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Bernanke Set To Unveil Number Larger Than "Eternity"

Tyler Durden's picture




 

It was just over a month ago that the Chairsatan formalized the incorrect named QE 3, aka the open-ended QEternity, whose purpose, for now, was to increase the Fed's balance sheet by $40 billion/month in new MBS purchases. Well, according to MarketWatch, whose previously unheard of Greg Robb is seemingly vying for the role of Jon Hilsenrath, Ben Shalom is preparing to unveil a number bigger than eternity: " After historic changes last month, Federal Reserve officials this week will discuss a possible expansion of the size of its third round of bond buying and better ways to guide markets about future policy actions." Just because $40 billion per month in new flow is apparently not enough, and because the market is now well below the level it was when "QE 3" was announced.

Of course, reading the fine-print indicates nothing new, and merely confirms what we said the same day QE3 was announced: "... the central bank will consider whether to expand its bond-buying at the end of the year to take account of Treasury purchases under its Operation Twist plan that finishes at year-end." In other words, instead of ending Twist, which it can't as this is an incremental $45 billion in long-end "flow" added to the market each month, the Fed will merely roll it into an unsterilized program, that will expand the Fed's balance sheet not by $40 but by $85 billion per month. Of course, those who look at the Balance sheet in terms of ten year equivalents, know this all too well already, and know that there is no way that the Fed will halt Twist in just two months without replacing it with an unsterilized program, for the simple reason that the Fed's holdings of sub 3 year debt are on the verge of running out.

From MarketWatch:

There are no pressures on the Fed for immediate action on these two fronts, economists said.

 

“I think they are reasonably comfortable with the market reaction [to QE3] and the way the economy has turned out,” said Michael Hanson, an economist with Bank of America Merrill Lynch.

 

Robert DiClemente, chief U.S. economist at Citigroup, noted that, in the wake of QE3, Citi’s financial-conditions index has reached its most accommodative reading since the Fed began easing more than five years ago. “At its current reading, the financial-conditions index is consistent with above-trend growth in final demand, an important prerequisite for stronger hiring and meeting policy goals,” DiClemente wrote in a note.

 

At the moment, the Fed is buying $45 billion of long-term Treasurys each month under its Operation Twist program, with the purchases offset by sales of shorter-term securities. Many economists think the Fed will decide to expand QE3 by that amount, and with Treasurys instead of MBS. But the announcement is not expected to come until its December meeting.

In other words, nothing new as this is precisely what we explained would happen on September 13. However, it is good to know that with each passing day the Fed is boxing itself ever more into a corner, as there is no way on this earth that Bernanke will be able to unwind a $5 trillion balance sheet (which is what it will be in 2 years), without destroying every last trace of the equity (and likely) other capital markets, unless there is a concurrent bout of hyperinflation.

And here is how the Fed's total assets will hit $5 trillion as Zero Hedge demonstrated before.

 

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Mon, 10/22/2012 - 15:51 | 2910471 SheepDog-One
SheepDog-One's picture

$40 billion a month is already not big enough? We are totaly fucked.

Mon, 10/22/2012 - 15:55 | 2910485 FoxMulder
FoxMulder's picture

QEternity + 1

Mon, 10/22/2012 - 16:06 | 2910547 max2205
max2205's picture

LoL loudly...fools

Mon, 10/22/2012 - 16:11 | 2910568 TheSilverJournal
TheSilverJournal's picture

All those hoping for a dip in equities and silver will get crushed. The market is about start front running the next addition to QE.

Mon, 10/22/2012 - 16:22 | 2910620 francis_sawyer
francis_sawyer's picture

Print til it hurts bitchez...

Mon, 10/22/2012 - 17:00 | 2910791 ParkAveFlasher
ParkAveFlasher's picture

Gold, bitchez.

Mon, 10/22/2012 - 19:55 | 2911178 Muppet of the U...
Muppet of the Universe's picture

I'd say long nooses and small, throwable rocks, but I'm pretty sure GMOs are going to wipe out the population before then... *facepalm.

Mon, 10/22/2012 - 23:00 | 2911645 goldfish1
goldfish1's picture

Is infininity bigger than eternity?

Mon, 10/22/2012 - 17:01 | 2910793 Jake88
Jake88's picture

it's nothing different than already indicated

Mon, 10/22/2012 - 17:16 | 2910833 TheSilverJournal
TheSilverJournal's picture

Tell that to the balance sheet.

Mon, 10/22/2012 - 16:20 | 2910615 WmMcK
WmMcK's picture

Cardinality increment, bitchez.

Mon, 10/22/2012 - 17:49 | 2910917 Parabolic
Parabolic's picture

QEternity + Infinity

Mon, 10/22/2012 - 19:02 | 2911084 surfersd
surfersd's picture

Romney wins 322 ev to 221 - QEternity in December - Fiscal cliff fixed --- Markets to the Moon!!

Phew, dodged that bullet, 2013 is going to be a partayyy!

Mon, 10/22/2012 - 15:55 | 2910486 Tyler Durden
Tyler Durden's picture

It is not $40 billion a month. It is already $85 billion a month as the matching UST sale of $45/month on the short end is completely meaningless and riskless. Bernanke will merely formalize this on January 1, 2013.

Mon, 10/22/2012 - 15:57 | 2910495 Dr. Richard Head
Dr. Richard Head's picture

Certainly, $85 billion is NOT ENOUGH.  - Paul Krugman

Debt begets debt begets peace, as seen in the EU Nobel Peace Prize. 

Mon, 10/22/2012 - 16:05 | 2910541 El Viejo
El Viejo's picture

so when does the panicked bond selling begin???

Mon, 10/22/2012 - 16:20 | 2910616 Orly
Orly's picture

That's what I'm saying.  Either the memo has already gone out detailing the time and place or these bond boys must have big brass balls.

Mon, 10/22/2012 - 16:47 | 2910735 El Viejo
El Viejo's picture

Bernanke's replacement's replacement's ... will telegraph for months. Relax

Mon, 10/22/2012 - 16:49 | 2910741 LawsofPhysics
LawsofPhysics's picture

What are you talking about Orly?  Most os the 401k sheeple are parked in bonds and most of the rates are not even negative (yet and yes some are).  So plenty of more buying can be done.  Apparently, lots of people want to pay Uncle Sam to lose their retirement. - "Winning"

Mon, 10/22/2012 - 16:56 | 2910775 Orly
Orly's picture

I'm talking about stocks going into the tank and the 10-yr. yield barely budging and even rising slightly today.  Nothing makes any sense any more.

It's either that everyone has their eye on everyone else, waiting like at the OK Corrall for Ike to blink before all hell breaks loose, or somebody knows something somewhere.  The markets seems very much relaxed, don't you think? A little too much so?  Don't you think that's just a bit strange?

Mon, 10/22/2012 - 17:11 | 2910827 derek_vineyard
derek_vineyard's picture

stocks have never tanked here.....they almost did at 666

review the nekkei to see what 'tank' means and what 30yr JGB's yield

Mon, 10/22/2012 - 17:25 | 2910848 Orly
Orly's picture

Okay.  Please allow me try again, calmly and without hyperbole or sarcasm...

For having such a rapid sell-off of equities and each earnings announcement seeming to get worse as the season progresses, doesn't it seem odd to you that global equity markets are as stable as they are and the bond market is completely ignoring it and is, in fact, trading anathema to what would be considered a "normal" pattern?

I know things haven't been "normal" for quite some time.  What I mean to say is that the markets are more abnormal than we have seen previously.

What it means to me is that there could very well be a major announcement at the close of Wednsday's Fed meeting in which the Fed announces a massive program of asset purchases, which are more than likely to not fit under the previously understood purview of the Federal Reserve.

Like when you're out in the woods and things are just too quiet...

Mon, 10/22/2012 - 18:35 | 2910986 poor fella
poor fella's picture

something's up

People don't affect the markets - the 'markets' have become numbers and people react TO them. Even if that's not entirely true - the forces that move markets have become increasingly more influential to the point that it must be hidden (i.e. Goldman's special software that could manipulate markets in the wrong hands).

At the highest level, since 'debt' is all that matters, there isn't a whole hell of a lot to watch. As long as speculation, consumerism, war, income disparity, and 'keeping up with the Joneses'" remains Global Policy - things are looking quite well. That's one of the many reasons a bad job market is great. Low wage pressures along with the limited possibility of Main Street to pay down debt (moving against the Fed) in a substantial way due to insecurities and necessity to save (or help family and friends - ALL consuption positive).

It's interesting that fascism surrounds our lives but I haven't seen the Fascist Party on any of the polls. Might be good to join early. Turn in your neighbors before they turn you in... and all that.

Mon, 10/22/2012 - 18:34 | 2911029 Orly
Orly's picture

Well, suppose we're on a time-warp hunting trip and we're tracking a load of sauropods through the swamps of Iowa back in the day.  You've seen the tracks of the T-Rex the past couple of days, so you're a little edgy.

In a clearing, you can hear maybe twelve of them- big mammas- surrounding the herd, all hissing and squealing, trying to frighten them into a tighter circle; to wait for the attack and separate a fat one from the rest.  Except with all the hiss and thunder, no one moves.  They keep on eating grass and drinking the water from a river delta, nuzzling up to each other.

You hear it and are scared out of your freaking mind but not one of the Apatosaurs reacts in any way, shape or form.

That kinda weird.  That's what I'm talking about.

Freaky kinda weird.

Mon, 10/22/2012 - 20:03 | 2911201 poor fella
poor fella's picture

At least that would be natural, in a cull-the-weak, slow, old, fat, etc. sorta way.

We went through the 'new technology' phase in financials.

Similar to:

old growth forrest  --->  meet steam engine and saw (now the old trees worth naming fit on one page)

shark ---> meet shark-finner (millions of dead fish for nothing)

buffalo ---> meet Bill (Oh, sorry, guess there weren't unlimited buffalo)

tuna ---> meet satellites and factory ship (million dollar tuna coming soon as they approach extinction)

business ---> meet private equity 'harvester' (Too much capital JUST SITTING THERE, should be in my POCKET!)

ma-n-pa pension ---> meet hedge fund manager (who cares, it's covered by govt sponsored pension insurance)

 

Those first to the party made all the money.. Now the wannabe's, once they saw how it was done, are standing around waiting for sloppy seconds. Too bad it would take decades of productivity and healthy economies to rebuild the surplus that was wrested away with the help of the government/private revolving door.

This is the 'weird quiet' Bernanke hears when he goes home and sits in silence. Completely expecting things to blow the F'ING hell up, and surprised that he goes to work each morning. Does he hear the voices of crowds in the night and relieved it's only the t.v. downstairs and not an actual riot?

THAT kinda weird!!!?

 

Mon, 10/22/2012 - 17:27 | 2910853 TheSilverJournal
TheSilverJournal's picture

The US situation isn't comparable. The Japanese had a huge export economy with a ginormous savings rate, whereas the US is hugely dependant on imports.. and savings?...what does save mean?

Tue, 10/23/2012 - 12:20 | 2913013 A is A
A is A's picture

This is a thing of the past. Japan's savings rate is basically 0 now and they just reported a huge trade deficit for Sept. They are screwed just like the rest of us.

Mon, 10/22/2012 - 15:58 | 2910501 SheepDog-One
SheepDog-One's picture

Yep, no doubt.

Mon, 10/22/2012 - 16:04 | 2910532 FL_Conservative
FL_Conservative's picture

If you ask me, it looks like we're back to the same old verbal masterbation.

Mon, 10/22/2012 - 16:07 | 2910544 GolfHatesMe
GolfHatesMe's picture

Once you have had $100 Billion per month you can't go back. 

Mon, 10/22/2012 - 16:30 | 2910648 machineh
machineh's picture

That's enough Krugmanrands to fill the Grand Canyon.

Mon, 10/22/2012 - 16:06 | 2910545 LawsofPhysics
LawsofPhysics's picture

Correct, now where can I exchange these FRNs for SDRs?  certainly those will be as good as gold. < sarc off >

Tue, 10/23/2012 - 07:21 | 2912066 Anasteus
Anasteus's picture

I would like to figure out how the heck is then possible that gold is falling so rapidly. I do not tend to attribute it wholly to JPM.

Mon, 10/22/2012 - 15:57 | 2910494 Calvinvtw
Calvinvtw's picture

I make $82h while I'm traveling the world. Last week I worked by my laptop in Rome, Monti Carlo and finally Paris…This week I'm back in the USA. All I do are easy tasks from this one cool site. check it out, www.Zoo33.com

Mon, 10/22/2012 - 15:57 | 2910498 Dr. Richard Head
Dr. Richard Head's picture

SPOILER ALERT!!!!!

You know, you can just masturbate on a webcam in your bedroom and not have to travel the world.

Mon, 10/22/2012 - 16:32 | 2910657 machineh
machineh's picture

Yeah, he should be ashamed of pimping out his mom (she's a virgin).

Mon, 10/22/2012 - 17:06 | 2910801 francis_sawyer
francis_sawyer's picture

Simon Black ~ Is that you?... How's PANDORA treating you?...

Mon, 10/22/2012 - 16:02 | 2910527 e-man
e-man's picture

Come back on this site when you're making $85 B an hour.  In the meantime, here's a site you can post on, where robot readers will be interested in your $82/h: http://www.cnn.com

Mon, 10/22/2012 - 19:03 | 2911086 Tommy Gunner
Tommy Gunner's picture

Better to post on CNBC.com - where all the muppets are

Mon, 10/22/2012 - 20:13 | 2911227 DosZap
DosZap's picture

I make $82h while I'm traveling the world. Last week I worked by my laptop in Rome, Monti Carlo and finally Paris…This week I'm back in the USA. All I do are easy tasks from this one cool site. check it out, www.Zoo33.com

 

Simon?, is that you?.

Mon, 10/22/2012 - 16:05 | 2910542 resurger
resurger's picture

big fucking time

Mon, 10/22/2012 - 16:07 | 2910543 jomama
jomama's picture

40b.  that's only $4.23 a person a day for everyone in the US.

no big deal, right?

Mon, 10/22/2012 - 17:45 | 2910909 CPL
CPL's picture

For only dollars a day you can take care of a starving american and make sure they get the nutrition they need.

 

Oh Sally Struthers where are you to eat cake and market this tragedy.

Mon, 10/22/2012 - 18:13 | 2910973 HurricaneSeason
HurricaneSeason's picture

It's no big deal because we borrow $1.5 trillion in new debt each year and the interest on the national debt is only a few hundred billion a year. Clear sailing for the next 10 years if interest rates don't go up.

Mon, 10/22/2012 - 18:42 | 2911044 lolmao500
lolmao500's picture

And when it does, kaboom overnight.

Mon, 10/22/2012 - 19:34 | 2911141 Mentaliusanything
Mentaliusanything's picture

Not at all, you can just print your interest payments. Your creditors will love the smell of New money.

When it ends I want to be sitting in front of (but not to close to) Bernanke as he pukes up his guts.

Then I'll offer him a loaded revolver. Its the humane thing to do.

Mon, 10/22/2012 - 17:29 | 2910856 q99x2
q99x2's picture

The FED is totally fucked. I'm good.

Mon, 10/22/2012 - 18:42 | 2911041 lolmao500
lolmao500's picture

Well no, the US runs $100 billion deficits per month...

Mon, 10/22/2012 - 19:39 | 2911155 omniversling
omniversling's picture

Infiternity

(...bitchez)

Mon, 10/22/2012 - 22:06 | 2911487 Stuck on Zero
Stuck on Zero's picture

$40 billion a month.  That's nothing.  The end of the Altair IV empire came when the Krell built the biggest printer ever: literally they could print "10 to the power of infinity" as Dr. Morbius was heard to say.  We're a long ways off from that yet.

 

Mon, 10/22/2012 - 15:55 | 2910482 CheapPanderingCrony
CheapPanderingCrony's picture

"Ben Shalom," pointing to his jewish ancestry; classy.

Mon, 10/22/2012 - 16:03 | 2910516 The Shootist
The Shootist's picture

That's his middle name. Just like Mitt Romney's real name is Willard, and Barack Hussein Obama,  twat.

Mon, 10/22/2012 - 16:03 | 2910528 john39
john39's picture

the irony is too rich to pass up...   the guy who was/is the public face of the FED, the institution that played the front line role in imploding the United States, which spread misery and suffereing around the world...  has the middle name "Shalom"?  kinda like barry obomber getting the Nobel Peace prize.

Mon, 10/22/2012 - 19:06 | 2911088 Tommy Gunner
Tommy Gunner's picture

And his bosses are Dimon and Blankfein.  Read this http://www.scribd.com/doc/8634450/Germany-and-the-Jews-by-Benjamin-H-Fre...

Mon, 10/22/2012 - 18:04 | 2910948 WTFx10
WTFx10's picture

Zionist Jewish ancestry. Worse than Nazi's, since most do not believe they exists and they are in total control.

Mon, 10/22/2012 - 15:55 | 2910483 chinaboy
chinaboy's picture

Satan indeed. He and his cohorts are going to destroy capitalism at the roots.

Mon, 10/22/2012 - 16:25 | 2910632 blindman
blindman's picture

they destroy more than isms, they destroy people
and places, then tell you it is god's work.
then you believe them

Mon, 10/22/2012 - 16:53 | 2910761 Al Gorerhythm
Al Gorerhythm's picture

You for got Liberty.

Mon, 10/22/2012 - 17:45 | 2910907 blindman
blindman's picture

apologies

Mon, 10/22/2012 - 15:55 | 2910490 Dr. Richard Head
Dr. Richard Head's picture

Just in time for Halloween!  We could all knock on the door of the Federal Reserve this witches' hour.

Mon, 10/22/2012 - 15:56 | 2910492 kito
kito's picture

no no no.....romney will replace the bernank with a volcker type.......all will be fine.....romney said so.......

Mon, 10/22/2012 - 16:00 | 2910506 Dr. Richard Head
Dr. Richard Head's picture

Of course, in April of 2011, he didn't want to focus on the Fed.  Come on, Ben is a student of monetary police and is doing the best job he can!

http://www.youtube.com/watch?v=l6JDooqBcjg

Mon, 10/22/2012 - 16:00 | 2910509 fuu
fuu's picture

Mmmm turkey.

Mon, 10/22/2012 - 16:00 | 2910511 catacl1sm
catacl1sm's picture

Yeah! Higher rates to reign in inflation! Wait.. that'll do what to national debt interest payments? Oh, dear...

Mon, 10/22/2012 - 16:11 | 2910565 AndrewJackson
AndrewJackson's picture

And there in lies the problem. This is the main reason chairsatan will continue to his ploy to control 100% of all treasury issues and bring on hyperinflation. He would rather screw everyone than have (investors/banks/governments) take the painful medicine involved in the corrective depression.

Mon, 10/22/2012 - 16:39 | 2910692 catacl1sm
catacl1sm's picture

It ends the same either way, collapse. This method allows them to steal all of the 'wealth' and buy up real assests with it. I'm not sure how they'll maintain control of said assets (land) without a heavy fighting force. Rome was able to continue it's expansion by giving land to soldiers, but that beget the problem of continually needing to expand and protect a continually expanding border. cycles...

Mon, 10/22/2012 - 17:34 | 2910874 reload
reload's picture

Stupid Romans,

30,000 drones would have fixed it.

Mon, 10/22/2012 - 15:58 | 2910497 dick cheneys ghost
dick cheneys ghost's picture

Ladies, what do you make of this?

 

The Myth of the Money Multiplier-Steve Keen

 

''I am sure I will be told that actual bank operations are far more complex than this, and that is true. But at a very parsimonious level, I think this post captures the basic principles of how banks endogenously create money, why the Central Bank has no choice but to accommodate that behaviour, and why as a result it will be a cold day in Hell before Ben Bernanke’s printing press causes inflation. Other factors are far more likely to do that long before the Federal Reserve’s pushing on a string has any impact.''

 

http://www.businessspectator.com.au/bs.nsf/Article/money-supply-economic...

 

Mon, 10/22/2012 - 16:25 | 2910630 El Viejo
Mon, 10/22/2012 - 16:42 | 2910707 Bay of Pigs
Bay of Pigs's picture

So what? I guess being dishonest about inflation is okay with you?

Let me guess, you are a deflationist and "strong doelarr" bull?

Mon, 10/22/2012 - 16:54 | 2910755 El Viejo
El Viejo's picture

So the charts I linked to above were dishonest??

I'm not a anything. I try to take each issue as it comes.

See rip van w.. below:

Mon, 10/22/2012 - 16:55 | 2910763 Bay of Pigs
Bay of Pigs's picture

Come on man,

"it will be a cold day in Hell before Ben Bernanke’s printing press causes inflation"

 That is misleading and dishonest analysis.

Mon, 10/22/2012 - 16:56 | 2910776 El Viejo
El Viejo's picture

Bens printing goes right to the FED penalty box. Would like to chat more, but gotta commute.

 

Mon, 10/22/2012 - 17:11 | 2910822 Bay of Pigs
Bay of Pigs's picture

Inflation is running somewhere near 8-10%. What are you talking about?

Mon, 10/22/2012 - 16:58 | 2910781 resurger
resurger's picture

hey bay!

I guess what the article ment is that when u create bubbles and they pop (Deleverage) that prevents a hyperinflation. which is true to some extent, becuase u know that the modus opernadi is CTRL+P to reinflate.

however, not everyone is in the business of equity and bonds, and who gets it the average joe!

but what its missing in my view is that at some point you will eventually lose the trust and the credit in the system (Of course before the US populace , the other countries)

example - Germany demanding their gold back and an audit, was that teh canary in the gold mine!

And fuck the dolllllllllar, its only good in the back markets.

Mon, 10/22/2012 - 16:45 | 2910725 catacl1sm
catacl1sm's picture

We're "under-consuming"? What a quaint idea. http://en.wikipedia.org/wiki/Underconsumption

 

You're a douche and a paid shill. The money the Fed has created is simply sitting on bank balance sheets to shore them up against deflating asset values (MBS's and shit like it). When it is release and velocity picks up, hyperinflation has a good chance of taking root.

Mon, 10/22/2012 - 16:58 | 2910786 HegelianDialectic
HegelianDialectic's picture

Viejo...No one is buying your straw man BS. Your article linked is complete malarky. Go hang out with Mish and his pals. Great job trying to muddy the waters though. Go back to your BLBS job would ya, we have serious problems to contend with and deflation is not one of them

Mon, 10/22/2012 - 17:16 | 2910832 Orly
Orly's picture

Deflation is the problem.  That is beyond obvious.  Otherwise, Dr. Bernanke wouldn't be wasting his time with all these shenanigans.

Mon, 10/22/2012 - 17:43 | 2910902 Bay of Pigs
Bay of Pigs's picture

There is nothing wrong with falling prices (deflation).

That isn't whats going on. Good grief. Are you drinking the Bernank's Kool Aid?

Mon, 10/22/2012 - 17:49 | 2910918 Orly
Orly's picture

That's exactly what is happening.  If home prices, with normal interest rates, were allowed to fall to where normal people could afford them, then there would be deflation in that asset class.

Banks wouldn't like that.

All manner of games are being played to make sure that house prices do not deflate, lest the banks (wink, wink...) would lose a ton of money and lose future income become of the lower cost of interest to the new homeowner (nudge, nudge...).

Get it now?

Mon, 10/22/2012 - 18:01 | 2910944 Winston Churchill
Winston Churchill's picture

TBTF don't give a rats arse about falling house prices.

Harare Ben is relieving them of any conection to housing values via the mbs purchasing.

The FedRes will not sue them like the ordinary RMBS ivestors are/will more.

There cess pool of fraud, and its contingent liabilies,  is being backfilled by the FED.

Mon, 10/22/2012 - 18:25 | 2911001 Bay of Pigs
Bay of Pigs's picture

I get it alright, but you sure as hell don't. 

Mon, 10/22/2012 - 18:42 | 2911042 Orly
Orly's picture

K.  Try it this way.

In order to create a "wealth effect" by re-inflating the stock market and get people to spend money and ostensibly heal the global economy, the Fed has to allow the banks to release all that pent up money they have in the form of various junk.  Otherwise, stock prices go down, no one feels any richer and there will be no spending going on.

If stock prices go down, there will be massive deflation in that asset class and the banks wouldn't like that, so...

____________

Seriously, it is so obvious.  Let me ask you...

If not trying to re-inflate delfating asset classes, then what is the Fed trying to accomplish by trading junk from the banks for real credit?

Mon, 10/22/2012 - 20:13 | 2911225 Matt
Matt's picture

Looks like mad deflation in Detroit; should be able to live there for $20 per month, if houses are under $6000:

http://www.youtube.com/watch?v=VGESPpI9MsM

The reason prices fall so low? As I see it, the municipalites want backtaxes owned to be paid, becuase they cannot afford to take writedowns since they already listed the taxes as revenues before they recieved them.

What is the Fed trying to achieve? I think it is trying to save the banks from themselves. With hundreds of trillions in CDS, if anything goes down, it all goes down. The problem is that since the 2008 crises, the banks have been piling on more risk rather than lowering it. Why would they do that? Because a bank is not a single, rational person, it is a hive of individuals all trying to make bonuses, with no concern for the future viability of the bank as a whole.

The Fed has a dual mandate, but it is not quite the same as declared:

1) target inflation at 1 to 3% based on CPI

2) prevent the TBTF banks from collapsing.

Mon, 10/22/2012 - 19:47 | 2911172 Mentaliusanything
Mentaliusanything's picture

Yes Orly that is the game that cannot be allowed to be played. Deflation destroys the asset holders. That will never be allowed.

only one problem that faces Ben Bernanke is .... you cannot create demand, you can only accomodate it but if the Plebs won't drink it your going to see this blow up in your face.

The game of Monopoly ends when the Banker hold all the assets and cash and the "players" are illiquid.

Then comes reset

Mon, 10/22/2012 - 20:09 | 2911218 Mentaliusanything
Mentaliusanything's picture

http://www.google.com.au/url?sa=t&rct=j&q=november%2021%202002%20ben%20bernanke%20speech&source=web&cd=1&cad=rja&ved=0CB8QFjAA&url=http%3A%2F%2Fwww.federalreserve.gov%2Fboarddocs%2Fspeeches%2F2002%2F20021121%2Fdefault.htm&ei=St6FUJ7vL6eviQezmYCoAw&usg=AFQjCNGJBmuEdQ7GWrXPLWYzzX59R2OxQA

The Bernanke Doctrine is being followed to the Letter. Profit from it. He has shown you his plans and he is not going to stray from it. The sickness of a Narcissist is that they never accept they are wrong. and so it goes

Mon, 10/22/2012 - 16:10 | 2910560 HegelianDialectic
HegelianDialectic's picture

What the fuck is wrong with you DCG, go spew that bullshit on Politico or Huffington Post.

Mon, 10/22/2012 - 16:28 | 2910643 dick cheneys ghost
dick cheneys ghost's picture

Steve Keens work has been posted on ZH many times in the past.

 

I never said i agreed with it as it makes no sense to me, but WTF do I know?

Mon, 10/22/2012 - 16:33 | 2910661 El Viejo
El Viejo's picture

With the boomers retiring when do you think there will be any aggregate demand in the foreseeable future??

I like Keen.  +1

 

Mon, 10/22/2012 - 16:52 | 2910757 LawsofPhysics
LawsofPhysics's picture

If they can retire, they still ned to support the kids living in the basement.  Let me guess, you think they won't go anywhere or eat anything as well.

Mon, 10/22/2012 - 16:12 | 2910571 Rip van Wrinkle
Rip van Wrinkle's picture

What he means by inflation is 'wage inflation'. He's spot on.

 

What you mean is price inflation which, on the basics of life, is going parabolic. You're spot on.

 

The result? Serfdom.

 

 

Mon, 10/22/2012 - 15:58 | 2910500 fonzannoon
fonzannoon's picture

who gives a shit. really. who the fk bought this market today? retail? if not then who. what a bunch of dumb shit.

Mon, 10/22/2012 - 16:03 | 2910526 malikai
malikai's picture

Retail are the ones dumb enough to have been selling into this.

Mon, 10/22/2012 - 16:07 | 2910548 CrashisOptimistic
CrashisOptimistic's picture

There is no retail.  Nor will there be ever again.

There are only computers.

For retail there is farmland, and in the end that will be the only thing with value.

Mon, 10/22/2012 - 17:43 | 2910906 malikai
malikai's picture

First by tax, then by regulation, and finally by force, farmland too will be destroyed by this self-consuming system.

Mon, 10/22/2012 - 16:07 | 2910549 fonzannoon
fonzannoon's picture

85 bil unsterilized forever. this should make for a difficult gold market going forward.

Mon, 10/22/2012 - 16:17 | 2910599 TheSilverJournal
TheSilverJournal's picture

Min. $85B/month. It'll be increased again before summer begins.

Mon, 10/22/2012 - 16:23 | 2910627 Orly
Orly's picture

You mean later this week...

Mon, 10/22/2012 - 16:02 | 2910504 Ineverslice
Ineverslice's picture

 

aapls for EVeryone!

what the fuck...

Dear God, Pls let me live long enough to see the stampede towards the exit and.....

Mon, 10/22/2012 - 17:29 | 2910854 viahj
viahj's picture

ever experience both dread and relief at the same time?  i haven't, yet.

Mon, 10/22/2012 - 16:00 | 2910507 Pairadimes
Pairadimes's picture

Fuck you, Bernanke!

Mon, 10/22/2012 - 16:17 | 2910508 JustObserving
JustObserving's picture

US debts and unfunded liabilities grow by $8.4 trillion a year.  To achieve perfect balance, Bernanke has to buy $700 billion a month - then all our problems will be solved.  We can even send 50 tons of gold to Germany per year. And afford new wars with Syria and Iran. Not to mention 30,000 drones to achieve total domestic peace and harmony. And banksters getting their multimillion dollar bonuses.  We can also afford a billion or two for stalwarts like Blankfein (doing God's work) and Jamie Dimon (It's a free fucking country).

Maybe a debt forgiveness of $10 trillion will also do the trick.

 

Mon, 10/22/2012 - 16:02 | 2910522 newworldorder
newworldorder's picture

Another worthwhile article Tylers. Great for us to know but for the great unwashed - not so much.

This will not have any impact on the majority of our fellow citizens. They do not care that the FED has a balance sheet, and much less what is in it and at what amount. As long as the Great Oz does what he does behind the curtain, who cares?

Mon, 10/22/2012 - 16:03 | 2910529 razorthin
razorthin's picture

Fukk you Asshole Chairsatan.  You should be smart enough to know that a vigilant new breed of "dumb money" is waiting to get its price to transfer into retirement equity funds.  Price discovery applies even in a phony market.  Go ahead and hang yourself.

Mon, 10/22/2012 - 16:04 | 2910536 FuzzyDunlop21
FuzzyDunlop21's picture

Suck my dick and cock Bernanke

Mon, 10/22/2012 - 16:31 | 2910650 edifice
edifice's picture

You have two? Yikes...

Mon, 10/22/2012 - 16:37 | 2910680 machineh
machineh's picture

He's luckier than a two-dicked dog.

Mon, 10/22/2012 - 16:05 | 2910537 SmoothCoolSmoke
SmoothCoolSmoke's picture

Buck Fernankie realizes the QEternity crap has cost him his most important market levitating weapon......the rumor of more QE to come!  So, he' s get'n that fixed.   What a MoFo.

Mon, 10/22/2012 - 16:49 | 2910746 catacl1sm
catacl1sm's picture

You're right, the rumor of QE was way more effective than actual QE. He blew his wad before people even thought he was just crying wolf. Dumbass.

 

and. FUCK YOU BERNANKE

Mon, 10/22/2012 - 16:09 | 2910538 Aegelis
Aegelis's picture

In Algebra II, High School, I witnessed an amazing thing.  With our graphics calculator, our teacher has us put in a function that started at 0 and go to 'infinity' but over time it came back from 'infinity' and returned to 0.  To this day I have a hard time wrapping my head around how, but this article helps demonstrate how we can borrow to 'infinity' then end up with nothing.

Mon, 10/22/2012 - 16:05 | 2910539 resurger
resurger's picture

lol this is becoming a fucking joke!

Am serious, a JOKE!

Mon, 10/22/2012 - 16:14 | 2910579 jomama
jomama's picture

funnier still, most americans don't even know/don't care.

Mon, 10/22/2012 - 16:06 | 2910540 ziggy59
ziggy59's picture

Ben got the idea from Buzz Lighyear ..
Tto Infinity and Beyond

Mon, 10/22/2012 - 16:08 | 2910550 Xue
Xue's picture

Here is what Dr Evil has to say:

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

Mon, 10/22/2012 - 16:09 | 2910557 Kaiser Sousa
Kaiser Sousa's picture

dow just recovered 100 point loss in the last hour of trading....

all completely normal and explainable...

FUCKING BULLSHIT!!!!!!!!!!!!!!!!!!!!

 

Mon, 10/22/2012 - 16:14 | 2910582 malikai
malikai's picture

Actually it is completely normal and explainable.

Mon, 10/22/2012 - 16:20 | 2910609 Kaiser Sousa
Kaiser Sousa's picture

Explain away then....

and while ur at explain how the pattern has been consistently played out over the last 2 years...

then explain the coincidence at how fucking bernanke explicitly states he wants to force muppets into the debt coupon dollar denominated equities and days like today...

u have the floor....................

Mon, 10/22/2012 - 16:31 | 2910658 Orly
Orly's picture

QE 4.5 will be announced on Wednesday.  They're going to buy up everything in sight and wouldn't surprise me if there was something to do with converting muni-bonds to fed paper?

Don't know, jus' sayin'.  But it's going to be big.  If my charts are correct, the EURUSD should shoot the moon and come to a rest about 1.384.  Make sense?  Absoultely not but the charts don't lie and something ginormous is in the offing and soon.

Either that, or they're going to allow the collapse of the EURUSD pair to its normal channel about 1.16 but for some reason, they are absolutely terrified of this happening, so it ain't gonna happen.  Seriously, I wish I knew why there is a morbid fear of the Euro dropping below 1.24.

Mon, 10/22/2012 - 17:05 | 2910800 resurger
resurger's picture

i have studied that pattern in Normatology 101

yup, its normal.

Mon, 10/22/2012 - 16:09 | 2910558 devo
devo's picture

Benjamins Bernanke

Mon, 10/22/2012 - 16:10 | 2910561 Misean
Misean's picture

I'm long 0's.

Mon, 10/22/2012 - 16:11 | 2910564 sosoome
sosoome's picture

"Eternity" doesn't seem to last long anymore.

Mon, 10/22/2012 - 16:14 | 2910580 Misean
Misean's picture

Neither does a Benjamin.

Mon, 10/22/2012 - 16:30 | 2910647 edifice
edifice's picture

Aaaand, it's gone...

Mon, 10/22/2012 - 16:34 | 2910669 Orly
Orly's picture

You're very clever.

;)

Mon, 10/22/2012 - 16:13 | 2910572 mr. mirbach
mr. mirbach's picture

Bernake rumors more bank bailouts and the DJIA ramps more than 100 pts from the day's low to close green? 

 

Inconceivable...

Mon, 10/22/2012 - 16:13 | 2910575 This is the end
This is the end's picture

The stealing will continue...until it cannot. They will print, threaten to print and promise to print devaluing our money to prop the system up...until they cannot. Today is another powerful message to us all that the end is not here yet.

Mon, 10/22/2012 - 16:13 | 2910578 loveyajimbo
loveyajimbo's picture

Judas, is this clown the Anti-christ?!!??  Or is it Obama?  Twin satan's whelps... with Geithner as a demonic weasel imp and Holder as the devil's douchebag??  Ms. Cutter as the Bride of frankenstein... and "creepy" Crawley as the devils dietician...  Excuse me, I need more meds...

Mon, 10/22/2012 - 16:15 | 2910586 jomama
jomama's picture

you'd need meds to believe those fairy tales about demons and angels.

Mon, 10/22/2012 - 16:16 | 2910592 ptoemmes
ptoemmes's picture

Maybe a GOOGolplex?

And I learned that GOOGleplex is GOOG HQ!  Imagine that.

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

Mon, 10/22/2012 - 16:16 | 2910593 This is the end
This is the end's picture

I liked the nice message with AAPL to anyone doubting the Fed these days. You want to take AAPL down we will take it right back up every tick you sent it down. With these sociopaths running things (Bernanke, Draghi) they take it personally like anyone is actually shorting against them. Listen to Draghi threaten the markets when he speaks.....it is like an adult threatening little 3 year olds not to mess with him. Dude, no one is shorting anymore it is just there is no one left to buy except you. You have met the enemy and it is you.

Mon, 10/22/2012 - 16:44 | 2910714 machineh
machineh's picture

Bernanke's got a 'Print$$$' app on his new iPad mini.

So he doesn't have to go to the office when he gets those panicky 2 a.m. calls from Draghi.

Bernank can print in his bathrobe, from the privacy of his boudoir. iMagic!

Mon, 10/22/2012 - 19:46 | 2911171 lotsoffun
lotsoffun's picture

you got to give him a lot of credit.  he's got EVERYBODY behind him.  this isn't a DSK situation.  nobody got nothing on this guy.  he's clean as a whistle - he's 100% doing everything he can to help america.  what does the say, what does that tell you.  everybody is behind him.  and who ever is running the show, he's the wizard at the curtain.  obama is peanuts, monkey food.

bennie is on the face of it running the USA

 

Mon, 10/22/2012 - 16:16 | 2910594 debtor of last ...
debtor of last resort's picture

You will get your foodstamp bitch. In due time.

Mon, 10/22/2012 - 16:17 | 2910602 Voltaire
Voltaire's picture

Ben shalom and all these political and financial criminals should be hanged high. 

Mon, 10/22/2012 - 16:46 | 2910727 machineh
machineh's picture

Isn't 'shalom' the hebrew word for 'charlatan'?

Mon, 10/22/2012 - 16:49 | 2910749 knukles
knukles's picture

Shalom is going down the black high risk slippery slope drunk on one ski.

Mon, 10/22/2012 - 16:20 | 2910610 Caracalla
Caracalla's picture

I loaded up on AGQ this morning

Mon, 10/22/2012 - 16:21 | 2910618 SillySalesmanQu...
SillySalesmanQuestion's picture

Where's my QE Ben?!!!  Oh... I forgot... I am not a bank. FUCK YOU Ben Bernanke.

Mon, 10/22/2012 - 16:23 | 2910626 Arthur Two Shed...
Arthur Two Sheds Jackson's picture

This will not eternity well.

 

 

Mon, 10/22/2012 - 16:30 | 2910653 RobinHood73
RobinHood73's picture

Thsi is beyond ridiculous. The ramps are in direct correlation to the level of policymaker desperation: Its like , a 2.5% ramp wont get the muppets to bite, maybe 4% is the magic?

Mon, 10/22/2012 - 16:33 | 2910655 Dr. Engali
Dr. Engali's picture

You have to wonder how stupid the market participants are. Ben is doing everything except shouting out on tv....; " look you stupid fuckers can't you see I intend on blowing up the dollar?!" I guess that's his next move.

Mon, 10/22/2012 - 17:42 | 2910898 Antifederalist
Antifederalist's picture

WORD

Mon, 10/22/2012 - 19:39 | 2911159 lotsoffun
lotsoffun's picture

the market participants are still believing that this ok because they are believing us dollar will still be the best game in town - compared to owning lira, or drachma, or irish punts.  or whatever.  and still seems to have the biggest military to back it up.

go ask any of the big empires how that worked out for them in the long term.

 

Mon, 10/22/2012 - 16:36 | 2910687 blindman
blindman's picture

eternity is a state of mind, quantity is
merely a subdivision of pizza slices. where the
two meet, you can have anchovies or broccoli,
there is always a choice.
but seriously, the fed has no choice, it must
destroy the dollar while publicly being the
keepsake of its integrity, big time circus tent
shit, after all, these are professionals we
entrust to keep us safe and sound. pedigreed
and all with famous names and all....
enjoy the show and the treats but be sure to
remove yourself from the grounds before they
set it on fire or begin the "load out".
.
Jackson Browne - The Load Out / Stay - Live 1978
http://www.youtube.com/watch?v=jtuvXrTz8DY

Mon, 10/22/2012 - 16:38 | 2910690 drivenZ
drivenZ's picture

The balance sheet and MBS included unwinds itself for the most part since they're amortizing securities. The question is whether the traditional securitization and financing markets will pick up the slack. The fed is trying to keep things(housing prices, stocks etc) above stall speed. And so far they've done it but who knows what's around the corner. If the fiscal cliff/slope hits they will have to step up the purchases, no doubt.   

Mon, 10/22/2012 - 16:47 | 2910732 sbenard
sbenard's picture

Last week, in their quarterly review, Drs Van Hoisington and Lacy Hunt showed a compelling series of charts that showed nearly perfect correlation between QE and inflation of food, energy, and S&P 500 futures prices. When QE ended, they declined again. They then showed a second chart that showed a nearly perfect inverse correlation between QE and disposable incomes. With each QE, inflation soars and the cost of that inflation impoverishes the middle class.

Bubbles Bernanke is sewing the seeds of inflation the likes of which we haven't seen since the Volcker days -- and like much worse. One wonders if the Chairsatan has a dark desire to destroy rather than just an interminable hubris that leads to irreparable harm!

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