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Rick Santelli Rages: "What Is Bernanke So Afraid Of?"

Tyler Durden's picture


The following three minutes of absolute perfection uttered by CNBC's Rick Santelli is dangerous for anyone living in Kyle Bass' "intellectually dishonest" alter-world of denial and "unicorns and rainbows" as the Chicagoan goes off on the ignorance of everyone in these so-called markets. When every talking head is bullish and the world is going so great that we should all "buy stocks," Santelli demands we ask Bernanke - "what are you scared of," that keeps you pumping this much money into the system for this long? Simply put, Santelli's epic rant is the filter that every investor (or member of the public) should be viewing financial media and the Fed today (or in fact every day).

On CNBC and all the channels that cover business, we have person after person after person, buy side, sell side, upside, downside:

  • How is the economy? Economy is great.
  • What about stocks? You got to buy them.
  • What if they break? You have to buy the dips.
  • What's wrong with the economy? I don't hear these people saying anything is wrong with the economy.

So what's wrong, Ben? Why can't we get out of crisis management mode?


There's always going to be something.




Why don't these people kick the tires?


They take a press release from the Federal Reserve and they think it was written by God.

One of Rick's most epic rants to date:

And perhaps clarifying some of the issues Rick brings up, here are the pertinent thoughts from the most recent Sth Klarman letter:

Is it possible that the average citizen understands our country's fiscal situation better than many of our politicians or prominent economists?


Most people seem to viscerally recognize that the absence of an immediate crisis does not mean we will not eventually face one. They are wary of believing promises by those who failed to predict previous crises in housing and in highly leveraged financial institutions.


They regard with skepticism those who don't accept that we have a debt problem, or insist that inflation will remain under control. (Indeed, they know inflation is not well under control, for they know how far the purchasing power of a dollar has dropped when they go to the supermarket or service station.)


They are pretty sure they are not getting reasonable value from the taxes they pay.


When an economist tells them that growing the nation's debt over the past 12 years from $6 trillion to $16 trillion is not a problem, and that doubling it again will still not be a problem, this simply does not compute. They know the trajectory we are on.


When politicians claim that this tax increase or that spending cut will generate trillions over the next decade, they are properly skeptical over whether anyone can truly know what will happen next year, let alone a decade or more from now.


They are wary of grand bargains that kick in years down the road, knowing that the failure to make hard decisions is how we got into today's mess. They remember that one of the basic principles of economics is scarcity, which is a powerful force in their own lives.


They know that a society's wealth is not unlimited, and that if the economy is so fragile that the government cannot allow failure, then we are indeed close to collapse. For if you must rescue everything, then ultimately you will be able to rescue nothing.


They also know that the only reason paper money, backed not by anything tangible but only a promise, has any value at all is because it is scarce. With all the printing, the credibility of our entire trust-based monetary system will be increasingly called into question.


And when you tell the populace that we can all enjoy a free lunch of extremely low interest rates, massive Fed purchases of mounting treasury issuance, trillions of dollars of expansion in the Fed's balance sheet, and huge deficits far into the future, they are highly skeptical not because they know precisely what will happen but because they are sure that no one else--even, or perhaps especially, the  policymakers—does either.

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Wed, 06/19/2013 - 11:51 | 3671600 Flakmeister
Flakmeister's picture

Because he doesn't want an epic collapse on his watch?

Wed, 06/19/2013 - 11:57 | 3671626 nope-1004
nope-1004's picture

Bernocchio out of bullets.  Just all talk at this point.  That's why he can't taper, stop, exit - the whole house of cards comes crashing down, bringing all the large insolvent banks with it.

But let's live out this fantasy:  If things are getting so much better, I say stop buying MBS altogether.  Either stop buying MBS and end QE, or STFU BEN!!!



Wed, 06/19/2013 - 11:57 | 3671638 Jonas Parker
Jonas Parker's picture

Ben's a "one-trick pony". Problem is, the trick isn't working any more...

Wed, 06/19/2013 - 12:28 | 3671776 JPM Hater001
JPM Hater001's picture

<----Strike "one"...It's the most epic

<----Keep "one"...Rick was just warming up

Wed, 06/19/2013 - 12:41 | 3671841 Big Slick
Big Slick's picture

We all know that Rick REALLY DOES KNOW why they cannot do what he says they should.   But it's fun to think about the 3 or 4 people watching this who have a lightbulb go on above their head.

A few more lightbulbs to go...

Wed, 06/19/2013 - 12:48 | 3671880 Triggernometry
Triggernometry's picture

Go Rick

Wed, 06/19/2013 - 13:19 | 3672004 dontgoforit
dontgoforit's picture

However, Ben's trick is still working - at least for now.  Santelli is spot on correct.  The Fed is afraid of the hell storm that is coming - they're putting it off as long as they can - at any cost.  Yeah, that's fear alright.  We're in over our heads and nothing short of God's intervention will save us.  It's just a matter of when.

Wed, 06/19/2013 - 13:26 | 3672043 Divided States ...
Divided States of America's picture

Love Rick but I think everytime he goes on a rampage like this on TV on FOMC meeting days, the stock markets end up rocketing higher after 2:00.

Wed, 06/19/2013 - 13:30 | 3672061 BigJim
BigJim's picture

I think Rick better start avoiding hot tubs

Wed, 06/19/2013 - 19:27 | 3673584 dcohen
dcohen's picture

I want the coffee Rick has

Wed, 06/19/2013 - 13:30 | 3672064 SheepDog-One
SheepDog-One's picture

But has Bernank ever been fired before an FOMC report as Business Insider is reporting?

Wed, 06/19/2013 - 13:43 | 3672119 Herd Redirectio...
Herd Redirection Committee's picture

Which really is just the way to make both of them come out of this a little cleaner.

Wed, 06/19/2013 - 15:10 | 3672618 DaveyJones
DaveyJones's picture

"Avoid Epic Collapse" - Ben's avoidance techniques are enhancement tools. Funny how that works 

Wed, 06/19/2013 - 14:08 | 3672236 silverserfer
silverserfer's picture

I dont think the fed is afriaid of much. They have their stacks and islands. I think they are just toying with the masses.  

Wed, 06/19/2013 - 13:26 | 3672037 I am more equal...
I am more equal than others's picture

Because he doesn't want an epic collapse on his watch?

No, Ben is the set-up guy.  An epic closer is coming. 

Wed, 06/19/2013 - 12:45 | 3671855 knukles
knukles's picture

Now that, my friends, is a fellow bond trader.
From the old school, way back machine days.
'Nuff said.

Wed, 06/19/2013 - 12:48 | 3671883 eatthebanksters
eatthebanksters's picture

Fuck me...I love it when someone just talks honest.  Santelli has to scream to get attention, attention that the MSM won't provide. Well, when the shit hits the fan, he'll probably be safe.

Wed, 06/19/2013 - 12:56 | 3671909 Big Slick
Big Slick's picture

Great point Bankster!  When you consider the people with demolished 401k's will be coming for the MSM like a mob to Frankenstein's castle, you realize that Santelli is LITERALLY screaming for his life here.  Ha-ha!  I love you, Rick!!

Wed, 06/19/2013 - 13:22 | 3672016 Winston Smith 2009
Winston Smith 2009's picture

"When you consider the people with demolished 401k's will be coming for the MSM like a mob to Frankenstein's castle"

That should have happened in 2008, but didn't.

I have zero confidence in mobs.  They're idiots until the games and circuses totally come to an end and that hasn't happened yet in the US and has been temporarily papered over (literally) in the EU.

Wed, 06/19/2013 - 13:33 | 3672075 BigJim
BigJim's picture

 They're idiots until the games and circuses totally come to an end

They're still idiots even then, it's just their idiocy switches from bovine to ant-like.

Wed, 06/19/2013 - 13:45 | 3672124 Herd Redirectio...
Herd Redirection Committee's picture

They've also been lied to their entire life.

When you aren't taught HOW to think (only WHAT) it is difficult for the avg person to imagine the amount they are being lied to, on a daily basis.

Wed, 06/19/2013 - 14:09 | 3672237 Think for yourself
Think for yourself's picture

To be fair to the social insects, ants are way more organized and situationally aware.

I think the word you're looking for is heerwurm-like:

Wed, 06/19/2013 - 14:41 | 3672389 Winston Smith 2009
Winston Smith 2009's picture

"They're still idiots even then, it's just their idiocy switches from bovine to ant-like."

Agreed.  I should have said "complacent." They're just idiotic to be complacent.  And, unfortunately, without the masses on their side, anyone who isn't complacent gets squashed.

Wed, 06/19/2013 - 12:30 | 3671797 TruthInSunshine
TruthInSunshine's picture

The U.S. economy, as well as most western ones, are structurally hollowed out, where the parasitic Wall Street/Financial complex has its blood funnel (enabled by captured, bought & paid for legislative bodies and regulatory agencies) draining the remaining blood from the corpse.

These economies are hollowed out by monetary policy repression (courtesy of monetary policy designed to exclusively benefit CronyComrades of entities such as the FRBNY), automation (whereby technology increasingly renders human labor obsolete), non-free and very much shopping-for-the-most-sweatiest-shop-slave-labor "trade" pacts, and a massively expensive and bloated military-technologyNSA/government union worker Complex that sucks the taxpayers dry while simultaneously reaming them up the ass on the civil liberties & opportunity side of the ledger.

And if the emerging markets think they'll escape the carnage when the walls come tumbling down in the streets that the Modern Money Mechanics/fractional reserve banking system built (on a foundation of mud), they will learn that they're wrong, and that life isn't fair when you depend on the benevolence of absolute criminals.

Wed, 06/19/2013 - 15:18 | 3672650 DaveyJones
DaveyJones's picture

well said. historians note that as empires go to shit (and they almost always do), their financial sector both balloons and inbreeds with the "leaders" not only out of criminal greed (both cause and effect) but at an ever growing need to create tricks to shuffle, hide, beg, borrow and steal

Wed, 06/19/2013 - 13:37 | 3671928 bob_stl
bob_stl's picture

He thinks his pony is a Quadricorn...

Wed, 06/19/2013 - 11:58 | 3671648 Political_Savage
Political_Savage's picture

He doesn't want to be the Man that Sold the World


Too late Ben, sorry. History won't be kind.

Wed, 06/19/2013 - 12:08 | 3671688 FL_Conservative
FL_Conservative's picture

Wish we had more Rick Santelli's.  I love watching that guy leave the reservation.

Wed, 06/19/2013 - 12:17 | 3671728 V in PA
V in PA's picture

Santelli in 2016!

Wed, 06/19/2013 - 12:34 | 3671815 silverknuckle
silverknuckle's picture

I'll vote for that!

Wed, 06/19/2013 - 12:18 | 3671733 Herd Redirectio...
Herd Redirection Committee's picture

One word: Legend.

Wed, 06/19/2013 - 12:16 | 3671727 maskone909
maskone909's picture

Every time i think of the chair satan i think of that song, "The Man Who Sold the World" bowie and nirvana.


will some one please remind me why we pay income tax when the Fed prints 85Billion +per month?  100million people in the USA, only a fraction of that actually pay taxes at the end of the year.  this is going to end well.

I laughed and shook his hand.... and made my way back home.

Wed, 06/19/2013 - 12:33 | 3671789 ParkAveFlasher
ParkAveFlasher's picture

I can't square that either, mask.  Although all the baby boomers retiring, and averting the bankruptcy of their retirement funds, probably has something to do with it.

Wed, 06/19/2013 - 13:08 | 3671962 eclectic syncretist
eclectic syncretist's picture

Again, it's all about people's trust and belief in something that is not real, that the Fed or anyone else can create real value indefinitely.  Alchemy is madness, and Bernanke and those who believe he has the power to create value are alchemists.  What Bernanke is most afraid of is that this truth will be recognized by the masses.

Wed, 06/19/2013 - 13:24 | 3672025 dontgoforit
dontgoforit's picture

It's freakin' Animal Farm: the masses don't care as long as status quo is kept running - really; they don't want to know.  Don't understand it; don't want to hear it; don't want to know.  They swallow every lie like it's cream pie.

Wed, 06/19/2013 - 13:21 | 3672019 dontgoforit
dontgoforit's picture

History?  They're ain't no history when we're all done.

Wed, 06/19/2013 - 12:03 | 3671667 onewayticket2
onewayticket2's picture

Bernank doesnt want it to blow on his watch......and, to him, it's less bad if Americans resurect the line from the Bernanke Horror Picture Show:  "Damn it, Janet"

Wed, 06/19/2013 - 12:30 | 3671794 Jena
Jena's picture

More like "Rose Tint My World" (keep me safe from a troublin' pain)

Wed, 06/19/2013 - 13:22 | 3672024 insanelysane
insanelysane's picture

That guy has no fucking neck.

Wed, 06/19/2013 - 12:04 | 3671669 onewayticket2
onewayticket2's picture


Wed, 06/19/2013 - 13:21 | 3672012 tarsubil
tarsubil's picture

The funny thing is, the house of cards will come crashing down anyways. This idea is fantasy that we've been able to avoid consequences up until now so that means we will never have to face consequences.

Wed, 06/19/2013 - 11:57 | 3671636 Levadiakos
Levadiakos's picture

Ben was like a deer in the headlights in 2007-2008. He wouldn't MOVE!!!!

Wed, 06/19/2013 - 12:00 | 3671656 Flakmeister
Flakmeister's picture

Piss on him to your heart's content, but he kept the house of cards collapsing for better or worse....

He is like Randall Flag from The Stand, "The last Magician of Rational Thought" and there are no shortage of fools that will flock to his banner...

Wed, 06/19/2013 - 12:13 | 3671704 Bendromeda Strain
Bendromeda Strain's picture

IT'S FOR WORSE - Bass cites Taleb with full concurrence... (para) "when volatility is repeatedly supressed, eventually it will breakout with a combined force greater than the sum of the suppressed actions". I repeat, IT'S FOR WORSE.

Wed, 06/19/2013 - 12:29 | 3671787 Say What Again
Say What Again's picture

I know what you mean.  You oughta see how those catholic girls party once they leave daddy's house and come to the parties!

Wed, 06/19/2013 - 12:42 | 3671849 Winston Smith 2009
Winston Smith 2009's picture

Two years old, but for those who haven't seen it:

The Black Swan of Cairo

How Suppressing Volatility Makes the World Less Predictable and More Dangerous


"Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting no visible risks. In fact, they tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. Although the stated intention of political leaders and economic policymakers is to stabilize the system by inhibiting fuctuations, the result tends to be the opposite. These artificially constrained systems become prone to “Black Swans”—that is, they become extremely vulnerable to large-scale events that lie far from the statistical norm and were largely unpredictable to a given set of observers.

Such environments eventually experience massive blowups, catching everyone off-guard and undoing years of stability or, in some cases, ending up far worse than they were in their initial volatile state. Indeed, the longer it takes for the blowup to occur, the worse the resulting harm in both economic and political systems."

Wed, 06/19/2013 - 13:35 | 3672086 dontgoforit
dontgoforit's picture

Like a magma chamber under a heavy weight.  It'll find a way to squeeze out.

Wed, 06/19/2013 - 13:49 | 3672141 Herd Redirectio...
Herd Redirection Committee's picture

Vesuvius, bitchez.

Or will it merely be Eyjafjallajökull

Of course we could also get Pinatubo'd

Wed, 06/19/2013 - 14:08 | 3672230 Herd Redirectio...
Herd Redirection Committee's picture

Shit, I forgot Krakatoa!

Wed, 06/19/2013 - 15:18 | 3672660 Flakmeister
Flakmeister's picture

Google Toba Super Eruption...

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