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Up, Up And Away: At Least Something Is Going "Straight Up"

Tyler Durden's picture




 

Sadly, that "something" has nothing to do with the real economy, but it has everything to do with the stock market which is all that matters to the Fed. Presenting the Adjusted Reserves held by Fed banks: it is, logically, at a fresh all time high. This is the low-powered money that due to capital allocation preferences continues to go, every day for the past 4 years, not into the broader economy (blame it on the 2s10s, or the disastrous state of the US consumer who has no desire for loans, or what have you) but straight into the S&P500. Since the full blown launch of QE3 excess bank reserves have grown by $500 billion, or roughly a 30% increase in six months. Which is also the reason why the S&P has correlated not with any actual fundamental data, but only this chart for the past 6 or so months.

The logical consequence: Adjusted Monetary Base rises at a matched pace. At this rate, assuming QEternity continues unabated, the monetary base should be roughly doubled in two years. Just like in Japan.

 

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Fri, 05/31/2013 - 09:44 | 3613302 SheepDog-One
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Hard to believe anything today could make anything in 2012 appear to be 'the sane old days'.

Fri, 05/31/2013 - 09:48 | 3613327 slaughterer
slaughterer's picture

With a $6,000,000,000.00 POMO today and EOM window dressing, you would have to be a masochist to short.  

Fri, 05/31/2013 - 09:51 | 3613331 SheepDog-One
SheepDog-One's picture

Who said anything about placing any trade? I'm just sitting back waiting for the human extinction level event to commence. Humanity deserves no better.

Fri, 05/31/2013 - 09:52 | 3613341 MillionDollarBonus_
MillionDollarBonus_'s picture

Letter from a concerned American citizen

Dear Mr President,

First of all, let me congratulate you on securing your second term as President of the United States of America. You truly deserve your position of power given the sheer number of people who support you. However, I regret that the subject of my letter is of grave concern to me. 

My first and foremost concern is climate change. Few issues are as important as managing the climate, and yet to my knowledge there has been no significant progress. Where is the tax on carbon emissions? Where are the commitments to eliminate fossil fuels? Progressives are fed up with incompetence regarding climate change policy, and we want real tangible commitments, now.

My second concern is is regulation of the banking sector. We want to bring back Glass Steagal (the banking regulation act), and put a stop to excessive risk taking by the private sector. If we don't impose strict guidelines and regulation in order to teach people outside the government right from wrong, then how are we going to become a more progressive and caring society?

Thanks you for considering my message Mr Presidnet, and I wish you the very best for your second term as President of the United States of America.

Fri, 05/31/2013 - 09:57 | 3613355 mayhem_korner
mayhem_korner's picture

Where is the tax on carbon emissions? Where are the commitments to eliminate fossil fuels?

 

Where's the mashed potatoes?  Where's the cranberry?  Where's the pumpkin pie?  What blockhead made this...

Fri, 05/31/2013 - 09:58 | 3613360 Badabing
Badabing's picture

Do you think that is the actual amount that the fed gave out to banks?

Do you think only the USSA FED banks got free fiat?

Do you think they will not spend the free fiat?

Do you think that’s air you’re breathing?

Welcome to the matrix.

There watching!

Fri, 05/31/2013 - 09:58 | 3613362 otto skorzeny
otto skorzeny's picture

Used to be mildly amusing- now just dumb.

Fri, 05/31/2013 - 11:01 | 3613604 DeadFred
DeadFred's picture

MDB's purpose in life is to provide parrot back to us the sort of drivel that we get from the politicians an sell-side analysts. If he's now coming across as stupid and inane it means he has done his job well. Since his job is done maybe he should consider changing his schtick.

Fri, 05/31/2013 - 12:45 | 3613938 asteroids
asteroids's picture

I disagree. MDB has his off days when the sarcasm is too weak. No today folks.

Fri, 05/31/2013 - 10:16 | 3613419 GraveyardSpiral
GraveyardSpiral's picture

"Thanks you for considering my message Mr Presidnet..." ??    At least spell President correctly ors nos ones is goings to takes you seriously!  Oh, wait, its you, MDB; nevermind...... spell away as 'erronurusoly' as you'd like: What difference, at this point, does it make?"

Fri, 05/31/2013 - 10:22 | 3613460 waviator
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...teach people outside the government right from wrong,

Priceless!

Fri, 05/31/2013 - 10:39 | 3613519 semperfi
semperfi's picture

MDB, when was the last time you either drove or voluntarily rode in a fossil-fuel powered vehicle of any sort? And why would you wish an evil fascist-marxist the very best?

Fri, 05/31/2013 - 10:45 | 3613546 Skin666
Skin666's picture

You're a genius MDB!

+ 1

Fri, 05/31/2013 - 11:35 | 3613730 dtwn
dtwn's picture

Yay, he's back!

Fri, 05/31/2013 - 11:42 | 3613734 Monedas
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Climate change is what made Obammy black .... melanin mutant !  "Carbon Tax" .... tax all Negroes double .... until they pay back welfare benefits !       Monedas     1929      Comedy Jihad Humour Savant World Tour   

Fri, 05/31/2013 - 09:50 | 3613332 camaro68ss
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If this market erection last longer than 4 hours and is on a POMO day, don’t fight the FED

Fri, 05/31/2013 - 09:53 | 3613344 slaughterer
slaughterer's picture

All MOMO-monkey stocks were already GREEN in PM: AAPL. TSLA, NFLX, PCL, GOOG, AMZN, et. al.  EVERYBODY front running POMO GIGANTIC.

Fri, 05/31/2013 - 09:44 | 3613305 Stoploss
Stoploss's picture

im sure the consumers are confident.

Fri, 05/31/2013 - 09:45 | 3613309 Divine Wind
Divine Wind's picture

 

 

Wow.

Fri, 05/31/2013 - 09:45 | 3613311 otto skorzeny
otto skorzeny's picture

Explains the ramp-a-palooza right after today's opening bell.

Fri, 05/31/2013 - 09:48 | 3613325 DeadFred
DeadFred's picture

It started in futures before the open. Today is the second biggest POMO for May, $5 Billion.

Fri, 05/31/2013 - 09:47 | 3613315 LawsofPhysics
LawsofPhysics's picture

Velocity?  This data is inversely proportional to the world's faith in paper. Long black markets and sharecropping...

Fri, 05/31/2013 - 09:47 | 3613322 fonzannoon
fonzannoon's picture

Look at that PMI. 58.7. There goes the Ten year. 2.2 today?

Fri, 05/31/2013 - 09:52 | 3613340 LawsofPhysics
LawsofPhysics's picture

Exactly, see my post below, The Fed is going to have to drop a ball or sacrafice another "Lehman" soon.  Who will be kicked out of the club, place your bets...

Fri, 05/31/2013 - 09:54 | 3613348 fonzannoon
fonzannoon's picture

What is funny Laws, is how full retard this number is. They are just completely faking everything to try to have the economy reflect the higher rates, when in reality the higher rates have nothing to do with the economy.

 

Fri, 05/31/2013 - 09:47 | 3613318 ThunderingTurd
ThunderingTurd's picture

12 minutes and 50bps later...green screens for all. 

Fri, 05/31/2013 - 09:57 | 3613319 francis_sawyer
francis_sawyer's picture

Those cheesepope families sure must be rich to be able to buy all that shit... oh wait! all they have to do is print money... [must take a lot of 'homeschoolin' to learn how to do that]...

~~~

Other occupations requiring proper 'homeschooling':

- MIC - [It takes a lot of smarts that when your bosses say "Let's Bomb Syria", to assemble all the pieces & execute the plan]

- MSM - [It takes a lot of smarts to tweak stories to make the same people look like the bad guy all the time & read cue cards]

- LAW - [It takes a lot of smarts to find loopholes whereby the right people get prosecuted & right people skate ~ that leverage is applied in the proper places to stifle free speech]

It's all in the 'homeschoolin'

Fri, 05/31/2013 - 09:58 | 3613363 fonzannoon
fonzannoon's picture

"Those cheesepope families sure must be rich to be able to buy all that shit"

You have no idea Francis. My wife designs swimwear for the high end consumer. The lines she deals with are crushing it. She knows I know my stuff but I don't blame her if she thinks I am nuts when she goes to work everyday and sees what she sees.

Fri, 05/31/2013 - 12:11 | 3613847 Bay of Pigs
Bay of Pigs's picture

LOL, not dissing your wife my fellow crazy friend, but swimwear for the Manhattan/Hamptons crowd?

Maybe she should go visit some wonderful places like Detriot other US 3rd world shitholes.

"Detriot looks like Hurricane Katrina hit".

http://www.youtube.com/watch?v=LTQFtNLvcl8

Fri, 05/31/2013 - 13:11 | 3613911 francis_sawyer
francis_sawyer's picture

@fonzanoon

~~~

The 'cheesepope families' I'm referring to in this instance are the shareholders of the [non]Federal [non]Reserve [& the ludicrous idea that all their so called 'assets' were earned the same way as everyone else, through sweat & blood, instead of just printing money whenever they feel like it]... & who, since 1913, can counterfeit money for themselves and are doing so at a hockey stick pace at present...

Unless you consider my summary inaccurate...

It is rumored, for example, that the Rothschild enteprise [whose main functions are the BOE & the Fed]... Hold anywhere from 100-500 trillion dollars in notional assets... For doing what?... [I'll answer that actually ~ basically doing whatever it takes to rack up the most amount of debt ~ which, in turn, means 'STARTING WARS' & creating FEAR [like 'terror'] & publicizing the hell out of it so it becomes an enteprise in of itself both in terms of the MIC & public opinion]... Other things include 'social safety nets' [such as Johnson's Great Society & Obamacare]...

One things for certain... Even with a paltry 100 trillion ~ it's enough to buy all the politicians, bankers, media whores, & activists you'd ever need to keep folks like yourself & your wife thinking the world REALLY runs on fancy bikinis...

Fri, 05/31/2013 - 12:01 | 3613807 MachoMan
MachoMan's picture

LAW - [It takes a lot of smarts to find loopholes whereby the right people get prosecuted & right people skate ~ that leverage is applied in the proper places to stifle free speech].

Actually, this is a pretty antiquated way of thinking...  See, the whole "finding loopholes" thing got too tedious, so they just decided to buy the legislature and change the law...  much easier.  [Also has the added bonus of usurping common law, where possible].

Fri, 05/31/2013 - 12:35 | 3613915 francis_sawyer
francis_sawyer's picture

banking, MSM, political activism, jurisprudence...

~~~

When you've endeavored to populate the top of the triangle in those power nodes, even 2%ers can control the world [& make it seem like they're 'oppressed' & 'misunderstood' in the process]...

Fri, 05/31/2013 - 09:47 | 3613320 Smuckers
Smuckers's picture

We need a QETF.

 

Fri, 05/31/2013 - 09:47 | 3613321 SheepDog-One
SheepDog-One's picture

Nobody's got any balls to do anything about it anyway, I got out of this crap long ago and just waiting for the implosion show to begin...who cares?

Fri, 05/31/2013 - 09:50 | 3613333 DeadFred
DeadFred's picture

Of course we care. Popcorn gets stale if you have to wait too long for the show!

Fri, 05/31/2013 - 09:51 | 3613339 SheepDog-One
SheepDog-One's picture

I never did like popcorn anyway.

Fri, 05/31/2013 - 09:48 | 3613328 Monedas
Monedas's picture

Viagra bounce !

Fri, 05/31/2013 - 09:50 | 3613330 the not so migh...
the not so mighty maximiza's picture

6 Bil POMO, step right up and get your cut bankster buddies.

Fri, 05/31/2013 - 09:50 | 3613334 digalert
digalert's picture

...and it looks like the markets are about to go green.

Fri, 05/31/2013 - 09:56 | 3613354 SheepDog-One
SheepDog-One's picture

Like a bottomed-out crackhead, dependant on being handed another fresh glass pipe of crack....he might make it thru the day, or stab you in the throat.

Fri, 05/31/2013 - 09:54 | 3613335 LawsofPhysics
LawsofPhysics's picture

The Fed is losing control.  Can no longer manipulate the PM "market" and the treasury "market" and contain the yen impacts.

Pick one motherfuckers, boom baby, boom;

http://www.marketwatch.com/investing/bond/10_year

 

Fri, 05/31/2013 - 09:51 | 3613336 Downtoolong
Downtoolong's picture

Old Proverb: Money flows to power.

Modern Adjunct: Especially the power to print money.

Fri, 05/31/2013 - 09:58 | 3613361 francis_sawyer
francis_sawyer's picture

"POWER" [to print money]

~~~

Is there any other kind?

Fri, 05/31/2013 - 09:51 | 3613338 fonzannoon
fonzannoon's picture

PMI baby...The highest print since rabble rabble rabble (cue CNBC rock musics with Jim Cramer sound bytes in the backround).

Woohoo!

Fri, 05/31/2013 - 09:54 | 3613345 Stuck on Zero
Stuck on Zero's picture

All the trillions of dollars the Fed creates is digital money.  The digits flow into reserves, get recycled by banks back to TNotes. TNotes themselves are digital IOUs.  Why is this different from Bitcoin? Bits are bits.

 

Fri, 05/31/2013 - 09:55 | 3613350 LawsofPhysics
LawsofPhysics's picture

Well then, they better start "recycling" faster...

 

http://www.marketwatch.com/investing/bond/10_year

Fri, 05/31/2013 - 09:54 | 3613347 mayhem_korner
mayhem_korner's picture

 

 

Not only are these reserves bona-fide ramp fuel, they double as bank run insurance.  I think the Fed should pay these banks 10% interest on their excess reserves to reward them for their sterling stewardship.

Fri, 05/31/2013 - 11:25 | 3613692 ParkAveFlasher
ParkAveFlasher's picture

What a great business Banking is.  You could do it with a warehouse (for the pallets of cash) and thumb drive (for your bits and excel accounting spreadsheet).  What else, an armed watchman?  Talk about low overhead.

Fri, 05/31/2013 - 09:55 | 3613352 yogibear
yogibear's picture

POMO money pouring intgo stocks.

It's all about the Fed. They own everything.

It only stops when the US dollar crashes and prices skyrocket.

 

Fri, 05/31/2013 - 10:01 | 3613374 otto skorzeny
otto skorzeny's picture

What if the $ rips higher?

Fri, 05/31/2013 - 10:17 | 3613447 mayhem_korner
mayhem_korner's picture

 

 

That means that other CBs are out-printing Ben.  The jenga tower will fall with a colossal thud.  Possession of physical assets will be the only saving grace at that point.

Fri, 05/31/2013 - 10:25 | 3613473 semperfi
semperfi's picture

funny you mention jenga - yesterday I was trying to relate to my 14 year old daughter what is happening in the world of finance and used the jenga analogy

Fri, 05/31/2013 - 09:57 | 3613357 Sach Mahoney
Sach Mahoney's picture

At which time Benny Boy will execute his QEternity exit strategy of leaving the FED and disappearing off the face of the map, probably to some remote island with a few Billion US Dollars that he printed for himself.  

Fri, 05/31/2013 - 09:58 | 3613364 Rainman
Rainman's picture

Beautiful.....20 years after reading ' the Japanese Way ' we've finally made it. Just beautiful.

Fri, 05/31/2013 - 10:00 | 3613366 Aurora Ex Machina
Aurora Ex Machina's picture

Approaching asteroid 1998 QE2 has a moon. The 70-meter Deep Space Network antenna at Goldstone, California picked up the moon during the night of May 29-30, as 1998 QE2 hurtled through space on its way to a nearest approach to Earth on May 31. The asteroid will come about 3.6 million miles from Earth – about 5.8 million kilometers – or about 15 times the moon’s distance. Astronomers discovered the moon when the asteroid was less than two days out from closest approach at about 3.7 million miles (6 million kilometers).[source]

Cue lights, camera, action.

 

The Sun is throwing a welcoming party as well.

 

 

(Please, 4Chan at the back, we've all got the joke, before you need to go there).

Fri, 05/31/2013 - 10:03 | 3613372 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Sort of on topic and more on toilet paper and Venezuela

http://bigstory.ap.org/article/venezuela-police-seize-2500-rolls-toilet-...

CARACAS, Venezuela (AP) — Police in Venezuela say they have seized nearly 2,500 rolls of toilet paper in an overnight raid of a clandestine warehouse storing scarce goods.

The Thursday announcement on Twitter said that the officers raiding the garage in western Caracas also seized about 400 diapers and 7,000 liters of fruit juice.

Police chief Luis Karabin told Venezuelan news agency AVN that police, acting on a telephone tip, found "merchandise that we know is scarce on the shelves and doesn't reach the people."

Toilet paper is hard to find in Venezuelan grocery stores, as are staple food items such as sugar, milk and cooking oil.

The socialist government says the shortages are part of a plot by opponents to destabilize the country. Economists

blame the government's price and currency controls.

 

Amazing is the AP actually trying to give both sides of an argument here for once without judgement on either. Do I detect some actual unbiased journalism out of these people for once.

Fri, 05/31/2013 - 10:07 | 3613394 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

You forgot the chart that shows the monetary base doing the exact opposite down here on main street. You know the place that real productive economy is based, you know where the majority of Americans reside, you know where the 25% or so of batteries that are actually powering the other 75% or so plugged into the matrix. You know the 25% or so that need that fucking money to keep the batteries charged and powering the fucking matrix for the other 75% or so.

Fri, 05/31/2013 - 10:27 | 3613484 medium giraffe
medium giraffe's picture

I think we are in rats' alley

Where the dead men lost their bones

Fri, 05/31/2013 - 10:12 | 3613417 SheepDog-One
SheepDog-One's picture

'The stock market is the only thing the Fed cares about'?

I thought a few months ago bonds were all the Fed cared about?

Fri, 05/31/2013 - 10:18 | 3613449 medium giraffe
medium giraffe's picture

Funny, I thought they were basing their actions on employment targets. Or is that just on Tuesdays now? Or maybe that was the plan last year? Who's flying this thing, Goddamnit?!

Fri, 05/31/2013 - 11:32 | 3613716 ParkAveFlasher
ParkAveFlasher's picture

Wait...I thought they were targeting commodity prices.  Say, what's going on here?

Fri, 05/31/2013 - 10:20 | 3613454 semperfi
semperfi's picture

adding to the list of things they care about:

2. vacation compound in the Hamptons

3. getaway island in the south Pacific

4. annual salary increase

5. annual bonus

6. hookers

7. drugs

Fri, 05/31/2013 - 10:29 | 3613489 Sach Mahoney
Sach Mahoney's picture

Oh, I think they care very much about:

1. Power

2. Central Planning

3. Moar Power

4. Redistribution of private wealth to banks

Fri, 05/31/2013 - 10:22 | 3613443 semperfi
semperfi's picture

"excess bank reserves have grown by $500 billion, or roughly a 30% increase in six months"

So with excess bank reserves at roughly $2 Trillion, and outstanding derivative bets at roughly $80 Trillion, they still have about $78 Trillion in reserves to build for covering their asses when their house of derivative cards are vaporized.

Fri, 05/31/2013 - 11:50 | 3613762 Monedas
Monedas's picture

Once we were all black as a Brontosaurus' scrotum .... and the northern tribes lost melanin to hide in the snow .... or once we were all white .... and the southern tribes gained melanin .... to sneak up on alligator eggs in the mud ?  What's your theory, MDB ?

Fri, 05/31/2013 - 14:54 | 3614576 flow5
flow5's picture

Neophyte rant.   Only converted reserves count. 

Fri, 05/31/2013 - 18:40 | 3615418 U4 eee aaa
U4 eee aaa's picture

burning and/or deleting those probably solves a lot of problems

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