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Federal Reserve "Shouldn't Be Intervening All The Time" In Markets, Fed President Admits

Tyler Durden's picture




 

Moments ago, St. Louis Fed president James Bullard gave one of his signature yellow-backgrounded presentations to the Tennessee Bankers Association Annual Meeting taking place at the favorited by 1%-ers everywhere Breakers hotel in Palm Beach, Florida. The bulk of his presentation is the usual trite platitudes, but he did have some chose comments, such as:

  • BULLARD: FED SHOULDN'T BE `INTERVENING' ALL THE TIME IN MARKETS

So just intervene from 9:30 am to 4:00 pm in the US equity market? But what will those who have been screaming about rigged, manipulated, broken US equity markets rail about if the Fed isn't intervening all the time in "markets", and if some semblance of normalcy, even if highly crashy, returns?

Rhetorical questions aside, next we got this:

  • BULLARD: DOLLAR LOOKING GOOD AS RESERVE CURRENCY NEAR TERM
  • BULLARD: YUAN MAY EVENTUALLY POSE CHALLENGE AS RESERVE CURRENCY

Or, if you are a Russian company, "eventually" took place about 1 month ago.

In short, the Fed: always one step ahead of the curve.

Continuing, here is how the Fed measures, as in actually measures, the distance from the proverbial goal posts:

This formula, while idiotic, is notable because as Bullard shows, the Fed has now overshot in its rush to the Fed's "goals":

 

And shorter:

And as Bullard explains:

  • Another way to look at this data is to ask: How often has the FOMC been as far from its objectives as it is today?
  • The answer is about 75 percent of the time.
  • That is, if we do this calculation for every month of data since 1960, 75 percent of the time the FOMC was in a worse position with respect to its goals than it is today

In short, fun with greek letters and stuff.

His full presentation:

 

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Mon, 06/09/2014 - 10:06 | 4836858 Aknownymouse
Aknownymouse's picture

BTFD. NOW!!! Markets just had a downtick. GOD HELP US.

Mon, 06/09/2014 - 10:35 | 4836973 sodbuster
sodbuster's picture

This is just lip-service. I saw that down- tick!! We need more QE! Print MOAR! BTFATH!

Mon, 06/09/2014 - 10:38 | 4836985 Aknownymouse
Aknownymouse's picture

Wait. Could what he said mean that the FED might bump up rates in june? Remember they said they can raise rates before stopping QE.

Mon, 06/09/2014 - 10:52 | 4837027 Badabing
Badabing's picture

A perfect example of how they do it in plain sight!

“Federal Reserve "Shouldn't Be Intervening All The Time" In Markets, Fed President Admits”  

The Fed President admits, the fact that the Federal Reserve manipulates the market!

With a “mater of fact” statement like this, gives the illusion of normalcy when it is not!

A short while ago they would have made us wear a tin foil hat if we made a statement like this!

It’s so bad, it can’t be hidden anymore, so it’s meant to sound like business as usual.

Don’t believe for a second that gold and silver is worth what they set the price for!!!

We are entering the phase of last chance to stack!

Mon, 06/09/2014 - 10:37 | 4836983 flacon
flacon's picture

I think the FOMC members need to see psychologists.... really... "SHOULDN'T" what the fuck does that word mean? I SHOULDN'T RAPE PEOPLE. I SHOULDN'T KILL, MURDER AND STEAL. SANTA CLAUS SHOULDN'T BE A FAIRY TALE. 

Mon, 06/09/2014 - 10:07 | 4836860 Millivanilli
Millivanilli's picture

THe ponzi depends on the constant inflow of 401k money and padding the pension funds.  They know that when the confidence tips and that seed money leaves, the game is over.   

 

THis will end in misery. Guaranteed.

Mon, 06/09/2014 - 10:24 | 4836932 Government need...
Government needs you to pay taxes's picture

Just before the soon-to-be commanded MYRAs are plunged into equities, I do hope the Economic Commander-in-Chief quotes some Shakespeare:  'Once more into the breach, dear friends. . . '

Mon, 06/09/2014 - 10:31 | 4836962 Emergency Ward
Emergency Ward's picture

I want my MyRA to go into weapons-manufacturing company stocks.

Mon, 06/09/2014 - 10:55 | 4837039 NotApplicable
NotApplicable's picture

Soylent Green, FTMFW!

Mon, 06/09/2014 - 11:10 | 4837087 g'kar
g'kar's picture

"Tuesday is Soylent Green day"

 

Now I know what they meant by that.

Mon, 06/09/2014 - 14:09 | 4837741 SDShack
SDShack's picture

Yeah, but remember what happened when they ran out of Green. "The scoops are on the way....The scoops are on the way!" I look forward to the day the Green runs out. It's the only way things will change.

Mon, 06/09/2014 - 16:39 | 4838430 g'kar
g'kar's picture

LOL...I was referring to the green they dump on wall street every tuesday.

Mon, 06/09/2014 - 10:28 | 4836949 Sean7k
Sean7k's picture

How do you keep wheelbarrows full of cash from being seen in the streets and igniting panic? You change them to 1's and zero's and dump them in the stock and bond markets. Win win, except for that inflation that keeps cropping up, you know, the kind that rigged statistics can no longer hide.

Mon, 06/09/2014 - 10:09 | 4836861 GetZeeGold
GetZeeGold's picture

 

 

"Shouldn't Be Intervening All The Time"

 

We have to do it.....someone might get hurt if we don't.

Mon, 06/09/2014 - 14:11 | 4837761 SDShack
SDShack's picture

"Shouldn't Be Intervening All The Time"

but we are sociopaths, so we CAN'T stop. It's in our DNA. We are actually worse than a junkie.

-fixed it.

Mon, 06/09/2014 - 10:08 | 4836869 JRobby
JRobby's picture

Too late, It will take years to unwind FED BALANCE SHEET, decades to unwind the "off balance sheet". But assigning time frames is futile as this would assume desire and honesty to do it. 

Mon, 06/09/2014 - 10:15 | 4836901 insanelysane
insanelysane's picture

agree 100%.  I remember when all of the pundits were saying that the FED intervention was minimal.

Mon, 06/09/2014 - 10:09 | 4836873 Everybodys All ...
Everybodys All American's picture

Bullard actually comes clean and says  ... YUAN MAY EVENTUALLY POSE CHALLENGE AS RESERVE CURRENCY.

Next thing you'll know he'll come out and say that's part of the Federal Reserve's mandate.

Mon, 06/09/2014 - 10:10 | 4836875 RaceToTheBottom
RaceToTheBottom's picture

Just when does intervention actually become the market?

Mon, 06/09/2014 - 10:12 | 4836887 GetZeeGold
GetZeeGold's picture

 

 

That would be now.

Mon, 06/09/2014 - 10:43 | 4836921 JRobby
JRobby's picture

About 5 years and 9 months ago

Mon, 06/09/2014 - 10:10 | 4836876 saveUSsavers
saveUSsavers's picture

HE'S A LIAR !look at his votes- AND HE WAITS TIL MARKET UP 150% !

Mon, 06/09/2014 - 10:10 | 4836880 yogibear
yogibear's picture

Tell that to your insane Keynesian bunch like Yellen, Dudley and Evans. Their fixated on getting the economy to recover at all costs. They will not let the system cleanse itself of the toxic debt.

Just print and destroy the purchasing power of the US dollar. Take down many to save a few. 

Mon, 06/09/2014 - 10:12 | 4836881 Thought Processor
Thought Processor's picture

Just like a drug dealer "shouldn't" keep supplying heroin to his addicts.

 

Hard habit to quit when all the people in on it are making money hand over fist.

 

 

 

 

Mon, 06/09/2014 - 10:13 | 4836889 yogibear
yogibear's picture

Let the Fed destroy itself. Point the mobs to the Federal Reserve banksters when their Ponzi comes apart.

Mon, 06/09/2014 - 10:13 | 4836890 MFL8240
MFL8240's picture

What part of their charter says that they have the right to intervene at all?

Mon, 06/09/2014 - 10:13 | 4836893 the not so migh...
the not so mighty maximiza's picture

intervention=manipulation

Mon, 06/09/2014 - 10:13 | 4836894 NoWayJose
NoWayJose's picture

Quick Quiz - When was the last time the Fed did NOT intervene in the markets? ......

Mon, 06/09/2014 - 10:56 | 4837044 NotApplicable
NotApplicable's picture

1909?

Mon, 06/09/2014 - 10:13 | 4836896 MFL8240
MFL8240's picture
  • BULLARD: DOLLAR LOOKING GOOD AS RESERVE CURRENCY NEAR TERM
  • BULLARD: YUAN MAY EVENTUALLY POSE CHALLENGE AS RESERVE CURRENCY

In other words, get the hell out of the dolar while you can?

Mon, 06/09/2014 - 10:21 | 4836923 disabledvet
disabledvet's picture

Sometimes Islam attacks.

"Prepare for Mongolian horde."

Mon, 06/09/2014 - 10:14 | 4836898 undercover brother
undercover brother's picture

The fed shouldn't be intervening AT ALL with supply/demand/fundamental price discovery mechanisms in free markets. They are supposed to be free markets, not manipulated or intervened with markets. Our global markets are in this mess because of central banks constant micro meddling and now it's become obvious continuous meddling will be needed in order to perpetuate the mess for the sake of expediency. They really screwed the pooch on this one.

Mon, 06/09/2014 - 10:15 | 4836902 OC Sure
OC Sure's picture

"So just intervene from 9:30 am to 4:00 pm in the US equity market?"

What is the evidence that the Federal Reserve does this and what authorizes it?

Per the Federal Reserve Act, Section 14, they have only usurped the power of intervening in the Gold and Credit markets:

http://www.federalreserve.gov/aboutthefed/section14.htm

 

Mon, 06/09/2014 - 10:28 | 4836950 yogibear
yogibear's picture

What evidence is there they are following their charter? Their charter has been expanded to include unemployment as well as buying US treasuries directly.

Mon, 06/09/2014 - 10:40 | 4836994 OC Sure
OC Sure's picture

I see, but what evidence is there that they are directly involved in equities? Is the machination that they purchase US Treasuries, then the recipient of the counterfeit, a member bank or fund maintained by a bank, does the Federal Reserve's bidding for them?

Mon, 06/09/2014 - 10:18 | 4836904 ebworthen
ebworthen's picture

Tennessee banksters living it up in Palm Beach FL having one of their FED lackey's assure them the fix is still in - with some B.S. thrown in for the little people.

Mon, 06/09/2014 - 10:16 | 4836907 Oldwood
Oldwood's picture

The shouldn't be intervening all the time because then everyone would have the same shot. They just need to do it sporadically so only the insiders have the real opportunity to win every fucking time. The markets are corrupt and the Fed is at the top of the list of "corruptors".

Mon, 06/09/2014 - 10:18 | 4836914 disabledvet
disabledvet's picture

The Fed hit the debt reset over a year ago.

We've had a wicked shot of inflation over the winter.

Now it's war with Russia "on the cheap."

What's the Fed got to do with anything at this point?

Mon, 06/09/2014 - 10:27 | 4836947 OC Sure
OC Sure's picture

"What's the Fed got to do with anything at this point?"

The Fed maintains and facilitates the ongoing theft from everyone who produces anything to those who produce nothing.

Mon, 06/09/2014 - 10:21 | 4836922 T-NUTZ
T-NUTZ's picture

"all the time"...

Mon, 06/09/2014 - 10:26 | 4836928 DavidC
DavidC's picture

I'm not half as clever as those guys at the Fed, but I've always thought the inflation character they've used  is the symbol for Pi, not inflation... what do I know...?

DavidC

Mon, 06/09/2014 - 12:48 | 4837398 Cthonic
Cthonic's picture

Macroeconomists appropriated pi and use it to represent profit or inflation in equations.  Specialist cliques often corrupt the meaning of common symbols of a language in order to easily identify outsiders/laymen.  In this case it also serves to borrow the credibility of the underlying symbol, e.g. the ratio's absolutely measurable quality, and apply it to those things most important to their profession which are a best nebulous and unrigorous concepts.

Mon, 06/09/2014 - 10:24 | 4836931 yogibear
yogibear's picture

The Fed is continuing to print to buy US treasuries. With rising prices it's squeezing houshold margins.

 

 

Mon, 06/09/2014 - 10:46 | 4837003 OC Sure
OC Sure's picture

That is the inflation of counterfeit. Don't forget that prices also rise from the deflation of productive work. So, when 90 million drop out of the labor force, and the presumption here is that they therefore are not producing products, then this increases prices too. So much for what the Tyranny of Modern Economics falsely calls stagflation...

Mon, 06/09/2014 - 10:48 | 4837012 overmedicatedun...
overmedicatedundersexed's picture

This is true: my wife got a letter from sears, saying they are adding balance transfer to her sears master card, at get this 25.24% apr...wtf I get .01% on savings, sears wants 25%.. plus a 5% transfer fee...tylers it's time for the revolution.....

Mon, 06/09/2014 - 10:38 | 4836941 ebworthen
ebworthen's picture

Objective value:  (10%-2%)2 + (15%-5.4%)2 = 156.16

Square root =  12.49. 

Funny, his chart never goes above 10 (?).

Of course, fudged inputs give fudged outputs.

Mon, 06/09/2014 - 10:39 | 4836990 Atomizer
Atomizer's picture

Well said, that will fuck up Steve Lieman next market segment comedy role.

Mon, 06/09/2014 - 11:07 | 4837081 ebworthen
ebworthen's picture

Thanks. 

And the hilarious thing is that currently Pollard calculates we are at a "1".

Which would be something like this:  (.7)2 +(.7)2 = 1 (rounded up from .98).

Using 2% desired inflation and 5.4% historic unemployment, he is saying that inflation is 2.7%, and unemployment 6.1%.

ROFLMAO!  Fine batch of fudge there Chef!

Pollard needs to be pollarded.

Mon, 06/09/2014 - 10:26 | 4836944 Dr. Engali
Dr. Engali's picture

All the time? How about never?

Mon, 06/09/2014 - 10:32 | 4836965 Emergency Ward
Emergency Ward's picture

That Bullard fellow should stop beating his wife all the time.

Mon, 06/09/2014 - 10:30 | 4836959 Obama_4_Dictator
Obama_4_Dictator's picture
Federal Reserve "Shouldn't Exist, is illegal", Fed President Admits
Mon, 06/09/2014 - 10:33 | 4836966 Debeachesand Je...
Debeachesand Jerseyshores's picture

The Fed has been "intervening" in the Markets for over a 100 yrs.....

 

Did this dickhead just get the memo?????

Mon, 06/09/2014 - 10:43 | 4837001 quasimodo
quasimodo's picture

Bullard is really Captain Obvious in disguise. 

Mon, 06/09/2014 - 10:54 | 4837015 khakuda
khakuda's picture

Old men men shouldn't be sleeping with young girls either, but shouldn't be is different than won't.

He should drive up to Daytona after lunch and do a victory lap for creating a huge asset price bubble in the stock and bond markets again.

Mon, 06/09/2014 - 10:57 | 4837041 Sick
Sick's picture

This just reminded me of an old saying....FACINATE THEM WITH FACTS OR BAFFLE THEM WITH BULL SHIT.

Mon, 06/09/2014 - 10:57 | 4837046 MrBoompi
MrBoompi's picture

The number one goal of the Federal Reserve is to protect the wealthy who own the banks in the Federal Reserve system, regardless of what they tell the public.  If that means they will constantly manipulate every market, so be it.  These people will lie to cover up what they do, no different from any NSA or CIA official.  They've sworn an oath to the oligarchs which takes precedence over the constitution.  Understand this is not a recent development either.

Mon, 06/09/2014 - 11:02 | 4837062 yogibear
yogibear's picture

Bullard acts to counter the mania.

The Federal Reserve is one huge dog and pony show.

Mon, 06/09/2014 - 11:05 | 4837072 pragmatic hobo
pragmatic hobo's picture

it's their version of bad-cop crazy-cop routine.

Mon, 06/09/2014 - 11:04 | 4837069 pragmatic hobo
pragmatic hobo's picture

looks like the algos have their mind set on pushing rut to new all time high ...

Mon, 06/09/2014 - 11:12 | 4837095 g'kar
g'kar's picture

The FED could put this to rest by leaving the markets to fend for itself and telling Belgium to do the same. Naive, I know.

Mon, 06/09/2014 - 11:13 | 4837096 Eyeroller
Eyeroller's picture

Hubble, BUBBLE, toil, and trouble...

Mon, 06/09/2014 - 11:18 | 4837110 Madcow
Madcow's picture

if Harry Dent is correct - it is far too late to stop "intervening" in the markets. 

if the markets were allowed to trade normally, asset prices would fall 90% and there would be rampant civil unrest as bankers foreclose on the assets of a populalation no longer able to afford to pay taxes and debt service.

the Fed has no choice but to keep buying assets and intervening in the markets at an increasing and accelerating rate - 

tough toenails - 

Mon, 06/09/2014 - 12:36 | 4837370 SilvertonguedAngel
SilvertonguedAngel's picture

Harry Dent is a smart guy. But from my perspective his calculations are gradually becoming less and less relevant as they don't seem to reflect the influences of certain demographics like the quickly diminishing role and perceived value of the US and the FRN in international trade, and apparently completely ignores the massive juggling act required to keep the 10's of trillions of worthless FRN derivitive bagholder creditors from heading for the exit.

 

Still Harry has been a good read if not a very accurate forecaster.

 

 

Mon, 06/09/2014 - 11:22 | 4837122 Downtoolong
Downtoolong's picture

I hear the magician they hired for the luncheon entertainment is really pissed he had to follow Bullard’s act.

Mon, 06/09/2014 - 13:24 | 4837529 Dre4dwolf
Dre4dwolf's picture

The Fed and Government took the worst parts of our economy, the worst most corrupt failing industries.

And made them a permanent component to the economy with bailouts.

 

The world would of crashed, and been rebuilt in a beautiful shining new form of greatness.

Instead we have "this shit".

 

 

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