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Expect No Real (Forward) Guidance From Your Leaders

Tyler Durden's picture





 

Submitted by Howard Kunstler of Kunstler.com,

“Guidance” is the new organizing credo of US financial life with Janet Yellen officially installed as the new Wizard of Oz at the Federal Reserve. Guidance refers to periodic cryptic utterances made by the Wizard in staged appearances before congress or in the “minutes” (i.e. transcribed notes) from meetings of the Fed’s Open Market Committee. The cryptic utterances don’t necessarily have any bearing on reality, but are issued with the hope that they will be mistaken for it, especially by managers in the financial markets where assets are priced and traded. 

One such infamous moment of guidance was Ben Bernanke’s May 2007 statement saying that percolating sub-prime mortgage problems were “contained.” If that was a signal for anything it was a green light for banks not yet deemed too big to fail to continue constructing swindles called collateralized debt obligations (CDOs), which were bundles of already bundled mortgage backed securities based on janky mortgages for million-dollar houses owned by Las Vegas busboys, and the like, that had no prospect of ever being paid. The banks kept at it sedulously for another year, and then in September of 2008 this stream of combustible financial garbage blew up the banking system. Nobody at the Fed saw it coming, least of all Janet Yellen.

And then the banking system was “rescued” by the “program” (free money bailouts) enacted by congress called TARP, while the Fed set up a carry trade system that would enable the floundering (now) too big to fail banks to convert massive volumes of zero-interest no-risk loans into a dependable revenue flow to “build reserves,” that is, allow them to appear solvent while engaging in new dodges, swindles, and manipulations of markets, currencies and interest rates.

Which brings us very near the present. Fed chairperson Yellen gave a marathon six-hour audience to the House Committee on Financial Services last week. It was so devoid of substance and meaning that the TV network covering it switched the feed a few times to the exciting Olympic event of curling, in which “athletes” wield brooms to induce giant polished stones to glide across a length of ice at a scoring target — that is, an entirely artificial and purposeless activity aimed at producing a trance of contentment among viewers who have nothing better to do in the middle of the day.

Last May’s remarks by then Fed Chairperson Ben Bernanke that the Fed might consider “tapering” its gigantic monthly purchases of US Treasury bonds plus an equal amount of stranded mortgage paper made the markets so nervous that stock indexes had a seizure and the interest rate on the lodestar ten-year treasury bill shot up 150 basis points — into a zone that would cripple the government’s ability to keep its credit revolving. These dire portents prompted Bernanke to take back what he’d said, but then three months later, in the fall, he restated the taper guidance. By then, market watchers and playas were sure that he was just juking them, and anyway they were too busy stuffing their Christmas bonus stockings to take him seriously.

Lo, the taper is still on under Wizard Yellen, for the simple reason that if she backed out of it now, before she officially chaired her first meeting of the Fed governors, her outfit would lose whatever shreds of credibility it still hangs onto. Even with the taper on, it is for now still pumping over half a trillion dollars a year into the banking system. There is some reason to think that it made the markets puke two weeks ago. But then a really bad employment number came out, and in the inverse climate of bad-news-being-good-news for bubble markets, that was construed as a sure sign that the Fed might have to un-taper sometime around late spring with Yellen’s chairpersonship fully established.  I suspect they’ll do something else: they’ll continue to taper down purchases of treasuries and mortgage detritus via the direct TBTF bank channel and they’ll establish a new “back door” for shoveling money into the system. Nobody knows what this is yet, and it may be some time even after it starts that the mechanism is discovered. In the meantime, the seeming placidity of the renewed “risk on” mood should be a warning to market cheerleaders. Something’s got to give and I think it will be the US dollar index, which has been in Zombieland since November. The world has never been so ready for a change in direction. Expect no real guidance from your leaders.

 


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Mon, 02/17/2014 - 14:20 | Link to Comment rtalcott
rtalcott's picture

Wizard or Lizard?

Mon, 02/17/2014 - 14:24 | Link to Comment InjectTheVenom
Mon, 02/17/2014 - 14:32 | Link to Comment pods
pods's picture

Really getting pretty tired these self appointed "leaders."

Basically these are HOA board members writ large.

Same basic controlling tendencies, and they relish the thought of people asking them for permission.
I wouldn't piss in their mouth if their teeth were on fire.  Fuck em. All of them.

pods 

Mon, 02/17/2014 - 14:36 | Link to Comment Overfed
Overfed's picture

Yeah. Our "leaders". That's rich. I see nothing but parasites dragging us down.

Mon, 02/17/2014 - 14:42 | Link to Comment Oh regional Indian
Oh regional Indian's picture

What a tired scam this has become, world over. Dead money system and it's dead money masters. Ugly, all of them, for good reason.

Yick....

Mon, 02/17/2014 - 14:49 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Yes, I pine for the good old days of post WWI Germany , when military coups would force the government to flee the capital. Ahh and we would drink and sing songs all night! What a time!

Mon, 02/17/2014 - 15:08 | Link to Comment fonestar
fonestar's picture

Canada scores another goal in the world Bitcoin Olympics!!

http://globalnews.ca/news/1152356/citys-first-bitcoin-atm-makes-debut/

Mon, 02/17/2014 - 15:15 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

Wizards?  No, they are the new Grand Priests!

Mon, 02/17/2014 - 15:22 | Link to Comment knukles
knukles's picture

Does this mean there will be no more effective Propaganda?

 

 

I ah, I say, I say there, that's a trick question, son.
That boy's so dumb he thinks the Mexican border pays rent

Tue, 02/18/2014 - 03:35 | Link to Comment Doña K
Doña K's picture

Since it's illegal for the FED to hand out money to the TBTF banks directly, I wonder if a citizen's group can sue the FED for gaming the system by handing them loans for very little interest and redeposit them for higher interest effectively handing them money. 

Is there an attorney in the house? I've got a nice daughter for you 

Mon, 02/17/2014 - 16:31 | Link to Comment BlackChicken
BlackChicken's picture

I don't think this was a bit coin story/post.

Be patient, I'm sure there will be one later today.

Mon, 02/17/2014 - 16:39 | Link to Comment fonestar
fonestar's picture

Okay. Standing by.

Mon, 02/17/2014 - 20:40 | Link to Comment boogerbently
boogerbently's picture

So,

What does that mean?

Do you know the most popular show on TV ?

Mon, 02/17/2014 - 15:08 | Link to Comment August
August's picture

They could beat up the communists, jews and homosexuals. 

But, somehow, they never got around to beating up the bankers.

Mon, 02/17/2014 - 15:20 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Bankers always backed the putch leaders. Restoring the monarchy (or some such absolute ruler) and feudal rights of the old nobility was highly profitable for connected bankers, like me

Mon, 02/17/2014 - 16:33 | Link to Comment cossack55
cossack55's picture

www.zengardner.com/meet-the-ruling-faces-of-evil/

 

Always a great reminder when one speaks of "leaders"

 

Note: scroll down one page 

Mon, 02/17/2014 - 14:37 | Link to Comment exi1ed0ne
exi1ed0ne's picture

Leaders:

Someone who has no idea what is going on, has no technical expertise in any topics they discuss, and who's only skill is detecting where the hive mind is going already and jumps in front saying "Follow Me!"

Or so I gather from what qualifies as a leader these days.

Mon, 02/17/2014 - 16:12 | Link to Comment svayambhu108
svayambhu108's picture

jumps ... saying, "Follow Me!"

 

http://www.youtube.com/watch?v=TPjbitc9uho

Mon, 02/17/2014 - 16:34 | Link to Comment RKDS
RKDS's picture

Ain't that the truth.  It's so fucking depressing.

Mon, 02/17/2014 - 14:27 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

My 4 year old always called it the Lizard of Oz and with Yellen at the helm, lizard it shall continue to be.

 

Mon, 02/17/2014 - 14:43 | Link to Comment pods
pods's picture

Kids come up with the cutest things.
My favorite from my clan was my daughter calling a mockingbird a "knocking bird."

pods 

Mon, 02/17/2014 - 14:56 | Link to Comment detached.amusement
detached.amusement's picture

I used to get a kick out of my younger brother's imaginary Burning Shepard!

Mon, 02/17/2014 - 14:22 | Link to Comment daily bread
daily bread's picture

The Greeks had an Oracle at Delphi.  Much more trustworthy that the Oracle of Omaha.

The Romans/Etruscans had "liver-watchers" (haruspexes) devoted to working out the future.

But in modern times, the Fed is so much better than those impostors from the past.

Mon, 02/17/2014 - 14:26 | Link to Comment Ignatius
Ignatius's picture

"Oracle at Delphi"

This is an avenue and, more importantly, an intriguing business and franchise opportunity that is begging to be more fully explored.

Mon, 02/17/2014 - 16:56 | Link to Comment tickhound
tickhound's picture

Oh it's being explored alright. To religious proportions...

Cuz most religions speak in this code full of vague BULLSHIT. Otherwise it'd be something else other than religion. We INSIST on this type of talk from our Messengers of the Gods.

PONZI sits atop his mayan temple proclaiming MORE monuments are the answer, at ANY cost. Do it faster to please the gods. Do it or the RAINS WONT COME! He has become the MOST POWERFUL GOD OF ALL TIME. He givith SUNDAY for any midget God we worship, but MONDAY thru FRIDAY are to be DEDICATED TO HIM.

Then all the PONZI Priests spread like plague to regurgitate the message, and we worship them... We give them immunity from all worries. We excuse them from guilt. We shower them with gifts. Guilt is the burden left for us... So we blame ourselves for the table scraps.

Failures of PONZI are ALWAYS our own. Our moments of weakness and lack of faith in the PONZI ORDER become rational excuses for periods of drought.

PONZI provides guidance to all Humanity through the good word.... So we shower him with rose petals and await his next public appearance.

Mon, 02/17/2014 - 14:23 | Link to Comment skwid vacuous
skwid vacuous's picture

Gold another $10 of gellin' for Yellin today

Mon, 02/17/2014 - 14:24 | Link to Comment bubblemania
bubblemania's picture

Bullish! BubbleJew Yellen will is priming the pump.

Mon, 02/17/2014 - 14:27 | Link to Comment kurt
kurt's picture

Ahem... Fed Chair

 

Satan

Mon, 02/17/2014 - 14:27 | Link to Comment MFLTucson
MFLTucson's picture
Expect No Real (Forward) Guidance From Your Leaders

We don't have any leaders; we have a group of trash in charge!   

Mon, 02/17/2014 - 14:42 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Where are those skilled at prognostication when you need them?         

 

Insted of having leaders skilled at reading animal entrails, our leaders ARE animal entrails (figuratively if not literally).   

Mon, 02/17/2014 - 14:25 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Captain obvious is back. But I digress, there is no "leadership", elected or otherwise.

Mon, 02/17/2014 - 14:29 | Link to Comment El Vaquero
El Vaquero's picture

No leadership you say?  Then what is our government doing?

 

Oh, that's right.  Go Go Gadget Assrape!

Mon, 02/17/2014 - 14:45 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Then what is our government doing?

 

Looting the little that remains, facilitating the same for their friends and building armies and battlements for staving off the pissed off masses when they discover these crimes.

Mon, 02/17/2014 - 14:30 | Link to Comment Bioscale
Bioscale's picture

I would put it much shorter:

We politicians and bankers have fucked you brave stupid poor little people in the ass with TARP put on the Ben's cock and will fuck you again even thoug the Ben is gone. We have for you a little stupid fucking lady Yellen who will soften the image of us being the masters of assfuckers and keep you calm. And BTFD

Mon, 02/17/2014 - 14:30 | Link to Comment devo
devo's picture

Gold just spiked straight down. That's not fishy or anything. Yellen's first trade!

Mon, 02/17/2014 - 14:36 | Link to Comment Motorhead
Motorhead's picture

That means the dollar should be up...strong dollar policy!!!!!!  (sarc)

Mon, 02/17/2014 - 14:50 | Link to Comment cynicalskeptic
cynicalskeptic's picture

By what chart do you so claim?    

It's been headed upward with minor variation for a few days.... no major downward move at the time of your post - or are you one of the 'perception police' employed to shape opinion following a script  (for a few cesnts a posting - better than work at McD's I suppose)  who misread the schedule and posted early?

Mon, 02/17/2014 - 14:56 | Link to Comment seek
seek's picture

goldprice.org is showing it. It looks like a glitch to me. I think it's due to some exchanges being closed due to the holiday.

Mon, 02/17/2014 - 15:44 | Link to Comment devo
devo's picture

Why do you have to be a total dick and accuse me of being a shill while taking cheep shots at people who work at mcdonalds? It's on goldprice.org, man. Couldn't you leave it at "what chart?"...??

Anyway, goldprice.org is the site I use. If there's a better site let me know, but I have been using it for a handful of years without any issues.

Mon, 02/17/2014 - 22:27 | Link to Comment HardAssets
HardAssets's picture

devo - well the gold price is heading down as I type this. I'll have to check the time put up after I post this. After recent price movement a lot of us expected an attack and it'll be interesting to see how it goes next week.

Just a little bit of friendly advice though . . . . people have to grow a rhino tough skin on ZH.

Everyone will have a statement that's down arrowed or jumped on if theyre here long enough. IMO that's actually a postive aspect of the site. You might down arrow a statement from someone, and in the very next article up arrow another statement of their''s on a different topic.  Instant feedback.

 

 

Mon, 02/17/2014 - 14:38 | Link to Comment Motorhead
Motorhead's picture

Janet Reno, Hillary, Janet "Incompetano" Napolitano, Justice Kagan, and now Jabba the Hut...the Dems can sure pick the hot chicks.

Mon, 02/17/2014 - 16:03 | Link to Comment skwid vacuous
skwid vacuous's picture

you forget Sotomayor, Feinstein, and that troll from Washington state Patty something

Mon, 02/17/2014 - 22:32 | Link to Comment HardAssets
HardAssets's picture

"you forget Sotomayor, Feinstein, and that troll from Washington state Patty something"

Thats Patty Murray from Washington state. She actually first campaigned years ago as a down to earth 'Mom in tennis shoes' headed to D.C.  

She was also voted at one time as one of the dumbest people in the congress/senate

Of course now she's another typical politician

Mon, 02/17/2014 - 14:38 | Link to Comment Seasmoke
Seasmoke's picture

I have NO leaders.......I strongly suggest you all don't either 

Mon, 02/17/2014 - 15:05 | Link to Comment NotApplicable
NotApplicable's picture

A slight amendment is in order.

Each of us should have ONE leader, that little voice inside your head.

Mon, 02/17/2014 - 20:44 | Link to Comment boogerbently
boogerbently's picture

......well......just the One.

Mon, 02/17/2014 - 14:38 | Link to Comment Judge Crater
Judge Crater's picture

In the 1932 movie, "If I Had A Million," John Glidden talks about who would take over his businesses if Glidden were no longer around.  The following excerpt is from the movie's script.  Glidden's doctors have told him he does not have long to live.  I especially like Glidden's comment that "they'll make a meal for the first wolf that finds them."  Glidden could be describing the incompetents running the USA into the ground now. 

22
00:03:17,040 --> 00:03:21,409
Don't talk to me
about my employees.

23
00:03:21,480 --> 00:03:23,767
Dummies.

24
00:03:23,840 --> 00:03:26,446
Idiots. Fools.

25
00:03:26,520 --> 00:03:30,047
Not a business head
in the lot of them.

26
00:03:30,120 --> 00:03:33,283
Bankrupt the whole business in a year.

27
00:03:33,360 --> 00:03:38,571
Stupid cowards. No brains, no nerves.
Just a lot of sheep who do what I tell 'em.

28
00:03:38,640 --> 00:03:40,642
When I'm not here to tell them,

29
00:03:40,720 --> 00:03:44,441
they'll make a meal
for the first wolf that finds them.

Mon, 02/17/2014 - 14:40 | Link to Comment Dollarmedes
Dollarmedes's picture

The Fed's only advantage is in "predicting" their own policies. Their track record for predicting external market events is worse than average.

If they say one thing and start doing another, they won't even have that going for them.

Mon, 02/17/2014 - 15:01 | Link to Comment akak
akak's picture

"The subprime crisis is contained, and will not spread to the broader economy".

 

Mon, 02/17/2014 - 14:43 | Link to Comment observer007
observer007's picture

keep in mind:

 

IMF: 'One-Off' Wealth Tax

http://homment.com/imf-wealth-tax

Mon, 02/17/2014 - 15:05 | Link to Comment Chuck Knoblauch
Chuck Knoblauch's picture

Tax the multi-national corporations!

 

Give the net operating loss deduction a holiday for a few years!

 

Give the foreign tax credit a holiday!

 

Eliminate the APB 23 bullshit of permanent oversees reinvestment!

 

Limit the deductibility of non-cash compensation vesting/exercises!

 

LOTS OF WAYS TO BRING IN THE CASH VIA THE 1120 MULTI-NATIONALS!

 

GET OFF MY OVER-TAXED 1040 ASS!!!!!!!!!!!!!!!!!!!!

Mon, 02/17/2014 - 15:10 | Link to Comment NotApplicable
NotApplicable's picture

Hey if you're still thick enough to think that taxing others is any solution, then I'd say YOU need to pay more taxes.

Mon, 02/17/2014 - 15:26 | Link to Comment Chuck Knoblauch
Chuck Knoblauch's picture

Actually, they pay very little tax, if any tax at all. I just want them to pay their fair share Mr. Shareholder.

I'd love to see the FED start paying a tax on all the interest income they collect as profit from all this debt spending

Mon, 02/17/2014 - 15:35 | Link to Comment Chuck Knoblauch
Chuck Knoblauch's picture

The tax code is the only tool the government has left to force jobs back into the U.S. I just outline several sticks to be used to chase the greedy, fat pigs out of cheap manufacturing markets.

Mon, 02/17/2014 - 17:00 | Link to Comment Droel
Droel's picture

If the debt incurred went straight to the bank accounts of the top 10%, then wouldn't it make sense for a wealth tax to pay off the debt?

Mon, 02/17/2014 - 17:52 | Link to Comment Chuck Knoblauch
Chuck Knoblauch's picture

Can I get an exemption or waiver? I'm sure this doesn't apply to everyone. Who's campaign fund should I write my check to?

Mon, 02/17/2014 - 15:14 | Link to Comment ebworthen
ebworthen's picture

"Baffle 'em with Bullshit" in full force.

Fear and guilt the primary messages from TPTB and the MSM; sprinkled with envy, greed, sloth, pride, lust, gluttony, and goading to wrath against phantom enemies.

Mon, 02/17/2014 - 17:29 | Link to Comment Radical Marijuana
Radical Marijuana's picture

Cute little ditty about "kicking the can down the road." However, in the real world it is more like kicking the snowball down the slope of the avalanche.

Mon, 02/17/2014 - 15:21 | Link to Comment rosiescenario
rosiescenario's picture

"Cryptic utterances".....how well put. Greenspam and his acolyte Ben "testifying" before the grubbermint using enough sophistry to sound authentic, but saying nothing of any use.

Mon, 02/17/2014 - 17:41 | Link to Comment Chuck Knoblauch
Chuck Knoblauch's picture

Who was the last Goy to serve as FED chairman?

Mon, 02/17/2014 - 18:19 | Link to Comment Chuck Knoblauch
Chuck Knoblauch's picture

Beginning in 1979 with Paul Volcker, and kosher ever since. Wow, 35 year run for them.

 

Last Goy to serve as Fed chairman was G. William Miller, who was probably a good Jesuit boy. The Vatican has to get its cut too.

 

Who the hell was G. William Miller? He must have done a good job because no one remembers him!

Mon, 02/17/2014 - 15:26 | Link to Comment stant
stant's picture

i simply refer to them as "those people" as they were called by a man named lee

Mon, 02/17/2014 - 15:27 | Link to Comment rosiescenario
rosiescenario's picture

"Fed chairperson Yellen gave a marathon six-hour audience to the House Committee on Financial Services last week. It was so devoid of substance and meaning that the TV network covering it switched the feed a few times to the exciting Olympic event of curling,..."

 

At least with curling we see an honest effort with measurable results...Yellen's delivery was more like hurling, and I do not mean the Irish sport.

Mon, 02/17/2014 - 15:56 | Link to Comment q99x2
q99x2's picture

Kunstler doesn't know my leaders.

Mon, 02/17/2014 - 17:23 | Link to Comment Radical Marijuana
Radical Marijuana's picture

The reality is that public "leaders" are the best available professional liars and immaculate hypocrites, which work as puppets for the actual "leaders" who were the people that were the best at being dishonest and backing that up with violence. The public "leaders" have the job of being the puppets mediating between the oligarchical ruling classes, and the masses of muppets. The REAL source of "leadership" was the history of warfare, where success was based upon backing up deceits with destruction, upon which was built the financial system of backing up frauds with force.

"... they’ll establish a new “back door” for shoveling money into the system. Nobody knows what this is yet, and it may be some time even after it starts that the mechanism is discovered."

What most articles discuss as "moral hazard" is like discussing the impropriety of picking ones nose in public, after the person doing that has jumped off the top floor of a skyscraper. All of the relative "moral hazards" regarding keeping the current systems going by "shoveling money into the system" are trivial compared to the fundamental structure of the system itself.

But nevertheless, I agree most with the point that the surprising creativity in the repackaged frauds that our "leaders" develop tends to astonish me. After all the ONLY thing that they are good at is fraudulence (due to long history of backing that up with so much force that that has given their financial frauds awesome momentum.) Therefore, I confess that usually I am still quite flabbergasted, after I discover the latest kind of astounding new frauds that our "leaders" have concocted. History selected for our "leaders" to be good at nothing but being dishonest, and backing that up with violence. They were necessarily the best at doing that! Therefore, they do "lead" the way by inventing new ways to repackage their fraudulence (although, usually, one can find that even there, they have merely copied from the pattern of plays to be found in the old books about the principles and methods of organized crime, and then slightly modified some aspect of those.)

The world as a whole is "led" by runaway systems which were selected by each short-term increment of claims backed by coercions, whose longer term consequences never mattered, because those had no real effect upon the immediate expediences of backing up lies with violence. Primarily, the laws are legalized lies, backed up by legalized violence, whereby the persistent application of that violence eventually results in the majority of people accepting those lies as somehow being the truth, because they must adapt to that de facto situation.

The "guidance" that the public gets from their "leaders" operates inside that historical context, where the money system is the state religion, backed by the power of the state, through which means the high priests (and now high priestess) of that state sanctified religion are able to promote the absurdities of frauds, as if they make sense, because they are backed by force, which never truly makes those frauds make sense, but nevertheless continues to enable those frauds to dominate the civilization, and drive more development of repackaged frauds to continue to emerge from out of those secret systems of organized crime, into public presentations, pretending to be something utterly different than what they actually are.

Yellen currently symbolizes the pinnacle of that system, wherein the government is the biggest form of organized crime, controlled by the best organized gang of criminals, so that they CAN establish a new “back door” for shoveling money into the system, DESPITE THAT nobody knows what this is yet, and it may be some time even after it starts that the mechanism is discovered.

Mon, 02/17/2014 - 17:06 | Link to Comment falak pema
falak pema's picture

Forward guidance says 4% growth in 2014 ! 

Mon, 02/17/2014 - 17:23 | Link to Comment Clowns on Acid
Clowns on Acid's picture

All this talk about Yellen... why not focus on the real decision maker ... Mr Stanley Fisher...

Mon, 02/17/2014 - 17:36 | Link to Comment Chuck Knoblauch
Chuck Knoblauch's picture

Mr. Dual Citizenship (Israel/USA), Stan Fisher

I'm sure he's a good American.

LOL!

 

Mon, 02/17/2014 - 18:02 | Link to Comment Chuck Knoblauch
Chuck Knoblauch's picture

Update: Former non-gentile Bank of Israel chairman Stanley Fischer has now been nominated as Yellen’s Vice Chairman.

There will be absolutely no conflict of interest. Israel will get its welfare check from the U.S. taxpayer (no matter what may happen).

 

Mon, 02/17/2014 - 21:00 | Link to Comment prmths2
prmths2's picture

With all this talk about "guidance" and very little about leadership, I get an odd vision of Temple Grandin's work being perverted and applied to manage the economic fate of the population.

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