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]

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