Market Reaction To FOMC Minutes

Tyler Durden's picture


UPDATE: Minutes after the post - Stocks getting ugly now, catching down to VIX and USD's move

Bonds were sold instantly as the more hawkish comments from the FOMC hit - as was Gold. The USD rallied and stocks dipped modestly. Once that initial knee-jerk settled, stocks have gone largely sideways to modestly lower, Treasury yields have pushed back towards the day's highs as the USD strength and Gold weakness are tracking each other perfectly for now. Unfortunately, this is not helping the price of Oil - which is higher post-FOMC. Notably, while this is clearly being viewed as hawkish for bonds, commodities, and the USD, stocks appear unphased - but it seems VIX is soaking up the equity uncertainty for now (VIX +1.1 vols at 13.40%) indicating considerably more concern than the market itself (for now). The 'bond-like' Utilities sector is the most pressured (as rates rise) for now.

USD Up (inverted), Gold Down, Treasury yields Up, Oil Up, Stocks Flat...


But VIX not happy...


and Utes are hurting more as rates rise..

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Wed, 02/20/2013 - 15:43 | 3260742 kliguy38
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sell that barbarous me

Wed, 02/20/2013 - 16:12 | 3260793 TruthInSunshine
TruthInSunshine's picture

Let me provide the real FOMC transcript as a public service:


Esther George:  Gee Ben, aren't you seeing what I'm seeing out there? This will end badly.


William Dudley:   What do you want him to do, stop printing?


Elizabeth Duke:   Maybe we can try to thread the needle & buy some more time?


Sarah Bloom Raskin:   Whatever do you mean?


Jeremy Stein:   You know, increase both the frequency of more hawkish statements and influence public perception that a greater number of us are becoming more hawkish, or at least less dovish.


James Bullard:   You mean try and talk the suicide markets down? [At this point, Bullard is spontaneously laughing out loud] Hey, Dudley, why don't you buy some CRM?


Eric Rosengren:   Sounds good to me, let's do it. 


Ben Bernanke:   Should we take a vote?


James Bullard:   Fuck you Bernanke. I'm hungry. Let's eat.
Wed, 02/20/2013 - 16:25 | 3260921 NotApplicable
NotApplicable's picture

Tickle me algos?

Wed, 02/20/2013 - 15:59 | 3260813 spastic_colon
spastic_colon's picture

why do I keep hearing the theme song to Kelly's Hero's in my head?

Wed, 02/20/2013 - 17:04 | 3261081 TruthInSunshine
Wed, 02/20/2013 - 17:27 | 3261178 spastic_colon
spastic_colon's picture

+1 well many metphors, so little time

Wed, 02/20/2013 - 16:11 | 3260853 Banksters
Banksters's picture

File this under:  The fed is trying  to have its cake, eat it, shit it out, and eat it again.


Oil down  Check

Gold down Check

Bernake still a shit eating fuckstick    Check x4



Wed, 02/20/2013 - 16:14 | 3260867 The Proletariat
The Proletariat's picture

Just remember, Zionists, according to their religion, are forbidden to charge eachother interest.  Nothing will change until the bernanke is removed....

Wed, 02/20/2013 - 16:53 | 3261047 Kirk2NCC1701
Kirk2NCC1701's picture

Assuming for a moment that your statement is correct, by implication... What does that say about the followers of Jesus?  Rhetorical question:  Are they looking out for each other like Zionists are, or are they too busy being their "bitches"?  Are they really "Christians" (genuine followers of Jesus), or more like indoctrinated and zombified followers, who act like a sheep or peasants?

Don't you wish that these "Christians" would look out for each other also, the way these 'Zionists' do?  Are you mad at the 'Zionists' for looking after their own, or mad at these "damned Christians" who are not looking after their own?  Just sayin'.  Hope you can handle the cognitive dissonance w/o needing to go into attack mode.  Like Truman said:  It's not my enemies, but my (so-called) 'friends' that keep me up at night.  Cheers.

Wed, 02/20/2013 - 17:05 | 3261085 akarc
akarc's picture

Yeah but he got four upticks for mentioning "zionist". You didn't get any for telling the truth? Now there is some cognitive dissonance.  I got a beard, I'm prob guilty too. 

Wed, 02/20/2013 - 19:43 | 3261579 The Proletariat
The Proletariat's picture

I never said "Christians" were not "Zionists" so I do not understand what your talking about.

Wed, 02/20/2013 - 16:26 | 3260925 NotApplicable
NotApplicable's picture

That's sustainable, no?

Wed, 02/20/2013 - 16:28 | 3260936 Banksters
Banksters's picture

Al gore seems to be doing ok.

Wed, 02/20/2013 - 17:27 | 3261172 knukles
knukles's picture

Eat more talk less.

Wed, 02/20/2013 - 18:06 | 3261317 Stock Tips Inve...
Stock Tips Investment's picture

The Fed knows that a bad move can ruin all the work done in recent years. Surely we will see the guy Ben and his friends juggling again.

Wed, 02/20/2013 - 20:08 | 3261643 MFLTucson
MFLTucson's picture

A perfectly timed fraud so people will sell to the gangsters before the crash!

Wed, 02/20/2013 - 15:43 | 3260746 docj
docj's picture

Notably, while this is clearly being viewed as hawkish for bonds, commodities, and the USD, stocks appear unphased

Of course - nothing is allowed to "phase" stocks. At least not negatively.

Wed, 02/20/2013 - 16:01 | 3260792 spastic_colon
spastic_colon's picture

just setting up for another jawboned, VIX crushing ES bounce to new highs over the next few days


PS - ........."Stocks getting ugly now".......really?  stocks won't be "ugly" until they cross ES 1200

Wed, 02/20/2013 - 16:27 | 3260928 NotApplicable
NotApplicable's picture

Meanwhile, they've got the positive direction covered with their QE4EVA Warp Drive.

Wed, 02/20/2013 - 15:43 | 3260747 McMolotov
McMolotov's picture


Wed, 02/20/2013 - 15:51 | 3260785 HelluvaEngineer
HelluvaEngineer's picture

Er, McMarket.  Everything soon to be on the Dollar Menu.

Wed, 02/20/2013 - 15:58 | 3260809 McMolotov
McMolotov's picture

Once the hyperinflation begins, it'll be the Fiddy Dollah (Hollah Hollah) Menu.

Wed, 02/20/2013 - 15:43 | 3260749 Xibalba
Xibalba's picture

fuckers and their computers 

Wed, 02/20/2013 - 15:45 | 3260756 Karlus
Karlus's picture

We are so close to 1500....While I dont love falling knives, I also feel like if you waited this long to pull the ripcord and buy, it might be time to make a big splash bet...

Wed, 02/20/2013 - 16:31 | 3260952 NotApplicable
NotApplicable's picture

My bet is that they'll use your account holdings leveraged 200 times against you, rehypothetically speaking.

And if you happen to win anyway? Bank holiday.

All exits will be sealed. The only winning move is not to play.

The DTCC cartel thanks you for your participation, as they couldn't game anything without those of you who insist there's risk-free value to be had by picking up that penny near the steamroller.

Wed, 02/20/2013 - 17:28 | 3261181 knukles
knukles's picture

"rehypothetically speaking"

Now that's serious funny.

Wed, 02/20/2013 - 15:47 | 3260767 electricgorilla
electricgorilla's picture

No QE from the Fed and Gold Plummets. I was never bullish on Gold and still am not. If anything Silver over Gold. Difference between tangible Dollars and Digital Dollar's. The fed can easily destory digital dollars but not tangible ones. The Fed can't physically print tangible money and put it into the real economy the way it can print digital money. The value of the physical tangible dollar doesn't begin to truly lose value to me until real ppl are not willing to accept it. I'm not seeing that. 

Wed, 02/20/2013 - 15:52 | 3260788 maskone909
maskone909's picture

BREAKING NEWS: FED hoarding 3D printers for printing tangible assetts

Wed, 02/20/2013 - 16:09 | 3260848 jimmyjames
jimmyjames's picture

I was never bullish on Gold and still am not


Then obviously you were wrong for 12 years and now you think because gold is back testing the Aug 2012 breakout (normal bull market action)--that you have credibility now-

Wed, 02/20/2013 - 16:09 | 3260851 Clint Liquor
Clint Liquor's picture

"The Fed can't physically print tangible money and put it into the real economy the way it can print digital money."

Have you ever heard of SNAP cards? The idea that there is a difference between digital money and 'tangible' money when describing FRNs is absurd.

Wed, 02/20/2013 - 16:34 | 3260961 NotApplicable
NotApplicable's picture

Not to mention paper checks, or other forms of monetized paper one can trade.

Wed, 02/20/2013 - 15:51 | 3260783 JustObserving
JustObserving's picture

It seems that the Fed leaks its minutes to its favorite customers earlier.  They seems to know what is coming and start shorting precious metals a week earlier.

Wed, 02/20/2013 - 15:55 | 3260798 Confundido
Confundido's picture

really? I didn't know....thanks for sharing.

Wed, 02/20/2013 - 15:56 | 3260802 tecno242
tecno242's picture

Apparently Bill Gross isn't one of his favorite as Gross recommended everyone load up on TIPS and other inflation protected assets just a week ago.

Wed, 02/20/2013 - 16:35 | 3260968 NotApplicable
NotApplicable's picture

But did he?

I'd say Bill is talking his book.

Wed, 02/20/2013 - 15:56 | 3260803 Cognitive Dissonance
Cognitive Dissonance's picture

Of course they did. Desperate measures by desperate men are called for. Give me ramming speed Scotty.

<Politicians and banksters to the lifeboats.>

Wed, 02/20/2013 - 16:36 | 3260973 NotApplicable
NotApplicable's picture

*prays for dry-rot*

Wed, 02/20/2013 - 15:52 | 3260786 helping_friendl...
helping_friendly_book's picture

BTFD? Or is it different this time?

Wed, 02/20/2013 - 15:53 | 3260789 Cognitive Dissonance
Cognitive Dissonance's picture

I'm smelling a cognitive dissonance brewing.

<Sorry.......that was just my feet.>

Wed, 02/20/2013 - 16:03 | 3260834 akarc
akarc's picture

IT only looks like cognitive dissonance. It looks as though even the fed can no longer suspend reality

Wed, 02/20/2013 - 16:40 | 3260989 NotApplicable
NotApplicable's picture

We're well beyond the point of no return, so there's little left to lose. Slowly letting the bad news out now is what they call "managing expectations."

Next thing you know, the "fiscal hawks" will be demanding even more QE, while the "doves" will be lining up at the altar of the IMF.

All they lack is an appropriate sacrifice. Gee, I wonder where they'll find one...

Wed, 02/20/2013 - 16:59 | 3261070 resurger
resurger's picture

hhh :)

Wed, 02/20/2013 - 15:56 | 3260800 Whatta
Whatta's picture


How is the fed gonna EVER raise rates/cease QE

If they do the market will tank, whatever wealth effect will cease and the economy will be in the shitter again.

ALSO...all of these pension funds (Public and Private) that are counting on unrealistically high returns will be even worse off if the FED pulls the plug...the government via the FED will be the only backstop again for We The Freaking People.

They can't cease printing...ever...till it go BOOOOM!

Wed, 02/20/2013 - 15:57 | 3260807 tecno242
tecno242's picture

you are correct..

and the longer they wait.. the bigger the boom when they do.

that's why Japan is a zombie economy with debt that's 250% of GDP

Wed, 02/20/2013 - 16:10 | 3260855 Sandy15
Sandy15's picture

It should be at the point of ........BOOOOM now!!!!!!

Wed, 02/20/2013 - 16:43 | 3261006 NotApplicable
NotApplicable's picture

Too soon. TINA is yet to arrive at the theater, let alone take the stage. When you see the puppets start arguing over HOW the IMF will save us (rather than IF), you'll know the regime's end is near.

Wed, 02/20/2013 - 15:57 | 3260805 WhiteNight123129
WhiteNight123129's picture



Today the most knee-jerk sell-off in Gold in the history of the world.

The Fed prints it will affect the long term price structure. The Fed stops printing because inflation starts to come in.

So indeed Soros has been buying the cause the Printing, but the Fed will not keep printing once the newly monetary units start to show off in teh economy.

So the masses will buy the Gold when they see the inflation. Sell your Gold at that point.

The Problem with Gold is that if you take out the 1998-2002 episode, the Gold probably was 400 USD per ounce. The Monetary base has been multiplied by 5 times since 1998, so we have a new target base for Gold at 2,000 - 2,100 this is assuming no expansion of the monetary base.

When the Fed is forced to raise rates aggressively it is because inflation is getting unnoyingly high, sheeple buy the consequence, you sell.


Wed, 02/20/2013 - 16:00 | 3260822 maskone909
maskone909's picture

thats right dawg long TMV JGBD just hope my paper will have some fkn value

Wed, 02/20/2013 - 16:45 | 3261013 NotApplicable
NotApplicable's picture

Well, you can always wipe your ass with it. Some find value in that.

Wed, 02/20/2013 - 16:03 | 3260831 WhiteNight123129
WhiteNight123129's picture

* This assuming no expansion of the COVERAGE of the monetary base.


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