This page has been archived and commenting is disabled.

Fed's Bill Dudley: The Fed Doesn't Fully Understand How QE Works

Tyler Durden's picture


Well, it took three years, but finally the Goldman Sachs-based head of the New York Fed, Bill Dudley, admitted what we all knew. From a speech just given by NY Fed's Bill Dudley at the 2014 AEA meeting in Philadelphia:

"We don't understand fully how large-scale asset purchase programs work to ease financial market conditions"

Or, in other words, "we still don't know how QE works." It just does (thank you Kevin Henry). And this coming from the people who want their word to become equivalent to gospel in a time when QE is being phased out and replaced with forward guidance. Luckily, at least the Fed knows all about how "forward guidance" works.

The good news: it only took $4+ trillion in Fed "assets" for the central bank to understand it had no idea what it was doing.

In retrospect, things could always have been worse.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 01/04/2014 - 14:02 | 4299930 starman
starman's picture

Years ago a Japanese millionaire crashed and died in a Ferrari, the magazine editor quoted " being able to spend shit loads of money on fast cars doesn't make you a better driver"

Sat, 01/04/2014 - 14:18 | 4299941 nope-1004
nope-1004's picture

"Dudley".  Fitting name.

QE from the start has been about bank bailouts, not stimulus.  Has nothing to do with helping the average person, but has everything to do with providing liquidity to insolvent banks.  Once liquidity is removed, insolvency becomes bankruptcy.

Which is why I believe QE will never end.  This whole taper thing has been another attempt at fooling the masses.  The FED is desperate for economic conditions to improve, and have lied consistently about policy.

QE is bailouts for the insolvent banks, and nothing more.

Wouldn't it be great if we could all go to Vegas, bet wildly, lose horribly, face insolvency -- then have someone show up and change how our debts appear on ledgers and pump money back into our accounts to further fuel our addiction?  Then have the audacity to say publicly "This money given to these gamblers is for economic well being of all of you homeless."

Total gong show.  There is no economy.  It's all a sham.  The FED is corrupt to the core and they all need to be hung in public.

Sat, 01/04/2014 - 14:28 | 4299982 TheFourthStooge-ing
TheFourthStooge-ing's picture


Total gong show.  There is no economy.  It's all a sham.

Cue Gene, Gene, the printing machine.

Sat, 01/04/2014 - 14:48 | 4300002 Cult_of_Reason
Cult_of_Reason's picture

QE is a psychological phenomena. It works as a placebo ("Don't fight the Fed" and "Fed put") that scares the bears and emboldens the bulls. Many don't realize that the additional liquidity the Fed injects can also be used to short (sell) the stocks (but the bears are scared).

It results in an imbalance between the buyers and sellers, and higher inflated asset prices.

As soon as the placebo is removed, the asset prices revert violently down to reality (more sellers than buyers).

Sat, 01/04/2014 - 14:46 | 4300018 boogerbently
boogerbently's picture

How QE works:

Buy TRILLION$$$ worth of stuff/year, and the game explodes on someone elses watch.

Sat, 01/04/2014 - 15:19 | 4300024 Cult_of_Reason
Cult_of_Reason's picture

If the sentiment changes, this "TRILLION$$$" of additional liquidity can also be used to sell (short) "TRILLION$$$" worth of stuff/year.

This is something they (the majority of market participants) don't understand (even the Fed, and I don't think even Zero Hedge). QE can work both ways, push asset prices up or down. So far they have been successful (using propaganda "additional liquidity means higher asset prices") to push it in one direction.

Sat, 01/04/2014 - 15:26 | 4300077 The Thunder Child
The Thunder Child's picture

"We don't understand fully how large-scale asset purchase programs work to ease financial market conditions"

If they admitted they knew how it worked they would be admitting to the largest theft in the history of mankind. QE steals the purchasing power from everyone holding dollars and hands it to the people at the top.

Roll the motherfucking guillotines!

Sat, 01/04/2014 - 15:39 | 4300097 Cult_of_Reason
Cult_of_Reason's picture

% embolden bulls vs % scared bears

Sat, 01/04/2014 - 16:15 | 4300132 HardlyZero
HardlyZero's picture

I see we are at the Ponzi Peak.   They failed QE 3 times to 'get it right'... the end of the Ponzi road.

Those Jean Genie printers...demons...

Sat, 01/04/2014 - 18:46 | 4300368 espirit
espirit's picture

Sanders "doesn't know" (about NSA).

Dudley "doesn't know" (about QE).

Playing O'Blatherer's "I Didn't Know" game is wearing very thin.

Roll the motherfucking guillotines for those that "don't know".

Sat, 01/04/2014 - 19:23 | 4300444 asteroids
asteroids's picture

A generation ago the Japanese had a real estate crash and they had "zombie" banks that the government refused to let die, so they came up with "QE". Does this sound familiar kids? Now 30 years later the FED and other Western Central Banksters are taking the same play book, Why should it be ANY different here? No, this will not end well.

Mon, 01/06/2014 - 00:12 | 4303518 TheReplacement
TheReplacement's picture

Well or otherwise, as long as it ends.

Sat, 01/04/2014 - 14:39 | 4300005 Thomas
Thomas's picture

It's appalling what they do. It is even more appalling how many people blindly endorse it like it's normal, logical, rational. The former group are reckless; the latter group are unthinking idiots.

Sat, 01/04/2014 - 15:01 | 4300052 NIHILIST CIPHER

Thomas       The "latter group", MSM et al get paid to act like it is NORMAL. Who says money can't buy everything....but are they happy?      /sarc

Sat, 01/04/2014 - 17:26 | 4300235 logicalman
logicalman's picture

Money can't buy you happiness, but at least it enables you to be miserable in comfort!

Sat, 01/04/2014 - 16:31 | 4300162 WmMcK
WmMcK's picture

Dudley DoWrong.

Sat, 01/04/2014 - 18:30 | 4300342 Bo Peep
Bo Peep's picture

Singularly or in pairs?'s a coming!

Sat, 01/04/2014 - 14:06 | 4299931 Al Huxley
Al Huxley's picture

Wow, that was a pretty significant program they undertook, considering they don't understand how it works.  Usually if I'm experimenting with something new, I try it out on a small scale first, then after I learn how it works I decide if more is a good idea. 


Oh well, it's only the economy and the wealth of future generations and the stability of the entire world economic and political systems that will be affected, so even if there are bad and unreversable consequences, at least the damage will be limited to only those areas.

Sat, 01/04/2014 - 14:10 | 4299937 TheFourthStooge-ing
TheFourthStooge-ing's picture

"We don't understand how it works, but it sure feels good, and the bigger the scale, the better it feels. It must be a good idea."

Sat, 01/04/2014 - 14:24 | 4299968 Sudden Debt
Sudden Debt's picture

Usually if I'm experimenting with something new, I try it out on a small scale first, then after I learn how it works I decide if more is a good idea.

I understand you completly! It's how the misses and I worked our way through the camasutra! And believe me, some of that shit can kill ya or break your back!

Sat, 01/04/2014 - 14:41 | 4300011 Thomas
Thomas's picture

This is like one of those prime time medical shows (House) in which they come up with some cockeyed life-saving treatment. The difference is, House never loses patients. I, on the other hand, am losing patience.

Sat, 01/04/2014 - 16:32 | 4300160 WmMcK
WmMcK's picture

Now I understand your


comment better; sorry I should read down thread more.

Sun, 01/05/2014 - 00:14 | 4301072 BigJim
BigJim's picture

 Wow, that was a pretty significant program they undertook, considering they don't understand how it works. 

Psssh! If you were to ask a REAL economist, like nobel-prize winner Dr. Paul KrugPot, he would tell you the amount was much too small, hence why we are still in a recession!

Sat, 01/04/2014 - 14:13 | 4299949 Melin
Melin's picture

Translation: "We can't see the destruction."

Sat, 01/04/2014 - 15:13 | 4300064 Papasmurf
Papasmurf's picture

They don't care about the destruction because so far they aren't effected.

Sat, 01/04/2014 - 14:21 | 4299954 Soul Glow
Soul Glow's picture

"You know, we just wanted to have a little fun and blow up the dollar, you know, just to see what happens.  So we fucked with everybody, so we fucked everything up, so what?  We did it in the name of economic stability.  That doesn't make sense to you?  Does it need to?  We just do what we want.  We are the masters of the universe."

Sat, 01/04/2014 - 14:20 | 4299960 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Public relations is propaganda as classical conditioning is to forward guidance.

Sat, 01/04/2014 - 14:22 | 4299963 Sudden Debt
Sudden Debt's picture


It's called:

Sat, 01/04/2014 - 16:27 | 4300154 WmMcK
WmMcK's picture

But not at the same time, of course.

Sat, 01/04/2014 - 14:25 | 4299964 spinone
spinone's picture

Its valuable to read the speech.  Its short, and the quote in contect reveals more about what he's saying:

I'm very pleased by the contributions of our economists in the Bank, whether they sit in the Research Group or elsewhere in the Bank.  I think we have helped to contribute to the considerable progress made on a number of fronts, including making the financial system more resilient and robust and helping make monetary policy more effective, even at the zero lower bound.

But there is much more work to do.  In particular, I think we have just scratched the surface in understanding how developments in one area, such as capital and liquidity requirements for large, complex financial institutions, affect other areas, such as effective monetary policy implementation. We still don't have well developed macro-models that incorporate a realistic financial sector.  We don't understand fully how large-scale asset purchase programs work to ease financial market conditions—is it the effect of the purchases on the portfolios of private investors, or alternatively is the major channel one of signaling? 

I suggest that he read this article from ZH if he wants a good description:

Sat, 01/04/2014 - 14:24 | 4299969 El Vaquero
El Vaquero's picture

Well Bill, it's pretty simple, really.  One part is the Fed hoovering up all of the shit MBSs created by the likes of GS to swindle investors out of dollars.  The other part is the primary dealers acting as straw purchasers of US Treasuries so that the Fed may monetize the debt.  In the meantime, bankers are skimming off of this and paying themselves huge bonuses, while the portion of that electronically minted money that isn't spent by the US government sits in an interest bearing account at the Fed.  All of this is distorting markets, from stocks to commodities.  In the mean time, the rich are getting richer and the poor are getting poorer, because very little of that money that the bankers are skimming from gets out into the real economy where real tangible things are supposed to change hands.  In the mean time, the Fed fallaciously considers dollars, rather than goods, changing hands to be the real economy.  Oh, and if there is a real taper, or even a stop to QE, treasury yields may go down in the short term, but banks will go bankrupt and those treasury yields will eventually skyrocket and the US government will not be able to fund itself.


That's how it works Bill. 

Sat, 01/04/2014 - 14:58 | 4300034 Colonel Klink
Colonel Klink's picture

It's all a GIGANTIC lie.  They know exactly what they've been doing.  There have been enough people telling them in the "blogosphere".

First rule of Central Banking, protect the biggest LIE in history.  Even Henry Ford said it.  Once you reveal the truth to the masses, it all comes apart.

Sat, 01/04/2014 - 15:47 | 4300106 dick cheneys ghost
dick cheneys ghost's picture

there will be liquidation.........just a matter of time...


Sat, 01/04/2014 - 18:14 | 4300307 lakecity55
lakecity55's picture

Well, COL, I am now happy all my PM Fizz fell off my canoe.

I am into fiat now, because I Believe.


"LC, did you know there is a fishing float in the middle of your pond tied to a string?"

"Uh, no. Leave it alone, Bill. It is the drain plug to the pond."

Sat, 01/04/2014 - 14:35 | 4299978 A Lunatic
A Lunatic's picture

They are just giving themselves a hedge of plausible deniability for the time when the catastrophic results of their meddling becomes evident. They know what they are doing.......

Sat, 01/04/2014 - 17:30 | 4300248 logicalman
logicalman's picture


Are you nuts?

Sat, 01/04/2014 - 14:28 | 4299983 optimator
optimator's picture

And Willie Sutton didn't know quite how bank robbery works.

Sat, 01/04/2014 - 14:42 | 4299987 Atomizer
Atomizer's picture

Don’t let the Federal Reserve lie to you. Managing employment and shilly-shally interest rates has always been the game so they look like heroes. Let’s start out with the computer boom..

Moore's Law Got Me!

Now we apply math to emerging globalized nations who build shite for free and ship crap across the ocean.

The Most IMPORTANT Video You'll Ever See

Sat, 01/04/2014 - 14:55 | 4299989 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Looks like the only tool they have left is jedi mind tricks aka forward guidance. Time to call them out and time to expose the emperor for having no clothes though I don't think seeing Yellen's camel toe would be a pleasant sight.

These are not the droids you are looking for.

Sat, 01/04/2014 - 17:33 | 4300252 logicalman
logicalman's picture

Time to ask "where does the interest come from?"

Sat, 01/04/2014 - 14:35 | 4299991 Downtoolong
Downtoolong's picture

"we still don't know how QE works."

It works for Wall Street. That's all ya really need to know Bill.


Sat, 01/04/2014 - 14:36 | 4299994 Martdin
Martdin's picture

Just say "Wealth Effect" Bill, just say "Wealth Effect"...

Sat, 01/04/2014 - 14:41 | 4300003 no more banksters
no more banksters's picture

"The Fed Doesn't Fully Understand How QE Works": BS.

"... if more money were going to the market, then they would lose much of their value and we would lose profits because we are the ones who print money! That's why we invented inflation, to keep governments in fear and directing money back to us through the so-called Quantitative Easing Policies."

Sat, 01/04/2014 - 14:40 | 4300006 Reaper
Reaper's picture

Perhaps, he's just lying. They know and knew how it works, but the truth would've destroyed the Fed.

Sat, 01/04/2014 - 17:34 | 4300254 logicalman
logicalman's picture

A banker telling lies??

I can't believe it!

Sat, 01/04/2014 - 14:41 | 4300009 TrustWho
TrustWho's picture

PhD educated check the box crimminals. They have no spine. Why did we give them so much power?

Sat, 01/04/2014 - 14:59 | 4300040 Colonel Klink
Colonel Klink's picture

They took it through bribery....AKA....political contributions.

Sat, 01/04/2014 - 16:17 | 4300141 TrustWho
TrustWho's picture stupid and uncaring citizens.

Sat, 01/04/2014 - 14:52 | 4300030 ItsDanger
ItsDanger's picture

Its supposed to free up capital for banks to lend more out yet all it does it encourage the lenders to sell them crap assets.  Shoudl be focused on business loans not ARM mortgages.

Sat, 01/04/2014 - 14:53 | 4300033 Sufiy
Sufiy's picture

Chinese know how QE works and buying all the availible Gold now:


Eric Sprott 2014 Sends Gold North of $2,000 and Silver Over $50

  Gold has started new year with the bang and is solidly up from the retest of the low in 2013. Bearishness in the sector is another reason for the big turn around and equity markets are taking a breather now as well. Great Rotation from Bubbles into the Real Assets could be just in the beginning. The action next week will be very important for Gold and Silver markets and Gold mining shares.

Sat, 01/04/2014 - 15:19 | 4300071 holdbuysell
holdbuysell's picture

Friend Of a Friend Of Another has a good 2014 Happy New Year post that has some interesting detail and charts.

Below is an excerpt discussing the structural support for the dollar having been removed in 2013. The chart afterward is telling (go to the link above to see).

"Back around 2005, Ari started noticing European central bank policy references to the year 2010, which he interpreted as a general time frame in which a window might be opened (structural support removed) such that a natural transition of systems could occur with minimal disruption thanks to preparation and foresight. Then, following the 2008 global financial crisis, he looked for signs that the time frame might have been pushed back. In late 2010, he wrote in an email: "As for the new timeframe, I'd say that the reported EU plan "to make private bond holders shoulder some of the pain from any sovereign debt restructuring after mid-2013" is as good an indication of a benchmark as any I've seen."

This is the basic theory on which "2013 – Year of the Window" was based. You may not believe that the current system is fragile, and therefore needs support, but the BIS, the European central bankers, have believed it since at least 1979, and have acted accordingly. If Another is to be believed, they were worried that the launch of the euro, combined with the withdrawal of their support for the dollar and the gold market in 1999, would usher in the new Freegold paradigm right at the turn of the century.

That didn't happen for the reasons I have explained (the BOE, China and the commodity bull run), and by 2005 they may have noticed some adjustment to their new Eurosystem that they hoped to implement before the transition did ultimately occur. That sentiment may have been what Ari picked up on. The 2004 renewal of the WAG/CBGA reaffirmed the same limitations on support laid out in 1999, but the subsequent 2009 renewal lacked the limit on gold leasing. Perhaps this was a reflection of some renewed purpose for extending their support at that time.

In any case, following Ari's theory, I kept my eye on 2013, and one year ago today I asked the question: "Will 2013 be the year of the window?" To answer that question, I proposed a test:

"If the recorded price on Friday, January 4th, 2013 is EUR 1,246 or lower, it's game on for Freegold meaning that the window of opportunity is now open because official support for paper gold has apparently ended. In other words, there may be no system support the next time something breaks. But if the recorded price on January 4th is EUR 1,389 or higher, it's six more months of kick the can. And if it's anywhere between EUR 1,246 and EUR 1,389 (which it is today) then the €PoG will be too ambiguous to be predictive one way or the other."

Of course there was nothing magical, scientific or even mathematical about my test, it was simply me looking for an unambiguous sign—or at least a significant indication—one way or the other, in case there was something to Ari's theory. And yes, I do believe there is something to his theory. But as it turned out, the January 4th snapshot came in at €1,261.18, delivering mostly ambiguity and no definitive confirmation either way.

So was 2013 the Year of the Window as I suspected? Well, as the year unfolded, it sure appeared to be!

New Year's is that special time when we look back at the year that was, and forward to the prospects of the next. Looking back, 2013 was quite a remarkable year. Over less than one week in April, the price of gold tumbled $200, from $1,575 down to $1,375. As I said, the first ECB snapshot of the year was €1,261.18, and 6 months later it was down €341, to €919.92. 550 tonnes of gold were drained from GLD, over 40% of its inventory built up over eight long years, gone in one! Also in 2013, we witnessed what is apparently the end of structural support for the dollar!

Now see if you can spot the trend, and the dramatic change in 2013, in the following data. In 2010, the U.S. trade deficit was $498B, and foreign official holdings of Treasury securities that year grew by $456B. In 2011, the trade deficit was $560B, and foreign official holdings of Treasuries grew by $426B. In 2012, the trade deficit was $540B, and foreign official holdings of Treasuries grew by $386B. Of course the final numbers for 2013 aren't in yet, but here's what it looks like. The trade deficit in 2013 will probably be around $485B, and foreign official (that is, foreign central banks, i.e., "structural support") holdings of Treasuries grew by a mere $20B through October, $24B extrapolated through December. Here, I made you a handy chart to help you visualize it!"


Sat, 01/04/2014 - 15:43 | 4300104 Papasmurf
Papasmurf's picture

How much PHYS does Sprott hold in his personal accounts?

Sat, 01/04/2014 - 15:05 | 4300055 Gromit
Gromit's picture

Of course they don't.  How could they?

Noone has ever had the audacity to pull off this sort of stunt before.

Weimar tried......but they didn't have the advantages enjoyed by the USA, including but not limited to 12 aircraft carrier groups....


Sat, 01/04/2014 - 15:17 | 4300069 Winston Churchill
Winston Churchill's picture

As they used to say in the Silent Service.

"there are submarines, and there are targets".

Nowadays" there are missiles, and there are targets".

Twelve carrier groups will not be enough.

When you add in logistics, and rotation, thirty would not be enough.

Sat, 01/04/2014 - 16:11 | 4300131 Gromit
Gromit's picture

If missiles can be effective, aircraft carriers become as obsolete as battleships.

Sat, 01/04/2014 - 17:55 | 4300283 lakecity55
lakecity55's picture

China's New Navy will consist of the old US Navy once they call in their debts.

We should learn Chinese so we can get jobs changing the labels on the ships.

Sat, 01/04/2014 - 15:09 | 4300059 Loophole
Loophole's picture

I understand how it "works."

They are stealing wealth from some and giving it to the govt and others.

Sat, 01/04/2014 - 15:18 | 4300066 ziggy59
ziggy59's picture

So, IOW, the Great Global Experiment on its population by Dr Bankster and his henchmen, is running full speed ahead...

Sat, 01/04/2014 - 15:21 | 4300070 Sufiy
Sufiy's picture

Professor Laurence Kotlikoff: The Inform Act - The True Size Of The American Debt

 Professor Laurence Kotlikoff discusses The Inform Act and the true size of the American Debt. "The country is in the worst shape than Detroit, it is basically bankrupt." China knows it and buys record amount of Gold this year.

Sat, 01/04/2014 - 15:31 | 4300091 highwaytoserfdom
highwaytoserfdom's picture

What were you expecting from QE designed from a flash back from LSD use.  Wonder what Helicopters trips were on Blotter,Microdot,orange sunshine, Window pane, Yellow sunshine?

Sat, 01/04/2014 - 15:36 | 4300098 the grateful un...
the grateful unemployed's picture

noun \?ra-k?-?tir\

: a person who makes money through illegal activities

  :  one who obtains money by an illegal enterprise usually involving intimidation Examples of RACKETEER
  1. <the racketeer threatened to have his thugs vandalize the shop if the shopkeeper didn't pay him a monthly bribe>

ya see louie, i'm gonna give you this money, and you're gonna go down to the NYSE and buy stocks for the boss, cause if you don't, i'll break your knees


Sat, 01/04/2014 - 17:39 | 4300255 logicalman
logicalman's picture

Sounds a bit like the tax system, wouldn't you say?

Sat, 01/04/2014 - 17:55 | 4300280 lakecity55
lakecity55's picture

The Fed is the biggest organized crime group around, associated with the USG organized crime family.


Sat, 01/04/2014 - 15:40 | 4300099 Milton Waddams
Milton Waddams's picture

Dudley, it works like this:

Sat, 01/04/2014 - 15:39 | 4300100 moneybots
moneybots's picture

"The good news: it only took $4+ trillion in Fed "assets" for the central bank to understand it had no idea what it was doing."


Bernanke knew it didn't work, 4 trillion dollars ago.  Congress knew dismantling Glass Steagall wouldn't work. 

They don't care QE or dismantling Glass Steagall or record blowing deficits don't work.  The filthy rich got filthy richer.

Sat, 01/04/2014 - 16:07 | 4300125 ebworthen
ebworthen's picture

Grandma Dudley: 

"I'm not sure why putting $50,000 in the cookie jar every week makes my Grandson happy; but he says he likes it better than cookies and he sure has a lot of colorful friends and a sporty car, or two."

Sat, 01/04/2014 - 16:06 | 4300127 gwar5
gwar5's picture

Priceless and worth an encore.


Invited guest, Austrian economist Robert Wenzel's speech to New York Fed, April 5, 2012


Excerpt, closing remarks


"...I will now give you more warnings about the economy.

 The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or,  if you stop printing, another massive economic crash will occur. There is no other way out.
Again, thank you for inviting me. You have prepared food, so I will not be rude, I will stay and eat. Let’s have one good meal here. Let’s make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats."

Sat, 01/04/2014 - 17:38 | 4300261 logicalman
logicalman's picture

Instead of the two legged rats that are there now.

Sat, 01/04/2014 - 16:07 | 4300129 Herdee
Herdee's picture

But,do you blame Bernanke or the idiots doing the endless spending in Washington?Seems to me that the Fed has become a literal political piggy-bank and lost it's independance to corruption by those elected officials in Congress and in the Senate.The Fed has turned into a trough for the pigs to eat at.Remember that old saying,"Debts don't matter."...until...

Sat, 01/04/2014 - 16:20 | 4300149 RiverRoad
RiverRoad's picture

QE'll end all right:  It'll get finished about the same time as Penelope's rug.....and she's still working on it.

Sat, 01/04/2014 - 17:42 | 4300262 logicalman
logicalman's picture

Tell Penelope to get a move on, let's end this shit.

Sat, 01/04/2014 - 18:08 | 4300303 logicalman
logicalman's picture

I notice "assets" is in quotes.

Can anyone tell me what those "assets" are backed by?

Inquiring minds.......

Sun, 01/05/2014 - 05:54 | 4301331 JimS
JimS's picture

Worthless second mortgages and grossly over-valued first mortgages.

Sat, 01/04/2014 - 18:11 | 4300308 syntaxterror
syntaxterror's picture

Here's how it works for dumbfucks like Dudley:

X = QE in US$. L = 30, leverage.

S&P500 buy order = X*L

Sat, 01/04/2014 - 18:18 | 4300316 lakecity55
lakecity55's picture

"The Truth is Out There, Scully."

Sat, 01/04/2014 - 20:54 | 4300660 Westcoastliberal
Westcoastliberal's picture

Thing is, Dudley and guys like him get away with admitting such stupidity.  And the banks are allowed to rob us blind with no criminal penalties, just fines.

No one in government is willing to stick their neck out for the truth or what's "right".

Do NOT follow this link or you will be banned from the site!