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Gold, Bonds, And Stocks Soar As Bernanke Promises Moar
The punchline (as far as markets are concerned) of Bernanke's Q&A appears to be: Inflation and jobs signal more Fed stimulus needed and that Tapering does not end stimulus. In other words - highly accomodative policy needed for foreseeable future:
- BERNANKE: 'TOO EARLY' TO SAY U.S. 'WEATHERED FISCAL' RESTRAINT
- BERNANKE SAYS INFLATION, JOBS SIGNAL MORE FED STIMULUS NEEDED
So on one hand Bernanke admitted he had to pop the HY bubble with the Hilsenrath leaks a few weeks ago (talk the market down), but is happy to take the equity gains in hopes they will trickle down to wealth effect, inflation and employment even if credit is spooked (and the bond market technically corrupted).
Bernanke admits the bond market is broken:
Bernanke on collateral shortage: "There may be some pressure on the supply of safe assets"
However, per Ben, it is only a "little" broken: according to Bernanke he does not remove collateral from the market via monetization because the Reserves he creates are a form of High Quality Collateral, as the TBAC inferred in this refunding slide. However, as the TBAC also explained with the following two slides (here and here) this private to public collateral transformation is not working out quite as expected. That, however, is irrelevant to Ben, who is always ready to do more oblivious of the effects.
- BERNANKE SAYS FALLING INFLATION CAN BE BAD FOR AN ECONOMY
- BERNANKE SAYS `OVERALL THRUST' OF POLICY HIGHLY ACCOMMODATIVE
So keep buying - they'll always be a greater fool (The Fed) to sell to, no matter how much we destroy the markets.
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Please note that more fiscal stimulus might appeal to the day trader tomorrow, but in general bond prices decline after stimulus is announced. Do we call this QE5?
Once again the headline reading algo bots miss it
Raising the Fed Funds rate is not the same thing as stopping or even slowing down the bond purchases. Just slowing down will cause the rates to spike. Everybody forgets that there aren't enough buyers now AND the supply is increasing by $1T a year.
"
WASHINGTON (MarketWatch) — The Federal Reserve will not be in a hurry to raise short-term interest rates, even after the unemployment rate falls to the central bank’s threshold of 6.5%, Fed Chairman Ben Bernanke said Wednesday. “There will not be an automatic increase in interest rate when unemployment hits 6.5%,” Bernanke said in the question-and-answer session of a speech to economists."
yeah, we hit 6.5% in 3214.
Ben promises moar? Color me surprised.
I heard him announce to the world that the Fed had to do what they did and then ask what would have been the outcome if he hadn't had delivered the message on tapering? This is most blatent announcement of outright market manipulation that I can ever remember. Sit back and think about it, he basically said that any segment of the market that gets a bit frothy is subject to a Fed ass whooping! All I can say is good luck to anybody involved in any aspect of investing in any asset class in any industry. And we are worried about what Obama is doing? So markets are going to get back to doing what they were doing until Bernanke jap slaps your ass again. With that said, I still feel that eventually the market is the one that's going to be jap slapping Bernankes ass because I really don't think that Baernanke, nor anybody can stop the train that is barreling down the tracks in Europe. It's picking up momentum by the day.
I'm very grateful for things:) can't say openly...but you know....those of you who know, will know that I am starting to have Gratitude...after a long time in the wilnerness...I'll leave it at that...:) I feel positive..
whoever gave me a plus 1, I'm very appreciative, truly....
Gold up 32. Wow. That was truly one of the most amazing things I have ever seen. He had a smirk on his face like he was a truimphant hero or something. ho
Bennie placed an ordr for AGEs last night.
Well you can't have inflation without gold going Up....it just wouldn't look right
I would guess that an overwhelming majority of zh followers don't believe the bs spewing from Bernake's mouth. Why then does everyone get all hot and bothered when he issues his latest line of bs? Why does zh even bother to cover his bs with post after post after post? Trying to make sense from nonsense? Good luck with that.
Like all creatures of the underworld, he mixes lies with the truth. Of course he isn't going to stop buying. We all knew that.
No offence but Bernanke says QE will continue as he said all along, but he did not take tapering off the table. Same thing happend after the FOMC today, gold shot up then came right back down. This is the algos picking up words but not interpretting them exactly. This rally might be a bull trap.
So why the fuck should we believe him?
I always said the taper would be short lived. But I didn't think it would end before it started. Even I thought the fed wouldn't be so stupid as to screw with its credibility by floating taper and then not do it. Dumb me.
Wasn't dumb to call the gold bottom at $1200 tho. Ka-Ching.
The point is Ben is friends with the bankers, he'll let the markets drop while the sheeple sell their gold into the powers, when everyone is shaken out then he'll say....just kidding!
Plus while these algos are buying there is short covering also by algos, when it's figured out it was misinterpreted then it falls just as fast (as we saw in the trading session today). I still think gold is going to $1000 before it turns to the upside.
He is shitting his pants watching rates go up. He is now screwed and the markets are requiring him to keep printing, otherwise they will sell off and undue 5 years of manipulation, proving him to be an imbecile.
Not on his watch.
It sucks to be the Joo with the bag, just ask Madoff and his clients.
Bernanke should get out while he can.
Rising rates will be bullish for gold as we enter stagflation in the coming years, but not before gold corrects one more leg down to $1000ish, JMHO.