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Did The Fed's Magic Just Run Out?

Tyler Durden's picture




 

Jackson Hole - that magical place where the world's greatest monetary central planners gather once a year to yarn long into the night about how they are printing money, crushing the middle-class, monetizing debt, and ramping asset prices; all in the name of economic progress and saving the world from the c-word... "counterfactual" that is. The last few years, Jackson Hole has also been a guaranteed Buy-The-Rumor and Buy-The-News moment for the smartest traders in the world... except this time something just changed. 

 

 

  • 2014 AUG 22 Yellen, Draghi, & Kuroda Let-Down - 1992.4 to 1988.4, -4
  • 2013 AUG 22-23 No Bernanke Speech, Yellen Dovishness -  1642.8 to 1663.50, +21
  • 2012 AUG 31-SEP 1 Bernanke QE3 Case - 1399 to 1413, +14
  • 2011 AUG 26-27 Bernanke Moar  - 1159 to 1210, +51
  • 2010 AUG 27 Bernanke QE2 unveiled - 1047 to 1064, +17

*  *  *

Did the Fed's magic just run out?

 

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Fri, 08/22/2014 - 17:16 | 5131593 jomama
jomama's picture

gold, bitchez.

Fri, 08/22/2014 - 17:24 | 5131643 Latina Lover
Latina Lover's picture

Substitute  the world 'lies' for magic and the story makes much more sense.

Fri, 08/22/2014 - 17:33 | 5131680 negative rates
negative rates's picture

I'm certain their is plenty of magic dust, it's just the confidence is beginning to wane.

Fri, 08/22/2014 - 17:40 | 5131706 kaiserhoff
kaiserhoff's picture

Relax Tyler.  It's only a flesh wound.

Hmmm.  Looks pretty red, though.

Fri, 08/22/2014 - 23:51 | 5133240 Wait What
Wait What's picture

wait til monday, spooze has all weekend to melt up on no volume because WW3 didn't actually start this weekend.

Wait, What predicts SPX will make a a 29th record this year before tuesday. no justification, just because.

Fri, 08/22/2014 - 17:35 | 5131686 Otto Zitte
Otto Zitte's picture

Magic is the art of illusion; deception. You should reflect on all the stories of witchcraft and sorcery you ever heard, as having been filtered through the pre-literate mind.

Sorcery is the art of deception. And what do we do with witches?  

Fri, 08/22/2014 - 18:01 | 5131801 The Wizard
The Wizard's picture

It's a delusion, an illusion brought on by deception. One of my favorite chapters in the Scriptures is 2 Thes 2. Here God is telling the people if it is Fantasyland they wish to live in, then He will grant their hearts desire.

 

Below excerpt from:

http://www.theatlantic.com/doc/200905/goldberg-economy

THE WAY I SEE IT, it’s all a con game,” Cody Lundin was saying. “What I mean is that Wall Street has always been an illusion. Now it’s an illusion that’s crumbling. Wall Street is like someone who’s having heart trouble. It’s in constant need of resuscitation, but after a while, it just doesn’t work anymore. People think that Bernard Madoff was unique, that he was an illusion, but he’s just an extension of the same illusion, the same con game. This is one of the reasons I don’t like to have any debt. When you have debt, you become part of this illusion, and sometimes you get trapped by it.”

2 Thes 2:1 Now we beseech you, brethren, by the coming of our Lord Jesus Christ, and by our gathering together unto Him,

2 That ye be not soon shaken in mind, or be troubled, neither by spirit, nor by word, nor by letter as from us, as that the day of Christ is at hand.

3 Let no man deceive you by any means: for that day shall not come, except there come a falling away first, and that man of sin be revealed, the son of perdition;

4 Who opposeth and exalteth himself above all that is called God, or that is worshipped; so that he as God sitteth in the temple of God, shewing himself that he is God.

5 Remember ye not, that, when I was yet with you, I told you these things?

6 And now ye know what withholdeth that he might be revealed in his time.

7 For the mystery of iniquity doth already work: only he who now letteth will let, until he be taken out of the way.

8 And then shall that wicked be revealed, whom the Lord shall consume with the spirit of His mouth, and shall destroy with the brightness of His coming:

9 Even him, whose coming is after the working of Satan with all power and signs and lying wonders,

10 And with all deceivableness of unrighteousness in them that perish; because they received not the love of the truth, that they might be saved.

11 And for this cause God shall send them strong delusion, that they should believe a lie:

12 That they all might be damned who believed not the truth, but had pleasure in unrighteousness.

13 But we are bound to give thanks always to God for you, brethren beloved of the Lord, because God hath from the beginning chosen you to salvation through sanctification of the Spirit and belief of the truth:

14 Whereunto He called you by our gospel, to the obtaining of the glory of our Lord Jesus Christ.

15 Therefore, brethren, stand fast, and hold the traditions which ye have been taught, whether by word, or our epistle.

16 Now our Lord Jesus Christ Himself, and God, even our Father, which hath loved us, and hath given us everlasting consolation and good hope through grace,

17 Comfort your hearts, and stablish you in every good word and work

Fri, 08/22/2014 - 18:08 | 5131838 Escrava Isaura
Escrava Isaura's picture

The Wizard,

You wrote: "It's a delusion, an illusion..."

Then, you wrote" "...my favorite chapters in the Scriptures is 2 Thes 2."

Can you see the conundrum I am facing here?

Can’t tell which one is what!

Fri, 08/22/2014 - 18:47 | 5132019 Otto Zitte
Fri, 08/22/2014 - 20:18 | 5132456 The Wizard
The Wizard's picture

Does this work: Delusion = Illusion + Deception. The illusion exists because of deception. I'll have to reword that sentence.

Fri, 08/22/2014 - 19:32 | 5132230 LooseLee
LooseLee's picture

The 'idea' of a 'Savior' is an illusion. "You must go through 'Me' in order to get to the 'Father' is my favorite Jesus 'quote'. In layman's terms, 'You must understand the nature of your 'self' before the right foundation can be laid to understand 'God'.....

Fri, 08/22/2014 - 20:45 | 5132470 The Wizard
The Wizard's picture

True, we do have to understand the nature of "self", which is corrupt by nature. That is exactly why we need a Savior, to save us from ourself. However, many believe hu-mans are not corrupt by nature. That would pose a problem with my logic.

Sun, 08/24/2014 - 22:01 | 5138905 stacking12321
stacking12321's picture

what a vile, ugly, loathsome "religion" you must believe in, in order to say that the self is corrupt by nature.

i hope you overcome your brainwashing.

Sat, 08/23/2014 - 10:38 | 5134016 Winston Smith 2009
Winston Smith 2009's picture

"Here God is telling the people if it is Fantasyland they wish to live in, then He will grant their hearts desire."

Speaking of delusions...

Fri, 08/22/2014 - 22:32 | 5131725 Ben Ghazi
Ben Ghazi's picture

Fed Fucks jacking off at Jackson Hole.

 

Who gives a shit what these assholes say or do?

Fri, 08/22/2014 - 20:06 | 5132395 RottenAlpha
RottenAlpha's picture
Fri, 08/22/2014 - 17:17 | 5131596 max2205
max2205's picture

Poof its gone

Fri, 08/22/2014 - 19:42 | 5132268 flacon
flacon's picture

+1 for Kaiser Soze reference.

Fri, 08/22/2014 - 17:17 | 5131597 Jack Burton
Jack Burton's picture

If the Fed's magic runs out, run for the exits!

Fri, 08/22/2014 - 17:50 | 5131753 Escrava Isaura
Escrava Isaura's picture

So Jack,

No more endless growth and effective technique of social control.

Sat, 08/23/2014 - 07:18 | 5133677 americanreality
americanreality's picture

Your avatar doesn't help.

Fri, 08/22/2014 - 17:17 | 5131602 wrs1
wrs1's picture

lameo

Fri, 08/22/2014 - 17:18 | 5131603 Tall Tom
Tall Tom's picture

No. The Fed is the Market.

Fri, 08/22/2014 - 17:34 | 5131685 negative rates
negative rates's picture

No, the mkt is the Fed.

Fri, 08/22/2014 - 20:14 | 5132434 divingengineer
divingengineer's picture

In Toto

Fri, 08/22/2014 - 17:19 | 5131610 spieslikeus
spieslikeus's picture

Magic? I like that David Copperfield fella.

Fri, 08/22/2014 - 17:24 | 5131627 ShrNfr
ShrNfr's picture

Personally, Penn and Teller are better. They like don't like gun control or PETA.

Sat, 08/23/2014 - 08:39 | 5133802 mvsjcl
mvsjcl's picture

Nor any version of 9/11 events other than the official government sanctioned version. Fucking tools.

Fri, 08/22/2014 - 17:32 | 5131673 john39
john39's picture

the Fed relies more on the black satanic variety...

Fri, 08/22/2014 - 17:21 | 5131616 Da Yooper
Da Yooper's picture
Did The Fed's Magic Just Run Out?

 

Awwwwwwwww what happened

 

they run out of their endless supply of BS

Fri, 08/22/2014 - 17:24 | 5131645 ShrNfr
ShrNfr's picture

Yeah, sure. Next you will tell me that they ran out of fiat money. Pidgeon woman allways carries a knapsack of both.

Fri, 08/22/2014 - 17:31 | 5131666 free_lunch
free_lunch's picture

Some background on the liquidation of the middle class:  http://www.thenewamerican.com/reviews/books/item/17630-book-review-inter...

 

Free trade agreements are NWO bricks..

 

Fri, 08/22/2014 - 17:33 | 5131679 Da Yooper
Da Yooper's picture

Can you hear Ross Perot's giant sucking sound

 

NOW

Fri, 08/22/2014 - 17:33 | 5131632 digitalindustry
digitalindustry's picture

its a temporary glitch - eeeevery thing is fine.....

 

eerie how these two markets volume are converging..

What would a Crypto currency collapse look like?

http://kolinevans.wordpress.com/2014/08/22/what-would-a-crypto-currency-...

Fri, 08/22/2014 - 17:41 | 5131705 lasvegaspersona
lasvegaspersona's picture

dig

the crypto coin thing is best viewed with a  long term outlook.

Anything can be used as a store of value including your great great granny's old hutch. Anything thing can be used as a medium of exchange....including the hutch ..'I'll trade you a hutch for some tires.'

In the monetary system coming there will be many media of exchange, the most used will be the currencies of large trading countries. There will be one best store of value. It will be the one thing the world has always used as a store of value. It will have intrinsic value and will not have counter party risk. It will be the one thing central banks either already have or are acquiring now. It won't be made of paper. I think I know what it is and it is not a crypto currency....though I'd have no problem using those for exchange....I certainly won't be stuffing my safe with them.

Gold...'get you some'...Ari

Fri, 08/22/2014 - 17:24 | 5131635 Fuku Ben
Fuku Ben's picture

You forgot the k in magick

Fri, 08/22/2014 - 17:24 | 5131637 DaveyJones
DaveyJones's picture

Like Magic Johnson, it's ultimately a medical condition

Fri, 08/22/2014 - 17:24 | 5131641 Duffy
Duffy's picture

heh heh heh.... hole.

Fri, 08/22/2014 - 17:25 | 5131649 LawsofPhysics
LawsofPhysics's picture

Just wait until the fed runs, period.

Fri, 08/22/2014 - 17:28 | 5131658 nosoeawe
nosoeawe's picture
"Did The Fed's Magic Just Run Out?"

Maybe, but they still have plenty of ink 

Fri, 08/22/2014 - 17:29 | 5131661 Son of Captain Nemo
Son of Captain Nemo's picture

Monday!... Monday!... Bah Dah... Bah Dah Dah Dah...

Fri, 08/22/2014 - 17:48 | 5131665 ebworthen
ebworthen's picture

The "extended period" spell was not used.

The "easing dove" was made to disappear.

The furry "taper rabbit" was not put back in the black top hat.

The "ZIRP Lady" was sawn in half and did not come back on stage.

Fri, 08/22/2014 - 17:33 | 5131676 SillySalesmanQu...
SillySalesmanQuestion's picture

Did Mrs. Debtfire just kill that wascally wabbit...?

Fri, 08/22/2014 - 17:43 | 5131721 Amish Hacker
Amish Hacker's picture

The magic runs out when enough people wise up to how the trick is done.

Fri, 08/22/2014 - 20:12 | 5132425 divingengineer
divingengineer's picture

There is a loooooong way to go by that metric.  Most people cannot even figure out how to play the game, much less win at it.  

Hardly anyone of the educated people I know even know what the Fed does, or should be doing.

Fri, 08/22/2014 - 21:14 | 5132695 seek
seek's picture

Based on poll results, 40% of the people won't wise up until the EBT cards stop working, and honestly, that will just result in the first few of the 40% figuring it out, it's going to take the neighbors dying of starvation in the street before we get to an 80% awareness level in this country. We'll never see anything much higher than that.

Fri, 08/22/2014 - 17:47 | 5131735 GooseShtepping Moron
GooseShtepping Moron's picture

QE is ending, rates are rising, and the stock market will go down. The Fed didn't even try any magic this time, and whatever magical powers they seemed to have possessed in the past were certaily enhanced by the willing suspension of disbelief on the part of the traders. Now that the charmed circle has been broken by Yellen, the dancers are starting to weary of the ball. The days events do not appear to me to contain any mystery.

Fri, 08/22/2014 - 17:50 | 5131749 LawsofPhysics
LawsofPhysics's picture

"QE is ending, rates are rising,"  -  Bullshit, show me the fucking balance sheet motherfucker and wake me when rates get back to their historical avergaes.

Fri, 08/22/2014 - 19:13 | 5132151 Bastiat
Bastiat's picture

. . . and show me who's behind the Belgian buyer of UST paper.

Fri, 08/22/2014 - 22:29 | 5133003 Equality 7-25-1
Equality 7-25-1's picture

Check the old documents. "Belgium" is as fictional as Iraq. There haven't been any Belgians since Romans.killed.them.all. Its a way of life...

Fri, 08/22/2014 - 20:08 | 5132411 divingengineer
divingengineer's picture

Right, the proof is in the offered rate.  

Until that rises on the UST column, don't jack me off with hopeful statements.

Fri, 08/22/2014 - 18:09 | 5131802 Escrava Isaura
Escrava Isaura's picture

GooseShtepping Moron,

Their logic goes something like this:

a) Deflate the market and consumer prices

b) Investor run for safety: US Treasuries [keep dollar King perception]

c) Hidden QE: Protect the Global Reserve Currency

 

Fri, 08/22/2014 - 20:07 | 5132399 divingengineer
divingengineer's picture

You ever drive a dune buggy? On the beach sand?

You can go for miles until you try to turn around.  When you cut the turn, you bog down and get stuck in the sand.  

Fri, 08/22/2014 - 17:52 | 5131761 NOTW777
NOTW777's picture

how many years can investors/traders buy the line "the economy is improving, but"  we just need to give big banks a few more trillion dollars

obamas entire presidency has been marked by nonstop, cheery, positive and upbeat stories about the "improving" econ omy

Fri, 08/22/2014 - 18:04 | 5131813 SeattleBruce
SeattleBruce's picture

The Kenyan Keynesian's presidency is also marked by:

**Permacampaigning

**Teleprompted speeches

**Endless golf

**Endless delays in implementing 'affordable care act' ('we were just kidding...')

**Dozens and dozens of executive orders

Is it almost over?  Are we there yet??!  That's right, it doesn't matter.

 

Fri, 08/22/2014 - 18:10 | 5131844 GrinandBearit
GrinandBearit's picture

The Fed has an infinite supply of rabbits to pull out of their hat and lots of pixie dust to sprinkle over top of everything.

 

Fri, 08/22/2014 - 20:04 | 5132386 divingengineer
divingengineer's picture

I used to think the markets were too big for them to really control in the conspiracy theory sense. Now I know I was dead wrong, I have the wrecked shell of a prudently invested 401k to show for it.  They will not trend the market down until they are net short and ready to scarf up on some cheap assets.

Fri, 08/22/2014 - 18:28 | 5131935 ekm1
ekm1's picture

No other options left.

 

Either financial wipeout of insolvent bank lobby oligarchs or assassinated executives lying on streets

Fri, 08/22/2014 - 18:44 | 5132002 Dungholio
Dungholio's picture

Mr. Yellen.... Tear down this market!

Fri, 08/22/2014 - 19:00 | 5132081 RaceToTheBottom
RaceToTheBottom's picture

Don't water the garden gnome.  We have a water shortage.

 

Fri, 08/22/2014 - 19:15 | 5132160 alfred b.
alfred b.'s picture

 

     The fed never had magic...only smoke & mirrors, and of course a gulible sheeple!

 

Fri, 08/22/2014 - 19:57 | 5132332 LooseLee
LooseLee's picture

aka PINKO COMMIE FASCISTS---many lurking here on ZH as "Americans"....

Fri, 08/22/2014 - 20:01 | 5132371 divingengineer
divingengineer's picture

Alfred,

The average wage slave walking down the street knows multiples more about honey boo-boo than the Fed.  9 out of 10 people, maybe more like 97 out of 100 could not even tell you in plain words what the Fed was or what function it performed.  Dual Mandate? Wazzat? Stimulus? Whazzat some kinda free car loan or somthin?

Fri, 08/22/2014 - 22:26 | 5132989 Equality 7-25-1
Equality 7-25-1's picture

What actual commentary from Ferguson got out negates your premise. Try again, and this time, don't present a construct that frames a bunch of people you don't know as the cause of all your personal troubles. Practice this and the truth will soon be revealed.

Fri, 08/22/2014 - 19:29 | 5132213 limacon
limacon's picture

All they do is control more-and-more of less-and-less . This is what the Hausdorff-index means . The system collapses eventually from complexification (as per Tainter)

Or , the off-book economy tootles off to do it's own thing . (Jared Diamond Collapse)
See http://andreswhy.blogspot.com/2013/02/hierarchical-reserves-ii.html

Fri, 08/22/2014 - 21:16 | 5132703 medium giraffe
medium giraffe's picture

"Ta-da! You see? There's nothing in there!"

"Gaaaaasssssppppp"

 

magic still working

Fri, 08/22/2014 - 22:55 | 5133092 Bernankenstein
Bernankenstein's picture

SPY up big this week. Jackson Hole has not lost it's charm. 

Fri, 08/22/2014 - 23:02 | 5133113 toadold
toadold's picture

"If we put a littlle old gray haired lady in as the head of the Fed and this thing blows up with bad timing and max defaults,  they are less likely to bury her up to her neck at low tide and they'll go slow enough for us to get outa Dodge."

Sat, 08/23/2014 - 01:12 | 5133371 alexdg
alexdg's picture

where can i get the "what recovery?" t-shirt?

should be a best seller by now... better than the V for Vendeta mask.

Sat, 08/23/2014 - 01:39 | 5133408 hedgiex
hedgiex's picture

Delusional academics and bureaucrats still think that you can direct global markets as you did before as a real economic power with manageable debts.

Many Global traders can observe Fed waning influence and while they fear the priniting presses that can upturn their positions, they are into high liquidity spaces with risk on hats.

Fed & ECB want to keep the banksters alive from an implosion of their derivatives and the Creditor Nations (Bankers) want to have their fees for this game. (There is no shortage of short term and long term spaces to play in the World just the risk/return trade-off). US still provides the best liquid trading space and Fed has to maintain it for the new rollers.

All spins from manipulated data (eg growth, inflation) from whichevever/wherever HOLE to raise interest rate or stay ZIRP are just porns for the muppets.

Sat, 08/23/2014 - 08:16 | 5133765 gmak
gmak's picture

SPX with a 90 points viagra move up in the last 5 - 10 days. I would suggest that the J-hole ramp was just anticipated this time.

Sat, 08/23/2014 - 08:39 | 5133804 tradewithdave
tradewithdave's picture

That's the thing about magic... it never runs out.  That's the thing about ponzis... they can't be tapered. 

Sat, 08/23/2014 - 09:47 | 5133923 Who was that ma...
Who was that masked man's picture

Yup.  When the magician reaches into the hat and there's no white rabbit to pull out, the show is over.

Sat, 08/23/2014 - 10:45 | 5134047 hairball48
hairball48's picture
Did The Fed's Magic Just Run Out?

I sure hope so.

Sat, 08/23/2014 - 12:35 | 5134318 Tachyon5321
Tachyon5321's picture

 

 

Paul Krugman's solution would be to print a lot more money. That way everyone is a millionaire.

 

Sun, 08/24/2014 - 16:01 | 5137744 AdvancingTime
AdvancingTime's picture

Much of the economic landscape is beginning to look like something out of  "Alice And The Looking Glass" A bizarre  and unrecognizable land, a land that is distorted and papered over by ream after ream of paper. This paper has been rolling off the printing presses of central banks all across the world in an attempt to mask reality.

Peter Schiff says, printing money is to the economy what taking drugs is to a drug addict. In the short term it makes the economy feel good, but in the long run it is much worse off. What was once the "long run" or "distant future" may be getting much closer. More on what happens when the momentum ends in the article below.

http://brucewilds.blogspot.com/2013/01/what-happens-after-momentum-ends_...

 

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