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Hilsenrath Warns, Following Jobs Data "Early Rate Increases Remain On The Table"
The Wall Street Journal's Fed-whisperer Jon Hilsenrath has explained (briefly) how traders should think after the better-than-expected (but fewer in the workforce) jobs data...
The US jobless rate, which falls to 5.9% in September, was already where Fed officials projected last month it would be by year-end. Moreover payroll employment growth is robust, averaging more than 200k per month.
That means early interest rate increases next year — though not the Fed’s expected path before today — remain on the table.
In addition, officials will need to make a tough decision at their policy meeting later this month about whether to alter their guidance about the interest-rate outlook, or wait until they update their economic forecasts in December before changing the guidance.
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As Albert Edwards warned - it seems bad news is bad news again
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More jawboning, raise rates already motherfuckers.
This time, I really think they are serious.
One little problem remains...you can't taper a ponzi scheme without collapsing it.
But you can always ebola it.
And war the fuck out of it.
thanks for the warning ... not sure if there is anything i could do though ... i am counting on the federal government and wall street people to fix the economy ...
Raise rates???
Well, good luck with that...
The fed will raise rates next year. They won't Volker anything. But they will raise rates. Gold will be at/around $1,000 and your dealer will still have plenty to sell you.
Curse me out if you want to, but that is what will happen.
Curse? Why? You just explained my best case scenario. Picking up the anti-US fraud hedge at $1k would be incredible. Rates rising to historical norms of around 6.5% would also be a housing purge blessing. The average income might be able to then afford the average home price, which is not the case today.
Hope you're right.
And no I didn't -1 you..... votes seem to be a sensitive area for some - lol
Alright hear me out for a sec, because I know you know your shit.
Take that normalizing rates idea and throw it out the window. Forget it. It's never going to happen. Ever.
Now lets take rates and gently lift them off the zerobound and maybe get a few .25% moves up over the course of say 12 months, starting in June of next year. Lets say that pushes the 10yr up to around 3-3.25% and the 30yr to close to 4%
Then the fed stays there for a year. Then They spend 2 years talking about possibly moving them up just a bit further. But then we hit a slight bump in the road and they hold off. Theat takes us to around 2018. The housing market muddles along because no one takes out a mortgage anymore anyway so slightly higher rates don't have much of an impact. The S&P gradually climbs to 2,600 or so as people continue to find yield in stocks and continues to have no other option.
That is the scenario I would say is more likely than the fed jamming up yields to fight off inflation. You can see from all of Tyler's posts today that wages are stagnant or falling.
Although I agree, that they will try a cosmetic raise before the next crisis will hit, but treasuries today seem not to buy the raising rates story.
Fed funds will never be above 1%. Japan is the model.
The Fed's model will only work when you ignore growing part of the population. To them, its a race to obtaining wealth fastest before the collapse and if you dont partake, then its your fault that you didnt get into the 10% club. Not sure honestly if holding gold would do any good, but the most important thing is that if you dont join the game, you better make sure you are self sufficient to survive. The end result will be 90% of the people living in the sewers and the 10% who thinks the world is fine because they dont see the wrongs of society as its below the ground. Watch Demolition man, that will be our future. Well, unless of course if Ebola doesnt wipe out the 90% first.
Well in the meantime I want to know what odds Nope puts on my scenario playing out, and if he puts low odds on them playing out, to tell me why.
Virtually anything is possible with the Fed. I honestly have no idea what they will do. Your scenario may play out, but a 50bp hike is not a significant rate hike IMO. We need 200 or 300 bp hike to see how mr. market reacts, as historically rates around 6% is where balance is acheived. Keep in mind that we are in the middle of a severe deflationary episode brought on by massive debt, so any rate hikes will be met with an equivalent drop in equities... I don't think both can keep going up from here.
they cant play around with the value of these currencies for much longer. the yen had a pretty big move this quarter and its just getting started. things are beggining to get increasingly distorted as geo politics and monetary agreements are slipping away from the grasp of control of tptb.
"Lets say that pushes the 10yr up to around 3-3.25% and the 30yr to close to 4%"
I don't think that they can handle even those rate hikes. There is a lot of debt out there.
Yup...I am getting split personalities too from all these gyrations in the markets the last TWO weeks...its triple digit move every fuckin day....
btw, no sign of Headbanger...maybe hes bleeding out of his head already from Ebola....and were all next.
I would never curse such optimism. This was clear to me the day Paulson went to congress for a bailout and mentioned how the only thing they forgot to do in the 70's was "get control of gold".
It won't fucking last. The thermodynamics of 7+ billion people all competing for a better quality of life and the west trying to maintain power and control over real resources means ony one thing.
I think that Jon Hilsenrath is a Jew, learnt that the CDC head Frieden is a Jew, now this guy Furman whose only 44, is a Jew and hes head of the council of Economic Advisors. CNBC maybe useless but it really opened my eyes to how the fuck so many Jews hold such high positions....I dont fuckin get it. two thirds of the guests that goes on CNBC are Jewish!....WTF!
but the REALLY shocking thing is, that the sheeple do not recognize it, and if they are informed about it, they do not care, because they have been conditioned: nothing to see here, move on.
The stupidity and ignorance of the people makes it so easy for their enemies to exploit them.
Brainwashed for decades.
Here's a good example. http://www.hollywoodreporter.com/news/norman-lear-memoir-excerpt-throwdo...
Archie Bunker was a 'cult hero' to the masses. That wasn't Lear's intention, of course.
All his other shows were pure propaganda, too.
The economy is on the skids with no help in site. I predict the Fed will raise rates and tank the market pre-emptively, in order to try and maintain the illusion that they still have control. The alternative would be to have the market tank while the Fed was easing, which would too overtly expose the Fed for the fraud on the economy that it is. Call me crazy, but if the Fed loses the confidence of the people that it is in control then their power goes out the window, and they will do ANYTHING NECESSARY to try to prevent that. JMHO.
The problem is they control the mechanism that drives a selected few consumer's perceived confidence, which are the Equity markets and they got the bots working hard to make sure that it supports it come hell or high water.
btw, my thoughs on the USD strength is that somebody, maybe foreigners are buying US stocks hence they need to buy USD and it goes up...or they buy USD for whatever reason and need to park it into stocks for a return because USD dont earn interest....anyways, when this thing turns lower, we will see USD and US stocks crap out at the same time.
Anything necessary would mean raising rates to historical norms to prevent investors fleeing the dollar. So, what they do instead is take turns with BoJ and ECB at printing. This makes them look good, for a while. They need a crash to justify their next round of QE. That can't be more than 6-8 months away.
Because of the crowding out effect of interest on the national debt, the government is now turning over 50% of its debt per year (i know because ZH told me). If rates go up, I imagine that this number will blow out quite a bit. At what point does it all come crashing down, at 100%? 200%? Especially because we all know their won't be wage and spending increases, and much more tax revenue, as one would expect in a rising rate environment.
Yep. They're rolling over $8 trillion/year.
Precisely the reason they can't raise rates...
Ain't gonna happen. Draghi jawboning at best.
You don't know that! - Oblama.
Why doesn't someone stuff a COCK in Hilsenrath's dirty lying mouth ?
SCUMBAG.
Haven't they been serious every time QE had been stopped?
I think the Fed's wish is now to cool down the equity markets - that works by talking (think about Draghi's "whatever it takes" and then doing nothing). While in real economy businesses react to facts. So talking about raising rates, while in reality keeping them down.
This could go on for many months now.
Why wait let's do it today
Sounds like a double-dog dare to me.
I'd skip that and go straight for the "triple-dare-ya."
It isn't going to happen because the REAL economy remains broken, both Global and US. Higher rates mean higher Gubmin interest payments and higher mortgage rates, which will stall the economy again. Either way, expect USS QE5 to be launched sooner...And with "The flow" gone, "Markets" are about to collapse.
Interesting "jawboning" though. Aren't they concerned that the USD strength, especially with rate hight talks, is going to crush exports? I guess the new cold war against Russia takes precedence over all (Strong Dollar, lower oil prices courtesy of Saudi in thanks for Syria etc.)
When WW3 and ebola are more palatable options than raising rates 1/4 of 1% things must be tough.
QE5 might juice the markets a bit for a little while, but it wouldn't fill the restaurants, stores, stadiums, ect., that would be indicative of truly improving the economy. Couple that with the fact that they have already stretched the lie to the point that they are saying unemployment is less than 6%, meaning they would have to get to ~4% with QE5, and the monstrous foreign reserves that make QE5 a huge gamble for the FedGov, and I don't see it happening because it would ultimately destroy what little confidence the public still has in their capacity to help mainstreet (which they cannot do by the way, since they never were designed or intended to do that and instead lie about it on an ongoing basis). The game is already over for the dollar, it's only a matter of time at this point.
Agreed. But which is more likely. A rate hike or QE5? I rest my case...
The Fed should get out of the rate setting business altogether and let the people set the rates by their own actions known as supply and demand.
The Fed should have never been created as the Constitution and Founders disallow it.
Token talk and token rate increases.
They cannot do anything constructive with rates without destoying everything they have created in the past 7 years...debt!
The west is really drama. Just like the Joker and Batman.
At least its fun to watch.
Its way past the time to raise the rates...according to their own goalposts....if the economy is doing so great...why do we still have 0% interest rates....why???? because its all lies
The 10 year is calling you out Hilsenbarf.
Thanks, Cap'n Obvious.
That's so cute that he thinks the Fed would ever raise rates.
Now that is actually funny
Here is where they are shocked to learn that the feds do not control the long tbond. You tbond shorts had better get out with what you can right now.
Kabuki
Placing full time and part time jobs is the same bucket and then reporting a number is fraud.
It would be like placing apples and apple slices in a barrel, counting the number of items in the barrel, and then using that as the number of apples you have in the barrel would be fraudulent.
It's time we ended the fraud.
End the FED.
The ship is going down after the election.
Please, that comment was made for every U.S and non- U.S elections since 2008......... BTFD.
BTFD?? Right now? After an exponential run up? LOL you do that. We will see in 6 months how that works out for you.
It will work out just fine for him
It's been working out just fine for me. BTFD, take profits and buy PMs. With PMs getting hit, it's even better. I get moar for my fiat. If you're not taking advantage of the free digital fiat that's your problem. If and when this shit collapses I will have a lot more PMs than I would have, had I not participated.
Eeerrrrr, you mean 1996.
I remember gold and silver bottoming in Nov. 2008.http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&instty...
We should have elections more often then.
If the FED now truly controls the market, raising rates is possible.
Do tell, because that isn't what I see based on the unfunded liabilities of the U.S. government.
If the FED now truly controls the market, raising rates is possible.
You repeat it one more time and I start to believe it
Oh that's right, now that the unemployment numbers are only "5.9%" the FED can start jacking up interest rates with impunity --- good luck wtih that you lying priicks!
Fed doesn't set rates - Fed can influence rates with their purchasing of US goobamant debt (bonds, bills, notes)
This is how the bank lending rate is "set".
http://bullandbearmash.com/about/us-prime-rate/
As Fed will purchase much less over time (ie POMO is done), it will have less influence. Yellen wants to "reinvest" earnings from debt returns - another tool to pump the markets up in time for barry's mid-terms.
Austerity cuts and higher rates to attract buyers are coming.
They will raise rates only to collapse it. Giving perfect excuse for the governement to take more control, ramp up another round of QE, fresh new bailouts or bailins.
It is time for the US public to get a round 2 of its medicine and the bankers to clear the way for the next round of asset grabs.
It will go down after the election. It will be concerted and collaborative effort to take down the us economy, and stocks to support the more important bond bubble.
Clearly, we will have our answer soon. The S&P needs to get past 2020 on this run heading into earnings warning week. Hopefully companies have continued borrowing money they don't have to buy more of their own stock. If the market goes down those companies stand to lose money they borrowed, which would not be good for business.
We are willing to start wars to get the presidential popularity rating up before the elections. Do you really think we would get a bad jobs number before the election when the democrat party is at risk. Recent headline states Obama approval rating up 8 points due to ISIS bombing. Oldest trick in the book.
Why does HILs decide to add icing to the jobs numbers cake with his quasi threat?
Right...here's the deal. happy to be held accountable to the following view: I am SHORT US equities and am staying short. The FED's balance sheet is no longer in play. That is massive....why? because equity valuations are massively stretched as a direct result of 1/ the feds POMO injections and 2/ mispriced money
Going forward bad economic news is just that and good economic news just prices in an earlier FEd hiking policy. I personally do not believe the FED will hike rates next year (just for the record)...but i think the risk reward of being short US equities here is compelling, one way or another.
PS: I'll post if/when i stop myself out ;-)
Are they also counting the "My friends' sister's mom makes $1400 dollars..." ads in the job creation numbers?
bloviating butt nugget
My only unfulfilled prediction of many I made on in May 2013, that there will be a margin call by no later than December 31st, 2014, may actually be fulfilled
All other predictions already fulfilled
This is real easy to see.
Fed know we are trapped into infinite QE but can not say this. The end game is up and the bankers are fighting for the leftover scraps of the system.
Fed needs the economy to be bad enough to give cover for the next round of QE.
They tried jawboneing end of QE. That did not work, economy muddled along.
They are tapering QE. That has not worked yet, economy muddled along.
They WILL raise rates to take the ship down.
Once the next downturn is clear, they will quickly reverse course, bail-ins, bailouts, and major QE will be enacted. BUT THIS CAN NOT HAPPEN UNTIL THIS ECONOMY COLLAPSES!
"Once the next downturn is clear"
so we are not, and have not been in a continual downturn??? A contunual downturn that the fed has continued to combat by pushing up assets?
You really still believe QE has ANYTHING to do wth the economy?
Your completely wrong. The end game is no where near up. If the markets were to drop 20%, the fed could easily reinstate QE and this time instead of $85 billion/month, how about $170 billion. and the game continues for another few years. This game can play on for at least another 1 or 2 years.
That's complete hogwash. If you think food and energy are expensive now, you just watch what happens if the Fed. goes full retard on printing again. There will be riots everywhere as people starve to death in their homes.
Have you not noticed the 100% + increase in food and energy over the last 6 years? The fed is caught between a rock and a hard place.
The Fed. won't raise rates in any meaningful way. Period. The usd at these levels is extremely damaging on energy exports, and doesn't help purchasing power on the import side, because NO-ONE has any fucking money to buy cheap Chinese trinkets. Did you see the collapse in auto sales numbers, and shitty mortgage numbers.
'Your completely wrong. The end game is no where near up. If the markets were to drop 20%, the fed could easily reinstate QE and this time instead of $85 billion/month, how about $170 billion. and the game continues for another few years. This game can play on for at least another 1 or 2 years. '
Trust me....if the FED reinstates large scale asset purchases the game will be OVER. I'm not saying it can't happen....but it seems to me that the FED has undergone a fundemental change in policy doctrine this year...namely, that LSAP are having negative marginal returns at this point in time (they are correct in this view)....
As I've said on more than one occasion on here, they are now going faced with a list of ONLY poor outcomes, and they will choose the least damaging of those in the short/med term.. a repricing lower of risk assets, principally equity mkts. The global system can withstand that repricing as equity mkts are far less important than sov bond mkts...particulary when the latter asset class is the bedrock of the system's general collateral. A repricing of stocks will actually underpin that asset class (and their own massively leveraged balance sheet)...
We'll see how this plays out.
The more they raise short rates, the more long rates will come down.
Yeah, right. Go ahead and raise rates, you assholes. Go right ahead.