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A "True Normal" Is Still A Distant Dream

Tyler Durden's picture




 

Reflecting on the farce that was the FOMC statement and press conference yesterday, Bloomberg's Richard Breslow jabs that it appears Janet Yellen's 'splaining can be summed up, "we can’t know what considerable time means because we’re told it’s a very nuanced concept." In other words, we are just not smart enough, leave it to the PhDs in the room. Even Goldman was struggling to find the dovish side reflecting that market movements were more driven by positioning than anything new policy-wise. As Breslow sums up so eloquently, "a 'true normal' balance sheet remains a very distant dream, perhaps end of decade, and who knows if they’ll ever get back there."

 

As Richard Breslow notes,

Fed mtg this week had very little new despite them playing around with the dots and obfuscating the ranges they imply. They are data dependent.

 

We can’t know what considerable time means because we’re told it’s a very nuanced concept. They did acknowledge inflation is slowing; I still reiterate that’s only by their definition, as nothing that I buy seems to be any cheaper.

 

Yellen did acknowledge there is room for labor mkts to strengthen, and I found myself wondering who was sillier last night, me or the people who did the dots? As I studied the dots in a side by side comparison, I realized first grade was a long time ago, and I wasn’t likely to receive enlightment.

 

Are they going to tighten in 2015? No if data is blah, yes if data strong -- and we knew that. As Goldman Sachs’s Jan Hatzius says, the reaction of the mkt was more indicative of the positions people had on than reaction to the Fed

 

I also was struck by comments about balance sheets staying bigger for longer; this means they will continue to stay very involved in mkts. A “true normal” balance sheet remains a very distant dream, perhaps end of decade, and who knows if they’ll ever get back there.

And here is Goldman's reflection on why did the market sell off?

The information released today was--except for the dots--at least as dovish as expected. The selloff in the Treasury market therefore likely tells us more about the market than the Fed. That is, market expectations for the meeting were probably not as hawkish as suggested by pre-meeting surveys.

 

Did the FOMC provide any new signals about monetary policy?

 

No. The forward guidance in the FOMC statement was unchanged, as the Committee kept the "considerable time" and post-liftoff guidance word for word, and Chair Yellen opened the press conference stating that the released information is "not meant to convey any change in the stance of policy." While the median of the funds rate projections (or "dots") drifted up in 2015 and 2016--by 25 basis points (bp) and 37.5bp, respectively--we would not put too much weight on this. First, the dots that most likely capture the views of the FOMC leadership--projections 4 to 6 from the bottom--moved up very slightly in 2015-16 and most forecasters had anticipated an increase. Second, the change in the dots is difficult to assess as they are now expressed as the mid-point of a range. Yellen consequently downplayed the "relatively little upward movement in the path" of funds rate projections, suggesting it is "broadly in line with what one would expect with a very small downward reduction in the path for unemployment and a very slight upward change in the projection for inflation."

*  *  *

The Fed has reached peak transparency and that is no longer a good thing as the Emperor's clothes are starting to show.

 

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Thu, 09/18/2014 - 11:16 | 5230103 Zirpedge
Zirpedge's picture

I have seen Yellen's bush, her silver beaver pelt evokes the wisdom of years in public service and garners my full faith in her ability.

Thu, 09/18/2014 - 13:47 | 5230720 detached.amusement
detached.amusement's picture

cripes dude, I just ate!

 

 

*hoark*

Thu, 09/18/2014 - 11:18 | 5230117 Dr Strangemember
Dr Strangemember's picture

I don't feel normal.  At all.

Thu, 09/18/2014 - 11:58 | 5230334 eclectic syncretist
eclectic syncretist's picture

How can it be normal when Fantasy Football leagues across the US are in dissarray?

http://finance.yahoo.com/news/adrian-peterson-causes-chaos-fantasy-14540...

"Teenage Lobotomy"

Lobotomy, lobotomy, lobotomy, lobotomy!
DDT did a job on me
Now I am a real sickie
Guess I'll have to break the news
That I got no mind to lose
All the girls are in love with me
I'm a teenage lobotomy

Slugs and snails are after me
DDT keeps me happy
Now I guess I'll have to tell 'em
That I got no cerebellum
Gonna get my Ph.D.
I'm a teenage lobotomy https://www.youtube.com/watch?v=rwdc8u93r_w

Thu, 09/18/2014 - 13:51 | 5230728 MalteseFalcon
MalteseFalcon's picture

"Normal" is not returning, ever.  "They" don't want it.

Thu, 09/18/2014 - 11:26 | 5230159 KnuckleDragger-X
KnuckleDragger-X's picture

Alice laughed. "There's no use trying," she said: "one can't believe impossible things."
"I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for half-an-hour a day. Why, sometimes I've believed as many as six impossible things before breakfast."

Thu, 09/18/2014 - 11:28 | 5230172 Bell's 2 hearted
Bell's 2 hearted's picture

"I still reiterate that’s only by their definition, as nothing that I buy seems to be any cheaper."

 

obviously not a Pier 1 shopper -

 

"The retail environment remains highly promotional and is pressuring gross profit in the near-term," Chief Executive Alex W. Smith said in the company's earnings release. 

http://www.marketwatch.com/story/pier-1-cuts-guidance-blames-margin-pres...

 

it is what i've noticed for a few months now ... stuff still regularly priced, but some real "on sale" deals

Thu, 09/18/2014 - 12:40 | 5230494 Vooter
Vooter's picture

"obviously not a Pier 1 shopper"

Oh, I didn't know you could do your grocery shopping at Pier 1...

Thu, 09/18/2014 - 11:29 | 5230180 Mrs. Cog
Mrs. Cog's picture

We Cogs were just discussing normal. It is whatever the herd declares it to be. I prefer to be Abbynormal. :-)

Thu, 09/18/2014 - 13:57 | 5230754 detached.amusement
detached.amusement's picture

Dr. Frederick Frankenstein: [to Igor] Now that brain that you gave me. Was it Hans Delbruck's?

Igor: [pause, then] No.

Dr. Frederick Frankenstein: Ah! Very good. Would you mind telling me whose brain I DID put in?

Igor: Then you won't be angry?

Dr. Frederick Frankenstein: I will NOT be angry.

Igor: Abby someone.

Dr. Frederick Frankenstein: [pause, then] Abby someone. Abby who?

Igor: Abby... Normal.

Dr. Frederick Frankenstein: [pause, then] Abby Normal?

Igor: I'm almost sure that was the name.

Dr. Frederick Frankenstein: [chuckles, then] Are you saying that I put an abnormal brain into a seven and a half foot long, fifty-four inch wide GORILLA?

[grabs Igor and starts throttling him]

Dr. Frederick Frankenstein: Is that what you're telling me?

Thu, 09/18/2014 - 16:18 | 5231266 Salsipuedes
Salsipuedes's picture

We should take a closer look at Mel Brooks...figuratively, not literally. It's lunchtime.

Thu, 09/18/2014 - 12:49 | 5230213 khakuda
khakuda's picture

It is actually getting less normal every day and asset bubbles are growing daily as a result.  Only a fool could believe it ends well at this point but, for now, party on.

Thu, 09/18/2014 - 11:36 | 5230220 SpanishInquisition
SpanishInquisition's picture

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less."

Thu, 09/18/2014 - 11:45 | 5230272 SheepDog-One
SheepDog-One's picture

It's all totally meaningless, because even if a huge list of Fed targets were to be met today, they could just say rates remain at 0 with full EZ money for another quarter, year, or however long they feel like. The goal posts are on wheels, and they can put it wherever they want it.

Thu, 09/18/2014 - 11:52 | 5230312 disabledvet
disabledvet's picture

Have we just inflated our way into a recession?

Are they just numbers after all?

Besides a massive debt load what has Wall Street ever created?

Pretty much nothing when it comes to New York.

It's nice to think we got away with 2008 "Scot Free"...but seriously...there is a war going on. Time to flee?

Thu, 09/18/2014 - 11:59 | 5230335 ilw4e
ilw4e's picture

There's no way of rewinding. You blew a bubble, the only way out is wait til it burst. Bunch of idiot people letting FED do whatever they want, wait for the time of real suffers comes.

Thu, 09/18/2014 - 12:17 | 5230400 No Quarter
No Quarter's picture

None of this life we are currently living feels normal to me at all. The bubble surrounds EVERYTHING and its just surreal seeing how oblivious everyone around me is. Going about their lives as if nothing is amiss... Then listening to my wife reinforcing the idea to her kid that he MUST do well in school so that he can get into a GOOD (read: expensive) college and get a good job. WTF. I'm thinking, good luck kid, you're going to need it. Have fun paying back those crushing student debt loans (that i have absolutely no intention of co-signing) I'm all for education if it has value but not at the expense of debt-slavery for me or anyone else.

Thu, 09/18/2014 - 14:09 | 5230807 esum
esum's picture

CONSIDERABLE TIME ...... THE ONE THAT DALI PAINTED WITH THE MELTING CLOCKS.....

they dont have a clue........... fingers crossed for a RECOVERY TOOTH FAIRY......

UP THE RATES and crash the market,,,,,,, fuck over retirement funds..... deplete corporate resources to cover shortfall in retirement funds... hey T and CALPERS what do you think of that scenario..... and all the rest of the generous retirement PLANS THAT dont really have and will never have the $$$$ hello nuevo york deblabio ..... hey honey.... we will never get to cruise the rivers (i mean sewerage disposal streams) of europe ..... never get to rub shoulders with the phonies and wannabes in monaco...never smell the cat urine in the coluseum and the french armpits and see hairy legs.... never get to see the poor english dental foulmouthed work or the queen....  and forget the Veyron..... 21 speed bike or used yugo will have to do... 

Thu, 09/18/2014 - 15:32 | 5231106 Salsipuedes
Salsipuedes's picture

Quality bullshit is always "nuanced."

Thu, 09/18/2014 - 16:41 | 5231328 Radical Marijuana
Radical Marijuana's picture

The old "normal" was based on being able to strip-mine the planet's natural resources at an exponentially increasing rate, while "money" was made out of nothing as debts to "pay" for that. 2007 was the last such "normal" year, and we are NEVER going back to that kind of "normal" again. Rather, the enforced frauds that operated through the political economy are the leading edge of the sundry ways that running into real limits and diminishing returns are manifesting.

The established systems operated on the basis of fundamentally fraudulent financial accounting systems, through attitudes of evil deliberate ignorance towards the basic laws of nature (as a necessarily corollary to being able to sustain a social system wherein "money" was being made out of nothing by private banks, while that fraud was being enforced by governments that those banks controlled.) Therefore, the runaway strip-mining of the planet, in an economic system which turned natural resources into garbage and pollution as fast as possible, in order to make more "money" out of nothing, on a debt treadmill, will approach the real limits and diminishing returns going as fast as it possibly can, while, publicly, it deliberately ignores facing those facts.

The "new normal" is best described by the absurd classic cartoons, known as the Wile E. Coyote moments. The economic system is based on ENFORCED FRAUDS, which only worked as long as exponential growth of strip-mining the planet worked. There is NEVER going to be any way to go back to that kind of "normal." Rather, we are headed towards the severe psychotic breakdowns of the systems of ENFORCED FRAUDS. It appears that we have only recently reached the tipping point where the strip-mining of the planet is manifesting diminishing returns. That kind of bubble bursting is nothing like any of the previous economic bubbles popping. What is happening now is nothing like ever before in known human history.

Theoretically, human beings could develop better human, industrial and natural ecologies, which adapted to live within the limits of their real environment. However, realistically speaking, almost everyone is deeply committed to "growth," which means deeply committed to continuing to try to remain "normal" ... which means deeply committed to maintaining the entrenched social insanities of the ENFORCED FRAUDS that control the established political economy.

The new figurehead of the Fed is presenting the view that the established systems can continue for some considerable time. However, every day that those continue, the strip-mining of the planet drives the established systems towards even worse crazy collapses into chaos. The financial systems will be the first place that manifests, and will do so in the form that their ENFORCED FRAUDS will go through psychotic breakdowns. The underlying ability to continue to strip-mine the planet's natural resources is automatically becoming a more and more dubious proposition every day that is able to sustain itself.

Every attempt to continue the established systems for some considerable time guarantees that their eventual psychotic breakdowns will be worse. Theoretically speaking, there could be integrated systems of creative alternatives, with the combined human murder/money systems at their core. However, realistically speaking, the old normal was that those systems operated through the maximum possible frauds and deceits, and therefore, the only ways that they could change is through psychotic breakdowns and collapses into crazy chaos.

The Federal Reserve Board is the American King of Fraud, integrated into a global system, with the Bank of International Settlements being the King of Kings of Fraud. Nothing about how those institutions were actually made and maintained is ever allowed to be stated as social facts in the mass media, nor the public school systems. Instead, the banksters' bullshit dominates all significant public discussions. Since the banksters' systems are based on ENFORCED FRAUDS, and that was "normal" and possible to continue as long as the Earth could have its natural resources strip-mined at an exponentially increasing rate, any suggestions of ever returning to that kind of "normal" is based on deliberately ignoring the problem that the planet is finite.

However, although the planet is finite, the fraudulence of the financial system is apparently infinite, since there seems nothing which stops money made out of nothing being infinite. In theory, human beings and human civilizations could be understood as manifestations of general energy systems. However, practically all of the biggest bullies' bullshit social stories are in the way of that being achieved, because not only are the established systems spouting that bullshit, but also all of the publicly significant controlled opposition groups are based on the same bullshit too.

Since the political economy is controlled by ENFORCED FRAUDS, the ways that the world works operates through apparently infinite tunnels of fraudulence. Where the "facts" may be in those systems of almost totally triumphant fraudulence is extremely difficult to determine! However, it is obvious to anyone willing to look that our economic system is based on turning natural resources into garbage and pollution as fast as possible, while maintaining attitudes of evil deliberate ignorance to the longer term consequences of doing that.

Human beings could develop better ecologies, in which industrial ecologies were integrated like natural ecologies. However, the primary obstacle in the way is that human history developed human ecology to be based on the maximum possible deceits about how the death controls were actually operating as the central core of that human ecology. The results of human societies being directed by systems of ENFORCED FRAUDS are profoundly paradoxical, because that generates a society which is like a Bizarro Mirror World, where everything appears proportionately backwards and distorted.

Nothing is understood in more distorted and backwards ways than the human murder systems that maintain the human monetary systems. Nothing is more important to the emergence of the new systems that adapt to the limits to strip-mining the planet than the new murder systems, or death controls, that develop. However, tragically, since organizations like the Federal Reserve Board are a King of Fraud, integrated into globalized systems of financial fraud, whose real history are repressed social facts, the path we are on is for the established systems to endeavour to continue for some considerable time, based on their ability to operate inside of a society which has attitudes of evil deliberate ignorance towards the basic laws of nature.

The old normal was debt slavery, backed by wars based on deceits. The new normal is that debt slavery has generated numbers which have become debt insanities, and those debt insanities are provoking death insanities ... BUT, THAT IS ONLY JUST BEGINNING TO BECOME MORE OBVIOUS. The deeper causes are factors which the vast majority of people have developed attitudes of evil deliberate ignorance towards. Therefore, the new normal will NOT remain "normal," but rather will be a tragic trajectory towards severe social storms, and psychotic breakdowns, as the ENFORCED FRAUDS reach the real limits of the environment, and the attempts to continue the exponentially increasing strip-mining of the planet manifest worse and worse diminishing returns.

Every day that the established systems of ENFORCED FRAUDS maintain themselves, and attempt to extend themselves for some considerable time, is another day that enables the real problems to get BIGGER. Anyone suggesting that we are ever able to go back to the old normal is an idiot, who enjoys indulging in delusions. (I somewhat sympathize with those who enjoy those ideological delusions over the short-term.) The foreseeable future will be a wild, out of control, roller coaster ride, as the long way UP strip-mining the planet at an exponentially increasing rate tips over to the fast ride DOWN of the consequences from having done so ...

Whatever new systems of organized lies operating robberies emerge out of being required to adapt to those fundamental transformations remains to be seen, especially since, before we get there, what used to be the NORMAL ENFORCED FRAUDS must go through some series of severe social storms and psychotic breakdowns, since the social pyramid systems in which those operate are apparently incapable of preventing their runaway debt insanities from becoming Peak Insanities!

The real social history of the Federal Reserve Board capturing control over the American economy is excluded from all significant public debates. The established systems of ENFORCED FRAUDS are publicly treated as if they are somehow not fraudulent. The long history of social success being based on the ability to back up legalized lies with legalized violence is behind that. That history has enabled the American economic system to dominate the world, and enforced globalized financial frauds, all of which were based on the social successes from backing up lies with violence, which enabled the exponential growth of the strip-mining of the planet's natural resources.

Since it is practically impossible for there to be any significant public debates about the established systems of ENFORCED FRAUDS, but only bullshit discussions about how those may be continued for some considerable time, there are no ways that more rational evidence and logical arguments regarding the limits of the relatively more objective real world of environmental limits can be presented in any significant public way. There appear to be covert plans which are well-developed to drive through the death insanities that will surely be provoked by the runaway debt insanities! However, there are no overt public discussions about that presented in the mass media, nor the public schools.

Any mass media discussion of the Federal Reserve Board polices makes the fable about the Emperor's New Clothes appear extremely optimistic. In fact, in the real world, for a long time, the Emperor has been rewarding those who agreed with the delusions, while punishing those who disagreed. For generation after generation, the Emperor has ordered politicians who spoke out about the Emperor's frauds to be discredited and destroyed. Everyone who was socially successful became so through their abilities to be professional liars and immaculate hypocrites, who agreed to deliberately ignore the relatively objective facts, while they would publicly announce their agreements with the runway frauds. (A more historically honest account of that fable would be a long book, where over and over again the boy who pointed out that the Emperor was naked was dragged away and murdered for having done so, thus making sure that few would dare to do so.)

Since the old normal was debt slavery backed by wars based on deceits, which has gradually degenerated into becoming debt insanities, backed by death insanities, the ability of that to continue for some considerable time constantly pumps more energy into the social pyramid systems, driving them towards severe social storms and psychotic breakdowns. However, due to the degree that the entrenched systems of ENFORCED FRAUDS still dominate the ways that people think, especially as presented in the mass media, and the public schools, the only feasible future is that those will be driven towards Peak Insanities, as peak everything else is reached with the turning points, where the strip-mining of the planet at an exponential rate is just no longer possible. AT THOSE TIPPING POINTS, WE WILL ENTER ANOTHER PHASE, IN WHICH ALMOST NOTHING WILL BE LEFT THAT IS EVEN REMOTELY LIKE "NORMAL."

Thu, 09/18/2014 - 17:19 | 5231486 CrabNuggetOne
CrabNuggetOne's picture

Cracking post. + Loads.

Thu, 09/18/2014 - 19:50 | 5232071 Salsipuedes
Salsipuedes's picture

In short, it's a rocket ship to hell but it's exponential now with our bigger, faster (dildo shaped!) PLASMA rocket! 

I don't know where you get your shit Rad but I'm glad you go there.

Thu, 09/18/2014 - 23:28 | 5232726 Radical Marijuana
Radical Marijuana's picture

I thought this news was interesting, given its potential to roughen the ride of that PLASMA rocket:

http://www.thewestwire.com/h-r-24-audit-the-fed-bill-passes-in-house/

H.R. 24 ‘Audit the Fed’ Bill Passes in House

That news was also discussed here:

http://dinaresgurus.blogspot.ca/2014/09/jc-collins-post-separation-of-us...

Do NOT follow this link or you will be banned from the site!