FOMC Does Exactly What Market Told It To Do

Tyler Durden's picture




 

Just as consensus demanded expected, the FOMC transformed sterilized 'Twist' into unsterilized QE4 in addition to QE3's MBS buying and lowered economic forecasts - dropping calendar-based rate guidance unchanged with a shift to "Evans-Rule"-like threshold-based guidance. High inflation, forget it; 'lower' unemployment, naah; market wants 'moar' so market gets 'moar'. $4 Trillion balance sheet here we come (check to Draghi's OMT and Spain or EUR 'richness' crushes hopes of recovery).

  • *FED BOOSTS QE WITH $45 BILLION IN MONTHLY TREASURY PURCHASES
  • *FED TO KEEP BUYING MORTGAGE BONDS AT PACE OF $40 BLN PER MONTH
  • *FED SAYS MONTHLY PURCHASES TO TOTAL $85 BLN
  • *FED ADOPTS ECONOMIC THRESHOLDS FOR POLICY TIGHTENING
  • *FED: RATES TO STAY EXCEPTIONALLY LOW WITH JOBLESS ABOVE 6.5%
  • *FED: RATES TO STAY LOW WITH INFLATION SEEN AT 2.5% OR LESS

Disappointingly for AAPL investors, there was no explicit decision to monetize mini-iPads (or their own subsidized student loan debt in the ultimate reacharound).

Pre- And Post- Levels (post = 15 mins after news) - small moves in general

 

 

Redline comparison with October statement:

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Wed, 12/12/2012 - 13:34 | 3056330 SoNH80
SoNH80's picture

Charge it!

 

 

Wed, 12/12/2012 - 13:34 | 3056340 Transformer
Transformer's picture

Here we go!!

Wed, 12/12/2012 - 13:38 | 3056366 camaro68ss
camaro68ss's picture

by my calculations and based on 1/2 lifes. QE12 will start around July 15th 2013. QE13 will then start on july 16th 2013. We got 7 months

Wed, 12/12/2012 - 13:42 | 3056373 fuu
fuu's picture

$32,473.21 per second...FOREVAR!

Wed, 12/12/2012 - 13:44 | 3056407 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is not remember for QE, one day is wake up and bank account balance is double. QE2, is double again. QE3, QE4, is wake up for bank account double. No, wait, is dream only, but dollar (or ruble) is now 1/8 value. Next life, Boris is born a Rothschild, tired of life as serf.

Wed, 12/12/2012 - 13:49 | 3056429 TruthInSunshine
TruthInSunshine's picture

 Even in "sovereign" Russia, Rothschild owns Putin!

Wed, 12/12/2012 - 13:55 | 3056463 kahunabear
kahunabear's picture

When do the huge Charles Evans statues and images go up in the public squares?

Wed, 12/12/2012 - 14:27 | 3056466 fuu
fuu's picture

Kitco we have liftoff. Err umm.

Wed, 12/12/2012 - 14:28 | 3056616 icanhasbailout
icanhasbailout's picture

Inflation at 2.5%, eh?

 

My benchmark 99 cent box of pasta from two years ago is now at $1.65.

 

As there's been no particular shortage of that product relative to any other, I'd say actual inflation is already running at near 30% y/y.

 

 

Wed, 12/12/2012 - 15:56 | 3056716 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is benchmark by dilution of basic commodity like Vodka.

2005, Vodka to Ethylene Glycol 10%

2007 - 25%

2009 - 55%

...Today, Boris is just drink Ethylene Glycol.

Wed, 12/12/2012 - 15:01 | 3056749 The trend is yo...
The trend is your friend's picture

Have you adjusted the numbers for the reduced quantity in the box?  Food Inflation is probably running higher

Wed, 12/12/2012 - 16:20 | 3057105 icanhasbailout
icanhasbailout's picture

The box is still 1 lb. of pasta.

Wed, 12/12/2012 - 16:27 | 3057123 GolfHatesMe
GolfHatesMe's picture

No it isn't, neither is coffee nor ice cream  time for Tiny utensils

Wed, 12/12/2012 - 16:42 | 3057172 Esso
Esso's picture

A pound of smoked sausage went from 16 to 14 to 9 ounces double-quick.

Wed, 12/12/2012 - 16:54 | 3057225 TruthInSunshine
TruthInSunshine's picture

lmao...Kindergarten classes being taught the "new math" as we speak, across the country

"1 pound equals 12 ounces."

Wed, 12/12/2012 - 17:09 | 3057280 icanhasbailout
icanhasbailout's picture

I'm Italian enough that they couldn't reduce the amount of pasta in a box without me noticing. I've been attentive to changes in product sizes; the great thing about the pasta benchmark is that the product size has not changed, which is why it reveals a level of inflation obscured by product size changes in other products.

And yes, I've noticed that the tricolore pasta is indeed down to 12 oz. but that's not my benchmark.

Wed, 12/12/2012 - 15:41 | 3056920 YuropeanImbecille
YuropeanImbecille's picture

What are the gooks saying about this? What will they do with their 3 Trillion joobux?

Wed, 12/12/2012 - 13:51 | 3056441 EscapeKey
EscapeKey's picture

It's a little known fact that the Fed can print unlimited amounts of money and it has no repercussions whatsoever. That's what the history of John Law taught us. - Cliff 'Bernanke' Clavin

Wed, 12/12/2012 - 13:54 | 3056459 Caviar Emptor
Caviar Emptor's picture

Love the Cheers reference. I agree that there are no repercussions to uninhibited money printing, growing, harvesting and chopper-dropping. It  stimulates hardons and kindles the inner yuppie in all of us.

Wed, 12/12/2012 - 18:48 | 3057623 hannah
hannah's picture

didnt work out too well for woodie when him and sam invested with the rich guys...

Wed, 12/12/2012 - 23:31 | 3058306 eatapeach
eatapeach's picture

I'll have a Screaming Viking, please

Wed, 12/12/2012 - 13:57 | 3056471 Beam Me Up Scotty
Beam Me Up Scotty's picture

Boris, pass the Wadka please.

Wed, 12/12/2012 - 14:03 | 3056513 CrashisOptimistic
CrashisOptimistic's picture

The only astonishing thing about all of this is that people walk around pretending everything is fine and this is all normal.

Wed, 12/12/2012 - 14:13 | 3056553 EscapeKey
EscapeKey's picture

The vast amount of people out there want to swallow the blue pill.

Wed, 12/12/2012 - 14:26 | 3056610 odatruf
odatruf's picture

Exactly. Even if you gave them a placebo, they'd pretend to have taken a blue one in hopes of faking it 'till they make it.

 

Wed, 12/12/2012 - 15:08 | 3056777 Luckhasit
Luckhasit's picture

"If i don't know about it, then it can't hurt me."

Wed, 12/12/2012 - 14:47 | 3056691 JPM Hater001
JPM Hater001's picture

We got seven month "Sir".  I'm sure you didnt mean to disrespect the Powers That be.

Wed, 12/12/2012 - 13:40 | 3056379 eclectic syncretist
eclectic syncretist's picture

First we print the money that belongs to you, then we loan it to you at interest.  The best part it, we made it all legal.

- B.S. Bernanke

Wed, 12/12/2012 - 13:44 | 3056408 rqb1
rqb1's picture

Well said, I remember when I first understood that statement.  Great business they got there.

Wed, 12/12/2012 - 13:56 | 3056464 camaro68ss
camaro68ss's picture

a 30% increse in printing from there last Announcement in September and the markets didnt even bat an eye. We are so F***ed

Wed, 12/12/2012 - 14:27 | 3056614 odatruf
odatruf's picture

If they were actual markets, they would have trembled. That they didn't is simply more proof of their corruption.  As if any were needed...

Wed, 12/12/2012 - 14:45 | 3056682 JPM Hater001
JPM Hater001's picture

This is just stupid.

Get it over with already.

Wed, 12/12/2012 - 14:52 | 3056708 JPM Hater001
JPM Hater001's picture

If you arent familiar go watch the smoke filled room study.

In short,

Test One:One Female-Sitting in chair filling out a Survey-smoke comes under far door.  Out in less than 30 seconds.

Test Two: 7 or 8 Confederates and 1 Female- Sitting in Chairs all filling out surveys- Cue smoke under far door.  No one said anything and the lady didnt leave for over 20 minutes.  I gotta think we're close to that threshold.

Wed, 12/12/2012 - 14:57 | 3056735 XitSam
XitSam's picture

I've seen similar studies where the other people assured the test subject that everything was fine and not to worry. Test subject believed them.

Wed, 12/12/2012 - 13:51 | 3056450 EscapeKey
EscapeKey's picture

Meh, it was legal long before Bernanke existed.

Besides, he is nothing but a puppet in their little game.

Wed, 12/12/2012 - 14:05 | 3056520 ParkAveFlasher
ParkAveFlasher's picture

The USD is simply a license to trade with US corporations and citizens and traffic in American goods.

It is only license.  This is why its meaning is plastic - it is at once commodity, asset, liability, money, currency, etc.   It is all these things in latency, proxy, and shapelessness. 

Gold is not a "money substitute".  Instead, Fiat is a substitute for reality.

Wed, 12/12/2012 - 14:05 | 3056521 vast-dom
vast-dom's picture

JAIL THE FED!

Wed, 12/12/2012 - 14:53 | 3056719 JPM Hater001
JPM Hater001's picture

This time I actually mean it...

Tell me how you really feel.

Wed, 12/12/2012 - 13:36 | 3056352 slaughterer
slaughterer's picture

Quick, someone here tell me, how do we keep the unemployment numbers up?  

Wed, 12/12/2012 - 13:38 | 3056367 derek_vineyard
derek_vineyard's picture

if every country prints money...isn't it the country that prints the highest % going to be the one getting the worst inflation?

Wed, 12/12/2012 - 13:56 | 3056461 Caviar Emptor
Caviar Emptor's picture

Actually, the country with the fastest printing press will win because it becomes the richest country , Silly.

Wed, 12/12/2012 - 14:20 | 3056592 NaiLib
NaiLib's picture

FED...BOE...ECB...BOJ...PBOC...SNB... they're all printing more and more.

Wed, 12/12/2012 - 13:39 | 3056369 Quintus
Quintus's picture

Simply raise the Labor Participation Rate. 

Wed, 12/12/2012 - 13:49 | 3056435 TheSilverJournal
TheSilverJournal's picture

So, extend unemployment benefits and reopen unemployment benefits up to those who have already used up their unemployment?

Wed, 12/12/2012 - 13:56 | 3056467 CPL
CPL's picture

Yes.

 

Like the last five extensions starting in 2008.

Wed, 12/12/2012 - 13:57 | 3056468 Caviar Emptor
Caviar Emptor's picture

Or hold a mandatory monthly jobs fair at the mall where EBT bonus cards get distributed

Wed, 12/12/2012 - 13:58 | 3056477 rubearish10
rubearish10's picture

Which also implies no spending cuts on UE benfeits since that would reduce the LPR too! What Fiscal Cliff?

Wed, 12/12/2012 - 14:04 | 3056514 HD
HD's picture

Unemployment above 6.5%?  HILARIOUS. They just gave themselves cover to print FOREVER...

Wed, 12/12/2012 - 13:39 | 3056370 TruthInSunshine
TruthInSunshine's picture

More accurate unemployment numbers will thus now be reported, while CPI will thus now be even more tortured.

Wed, 12/12/2012 - 13:43 | 3056402 SoNH80
SoNH80's picture

If they are off by 1% GDP deflator right now, we are in recession.  They are likely off by at least 2%.  We are in deep doo-doo, as George Herbert Walker Bush Walker Preston Bush IV would say.

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