Fed Hints At Reason For QE5: Obamacare

Tyler Durden's picture

While excess risk-taking and broken markets likely dominate their thinking, the 'real economic recovery' meme the Fed is using to enable them to 'taper' their excesses. However, investors remain assured that if things get worse once again then the Fed will crank the presses and save the assets. It seems they have found their new excuse - no matter what...


So, despite admitting asset-bubbles, fears over stock-multiples and excessively easy lending; the Fed will launch QE5 when Obamacare drags the US economy into trouble...


But - that's not what Obama said!

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Grande Tetons's picture

Long promise zones. 

max2205's picture

I am sorry but is the Fed in charge of fiscal policy now

HoofHearted's picture

Why in the hell is the Fed even considering this? Where is it in their mandate to consider "dumb ass mistakes the executive banch made"?

SAT 800's picture

It's not a mistake. It's a deal. The insurance industry was instrumental in funding the Obamanation publicity blitz and he came through by selling the American public to the insurance industry. that's all Obamacare amounts too; that and nothing else.

KickIce's picture

Dear Leader's crown jewel will not be allowed to fail.

Grande Tetons's picture

Nixon was actually pimped the idea that we are seeing today. It is all about evolution and the fact that Obama is just the current whore in the house. 


SafelyGraze's picture

OT -

why can't the topus nominate someone to the board who grew up in a communist regime and is a member of the cfr

someone who wrote:

"many allege multinationals are 'exporting' US jobs when they expand operations abroad. .. but substitution between labor employed byt parents [parent companies] in the US and affiliates abroad [the offshore arms] is low."



FL_Conservative's picture



"Why in the hell is the Fed even considering this? Where is it in their mandate to consider "dumb ass mistakes the executive banch made"?"


The Fed's mandate comes from those who the Fed was set up to serve.

0b1knob's picture

Lacker?  That's his name?  

Appropriate in so many ways....

Popo's picture

Well now they really are admitting QE infinity.

If anything (no matter what, apparently) negatively impacts the economy... They'll QE.

Given that ceasing QE itself would negatively impact the economy, it's abundantly clear that they will never, and can never stop.

Nice job, assholes. You've walked straight in to the most obvious type of central banking failure.

Keyser's picture

It's not a mistake. It's a deal. The insurance industry was instrumental in funding the Obamanation publicity blitz and he came through by selling the American public to the insurance industry. that's all Obamacare amounts too; that and nothing else.

It's built into the ACA legislation that the insurance companies are protected from any losses related to ACA implementation for 3 full years from the rollout date. So yeah, the providers will be getting a bailout later in 2014... This is estimated to be in the billions of $$$... 

Fuck you Obama and Yellen...


onewayticket2's picture

i wonder if it'll happen right before the elections...

Canadian Dirtlump's picture

Indeed. I'm no sage by any means but I am surprised that more people didn't realize that these criminals had all their bases covered.  People talked about QE getting slashed because the deficit was going down so there would be less of a need to fill the revenue gap in. When this ends up blowing the lid off costs the insurance companies will be perpetually bailed out, as was always the case as they wrote this. When the revenue gap explodes, the lender of last resort will be there with bells on to liquify the spender of last resort.

NihilistZero's picture

Well the FED has to have some type of debt to buy right?  Those Treasuries must be spent on something... 

So as I see it:

Obamacare breaks the Health Insurance Industry then treasury bills are issued to pay for the breakage.  Said breakage leads to Single Payer then treasury bills are issued to pay for single payer. 

Looks like they have the next boom/bust planned out nicely.  At least that will get them out of residential RE for a few years so I can buy a fucking house at a sane price...

Canadian Dirtlump's picture

until they buy all the MBSs at 100 cents on the dollar from the banks, they will have to keep doing that. I don't know how much student debt is held at banks, but that has to be looked at as well.


So you have them cleaning up the balance sheets of banks on one end, and filling in the funding gap for the govt on the other... I guess.

SAT 800's picture

Of course. I'm very concerned ACA will turn out to be the final nail in the coffin of what was once the most productive nation on earth; now merely "Food" for the finance vultures.

holdbuysell's picture

"Dear Leader's crown jewel will not be allowed to fail."

I'm concerned that should it succeed that it would actually fail in this admin's eyes.

Seems there's something else to this plan, starting with strange vertigo-inducing questions on the questionnaire when you visit the doctor.

Seems it's a Trojan Horse for something else and I don't think Single Payer is it.

Seems something along failure is what's intended.

aVileRat's picture

Yup. Not rocket science.

Way it works: People take out policies, policy cash is then arbed into the market by your insurance co. That cash then feeds the multiplier effect. Monetization of health risk is just another form of forcing savings into the markets, similar to the securitization of housing assets led to the rally of 1987-2007.

1 small problem: they waited too late to arb a mandatory policy for the wealthiest nation on the planet. The demographic hump is now passing into their late phase consumption patterns, and this will not only increase the cost burden on AHA but also will limit the growth stories the market is willing to chase going forward without QE due to the huge disconnect between those liabilities vs. growth ROE risk premium's. Therefore, the market pump QE will be necessary to entice and offset the true risk premium for all this fresh CMB money dropping into the market. This means that the AHA stimulated social policy is going to be less effective then when Clinton launched the monetization of home equity.

What does this mean ? Because no insureco's will be able to 'reach for the yield' they need, cost burdens will go up to offset the hole. Since healthcare is mandatory, the product will become a giffen good. ie. any amout of premium +% will be paid with a smile. This will only compound the headwinds on markets as both consumers and employers must manage these burdens.


eimcmullin's picture

SAT 800 is right. The Government and the insurance industry have been working together since Nixon signed the Health Maintenance Organization Act of 1973. Been watching the decline in health care, as a nurse and consumer, since 1975. It's a great example of one hand washing the other.

The government has been using insurance companies to administer Medicaid and Medicare for years now. 

Oh and all the info being collected electronically (EHR) is sent to the Centers for Medicare and Medicaid - even if you have private insurance. You are not told this (specifically, but if you are given a privacy statement it's covered by a sentence or two that states your info is private but will be given to the goevernment...) It's called Meaningful Use. All your data is being collected by your doctor and sent to the government ...and has been since you first saw a tablet or laptop being used in your doc's office.

There is a penalty if docs/hosps don't comply - Medicare payments, already paltry are reduced further. 

The government has been increasingly controlling health care for years through insurance companies.




Grande Tetons's picture

The ACA was not a mistake. It is just another set of handcuffs thrown on by a stupid beat cop. 

Sofa King Confused's picture

Check out this United States Code......... 42 USC 18115....

El Vaquero's picture

Notice that it only exempts health insurers from penalties and fees for not participating, not individuals and other businesses. 


No individual, company, business, nonprofit entity, or health insurance issuer offering group or individual health insurance coverage shall be required to participate in any Federal health insurance program created under this Act (or any amendments made by this Act), or in any Federal health insurance program expanded by this Act (or any such amendments), and there shall be no penalty or fine imposed upon any such issuer for choosing not to participate in such programs.

walküre's picture

Obamacare will be the Soviet style gulag care that everyone feared is the worst nightmare ever.

Health insurers will break up their companies in a basic gulag style coverage and platinum Bentley driver coverage for the cream of the elite. That or they will refuse to participate alltogether and the gulag American is forced into a basic gulag style coverage from a shitty insurer.

1% - Bentley

99% - Gulag

Forward Amerikan Soviet

Miffed Microbiologist's picture

The worst part for the 99% is that they are terribly unhealthy. We are being swamped by influenza and the demographics are just astounding. Flu used to be the scourge of the elderly. Not any more. Now we see 20-40 year olds often in ICU on ventilators. Had one 35 year old come in today with a 650 glucose and a BMI of 54. The best healthcare in the world cannot deal with this forever. This country is dying before my very eyes and it's maddening to know you can do nothing to stop it.


walküre's picture

A woman in Canada died from H5N1. She came back from China and allegedly had no contact to either markets or poultry farms. Now WHO is scrambling to find out if she contracted H5N1 from another human.

H5N1 = bird flu is not supposed to get passed between humans

Chinese are lying about H5N1 cases.

Flu will eventually kill many of us.

Grande Tetons's picture

MiffedMicro, No sarc. 

Any street level thoughts on causation or correlation as to what you are seeing.?

Miffed Microbiologist's picture

What I see is a dramatic increase of young (20-40) people having serious complications from flu. Especially in the last 5-10 years. This is, of course, not scientific but the trend is there. What I do notice is these young people always have some chronic condition that causes them to be unhealthy in the first place. Diabetes and asthma is the most common and there is an epic amount of this in this country. I contracted 2009H1N1 when it first came out ( being close to Mexico, San Diego had quite a few cases early on in that pandemic). Yes, I was very sick for about three days, my fever hit 104. My husband was quite thrilled I had given it to him as well and claimed it was the worst flu of his life. The flu this year appears to be a variant of that strain which, I am hopeful I have some protective immunity. If one had simply gotten the flue shot, they would have basically have NO immunity because the shot has only efficacy ( even that is debatable) for the current season. Win win for flu manufacturers who will see a constant revenue stream.

Flu has been around forever. It will never go away. The best way to deal with it is to be very healthy and GET the flu. This will confer great immunity that will last 10-20 years for that strain and ones like it. Yes, a novel strain that has NEVER been seen in a population has the potential for massive deaths like 1917. However, deaths in that era were primarily due to complications, not the flu itself. I believe what I am seeing now is the results of a very unhealthy population meeting an unusually harsh flu that years ago would never be so detrimental.


Henry Chinaski's picture

ACA = Lane closures on the heathcare system bridge.

trader1's picture


this was all planned methodically, no?

Kirk2NCC1701's picture

Why are you so surprised?  "Taper" works both ways, depending on direction.

Any BM (Bowel Movement) has both:  Alternating increases and decreases in 'taper'.

Crash Overide's picture

What the fuck do we need the FED for when we have a Treasury to print interest free money?

This is stupid, and what's even more stupid is we tolerate it.

Anglo Hondo's picture

The Fed is in charge of all policy now.  It's obvious that the do-nothing congress critters have no clue what policy even is. 


And as for Obama, he is there just to read the teleprompter.  God only know what the SCOTUS does any more.


That just leaves the fourth section of this representational republic, The Federal Reserve of the United States, now knoen as FROTUS.

Colonel Klink's picture

I like FRODO, Federal reserve of da oligarchy.

They have all the rings now!

Hughing's picture

Spend and print is the governing policy. The fed is merely a tool.

101 years and counting's picture

instead of raising/lowering rates, the fed is now stuck with 0% rates and increasing/decreasing its printing is the new way to "manage the economy".  we'll drop into recession, and the fed will increase its printing.  same as it ever was, except with a ton more debt and no actual growth.

PGR88's picture

The Fed in the US Government now

doctor10's picture

Hmmm-looks like QE5,6,7,and 8 will all go to the Insurance Companies-gues its time for them to get "theirs" from us now


Kapich peassant?

Blues Traveler's picture

Exact.  If they do not repeal ExhortionCare, it will get worse. Then the lingering threat of the immigration bill.   

The perfect storm, err shit storm for the people who work and have dreams plust further isolate the micro-credit communities/demogrpahic.

machineh's picture

The American idiot Greenspan fancied himself somewhat of an expert on energy policy.

Now the new generation of Fed central planners imagine themselves to be health care experts.

These people are PhD morons who need a week of training to clip their own toenails.

walküre's picture

My comment regarding Grünspan got censored. Doesn't change the fact about what this man is or what his motivations were.

Not surprised at all to see the censorship. I know who is in charge and who defines what PC is.

The agenda of PC is to make people accept that up is down, low is high and wrong is right.

It is working as we can see all around. My livestock has more common sense than many people out there. Common sense was educated out of the people for a reason. The scam can go on longer when people are stupid and fall over their own two feet because they want to go forward but their feet tell them to go back.

Those who upvoted the original comment understand as well.

fonestar's picture

"end the fed"

Should read, "end the dollar"

I happen to know a Japanese cryptographer who is working on that.

jcaz's picture

Just when it didn't seem possible you could be a bigger doosh....

Go back to counting your 3 coins, sparky-  you lost count again.....

Deacon Frost's picture

Had to give you an 'up' jcaz, spot on, more of these troll types showing up.

SAT 800's picture

Please don't waste your valuable time talking to us; just network up with your Japanese buddy there, and you can post a victory anouncement when you're done.