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Fed's Fisher Wants Some Steam Out Of The Market, But "No Popping The Bubble"

Tyler Durden's picture




 

It appears the Federal Reserve is in full court press mode to jawbone the rational exuberance out of the stock markets... On the heels of Yellen's largely ignored "stretched valuations" comments, Dallas Fed's Fisher exclaims:

  • DALLAS FED PRESIDENT FISHER SAYS 'MARKETS ARE OVERSHOOTING'
  • FISHER CONCERNED FED MAY 'BE STAYING TOO LOOSE TOO LONG'
  • FISHER: I DON'T THINK YOU SHOULD 'POP' A BUBBLE, BUT SHOULD LET SOME SPECULATIVE STEAM OUT OF MARKETS

His plan for this "letting out of steam" is to start shrinking the Fed balance sheet in October and raising rates early in 2015. Of course, what does the Fed know about bubbles? We are sure the spin will come soon that this is bullish as 'froth' will be removed and then the secular bull can go on (aside from the total and utter lack of liquidity in markets, small doors and large crowds do not make for good endings).

Finally, when Fisher says don't pop the bubble, that suggests there is no bubble, yes?

 

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Wed, 07/16/2014 - 13:04 | 4963170 buzzsaw99
buzzsaw99's picture

Glory be to the Bomb, and to the Holy Fallout. As it was in the beginning, is now, and ever shall be. World without end. Amen.

May the Blessings of the Bomb Almighty, and the Fellowship of the Holy Fallout, descend upon us all. This day and forever more.

Congregation: [singing] Amen!

Wed, 07/16/2014 - 13:08 | 4963206 Say What Again
Say What Again's picture

FISHER: I DON'T THINK YOU SHOULD 'POP' A BUBBLE, BUT ...

... You should Lance a Boil

Wed, 07/16/2014 - 13:23 | 4963293 Nostradamus
Nostradamus's picture

LOL.  FISHER: I don't think you should "pop" a bubble, but... you should ooze a cyst, drain a waterbed, and take the lid off of a pot of boiling water in order to avoid overflow.

Wed, 07/16/2014 - 13:24 | 4963296 eclectic syncretist
eclectic syncretist's picture

Your jawboning isn't working Fisher.  I bought SDS at 25 yesterday and am down already asshole. 

And on a somewhat related note I'm getting a little bored waiting on the sidelines to see how PMs will react when the reality of the economic outlook, and the ultimate futility of fiat fixes, smashes through into the public conciousness, so I can assess how to best play the big move everyone knows is coming.

Wed, 07/16/2014 - 13:30 | 4963336 buzzsaw99
buzzsaw99's picture

yep. the jaw bone of an ass isn't going to cut it. it took four years even after the fed started raising rates in 2004 to have any effect. yellen has no bona fides. she is seen for what she is, a big fat ugly dove.

Wed, 07/16/2014 - 13:27 | 4963306 Renewable Life
Renewable Life's picture

They wanted Socialism, because Capitalism is just too scary and unpredictable, and their friends were too stupid to compete anymore, so you guys fucking got it!!!

NOW you dumb motherfuckers think there is a market left to talk down???

Only a bunch of worthless academics would actually think this is possible??
All that is left, is what you've programmed the slaves and servants to do, buy until their heads explode with greed and fantasy!!

Geeezus it's unreal, they really think there is some mechanism left for the markets to go down????? BTFD sound familiar you fucking moronic fools?? No one is selling, no one believes you won't continue to pump, and only a Lehman moment would wake these sheep up, AND you Fed POS scumbags know that wouldn't be "letting a little air out", would it??

God damn these guys are fucked beyond belief, it's really unreal, surreal actually!!

Wed, 07/16/2014 - 13:44 | 4963411 slightlyskeptical
slightlyskeptical's picture

Facism is not socialism. No one but those in charge wanted facism.

Wed, 07/16/2014 - 13:04 | 4963172 LawsofPhysics
LawsofPhysics's picture

Henchforth, "rate hikes" will always be a year away...

Wed, 07/16/2014 - 13:04 | 4963173 LostandFound
LostandFound's picture

ZIRP Forever!

Wed, 07/16/2014 - 13:27 | 4963318 eclectic syncretist
eclectic syncretist's picture

The Fed has to hike rates unless they want the US government to sell bonds to no one but the Fed.

If you don't think they are going to raise rates you don't understand how precarious the position of the USD is rapidly becoming.

Wed, 07/16/2014 - 14:28 | 4963618 NihilistZero
NihilistZero's picture

I wholly agree

Beyond that...

His plan for this "letting out of steam" is to start shrinking the Fed balance sheet in October and raising rates early in 2015.

He's either stupid or disengenous (I'll assume the latter) as this WILL cause a pop!  Maybe not right away but when the credit market turns south, I expect it will do so quite rapidly.  So few players and such low volume in all the markets (the RE, credit, equities unholy trinity) precludes any other outcome.

Wed, 07/16/2014 - 14:40 | 4963671 yrad
yrad's picture

For the 1000th time. They can't raise rates! They can't!! They will not be able to swing the payments on their debts! It's that simple...

Wed, 07/16/2014 - 14:47 | 4963707 SunRise
SunRise's picture

They don't have to raise rates.  Increasing the debt will have the same effect.  There is a date on the calendar when that devil will be delivered.

Wed, 07/16/2014 - 13:05 | 4963185 LostandFound
LostandFound's picture

Did he forget the elephant in the room? the quadrillion in derivatives?

Wed, 07/16/2014 - 14:52 | 4963749 jmc8888
jmc8888's picture

2 quadrillion now

Glass-Steagall

Wed, 07/16/2014 - 13:06 | 4963190 Conax
Conax's picture

They want less froth in the equities, but every time some alternative begins to edge up, they stomp its little golden head in.

Sorry, FEDs, but this is your Frankenstein, enjoy your blow-off top.

Wed, 07/16/2014 - 13:08 | 4963204 buzzsaw99
buzzsaw99's picture

they started QE3 when the S&P was at 1465. Clearly they wanted it higher than that since the stock market is their only policy tool. Now it is at 1975. Why don't they just tell us the exact number they want? May I suggest 1666?

Wed, 07/16/2014 - 13:16 | 4963250 Conax
Conax's picture

1666

Yes, Master, hurhurrhurhur hurrr..

"Feed My Frankenstein"

http://www.youtube.com/watch?v=NO2cHJmDkBg

Wed, 07/16/2014 - 13:17 | 4963254 fonzannoon
fonzannoon's picture

if they were going to raise rates 6 months from now then why not call out Utilities and telecom stocks as overvalued? I'd rather be in facebook or certain biotech stocks than con ed and AT&T if i knew rates were going up.

liars.

Wed, 07/16/2014 - 13:25 | 4963305 oddjob
oddjob's picture

They have been increasing interest rates 6 months from now for 5 years.

Wed, 07/16/2014 - 13:29 | 4963325 fonzannoon
fonzannoon's picture

clearly this time is different.

Wed, 07/16/2014 - 13:26 | 4963275 hobopants
hobopants's picture

The crazy thing is this moron thinks you can let "steam" out of a bubble without popping it... "There is too much irrational speculation going on, can we have a little less irrational speculation please?" Has this guy even looked up the definition of asset bubble? Once people figure out things are not going to go up anymore, they panic.

Wed, 07/16/2014 - 13:27 | 4963311 fonzannoon
fonzannoon's picture

what makes it even more bizarre is that I credit the fed for letting the air out of the biotech/social media bubble earlier in the year without even nicking the index. yet they are now doing it again. Some big politician must be short the ibb.

Wed, 07/16/2014 - 14:57 | 4963559 buzzsaw99
buzzsaw99's picture

correction. i think it was QE4 and the market went from 1400+ to under 1200 in december or something like that before it started. apologies, the mind gets muddled with this crap.

Wed, 07/16/2014 - 13:07 | 4963200 Glass Seagull
Glass Seagull's picture

 

 

Dick gonna prick?

Wed, 07/16/2014 - 13:08 | 4963202 oddjob
oddjob's picture

Then raise interest rates you fucking windbags.

Wed, 07/16/2014 - 13:09 | 4963211 buzzsaw99
buzzsaw99's picture

Do you expect me to talk?

No, I expect you to die!

Wed, 07/16/2014 - 13:15 | 4963221 yogibear
yogibear's picture

But they can't raise rates. All they can do is try and talk the market down.

The Fed is stuck allowing inflation to get wildly out of control.

Wed, 07/16/2014 - 13:37 | 4963376 Nostradamus
Nostradamus's picture

The thing is, they probably could raise rates and inflation would still get wildly out of control unless they pulled a Paul Volcker on the market.

Wed, 07/16/2014 - 13:11 | 4963218 yogibear
yogibear's picture

Fisher like Bullard are playing the role of moderates. It's all for show kiddies. The Federal Reserve can't allow rates rise. The government can't afford it.

It's trying to talk the market down but it won't work. Inflation just keeps increasing while the Fed is still stimulating. Inflation will just keep getting worse.

In the mean time the Fed is stuck like a deer in front of a huge 18 wheeler going 90 mph.

Wed, 07/16/2014 - 15:05 | 4963816 NihilistZero
NihilistZero's picture

The Federal Reserve can't allow rates rise. The government can't afford it.

Why???  Between all the reverse repo's and Belgium purchases the FED can very easily raise rates while purchasing enough paper to make it budget neutral.  The whole thing is an illusion anyway...  Raising rates is inevitable support for the petrodollar.

Wed, 07/16/2014 - 13:13 | 4963222 DOGGONE
DOGGONE's picture

Just show the REAL Dow truth:
http://www.showrealhist.com/recDJIAtoRD.html

Wed, 07/16/2014 - 13:13 | 4963223 semperfi
semperfi's picture

 

 

while (1)
{
    printf("we're going to raise rates soon\n");
    rate = rate + 0;
}

Wed, 07/16/2014 - 13:34 | 4963359 gcjohns1971
gcjohns1971's picture

GDP=1

DEBT=(${GDP} * 1.4)

RATE=($PRODINCREASE + ($PRODUCTION * 1.02))

monetarypolicy () {

while [ $DEBT > $GDP ];

 do

   printf "We will raise rates season after next.";

   RATE=($RATE * 0);

done;

}

Wed, 07/16/2014 - 13:53 | 4963455 Bernoulli
Bernoulli's picture

DO

{CTRL P}

LOOP UNTIL everybody goes crazy

Wed, 07/16/2014 - 14:53 | 4963762 jmc8888
jmc8888's picture

10 Print "Money"

20 GOTO 10

 

] Run

Wed, 07/16/2014 - 13:12 | 4963225 TabakLover
TabakLover's picture

The SP's reaction tells me............nobody is listening to Mr. Fisher.

Wed, 07/16/2014 - 13:13 | 4963230 Tsar Pointless
Tsar Pointless's picture

Bubble? What bubble?

Wed, 07/16/2014 - 14:14 | 4963555 Tigg47
Tigg47's picture

What bubble?. The bubble that will burst on july 30 12:30 GMT. THAT bubble.

Wed, 07/16/2014 - 13:14 | 4963235 DavidC
DavidC's picture

They know it's a bubble, we know it's a bubble, they know that we know that they know it's a bubble....

DavidC

Wed, 07/16/2014 - 13:17 | 4963252 Quinvarius
Quinvarius's picture

And now we know that they know it is a bubble.

Wed, 07/16/2014 - 13:17 | 4963262 Tsar Pointless
Tsar Pointless's picture

I know, that you know, that they know, that you know, that I know, that they know...

Wed, 07/16/2014 - 13:15 | 4963244 Quinvarius
Quinvarius's picture

Anything approaching a normal valuation for this market is going to look like a bubble popping. 

Wed, 07/16/2014 - 13:34 | 4963360 lasvegaspersona
lasvegaspersona's picture

When the Fed 'coaxes' the interest rates down to 2% on the 10 year, current prices will look like a steal.

'Why, oh why, did I not buy back when the P/E ratios were at 19'...we will say..

Wed, 07/16/2014 - 14:22 | 4963591 Bernoulli
Bernoulli's picture

'Why, oh why, did I not buy back when the P/E ratios were at 19'...we will say..

Isch don't sink so...

'Why, oh why, did I not buy back when the ounce was at 1300 USD...we will say..

 

Wed, 07/16/2014 - 13:16 | 4963246 Bernoulli
Bernoulli's picture

Good luck with that, dude.

"Ok, everybody: There is a fire in this building, but we do not think you should all rush to the exits, but rather some of you move slowly and controlled towards the exits, without the others noticing!"

Wed, 07/16/2014 - 13:56 | 4963474 Quinvarius
Quinvarius's picture

Or he walks into a crowded stadium with a gun.  "I am only going to shoot 3 of you...."

Wed, 07/16/2014 - 13:17 | 4963261 lasvegaspersona
lasvegaspersona's picture

...because it is the main purpose of the fed to watch the markets and to make sure they are 'where they should be'.

Wed, 07/16/2014 - 13:32 | 4963344 i_call_you_my_base
i_call_you_my_base's picture

Right, wtf? - jawboning the stock market?

Wed, 07/16/2014 - 13:57 | 4963478 buzzsaw99
buzzsaw99's picture

not too hot

not too cold

just right

[/goldilocks]

Wed, 07/16/2014 - 13:20 | 4963273 TVP
TVP's picture

Interest rates will be raised after the fourth and final blood moon in fall of 2015.  

 

What will follow will make 1929 and the ensuing decade seem like a bump in the road.  

 

And Janet Yellen will replace Roy Young as the ultimate destroyer of values, wealth, and life.  

Wed, 07/16/2014 - 13:43 | 4963408 Bernoulli
Bernoulli's picture

If it takes that long, I'll be pretty much broke.

But at the same time, I have much more phyzzzzz.

 

Wed, 07/16/2014 - 13:46 | 4963416 lasvegaspersona
lasvegaspersona's picture

I do not believe that raising interest rates is still a feasable policy. It was in 1980 but America has changed. We will likely have very low interest rates for the rest of Ben Bernacke's lifetime...and he ain't that old.

Actually the wheels will surely come off the cart soon...but, as long as we still use the dollar, we are stuck in the realm of possible policies. Raising interest rates is not among them.

It looks to me like the Fed is committed to full forward, Zimbabwe  full retard, Weimar mirroring, Uncle Scrooge money pool diving, wear the bearings on the printing press til they grind...printing...subtley of course. They will use derivatives so as not to frighten the MSM (who are contractually forbidden from commenting on any thing except headlines.)

Until then...everything looks fine.

Wed, 07/16/2014 - 13:21 | 4963274 TabakLover
TabakLover's picture

Slightly OT, but, how about this little pattern I've noticed the last 6 trading days:

1. Buy the SP at the close of the 11 am hour candle,

2. Sell at the close of the next red 1-hour candle

SP points result:

7/8 = +2

7/9 = +5

7/10 = +1

7/11 = +9

7/14 = -1

7/15 = +7

today = +3  (so far)

Total = +27

Riggged?.........nah.

 

 

Wed, 07/16/2014 - 14:23 | 4963577 Squid Viscous
Squid Viscous's picture

how about buy the fucking S&P every day at 10 am... maybe sell some at the close, or not ...there fixed it for you, genius

Wed, 07/16/2014 - 13:21 | 4963284 gcjohns1971
gcjohns1971's picture

Fisher doesn't understand that the abcess under the boil has been quietly (or not so quietly) eating away the substance of the economy as the boil expanded.

You can't let just a little out.  Like pricking a balloon, all the pent-up pressure will rip assunder even the tiniest hole.

Wed, 07/16/2014 - 13:24 | 4963300 NoWayJose
NoWayJose's picture

So the Fed cuts back and the market drops 10% similar to the last couple times QE ended. And the Fed is going to stand by in October, just weeks before the election, and say 'we are going to let the markets fall and in fact we are going to raise rates next year'. Not likely.

Wed, 07/16/2014 - 13:33 | 4963351 Bunga Bunga
Bunga Bunga's picture

 I'm curious how Fisher wants to deflate the chain mail game without blowing it.

Wed, 07/16/2014 - 13:34 | 4963358 Nostradamus
Nostradamus's picture

Hyperinflation psychology is already taking hold in the markets.  Nobody believes Fed presidents anymore when they talk about tighteneing.  The markets know that they won't allow a serious correction before easing again and again.  The Fed needs to raise rates and end QE at the next meeting in a surprise move if they want to bring this market back to earth.  The market hears this crap from them and call their bluff by moving higher.  They had better rain on this parade.....and sooner rather than later.

Wed, 07/16/2014 - 14:00 | 4963489 lasvegaspersona
lasvegaspersona's picture

Nost...they can't...not wothout making the depression obvious. Right now they have been able to fiddle with the stats and declare we have a normal economy. It is far from that. We are now completely dependent upon Fed policy and the kindness of strangers (like Russia and China and Saudi Arabia) for our stuff. I believe this is the final glide path. We have turned final, engines gone, runway in sight. We will make it to the ground but the runway is only 50 yards long ...so we might have trouble once we touch down.

Wed, 07/16/2014 - 13:39 | 4963383 thetruthseeker
thetruthseeker's picture

Why couldn't this guy have just stayed in Israel?  Do we really need another Rothschild agent at the Fed?  The game is getting old.

Wed, 07/16/2014 - 13:47 | 4963394 Squid Viscous
Squid Viscous's picture

wait there's a Dick Fisher, and a Stanley Fischer? how many more jews can they fit on the fed B.O.G.? unreal...almost forgot about "kosher"lakota

Wed, 07/16/2014 - 13:42 | 4963400 Colonel Klink
Colonel Klink's picture

Because we need THIS guy having input and control over the US money supply???

Stanley "Stan" Fischer (Hebrew: ????? ????‎; born October 15, 1943) is an economist and the vice chair of the U.S. Federal Reserve System . Born in Northern Rhodesia (now Zambia), he holds dual citizenship in Israel and the United States.[1] He served as governor of the Bank of Israel from 2005 to 2013. He previously served as chief economist at the World Bank.[2] On January 10, 2014, United States President Barack Obama nominated Fischer to be Vice-Chairman of the US Federal Reserve Board of Governors.

Fischer was born into a Jewish family in Mazabuka, Northern Rhodesia (now Zambia). When he was 13, his family moved to Southern Rhodesia (now Zimbabwe), where he became active in the Habonim Zionist youth movement. In 1960, he visited Israel as part of a winter program for youth leaders, and studied Hebrew at kibbutz Ma'agan Michael. He had originally planned to study at the Hebrew University of Jerusalem, but went to the United Kingdom to study after receiving a scholarship from the London School of Economics, and obtained his B.Sc. and M.Sc. in economics from 1962–1966. Fischer then moved to the United States to study at MIT, and earned a Ph.D. in economics in 1969 with a thesis titled Essays on assets and contingent commodities written under the supervision of Franklin M. Fisher.[3][4] He became an American citizen in 1976.

Wed, 07/16/2014 - 14:29 | 4963418 Squid Viscous
Squid Viscous's picture

the writing is on the wall, colonel... they can't get any more blatant than that... in your face goyim! you will learn to love it, on your fenced in kibbutz...eventually

Wed, 07/16/2014 - 15:02 | 4963802 Colonel Klink
Colonel Klink's picture

Fucking guy wasn't born here, and doesn't have a clear cut allegiance to the US.  Amazing our so called "leaders" allow this to go on.  Although many of them have dual citizenship too.

Wed, 07/16/2014 - 13:47 | 4963435 joego1
joego1's picture

Ofcourse you will have some overshooting when you are to loose for to long.

Wed, 07/16/2014 - 14:11 | 4963451 Tigg47
Tigg47's picture

Prediction: Bubble will pop on july 30 8:30AM EST. 12:30 GMT.

Wed, 07/16/2014 - 13:53 | 4963464 orangegeek
orangegeek's picture
Fed's Fisher Wants Some Steam Out Of The Market, But "No Popping The Bubble"

 

that's like pinching off half way through taking a dump

 

good luck stopping that momentum Fisher

Wed, 07/16/2014 - 14:05 | 4963510 Bernoulli
Bernoulli's picture

Not half way. Just a couple of tiny beadlets of excrement are allowed out.

And you didn't take a dump for 2 weeks, but rather drank 3 litres of laxative every day.

There you go.

Good luck Fisher.

To those of you just having lunch, I apologize

Wed, 07/16/2014 - 14:26 | 4963610 Squid Viscous
Squid Viscous's picture

so you're saying there's going to be a massive shitstorm at some point... got it

Wed, 07/16/2014 - 14:32 | 4963635 Bernoulli
Bernoulli's picture

something like that.

and please picture additionally a massive fan instead of a toilet bowl to evenly spread it all out.

 

Wed, 07/16/2014 - 14:37 | 4963658 SheepDog-One
SheepDog-One's picture

Fisher seem to think the Fed can organize a nice orderly cattle stampede, yea good luck with all that.

Wed, 07/16/2014 - 13:55 | 4963470 khakuda
khakuda's picture

Sadly, ever rising bond, stock and real estate prices have CONVINCED the central planners that they MUST be right.

Now that it is getting harder to deny that we are seeing certain prices at levels that are mispricing risk and causing capital misallocation, they are starting to worry.  But, as long as prices are rising, these academics are beaming like a kid with a straight A report card.  No matter that they didn't learn anything, there's an A on the report card.

Wed, 07/16/2014 - 14:05 | 4963514 Quinvarius
Quinvarius's picture

The Fed looks at who is making money in the bubble to decide if it deserves to live.  A bunch of foreign CBs and hedgefunds have pumped 29 trillion into it.  That is almost as bad as the public making money.  If the bankers are not making all the money, it needs to die.  And they will make the money killing it.

Wed, 07/16/2014 - 14:34 | 4963645 SheepDog-One
SheepDog-One's picture

Whenever they feel like it, they'll just get short and pull the rug out, no difference to them.

Wed, 07/16/2014 - 14:30 | 4963630 SheepDog-One
SheepDog-One's picture

Good cop, bad cop from here on out. Pretend you're very concerned about markets being over optimistic yet never allow any red to stay for even 1 close to the next.

Wed, 07/16/2014 - 18:23 | 4964667 mastersnark
mastersnark's picture

Stock exchange holiday: Bubble will never pop if the exchange is closed.

Problem solved.

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