The 'Other' Confidence Indicator

Tyler Durden's picture


Presented with little comment, but as we head into another FOMC meeting, we remind all those 'recovery is just around the corner'-ites that the market's expectations for how long the Fed will be on hold has never been higher at around 35 months - certainly doesn't suggest an expectation of things getting better in reality any time soon.



Chart: BofAML

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Tue, 12/11/2012 - 18:00 | 3053328 Stackers
Stackers's picture

You sure thats not years on the left hand scale ?

Tue, 12/11/2012 - 18:07 | 3053351 buzzsaw99
buzzsaw99's picture

+1 - 35 years is more likely imo

Tue, 12/11/2012 - 18:15 | 3053385 Boris Alatovkrap
Boris Alatovkrap's picture

"how long the Fed will be on hold has never been higher at around 35 months"

Duration of Mismatch is central problem of FOMC. Raise Treasury rate, Bank is lose reserve capital in fleeing deposits, further is contraction of credit. Shadow credit is also contraction, so currency is to stop to flow and banking system is SOL.

ZIRP Forever!

Wed, 12/12/2012 - 09:18 | 3055265 midtowng
midtowng's picture

But wait! I read that the Fed has an exit plan. LOL

Tue, 12/11/2012 - 18:02 | 3053334 SheepDog-One
SheepDog-One's picture


Tue, 12/11/2012 - 18:09 | 3053354 Bay of Pigs
Bay of Pigs's picture

End of 2015 then?

And a hefty .25% hike.

Tue, 12/11/2012 - 19:02 | 3053505 Dr. Engali
Dr. Engali's picture

There will never be a rate hike again. Any rate hikes will blow up the fed's balance sheet.

Tue, 12/11/2012 - 22:05 | 3054296 malek
malek's picture

Exactly, and not just the fed's.

ZIRP will end when the currency implodes, and not one day sooner.

Thu, 12/13/2012 - 02:57 | 3058574 Boris Alatovkrap
Boris Alatovkrap's picture

Bernanke is talk smart talk, Dual Mandate, blablablab, but is real situation, how do you say, "fool in". Federal Discount Rate permanently is ZERO - cannot go up or will break bank, but is cannot go lower. Lend long, borrow short, cross line and can't turn back.

Tue, 12/11/2012 - 18:14 | 3053373 Mister Ponzi
Mister Ponzi's picture

You forgot to mention that the chart is in log scale.

Tue, 12/11/2012 - 18:32 | 3053423 Uber Vandal
Uber Vandal's picture

I wonder how the Bank of Japan's chart looked since September, 1995?

FYI, they have not had an interest rate above 3/4 of 1% since that time, or 17+ YEARS of ZIRP.

Tue, 12/11/2012 - 19:03 | 3053513 ball-and-chain
ball-and-chain's picture

Let's be honest.

We're in a depression.

We've been through the biggest bubble in human history.

It's gonna take a decade to dig ourselves out.

Sucks.  But thems the facts.

Tue, 12/11/2012 - 19:07 | 3053522 JackT
JackT's picture

A decade from now or the one that has already passed?

Thu, 12/13/2012 - 03:01 | 3058578 Boris Alatovkrap
Boris Alatovkrap's picture

Decade passed is dig hole, next decade is dig out.

Tue, 12/11/2012 - 20:34 | 3053837 Hohum
Hohum's picture

ZIRP & QE are covering up the fact that industrial society cannot pay for itself.  Better hope for some nuclear fusion, boys!

Tue, 12/11/2012 - 20:53 | 3053919 haskelslocal
haskelslocal's picture

You mean Eugene? He not wit us no mo.

Wed, 12/12/2012 - 03:34 | 3054943 TulsaTime
TulsaTime's picture

ZIRP is the final cancer the Fed has bequeathed this system. So no risk exists at the fed to corp level anymore? Where does anything expand in a peak/full world?

Nobody has a way to manage a contracting system, yet we have declines to deal with in water, net available energy, natural resources, etc.. All we hear from anyone is growth, and it is not forthcoming.

Wed, 12/12/2012 - 08:57 | 3055213 Aegelis
Aegelis's picture

I think I've ridden on this rollercoaster before.  I know what happens when we get to the top.

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