Santelli rages "the notion that a small group of people should control the price of money should be under review," adding that "if stocks are rallying because The Fed is retreating, we certainly will turn into Japan."
Santelli Thanks Plunge Protection Team As Bond Bloodbath Sparks Buying Frenzy In Stocks & CommoditiesSubmitted by Tyler Durden on 12/29/2015 17:34 -0500
“To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything.” ~Edward Abbey
The entrance to The CME has been blocked for most of the morning by "Soros-paid Morons" according to one trader. Rick Santelli has a few opinions on the apparently ill-informed protesters' actions, and concluded, "It would be sad commentary - based on what the politicians have done with the budget - to chase more companies out of Illinois."
On Wednesday morning a new national poll revealed that 54% of Americans rate the economy as 'poor', but instead of focusing oin that, Becky Quick quizzed Marco Rubio about his 'lack of bookkeeping skills,' Carl Quintanilla posed questions about homosexuality and fantasy football, and the astonishingly incompetent John Harwood expressed doubt about Donald Trump's 'moral authority.' The interaction between the candidates and the CNBC moderators revealed the yawning gap between the bubble world at the intersection of Washington and Wall Street and the hard scrabble reality of economic stagnation and political alienation on main street America.
As more and more Fed speakers, talking heads, and status-quo-protectors talk of, beg for, and demand negative interest rates (NIRP), the mainstream is starting to wake up to the possibility of this farce coming to America. As Lacy Hunt tells Rick Santelli in the brief clip below, "the evidence is overwhelming that QE was more of a negative than positive," and warns the consequences of NIRP are dire (and The Fed has the tools to enginner it) as "to make it effective they would effectively have to call in the currency."
We have argued that it is a perilous myth that central bankers these days control a general price level. They instead incentivize massive financial flows into securities markets and fashionable sectors. Over time, ramifications and consequences reach the profound. For one, excess liquidity promotes over/mal-investment. It’s only the scope and nature that remain in question. If major Bubble flows inundate new technology investment, the resulting surge in the supply of high-margin products engenders disinflationary pressures elsewhere. Policy responses to perceived heightened “deflation” risks then only work to exacerbate Bubbles, mounting imbalances and structural fragilities. This was a critical facet of “Roaring Twenties” analysis that was lost in time.
Having exposed the reality that the world's capital markets are a manipulated shell game, Janus' Bill Gross has a message for the perpetual bulls in his latest letter to investors - "say a little prayer." Gross continues, "low interest rates are not the cure – they are part of the problem," warning that ZIRP has enabled, "a host of zombie and future zombie corporations now roam the real economy. Schumpeter’s 'creative destruction' – the supposed heart of capitalistic progress – has been neutered. The old remains in place, and new investment is stifled." As he previously warned, when the central bank manipulation is removed the likely trajectory of prices is downward...
"Free" markets for all, but the real joke is that this comes from the Beijing Review
Having looked surprisingly at Ed Lazear's comment that "the market is still the best predictor of the economy," Rick Santelli unleashes his latest bout of truthiness when he explains to the former Bush economic adviser that "investors are blindfolded," by central bank intervention (such as BoJ buying e-minis). "We used to think plunge protection was heresy," he exclaims, "but now, if your nation doesn't have a plunge protection team, that's heresy!"
Rick Santelli recently unleashed his own brand of truthiness on an unsuspecting CNBC audience, that, just like in China, "the central planners are in control" in Japan, Europe, and most of all America. As part of the 3 minutes of lack-of-free-market despair, Santelli drew what we called "the chart of the year." By popular request, it is reproduced below...
"China is not doing anything that the US has not already tried," exclaims Rick Santelli as he derides the 'entitlement' society that has reached the investor class. Whether it's US, Japan, Europe, or China, "the idea of trying to prop up returns in the equity market - admitted or not - is going on," Santelli notes, asking - after forcing every mom and pop out of savings and into investment, "if it doesn't turn out well... do they have a moral obligation to help out?" Simply put, he rages - drawing the chart of the year - "the central planners are in control... and I don't suspect they will give up the reins any time soon."
We warned previously that when (not if) the market crashes next, The Fed is going to need a scapegoat (other than British traders living at home with their parents) and judging by The Fed's Lael Brainard's comments today, high-frequency-traders (HFT) are in the crosshairs. Crucially, Brainard warns that HFT "may amplify market shocks," and The Fed is "studying possible changes in liquidity resilience."
First it was Jim Bullard in October, after US equity markets had fallen almost 10%, dropping the only word that matters to headline scanning algos, i.e., "QE4" and suggesting that asset purchases will make a comeback if the market drop continues. And now, with stocks fractions-of-a-percent off record highs, Minneapolis Fed president Narayana Kocherlakota spouts this idiocy: KOCHERLAKOTA: THERE IS EVEN A THEORETICAL ARGUMENT TO BE MADE FOR MAKING ASSET PURCHASES NOW IF ECONOMY FALTERED.
Stocks, rather stunningly, appear to have finally given up responding to this utter farce, and are falling.