FOMC Ignores EM Crisis, Tapers Another $10 Billion - December Statement Redline

Tyler Durden's picture




 

Consensus that the Fed would extend its $10bn taper from December with a further $10 bn taper today (reducing the monthly flow to a 'mere' $65 billion per month - $30bn MBS, $35bn TSY) was spot on. We suspect the view, despite the clear interconnectedness of markets (and flows), of the FOMC is that "it's not our problem, mate" when it comes to EM turmoil.

  • *FED TAPERS BOND BUYING TO $65 BLN MONTHLY PACE FROM $75 BLN
  • *FED SAYS LABOR MARKET `MIXED,' `SHOWED FURTHER IMPROVEMENT'
  • *FED REITERATES LOW RATES UNTIL JOBLESS RATE `WELL PAST' 6.5%
  • *FED REPEATS RISKS TO OUTLOOK HAVE BECOME `MORE NEARLY BALANCED'
  • *FED SAYS UNEMPLOYMENT HAS DECLINED `BUT REMAINS ELEVATED'

Of course, "communication" was heavy with forward guidance on lower for longer stressed. We'll see if the market buys the dichotomy of hawkish real tapering and dovish promises...remember "tapering is not tightening."

Pre-FOMC: S&P Futs 1775, Gold $1267, 10Y 2.71%, 2Y 35.5bps, USDJPY 102, EM FX 85.67, WTI $97.35, IG 72bps, HY $106.35

 

Perhaps this chart from Saxo Capital Markets ( @saxomarkets ) sums up the world best for now...

 

Full redline below...

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Wed, 01/29/2014 - 15:03 | 4380769 Xibalba
Xibalba's picture

"less than expected"

Wed, 01/29/2014 - 15:05 | 4380778 AllThatGlitters
AllThatGlitters's picture

LOL - Look at Gold and Silver whipsaw up and down.  

Live Gold Chart Reaction: http://www.pmbull.com/gold-price/

Live Silver Chart Reaction: http://www.pmbull.com/silver-price/

As if any of this Fed Babble means anything. They don't stick to whatever they tell us they are going to do anyway.

 

 

Wed, 01/29/2014 - 15:06 | 4380788 Panem et Circus
Panem et Circus's picture

We are still a long way from lift-off. But I admire your enthusiasm!

Wed, 01/29/2014 - 15:08 | 4380794 hedgeless_horseman
hedgeless_horseman's picture

 

 

God bless Kevin Henry and his keyboard.

Amen.

Wed, 01/29/2014 - 15:09 | 4380811 Headbanger
Headbanger's picture

Now where are all the "Fed will never taper" douche bags who were here a month agao!!/

MOE-RONS!!

Wed, 01/29/2014 - 15:16 | 4380880 nope-1004
nope-1004's picture

If you believe the headline (and this gov't), do so at your own risk pal.

 

Wed, 01/29/2014 - 15:19 | 4380905 AllThatGlitters
AllThatGlitters's picture

That's right nope.  The Fed Statement is far from proof that Fed is tapering, LOL.  Talk about naive!

Wed, 01/29/2014 - 20:16 | 4382492 new game
new game's picture

it appears, haha appears that hey are acting prudent(yeh right), as a deversion from backstopping spending.

if we only knew. after 08 and the money laundered to buds around the globe and ge, i can asure you the 65 b is the tip of the iceberg.

until they are gone, it will be the shadow fed in my eyes...

but, i dare to say, they will be unseated when the dollar is no long king of the ponzi.

post syria crisses, we lost major credibilty worldwide. the world bank dude advising china and coming out, and the snow ball is rolling down the slope in wet snow....now world emerging fx turmoil. ok bricks have you had enuf? like our nsa spying?

fuking joke merica with the joker in charge. where is batman and boy wonder(snowden i supose).

i am preparing formy  dollar reserves to be cut in half if not vested. or spent on durable and hard assets.  trick is to pick the correct ones.

 

Wed, 01/29/2014 - 21:15 | 4382638 Jack Napier
Jack Napier's picture

The Fed may have tapered the rate of increase in QE as compared to last month but they are still increasing the amount of total QE every month. I'll consider it a taper when they decrase the money supply and start trying to unwind the black hole. That will never happen.

And the way markets are responding to a slight reduction in Fed heroine is evidence that the addict cannot survive without it. Don't get it twisted. QE isn't going anywhere. They are simply gauging the patient's level of addiction to determine future dosings.

Wed, 01/29/2014 - 15:18 | 4380891 NotApplicable
NotApplicable's picture

Until the Treasury market has to rely upon voluntary market support (aka real consumer demand), any "tapers" are merely fictional facades.

So, while the Fed pretends to taper, they merely make cash flow in a different direction.

And people like you apparently fall for it.

Here's the deal...

money is fungible

Wed, 01/29/2014 - 15:19 | 4380910 atomp
atomp's picture

IIRC, the meme from a couple months ago was: taper-crash-untaper, but yes, the never taper guys seem to be absent.

Wed, 01/29/2014 - 15:27 | 4380963 Herd Redirectio...
Herd Redirection Committee's picture

And we have seen the S&P down 3.5%+.  And EM turmoil.  The loonie lost 10% in the last month. I'm more in the "they'll never raise rates (significantly)" camp.

Wed, 01/29/2014 - 15:21 | 4380923 Cursive
Cursive's picture

@Headbanger

I've always thought they'd taper (they eventually have to), but not convinced of anything that they SAY.  I want to see what they DO.

Wed, 01/29/2014 - 15:35 | 4381000 Frozen IcQb
Frozen IcQb's picture

Headbanger

That would be me...I accept full responsibility and spare my fellow ZH'ers.

 

Wed, 01/29/2014 - 15:37 | 4381020 Uber Vandal
Uber Vandal's picture

Uber Vandal reporting for whipping boy duty, sir!

Wed, 01/29/2014 - 15:40 | 4381049 arkel
arkel's picture

I thought they would never taper, so I'm wrong.

Plus, surprised that gold/silver aren't sliding. Also surprised that bond yields aren't moving higher. 

Wed, 01/29/2014 - 20:22 | 4382508 new game
new game's picture

fear trade, plus they have 19 dealers given marching orders(the club) and have their backs covered.

taking the 2.5 handle way sooner than previously thought. 16 basis pts from...

Wed, 01/29/2014 - 15:48 | 4381097 ejmoosa
ejmoosa's picture

So, if we change it to a time perspective, then the Fed is just two weeks behind on it's normal volume of actiities....And for the last 12 months, we are at Taper= (85*12)-30. 

97% of the previous rate of QE, or 100%.

Petty much the same in my eyes.

Wed, 01/29/2014 - 16:18 | 4381227 SDShack
SDShack's picture

Just wait until the end of February, when the Repukes cave on the debt ceiling, and the budget deficit starts rising again due to expiration of the sequester. QE was just a way to monetize the debt. The deficit fell because of the debt ceiling and sequester. That is coming to an end, and the deficit will rise as congress goes on another spending spree. Hell, you just saw it with the Farm Bill that just passed. Every bill going forward is going to be larded with pork. Under Bush, $400B deficits were the end of the world, but $700B deficits now are trumpeted by 0zer0 in his SOTU speech. Meanwhile housing is slowing, jobs are non-existent, benefits continue and are trying to be expanded, add amnesty and 0zer0care = deficit rises and debt ceiling is broken, so the Treasury has to find more treasury buyers, and the Fed is buyer of last resort. This taper is only temporary at best. By the end of 2014, it will be apparent the recovery that never was will give way to the never ending great recession. Enter the Fed once again. Rinse and repeat.

Wed, 01/29/2014 - 15:09 | 4380817 Hedgetard55
Hedgetard55's picture

Questiion: how does ZH get this info and it's analysis out so quickly, time stamp 14:01, 1 minute from release? At least with Hilsenwrath I know he gets it 30 minutes early, but Tyler? What up wid dat?

Wed, 01/29/2014 - 15:18 | 4380892 RebelDevil
RebelDevil's picture

Keep in mind that the "Tylers" are more likely a team of 40 (or more) than 4. See Wikipedia and past bios on the Tylers.

They're dedicated to be the best in financial and economic journalism, and I like that. :)

Wed, 01/29/2014 - 15:22 | 4380925 Hedgetard55
Hedgetard55's picture

Yea, a C-note to Jon and the minutes find their way over to Tyler also. Guess that's cool, bringing a gun to a gunfight, so to speak.

Wed, 01/29/2014 - 16:37 | 4381409 silvermail
silvermail's picture

"how does ZH get this info and it's analysis out so quickly, time stamp 14:01, 1 minute from release?"

They are advance prepared text of this last of Bernanke's speech.

Wed, 01/29/2014 - 15:08 | 4380796 A L I E N
A L I E N's picture

Taper is tightening in this Keynsian wonderland

Wed, 01/29/2014 - 15:10 | 4380819 StacksOnStacks
StacksOnStacks's picture

Hey guys!  Instead of smoking 10 packs a day I'm going to smoke 9.5.  It'll be like I'm not smoking at all! Everything is well.

Wed, 01/29/2014 - 15:05 | 4380770 AllThatGlitters
AllThatGlitters's picture

Isn't this what everybody said it would be?

 

Wed, 01/29/2014 - 15:03 | 4380773 sixsigma cygnus...
sixsigma cygnusatratus's picture

Cue Cramer melt down...

Wed, 01/29/2014 - 15:09 | 4380805 ebworthen
ebworthen's picture

He's saving the full-bore histrionics for the next big crash so his acolytes can see him get angry.

"What does it matter!?!?  Four years of gains are dead!!!"

Wed, 01/29/2014 - 15:12 | 4380836 Levadiakos
Levadiakos's picture

Hold on! I need to know what he's buying.

Wed, 01/29/2014 - 15:14 | 4380850 dcj98gst
dcj98gst's picture

bewwwwwyaaaa

Wed, 01/29/2014 - 15:05 | 4380775 ebworthen
ebworthen's picture

Set the prime rate at 5%!

Zero QE!

C'mon you CHICKENS!

B'gawk!

Wed, 01/29/2014 - 15:04 | 4380777 maskone909
maskone909's picture

bond buying? i thought it was only MBS

Wed, 01/29/2014 - 15:13 | 4380856 CH1
CH1's picture

It was 40/45.

Not sure what it is now.

Wed, 01/29/2014 - 17:24 | 4381661 peter123007
peter123007's picture

35/30

Wed, 01/29/2014 - 15:04 | 4380780 Tsunami Wave
Tsunami Wave's picture

I didn't expect another taper so soon.  But then again, it's maybe good cop FED time before bad one comes in soon.

Wed, 01/29/2014 - 20:30 | 4382529 buyingsterling
buyingsterling's picture

They need a big taper before the big correction, or they won't be able to justify the untaper.

Wed, 01/29/2014 - 15:06 | 4380781 SDRII
SDRII's picture

yen sub 102

Wed, 01/29/2014 - 15:09 | 4380785 Dr. Engali
Dr. Engali's picture

Don't worry we can make up for it in our MyRas.

 

Way to go Ben you throw 23 trillion at the problem just to fuck it up on your way out. You're an even bigger buffoon than I thought.

Wed, 01/29/2014 - 15:07 | 4380790 Kaiser Sousa
Kaiser Sousa's picture

they aint tapering a mother fucking cent...

the counterfeiting will continue along with the free confetti being spoon Fed to their banker brethren...

I HOPE YA'LL R STILL STACKIN'..............

 

Wed, 01/29/2014 - 15:11 | 4380816 oddjob
oddjob's picture

Selling the same bonds twice had a rather destructive conclusion last time.

Wed, 01/29/2014 - 15:14 | 4380849 Levadiakos
Levadiakos's picture

You had to throw your hat into the ring

Wed, 01/29/2014 - 15:18 | 4380883 Kaiser Sousa
Wed, 01/29/2014 - 15:21 | 4380918 Levadiakos
Levadiakos's picture

Go ahead. Average down.

Wed, 01/29/2014 - 15:15 | 4380872 Winston Churchill
Winston Churchill's picture

42 times actually , by the unlamented Bear Stearns decd.,

Wed, 01/29/2014 - 15:15 | 4380869 DadzMad
DadzMad's picture

Right.  Saying they're going to taper and actually tapering are two different things.

On another note.  I check CNBShit occasionally to catch up on commodities (corn and beans).  I love how they openly hate the metals.  The headline reads "Gold inches higher" when it's up fifteen bucks, but the next time state "Gold gets slammed!" when it drops 4.50.

Wed, 01/29/2014 - 15:15 | 4380873 wiseindian
wiseindian's picture

And speaking of stacking, what is the ZHers consensus on approximate oz of stacks that we should own and subequently foolishly to lose in boating accidents? Looking for rule of thumb to see where I stand in the army of stackers.

Wed, 01/29/2014 - 15:32 | 4380994 Kaiser Sousa
Kaiser Sousa's picture

take note of the global debt based currency paradigm unraveling on a daily basis before your very eyes...

then open up your safe and stare at your real money...

if you can close it with the belief that you have enough to get you and yours thru the great reset  - then you have enough...

if you cant - you dont.....

Wed, 01/29/2014 - 18:04 | 4381860 AngelEyes00
AngelEyes00's picture

"if you can close it with the belief that you have enough to get you and yours thru the great reset"

You haven't been listening to Lindsey Williams have you?  Currency exchanges operate to adjust currency valuation.  Currency resets are not needed.

 

Wed, 01/29/2014 - 16:18 | 4381290 superflex
Wed, 01/29/2014 - 22:18 | 4381302 Frozen IcQb
Frozen IcQb's picture

5% in palpable physical and another 25% in pm shares as a percent of investable assets.

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