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Is The Fed Pushing Too Hard?
It may seem like a rhetorical question but Citi's credit stretgy team fears that the Fed may be pushing a bit too aggressively at this stage. The chart below shows monetary policy (defined as the funds rate and the Fed's balance sheet) vs. a "market health" index comprised of economic factors, systemic risk metrics, and valuation metrics. Historically the two have tracked well, but not recently. The health index is firming, but policy is getting easier, not tighter. Is the Fed out of its depth here, or do they know something we don't?
Source: Citi
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ALL YOUR BONDS ARE BELONG TO US...
when they start printing to buy gold; hyperinflation begins.
but, for now, it's like a big head fake to get us to buy stocks and golds while the banks sell, before we go off the cliff; truth is... the FED can't buy any new treasuries from the gov cause the gov can't sell'm until the debt cieling is lifted; which ain't even parts of the cliff baby.
i bets gold cause i know how humans are; but, i'm not stupid, i'm waiting for the big sell off in paper golds which always comes at the end of the year; and if we go off la-cliff, maybe into next year as well.
The Fed knows that China is drastically reducing Treasury purchases. The big banks need the liquidity to keep buying treasuries in China's absence to fund this beast, otherwise confidence is gone and the ponzi gig is up.
yep; and when the ceiling is raised again; probably to 18 trillion; maybe 20 if bama gets lucky; the fed will start to buy those too; and maybe even increase to say 100 billion a month.
"Is the Fed out of its depth here, or do they know something we don't? "
- Out of its depth: Why? ENDOGENEITY
James Rickards gave an excellent video at CapitalAccount on youtube yesterday where he said that China is heavily buying gold so if the dollar tanks and they lose out on the treasuries they still have, they gain on their gold exposure. He also said as we've heard before, the official holdings are likely to understate China's actual holdings of gold. Perhaps China will simply get out of its treasuries by letting them mature and using the cash to buy US assets going forward such as they just did with the AIG purchase?
What if China's total holdings of treasuries are a mirage and they don't have to give a damn? Considering how everything else is rigged, why not the biggest, boldest lie? I base this twilight-zone theory on how reserved they've been. With the dollar heading to where it is, and the heavy foot of the Fed on the accelerator of debt - I'd be making a lot more noise if I had "skin" in the game. Wouldn't you?
What a headline that would make - "Treasuries Rigged - Anonymous Chinese Official Says"
"Is The Fed Pushing Too Hard?"......let me put it this way; Some fucking KY would have been nice!
The Chinese aren't gpoing to make a stink about the Treasuries they hold. They don't want to crash the UST$ market. They'll just reduce treasury buying to as little as they can get away with...and virtually all of that will be on the short end...TBills to 2Yr stuff. And as said above, they'll buy whatever hard assets they can, when they can. The debt they have to hold on to will diminish in "real' value to the point it won't be significant relative to their economy. The Chinese will, in effect, just "write it off".
china doesn't need our paper now-- the imp/exp trade has compressed dramatically...
http://www.ustr.gov/countries-regions/china
QE 4152 anyone???
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No, all the economic numbers are totally raw, accurate, transparent, and immediately available to everyone. 'Tis a free country. Sun shining everywhere. Efficient markets wherever you look.
What the FUCK is Bernanke thinking? Linking Interest Rates to Unemployment Rates?? When we all know they fudge the Unemployment Rate?
It will be more accurate if he linked interest rates to Gun Sales or to # of people on Food Stamps.
They figure that they are stuck with structural unemployment, so interest rates will never rise anyway.
The policy feedback, justifies the policy in a self reinforcing cycle.
Clever bankster bullshit as per normal..
They are caught in an exponential trap. They must print to keep the country solvent, but that's just the start of it. They also have to keep printing exponentially more to keep the economy "appearing alive", else, the currency, the US economy, the US military power and US empire suddenly collapses. The tulip bubble, Weimar, and Rome have got nothing on us. When the US goes down, it's going to happen in about 10 seconds, not years, or hundreds of years. The US empire could collapse so fast, drones would just fall out of the sky.
long overdue.... but, that alone will not solve current world issues... the people responsible for destroying the United States from the inside will simply move on to other hosts and repeat the process. they must be rooted out and dealt with.
Yes, people also forget that the Fed is a private bank with shareholders and owners. People should ask themselves what do many private banks do, in the interest of their shareholders, when they become or see insolvency on the horizan. Interesting times.
After US hegemony is over, every country in the world is going to want a piece of the guilty US officials, and those implicated in these war crimes. Think of the Israeli Mossad Nazi hunters, but from fifty countries, not just one. There will be no place to hide for them.
that's what worries me... If the leaders in the US understand that and the implications, they won't go quietly, they'll start WWIII.
The exponential function is a mo fo, and like inflation, 99% of people are as clueless about it as the original snorgtees girl!
"Is the Fed pushing too hard...?" That's what pushers do
Why should any small group people possess the power to price money for millions of people?
This is starting to sound similar to a story of a certain captain hunting a whale
"When we all know they fudge the Unemployment Rate?"
There is this little thing called U-6
I think Don Draper said 'QE to Infinity' sounds really bad - that makes people feel uncomfortable - it makes them want to buy gold and silver.
We need to counter this says Don - how do we say QE to Infinity without saying it - we say QE till the job rate is under 6.5% - we know that will only happen if there is some sort of miracle - we all know the QE is never-ending (until it is forced to end by implosion) - but of course the public is eternally optimistic - so they will believe the bullshit
And so this is how Ben announces America is on the path to becoming Zimbabwe - without causing a panic and a massive run on PM
"market health"??
What the fuck is that?
It's similar to when they examine your prostate...
the RHS is WRONG. The Fed is, according to adjusted RHS, not doing enough and yet Fed is impotent anyway to affect said adjusted RHS. Therefore, the Fed is making matters worse, and not by insignificant factor.
Only in this instance, they are not using their finger.
It refers to the amount of money being stolen by the statists.
-noun, -- an artificial personification of broken ponzi financial markets designed to convince stupid lemming retail investors that the economy is an organism recovering from a mild cold instead of a calculated system designed to confiscate as much wealth as possible from society and transfer it to the pockets of financial oligarchs. Ex. I told my clients that the market health was looking up and they should buy more loaded funds from me immediately.
brilliant rp.
+1
it's a lot like the word "fuck" and its relatives. Strategically, it can be a noun, a verb, an adjective...
People validate their existence at these banks by making things more complex and new ways of finding value.
But it sucks to be in tier 1 capital. They'll be showing everyone the door.
funny, market "health" is near all time highs....change the chart boyzzz
The fed knows we are going off the cliff. All these pundits are explaining away the market going down by saying the fed will have to raise rates sooner than expected because of the UE rate going down. Once we go off the cliff we will shoot right back above 8% no problemo. The repubs will take the blame and 6.5% will seem years away again so everyone will know QE is here to stay.
Not necessarily. Need to understand how unemploy keeps dropping. More poeple leaving labor force. More people getting on disability or welfare. Trend still goign up meaning unemply rate will keep dropping with full time jobs becoming part time as well.
I understand how unemployment keeps dropping. When we go off there will be fresh layoffs.
Didn't you see the hard data from this week's labor report. Not a single state had fewer claims than last week, but initial claims still went down.
Real data showed massive job losses last month, yet 136k jobs were created.
The data manipulation must continue because "improving" data suports the stock market which in turn allows insiders to sell stock at higher levels so they can derive income from it.
You don't expect directors to actually do work for a living do you?
I think state data is for the week previous.
People don't "dissappear", they still need to eat and many are engaging in work and accepting other medians of exchange. Funny, you'd think that the Fed was trying to kill the FRN or something.
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"No, all the economic numbers are totally raw, accurate, transparent, and immediately available to all. 'Tis a free country." /sarc
There, fixed it for ya!
DC needs to be FED ... is it a push or a pull?
Yes, intentionally. They see the writing on the wall. To reference another poster in another thread, time to find out "who's bitch is who's".
Just like the conversation from yesterday. The point of diminishing returns has been reached (or is very close). The game has to change now. Something funny must be coming.
Another poster told me that "the Fed is Congress' bitch, not the other way around". Wake me when Congress tells the Fed to fuck off and stops paying all that fraudulent interest. Ron Paul would agree with the poster, now remind me, how did the GOP treat Ron and his delegates again?
Fed Easing Pushing Investors to Buy Junk Bonds, Stokes Risk of Bond Reckoning, Benefits the Super-Elite At The Expense of The Little Guy, Fuels Fears of US Currency War, Increases Inequality And Fails To Stimulate The Economy.
http://investmentwatchblog.com/fed-easing-pushing-investors-to-buy-junk-bonds-stokes-risk-of-bond-reckoning-benefits-the-super-elite-at-the-expense-of-the-little-guy-fuels-fears-of-us-currency-war-increases-inequality-and-fails/
Someone tell Bernanke if he pushes too hard he'll get hemorrhoids. or a prolapsed anus.
Is the Fed pushing too hard?
Pushing on a string never worked in the first place. Funny that a connected TBTF posed the question though.
Don't worry, he is already well-positioned in the asian currencies that will make up the new reserve basket with gold backing. Once that trade is public (and no longer profittable), you will get your chance.
Here we go with the usual b/s worthless afternoon tapebombs! Fiscal cliff crapola!
The TBTF banks simply want more free money to play with, silly rabbit.
Fuck. This. "Market."
IF "Obama" AND "Boehner" AND "Meeting" AND "Cliff" THEN BUYBUYBUYBUYBUY
See? Anyone can program an algo!
Somebody's pushing at just the right strength right now on the equity market "BUY BUY BUY" buttons.
Whee! Up up and a-way we go!
Boehner and Obama plan a meeting and everything is solved fiscally? These markets are so completely messed up by bs. Madoff would be an improvement on this craziness.
Answer: The Fed knows exactly the same as anyone who doesn't have his head up his ass. To assume that the "health index" is signalling correct info is dumbassery. The unprecidented amount of Fed intrusion and federal stimulus dollars have distorted the market (more than usual), so it would be wise to ignore the econometric data.
I wish some patriotic martyr would leak the classified documents for what the Fed/Treasury's plan is when the currency fails. Are they going to go to a geld mark, or something? They can't really believe people are going to accept SDRs.
My ass hurts...........
The ineffectiveness of pushing on a string not covered in economics PhD program. The perils of debt monetization and currency debasement also not covered. He was asleep during the undergraduate recitation on the fall of Rome.
Well, it's an advanced class, titled "We need a thicker string!"
I wish they'd push harder, and just get the whole thing over with. I'd like to get my goat herd set up on the washington mall before the cherry trees bloom. I can build my cabin out of the remains of the Lincoln monument, may he burn in hell for eternity.
For a second I thought you were positioning yourself as my goat-herding competition. Then I got to the location, and... well, good luck!
I wouldn't let my goats within 200 miles of that hole. Besides, I'm depending on the dandelions to own that place again someday.
To be honest, I wouldn't either. I refuse to go within a hundred miles of the place for the remainder of my life. It just made for a good visual, like the "desolation" painting in the course of empire series:
http://en.wikipedia.org/wiki/The_Course_of_Empire
PPT to the rescue.
The problem is the Fed thinks it knows something "we" don't know (even beyond the notion that monetary policy can rescue a grossly over levered economy) when, in actuality, the Fed doesn't know shit. In particular, it knows nothing about fostering competition in financial intermediation. But then again, it's very creation was for the purpose of protecting an oligopolistics banking cartel (until that damned Glass-Steagall got in the way, which it (the fed) helped dismantle).
It's so cute, the way everybody pretends the FED's buying bonds to 'stimulate the economy', and not because they have no fucking choice, as SOMEBODY has to monetize the fucking deficit. I guess if nobody says it, then it doesn't have to be acknowledged.
They are monetizing the debt. Of course. That is an objective observation, and I'm sure it doesn't escape anyone here. We are reacting to their blatant lie about their motive.
I meant the MSM and the financial media, not most of the readership here.
Well, CITI is a fedgov operation, so periodic make-work is to be expected.
You're surprised the MSM won't touch the topic with a 10-foot pole?
"The simple way to say it is -- others are lending money to the federal government, you are purchasing those loans and then the interest payments being made to you -- because you're the official maker of the loan -- are then remitted back to treasury. so maybe in laymen's terms, this is one part of the government lending another part of the government money, which would not lead to long term confidence once the american people understood the basics a little bit better."
http://youtu.be/TM2HRiZEPs8
Making the system unnecessarily complex doesn't prevent it from being monetization. All it does is serve the interest of the inventors of the system, in that most either get overwhelmed (or bored) trying to understand the details, or caught up in the technical minutiae, which allows said system inventors to fuck EVERYBODY over, as the majority lose sight of the obvious - if you spend more than you make, over the long term that's going to be a problem.
Someday, maybe 3 years from now, maybe 5, maybe 10, this is going to trigger another one of those collective 'oh yeah' moments in the public, and the MSM meme is going to be 'in retrospect, it should have been obvious that all that monetization of the debt was a bad thing, but who could have predicted it back in 2012?' Much the same way they're currently doing that (or were doing it over the past year or so) regarding the housing bubble and burst - 'yes, in retrospect, all those HELOCs and over-valued, over-mortgaged homes were destined to cause trouble, but who could have known at the time?
No wonder psychopaths have such a good time in our society - any lie, no matter how ridiculous, will be accepted, as long as its told with authority and confidence.
Worse yet, Benron says that they aren't monetizing debt, so any possible acknowledgment is met with official denial.
Baghdad Bob, FTMFW!
someone said this yesterday I saw, it's like playing monopoly and doing your own QE .. buying up all the shit. ain't right!
it is a game that i would be comfortable to estimate that 95% of american children (now 25 yo and above) played.....and they can not grasp what is happening to them.
bet if we explained it on that level there could be a few more that could understand and be pulled over to our side.
in my line of work, keeping it simple (stupid) is mandatory. gotta speak to the sheeple in bah bah terms.....not alpha, beta, derivatives, MBS, etc, etc.
Fuck You Bernanke. I hope you die very very soon. This unelected cocksucker is really pissing me off
how can you guys continue to analyse chart based on biased-and-book-cooked numbers ! Don't look for any logic in there, the market's fake.
I just saw on CNBC.com that Boehner is heading to the White House for a 5 p.m. meeting with Obama.
You know what that means - the cocaine and hookers have arrived!
That's why the markets are spiking. Cocaine is a hell of a drug.
Don't forget, Obummer's got his own brewery now, so they can start out with a couple of pints to loosen things up first.
(besides, they can't sneak in the teenage boys until it gets dark)
Midnight tours are supposed to be the norm, if I recall correctly.
http://www.bing.com/videos/search?q=midnight+tours+boys+white+house&mid=FA6D57B9F3F2980C464CFA6D57B9F3F2980C464C&view=detail&FORM=VIRE2
http://wanttoknow.info/890629washingtontimesfranklin
I think the Fed knows more than the average joe. I think the economy is much worse off than the numbers that are published; that the numbers are being manipulated so as not to scare the public. This is also why Obama can't allow any spending cuts; it will further kill the economy. But this is the problem you have when the truth is hidden.
Notice how there has been no frank discussion about the state of the economy with the fiscal cliff? It's all about philosphies. I think Geithner and Obama know it's much worse than being told to the public.
Just a hunch.
The only "frank discussion" they're capable of having involves dick jokes and a retiring "member."
Meanwhile, local media only writes about how local angencies are gonna lose all of their moneys if da ebil obstructionists don't stand down.
Spot on. The canary is being gagged.
You can't have a ponzi scheme with full discolsure.
Those fun pre-market trades from this morning got cancelled.
http://www.cnbc.com/id/100311256
Complete with a "no comment." Now that's precious! LOL
Something tells me "market health" peaks just before a crash.
Once you no longer believe the lies you are label a radical in order to marginalize you. If the marginalization does not work you are labeled a terrorist. Soon ZH readers will appear in memos as possible... (Post edited for reasons of National Security)
You're pushing too hard! Go on, get it all out.
No golden hemarrhoid yet, push away!
The last I heard, there was something like $700 trillion in derivatives, and God knows how much in plain old shitty assets on banks's books. I imagine much of the QE is going to buy up stuff they can't sell and/or dare not mark to market.
Wrt shitty assets...
Yeah, those MBS's were money out the door for paper that was supposed to supply a nice fat stream of future income. Now worthless, (or "impaired"), no money and sparsely a trickle to no income stream. Fed's purchases by way of QE are replacing some of the lost $ as the institutions don't have adequate assets to absorb the losses themselves. And some misguided souls think failure of the insolvent is now inappropriate. So...backdoor bailouts hushed from those pesky taxpayers that got all upset about the previous Paulson disclosed and advertised bank bailout. (As I recall, it was conveniently put in place that any ultimate Fed losses would be transferred back over to the Treasury, i.e. the taxpayers.)
Thus, under guise of "QE" taxpayers are providing additional bailouts, just without their knowledge. Much like the end goal across the pond that German taxpayers, by way of backdoor agreements, will be supporting their own government and society along with Greek's government and that part of Greek society dependent on government and Spain's Government and society, et cetera, et cetera.
The deflating credit bubble is the saving grace counteracting (and overwhelming) Fed's printing and sheer damage it would cause. Four decades of credit expansion culminating in tons of bubblicious bad debt all fluttering off to money heaven.
China will not allow the Fed to print. I know this is hard to believe - but DC is out of money and options - and must now figure out how to raise taxes dramatically AND eviscerate goverment spending.
GovCo will direct all funds to pay creditors - and will be forced to allow Californa and the 'fly-by states' (basically everything outside of the moat surrounding Washington DC) - to collpase.
FINALLY - it is time to short the SPX, REITs, Munis, etc. All available engine power will be concentrated so that USTs are the last thing to collapse.
If you live in a big metropolitain area you are taking an unreasonable risk.
The Fed doesn't push, if you look at how they calculate their fund rates they are the pullers of the economy. They honestly believe that they are the incentive makers rather than the incentive destroyers.
The answer to the post question must be that the Fed is out of its' depth, since, depspite those still in awe of TPTB, there really isn't anything the Fed knows that we don't know. Tick toc.
Haiku
Ben Bernanke Love
Unlimited A.T.M
Kevin Warm Towel Cleanse
Is the Fed out of its depth here, or do they know something we don't?
"Everyone" said this was expected .... really? I thought the economy was improving ... evidently not. Good news quickly portends bad news
Title reminded me of The Seeds track Pushin Too Hard http://www.youtube.com/watch?v=LfNq0kboAII
Seems to fit the article... nice reference if that was the intent.