't wish to get it. They sleep not because they are ignorant, but because they are willfully ignorant. BIG difference.

in the end, there are three types of folks:

1. those who wish to be ruled, and prefer not to think about whether or not their overlords will lead them to their own extinction. 

2. those who wish to rule, believing that this is their only way to survive long-term.

3.  those who do not wish to rule or be ruled, wishing only to improve their probability for peaceful long-term survival without deliberately murdering the competition in the process. 

perhaps #2 is most realistic, but #3 is most ideal where it is even possible.   

I've always said that my belief in liberty extends to my own child in this way:  if she is smart and hard working then she will do great.  if she is smart and lazy then she will do fine.  if she is dumb and hard working she will be fine.  if she is dumb and lazy, then she has failed humanity and should not expect to be rewarded with liberty or survival at someone else's expense.  Smart folks bring good ideas.  Hard-working folks pull their weight and more.  This is peaceful progress; any alternatives are unjust, in my mind. 

Thu, 10/28/2010 - 12:22 | 683541 RockyRacoon
RockyRacoon's picture

CD, since I only have 12 hours a day to devote to ZH I have to be finicky about what I comment on, even though I read nearly every article.  Your points are well taken, but I think the 8% may be skewed since there is no breakout of the "regulars" who post comments and those who read only.   Anyhow, thanks for your observations.

Thu, 10/28/2010 - 19:48 | 684806 chopper read
chopper read's picture

since I only have 12 hours a day to devote to ZH

+1.  :)

around here these are part-time hours. 

Thu, 10/28/2010 - 09:32 | 683025 Dburn
Dburn's picture

33 Million Americans would listen to the explanation long enough to comprehend it?

Lets get some PowerBall tickets. The odds are much better. 

Thu, 10/28/2010 - 09:34 | 683029 SheepDog-One
SheepDog-One's picture

Actually only about 3% fought in the Revolution.

Thu, 10/28/2010 - 12:24 | 683551 RockyRacoon
RockyRacoon's picture

One can support a movement without taking up arms.

Underground railroad?

Thu, 10/28/2010 - 07:05 | 682777 nedwardkelly
nedwardkelly's picture

Mostly getting met with responses to rants along teh lines of "monetary what?" "primary who?".

There's actually a lot of people that are indifferent... They already know the playing field isn't level, that it's all stacked against them, but they stopped caring.

Thu, 10/28/2010 - 08:44 | 682927 Praetor
Praetor's picture

Ned, I am assuming with that name your an Aussie and that those responses your receiving are due to Australians not having a rough time as yet with the GFC. Time will tell.

Thu, 10/28/2010 - 07:50 | 682817 SWRichmond
SWRichmond's picture

What are "we" here on ZH doing with "the truth"?

Since I don't have a mouse in my pocket I will speak for myself.  I am politically active, writing articles, meeting with / educating legislators, trying to chart a path forward.  I have to try.

Thu, 10/28/2010 - 08:11 | 682850 Dagny Taggart
Dagny Taggart's picture

Disorganized resistance... hopefully we're all leaking info and ideas to anyone and everyone. The "truth" also drives me to the gun range instead of the driving range.

Thu, 10/28/2010 - 08:28 | 682886 scatterbrains
scatterbrains's picture

that dude flying his small plane into that IRS building..  was that disorganized resistance ?

Thu, 10/28/2010 - 08:40 | 682913 Dagny Taggart
Dagny Taggart's picture

It would appear so, however wasted and thoughtless... I'm sure his family could elaborate.

Thu, 10/28/2010 - 08:12 | 682853 Wyndtunnel
Wyndtunnel's picture

What about hacking into the time square billboard? Or getting Tyler(s?) on CNBC?

On a more serious note: What chain of non-revolutionary events could possibly lead to the abolishment f the Fed? It is beginning to look to me as if only a major disruption in the food supply chain would be sufficient to bring the system to its knees. And even then I wonder. Would starving, ignorant America choose food over liberty and if so would enraged enlightened America let them? I fail to see how a 2nd Civil War can be avoided.

Thu, 10/28/2010 - 08:43 | 682911 i-dog
i-dog's picture

You can be damn sure that there will be a "major disruption to the food supply chain" in the not-too-distant future ... it is part of their master plan! However, by that time, they will also have nationwide martial law in place.

Action needs to be taken before the situation gets to that point. My suggestion is to use whatever time and influence you have to mobilise your state to secede and re-take control of its National Guard before it happens. Without the states' participation, there is no Fed or federal government.

Thu, 10/28/2010 - 10:45 | 683220 cranky-old-geezer
cranky-old-geezer's picture

What are "we" here on ZH doing with "the truth?

Maybe some frontrunning of what surely now will become a (hyper)inflated Dow? 

Beyond that, nothing.

Welcome to Weimar America.

Thu, 10/28/2010 - 08:29 | 682890 Freewheelin Franklin
Freewheelin Franklin's picture

The People: As long as I can have two TV sets and two Cadillac cars...

Thu, 10/28/2010 - 08:31 | 682891 jm
jm's picture

Aside from being outraged, they should finally realize that Bernanke is a pipsqueak surrounded by... rougher types.

That and buy stocks from the following list:

BNP Paribas Securities Corp.
Banc of America Securities LLC
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies & Company, Inc.
J.P. Morgan Securities LLC
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
Nomura Securities International, Inc.
RBC Capital Markets Corporation
RBS Securities Inc.
UBS Securities LLC.

 

Thu, 10/28/2010 - 13:44 | 683810 Geoff-UK
Geoff-UK's picture

Who's to say that mgt of these companies won't take gargantuan cuts off the top for themselves, leaving minimal to zero profit--screwing stockholders while they make out like bandits?

 

I know you're saying buy stock in the Mafia that's running the casino after they've bought off the gaming commission--but why play that game at all if the Mafia decides what that stock is going to be worth?

Thu, 10/28/2010 - 14:03 | 683879 jm
jm's picture

Good point: a lot of these guys are yield deficient, and their asset quality leaves a bad taste.  However, there is something to be said for being on the side of guys that are able to raise over a billion dollars on a 50 year bond.  Whether this can blow up in Goldman's face is irrelevant.  That they did it leaves me somewhat speechless. 

Adding Goldman to a portfolio is a smart thing.  Amazingly less pissed off.  Helps in thinking less emotionally, more clearly. 

Thu, 10/28/2010 - 00:35 | 682450 thermroc
thermroc's picture

I think the keystone just crumbled.

Thu, 10/28/2010 - 01:22 | 682535 Hook Line and S...
Hook Line and Sphincter's picture

Yes, but the Guidestone is still intact.

Thu, 10/28/2010 - 00:37 | 682452 potatomafia
potatomafia's picture

Well Fuck, this cant be good, can it?

Thu, 10/28/2010 - 08:17 | 682861 MeTarzanUjane
MeTarzanUjane's picture

Is that you Mr. Gross? I liked your article yesterday.

Thu, 10/28/2010 - 00:41 | 682456 TheGreatPonzi
TheGreatPonzi's picture

It's cool to be a banker. A few trillions here, a few trillions there. Directly in your pockets. When the final collapse comes, you flew to your private island in an helicopter with two bodyguards.

Impossible to go bankrupt. You can only win.

This is reality. This is the 2010 America. Face it.

Thu, 10/28/2010 - 10:03 | 683091 Kassandra
Kassandra's picture

We need another Judge Roy Bean.

Thu, 10/28/2010 - 00:40 | 682461 Trifecta Man
Trifecta Man's picture

Demonstrate!

Thu, 10/28/2010 - 00:45 | 682473 Flatchestynerdette
Flatchestynerdette's picture

against who? they've left the country on their private jets or are on their private islands. Maybe we can all go to the Hamptons or Connecticut or NJ if you're on the east coast and to Bill Gross's house if you're on the west coast.

 

Thu, 10/28/2010 - 01:35 | 682553 Trifecta Man
Trifecta Man's picture

The Fed.

Thu, 10/28/2010 - 13:46 | 683817 downrodeo
downrodeo's picture

I've always had this vision of thousands upon thousands of peasant people storming the fed, each with a chisel in one hand and a hammer in the other. We would then symbolically and literally take the fed apart one piece at a time. Perhaps some out of work construction person would bring his jackhammer to help speed things up. Sadly, it remains only a vision.

Thu, 10/28/2010 - 02:20 | 682606 tomdub_1024
tomdub_1024's picture

dedicated to Ben and Timmay:

http://www.youtube.com/watch?v=In02RLoJbDA&NR=1

(the best party band of the Twin Cities)

Thu, 10/28/2010 - 09:29 | 683020 Cheyenne
Cheyenne's picture

Does that accolade not belong to the Mats?

rtsp://v2.cache2.c.youtube.com/CjgLENy73wIaLwlpyxnv9pDWHxMYJCAkFEIJbXYtZ29vZ2xlSARSB3Jlc3VsdHNg_f6bhcGfwqdMDA==/0/0/0/video.3gp;connectionuid=WAP2%20trans

Fri, 10/29/2010 - 00:06 | 685127 tomdub_1024
tomdub_1024's picture

I should have included the obligatory "imho"....but it is a toss up for me...the 'mats, when they were "on", could blow you away....the 'burbs were more consistantly "on" and fun...imho from all the shows/gigs I attended...:)

Thu, 10/28/2010 - 00:42 | 682464 Flatchestynerdette
Flatchestynerdette's picture

I was wondering why China came out and 1) said that it might go more GLD than $ and 2) that printing $ was inflationary to the world - ie them and causing 'them' harm with their economy.

*

Then I see the Helicopter Ben wants to do a mini QE2 - like small yachts named titanic1 titanic2 titanic3 - over time as it were

*

now we have the final piece of the story - Ben can see China from his window and its not looking very neighborly anymore in wanting to buy our shit exports - literally as well as financial and that could leave us up the creek.

Screwed. We are so screwed.

Thu, 10/28/2010 - 00:42 | 682465 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Bennie, Bennie, Bennie, oh Bennie and the Jets.....Behnie, Behnie, Behnie, oh Behnie and the jets..jets...Behnie Behnie Behnie and the jets Bennie Bennie Bennie oh Behnie and the jets...Behnie Behnie, Behnie Behnie, Behnie Behnie...and the jets..."

Elton John - Benny and the Jets:

http://www.youtube.com/watch?v=ZxeBccvWDRQ

Thu, 10/28/2010 - 04:25 | 682697 goldfish1
goldfish1's picture

Battle? Only the illusion of battle. One word: Diebold.

Thu, 10/28/2010 - 08:09 | 682846 ReeferMac
ReeferMac's picture

BAWHAWHAWHAWHAWHAWHAHAHAHHAHAHA!!!!!!!!

 

One word indeed!

We've already witnessed election fraud swept under the carpet, but folks made too much noise, and chad's are a running joke on late-night TV.... How can we make this more transparent?

Thu, 10/28/2010 - 09:52 | 683069 silverhammer
silverhammer's picture

Simple...you have access to a smartphone or digital camera, no?  Take a picture of your vote, post it wherever online you choose (Facebook, Twitter, etc.).  Encourage others to do the same.

Thu, 10/28/2010 - 10:40 | 683213 Jean Valjean
Jean Valjean's picture

That's actually a good idea.  After the 2004 election I thought about voter fraud quite a bit and there are all kinds of verifiable technical solutions that would work.  The problem is that for every one who wants an honest election, there is someone else who does not.  Both in the populace, and in the government.  So none of the solutions will ever get implemented.

Thu, 10/28/2010 - 13:51 | 683834 Geoff-UK
Geoff-UK's picture

Maybe if we had the option to make our vote PUBLIC--published with our name and voter # on a website...then they couldn't steal YOUR vote.  But wouldn't stop the Quantitative Easing in Voting--i.e. Vote Creation.  That's been going on for decades.

 

But now they've figured out that filling out extra paper ballots is SOOOoooooo 2000.

 

Much faster to create digital votes. 

Thu, 10/28/2010 - 08:11 | 682849 bada boom
bada boom's picture

Perhaps you are right, but isn't it just making the system more efficient?

Money buys politicians.  So, instead of requiring the citizens to go out and vote, which is a complete waste of time, why not just have money flow into diebold to determine who bought the most votes.  In the end, it may save money and time.

Thu, 10/28/2010 - 09:08 | 682980 New_Meat
New_Meat's picture

Can't complain about Diebold.  Gotta go after the (re)programmers.  Like in Vegas where they have been so thoughtful as to pre-check  the box for Reid pere.

- Ned

Thu, 10/28/2010 - 13:43 | 683805 Strider52
Strider52's picture

+ $1342.20

Thu, 10/28/2010 - 01:36 | 682466 Miles Kendig
Miles Kendig's picture

The key here is that substituting "inflation targets" for "price stability" will be the blank check Ben has been waiting for. The numbers announced really won't matter for anything other than to give fodder to various Gerbervores and their lemmings

Fact remains that as this drags on all pretense is falling away. We are now getting a real and rare treat into how both parties are getting their; "Honey, I didn't forget the lube this time" moment of appeasement.

Big Boy Letters indeed.  ROFLMAO  Just wait until all of this happy crappy gets shoveled onto those even greater fools, the so called sophisticated investors.  Oh man, this is gonna be nearly as good as running a sprinkler test while the fed and the pd's try and tell us the pool on the roof must have a leak

Thu, 10/28/2010 - 01:38 | 682558 nuinut
nuinut's picture

all pretense is falling away

all pretense is falling away

all pretense is falling away

 It's been comin' for a long time, but it sure does feel weird all the same.

Thu, 10/28/2010 - 06:07 | 682755 Bendromeda Strain
Bendromeda Strain's picture

And some folks still think Jim Sinclair is a crank (Robo). His "QE to Infinity" call will be proven correct, and the naysayers will gnash their teeth (and lead the attack against the hoarders, most likely).

Thu, 10/28/2010 - 09:45 | 683051 gmrpeabody
gmrpeabody's picture

+1

Thu, 10/28/2010 - 00:44 | 682469 Sean7k
Sean7k's picture

Well, why even pretend we are a nation of laws? Why pretend our government has anything to say about how we are ruled? Why pretend that the Constitution has meaning? Why pretend to support a nation run by banks, for banks and to their ultimate elevation as overlords of the people?

Just say no to Federal Reserve Notes. 

Thu, 10/28/2010 - 01:02 | 682504 66Sexy
66Sexy's picture

the law is gone... there IS no law, but common.

Thu, 10/28/2010 - 02:36 | 682620 midtowng
midtowng's picture

Why pretend? It's obvious. Without the pretense of laws and elections the people might actually do something to disrupt the status quo.

Bread and circuses brother.

Thu, 10/28/2010 - 04:52 | 682712 Cognitive Dissonance
Cognitive Dissonance's picture

The act of pretending is the "Big Lie".

Thu, 10/28/2010 - 03:27 | 682649 StychoKiller
StychoKiller's picture

Just when ya think that the times could NOT go any lower:

The Balrog appears "like a great shadow, in the middle of which was a dark form, of man-shape maybe, yet greater".

Thu, 10/28/2010 - 04:23 | 682692 Pondmaster
Pondmaster's picture

Pretty much describes our current Political leadership, The Fed , the Banksters   ... and you and me . In men there is NO HOPE . None !!

Romans 3:10-18

As it is written, There is none righteous, no, not one: There is none that understandeth, there is none that seeketh after God. They are all gone out of the way, they are together become unprofitable; there is none that doeth good, no, not one. Their throat is an open sepulchre; with their tongues they have used deceit; the poison of asps is under their lips: Whose mouth is full of cursing and bitterness:Their feet are swift to shed blood: Destruction and misery are in their ways: And the way of peace have they not known: There is no fear of God before their eyes.

Thu, 10/28/2010 - 13:55 | 683853 downrodeo
downrodeo's picture

 

 

 

"god creates dinosaurs. god destroys dinosaurs. god creates man. man destroys god. man creates dinosaurs."

-Dr Ian Malcolm

Thu, 10/28/2010 - 07:47 | 682794 AccreditedEYE
AccreditedEYE's picture

I would prefer Durin's Bane to what we have now Stycho. The Dark Fire is weak compared to the nation-destroying power of The Squid. Simon Johnson continues to be proven correct and still nothing is done... you almost have to laugh at this point as everything is out in the open and people don't even care about "pretending" anymore. LOL

It can't last... the only 2 things the country has going for it right now is reserve currency status and low interest rates to finance the Ponzi. QE will obliterate both of these... they will be destroying the last props holding up a very sickly system.

Thu, 10/28/2010 - 07:24 | 682787 Popo
Popo's picture

Just say no to taxes.

Thu, 10/28/2010 - 00:54 | 682476 poor fella
poor fella's picture

Soon 'whatever particular puppets end up in Congress' will be decided by money flows into TBTF banks and PDs who can hide said money in campaign contributions and purchase The Invisible Hand. How much would 'The American Way of Life' will go for at auction and what kind of yield should be expected?

Do the books, "How to Become a Canadian Anchor Baby" or "Mexican Ganglordship 101" exist?

Thu, 10/28/2010 - 00:47 | 682478 flaunt
flaunt's picture

Isn't this a bit like asking children how many cookies they anticpate eating, and how many they expect their mother to bake for them?

Thu, 10/28/2010 - 07:08 | 682780 nedwardkelly
nedwardkelly's picture

Great analogy.

A smart kid might figure out that mum is asking because she wants to avoid them getting upset about not getting enough cookies and will estimate accordingly.

Thu, 10/28/2010 - 10:35 | 683190 MilleniumJane
MilleniumJane's picture

+1000!!!!!

Thu, 10/28/2010 - 00:48 | 682480 moofph
moofph's picture

...something tells me when they role the dice, it's gonna come up snake eyes.

Thu, 10/28/2010 - 12:24 | 683558 flacon
flacon's picture

role = roll

Thu, 10/28/2010 - 00:48 | 682482 gigeze787
gigeze787's picture

The Fed surveying their "clients" for guidance on QE2 is nothing more than Mussolini's version of fascism:

"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power."

Impeach/Fire Bernanke.

Now.

Thu, 10/28/2010 - 03:41 | 682658 A Man without Q...
A Man without Qualities's picture

What you say is correct and people should pay far more attention to this. I would recommend a book by Adam Tooze, called "The Wages of Destruction".  The way the Nazi war machine was used in order to benefit the demands of the manufacturers pushed forward the war agenda when it became obvious that they needed to start using the materials created or the factories would become idle.  I have always believed that a factor in the way the first Gulf conflict played out was the need for the US military to clear stock that had been gathering dust since Vietnam, so they had an excuse to order shiny new stuff.

When we have a situation where many of the PDs are implicated in a massive fraud against borrowers, investors and state governments, and the Fed thinks it is ok to trust them to honestly answer how much money to print for the sake of the economy - it tells me the situation is more fucked up that even I imagine.  It's the last gasp of a dying regime.

 

http://www.amazon.com/Wages-Destruction-Making-Breaking-Economy/dp/07139...

Thu, 10/28/2010 - 00:49 | 682483 tony bonn
tony bonn's picture

when i thought i had seen and imagined it all them comes this, and treason is too kind of a word for the treachery so documented.

and now we know why the great apostle advised, owe no man nothing.

"and say the market will plunge unless at least this much money is printed"

good - let it plunge bitch.

fuck bernankrupt. fuck the fed. and fuck gross. he knows on which side his bread is buttered.

Thu, 10/28/2010 - 00:50 | 682484 RobotTrader
RobotTrader's picture

Any wonder why luxury goods sales are going through the roof?

PigMen are making absolute fortunes.

Never before has it been so easy for them.

Thu, 10/28/2010 - 01:06 | 682517 Burnbright
Burnbright's picture

I suppose you are just enjoying the ride before it becomes a blazing inferno?

Thu, 10/28/2010 - 02:17 | 682604 Caviar Emptor
Caviar Emptor's picture

Risk free

Thu, 10/28/2010 - 03:14 | 682640 iconoclast63
iconoclast63's picture

A careful study of the Weimar Republic demonstrates many similarities to what's happening in the U.S. right now. The big capitalists howled at the notion that the Reichsbank should stop printing money. The stock market volume shot through the roof. The surplus currency in the system found more and more non-productive outlets like stock gambling and mergers and acquisitions, building factories that built nothing but parts used in the building of factories, etc ...

The excess money, once printed and released into the system, had to find a place to live once the legitimate productive uses for it ran dry.

This is the role of the pig-fuckers (ahem, I simply could not call them "men", sorry) on Wall St.

I fear the outcome will be the same.

Thu, 10/28/2010 - 04:31 | 682700 Pondmaster
Pondmaster's picture

Dictatorship ,war,  subservience , poverty , starvation , death .

This is what these men utlimately offer us . And we play their market games hoping for crumbs that fall from their tables .

Thu, 10/28/2010 - 05:28 | 682734 drwells
drwells's picture

I'm offended, Mr. Kaczynski. That term is far too generous.

Thu, 10/28/2010 - 07:49 | 682813 New_Meat
New_Meat's picture

Tell me about it!

Thu, 10/28/2010 - 10:29 | 683174 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

RoBOW your weird and i don't get you. but here in this little college town luxury goods stores are folding, like before my very eyes. my luxury beauty cosmetic store just B O O M gone overnight. replaced with skit hippie clothes. right at heart of downtown pearl street mall. no word to me as a robust buyer of all things cream and smell goods, hey lady we are closing shop this week if you want to buy up your favorite products. oh well i guess i now perceive my luxury creams etc as precious commodities. oh and my wax jobs no more.

Thu, 10/28/2010 - 10:43 | 683225 Jean Valjean
Jean Valjean's picture

I thought you were like 80 and decrepid in a prior post.

Thu, 10/28/2010 - 11:07 | 683305 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

well i am 80 decrepid and ugly. that is why i started using make up and cosmetics.

Thu, 10/28/2010 - 10:35 | 683188 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

double

Thu, 10/28/2010 - 00:50 | 682485 RecklessMonkeys
RecklessMonkeys's picture

I'm still thinking that it will not be a bazooka, although maybe they'll front load it in the earlier months. There's nothing stopping them doing it again in six months, a la boiled frog.

As you say, Bernanke and the banks will gang up on the hawks with the threat of a crash if they don't get something. The MSM has been on about 500 billion, which was my guess, but since they're probably setting low expectations, I'm going for a trillion now.

 

 

 

Thu, 10/28/2010 - 00:59 | 682499 poor fella
poor fella's picture

The question is, will the public hear the 'T' word and finally wonder what the s*CKityF#cka&&*)(*Cbicklikn is going on?

Thu, 10/28/2010 - 01:01 | 682501 Flatchestynerdette
Flatchestynerdette's picture

I'm to bed but I could have sworn that Helicopter Ben's main selling point in his confirmation hearings was that he had written ALL about the depression and KNEW what to do to prevent one from EVER happening. Seems his dissertation and real life are vastly different animals but then again, whenever 'theory' his the road of life it falls away to reveal reality. Funny how now in hindsight I think that we should have just let LTCM fail in the late 90s. That was the first of its kind and set the stage for later hand outs.

 

42,000 factories lost in America since the 4th Q of 1999 through 2nd Q 2010. Average number of workers in each of these factories? 500. What are we selling to China? Paper - waste and treasuries (also waste).

 

What happens if they start selling or stop buying as it seems Ben has figured out they are doing? You get a Fed that goes to PDs and begs.

Thu, 10/28/2010 - 01:01 | 682503 Rogerwilco
Rogerwilco's picture

It's a creepy revelation, like the scene in the 1960’s film Spartacus, where Laurence Olivier (Bernanke) tells Tony Curtis (Geithner) that some men like snails (QE) and some like oysters (a strong USD), but he likes snails and oysters. So he inquires of Tony, does Tony like snails? Or is he more into oysters? And wouldn’t he like to try some snails, just to see what it’s like...and if Tony still has doubts, look at all my friends on this PD list, why they like snails too!

Thu, 10/28/2010 - 02:02 | 682588 lemonobrien
lemonobrien's picture

that's a homosexuality/bisexual reference.

Thu, 10/28/2010 - 01:04 | 682511 TexasCapitalism
TexasCapitalism's picture

Wells Fargo is not a PD.

Thu, 10/28/2010 - 01:05 | 682513 LeBalance
LeBalance's picture

With all of the historic precedence, some folks here were still calling for a low-ball QE2.  Even now, this hilarious article floats a low-ball high number, just to prepare the field for the true high ball number.

This is still peanuts.

Wait for it.....

Thu, 10/28/2010 - 01:10 | 682521 TheGreatPonzi
TheGreatPonzi's picture

Over 10 trillion?

Thu, 10/28/2010 - 01:40 | 682563 nuinut
nuinut's picture

Infinity, ultimately.

 

Thu, 10/28/2010 - 11:11 | 683319 NumberNone
NumberNone's picture

Paul Krugman called and said you are a pussy guessing such a tiny number.  He says we need some real money to hit the system.  

Thu, 10/28/2010 - 01:08 | 682518 trav7777
trav7777's picture

what part of "credit must grow" are you cretins freakin struggling with?  GFD is Douchinger running this site too???

I had this argument 2 years ago where I predicted that if private credit origination did not pick up that the government would take up the baton and MAKE you borrow.

There's no way out of this math, the credit system must grow or else.  The Fed has no choice but to print the coupon and force the origination.

No, the economy won't recover, oil has peaked.  It won't really gd matter what the Fed does.  Just accept that and move on.  Pigmen will sit at trough-head and continue to buy Ferraris.  The banks own the Fed anyhow; they are the shareholders.

Thu, 10/28/2010 - 04:12 | 682684 wake the roach
wake the roach's picture

Yep... There is no possible way to win this game we call industrial civilization. A monetary profit system (irrespective of credit) requires infinite growth in the supply of energy into the ever cooling "warmer body" (the worker/consumer) from which a monetary (energy) profit is extracted. In order to maintain the required energy imbalance (think temperature) needed to allow the energy (monetary) transfer to the cooler body (owner of production) in a profit system of exchange. Unfortunately, this means infinite growth in the supply of energy to the system. We do this with the ever increasing production/consumption/waste of goods and services for which this energy is embodied... Unless energy supply (and the resources we shape with this energy for the production of goods of trade value) can grow infinitely, or the rate of efficiency at which we use each unit of energy increases infinitely (both impossible), the system must return to equilibrium. Entropy always wins. Unfortunately for mankind, we will only learn this most fundamenetal universal economics lesson the hard way. Good luck to you all.

Thu, 10/28/2010 - 08:11 | 682842 Green Leader
Green Leader's picture

MAHATMA GANDHI ON INDUSTRIALIZATION

http://www.tinytechindia.com/gandhiji1.html

Thu, 10/28/2010 - 12:19 | 683532 the rookie cynic
the rookie cynic's picture

Yes. Our current system is built on exponential growth yet the earth is a limited system. These two paradigms are mutually exclusive.

http://therookiecynic.wordpress.com/2010/10/12/your-lethal-education-par...

Thu, 10/28/2010 - 01:10 | 682519 ElvisDog
ElvisDog's picture

Sorry, I'm not buying it. If they try $2T a year, the wheels come flying off immediately, not in 2014 or 2020 but immediately. There is no way TPTB can manage or control the economic distortions that will ensue if that level of monetization is attempted. Bernanke would quite probably literally be signing his death certificate (In the French Revolution, the tax collectors were the first ones to be strung up by the mob).

Thu, 10/28/2010 - 08:31 | 682892 MeTarzanUjane
MeTarzanUjane's picture

Without a doubt. But stranger things have happened.

Thu, 10/28/2010 - 08:37 | 682905 SheepDog-One
SheepDog-One's picture

Theres no way out of this, I dont care who the embarassed and failed Bernanke passes the baton off too.

Thu, 10/28/2010 - 01:10 | 682520 skyr191
skyr191's picture

Durden for Prez, Bitchez.

Thu, 10/28/2010 - 01:16 | 682522 Problem Is
Problem Is's picture

"events that could lead to civil war: in effect Bernanke will use the PD's decision as a trump card..."

Lessons taught but never learned
All around us anger burns,
Rig the markets by HFT,
Long ago front running was plain to see.

For they marched up to Bastille day,
La guillotine claimed  her bloody prize,
Hear the echoes of the fraudsters,
Power isn’t all that money buys.

Thu, 10/28/2010 - 01:24 | 682539 ebworthen
ebworthen's picture

Yes, the heads of the banksters need to roll to restore balance.

Thu, 10/28/2010 - 03:04 | 682634 Bananamerican
Bananamerican's picture

Lord Acton: The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.

Thu, 10/28/2010 - 01:13 | 682524 chet
chet's picture

Fucking shit.

Thu, 10/28/2010 - 13:28 | 683759 RockyRacoon
RockyRacoon's picture

I think that's the most articulate and accurate comment so far.

Thu, 10/28/2010 - 01:15 | 682525 gigeze787
gigeze787's picture
'A banana republic of the banks, by the banks and for the banks.'
Thu, 10/28/2010 - 01:16 | 682527 gloomboomdoom
gloomboomdoom's picture

Honestly (No joking here) why is everyone so doomy?

I know you all are mad about not being able to sit around all day long and collect interest off your millions. But many of us live hand to mouth.

Your Tea Party will gain influence, for certain, but any attempt at Austerity will throw any political party or movement off the face of the earth for at least a century.

These people in Washington are not going to change a thing, I promise. They are going because they want to be career politicians and live the rock star life. *junk*

Thu, 10/28/2010 - 13:32 | 683767 RockyRacoon
RockyRacoon's picture

Just wait til the Tea Party rubes get a load o' Washington DC!   They'll be absorbed like spit in a sponge.  Power luncheons and lobbyists brown bags of cash will turn their heads in a flash.  The realization that they have NO power will squash their egos and they'll be putty in the hands of TPTB. 

Thu, 10/28/2010 - 01:17 | 682529 frankTHE COIN
frankTHE COIN's picture

I'm speechless.

Thu, 10/28/2010 - 01:19 | 682533 Charlie Bravo
Charlie Bravo's picture

Ditto.

Charlie Bravo

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