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The Fed bombed the market - I ask, "Why?"
Last evening I got the WSJ breaking news story that busted the global capital markets today. Note the time, 8:06.
Look at the immediate consequence to the EURDLR fx rate. There are big gaps down for EUR shortly after the story hit the tape in Asia. That knee jerk reaction was the same market “read” that gutted a number of Euro banks today:
I looked at the WSJ story and concluded that it was a game changer. I wrote Tyler Durden at Zero Hedge about this. The “Re:” that I used was:
Stink on Shit
TD responded:
Obviously a plant.
ZH had a piece today on the WSJ story that caused all the trouble. The “plant” theme was repeated. from the ZH article:
Why would (the Fed) use its traditional mouthpiece the WSJ to spread fear?
Tyler answers his own question with:
Why QE3 of course.
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This is very important stuff. Three critical questions:
I) Was the WSJ story a plant?
II) If so, who planted it?
III) Why in heaven’s sake would anyone (especially the Fed) want to bomb the capital markets?
IMHO opinion this was a plant. The author was Carrick Mollenkamp. This guy is a seasoned pro. This story was vetted at the highest levels at the WSJ. The editors knew full well the implication of this article. Every ‘i’ was dotted and all quotes were checked. There are no mistakes in this article.
But who were those “sources” that the WSJ hung their hat(s) on? This was one of the biggest stories of the year. Who are the readers of the WSJ supposed to rely on regarding the serious issues raised in the article? Easy. No one is the answer. These are the attributed sources for the guts of the story:
Federal and state regulators, signaling their growing worry that Europe's debt crisis could spill into the U.S. banking system, are intensifying their scrutiny of the U.S. arms of Europe's biggest banks, according to people familiar with the matter.
The Fed is demanding more information from the banks about whether they have reliable access to the funds needed to operate on a day-to-day basis in the U.S. and, in some cases, pushing the banks to overhaul their U.S. structures, the people familiar with the matter say.
Fed officials recently have held meetings…………. according to the people familiar with the matter.
The New York Fed has also been coordinating with New York's superintendent of financial services, Benjamin M. Lawsky, to monitor the foreign banks' funding positions, said people familiar with the matter.
You can come to your own conclusions on this. It is my opinion that there is no way the WSJ could have run this story without direct confirmation from the Fed. Those people who are so “familiar” with this matter are senior Fed officials.
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That, for me, answers #s I & II above. But it begs the question, “Why”?
Is it remotely possible that the Fed deliberately engineered a collapse in markets in order to get the necessary political “cover” to initiate some new massive monetary policy as TD suggeted?
There is one possible clue in the article that points to this conclusion:
Until recently, that (Euro funding problems) hasn't been a problem. Thanks partly to the Federal Reserve's so-called quantitative-easing program, huge amounts of dollars have been sloshing around the financial system, and much of it has landed at international banks
This observation from Mollenkamp is from the Feds lips. The obvious conclusion from this paragraph is that to reverse the crisis now boiling over in Europe more “QE” is required.
What is QE? It can be anything that stimulates the price, velocity and availability of money. It does not have to be LSAP (traditional QE) or an extension of ZIRP. It can take other forms.
The most convenient of which is to open the Fed’s $ swap lines to the Euro banks. We may get this development by Monday morning.
My take on this is that the Fed manipulated the news. It did so very deliberately. The Fed had an agenda; they did whatever they thought necessary to gain acceptance for what they have up their sleeve.
The story was deliberately timed to undermine (further) the European banks. It worked. Now Bernanke and his cohorts have the excuse they need to act.
That's my take on this story. We may never know the truth. I wonder if Governor Perry understands this stuff. If he did, and he got the facts on this “out there” he would have a very big cannon to shoot. If the Fed did manipulate both the press and the markets to justify its actions it would be a very big deal indeed.
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Just the fact that Ms. Rand gets so much attention in 2011 speaks for the fact that she was no joke. It's incredible how you represent to know what the world outside of U.S. seems to think, and how you bring up obscure Frenchmen in your pseudo-intellectual rant.
I share Ms. Rand's background and understand her perspective. Albeit naturally biased, Ms. Rand presents views that resonate with many freedom-loving people around the world, including folks wildly (and rightly) popular on ZH, such as Ron Paul.
You can launch ad hominem attacks on Ms. Rand all you want. I understand that your discrespect her "ethno-cultural background"; she missed the gas chamber you see. While I'm not a fan of the person, I deeply respect her ideas and her passion.
Yeah,
You tell'em, dude. And don't forget she got the scoop from Mickey Spillane-----we don't need no stinkin' intellectuals at ZH---all of you suckers----Stay offa da line, pulleeeeeeese om
With no disrespect to the person outside the United States her ideas are considered shall we say half baked. What she did do however was publish a rather simplistic some say misleading book that fit the line of bull that the United States was trying to sell at the time so they picked up the ball and ran with it. Made her a star. Kissy kissy.
Incredible. You speak for everyone outside of U.S. "Her ideas are considered half-baked"? By who, yo mama? FYI, she was never promoted by anyone remotely affiliated with centers of power at the time. But you know this already, you see. Your posts are deliberate misinformation.
Too many idiots on this board, not enough QC.
Yes, let the capitalists have unlimited power because they will do the right thing if just given the chance. Hey look, it's the tooth fairy. Rand believers are either narcissists who use Rand to justify their own shortcomings as human beings, or they are just plain intellectually simple people attracted by black and white ideas. Don't worry, though. There are plenty of other cult members who will reassure you that you are really the smart one. Enjoy the meetings.
You're looking for fish among the treetops.
No one will EVER do the "right thing" unless it's the right thing for them, period, end of story. If you think you can point to someone that does the "right thing," I can unequivocally prove to you (provided you have the intellectual capacity and intellectual honesty to see it) that their actions are ultimately the result and combination of 200,000 years of evolutionary cognitive psychology (i.e., "all about me") and what computer scientists like to call the "ghost in the machine".
Unless you can change 200,000 years of human brain evolution, I suggest you thank your lucky stars for capitalism, because until then, no other socio-economic system will ever come close to providing the level of prosperity that capitalism has provided humanity, ever, period, end of story.
gd stimpy's all over this thread ...
No one does the "right thing," RE? Maybe it's rare in a system run by sociopaths with money, but most people march better to a different drummer:
http://www.youtube.com/watch?v=u6XAPnuFjJc
Too bad almost nobody knows that tune.
Your premise is so wrong and unfounded, I can't even bother. The vast majority of evidence indicates quite clearly that the most brilliant minds, the most noble human beings, have been anything but self interested, yet you come out with this crap as if somehow, you have proof to the contrary. You apparently don't know that most artists, philosophers, scientists, etc didn't advance understanding or society for their love of money. Fuck capitalism... it's destroying all manner of reason, and you're prime example 1.
It's an article of fundamental faith among the narcissistic Randian cognoscenti that everyone--and, most brilliantly, "producers"--are essentially sociopaths at heart.
What is especially strange is that Rand is such a God for so many people in the parasitic finance industry who truly fancy themselves Galt.
You can't make this shit up--nobody would believe it.
Ever heard of Jesus, Buddha, mother Teresa, Sister Emmanuelle, L'abbé Pierre? I'm not religious, but I deeply respect spirituality that feeds all altruistic instincts in man. Your mantra on man's self interest as per Ayn Rand's 'philosophy', if we can call it that, is as shallow as ...Veni, vidi, vinci...immortal pithy phrase that was said by the most powerful man on earth; who learnt the hard way at Pompei's statue's feet in Roman senate, how 'vinci' became 'e tu Brute'.
Thank you for doing that. It is always so fucking annoying to hear the greedy selfish mother fuckers describe the world from their limited head up their ass view: "everyone is greedy, no one has any other motives than self-interest, the world is full of progress due to said self-interest, in fact, i have to stop this parade of blather so I can go stroke myself while looking into my eyes in the mirrors I've installed throughout my mansion".
While in reality, the world is only livable because of the generosity and compassion these imbeciles dismiss... the world would be a cesspool hell if the capitalists were the only assholes to roam the planet. When the fuck will it sink in? I am convinced, never.
Keep up the good work friend... ps... Rand was a narcissistic self serving dip shit. There is plenty of valuable philosophy out there, she's not it. She's a self help author for the greedy mother fuckers of the world.
That deserves a +1
As for the article, Sept.20th rings a bell.
I know I'm wasting my time arguing with a cultist, but the idea that there is such a thing as a "free market" is absurd. Ask Rockefeller about free markets. Capitalism like all systems requires checks and balances. Rand believed in the tooth fairy because her daddy lost money to the communists. Sad story, but it doesn't make her simplistic view of humanity a viable model for society.
Did I say there was a free market? Where?
I said Capitalism, and as ugly as it is (we're seeing it now) it is still less ugly than all the other shit around.
Why? Again, we, you, me, EVERYONE is driven by selfish motives, and since it's "hard" wired, the only way society can benefit is indirectly thru the selfish pursuits of individuals. It's so freaking simple, how can ppl not see it?
Ah yes, let's all worship at the altar of selfishness. How can you watch the implosion of our banking system, caused by capitalists who deliberately profited by destroying the middle class and impoverishing future generations with unpayable tax bills, and suggest that more of the same is the answer? Do you have any idea what you believe in, or do you just repeat the ravings of your cult friends and nod your head?
@LetThemEatRand: You're not over-bright, are you?! Go peddle your big governments controlled by elitists someplace else.
I've said it before and I'll say it again: All those who find selfishness to be a vice and self sacrifice a virtue may feel free to give me all their money.
Any volunteers?
Dude, you're a fun troll, but a waste of time, since clearly you're not reading a thing I type. You keep on believing you're gonna institute a human-proof system of government, or maybe legislate morality. BTW, what flavor kool-aid is that? (You get the cult reference, stimpy?)
Definition: A troll is someone who does not like Rand and is not a libertarian.
What? She stick her high heel on your sack on the way out the door? Refuse to let you "sniff around" Throwing around names of unwashed french philosophers impresses no one here.. If whom is sniffing around is the be all know all gestalt of Rand wow, your deep..
The ideas have merit, could they have been delivered in a better style, sure, but cartoonish, moronic ideaologue ha, get that high heel off your sack Jeffy..
+10000 I second that
Nice Cult handle, Randy. Think for yourself much? nevermind. I know the answer.
Dear shill, please crawl back into the cave you came from and wait for the welfare check.
Ever heard of a Kruggerrand, bitch? Oh, sorry, I forgot you're waiting for that welfare check from the Debt Brother. Doesn't exactly buy a whole lot of gold. Enjoy the ride, sucker, it will be a rough one for little ones like you.
Way to reveal your true nature, Rand[y]. It's so easy with you cultist simpletons.
You always want to have the last word, don't you. No reason to argue with degenerates; nature is taking care of you by depriving your sorry ass of breeding opportunities.
Wow, rent U-Hauls/buy fertilizer much? If only you could harness your irrational anger and direct it towards the bankers you worship....
Equating respect for Ms. Rand's work with terrorism and worship of crony capitalists? What's new, with this attitude you could have been an operative in the Stasi. Get a life, my friend, and say no to fascism. It won't do you any good.
Is that you, Geopol? (sure sounds like it ... ad hominems by the truckload).
oh, but no one ever gets banned here, right fuckwit?
Are you stating categorically that Geopol was banned? I assumed he was diverted to his new blog, podcasts and many interviews at that time!
Maybe TD can set me straight ... or you could post a link to a relevant post from the admins? I've had some heated debates with, and been called every name under the sun by, Geopol ... but we parted friends and I respect his intellect (though not his Marxism). Which is way more than I'll ever say about you.
Hello my old friend,,,Were our debates that heated?? We are friends, and you are one of the evergreen contributors here....I do have other pursuits...
Cheers I-dog
WGT