The Deer Returns On Fears Bernanke's Training Wheels Are Coming Off

Tyler Durden's picture

One word can describe performance across all asset classes today: clobbered. Stocks tumble, Commodities slide and Bonds crash, with the 5 year suffering the biggest intraday percentage jump in yields... ever! And why? Because Bernanke confirmed what everyone thought they knew, namely that the Fed will start tapering (how else can the Fed match the reduction in gross Treasury issuance at auction without taking over the private market entirely) eventually. Or at least that's what the market read between the Chairman's lines. In reality, Bernanke himself is more dazed and confused than anyone out there and just like Europe, is making it up one day at a time.



Did the Fed's extraordinary actions increase or decrease realized vol?




leaving the S&P 500 at the lows of David Tepper Day...


Commodities were a one way street...


FX markets exploded with the USD bid (and if the bulls think carry will save the day - think again - this kind of vol means LESS carry not more)...


The Dow saw its 7th day of +/-100 p[oint days - first time since oct 11

Charts: Bloomberg and Capital Context

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HedgeAccordingly's picture

funny stuff.. inflation is nowhere to be seen. yet stocks get smoked

Shizzmoney's picture

There is inflation - it's just in Jaime Dimon's wallet.

Hedgetard55's picture

Ben's presser was a big FU to Pres. Pakalolo.

SheepDog-One's picture

Oh there's a FED/White Hizzy war erupting....NICE!!

Freedom In Your Lifetime's picture

Am I the only one that misses the 5-10% down days? This market has become very boring since 2008-2009.

fonzannoon's picture

I am waiting to hear that XYZ firm was caught on the wrong end of an interest rate derivative and is in deep shit.

Manthong's picture

I just want to know how many milliseconds before the critical seconds of the specific utterances a Fed functionary  leaked the words to their good buddies.

nope-1004's picture



QE4EVA announced last year, commodities tumble

TAPERing announced (although I believe it's a bunch of BS), commodities tumble.

100% proof that the Presidents Working Group on Financial Markets manipulates EVERY ASPECT OF THIS ECONOMY.

And price controls always work out in the end, don't they?


Beam Me Up Scotty's picture

That first chart of the % change in the 5 year kind of looks like a seismograph.  Tremors turning into an earthquake.

jbvtme's picture

the problem isn't money.  we're going post industrial.  now we decide who works and who is food?

Uchtdorf's picture

Now all your soylent green is mine.

nope-1004's picture

QE has to go on forever, because this talk of "taper" was to try to push investors out of equities and into treasuries.  Didn't work.  Bernocchio was noticeably nervous today because he knows he has lost control of the bond market.  Rates are rising and the only way to cool them off is MOAR QE.

Capital is flowing where it needs to and away from the charade.

Good luck Ben.... you're going to need it.


ZerOhead's picture

Actually it's WE that are going to need the luck... Ben and his friends know how to take care of themselves.

He's got a QE monkey on his back and he can't stop now... the questions are;

1) Does he really care about the country or merely the primacy of the elite

2) Is he going to ramp up the opportunity for exploitation of this crisis in ways you can not yet imagine to obscenely profit ($T^1) his benefactors... (pardon the pun...)


As Obama's former COS Emmanuel once so succinctly put it... "Never let a good crisis go to waste..."

jekyll island's picture

There is no way QE can end, if bonds get no bid interest rates will rocket up and US will be crushed by payments on debt.  Gold is going to be used to balance the books of debtor nations after they print and erase their oblicgations, granted at a much higher price than it is now.  It is the only thing that the world economies will accept after all this money printing.  

markettime's picture

Might have to buy some more gold soon as it got whacked today.

camaro68ss's picture

Happy Tapper day boys and girls

With love,

Uncle Bernake

toady's picture

The real deal is the boys on the street want the bernank to disavow the word taper. They want 100B a month, not 85. All the way to 100T a month. More more more moar!

Since he insists on the word taper, they will gently bludgeon him until he relents.

SafelyGraze's picture

fortunately, the Nank is realizing that he is not bound by pomo.

if the treasury doesn't issue enough debt that the nank can purchase from primaries, then just bypass that little obstacle altogether.

you will soon be seeing outright flow of funds directly to the primaries, as though treasury debt were being purchased.

'virtual treasurys' is the working title for the program.

caconhma's picture

Thanks to FED, US economy is moving from a “Great Recession" to a Great Depression.

So, who will support all these people on food-stamps and all these States and municipalities living on government substance?

CrashisOptimistic's picture

It's quite puzzling how the Fed's own projections of 2013 GDP have lowered since their March meeting, but he says it's gotten better.

Uchtdorf's picture

Problem: You are not allowed to question the Great and Powerful Oz.

Solution: Follow the yellow brick road.

jekyll island's picture



The entitlement populus, let's call them the 47%, will riot not when the SNAP cards don't work, but rather when bread is $15 a loaf.  It will be ironic that the very people the gubmint used to buy votes will be the ones who take them down.  

Panafrican Funktron Robot's picture

Fonz:  Getting closer to that magic 2.5% level in the 10 yr.  

And by magic, I mean giant fucking fireballs raining down from a swirling, black cloud of death.

pods's picture

Shit, at 2.5% the 10 year will be higher than my mortgage.

Liked the descriptor btw, nice visual!


fonzannoon's picture

They made Gundlach and Gross look like amateurs today. If we get to 2.50% and someone is leveraged up somewhere it's going to get interesting quick.

SAT 800's picture

Very disappointed in Gundlach; he's starting to look like one of the people who got high scores on tests but never really figured out what was going on. Very superficial analysis he made to anounce a coming rally in Bonds; for the record, I'm saying no. He's wrong. Groos has already lost a shit load of money; Kyle Bass is my main man; he knows what bullshit smells like, and he has absolutely no respect for any of the government-quasi government, assholes.

Dr. Venkman's picture

Maybe that is a tonic for what ills BB?? Rates popped because he said, truthfully, that the economy is in the midst of a robust improvement. Big bad XYZ was betting against the economy. Not our (FED) fault. USA!



SAT 800's picture

You can't be serious. Rates popped because there were more sellers than buyers in the bond market; that's how prices go down; it's the falliing sale price of the Federal Promise that is recorded as a "higher interest rate", which incidiently will never be paid. Wake up, please.

Dr. Venkman's picture

THanks for the lesson, SAT. I was not being serious; There will have to be a few bodies that hit the floor, and BB will need some BS to shovel over them. I was providing the BS. Apologies.

css1971's picture

Do the sellers just throw the excess bond certificates out the window and hope someone picks them up?

There's a buyer for every seller.

pods's picture

Fonz, you just could have said DB.


otto skorzeny's picture

Those were heady days- bouncing my newborn on my lap and watching the 700 point drops.

Go Tribe's picture

Ahhh, the ole double-inverse ETF days....Perhaps they'll return.

astoriajoe's picture

Yeah, those were some good times. Good times....

kliguy38's picture

You pull QE and you just might as well pull a pin on a figurative ponzi grenade for the Faux would be lights out mofo.......and that AINT the way these slimballs will do.......or is it????......wanna bet YOUR money.....

Timmay's picture

"If the situation improves we will scale back QE, if it worsens we will add more".


So, the situation isn't "good" now or you would be scaling back and if it worsens you will not only continue with an admitted failure of a policy but do more of it?

Dis nigga trippin'.

SheepDog-One's picture

It's 'Goldilocks'ed' of course, everything 'juuuuust riiiiiight'.

franzpick's picture

Having lost sight of our goals, and our methods, we'll do the .gov thing - re-double our efforts.

SAT 800's picture

Awesome avatar name; he's responsible for my favorite quote; "bonds are instruments of guaranteed confistication".

franzpick's picture

I liked his: "The bodies of the dead corporations are lying in the gutters of Wall St., but no one will pick up the corpses."

SAT 800's picture

chuckle. he was one of the good ones, alright. Smart and tough.

underman's picture

And yet the fear guage is slightly lower today.

Sweet Chicken's picture

Can anyone one please point me in the direction of an article that will help me educate someone about all of this?! I do not have a good enough grasp to do so. Thank you in advance. :)