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What 1,592 Days Of Central Planning Looks Like

Tyler Durden's picture




 

Back on November 25, 2008, in response to the complete wipe out in the capital markets, the Fed quietly announced its foray into Quantiative Easing, which was expanded in March of the following year, and the de facto start of the New Normal Centrally Planned regime.

491 days later, on March 31, 2010, QE1 was "tapered."

206 days later, when the market had gone exactly nowhere, the Fed commenced QE2 which had previously been disclosed at the 2010 Jackson Hole conference.

QE2 continued for 250 days and fully "tapered" on June 30, 2011.

83 short days later, with the market tumbling, the Fed had no choice but to continue its central banking press, and on September 21, 2011 started Operation Twist, which has since turned into QE3, or 4 depending on how one keeps count, also known as open-ended QE.

A month ago, despite one failed headfake experiment previously, the Fed announced it would begin tapering Open-ended QE by $10 billion, ostensibly by $10 billion at every FOMC meeting, but "data dependent" which of course means if the market is crashing the Fed would stay engaged.

So central planning continues, and as of January 19, 2014, the latest episode of QE, started in September 2011, has gone on for 851 days.

Altogether, of the 1881 days starting on November 25, 2008 and continuing through January 19, 2014, the Fed has directly and unambiguously intervened in the markets for a total of 1592 days. It was not been directly involved in the market for a tiny 289 days.

In sum: the New Normal is best characterized by a Federal Reserve which has been actively manipulating the equity "market" 85% of the time.

This is how the Fed's central-planning calendar looks:

And this chart, courtesy of DoubleLine Capital, shows how the "stock market" has moved during this period.

 

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Sun, 01/19/2014 - 17:56 | 4346711 Smuckers
Smuckers's picture

Call me old fashioned, but I prefer my chart porn to be all natural, not artificial.

Sun, 01/19/2014 - 17:59 | 4346717 Eireann go Brach
Eireann go Brach's picture

So the Obama presidency is also an illusion per the rise in the stock market too?

Sun, 01/19/2014 - 18:34 | 4346772 Chris Jusset
Chris Jusset's picture

It's too bad that the only thng left for the US economy is bubble-blowing by the Fed.

Sun, 01/19/2014 - 19:34 | 4346886 Pure Evil
Pure Evil's picture

With Yellen now at the helm, the thought of bubble blow jobs leaves me a tad squeamish, not that Berstank bubble blow jobs sounded any more appealing.

Sun, 01/19/2014 - 19:49 | 4346924 CarrierWave
CarrierWave's picture

Thank you ZH for confirming that I can keep my SP500 Index fund in the stock market Ad-Infinitum.

I bount SPX on Nov-2011 and stayed with the trend ever since for a whooping +75% so far.

It's comforting to know it was all Fed supported, and that my investment is safe for a while longer too.

Sun, 01/19/2014 - 20:59 | 4347076 wallstreetapost...
wallstreetaposteriori's picture

Obama will take credit for that as well.... just wait until the press conference where he says he is single handidly closing the wealth gap.

Sun, 01/19/2014 - 22:11 | 4347228 mumbo_jumbo
mumbo_jumbo's picture

that's what happens when an economy exports all the good paying jobs and then imports millions of the 3rd world peasants to do the jobs that can't be off-shored....in the end, it's just simple math.

Sun, 01/19/2014 - 18:26 | 4346755 VD
VD's picture

then u gotta lot to worry bout cause MrYellenz bush will be exceedingly manicured n most synthetic wayz wit her POMO to Nth...

Sun, 01/19/2014 - 17:57 | 4346712 max2205
max2205's picture

Awesome and shocksome

Sun, 01/19/2014 - 17:58 | 4346714 ultimate warrior
ultimate warrior's picture

"Before a policmaker jumps to the conclusion that wage and price controls can actually cure an inflation, he should make an attempt to understand the true causes of that phenomenon. The absence of such understanding is one of the reasons that wage and price controls have had such a long and painful history of failure and ineffectiveness; controls may be able to suppress the symptoms of inflation, but the evidence shows that they are not a cure for the disease itself."

-Forty Centuries of Wage and Price Controls

 

Sun, 01/19/2014 - 17:58 | 4346715 Waterfallsparkles
Waterfallsparkles's picture

Can you really call it a "Market" if the price is controled?

Sun, 01/19/2014 - 18:11 | 4346732 frankTHE COIN
frankTHE COIN's picture

Nice point. It's more like ' you're going to take these prices and Like It. '

Sun, 01/19/2014 - 18:33 | 4346771 Colonel Klink
Colonel Klink's picture

In a word....NO.  Market it about price discovery.  With intervention there is no real price discovery.

Fuck the Fed!

Sun, 01/19/2014 - 20:04 | 4346944 NIHILIST CIPHER
NIHILIST CIPHER's picture

niganomics  10.0

Sun, 01/19/2014 - 22:50 | 4347287 Harbanger
Harbanger's picture

The market has been manipulated for so long that I lost sense of true price.  How does price discovery play into global trade?  People in the west like the idea of Fairness, but imagine a Global minimum wage.  Those imports we like will no longer be affordable, people in the west will have a hard time adjusting to their new living standards.

Mon, 01/20/2014 - 11:40 | 4348175 Rodders75
Sun, 01/19/2014 - 18:45 | 4346788 U4 eee aaa
U4 eee aaa's picture

We call that a 'free market'. Free for them, marketed to us

Sun, 01/19/2014 - 19:51 | 4346930 CarrierWave
CarrierWave's picture

Why do we even care what it's called?

Just stay with the trend and make mullah. Don;t fight the fed.

Sun, 01/19/2014 - 18:17 | 4346738 teslaberry
teslaberry's picture

whats so upsetting is how teh market shot back up before QE2 even started. that little uptick is insider funds buying the shit out of the market on inside info regarding fed's immanent money injections called 'qe2' . 

don't fight the fed----get inside information from it. 

 

your market is no market. at the very top it is a hostage crisis. insiders scalping capitalists by controlling the printing of money and interest rates. 

 

BRINGING BACK CAPITALISM  requires a collapsee of the credit system. at the very least. who knows----maybe even a return to a restricted currnecy pegged to commodity supplies verified in an open audit process..... 

Sun, 01/19/2014 - 18:19 | 4346743 kchrisc
kchrisc's picture

I took a "quantitative easing" a few minutes ago. Now I want to say...wait, got to go!

Sun, 01/19/2014 - 18:21 | 4346748 Kaiser Sousa
Kaiser Sousa's picture

what is the objective of all casino's...

to strip delusional marks of their debt coupon dollars...

u play their games, u get whats coming to u - NOTHING...

Sun, 01/19/2014 - 18:27 | 4346752 JR
JR's picture

We are living the lie.

“You are a slow learner, Winston."
"How can I help it? How can I help but see what is in front of my eyes? Two and two are four."
"Sometimes, Winston. Sometimes they are five. Sometimes they are three. Sometimes they are all of them at once. You must try harder. It is not easy to become sane.” --
George Orwell, 1984

How is this Orwellian Fed-planned economy working out for you – you the saver, you the pensioner; you the busted homeowner with negative equity; the recent college grad living at home with your parents; the middle-aged college grad without a future; you the underpaid private sector employee without a pension; you the skilled laborer and/or middle management executive unemployed because the U.S. manufacturing and intellectual base was offshored; you the penniless baby boomer soon to retire on Fed-devalued SS and insurance premiums, you the gun owner fighting for your challenged rights; you the weeping lover of liberty, the holder of gold and silver, the long term private investor…?

America! America!  Break the chains that bind you. Rise off your knees! Abolish the Fed. Seize back the blessings of your freedom. Reclaim your sovereignty. Prosperity can only be for the free. Push aside those who have commandeered your greatness and outsourced your livelihood. Reclaim your blessings. America, the patent king and producer of the world! – THAT AMERICA! Not the bankers’ America of debt enslavement. The America that made possible Carl Sandberg’s Chicago!

Sun, 01/19/2014 - 18:45 | 4346791 kchrisc
kchrisc's picture

But remember, later Winston is told that it is all about power. That power is not the means to an end, but is the end, the goal.

I don't fully agree, as I do believe that it is all about "money and power" with both acting sometimes as an end and sometimes a means to the other.

 

To acquiesce to power is to participate in your own robbery."

Sun, 01/19/2014 - 19:04 | 4346835 JR
JR's picture

Yes. What’s happening to our economic America: Tyler, in this blockbuster defines it here.

In the past, central banks have been identified through use of central planning; this central bank is not planning, it is acting. And the acting is theft of American resources on a scale never before experienced in the world. And its goal is absolutely Orwellian.

Sun, 01/19/2014 - 18:36 | 4346775 Seasmoke
Seasmoke's picture

Wow i remember Operation Twist like it was yesterday !!!.....851 days sure do go quick, when you are having fun !!!!

Sun, 01/19/2014 - 18:38 | 4346781 U4 eee aaa
U4 eee aaa's picture

We are on zombie time.

We have been in an economic coma for three years now

Sun, 01/19/2014 - 22:11 | 4347234 Greenskeeper_Carl
Greenskeeper_Carl's picture

I disagree. we have been a zombie economy since 99-2000. Real growth stopped when they decided to create a housing bubble to replace the dot com bubble, it has been entirely fed driven since then

Mon, 01/20/2014 - 13:54 | 4348516 DOGGONE
DOGGONE's picture

Interesting ... maybe! These charts can be seen as consistent with your hypothesis, I suppose.
http://www.showrealhist.com/RHandRD.html
And the Real Dow jump to 100 in October 2007, after several years of low 80s average, began VERY ABRUPTLY a few days after NYT published this Real Homes chart.
http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2....
I reckon that keeping real price histories seldom seen by the people is a main tool of brainwashing.
The media do know how http://www.showrealhist.com/begun.gif

Sun, 01/19/2014 - 18:38 | 4346777 U4 eee aaa
U4 eee aaa's picture

It used to be that if you failed to plan you planned to fail.

Now if you central plan, you plan to fail

Mon, 01/20/2014 - 09:13 | 4347788 jay28elle
jay28elle's picture

"...but the market has hit new all-time highs, unemployment is down to multi year lows, more of my buddies are getting SS DI, and we're still getting unemployment.  Not to mention, of course, I have me a brand new iPhone 5S, 60" TV, and new wheels.  Don't change a freaking thing".  Thank you Obama and Ben", said the low information voter that is likely to vote in even more progressive idoits in 2014, and the 3rd biggest idiot, Hilliary, in 2016.

Sun, 01/19/2014 - 20:10 | 4346959 DOGGONE
DOGGONE's picture

Look here for stock and home prices BOTH since late 2008.
http://www.showrealhist.com/RHandRD.html
THE BIG CON!
Not telling these truths is The Big Lie -- Hitler & Goebbels approve.

Sun, 01/19/2014 - 21:34 | 4347143 JR
JR's picture

Tyler, this blockbuster needs greater exposure. If I were you, I would repeat this during the first part of the week, or keep it near the top through tomorrow morning.

Sun, 01/19/2014 - 23:25 | 4347347 Wait What
Wait What's picture

Great summary of What ZH has been trying to say all along. ZH is right in saying the only reason markets are inflating almost daily is because of the Fed. and to think, the Fed is actually proud of this outcome... at least, it will be, until it tries to pull the punchbowl. then it will be exposed as the Madoff/Corzine/LTCM bullshitter that it really is. because ponzi schemers always get exposed, sooner or later.

Mon, 01/20/2014 - 01:51 | 4347529 Nobody For President
Nobody For President's picture

It would be nice to get wider exposure of this article. 

Just a bullshit market being pumped by a bullshit dream...

Mon, 01/20/2014 - 07:09 | 4347701 Rising Sun
Rising Sun's picture

US following the lead of Venezuela - Caracass index up blah-blah %.

 

http://www.zerohedge.com/news/2013-09-22/venezuela-seizes-toilet-paper-f...

 

Good job Barry - you fucking shit sucking worm.

Mon, 01/20/2014 - 15:18 | 4348755 moneybots
moneybots's picture

"In sum: the New Normal is best characterized by a Federal Reserve which has been actively manipulating the equity "market" 85% of the time."

 

Wait until the market manipulates back.

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