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The Fed Goes Hunting For "Asset Price Bubbles"

Tyler Durden's picture




 

As the world's investors wait anxiously for the next piece of bad news from Japan, China, Europe, or US as a signal to buy, buy, buy on the back of a renewed "stimulus" of freshly printed money that has comforted them for 5 years, it seems the Fed is turning its attention elsewhere:

  • BULLARD SAYS MONITORING FOR ASSET BUBBLES `IMPORTANT CONCERN'
  • BULLARD SAYS ASSET PRICE BUBBLES MAY BECOME `BIG CONCERN'

The embarrasment continues:

  • BULLARD DOESN'T SEE PRICE BUBBLE LIKE IN PRE-CRISIS HOUSING

Because the Fed was accurate in spotting the "pre-crisis housing" bubble, right?

And the punchline:

  • BULLARD SAYS FED HAS BETTER `SYSTEMS' FOR `FLAGGING' BUBBLES

For now though, of course, the Fed's Bubble-o-Flagger (which can also be yours for four easy payments of $29.95) has no batteries. Pointing out the irony that the Fed creates the bubbles... and then when it becomes a "big concern" it promises to do something about it if it every sees one.  Finally, we are delighted that the schizhophrenia of the central planners continues to be exhibited for all to see: first Yellen tells everyone to buy stocks on Tuesday with an uber-dovish retracement of her "6 month" flub, and now Bullard is saying to watch out for bubbles. What can one say but... economists.

As a gentle reminder of just how these bubbles are formed...

Bubble Formation: start at the bottom left...

Bubble Bursting: ...and end with a 'debt crisis' and a 'rush for the exits'

Rinse and Repeat - Simple. QED

 

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Wed, 04/02/2014 - 11:35 | 4617442 Dr. Engali
Dr. Engali's picture

Hey Bullturd. In order to find the bubble all you have to do is look in the mirror. The fed with it's funny money FRNs is the bubble.

Wed, 04/02/2014 - 11:38 | 4617450 NotApplicable
NotApplicable's picture

Are you daring to suggest a cause and effect relationship between monetary and price inflation?

That's crazy-talk.

Wed, 04/02/2014 - 11:45 | 4617469 knukles
knukles's picture

Oh FFS Bullard, just have Vlad invade "The" Ukraine and be done with it.  The bubbles go away and QE stays.  Easy Peasy as Valerie Jarrett said about enrolling in ObieCare

 

Why am I the one who always has to come up with the solutions?

Wed, 04/02/2014 - 11:53 | 4617498 Thought Processor
Thought Processor's picture

 

 

Agreed.

 

The Central Banks are the bubble.

Wed, 04/02/2014 - 12:00 | 4617525 maskone909
maskone909's picture

the fed asset bubble finder machine is fueled by monkey bones and sacrificial newborn babies.

 

Wed, 04/02/2014 - 12:44 | 4617676 clooney_art
clooney_art's picture

Federal Reserve = Cacophony of incoherence.

Wed, 04/02/2014 - 18:18 | 4618916 hobopants
hobopants's picture

Sometimes my dog farts and then looks around for the perpetrator. Somehow this seems very much like the same thing.

Wed, 04/02/2014 - 11:42 | 4617458 Two-bits
Two-bits's picture

How can you expect any result, other than popping, when these bubbles are created by a bunch of pricks?

Wed, 04/02/2014 - 11:43 | 4617460 Manthong
Manthong's picture

Just don’t look up Janet’s posterior..  there’s a 3,500 psi one building there.

Wed, 04/02/2014 - 11:57 | 4617512 agstacks
agstacks's picture

Everyone knows the only bubble is in gold.

\s

Wed, 04/02/2014 - 11:35 | 4617443 derek_vineyard
derek_vineyard's picture

bullard is talking about PMs

Wed, 04/02/2014 - 11:36 | 4617444 replaceme
replaceme's picture

sorry to interject this, but did CA just announce a big Muni general fund sale?  Is this an IQ test for MyRA acceptance??

Wed, 04/02/2014 - 11:52 | 4617491 El Hosel
El Hosel's picture

Neel for Govenator of CA , creepy. 

http://en.wikipedia.org/wiki/Neel_Kashkari

Wed, 04/02/2014 - 11:57 | 4617503 ebworthen
ebworthen's picture

Good 'ole Neel Cash'nCarry, the Aladdin who made taxpayer money disappear into the black hole of Wall Street with the help of his Genie Hank Paulson.

Keep rubbing that lamp Neel!

Wed, 04/02/2014 - 12:02 | 4617532 Rainman
Rainman's picture

Even Jesus couldn't beat Moonbeam this year. Jerry is like the Dali Lama to all liberals and public union employees.

Wed, 04/02/2014 - 12:10 | 4617559 Rainman
Rainman's picture

CA muni sale is just under a billion for the UC system < probably to finance the pre-election Dream Act Diploma giveaway to the illegals >

Wed, 04/02/2014 - 11:39 | 4617447 El Hosel
El Hosel's picture

Don't worry, as soon as we go a couple of daze with no bad news a quick dip is possible.

Wed, 04/02/2014 - 11:37 | 4617449 Skin666
Skin666's picture

Can't see them being able to pump another bubble. Central Banking is already on borrowed time.

 

The FED will be dead by the end of 2015

Wed, 04/02/2014 - 11:40 | 4617454 NotApplicable
NotApplicable's picture

Psshaw! They'll just go double or nothing... AGAIN. (add a couple zeros to everything, and you've got a "new normal")

The FED holds the whole world hostage, and they'll kill us all before giving it up.

Wed, 04/02/2014 - 11:44 | 4617471 Skin666
Skin666's picture

They only have power as long as they can keep the purchasing power of paper tickets from cratering. That's gonna be nearly impossible with banking bailins and bank runs over the whole world.

 

Once the money turns to shit, it's game over, and there's not a fucking thing they can do about it.

 

Long precious metals and crypto

Wed, 04/02/2014 - 12:09 | 4617547 NotApplicable
NotApplicable's picture

As long as you and I still accept dollars in return for goods and services, there's not a fucking thing anyone can do about it.

The currency has been depreciating for around a hundred years now, yet I hold a fistful of dollars (cuz I gotta buy lunch).

Oh, and if everyone starts refusing them??? Well, then the nukes come out to create a "level playing field."

Wed, 04/02/2014 - 12:37 | 4617652 Skin666
Skin666's picture

"This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.'

"But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against 'real' goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days [especially in today's world of 24 hour media], the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them."

"It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last." Ludwig Von Mises

Wed, 04/02/2014 - 13:01 | 4617742 disabledvet
disabledvet's picture

280 billion in corporate debt sold to market this 1st quarter alone.

amazingly that isn't a record.
so no problem funding the balance sheets.

treasuries have rallied since last summer...time to dump it all a go long KING?

how about that return on a savings account!

i mean "bitcoin"? CRAZY!

CASH is still King in my book...even at these low rates. And the only asset that isn't correlated to the "non-recovery recovery" remain Treasuries. They have been getting hammered this week...said i would sell but i haven't yet.

kinda painful actually.
"story of my life."

Wed, 04/02/2014 - 11:39 | 4617455 Pairadimes
Pairadimes's picture

Good thing that old 'Elmer Fudd' Yellen is out to catch those 'wascally wabbit' asset bubbles. We can all relax now.

Wed, 04/02/2014 - 11:42 | 4617456 Squid Viscous
Squid Viscous's picture

just heard him on the radio ... "overall, inflation expectations are low so we're not concerned..." lol let's follow the consensus expectations of economist fucktards, that has always worked out so well   

Wed, 04/02/2014 - 11:43 | 4617465 Cattender
Cattender's picture

Silver is a Bargain right now.. (thanks to MANIPULATION!)

Wed, 04/02/2014 - 11:43 | 4617467 El Hosel
El Hosel's picture

indeed..... finding those bubbles is like trying to find a needle in a needle factory.

Wed, 04/02/2014 - 11:44 | 4617470 DavidC
DavidC's picture

Economists? I think the term is fuckwits.

DavidC

Wed, 04/02/2014 - 11:48 | 4617476 spekulatn
spekulatn's picture

 Finally, we are delighted that the schizhophrenia of the central planners continues to be exhibited for all to see: first Yellen tells everyone to buy stocks on Tuesday with an uber-dovish retracement of her "6 month" flub, and now Bullard is saying to watch out for bubbles. What can one say but...economists.

 

This is what makes a (rigged) market.

Wed, 04/02/2014 - 11:49 | 4617481 undercover brother
undercover brother's picture

Late as always.  

Wed, 04/02/2014 - 11:58 | 4617493 ebworthen
ebworthen's picture

Hey Bullard, Yellen, et. al. - the FED is the Bubble!!!

Wed, 04/02/2014 - 11:59 | 4617504 Notsobadwlad
Notsobadwlad's picture

A. Stock market

B. Real Estate

C. Farmland

D. Gold

E. All other metals and commodities

"Bubbles Bernanke" ... an approrpriate name for a guy who flooded the world with free debt-money for his closest friends and employers.

Wed, 04/02/2014 - 13:07 | 4617757 disabledvet
disabledvet's picture

steel, coal, iron ore, gold, silver.
if that's a bubble then they sure have corrected and we should be buying hand over fist.

all being replaced by natural gas which has now doubled in price?
hmmmm.

profits remain at all time highs. is there really a bubble in final demand?
seems to me we're just getting jerked around by the Banks refusing to pay interest on real money.
Berkshire Bank is kicking out BofA in these here parts.

Wed, 04/02/2014 - 11:55 | 4617510 agstacks
agstacks's picture

Taper on- right-a hand make-a circle

Taper off-Left-a hand make a circle

Taper on

Taper off

Taper on

Taper off

 

Wed, 04/02/2014 - 11:58 | 4617517 Tsar Pointless
Tsar Pointless's picture

Economists.

Meteorologists.

Which are more worthless?

Wed, 04/02/2014 - 11:59 | 4617521 khakuda
khakuda's picture

"Bullard says Fed has hired Hellen Keller to monitor for bubbles"

Wed, 04/02/2014 - 11:59 | 4617522 Itchy and Scratchy
Itchy and Scratchy's picture

I took a bath yesterday and made lots of bubbles!

Wed, 04/02/2014 - 12:04 | 4617536 Tsar Pointless
Tsar Pointless's picture

The Fed's Bubble-o-Flagger doesn't need any stinking batteries, because it's fueled by bullshit. And there is a large supply of that at our dear Central Bank.

Wed, 04/02/2014 - 12:04 | 4617538 Reaper
Reaper's picture

To paraphrase Teddy Roosevelt, "In the case of Fed economists, in 9 out of 10 cases, they are better off dead and in the tenth case, don't ask too many questions."

Wed, 04/02/2014 - 12:06 | 4617542 RaceToTheBottom
RaceToTheBottom's picture

Is this like the anti virus software that first introduces the viruses to your pc and then offers to remove them for a price?

Wed, 04/02/2014 - 12:09 | 4617552 JR
JR's picture

How can America survive the twin attacks from the EBT culture and Fed/Wall Street corruption.

The US stock market and the success of Wall Street is an EBT card and a welfare check.

Working Americans are the reservoir being tapped to run America’s so-called recovery, namely the transfer of their labor to the ne-‘er-do-wells, the illegal aliens, the underpaid immigrants, the displaced Americans, and the huge crowds of cheaters.

America’s current economic well being is simply stolen money, a credit card to buy anything you want with someone else’s labor. And THIS is what keeps the malls, the grocery chains, the endless 7-11 fast food traffic, the Costco trolleys humming.

Is there any wonder that a corrupt Congress is happy to endorse the flow of money to their corporate donors with a flow of more amnestied illegal aliens?

Wed, 04/02/2014 - 12:10 | 4617558 WhiteHose
WhiteHose's picture

Wish I was an economist! Theyre the only people who DONT have to live with their mistakes! Or lose their jobs over said mistakes.

Wed, 04/02/2014 - 12:11 | 4617561 buzzsaw99
buzzsaw99's picture

a fed hed sed something. i should go buy or sell something now. [/sarc]

Wed, 04/02/2014 - 12:33 | 4617651 alangreedspank
alangreedspank's picture
  • BULLARD SAYS ASSET PRICE BUBBLES MAY BECOME `BIG CONCERN'

Oh, so there are bubbles but the Fed did not get to care about it yet ? That's reassuring...

Seriously, Bullard is one of the least annoying Fed heads. He often acknowledged the unknown potential risks of QE and ZIRP (that's as far as he goes). Compared to Bernanke's "100%" certainity, he's much more candid.

Wed, 04/02/2014 - 13:00 | 4617738 DOGGONE
DOGGONE's picture

Dear Hunters,

If you want to FIND, see here:
http://www.showrealhist.com/yTRIAL.html

If you want to TALK, do NOT inflation adjust.

Wed, 04/02/2014 - 13:11 | 4617771 The Wisp
The Wisp's picture

Somebody forgot the Wednesday Humor, line in the Title...

Wed, 04/02/2014 - 13:16 | 4617785 moneybots
moneybots's picture

"BULLARD SAYS FED HAS BETTER `SYSTEMS' FOR `FLAGGING' BUBBLES"

 

What a bubble headed booby. 

We are in a bubble.  The FED is playing the we can't see a bubble, game.  When the housing market was a bubble, Greenspan declared it was just frothy.  Now he declares the stock market has run up a lot, but isn't a bubble.  Greenspan is rather transparent.

What is Bullard going to do when he finally flags the bubble?  Whenever they admit it is a bubble, it is going to be too late to do anything about it, other than burst it.

The bigger the bubble, the bigger the deflatulation.

Wed, 04/02/2014 - 13:23 | 4617805 moneybots
moneybots's picture

"BULLARD DOESN'T SEE PRICE BUBBLE LIKE IN PRE-CRISIS HOUSING"

 

He is looking in the wrong direction, then. 

Is anyone fooled by Bullard's willful bliindness?  We have seen this routine before.

Wed, 04/02/2014 - 17:14 | 4618739 dizzyfingers
dizzyfingers's picture

Check out newspapers for grocery-store food-sale prices.

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