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Fed "Tightens", Tapers $10 Billion - Full Redline

Tyler Durden's picture


Despite the world of mainstream media pundits proclaiming the US is recovering nicely and that a taper is priced in (and the warning that the 5Y auction gave this morning that it's not), markets are already reacting violently to the Fed's decision to announce a small 'taper' (and more dovish forward guidance)...


We now leave it to Ben and his final press conference to explain his decision... and, of course, make sure everyone remembers "QE is for Main Street", 'tapering is not tightening' (despite Jim Bullard telling us it is), and just how effective 'forward guidance' is.

Pre-FOMC: S&P Fut 1771 (spiked pre-FOMC), 5Y 1.55%, 10Y 2.875%, VIX 16.5%, Gold $1236 (which was spiking pre-FOMC), EUR 1.376

As a reminder, here are the 4 reasons why the Fed was cornered into tapering... as we have noted numerous times before; the "taper" is all about economic cover for a forced move the Fed has to make:

1. Deficits are shrinking and the Fed has less and less room for its buying


2. Under the surface, various non-mainstream technicalities are breaking in the markets due to the size of the Fed's position (repo markets, bond specialness, and fail-to-delivers among them).


3. Sentiment is critical; if the public starts to believe (as Kyle Bass warned) that the central bank is monetizing the government's debt (which it clearly is), then the game accelerates away from them very quickly - and we suspect they fear we are close to that tipping point


4. The rest of the world is not happy. As Canada just noted, the US monetary policy will be discussed at the G-20

Simply put, they were cornered and needed to Taper sooner rather later...


and as Jim Bullard previously noted,


Financial market reaction to the June and September FOMC meetings provides sharp evidence that changes in the expected pace of asset purchases have conventional monetary policy effects.


Using the pace of purchases as the policy instrument is just as effective as normal monetary policy actions would be in normal times”


Or - in other words:

Tapering Is Tightening


And as BAML noted previously, forward guidance is ineffective as,

...policy makers are finding it harder to convince markets that central bankers have more insight into the future course of the economy and policy than they actually do. Meanwhile, markets are learning that it can be painful to rely too heavily on forward guidance when the risk/reward of being long fixed income is asymmetrical when close to the zero lower bound.

Full Statement redline below:


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Wed, 12/18/2013 - 15:04 | 4257954 AllThatGlitters
AllThatGlitters's picture

Gold and Silver Popped before, now dropping.  Where does it finish?

Live Gold:

Live Silver:


Wed, 12/18/2013 - 15:03 | 4257960 Headbanger
Headbanger's picture

Those pussies! 

And to all of you "no taper" mooks....

Told you so!!

Wed, 12/18/2013 - 15:04 | 4257974 Technical Difficulty
Technical Difficulty's picture


Wed, 12/18/2013 - 15:08 | 4257996 1835jackson
1835jackson's picture

Bernanke the legacy man.

Wed, 12/18/2013 - 15:11 | 4258034 camaro68ss
camaro68ss's picture

Cover for the bernake so he can say he left on "good terms"

Wed, 12/18/2013 - 15:16 | 4258058 Deo vindice
Deo vindice's picture

Only in a crazy and bizarre world can one cut spending by 10 billion yet still spend 75 BILLION a month and people think that is fiscally prudent and/or conservative?

It is still 75 billion a month!!

Wed, 12/18/2013 - 15:21 | 4258080 LawsofPhysics
LawsofPhysics's picture

Exactly, but who knows what the printing really is or where it is going.  Please, show me an audit, oh, that's right, the Fed has never been audited...


More importantly, existing debt still needs to be serviced and the future liabilities/budget still needs to be funded...

tick tock motherfuckers...

Wed, 12/18/2013 - 15:24 | 4258128 Pladizow
Pladizow's picture

Doest he $10bil taper come from MBS, Treasuries, or both?

If both, in what %?

Wed, 12/18/2013 - 15:30 | 4258165 Popo
Popo's picture

Bah.  I'll believe it when I see it.   Let's be clear:  The Fed said they would START tapering in January.  When in January?  The 31st?   So maybe more than a month away?   A lot can happen in 6 weeks.  This is most definitely not "Taper on".   

It's "We promise to go 'taper on' sometime in the next 6 weeks.   Between now and that date we will have another meeting... with a new and more dovish Fed chief".

IMHO there are a lot of people here swallowing this bs who should know better.

Wed, 12/18/2013 - 16:28 | 4258480 MachoMan
MachoMan's picture

We all know they have to keep their foot in the gas...  so, front running causes diminishing returns at an accelerated pace.  The cure to prolonging the status quo?  Throw off the front runners every now and again...  In other words, introduce ambiguity to the mix to keep the market honest.  This is all that is happening.  In other words, even if they taper today, they may not tomorrow and the expectation is that they'll have to increase the printing at some future date...  again, timing decisions are fool's errands.

Wed, 12/18/2013 - 16:53 | 4258579 mayhem_korner
mayhem_korner's picture



Absolutely.  This is all a misdirection.  At $75 B/month, the Fed is still more than monetizing enough to soak up all of the bonds needed to float the federal govt's (non-GAAP) operating deficit.  No one is going to even be able to sort things out until after the Super Bowl anyway because the govt is going to release skewed holiday season retail sales, then obfuscate further with the January seasonal lump-sum adjustment to employment numbers.

Wake me up when the bond-buying drops below the monthly pace of deficit generation AND the 10Y yield stops rising.  Until then, this is nothing but Swan Song for Bentastic.

Wed, 12/18/2013 - 17:40 | 4258772 trader1
trader1's picture

that's because the press releases and press conferences are targeted to ensure understanding by all audiences, including people who can't work with decimal points.  

Wed, 12/18/2013 - 17:58 | 4258817 Manthong
Manthong's picture

Scottie..  Full Reverse!!!!!

“Cappen.. I’m givin‘ her all that we got..

I canna’ do no moar!”

Wed, 12/18/2013 - 19:46 | 4259079 Pseudonymous
Pseudonymous's picture

Dectaper - ducttaper. There, I fixed it.

I think what the FED is trying to achieve is simply to try to train the people to believe that the amount of QE is the new FED funds rate. That is, from now on, forget about the interest rate, now the central thing about their policy is the monthly rate of QE, which is to be manipulated up and down. And the mere assertion of "power" - that this tool of theirs is almighty and super influential over everything monetary - is their goal. What the actual effect on the economy is is not that important for them. It's about who is wearing the pants in the family.

Enough with trying to read sick people's minds now. At the end of the day it's all just a farce that does not deserve too much attention.

Wed, 12/18/2013 - 20:47 | 4259240 bunzbunzbunz
bunzbunzbunz's picture

Bitcoin is down, so free payouts of bitcoins are up at

Wed, 12/18/2013 - 15:30 | 4258167 JP McManus
JP McManus's picture

5 in each.

Wed, 12/18/2013 - 15:55 | 4258352 BigJim
BigJim's picture

Isn't it amazing that all these figures are round numbers? That the economy does not 'need' $74.3 b/month, but exactly $75b?

If I didn't know better... I'd say it's almost as if they're plucking these figures out of their collective ass.

Wed, 12/18/2013 - 18:05 | 4258834 Manthong
Manthong's picture

All they need is a lousy $ 73,994,229,133 dollars and 39 cents per month.. I did the math.

Wed, 12/18/2013 - 23:59 | 4259638 Pseudonymous
Pseudonymous's picture

That is because, apparently, you haven't seen that other South Park scene...

Wed, 12/18/2013 - 15:29 | 4258180 CounterPartyVice
CounterPartyVice's picture

Tapering you say? Let's buy more treasuries right now! TLT+0.85%

Wed, 12/18/2013 - 15:33 | 4258212 ejmoosa
ejmoosa's picture

Hell yes!  Thank you Fed for leaving some of that paper for the rest of us!

Wed, 12/18/2013 - 15:29 | 4258184 fonestar
fonestar's picture

So do any of you posses the ability to find out what the Fed is saying and then what the Fed is actually doing?  No.  Remember those secret bailouts that were only disclosed two years after the fact?  Maybe you only care about the Fed because you want your guy to takeover and unleash some new scam upon the world?  You still love those little green rectangles but thankfully they will be reduced to shit-paper by the time your guy gets to have a go at it. 

Wed, 12/18/2013 - 15:38 | 4258237 disabledvet
disabledvet's picture


Wed, 12/18/2013 - 15:43 | 4258291 eclectic syncretist
eclectic syncretist's picture

"fonestar phone-star 69 call back broker say SELL BITCHCON ALL THE WAY TO ZERO dumbass"

- as seen on


Wed, 12/18/2013 - 16:24 | 4258459 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

What does any of this information have to do with Bitcoin? That rascal Ben did not mention Bitcoin once.

//// 1st Bitcoin mention on this thread/////

Wed, 12/18/2013 - 17:25 | 4258718 fonestar
fonestar's picture

Where did I mention Bitcoin?  I am not talking about Bitcoin, I am talking about fake libertarians who believe their funny-money is going to rise from the grave.

Wed, 12/18/2013 - 16:58 | 4258606 bigrooster
bigrooster's picture


Do you enjoy being a dick all of the time?  How are those BTC's working out for you big guy?

Wed, 12/18/2013 - 17:34 | 4258722 fonestar
fonestar's picture

They're working out great!

(and I am a permadick)

Wed, 12/18/2013 - 17:39 | 4258769 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

longer than four hours is cause for concern

Wed, 12/18/2013 - 15:30 | 4258193 PRO.223
PRO.223's picture

This is so Bernanke can say "everything was going so well when I was leaving that we started to taper". It's just him trying to set up his own legacy as not being the failure it is.

Wed, 12/18/2013 - 15:39 | 4258246 hooligan2009
hooligan2009's picture

5 bil each

Wed, 12/18/2013 - 16:16 | 4258430 Four chan
Four chan's picture

"Doest he $10bil taper come from MBS, Treasuries, or both?

If both, in what %?"

the question we know the answer to, that they will never answer.

Wed, 12/18/2013 - 16:45 | 4258565 MillionDollarAnus
MillionDollarAnus's picture

Why are so many people ignorant of the fact that the Federal Reserve has indeed been audited back in 2011?  Here's the audit.


Wed, 12/18/2013 - 16:51 | 4258592 LawsofPhysics
LawsofPhysics's picture

That was only for the "loans outstanding" and not the entire balance sheet.  Of course all those financial firms paid back those loans, you knew they would.  Troll.

Wed, 12/18/2013 - 22:32 | 4259471 MillionDollarAnus
MillionDollarAnus's picture

It doesn't matter.  One part of the Federal Reserve being audited does not equate to "The Fed has never been audited"  You could've said the Federal Reserve has never had a full audit and then been technically correct (as far as we know). 

It says right in the audit that the loans were paid back, that isn't the issue.  The shadier part of the audit (imo) was that some banks required trillion dollar emergency loans to function.  Without a central bank to rely on our entire financial system would've collapsed. 

Yes it would be even more interesting to see a full audit but it's likely the majority of people viewing it would not understand it anyways.  I may be a jerk but I'm certainly not a troll and what's up with people using all kinds of words incorrectly?  I hear people use the word tool inaccurately so, so, so often. 

Wed, 12/18/2013 - 15:31 | 4258199 ejmoosa
ejmoosa's picture

So, for the last twelve months ending Jan 2014, QE would total 1.01 trillion versus 1.02 trillion....

Got it!

Wed, 12/18/2013 - 15:39 | 4258263 ejmoosa
ejmoosa's picture

Just one question:  If job growth this year is less than last year, how is that a strengthening labor market?


Wed, 12/18/2013 - 16:42 | 4258535 GubbermintWorker
GubbermintWorker's picture

Good news though. The Congress will pass a tightened budget that will whack out a whole 25billion dollars......over.....ten years. </sarcasm>

Wed, 12/18/2013 - 15:14 | 4258062 James_Cole
James_Cole's picture

Schiff explaining how he is still correct in 3...2...

Wed, 12/18/2013 - 15:22 | 4258093 LawsofPhysics
LawsofPhysics's picture

Still buying 75 billion, so technically 75/85=0.88 x 100 = 88%, so Peter is still 88% correct.

What do you think the fed will do when the existing debt cannot be serviced or the future liabilities/budget cannot be funded?  Are you going to buy all that government paper?

Wed, 12/18/2013 - 15:24 | 4258125 camaro68ss
camaro68ss's picture

88% of the time hes right every time

Wed, 12/18/2013 - 15:33 | 4258198 eclectic syncretist
eclectic syncretist's picture

Bernanke you little bitch, you better get down there in the basement with Yellin and start manning those printing presses like a couple of six year olds in a Seoul sweat shop, you greased up pivot man at the bankster circle jerk asshole!!!!!

Wed, 12/18/2013 - 15:36 | 4258201 eclectic syncretist
eclectic syncretist's picture

Now you can go out saying your job was done and everything was coming up roses when you left, Bernanke, you worthless piece of maggot shit.

Wed, 12/18/2013 - 15:27 | 4258159 James_Cole
James_Cole's picture

Charlatan Schiff has made a huge deal about being right on 'no taper.'

Just like other dumbasses (cough jim sinclair) you can go a long way on a 50/50 call.. but being wrong is inevitable. 

Not that any of the dumbasses who follow schiff care.

In investing commentary the only thing that really matters is getting timing. 

Wed, 12/18/2013 - 15:39 | 4258265 philosophers bone
philosophers bone's picture

You are calling Schiff a "dumbass"!!  LOL.  It's never been about cutting it by $10 billion here or there.  His stated position is nuanced - that the Fed won't taper or, if they do taper, it will be just a slight reduction but they'll never stop QE.  He's still right.

Wed, 12/18/2013 - 15:44 | 4258297 RSloane
RSloane's picture

Forget it. Its James Cole. He interprets his universe on whether or not Schiff was right or wrong according to what he thinks Schiff said about tapering.

Wed, 12/18/2013 - 16:03 | 4258384 James_Cole
James_Cole's picture

Nuanced?? The man is certainly not nuanced. 

Yeah, sure, he's given himself an out on tapering. But he's been playing up the 'no taper' for a while now, his followers on here going off at Tyler because Tylers argument has said an inevitable taper and therefore Tyler has been 'wrong.' 

Nuanced = Tyler's argument

Cartoon for children = Schiff

Wed, 12/18/2013 - 16:05 | 4258402 fonzannoon
fonzannoon's picture

You are ridiculous. He has been right about QE so far and yes he said they could cut a few purchases but will eventually have to do moar. So your posts have no value to them.

Wed, 12/18/2013 - 15:53 | 4258326 ejmoosa
ejmoosa's picture

This is more like the deficit/debt debate in my mind.  Reducing the deficit does not reduce debt.  Ending the taper includes reversing it's actions and getting back to 0.

So the Fed tapered by 10 billion a month.  So at the end of Jan 2014, the Fed will have 1.265 trillion in QE versus 1.275 trillion if they had not?

I just want to know when they are gonna repaper the markets and withdraw that 1.265 trillion(and growing) amount?

My guess is never.


Wed, 12/18/2013 - 16:39 | 4258527 highly debtful
highly debtful's picture

I am one of those dumbasses that predicted that the Fed will not taper, as in never. So clearly I was wrong about that. For now.

But I still think that violent market reactions to this tapering will make them pick up QE in full force again and even digitalise ever more dollars on a monthly basis.

Until something finally gives. 

Wed, 12/18/2013 - 15:30 | 4258187 onewayticket2
onewayticket2's picture

the game isnt over.  Schiff may still be proven entirely right....


Wed, 12/18/2013 - 15:51 | 4258328 kralizec
kralizec's picture

Not much of a fart and the Fedcoat ass shoots some more!

Wed, 12/18/2013 - 15:22 | 4258109 Australian Economist
Australian Economist's picture

Schiff did say either no taper or they would do a small taper and then in a few months when SHTF they will shift QE to over $100B.


Lets see if he's right

Wed, 12/18/2013 - 15:37 | 4258248 somecallmetimmah
somecallmetimmah's picture

In the grand scheme of things, Peter Schiff is 'right'.

Plan accordingly.

Wed, 12/18/2013 - 15:27 | 4258152 Sonic the porcupine
Sonic the porcupine's picture

Schiff has given himself the out, that if the fed does taper, which he doesn't think it will, that it will be forced to untaper quickly. If the FED is buying 75 billion or less a year from now, then I'd say Schiff was wrong.

Wed, 12/18/2013 - 15:30 | 4258168 fonzannoon
fonzannoon's picture

What if they are buying 50 billion a month a year from now and have extended the 0% pledge until Elysium? 

Get it? Everyone is missing what is really going on here.

Wed, 12/18/2013 - 15:33 | 4258211 philosophers bone
philosophers bone's picture

Exactly.  The concept of a "taper" means that it starts wide and continually narrows, like a piece of shit, which is the appropriate analogy. 

Wed, 12/18/2013 - 15:34 | 4258228 Black Forest
Wed, 12/18/2013 - 15:36 | 4258239 eclectic syncretist
eclectic syncretist's picture

Those bitches are tapering slower than Bernanke's hairline

Wed, 12/18/2013 - 15:37 | 4258250 RSloane
RSloane's picture

The markets know what's going on. Have a look [if you're not already]. You are spot on Fonz.

Wed, 12/18/2013 - 15:33 | 4258216 NotApplicable
NotApplicable's picture

I'm going to assume they untapered yesterday, and are likely sending out at least 20 billion a month via some other conduit to help pacify any "negative" reactions.

Wed, 12/18/2013 - 16:57 | 4258602 ejmoosa
ejmoosa's picture

THe key to remember is that the Fed has no out.

Wed, 12/18/2013 - 15:53 | 4258338 BigJim
BigJim's picture

 Schiff explaining how he is still correct in 3...2...

James_Cole about to become a complete douche in 3... 2... hold, on wait a minute, he's always a complete douche.

Wed, 12/18/2013 - 15:14 | 4258063 AL_SWEARENGEN

Yellen will unTaper Bernake's headfake while giving him head on his way out.

Wed, 12/18/2013 - 15:17 | 4258081 TruthInSunshine
TruthInSunshine's picture

Bernanke will be remembered as a "hawk."

Krugman already unfriended him on farcebook.

Wed, 12/18/2013 - 16:24 | 4258472 He_Who Carried ...
He_Who Carried The Sun's picture

You would call 10 Billion less = "Tightening"??

- remarkably silly statement, Mister!

Wed, 12/18/2013 - 15:14 | 4258061 Stoploss
Stoploss's picture

Look what's happening in VIX, all slamdown and short covering.


Wed, 12/18/2013 - 15:10 | 4258013 Matt1973
Matt1973's picture

Tapering is seen as positive

Wed, 12/18/2013 - 15:42 | 4258266 disabledvet
disabledvet's picture

Is it? Very interesting if true...and it may very well be. What's the market reaction again?

Wed, 12/18/2013 - 15:09 | 4258022 Ying-Yang
Ying-Yang's picture

"Pussies" don't taper?

Say it isn't so.

Wed, 12/18/2013 - 15:11 | 4258037 midtowng
midtowng's picture

I can't believe that the markets actually expected a larger taper. Who are they listening to?

Wed, 12/18/2013 - 15:36 | 4258227 NotApplicable
NotApplicable's picture

Listening? No, no, no. These people are manipulating.

I gotta say, it's quite the PR blitz.

Wed, 12/18/2013 - 16:38 | 4258523 Luckhasit
Luckhasit's picture

I'm callin bearish.  Let's see how the markets like this.  Soon as you mention the T word wall street starts having palpatations.  And from this, it looks like stroke material.

They are going to find a reason to reintroduce that 10 bill. 

Wed, 12/18/2013 - 15:07 | 4257993 Stoploss
Stoploss's picture

Still pumping 75B a month.

This is not a taper, this is a headfake, an your falling for it..

Wed, 12/18/2013 - 15:09 | 4258019 Groundhog Day
Groundhog Day's picture

they taper and so stocks roar, yields roar and gold roars, tht makes sense

Wed, 12/18/2013 - 15:12 | 4258053 midtowng
midtowng's picture

The markets actually expected a larger taper. Why? What are we missing? I find it hard to believe that I'm smarter than the markets, because I certainly never expected a big cut in Fed purchases.

Wed, 12/18/2013 - 15:39 | 4258247 U4 eee aaa
U4 eee aaa's picture

...implying the economy is healthy

Wed, 12/18/2013 - 15:13 | 4258041 FL_Conservative
FL_Conservative's picture

Exactly.  Yellen will up QE considerably by the June 2014 meeting.  Could be as early as the March meeting.  The ugly, fat lady WILL sing.

Wed, 12/18/2013 - 15:19 | 4258092 camaro68ss
camaro68ss's picture

i thought yellen was a man?


Wed, 12/18/2013 - 15:23 | 4258135 hooligan2009
hooligan2009's picture

so did his wife!

Wed, 12/18/2013 - 17:49 | 4258794 trader1
trader1's picture

these 3 comments taken in context - hilarious.  

nice touch hooligan ;-)

but, you guys are some damn childish!  


Wed, 12/18/2013 - 15:14 | 4258048 Ignatius
Ignatius's picture

I've heard the FED's job is to take the punch bowl away just as the party gets rockin'.

Well, Ben just dipped his fingers, flicked it on your coat, and said "Whatya gonna do about that?!!"

Wed, 12/18/2013 - 15:40 | 4258259 U4 eee aaa
U4 eee aaa's picture

No Ben No. We said the market was PUNCH DRUNK. What are you doing by the punch bowl?

Wed, 12/18/2013 - 15:48 | 4258321 eclectic syncretist
eclectic syncretist's picture

I thought ol' yellen was the dog they took out back and shot to put it out of it's misery.

Wed, 12/18/2013 - 17:49 | 4258797 trader1
trader1's picture

you thought wrong

Wed, 12/18/2013 - 15:15 | 4258078 HelluvaEngineer
HelluvaEngineer's picture


Official QE: -10 Billion

Secret QE: +20 Billion

Wed, 12/18/2013 - 15:09 | 4257997 Hippocratic Oaf
Hippocratic Oaf's picture


Big Fuckin' Deal

Wed, 12/18/2013 - 15:26 | 4258145 Waffen
Waffen's picture

I thought it was all about the flow, making even a small taper a disaster?

Wed, 12/18/2013 - 15:40 | 4258231 Harbanger
Harbanger's picture

Tapers are now fabricated/controlled "disasters".  It's still is all about flow, from suckers.

Wed, 12/18/2013 - 15:38 | 4258255 NotApplicable
NotApplicable's picture

Why would you ever believe it will actually happen? Somewhere, someone will be taking up the slack.

Wed, 12/18/2013 - 15:40 | 4258267 U4 eee aaa
U4 eee aaa's picture

You can't even buy a guy on the Forbes list for that price

Wed, 12/18/2013 - 15:24 | 4258142 Harbanger
Harbanger's picture

They use the old push/pull plunger style butter churn, you can make some money anticipating this.

Wed, 12/18/2013 - 15:41 | 4258276 U4 eee aaa
U4 eee aaa's picture

I've had one set trade trigger today already with one more on the verge

Wed, 12/18/2013 - 16:21 | 4258450 Harbanger
Harbanger's picture

I shorted some trades for 90 days 2 weeks ago.  I think there will be a another controlled correction coming, lets see.

Wed, 12/18/2013 - 15:56 | 4258360 Blano
Blano's picture

I tried.  I failed.  I'm out.

Wed, 12/18/2013 - 16:23 | 4258466 Harbanger
Harbanger's picture

Being outside of this is not a failure.  If you have some cash you can play again after the taper correction.

Wed, 12/18/2013 - 16:28 | 4258478 alangreedspank
alangreedspank's picture

Uh uh. And watch what happens next and what the bowl cut will be "forced" to do at the next FOMC...

Wed, 12/18/2013 - 15:22 | 4257965 Indian_Goldsmith
Indian_Goldsmith's picture

Thank you Ben. Now go away and retire

Wed, 12/18/2013 - 15:07 | 4257988 HedgeAccordingly
HedgeAccordingly's picture


Wed, 12/18/2013 - 15:09 | 4258018 slaughterer
slaughterer's picture

The Kev' army is bonering SPY to make the taper look like good news.  

Wed, 12/18/2013 - 15:14 | 4258054 Lewshine
Lewshine's picture

Gold and Silver is going to get absolutely MONKEY HAMMERED late today and ALL DAY tomorrow. While stocks (the real economy) inflates away!

Wed, 12/18/2013 - 15:22 | 4258108 LongBalls
LongBalls's picture

The gold and silver charts look more like a seismograph than a trading chart. The bots had no idea how to handle this. Deflation, inflation....what do we do boss? Central planning at its finest.

Wed, 12/18/2013 - 15:28 | 4258157 wiseindian
wiseindian's picture

Yeah I was getting motion sickness watching the gold ticker after the minutes were published. In "theory" it should end lower but who am I to know.  I don't work at GS so clearly I have no clue in how the manipulation is planned.

Wed, 12/18/2013 - 16:05 | 4258394 rubiconsolutions
rubiconsolutions's picture

I'm tapering too. This afternoon I'll only have 6 martini's and not my usual 7. That should help preserve my liver.


Wed, 12/18/2013 - 16:23 | 4258455 UH-60 Driver
UH-60 Driver's picture

This is how it works...

Southpark chicken with its head cut off running around a board spewing blood-this helps the federal reserve members make their decisions.

Wed, 12/18/2013 - 15:06 | 4257958 nope-1004
nope-1004's picture

10 yr gonna fly

Wed, 12/18/2013 - 15:10 | 4258011 NoDebt
NoDebt's picture

How high's the water, ma?  2.871 and risin'!

Wed, 12/18/2013 - 15:23 | 4258134 AlmostUncirculated
AlmostUncirculated's picture

What's with the 10yr spike to 2.93 and then immediately back below pre-FOMC yield levels ?  Guess they had the gun loaded for tonight..

Wed, 12/18/2013 - 15:31 | 4258178 Boston
Boston's picture


Yield is FALLING and if it breaks down much below 2.84% (right about now), then the uptrend in yields that began in late Oct. will be over. This, combined with a failure to take out the Aug/Sep high of 2.99% means that we could be looking at a notable DROP in yields over the next 30-60 days.

Wed, 12/18/2013 - 15:42 | 4258284 NotApplicable
NotApplicable's picture

Cuz yields always drop when the bond buyer of last resort takes a smoke break?

BTW, I'm not discounting your forecast. It's just really strange to see it in light of *duh, duh duh* "The Taper."

Bizarro World, FTMFW!

Wed, 12/18/2013 - 15:04 | 4257961 Cursive
Cursive's picture

LOL.  The forward guidance.  I knew the taper would happen sometime.

Wed, 12/18/2013 - 15:05 | 4257964 fonzannoon
fonzannoon's picture

It's not tightening!!!!!!!!!!!!

Wed, 12/18/2013 - 15:08 | 4258009 Hippocratic Oaf
Hippocratic Oaf's picture

This shit was priced in

Wed, 12/18/2013 - 15:13 | 4258039 Cursive
Cursive's picture

@Hippocratic Oaf

Short selling targets hit, then the short covering begins.

Wed, 12/18/2013 - 15:10 | 4258010 firstdivision
firstdivision's picture

That's what a good donky punch is for

Wed, 12/18/2013 - 15:13 | 4258038 fonzannoon
fonzannoon's picture

now they can stay at 75 bil for another year. 

Wed, 12/18/2013 - 15:43 | 4258286 U4 eee aaa
U4 eee aaa's picture

It's called the knockout game these days

Wed, 12/18/2013 - 15:09 | 4258021 Cursive
Cursive's picture


(If we believe them) then $10B less purchases a month is a definite taper.  Tiny, but taper nonetheless.

Wed, 12/18/2013 - 15:17 | 4258073 fonzannoon
fonzannoon's picture

I disagree my man. They increased QE just now. with their forward guidance of keeping interest rates at 0% until my balls drag on the floor when I walk, they just guaranteed they will need to buy moar. 

classic "look at this hand" move. typical central planning bullshit mindfuck.

Wed, 12/18/2013 - 15:26 | 4258156 Cursive
Cursive's picture


Will they re-up QE in the future?  There's a good chance of that.  But, at some point, there will be nothing for them to buy.  The Fed owns over 30% of current Treasury issuance as it is.  Their "ledgerdemain" works because hedgies and fundies are trained to believe it.  This is a desparate move and if it doesn't work and they feel pressured to increase QE, it's lifeboats time.

Wed, 12/18/2013 - 15:30 | 4258190 fonzannoon
fonzannoon's picture

whether they re up it or not is hard to say. What they did do was guarantee they will be buying more than forecasted because this will continue for freaking ever. See my comment on the Hilsenrath thread. I think I explained myself better there.

Wed, 12/18/2013 - 15:03 | 4257968 NoDebt
NoDebt's picture

Ben's "reputational cover story" has been initiated.

Start the 6 month clock to see if this sticks.

Wed, 12/18/2013 - 15:05 | 4257969 arkel
arkel's picture

Call me surprised. Let's see where the 10 year goes. Gold Silver not falling as much as I thought.

Wed, 12/18/2013 - 15:14 | 4258040 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Yeah exactly. How bonds react is the real game here. If the rates play against the dysfunctional CONgress spend until you drop party that taper won't be long lasting if they can't control interest rates using a different tool of monetary polcy. Problem really is the FED has been outed that they have no other tools and as such they've been approaching everying as someone who has only a hammer in their toolbox and therefore see every problem as a nail. This is just damage control now until they can use political considerations aka we need moar government debt to save the children since the economy is on life support right now.

Don't people realize this is just an accounting gimmick for publicity. That 10B is going to be diverted elsewhere when all is said and done probably through the shadow banking system to prop up the asset bubbles like they do now with the housing market and self-securitized loans to hedge funds to create artificial demand which in turn inflates prices.

Wed, 12/18/2013 - 15:20 | 4258098 CrashisOptimistic
CrashisOptimistic's picture

Only 5B of this is in Treasuries.

Wed, 12/18/2013 - 15:43 | 4258153 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

It is the interest rates in relation to making the existing debt load serviceable that will be the ulitmate consideration for if tapering continues or not as long as CONgress keeps spending with no regards for deficits and budgets.

Hammering a nail with less intensity than before doesn't change the fact they still only have a hammer in toolbox and still view every problem as a nail. Once the oh shit moment sinks in with enough people that the FED is nothing more than a one trick pony when it comes to monetary policy and in turn the other Central Banks following the same tact then the real fun starts.

Wed, 12/18/2013 - 15:04 | 4257976 apberusdisvet
apberusdisvet's picture

The end game just got closer

Wed, 12/18/2013 - 15:04 | 4257977 hooligan2009
hooligan2009's picture

taper worm!

Wed, 12/18/2013 - 15:06 | 4257978 gjp
gjp's picture

Markets up, gold down.  This was the opportunity to show they are 'ahead of the curve' - by only giving $75b a month to obscenely rich asset flippers.  Happy days.

What a fucking freak show.

Wed, 12/18/2013 - 15:06 | 4257979 Seasmoke
Seasmoke's picture

The Beard who cried Wolf !!!

Wed, 12/18/2013 - 15:05 | 4257981 Seasmoke
Seasmoke's picture

The Beard who cried Wolf !!!

Wed, 12/18/2013 - 15:08 | 4257982 ExecutionParty
ExecutionParty's picture

This taper is like a mosquito biting an elephants ass....


bubbles bullish 4 lyfe

Wed, 12/18/2013 - 15:07 | 4257984 rp1
rp1's picture

The Fed has said: economic boom.  And if you overpaid or invested in the wrong thing, you lose out.  Look for value, look for up and coming, quit speculating and invest.

Wed, 12/18/2013 - 15:05 | 4257985 Sonic the porcupine
Sonic the porcupine's picture

I am surprised. We'll keep an eye on the 10-year.

Wed, 12/18/2013 - 15:14 | 4258047 Zadok
Zadok's picture

Why do I have the feeling that we don't have the entire story? There is fine print and then there is what happens behind the curtain...when in doubt, pray and wait!

Wed, 12/18/2013 - 15:39 | 4258262 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Possible this is to gauge the psychological effects with the out being Yellen as the captain of the ship come January if things don't go as their 'models' said it should.

Wed, 12/18/2013 - 15:49 | 4258329 NotApplicable
NotApplicable's picture

Their entire front office operation is psychological, as it is nothing but a con-game.

Wed, 12/18/2013 - 15:07 | 4257990 Fiat Burner
Fiat Burner's picture

The Token Taper.  Next up: The Un-Taper.

Wed, 12/18/2013 - 15:55 | 4258350 eclectic syncretist
eclectic syncretist's picture

Bernanke wanted to taper

But it was a difficult caper

To salvage his legacy

He continued his recipe

As an American public raper

Wed, 12/18/2013 - 15:07 | 4257991 1835jackson
1835jackson's picture

Hahahahahahahahahahahahahahahahahahahahaha- what a joke this all is.

Wed, 12/18/2013 - 15:05 | 4257992 AndrewJackson
AndrewJackson's picture

Well done komrad bernanke. You did your one "tightening" measure after 7 years of QE and rate decreases.

Wed, 12/18/2013 - 15:11 | 4257994 sixsigma cygnus...
sixsigma cygnusatratus's picture

Token Tapir.

Wed, 12/18/2013 - 15:19 | 4258094 Ms. Erable
Ms. Erable's picture

Tokin' Taper.

EDIT: I see you beat me to it...

Wed, 12/18/2013 - 15:08 | 4257995 Bearwagon
Bearwagon's picture

Yes! Rahrahrah! My day in the sun will come ... one of these days ... one day ... the day is gonna come!

Wed, 12/18/2013 - 15:09 | 4257998 Tall Tom
Tall Tom's picture

Yes!!! Gold is going to be on sale. Yes!!!


This was the September Announcement in reverse.


What is happening to the Ten Year???




And Real Estate Contracts were at a 15 Year Low. Oh man...This is great.


Come on Derivatives meltdown. I guess the is Bernanke's way of saying "Fuck you" to Obama.


LMAO. Collapse baby collapse.

Wed, 12/18/2013 - 15:07 | 4257999 Charles Nelson ...
Charles Nelson Reilly's picture

oh yeah... that $10 billion will make a big difference?!? $1.2 billion out of over $1 trillion

Wed, 12/18/2013 - 15:07 | 4258000 time2blowitup
time2blowitup's picture

LOL "reacting violently" ya ok

Wed, 12/18/2013 - 15:23 | 4258139 somecallmetimmah
somecallmetimmah's picture

Hey, Scrooge.  It's the thought that counts.


Wed, 12/18/2013 - 15:07 | 4258001 Billy Sol Estes
Billy Sol Estes's picture

Well past 6.5% ? In whose lifetime?

Wed, 12/18/2013 - 15:11 | 4258020 hooligan2009
hooligan2009's picture

particiaption rate only has to continue its down trend by 1 or 2% and voila! 6.5% u/e

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