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The Fed's Revised Economic Projections

Tyler Durden's picture




 

If there is one thing to be said about the just revised economic projections from the Fed (2013 GDP slightly lower on the upper range, the same as the unemployment rate which the Fed now sees dropping to as little as 6.7% in 2014), is that the economy will do everything but what the Fed has forecast, at least if history is any indication.

When it comes to tightening, the Fed agrees: not for a long, long time:

 

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Wed, 03/20/2013 - 14:19 | 3353165 OldPhart
OldPhart's picture
How would life be without banksters? Cyprus banks to stay closed until Tuesday: reports NEW YORK (MarketWatch) — Banks in Cyprus will remain closed until at least Tuesday, according to media reports on Wednesday. Banks in the island nation, which have been closed since March 16, had been scheduled to reopen on Thursday. Monday is a previously scheduled bank holiday. Cyprus is scrambling to find money to rescue its banks from collapse after its parliament on Tuesday rejected a European Union-led bailout proposal that included a controversial tax on bank deposits.
Wed, 03/20/2013 - 14:26 | 3353200 ChrisFromMorningside
ChrisFromMorningside's picture

Unemployment at 6.4% in 2014? All that says is they expect millions more to exit the labor force over the next 12 months. Plebeians giving up hope = BULLISH!!

 

Wed, 03/20/2013 - 14:30 | 3353228 redpill
redpill's picture

lol @ the spread of them that think rates are going up in 2015.

Wed, 03/20/2013 - 15:34 | 3353609 Panafrican Funk...
Panafrican Funktron Robot's picture

Yeah, given that raising rates to even 0.5% would obliterate the value of the Fed balance sheet, I don't see where they could possibly ever raise rates.

Wed, 03/20/2013 - 14:33 | 3353245 Key-Rick
Key-Rick's picture

Who exactly guarantees the under E100,000 accounts in Europe?  Is it the ECB?  If Cyprus banks simply go under, then the bondholders lose, stockholders lose and everyone with more than E100,000 loses, but all the small depositors have to be paid under the guarantee, right?

Wed, 03/20/2013 - 15:25 | 3353564 walküre
walküre's picture

Glad you asked!

Deposit Protection Scheme

http://www.centralbank.gov.cy/nqcontent.cfm?a_id=8158&lang=en

The DPS is activated in the event a decision is reached that a member bank is unable to repay its deposits, or as a result of a Court’s order for the winding-up of a member bank.  Where a bank is unable to pay its deposits, the relevant decision is adopted by the Central Bank of Cyprus or, where a member bank is incorporated in a country outside the Republic of Cyprus, by the competent supervisory authority of the country of incorporation.

Where do they get their funding from and how much money is in that fund?

DO NOT ASK THOSE QUESTIONS!!!!

Wed, 03/20/2013 - 17:34 | 3354167 beentheredonethat
beentheredonethat's picture

Dipshit protection system

Wed, 03/20/2013 - 17:00 | 3353999 Go Tribe
Go Tribe's picture

Best thing to do is to climb into a rocket and get the hell away from these motherfuckers as fast as possible.

Wed, 03/20/2013 - 14:19 | 3353166 eclectic syncretist
eclectic syncretist's picture

Pump it up Bernanke, you stupid motherfucker!!!!!

http://www.dailymotion.com/video/xr22b_elvis-costello-pump-it-up_music#....

Wed, 03/20/2013 - 14:31 | 3353239 100pcDredge
Wed, 03/20/2013 - 14:21 | 3353177 fonzannoon
fonzannoon's picture

there you have it. 2015 at the earliest. by 2014 it will be 2017 at the earliest. by 2017 no one will even remember the days when they earned interest on their money.

simple. effective.

Wed, 03/20/2013 - 14:29 | 3353210 flacon
flacon's picture

Earning interest on money is an abomination anyway. Usury.

Wed, 03/20/2013 - 14:36 | 3353264 cifo
cifo's picture

By 2017 nobody will remember banks.

Wed, 03/20/2013 - 15:26 | 3353572 madcows
madcows's picture

Nonsense.  We'll have plenty of banks, just no depositors.

Wed, 03/20/2013 - 14:21 | 3353178 ejmoosa
ejmoosa's picture

If you have been a patient, there are times when you realize your doctor is the impediment to you recovering.

Wed, 03/20/2013 - 14:22 | 3353181 Debtonation
Debtonation's picture

In a few years it will make sense for me not to pay down the principle on my mortgage with interest rates like that.  The bank will be paying me! At least as long as they're solvent.

Wed, 03/20/2013 - 15:25 | 3353562 madcows
madcows's picture

I gave you an up arrow, but what you say is exactly the reason why the FED will not let rates rise.  All the banks would go bankrupt.

Wed, 03/20/2013 - 14:23 | 3353185 Winston Churchill
Winston Churchill's picture

I want to know where I can buy what they are smoking ?.

They are more fucked up than I used to get in Afghanistan back in the 70's.

Wed, 03/20/2013 - 14:30 | 3353225 Key-Rick
Key-Rick's picture

Sweet!  With QE going through 2014, I've got almost 2 more years of inflating my portfolio.  Hopefully by then it will exceed the remaining balance on my mortgage so I can eliminate my last remaining debt.

Good job, Ben.

Wed, 03/20/2013 - 15:56 | 3353702 gaoptimize
gaoptimize's picture

This is my principal consideration asuming the wheels don't fall off the wagon, but I'm betting on PMs to gain more than stocks.  I dream of the day I can walk into the bank and pay off my mortgage with a 100oz bar of silver.  Then I will have my twenty acres of ground, the whole of which I will cultivate myself with the help of my children; and our labor will keep off from us three great evils:idleness, vice, and want.

Wed, 03/20/2013 - 14:30 | 3353232 DutchR
DutchR's picture

It's hopium, pure and injected...

Wed, 03/20/2013 - 14:31 | 3353236 Antifaschistische
Antifaschistische's picture

repeat:    

If no one has a job, the "unemployement rate" (# of people receiving unemployment bene's) will eventually hit zero.

Wed, 03/20/2013 - 14:38 | 3353282 miker
miker's picture

In spite of his attempt at calmness, Bernanke knows we're in deep shit.  That is why they continue this stuff.  If they stopped and Congress eliminated the deficit in a signficant fashion, there'd be rioting in the streets.

Wed, 03/20/2013 - 14:44 | 3353328 Banksters
Banksters's picture

What a bunch of bullshit.  

 

MR. Subprime is contained, inflation is low, and 2nd half recovery Bernanke can FUCK OFF.

Wed, 03/20/2013 - 14:47 | 3353349 ivars
ivars's picture

You will find this interesting:

Here I have overlaid global public debt from 1999-Q3 2012 from this site (it was at about 50 trillion USD in Q3 2012) :

Global public debt World Bank database

Over the price of gold for the same period.

http://saposjoint.net/Forum/viewtopic.php?f=14&t=3214&p=41391#p41391

But global public debt= net world wide savings in fiat currencies ( all). One can see from the chart that initially, the raise in Japanese public debt did not cause movement in the gold prices, but when the USA debt started to grow due to Iraq war in the end of 2003 and decisively exceeded that of Japan by Q3 2005, gold price started to catch up. 

Also, its possible to see that gold price reaction to QE2 was fictitious, as QE2 did not increase global public debt, and gold prices returned to debt line, and now they probably have undershot below ( there are no data yet available for global public debt for Q4 2012 and Q1 2013). Gold prices can over and undershoot pretty much (+30%/-22%) , as I have explained before, and as visible from 

There is also no reaction to QE3, as QE3 does not increase USG debt relative to what it would have been without QE3; QE3 only suppresses interest rates.

Question remains is USG debt=net savings in USD driving the gold prices in USD, or is it the global debt=net savings in all fiat that impacts price of gold in USD. Correlation in 2001-2007 is better with USG debt, while after 2007 total fiat savings=global public debt - fits very well and explains the pullback after QE2. 

Wed, 03/20/2013 - 16:41 | 3353923 akak
akak's picture

No offense, Ivars, but didn't you also repeatedly claim (with detailed graphs) on Turd Ferguson's blog in late 2011 and early last year how silver would be well over $70 an ounce by now?

Wed, 03/20/2013 - 14:51 | 3353365 Lendo
Lendo's picture

I like how he keeps throwing "recovery" around.  He must mean the seniors going back to work part-time.

Wed, 03/20/2013 - 14:53 | 3353376 Lendo
Lendo's picture

Damn double post

Wed, 03/20/2013 - 14:58 | 3353404 gwar5
gwar5's picture

Exactly.  Always wrong, and their methods are so manipulated it is all meaningless.

Wed, 03/20/2013 - 15:10 | 3353481 hannah
hannah's picture

when did we go from 2014 to 2016....? what is the point is they just repeatedly shift it further and further out....?!

 

what a fucking joke...why bother with any of this shit...?

Wed, 03/20/2013 - 15:20 | 3353543 Stuart
Stuart's picture

Not a snowball's chance in hell rates will move up to 4%.  Uncle Sam would be bankrupt in a year for this would add nearly $500B to the ANNUAL deficit considering they already have to borrow to cover the current interest charges.  Checkmate. Hence why the FOMC press conference and talk of ending purchases is all Kabuki theatre for the gullible and stupid. 

Wed, 03/20/2013 - 16:36 | 3353859 Catflappo
Catflappo's picture

Notwithstanding that for the foreseeable future rates have no choice but to stay close to zero (even though "it's not Japan"), the prediction that in the 'long run' interest rates are going to be no higher than 4.50% seems to suggest some very short memories. 

Assuming 'the long run' is 'a very long time', then I'd be keen to buy some open ended 5% calls.   And presumably the FOMC will give them to be for nothing?

Wed, 03/20/2013 - 16:44 | 3353934 malek
malek's picture

That's a mistake to label it 2013, 2014, 2015 in the second chart.

Just put in "Now", "x + 1 year", "x + 2 years", and you will be able to re-use that chart until the Fed stops existing!

Wed, 03/20/2013 - 17:17 | 3354072 Composter
Composter's picture

i wonder what font they used in their report.

"US Gov BS - serif" ... something like that.

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