Deja Lu, All Over Again

Tyler Durden's picture

In what year was the following written:

The Federal Reserve appears on track to buy the entire [amount of] government debt it has committed to purchase, barring a sharp, unexpected shift in the economy's prospects.


If anything, lingering weakness and renewed concerns about global credit markets may lead top officials to lean toward doing more rather than less.


Policymakers would not likely have committed to a significant upfront figure if they saw the possibility that they would need to change course shortly thereafter. Instead, officials view the move much like traditional interest rate cuts, which are rarely taken back so rapidly.


A recent batch of better-than-expected economic data, including a relatively upbeat reading on the job market, has raised questions about whether the Fed acted prematurely in pulling the trigger...


The Treasury market has been selling off sharply, in part as a response to the somewhat brighter landscape.

The answer: 2010. The 10 Year back then was 3.40%.

But yes, baffle 'em with enough BS, and three years later everyone will forget that the "Taper" is nothing new, that it happens every year or so, and that without fail it is accompanied by a "sharp bond sell off" as a "response to the somewhat brighter landscape" only for central planning to go right back to doing the only thing it can do: buy everything without consideration for cost or market liquidity once the mirage fades all over again.

* * *

And a bonus, from the same Reuters article:

Whether the Fed's bond-buying policy, also known as quantitative easing or QE, will enter a third phase when the $600 billion in purchases is completed in June is another matter.


A hawkish tilt in the composition of voting members on the Federal Open Market Committee, where regional Fed bank presidents rotate in and out each year, will make consensus harder to come by in 2011.


The chorus of opposition to the policy, both internationally and domestically, could also restrain further Fed buying.


However, since the financial crisis sent the economy into its deepest recession, the Fed has shown a propensity for erring on the side of doing too much. Its influential chairman, Bernanke, has argued that Japan's fatal error was being too meek in its approach to unconventional easing.

Time to look forward toward not only the Untaper, but to QE5 (or is it 6? does anyone care as long as 'stocks' are up?), only this time with Janet Yellen hitting the print button.

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flacon's picture

Fed is going to TAPER.... They need to preserve their dry powder for a later date. They don't have to be a hero in June... 


Obama threw Bernanke under the bus already in anticipation of the TAPER. It's going to be an exciting few minutes on the trading floor when the news comes out. 


I am loaded with JPM and IWM puts. ALLLLLLL INNNNNN!


How did that Russian guy do on his FB stock? He bought ONE MILLION DOLLARS back when FB was at $27. "ALLLL INNN!"

Popo's picture

People seem to have forgotten that Greenspan also claimed he was going to end QE.   And he actually started to.. and then the biggest crash in the history of finance happened.   Greenspan retired and handed the printing press to Bernanke.  

Funny how these assholes always claim to be "about to get responsible" just before they retire.  

flacon's picture

Today may be the greatest opportunity to bet against the markets. Let's see how this turns out, but I think looking back on today there will be many who wished they had initiated puts today. 

Russell 2000



Groundhog Day's picture

If they do not taper, which is likely considering they can't, the market will fly tomorrow.  Those puts will disintegrate tomorrow.  I don't mean to burst your bubble but the shorts continuously get burned in this game.  It would be wiser for the news to come out and trade after, ou'll make less, but won't lose your shirt if your wrong on your black or red outcome.

SteveNYC's picture

No way dude, more of the same. Careful with those puts.

TriggerFinger's picture

I'm too lazy to scroll all the way down.... has anybody said 'Fuck You Yellen' yet?

NotApplicable's picture

Save dry powder? You must not be noticing the ever decreasing half-life of their actions.

What they're doing instead is to increase the velocity of BS in ALL directions, in order to counteract their otherwise ineffective machinations.

You ever watch an out of balance washing machine? What do you do? Open it up, rearrange stuff, and try again, hoping to achieve the moment when the centrifugal force is overtaken by inertia. But it only happens when a high enough velocity is achieved.

Of course, Ben can't stop the machine, or rearrange anything. All he can do is to throw more stuff in on the unbalanced side in an effort to maintain inertia. Never mind the fact that he cannot help but to overload the system. That'll happen some other day.

max2205's picture

market is melting up again today

flacon's picture

Buy puts, make money.

Yen Cross's picture

     MOAR {shite/fractional reserves}, to shovel!

TheFourthStooge-ing's picture

Don't forget to bring your hip waders.

Yen Cross's picture

  TheFourthStooge-ing    I'll be standing right along side of you, holding up the dam.

Lore's picture

Tapering is important. Imagine how your ass would snap shut without tapering.

This just in's picture

Plus the tapering helps to channel the headwinds while rapidly approaching the fan.

Lore's picture

Exactly. We're being tasteless, but the glib jargon for all these stupid programs might just as easily refer to bodily functions. When will central bankers call a spade a spade?

kentfinance's picture

ah yes...but with bonds selling off they get to buy at better levels...see?

slaughterer's picture

QE-YD (Yellen/Dudley) 2014 is a coming.  USA is going Japanese.

TruthInSunshine's picture

Yellen be gellin' just like Ben the fleeing felon as the CronyComrades demand MOAR!


resurger's picture


insanelysane's picture

Tylers, We need a Where's Ben going? poll.

slaughterer's picture

The Japanese are going to buy Bernanke from Obama for $5 trillion,  download all of Bernanke's mind, and put his body in a cryogenic chamber.

smlbizman's picture

bens going to pull off that fake fucking beard and rubber  face, revealling  himself to be maxine waters......

caimen garou's picture

I disagree, I think he is pee-wee herman

TruthInSunshine's picture



Greenspan's bubbles sat on a wall

Greenspan's bubbles had a great fall

All Bernank's fiat & all Bernank's Madoffs

Failed to truly reflate those bubbles before the revenge of the write offs


#KeepObamaBundler&Ex-CEOofGoldmanThe"Honorable" Jon S. CorzineFreeProject


resurger's picture

There will be no walls in Wolfstreet.


cloudybrain's picture

save toilet papers

Midasking's picture

Why can't we just give everyone a trillion dollar coin so we can move on from the QE and get back to more shopping!

madbraz's picture

Finally a spot on article on QE and the Fed BS behind it.  Despite QE, implied inflation expectations have dropped in the last 2 months.  Absent QE, the 10 yr goes below 1.5% again.  With a market correction (20% or more), it goes below 1%.





Panafrican Funktron Robot's picture

"Absent QE, the 10 yr goes below 1.5% again."

Tenuous assumption, keep in mind, QE boosts both stocks AND bonds.  $45 billion a month in UST purchases is present case, if that were to ever go down, the 10 year would probably go up in yield (even with an equity pullback).  

JustObserving's picture

US debt and unfunded liabilities are $141.6 trillion and rising at $8 trillion a year.  It is impossible for the Fed to taper under such conditions.

yogibear's picture

tick, tock like a bomb. Just a matter of time.

MisterMousePotato's picture

@JustObserving ... you fail to mention the trillion or so each year that the feds are spending as we speak just to keep places like Detroit and Memphis from ...



Dapper Dan's picture

You are frightening to children,  please cease and desist!

Do Not Worry !!

Do Not Worry !!



And remember kids, they're fighting for our freedoms, but only some of them.                  (the freedoms,  that is)

JJ McApe's picture

Ben is out of bullets and the dragon of no job growth due to excess regulations and excess
Government has not been slain. The speculation is very reminiscent of 1929.

SmallerGovNow2's picture

you nailed the two biggest problems when it comes to future growth.  cannot happen without repeal of massive regulatory burden (including simplifying the tax code) and reduction of the size and scope of the federal government...

MisterMousePotato's picture

So I walk into my little Sierra foothills town hall to pay the water bill. (Up about 400% in the last 15 years [they finally figured out a way to force people to fund their pensions].)

Anyway, in an idle moment, I picked up their "Welcome to [Paradise]" brochure to look at while waiting.

It consisted of no less than 40 or 50 pages of utter beaurocratic crap that one had to go through in order to open a business. This license. That permit. Those permissions and inspections and reviews.

Now, to sure, each page was only five and a half inches by eight and a half inches (letter sized paper folded in half), but 40 freakin' pages!?!

Fuck 'em. They've made it impossible.

crzyhun's picture

“2010 is whatever the records and the memories agree upon.” GO 1984

BadKiTTy's picture

I keep thinking I cant take any more of this...... and then I have to tell myself that this is the way things are, and nothing will change.  

Ignorance is indeed bliss.......I wish I could go back to having my head in the sand! 



NotApplicable's picture

Try some meth. I hear it cures everything that's wrong with society.

SmallerGovNow2's picture

not sure about that but i'm leaning pretty heavy on the alcohol crutch...

MisterMousePotato's picture

Looks like I picked a bad decade to quit sniffing glue.

yogibear's picture

"With doing more"

The Fed has infinite printing to counter-act  deflation. That's what it's doing.

Rather than let markets adjust to rid all the excesses, it's increasing the excesses.

Oh, this should end well (sarc).

slaughterer's picture

Today = FOMC pre-ramp.

Overnight futures shows the fabric of the half-time leaks as the informants and snitches relay their illegally-attained info to the Squid/Whale. 

Wanton1's picture

Magnetosphere weakened by 50% in last two years.  

Earth's magnetic field is 1/2 gauss .... down from 300 gauss 250 million years ago.  

Earth lost 70-80 % of its magnetic field in the last 4,000 years.  


Frank N. Beans's picture

are you suggesting a link between Earth's magnetic field and QE?