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NOctaper Or Shocktaper: Deutsche Bank's Five Reasons Why The Fed May Stun Everyone Once Again
Remember when minutes before the September FOMC announcement everyone was absolutely certain the Fed would announce tapering, only to leave a lot of very angry traders fuming? Fast forward one month when everyone is absolutely certain, again, that there is no way the Fed can announce anything even remotely suggesting a taper. One wonders though: since the Fed has by now burned all credibility bridges, and since the capital market bubble is now far greater than it was when both Stein and Bernanke, implicitly, warned about a building asset bubble (a chorus which has now been joined by JPM, Pimco and BlackRock) in early 2013, would today not be the best opportunity for the Fed to once again stun the market with a dramatic policy U-Turn, just to teach those momentum wave-riding vacuum tubes who is in charge? Probably not. However, as Lloyd Christamas noted, there is a chance. Deutsche Bank's Jim Reid explains why.
So will today's FOMC be as surprising to the market as the September meeting? Almost certainly not but you can't completely rule out a small taper for the following reasons: 1) In the September meeting a large majority of FOMC participants expected the taper to start before December; 2) the fiscal situation has been kicked down the road for a while; 3) financial conditions have arguably eased since the last meeting with rates lower and equities higher and 4) many of the members won't be on the committee into next year and may want to make a statement before leaving; and 5) they may feel a little bruised by the market's verbal reaction last time.
Overall we continue to think the Fed are trapped to a large degree by the liquidity they've provided financial markets over recent years which could destabilise assets if they reversed course without a strong economic recovery. Indeed the current data uncertainties is probably the biggest reason for holding fire at the moment, especially so soon after the shutdown. Indeed our view is that the Fed may have to adjust their criteria for tapering if they want to make regular cuts to QE in 2014. We're not sure how employment is going to suddenly pick up at this relatively mature stage of the cycle.
However when all said and done, the Fed do seem to want to taper and although we think they won't until well into next year, we can't help but think that the Fed are currently unpredictable enough at the moment that we need to be vigilant tonight and indeed in December. The story of the next 6 months could be very little tapering but a swing between liquidity complacency and liquidity fear. Maybe we're veering towards the former at the moment. DB’s Peter Hooper expects today’s FOMC to be most likely a “wait and see event” though he sees the case for a taper now is about as strong as it was in September when it was a very close call.
To all of the above we add one more reason: the following headline from the Chinese Ministry of Commerce, which hit earlier.
- MOFCOM: U.S. POLICY CHANGE MAY CAUSE CAPITAL SWING FOR CHINA.
And so, just like in 2011, China is once again openly complaining about QE (and, tangentially, the inflationary implications it has on the Chinese economy). Recall that it was the soaring Chinese inflation in 2011 that sent gold from roughly where it is now, to all time highs. So if we have a repeat, even as the entire world is now effectively begging Mr. Debtfire to taper, will the BIS' gold selling team headed by Michael Charoze out of Hong Kong be able to contain that one last remnant of the Fed's idiotic monetary policies? Stay tuned.
As for today, our personal hope is no taper now... or ever. After all, the faster the Fed proceeds to monetize everything, and in unlimited amounts, the faster this centrally-planned charade finally ends.
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100 billion.
interesting
the word tightening has been expunged from economic lexicon and replaced with tapering
mission accomplished
The number one reason there might be a taper is because there is not a person in the world who thinks they will taper. This is the perfect setup for a few insider trades before reversing in a few months.
OK....I think they're just screwing with us now.
Now?
Ya DB,... right. The FEd is going to taper just before Yellen takes over when the US econ prints are in serious decline... retards. Clearly not objective players but another actsive player in the battle to swing psychology to their own books.
No taper yet. Debt ceiling kicked to March.
They will finally taper when Miriam Webster changes the definition of taper to print more fiat.
Soon "Tapering" will be gone "Screwing" will be in.
CNBC: Fed has announced that it will not stop screwing you
I think Big Ben prefers the word "shtooping"
Today reuters report that Chinese are selling gold to get cash, what a shit, Chinese does not sell any phyiscal gold. In China most people don't know what is SHIBOR or what's going on in banking system, and lots of people have enough personal savings, why they sell gold?
I am tired to clarify day after day that those false information to lure people to get rid of physical asset and hold those shit's digital QE output.
And Jeffrey Christian and Andrew Maguire's debate is going on, mieanwhile Jeffrey is promoting miners to hedge their output, another financial shit crook.
100 Billion:
https://www.youtube.com/watch?v=jTmXHvGZiSY
Think big young lad. Let your dreams run wild.
Once they increase, $100B won't be enough because they will need to increase again too soon. The snowball grows at it rolls down the hill and it is gaining speed. I'm thinking more like $125B when it comes.
.....apparently DB did not get the pre-announcement release memo, they must have pissed someone at the fed off. so a tightening right before the twit IPO, and right before the holiday season, riiiiight.
the announcement will be the same as always, how great everything is doing which is why we still need 85B/month.
"We're there man..." - Lloyd Christmas
They've always been screwing with us. There are just fewer sugar crumbs left over for us to sooth our anal pain.
If I was a client of DB, I would've just closed my account with them. Goldman, hell,... never would've opened one. I don't like being part of the cattle drive for these ranchers. If I had a subscription to the WSJ or FT, I'd cancel them at light speed. For all of these outfits, I'd avoid them like the plague.
See, shocktaper = "correction". We need a "correction" right? To make it look real. Repeat suprise taper and viola' correction.
Don't forget to BTFD.
Just BTFATH and shut the front door. /sarc
You taper someone off a drug, it is appropriate.
I see your $100B and raise you $15B
75 Billion and I will throw in a Hilsenrath...just in case the market needs clarification.
With a detailed, fact-checked, and edited writeup six seconds after the public release. Because some releases are more public than others.
Didn't they just announce a 90% decline in net income?
Bullish.
Whats tapering?
The start of defecating!
Incorrect. Tapering follows each turd. However, one turd tapering does not preclude another turd queued.
Impressive. You must be a Nobel Prize winning Taperologist!
;)
I'm the guy behind the guy, behind the taper.
PAF = a Princeton Phd in Tapering.
Shit is tapered so your asshole doesn't slam shut.
Now THAT would be a funny sound.
Sounds like POP!; you know, just like a bubble bursting . Then you hear a wet splash and get a chill on your bottom.
Stocks are at an alltime high, but the real economy is in the toilet. IF they have any morals at all they would taper.
Morals? Seriously?
He meant morels, they're mushrooms.
When one enters a PhD program for Economics, in order to be accepted into the program, one must discard all morals. On the first day, there is a test to verify that you discarded them. You have to sit there and watch a newborn kitten die cause the milk from the mother is inflated so that the mother cannot afford to care for its kitten.
Of course they have morals.
But their morality is not at all what you expect.
This is actually more wishful taper talk hidden in reverse psychology, just like every other time. I think people are missing the point. QE didn't start in 2009. It has been ongoing for decades and has never been reduced. It can never be reduced. All they can do is hide it. If they announce a taper, they will just pump even more money to the banks and government in hidden ways.
Correct.
Of course it can be reduced.
In fact it can be stopped, and reversed.
The creatures who control this financial system know that it cannot be kept going forever. So when they can no longer get what they want out of it -- they will not wait for it to collapse naturally. They will 'pull' it in a controlled demolition.
Their purpose is not to keep the current paradigm functioning forever. Their purpose is to maintain their power forever.
Where do you think all the gold went, when 'they' were talking it down, keeping it cheap, and keeping it unaudited?
Of course THEY can reverse -- BUT ONLY if you assume they want what is right for America. Questionable assumption based on the track record.
You don't have to assume that at all, and I don't. I assume they will change policy when it is best for THEIR interests. When all the sheep are walking one way and baa-ing in unison, they will do something to shear them one again. You can count on it.
The function of the Fed is not to 'surprise'...it is to fund the government....read the dang Constitution...
Show me in the constitution where the Federal reserve, an illegal entity, is supposed to fund the government. You must have the special 2.0 version.
Agreed perhaps he left the Sarc tag off.
I am not american, but I know the fed has been around aprox 100 years raping and pillaging.
You're not an American? Well inside every foreigner is an American struggling to get out and go gorge on a Super Sized McDonalds meal.
We haven't been using the constitution for about the last 100 years....where have you guys been?
The Constitution was a stalking horse for the Federalists. They wanted all the power that the Brits had but the Articles of Confederation kept them from getting. The Constitutional Convention was in many ways a coup. There has been a constant ratcheting of central power ever since then.
'read' the Constitution???I thought if the president does something its OK.
The Constitution is just a prop...right???
I think the President can act unilaterally......I think. Pretty sure he doesn't even have to tell the truth while he's doing it.
Come on guys, it's so simple! The Constitution does not apply to Kenyans; so if one should get elected he could do literally whatever he wanted!
He'd have US on a technicality.
doc the restaurant is called Jerrys in Englewood, NJ. old school italian deli.
http://jerryshomemade.com/
i will have the veggie sandwich. italian bread. fresh mutz, roasted red peppers and marinated eggplant. splash of balsamic on the bread.
no need for any sides or drinks.
way to spice up the joint.
Doesn't seem to be working
What do I need this information for?
the fed has no mention in the constitution, congress issues the money gold and silver so on and so forth.
propaganda makes history foggier every day.
Many believe that the Fed is a failure, but acutally it has been a roaring success. It has accomplished exactly the mission it was to set up for, to protect and prosper it's owners the private banks. It has overseen a wealth transfer from the general public to the wealthest individuals via currency debasement to the tune of approxiamtely 97% and is in the process of stealing the remaining 3% if not stopped. Fractional reserve banking is an immoral, deceitful ponzi scheme made possible by fiat currency and will eventually collapse because that's is what it does. The outcome is never in doubt only the timing.
Will not be any big thing! LOL
nobody believes them anymore so it doesn't matter what they say
buzz
Watch what they do .........not what they say
It would matter if they increased rates a 1%
Which part of "zirp 4evah" do you not understand?
You can believe in the opposite of whatever any of the elites say. Bank on that.
they are just trying to increase trading volume so blankfein gets a bigger bonus
Shouldn't the photo be of lucy pulling the football on Charlie Brown..
I would say a photo of Lexington Steel ramming an average main street woman doggie style would be more appropriate.
DB said we needed a massive selloff in order to resolve the government shutdown.
ya, here is the surprise.
today, we will announce they will start to buy 1 trillion dollars worth of assets each month.
there is no way these douchebags will upset lloyd blankfein, god for fucking bid the dow dropped 100 pts, not allowed.
fb must go up,aapl must go up, amzn must go up, goog must go up, nflx must go up, tsla must go up, no down days allowed.
whatever, if there is a change it will be more QE, dont underestimate the hubris of these degenerates.
"our personal hope is no taper now"
Mine too, right on bro.
Over.
a credible tapering would be (imho) if the FED would announce that they will decrease by one billion per month. reminiscent of the "Baby Steps" of old. 85bn per month = 85 months until zero
Kile Bass in the excellent ZH piece lately spelled it out:
"Kyle: I think that as long as the Fed—for instance, the Fed is still buying $85 billion a month; almost a trillion a year—you could argue that the Fed is being more stimulative today than they were a year or year and a half ago. When we were running a trillion to a trillion and a half deficits, the Fed, at a trillion dollars in a deficit, was buying every bond that was issued. Today, you have a scenario where the fiscal deficit in the U.S., we think, is somewhere around 650 to 700 billion dollars. So, in theory, the Fed is actually adding more money to the economy today than it was a year ago because the deficit is lower and they’re still buying the same number of bonds. So what I’m saying is the monetary base continues to expand"
so there is less reason to "pump in" than before
yet this very number, 85 billions, i.e. one trillion per year, half for Uncle Sam and half for the mortgage market, looks like the number that the Anglo-Irish banker "took out of his ass"
i.e. it hints at a fundamental back room deal. and they can last very long, due to their political nature
so I expect the FED to talk about tapering. yet I'll believe it only if they frame it into something similar to the "Baby Steps" narrative, i.e. if they tie expectations to something traditional. banking and central banking are after all, all about expectations and traditions
"took out of his ass"
+100 for that referal
Hyperinflation is a movable feast...it makes holiday planning really tough.
I suck but I'm positioned for no change or an increase/further accommodation (manipulation). I'll even toss in the expectation of "due to political uncertainty" being deployed just to up the ante on the new terrorist AKA TEABAGGERS.
I hope ZH puts up the Ken Langone clip that just happened where he just shit all over the constitution while licking the governments balls. In the name of sacrificing freedom for security. He would have made a great Hitler supporter.
Why bother, havn't we just learned from the best that it's a "neutral non-event" ? /sarc
they can never taper
Then they will die!
Well known fact
Don't eat, you don't s#it, you don't s#it .................you die!
i agree thats the outcome
from the beginning i was asking how could they taper unless they have planet Zayton to buy U.S. goverment debt.
What a joke. Not only will the Fed not taper but the actual amount it is pumping many times the 85 Billion it claims into the market each month. The reason this is happening is to allow China to sell down its US bond holdings without upsetting the market and the gold price is being suppressed to allow the Chinese to buy cheap.
Fed priority seems to be servicing debt cost and not crashing markets. So taper talk has to be just chat. Whatever other reasons may warrant tapering are subordinate to the above two, otherwise it would have already happened.
Random Poll
Fed Doesn't taper=arrow up
Fed Does taper=arrow down
George Washington's latest blog is forecasting when hell will freeze over. I think he might be on to something there.
This Fed-conjuring is for idiots and suckers.
The Fed has one mandate - deception.
Clueless economists are clearly smitten with the Fed's act. Obvious to every soul that cares to look, the USD is dead, fiat is on the ropes as a construct, and the circus known as finance is clearly bankrupt and in terminal condition. All that can be done is government support perpetuating magic "markets?"
END THE FED, END FRAUD.
Taper... the reverse variety in 3... 2... 1.
Love it ... "Repat" QE
China could announce -
For every dollar of QE the FED does - China will sell an equal amount of US debt.
It's funny how even the Feds attempts at greater transparency still results in market surprises. To thnk that press conferences and notes would lad o greater stability shows the great economic minds at the Fed do not understand markets. All the press conference means is the market prices in what participants expect to be announced where before they priced In what they expected to happen. Either way the market is just as volatile and unpredictable.
To be or not to be that is the question? Shakespeare himself could not have put it better.
Now if Prof. Fama (actually pronounced FEMA) is to be believed and the FED+other central banks have done nothing but neutral things, then why would FED Chairman tout with dates a Taper and then back off?? No worries about markets and economy since all they've done is nothing?
OT: Chairman Mao would probably make a better choice over Janet Yellen
I say no way due to:
1) Housing market hasn't rebounded from last taper talk. Rates have come down but not enough to restart refimancing or buying. Any talk of taper now would send rates much higher and kill housing for atleast another 2-4 mths. With a mid-term election year coming and consumer confidence sinking I don't see that happening.
2) Rising rates = more debt servicing costs.
3) Obamacare will only get worse, which puts lame duck status as the frontrunner unless economy improves drastically. No way they want to risk recession in 2014.
$10 pints here we come, Great. so excited.
They are already $8, up from $6 two years ago.
No way Tapering is announced by Fed. Although they might mention the terrorist Rand Paul and his threat to hold up the nomination process of the Felon Yellen.
How Rand Paul's action will have a similar / worse effect as the Gov't shutdown... and "we don't want that again do we" ... cue lame Stream Media to focus on Rand Paul and Tea Party rather than:
ObamaCare
Benghazi
IRS targeting
NSA
Fast and Furious
Illegal Immigration
I wake up every week day hoping this madness will end. Every day just like everyone else here on ZH. One day we will all wake up to see the - SHTF and it'll probably be during pre-market so no one can escape except those who got "the word' the weeks/months prior.
Until then, fuck it.
QE WILL NEVER STOP, that's my take on this. Untill the Dollar crashes.
DB = Scheisshaufen. Like I said yesterday (Tue, 10/29/2013 - 20:35 | 4103299 )...
The Fed is trapped between two untenable positions: They want to taper, but can't. They HAVE to keep 'printing' (increase the 'Money'* Supply) as the VoM is not doing enough to keep the product of the two (M*V) at levels to equate with economic growth.
I think they may double down on QE4. Shock and awe.
"The endgame is a total collapse from a higher diving board"
"She(Janet Yellen) will make Bernanke look like a hawk."
http://www.youtube.com/watch?v=pxBW82q_V9k
His prediction of the Fed increasing QE to $100/2oobn and so on to $1trn/whatever a month is looking more and more likely.
I'll give you 1 reason why they won't taper, because they can't.
When will people wake up?
We had how many rounds of QE with no recovery?
Then we went to QE Infinity - no recovery
Then Bernanke said taper - the world started to explode
Then Bernanke soothed the world by promising more QE Infinity
Coming soon Yellen will increase QE because -as Krugman says 'we have the right medicine - just not enough'
And still there will be no recovery - and no taper
But the stupid donkeys of the world will continue to believe these liars and know-nothings
And eventually the USD will collapse - and these stupid fucks will be left with nadday - nothing - fuck all
And they will moan and wail and scream and blame the politicians - the bankers
But at the end of the day the donkeys will have nobody else to blame but themselves - they have umpteen warnings that the Fed would print the USD into the ground (because they have no other choice)
And they could have bought PM.
But nope - the donkeys bought stocks and bonds and properties and said to anyone who warned them 'see - you were wrong - good luck with your gold - watcha gonna do, eat it hahaha'
FUCK YOU STUPID DONKEYS - YOU CAN ALL STARVE FOR ALL I CARE - I WILL NOT LIFT A FINGER TO HELP YOU