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Will The Fed Let The Stock Market Crash Before An Election?

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Anyone in their position with the tools at hand would not have any other real option other than to buy stocks in whatever quantity is needed to reverse the selling and blow the shorts out of the water.

Since I'm writing this on Sunday evening, if the Dow Jones Industrial Average opens down 1,000 on Monday morning, I'm going to look very foolish. Such is the risk of being contrarian. So what's contrarian now--expecting a crash or expecting a bounce and rally?

 

Exactly what the sentiment consensus is right now is open to debate. Analysts expecting a stock market crash see those expecting a rebound as the consensus view.
 
But if we look at various measures of sentiment such as the Put-Call Ratio and greedometer.com, we find elevated levels of fear over the past few weeks. The consensus can hardly be said to complacent when the VIX index is over 20.
 
Let's set aside sentiment measures and technical analysis and ask a larger question: will the Fed let the stock market crash before an election? Once again we find two camps among participants. One camp believes markets still obey the basic rules of technical analysis. The Fed and other central banks may intervene at the margins, but their interventions only work on low-volume days. When selling increases, it overwhelms the relatively modest size of central bank intervention and the market then crash.
 
The other camp holds that all markets are now engineered, and intervention can reach essentially unlimited levels if the Powers That Be deem that necessary. I covered this view in Have We Reached a Financial Singularity? (September 4, 2014)
 
For context, let's recall that the Fed conjured up $16 trillion to backstop global banks in the Global Financial Meltdown; (the Levy Institute came up with $29 trillion after poring over all the data):
 
To put $16 trillion in context, note that entire gross domestic product (GDP) of the U.S. is about $17.3 trillion, and all residential mortgages in the U.S. total about $10 trillion.
 
Long-time readers know that I see the Federal Reserve as an intrinsically political entity. Though it casts itself as an independent institution that's above the political fray, this is simply good PR: the Fed is as political as any other institution of the central state.
 
What would happen to incumbents in the election a few weeks from now if the stock market crashes? The happy story--that all is well and you would be wise to re-elect the incumbents responsible for the economic good news--would be reduced to rubble.
 
One can only imagine the phone calls being made to Fed governors by politicos of both parties suggesting that it would be a terrible shame if all the hard work of those in power was destroyed by a needlessly destructive market crash.
 
We can also imagine similar calls being made to officials in the Bank of Japan, the European Central Bank, etc.
 
We know central banks are openly buying bonds and stocks, either directly or through proxies. What possible reason would the central banks have to suddenly reverse their interventions and stand aside right when the global markets are in meltdown?
 
Thus we can also imagine some conference calls being made this weekend to coordinate intervention on whatever scale is necessary.
 
If central banks have learned anything since 2008, it's that waiting around for the panic to deepen is not a winning strategy.
 
We can also ponder the psychological consequences of the vast expansion of intervention. Where prior to 2008 the Fed and other central state players might have viewed $10 billion as a major intervention, what do you think whatever it takes is now? Do you really think $1 trillion would give those in charge pause? Since we're talking about propping up a $160+ trillion edifice ($80 trillion of assets in the U.S. alone), what's a trillion or two between pals?
 
Some observers think it bearish that no central bank has stepped up and announced a new easing program. I reckon the central banks have fully grasped that the public is now skeptical of PR campaigns, and so the smart move is to avoid public jawboning in favor of buying the assets directly, in whatever quantities are deemed necessary.
 
Put yourself in their shoes. Isn't this what you would do, given the dearth of alternatives and the very real risks of implosion? Anyone in their position with the tools at hand would not have any other real option other than to buy stocks in whatever quantity is needed to reverse the selling and blow the shorts out of the water.
 

If $1 trillion doesn't do the job, make it $3 trillion, or $5 trillion. At this point, it doesn't really matter, does it?

 

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Mon, 10/13/2014 - 08:21 | 5323390 junction
junction's picture

Boy, I can remember when a trillion dollars was a phrase out of science fiction.  Unreal to most people.  Still is to me.

Mon, 10/13/2014 - 08:32 | 5323416 economics9698
economics9698's picture

The tribe is going to hit the cocaine button again. 

See Venezuela for your real life example.  They are starving down there and still they can’t figure out it’s the fucking bankers fault.  Still playing politics as their calorie count drops below 1,000 per day. 

So why would the Fed do anything other than all they know how to do?  Fuck people over.

Mon, 10/13/2014 - 08:35 | 5323433 gold-is-not-dead
gold-is-not-dead's picture

0.001% of the world can realize what's happening. That's why the criminals are playing with trillions.

Mon, 10/13/2014 - 08:40 | 5323444 Newsboy
Newsboy's picture

Whenever the market crashes it can be made "good" for somebody.

Stakes are high.

Look for boldness.

Mon, 10/13/2014 - 08:47 | 5323462 TruthInSunshine
TruthInSunshine's picture

Save the "free markets" and deliver us from risk, Sister Yellen .

Ensure "market efficiency," Father Dudley.

Be our guardian for "market fairness," Brother Evans.

Protect speculators from harm, K-Hen.

Be seated at the Right Hand of Kapitalism, Edward Quince.

Mon, 10/13/2014 - 08:53 | 5323477 Philo Beddoe
Philo Beddoe's picture

Let me pick - Pontius Pilate 

All of them, the crowd roars. 

Mon, 10/13/2014 - 08:59 | 5323500 Soul Glow
Soul Glow's picture

The Fed loves a market crash before an election.  Gets everyone worked up to get in line.  They'll own both candidates anyway.

Mon, 10/13/2014 - 09:13 | 5323548 indygo55
indygo55's picture

Right, and didn't the market crash in 2008 right before the election?

 

Mon, 10/13/2014 - 09:25 | 5323578 TruthInSunshine
TruthInSunshine's picture

What does Tel Aviv want?

Ring Ring: Hello?

Stanley Fischer, is that you?

Mon, 10/13/2014 - 09:51 | 5323673 tmosley
tmosley's picture

If it crashes, which it looks like it is, you can bet that it is because the powers that be have decided that the nation will vote for Republicans next month.  Probably made a deal to gut the Fed Audit in exchange.

Mon, 10/13/2014 - 10:06 | 5323714 TruthInSunshine
TruthInSunshine's picture

Or made a deal to kick Operation PNAC '7 Nations Steamrolled" into hyperdrive.

Don't get me wrong; it's not that both "different" political parties won't do everything that they can to do their task for their masters. It's about which "different" political party will be more slavishly eager to do it quickly handbags a sound plan to attempt to effectively undertake the task.

Syria is the current target.

http://www.youtube.com/watch?v=oXS7IsOdu-A

Mon, 10/13/2014 - 10:34 | 5323777 SWRichmond
SWRichmond's picture

There are no markets, there are only interventions.

Mon, 10/13/2014 - 13:56 | 5324776 InjectTheVenom
InjectTheVenom's picture

the author assumes , of course , that the midterm elections will still take place as scheduled .... i don't know about you, but me thinks that the rapidly escalating obola (phony)crisis would be a perfect cover for a "temporary" (*coughindefinitecough*) postponement of the elections  ... ?   << never let a good crisis go to waste ! >>

Mon, 10/13/2014 - 09:26 | 5323592 Eyeroller
Eyeroller's picture

A republican who wasn't running for re-election was in office during the 2008 crash.

QE3 was introduced just before the 2012 election, preventing a crash.

Mon, 10/13/2014 - 09:39 | 5323634 SilverIsKing
SilverIsKing's picture

"Once again we find two camps among participants. One camp believes markets still obey the basic rules of technical analysis. The Fed and other central banks may intervene at the margins, but their interventions only work on low-volume days. When selling increases, it overwhelms the relatively modest size of central bank intervention and the market then crash."

What about the jawbone? The FED only needs to talk about action and they will get the desired result. They don't need to buy at the margin or buy anything. One of the FED stooges comes our and says something that gives the impression that they won't tighten or will loosen further and the market will rocket higher.

Now, the real question is what does the FED want?

Mon, 10/13/2014 - 10:26 | 5323762 bbq on whitehou...
bbq on whitehouse lawn's picture

The Fed wants everyone calm so they can steal the better part of their money? To do this they can't have people worry about inflation or they will wake up to everyone and there mothers in other more stable currencies.

Now if you were a bureaucrate with a confortable lifestyle that depended on that stibility what would you do with a market choping at the bit to run because inflation was eating them alive?

Mon, 10/13/2014 - 09:44 | 5323652 Big Brother
Big Brother's picture

Thereby your postulate we should anticipate QE4 such that Hillary may be elected.  I await for something along the lines of "get to work madame chairwoman" to be said.  This is all going to get more inflated before it gets better.

Mon, 10/13/2014 - 09:47 | 5323661 toady
toady's picture

Yeah, it's becoming SOP to crash around elections. As stated above, it makes the pleebs think their vote matters.

Can't really see a major crash right now, just a minor one. After all, it's only a midterm. Gotta save the big crash horrible 2016.

I could be wrong...

Mon, 10/13/2014 - 09:54 | 5323681 economics9698
economics9698's picture

The clowns can only juggle them balls so long.

Mon, 10/13/2014 - 10:56 | 5323883 gold-is-not-dead
gold-is-not-dead's picture

hehehehe, one of the best explaniations for the morons in charge...

Mon, 10/13/2014 - 12:00 | 5324244 WOD
WOD's picture

You stole my thunder! People forget the recent lessons of our past so quickly.. The cycles of time these days are as simple as the instructions on a bottle of shampoo.

Mon, 10/13/2014 - 09:39 | 5323633 Spine01
Spine01's picture

Inequity brought us EBOLA. People in power must remember that. Closed echosystems have a way to deal with inequality. Humans are not unique in anything biologically related.

Banksters should always keep this in mind...

Mon, 10/13/2014 - 10:44 | 5323805 disabledvet
disabledvet's picture

This is a great point. As the last of the "salty talkers" I hope folks realize that prejudice is alive and well in this world and no, we are not rising above it here. Folks know what divides us makes us weak...what unites us makes us strong. Ebola is a classic creation of what divides us will make someone a ton of money.

I don't believe for one second that this was done intentionally by the folks we voted for. I do believe and have always been suspicious of the idea that "folks see a bad thing coming and they do nothing to stop it."

There is no way the folks in charge of the USA prior to 9/11 didn't see it coming. Same goes for Ebola. Somebody just decided in a world of "pop politics" since they knew Ebola was coming to America (indeed clearly actual doctors are bringing it here) who are they to stand in the way of the inevitable?

Discussions here have gotten quite civilized of late. Interesting to see. "Problem not solved" though.

Mon, 10/13/2014 - 08:53 | 5323484 DeadFred
DeadFred's picture

I keep wondering about the 'Satan Signal' from a few days ago. 666 e-mini contracts isn't chump change and the HFTs don't usually spoof with contracts large enough to be costly if they actually get filled. if it really was a signal to the machines to flip their switches from 'good' to 'evil' it means that someone in the know wants the market down. Don't expect this rally to work like the others.

Mon, 10/13/2014 - 08:57 | 5323491 Seize Mars
Seize Mars's picture

Dude sorry bro but 600 eminis is indeed chump-y

Mon, 10/13/2014 - 10:10 | 5323722 dontgoforit
dontgoforit's picture

Isn't it Soros who has bet against the US financial markets?  Doesn't he stand to gain a $billion or two if it tanks?  Like he did with the BOE?

Mon, 10/13/2014 - 10:49 | 5323830 DeadFred
DeadFred's picture

A few hundred million nominal may not be huge but the trend has been for the HFTs to go smaller and smaller. Small odd lot trades are becoming more frequent. You may not go broke if someone snags your 666 trade and you have to exit for a loss but why spoof a larger amount if a smaller one would work? They might know the larger ones will have have more effect but I wonder if there might be a trigger buried in the code somewhere that literally changes the way the programs trade. 

Mon, 10/13/2014 - 10:59 | 5323896 Arius
Arius's picture

too much worries ... just shoot as Tuco once said ...

 

pal 666 explains it all ... there is no chance on that amigo ... probably 1 in 1 trillion or so is a coicidence... now you decide

Mon, 10/13/2014 - 08:56 | 5323487 Badabing
Badabing's picture

"Will the Fed let"
We are condishened to beleve the fed has the right to fuck with true market forces.

Sad

ETF End the Fed

Mon, 10/13/2014 - 09:39 | 5323630 Badabing
Badabing's picture

-1 Al is that you?

Mon, 10/13/2014 - 09:19 | 5323566 xcehn
xcehn's picture

Bold red slashes.

Mon, 10/13/2014 - 08:45 | 5323458 Croesus
Croesus's picture

They will never let the market crash before an election. It would be too politically destructive to the puppets counting on re-election. 

 

 

Mon, 10/13/2014 - 08:47 | 5323464 DeadFred
DeadFred's picture

The puppets are expendable whenever it is decided they should be replaced with new puppets.

Mon, 10/13/2014 - 15:14 | 5325214 daveO
daveO's picture

EXACTLY! My CONgress critter will win with about 75% of the vote despite the fact that they rail against BHO and then vote FOR debt ceiling increases to fund his agenda!

Mon, 10/13/2014 - 08:50 | 5323475 spastic_colon
spastic_colon's picture

how else can they blame a crash on the repubs if they dont wait until after the mid terms.....and say it was a confidence thing

Mon, 10/13/2014 - 09:39 | 5323632 TruthInSunshine
TruthInSunshine's picture

Market stick save & rollback gasoline prices just prior to elections = standard procedure

Mon, 10/13/2014 - 15:16 | 5325233 daveO
daveO's picture

No shit? I learned that one the hard way back in 2000. They released Strategic Petroleum Reserves when Al Gore's poll numbers were sagging. My oil stocks got clobbered.

Mon, 10/13/2014 - 22:12 | 5327187 Nine Pies
Nine Pies's picture

The whole premise of this article assumes that elections are real.

Mon, 10/13/2014 - 12:06 | 5324237 sylviasays
sylviasays's picture

"See Venezuela for your real life example.  They are starving down there and still they can’t figure out it’s the fucking bankers fault.  Still playing politics as their calorie count drops below 1,000 per day."

It was the corruption and mismanagement of the Venezuelan economy by that fucking Marxist dictator Hugo Chávez (aka pineapple head) and his thieving leftist cronies that have bankrupted Venezuela.  The country’s dominant industry, petroleum, was nationalized under Chávez and has suffered at every level from mismanagement, financial milking by the government, and rampant corruption. Venezuela has sent tens of billions of dollars’ worth of oil to China, while China provides guarantees for Venezuela’s imports to some suppliers. Effectively, the Chinese are now getting part of their oil for free, while Venezuela has billions frozen in Chinese accounts.

To make matters worse, Venezuela has supplied oil at unbelievably low prices, with 30-year terms, to ideologically friendly countries in Central America and the Caribbean, including Cuba. Since 2004, this largesse has cost Venezuela $30 billion in lost income. Moreover, the Chavistas have forgiven the debt of many of these countries. They allowed Jamaica to pay its debts by sending a few hundred English teachers for a spell in Venezuela, while Cuba has been paying its debts by sending Olympic sports coaches and economic advisers.

Wasteful spending by Chávez, at home and abroad, left the country’s finances in severely critical condition and crippled effective financing of the private sector.  Chávez installed a socialist command economy in Venezuela, which has continued under his equally corrupt successor, Nicolás Maduro, a former bus driver. Thousands of companies across every segment of the economy along with farms and cattle ranches have been nationalized or simply confiscated without payment.

In desperation, the government has established an elaborate network of state enterprises charged with importing goods that were formerly offered by the private sector. Now hundreds of political appointees are in charge of importing billions of dollars in goods that range from wheat and corn to cell phones, medical devices, and power plants. 

Venezuela's Marxist dictators and their cronies are the ones who fucking over the Venezuelan people.

http://panampost.com/enrique-standish/2014/01/27/venezuela-coming-meltdo...

http://www.economist.com/node/18233412

Mon, 10/13/2014 - 12:55 | 5324533 marathonman
marathonman's picture

I distinctly remember the warm embrace of Barack Obama and Hugo Chavez at a Latin America confab.  The two soul brothers.

Mon, 10/13/2014 - 13:06 | 5324599 TBT or not TBT
TBT or not TBT's picture

They have been having a lot of Heinleinian "bad luck" down there.  

Mon, 10/13/2014 - 08:56 | 5323490 Herodotus
Herodotus's picture

The tribe is getting ready to pull out of the United States.  At this point, they have pretty much milked it for all it was worth.  Time to move on to greener pastures.

Mon, 10/13/2014 - 09:04 | 5323516 Calmyourself
Calmyourself's picture

Where are these greener pastures you speak of, Mars?

Mon, 10/13/2014 - 10:11 | 5323727 dontgoforit
dontgoforit's picture

Not much out there 'greener' than a green-back, yet.

Mon, 10/13/2014 - 11:02 | 5323917 Arius
Arius's picture

asia looks like the next game in town .... the plan must have been going on for 20 years or more ...do you think all those jobs in china went by accident? getting tax benefits to export the jobs?

Mon, 10/13/2014 - 15:23 | 5325273 daveO
daveO's picture

No, not pull out. The Patriot Act, car leases, home borrower(deadbeat owners and bankers) bailouts and non discharge-able student loans are the key. They slowly increase the slavery.

Mon, 10/13/2014 - 09:14 | 5323554 pazmaker
pazmaker's picture

Funny how it seems to appear that Maduro is well fed!

Mon, 10/13/2014 - 08:46 | 5323461 B2u
B2u's picture

a  trillion here, a trillon there and pretty soon you're talking about real money....

Mon, 10/13/2014 - 08:53 | 5323481 U4 eee aaa
U4 eee aaa's picture

Except that we all know now that when you talk about a trillion, you are no longer talking about real money :)

Mon, 10/13/2014 - 08:52 | 5323476 U4 eee aaa
U4 eee aaa's picture

I don't think I'll be too old before they announce the first NY condo that sells for a trillion

Mon, 10/13/2014 - 10:35 | 5323780 TeamDepends
TeamDepends's picture

A trillion what? Bloombux?

Mon, 10/13/2014 - 10:12 | 5323730 TheReplacement
TheReplacement's picture

It's a funny thing.  Ask any athiest and they will tell you there is no God because they haven't seen one.  And yet, they believe in a trillion dollars even though they've never seen it and never will.

Mon, 10/13/2014 - 08:21 | 5323391 wallstreetapost...
wallstreetaposteriori's picture

Lets fucking hope so.... I am so sick of hearing the dems talk about how strong the economy is... had they ever sat in any community college econ 1 class they would know to keep their mouth shut...

Mon, 10/13/2014 - 08:47 | 5323459 economics9698
economics9698's picture

You must have been one of my students.

Mon, 10/13/2014 - 09:21 | 5323575 Zorrohodge
Zorrohodge's picture

There's lotos of PhD economists who see nothing but golden fields of growth from their ivory towers as well.

Mon, 10/13/2014 - 09:52 | 5323664 Spine01
Spine01's picture

Economists dont get a thorough enough education in hard sciences.

They never see basic control theory, nor non linear dynamic systems, nor non stationary systems, much less control theory of those systems.

Neither do they study ever fractal theory and mathematics of chaotic systems and obviously much less how to control them.

 Now imagine this hard science blind guy trying to control a highly non linear infinitely nested non stationary system with chaotic behavior and you have the federal reserve and most economic advisors.

Sad but true!

Mon, 10/13/2014 - 10:03 | 5323697 economics9698
economics9698's picture

Fuck off have you seen a economics blog?  Fucking differential equations out the ass.  Yes I do have a minor in math.  Physics, chemistry, zoology, fucking put me to sleep.  Chaos, all that shit.

 

Now imagine a geek scientist trying to make sense of 4 billion permutations.  Stupid to try and model economics.  We figured it out the hard way.

Mon, 10/13/2014 - 10:13 | 5323735 messymerry
messymerry's picture

Bernanke and Yellen were sitting in the economist's seat.  'Nuff said...

Mon, 10/13/2014 - 12:08 | 5324281 Midas
Midas's picture

Economics9698, could you point me to some of those blogs?  I am not being a smart-ass, I would like to see what they have.  Thanks.

Mon, 10/13/2014 - 13:27 | 5324671 economics9698
economics9698's picture

Any PhD modeling "published" rag will do.

Mon, 10/13/2014 - 13:27 | 5324672 economics9698
economics9698's picture

Any PhD modeling "published" rag will do.

Mon, 10/13/2014 - 09:25 | 5323593 GeorgeHayduke
GeorgeHayduke's picture

Yeah. Then the rethugs can get into office and tell us how incredible this same crappy economy is under their control. Meet the new boss, same as the old boss.

Mon, 10/13/2014 - 08:22 | 5323392 Cognitive Dissonance
Cognitive Dissonance's picture

Markets don't move, they are moved. Always was, always will be. It is only a matter of degree.

Mon, 10/13/2014 - 08:29 | 5323414 DeadFred
DeadFred's picture

The only important question is whether the Baron R and his bretheren are counted among the shorts or not. The Fed will act accordingly and we will know soon.

Mon, 10/13/2014 - 08:34 | 5323425 spastic_colon
spastic_colon's picture

no bonds today and a chance to really front run a POMO day.....nothing more

Mon, 10/13/2014 - 10:13 | 5323736 dontgoforit
dontgoforit's picture

Time for the 'NEW & IMPROVED QE 4!"

Mon, 10/13/2014 - 08:22 | 5323395 IridiumRebel
IridiumRebel's picture

Let it crash NOW.

Mon, 10/13/2014 - 08:28 | 5323413 a growing concern
a growing concern's picture

I plan to be all in long around S&P at 200.

Mon, 10/13/2014 - 08:27 | 5323408 max2205
max2205's picture

Cs

 

 

You dumb son of a bitch

 

70% dont care about the market... add 25% that dont have much after 3 40% bear markets and your back to people that have already called DC for help

Mon, 10/13/2014 - 08:36 | 5323437 TideFighter
TideFighter's picture

So mad Max, you are attacking Cog's witty sarcasm this morning using PFA ("Plucked-from-Air") percentages or by your own inadequate attempt at witty sarcasm? Either way, you look like a fool this morning.  

Mon, 10/13/2014 - 08:45 | 5323451 Philo Beddoe
Philo Beddoe's picture

Pretty sure he was calling out the author and not Cog. 

Mon, 10/13/2014 - 08:50 | 5323471 max2205
max2205's picture

Thx, correct

Mon, 10/13/2014 - 09:12 | 5323539 McCormick No. 9
McCormick No. 9's picture

PFA percentages? Do they come from somewhere else too?

Mon, 10/13/2014 - 08:28 | 5323411 agstacks
agstacks's picture

Will the markets, and the Obama recovery, come screaming back this morning, or will the Bush recession return with a vengnege?  We shall see..

Mon, 10/13/2014 - 09:12 | 5323544 bulldung
bulldung's picture

Sorry, at this point I think Obama anti middle class, anti small business policy owns this economy. No longer a " Bush recession".

Mon, 10/13/2014 - 11:05 | 5323939 NihilistZero
NihilistZero's picture

Obama Recovery/Bush Recession.  What's the fucking diffrence???  If you actually work for a living you've been getting fucked over since 2000.  Actually let me correct myself you've been getting fucked since the late 70's with a brief reprieve during the deflastionary mid-90's recession.

Mon, 10/13/2014 - 13:51 | 5324763 Esculent 69
Esculent 69's picture

NihilistZero-"Obama Recovery/Bush Recession.  What's the fucking diffrence???  If you actually work for a living you've been getting fucked over since 2000.  Actually let me correct myself you've been getting fucked since the late 70's with a brief reprieve during the deflastionary mid-90's recession."

If you work back far enough it would be we were broke from the Vietnam War and France wanted their gold back. Nixon took us off the Gold Standard which then pretty much started the shitshow that is happening now.

So my guess would be the Vietnam bankruptcy/Carter malaise/Reagan recovery/HW Bush continued recovery(not of his policies)/Clinton boom and bust recession/W Bush boom bust recession/depression/Obama depression/great depression/facism. 

Oh and who gave us the Vietnam War???

Yeah you know.

Oh and enjoy your posts.

Mon, 10/13/2014 - 18:54 | 5326420 NihilistZero
NihilistZero's picture

It's funny.  I was thinking of amending the post to reflect the real fucking over of the working class since the 60's as soon as I hit enter.

It's been all downhill since that bullet took our last real president 51 years ago.

If you work back far enough it would be we were broke from the Vietnam War and France wanted their gold back.

And ironically enough the US was in Vietnam due to France...

And thanks for the compliment :-)

Mon, 10/13/2014 - 08:31 | 5323419 Don Levit
Don Levit's picture

When the Fed buys stocks who gets the money when they are sold?
How can the Fed be a stockholder?
Don Levit

Mon, 10/13/2014 - 08:42 | 5323442 Dr. Engali
Dr. Engali's picture

Who says they have to sell? When they conjure currency out of thin air they can hold on indefinitely. If they control the stock, the flows are easier to manage.

Mon, 10/13/2014 - 08:40 | 5323443 SheepDog-One
SheepDog-One's picture

It's all about controlling interest.

Mon, 10/13/2014 - 09:24 | 5323584 GoldenTool
GoldenTool's picture

If you can't control it, destroy it so no one else can.  Means someone is going to get scuttled.

Question is which was created for this DC or Fed Res.  Looking more like the intent of the fed is to scuttle dc to me...

Next 20 years are gonna be scary.  Someone plans on 30-50 year time horizons, which is even scarrier.

Mon, 10/13/2014 - 09:11 | 5323542 LULZBank
LULZBank's picture

 

"This you own, end up owning you."

Mon, 10/13/2014 - 08:32 | 5323421 raki_d
raki_d's picture

But you still dont recommend buying stocks do you ? Lets see whoelse is left to fight the fed ?

Mon, 10/13/2014 - 08:32 | 5323422 barre-de-rire
barre-de-rire's picture

i started to unlearn blabla language, i only talk true speaking now, so those articles do not worth anything to me. sorry ZH, but...

i juuuuuuust don't give a fuuuuuuuuck

Mon, 10/13/2014 - 08:48 | 5323468 Seize Mars
Seize Mars's picture

Yeah!

Mon, 10/13/2014 - 09:24 | 5323474 LULZBank
LULZBank's picture

Thats the spirit...

 

P.S. Actually we should broadcast our sentiment, by posting something like "We dont give a fuck!" on threads that discuss any of the FED's moves.

If all of us can do it, that will send the message. Its like "Occupy Internet" movement.

Mon, 10/13/2014 - 08:32 | 5323424 wmbz
wmbz's picture

It does not matter what should happen, is trying to happen or needs to happen. The un-fed will not allow a "crash" to happen, no way, no how.

Mon, 10/13/2014 - 09:26 | 5323590 barre-de-rire
barre-de-rire's picture

we know, that why it is pointless to speak about this circus anylonger,

this is the story of a kid, pyroman, playing in dad's house with matches.
he messed up the house, daddy comes home, extinguish fire, rebuild burnt stuff...
then, instead of seizing matches from his son he just asks to neighbors to buy extinguishers too.

 

so now...whatever the look of the graphs,   i juuuuust don't give a fuuuuuuck

 

Mon, 10/13/2014 - 09:53 | 5323680 LULZBank
LULZBank's picture

Not even the one chart says it all kinda graphs?

Mon, 10/13/2014 - 08:33 | 5323426 Dr. Engali
Dr. Engali's picture

The fed won't let the market crash until it's in their best interest to do so. When they do pull the rug nobody will escaope. Until then BTFD is still alive, but only with fiat you are willing to lose.

Mon, 10/13/2014 - 08:37 | 5323438 SheepDog-One
SheepDog-One's picture

And maybe it's in their best interest right now, I don't assume to know what these lunatics have decided to do and no one else does either except them.

Mon, 10/13/2014 - 09:22 | 5323579 LULZBank
LULZBank's picture

We might be debating all the way into hyperinflation...

Mon, 10/13/2014 - 08:58 | 5323494 BeerMe
BeerMe's picture

They have the Obola excuse going for them and winter is coming.

Mon, 10/13/2014 - 08:34 | 5323428 Pumpkin
Pumpkin's picture

Put yourself in their shoes.   

I need a shower and an exorcism!

 

 

 

 

 

 

 

 

Mon, 10/13/2014 - 10:20 | 5323748 exi1ed0ne
exi1ed0ne's picture

Coffee in the nostrils you glorious bastard.  Thanks for the laugh (and burning sensation)!

Mon, 10/13/2014 - 08:40 | 5323431 SheepDog-One
SheepDog-One's picture

Maybe just what the banksters do want is a political shakeup right now. Fact is, no one knows what they feel like doing next, what chaos they want to stir up for diversions to save their phony-baloney selves.

Mon, 10/13/2014 - 09:02 | 5323508 Greenskeeper_Carl
Greenskeeper_Carl's picture

a political shakeup that results in the republican wing of the bankster party could keep the illusion alive for a little while longer. Most of us on here know there isnt a real difference between the party, but most of the sheeple dont, and this could keep belief in the system alive for a while longer. "the dems suck, this time im voting for the republicans. That'll show 'em"

Mon, 10/13/2014 - 08:41 | 5323446 skbull44
skbull44's picture

The late Michael Ruppert predicted the end-game some years ago. From the documentary, Collapse: 

"We live in an infinite growth paradigm which requires growth forever. It’s not that Bernie Madoff was a pyramid scheme...the whole economy is a pyramid scheme, the whole global economy cannot be sustained. It requires infinite growth, but infinite growth collides with finite energy.

The first law of thermodynamics says that energy can neither be created nor destroyed. It can only be transferred from one form to another...You have finite energy and you have a financial paradigm which demands infinite growth and we are at a point in human history where the infinite growth paradigm collides with something that is more powerful than money is.

The people who have run the planet to this point and are running the planet now are losing control. What I see is a new paradigm that is as cataclysmic as the asteroid event that killed almost all life on the planet and certainly the dinosaurs. We may be seven billion people by the time anyone sees this interview. All of those people exist, are on this planet only because of oil. That’s it. So it’s axiomatic that if you take the oil away, the population must go away also.

Certain things are inevitable right now. FDIC insolvency I will tell you is coming. Insolvency of the Federal Reserve is coming. The Federal Reserve can go bankrupt. T-Bill defaults. We’re looking at major bankruptcies, starvation, dislocation, all these things are already on the way. Everything is going to breakdown."

 

http://olduvai.ca

Mon, 10/13/2014 - 08:56 | 5323486 madcows
madcows's picture

oil doesn't account for all energy.  Coal and hydro make up a lot of our power.  oil just transport crap, and makes plastic shit.  Don't be surprised if the world changes to adapt.  Now, I say the bigger issue is war.  TPTB can't get along with each other.  They all have to rule everything.  War is coming, soon enough

Mon, 10/13/2014 - 09:00 | 5323504 U4 eee aaa
U4 eee aaa's picture

They can get along with each other. It is the rest of us they can't stand. That is why they send our kids to war and not theirs

Mon, 10/13/2014 - 09:48 | 5323668 forwardho
forwardho's picture

All our wars are about OIL.

If We go back to farming with steam tracktors with no Nat gas based fertilizer, Billions will perish.

 

Mon, 10/13/2014 - 08:47 | 5323448 TideFighter
TideFighter's picture

Obongo wants to have the Republicans take control of the senate. He can take the next two years off, play golf, hobnob with Beyonce, and blame every policy failure on the Republicans.  

Mon, 10/13/2014 - 08:50 | 5323449 SheepDog-One
SheepDog-One's picture

Seriously, if people are conditioned right now to believe the Fed would never dare let markets plunge and it's their main objective to just keep people all placated and cozy forever, conference calls over the weekend to buy some stacks and pump some markets as Charles 'reckons', you haven't been paying attention and I doubt you're set up to handle upcoming events very well.

Mon, 10/13/2014 - 09:27 | 5323598 bulldung
bulldung's picture

So you think a deflation/crash is eminent, Sheep?

Mon, 10/13/2014 - 08:45 | 5323452 LawsofPhysics
LawsofPhysics's picture

But the Fed is "apolitical"....

Mon, 10/13/2014 - 08:53 | 5323478 max2205
max2205's picture

No they are Asexual

Mon, 10/13/2014 - 09:05 | 5323521 Seize Mars
Seize Mars's picture

No they are abiotic

Mon, 10/13/2014 - 10:39 | 5323794 PoliticalRefuge...
PoliticalRefugeefromCalif.'s picture

I believe the word you are searching for is amoral..

Mon, 10/13/2014 - 10:52 | 5323851 Not My Real Name
Not My Real Name's picture

assholes

Mon, 10/13/2014 - 12:53 | 5324524 barre-de-rire
barre-de-rire's picture

fat fuck eventually

 

nah wait, makes 3 words... oh, nvm, just like the fed, i mean, the pro, when we love, we do not count after all

Mon, 10/13/2014 - 08:45 | 5323455 dirtyfiles
dirtyfiles's picture

that will only speed up the "dedollarization" around the world

Mon, 10/13/2014 - 08:53 | 5323479 SheepDog-One
SheepDog-One's picture

Yea I agree, after all it's not exactly 2008 anymore. For example in 2008 if anyone suggested that Russia and China would be doing big energy deals outside of the dollar, they would have been called insane.

Mon, 10/13/2014 - 08:45 | 5323456 Seize Mars
Seize Mars's picture

Hmm let me check my net exposure to financial markets:
Oh that's right it's ZERO.
Fuck the pretend world. Like barre-de-rire, I only speak "real" now.

Mon, 10/13/2014 - 08:50 | 5323470 TideFighter
TideFighter's picture

You are smart and I like your posts. But to believe your exposure is zero because you own no stawks is a bit sshort-sided, no?

 

Mon, 10/13/2014 - 09:27 | 5323538 Seize Mars
Seize Mars's picture

Well yeah you're kind of right. My financial life is somewhat complicated it's true. However i am proceeding with a de-paperization plan. I have no stawks but I do have other pieces of paper that I am in the process of vaporizing. So there. It just more fun to type "fuck yeah I don't give a fuuuuck" than put all kinds of asterisks and so on.

Further, I do believe as others have pointed out, that the inevitable "crackup boom" as Von Mises called it, will be devastating whether one owns paper assets or not. It's not that people are incapable of adapting- in fact that would be a lot of fun and could be liberating for a lot of people to find out how to trade and produce, instead of living in a fantasy world.

The problem is, in my mind, the governments reaction to all this. Kind of like how the body's reactions are often more problematic than the disease.

So, yeah, I'm terrified.

Bitchez, bitchez

Mon, 10/13/2014 - 09:40 | 5323636 forwardho
forwardho's picture

Re; It's not that people are incapable of adapting- in fact that would be a lot of fun and could be liberating for a lot of people to find out how to trade and produce.

While your optimism is applauded, have you looked closely at your fellow travelers?

If people are liberated by losing everything. its far more likely they will find out how to rape and pillage than trade and produce.

 

Mon, 10/13/2014 - 11:48 | 5324191 Seize Mars
Seize Mars's picture

forwardho

I don't know. In a State-free world, I think things would be fine.

I think the raping thieves will be your .gov at work.

Mon, 10/13/2014 - 09:02 | 5323497 SheepDog-One
SheepDog-One's picture

That's how I look at it, I couldn't give a shit less at this point about what a string of central banksters announce today. Fuck em. They can flap their lips but they're running on totally borrowed time, and all borrowed time has an expiration date, exponentially diminishing returns are everywhere today and they know it.

Mon, 10/13/2014 - 08:46 | 5323463 Bumbu Sauce
Bumbu Sauce's picture

Depends on polling.  But you bet your ass that they will try to help the Fabians as much as they can.

Mon, 10/13/2014 - 08:56 | 5323485 SheepDog-One
SheepDog-One's picture

The Fed can never actually raise rates anyway, that's just been a red herring all along.

Mon, 10/13/2014 - 09:57 | 5323466 LULZBank
LULZBank's picture

Swap paper for physical, milk the joint stock companies dry until it starts to fall apart under its own weight.

Why would they want to stop the gravy train?

It only ends when there are no suckers left.

Mon, 10/13/2014 - 08:49 | 5323469 Inthemix96
Inthemix96's picture

Let me be the first to cordially say to the Fed, the Congress, the Supreme Court, the British Parliament, the Prime Minister, the World Leader of the free Western World Mr O, the whole fucking lot of you cunts from top to bottom, and not forgetting the mother fucking cunts who started this shit 400 years ago, the Bank Of Fucking England.

And that piece of shit thats sits on the throne, along with your inbred family, please allow me the honour.

Go and fuck yourselves you cunts.

You are, going to get yours.

;-)

Mon, 10/13/2014 - 08:57 | 5323493 U4 eee aaa
U4 eee aaa's picture

Does this mean you're not buying lunch?

Mon, 10/13/2014 - 09:30 | 5323608 Government need...
Government needs you to pay taxes's picture

I'll buy . . . meet me in front of the gibbet for a tongue sandwich.

Mon, 10/13/2014 - 09:48 | 5323665 Inthemix96
Inthemix96's picture

:-)  Not a chance, and dont get me started on that fat cunt of London Mayor clown freak, Johnstones.

The fucker should be shot on sight.

;-)

Mon, 10/13/2014 - 10:28 | 5323767 LULZBank
LULZBank's picture

That would be going too easy on him.

He should be dropped in Afghanistan, butt naked, with a GoPRo camera mounted on the back of his head.

Mon, 10/13/2014 - 09:32 | 5323611 SmallerGovNow2
SmallerGovNow2's picture

I96, thanks for the great start to my day... Cheers...

Mon, 10/13/2014 - 08:52 | 5323480 shovelhead
shovelhead's picture

I quote:

"Whatever it takes."

Any sense of money as a 'real' marker has long gone at the Fed, so that's that.

They'll prop until they want the drop. Digital 1's & 0's can be unmade just as easily as made.

Who is going to hold them for an accounting?

Seriously?

Mon, 10/13/2014 - 08:54 | 5323483 orangegeek
orangegeek's picture

banks are sick of barry

markets are sick of barry

americans are sick of barry

 

let the the fucker sink

Mon, 10/13/2014 - 08:57 | 5323488 Lordflin
Lordflin's picture

I wrestled in college (also was captain of my saber team... Talk about two very different sports)... One of my favorite moves was to grab a man's left leg, pull his body in close to mine, and support his left leg on top of my right. Next you begin moving the man backward so that he is off balance and has to depend on you for support. At the appropriate moment you pull the supporting leg at the same time throwing your weight on top of his. If properly done your opponent will hit the ground hard and fast.

TPTB have been stalling for some while now, as the nation, and the world for that matter, have been kept in an off balance position. At the same time the economy is now entirely dependent on the whimsical decisions of a handful of men. At the same time the world has been moved to the brink of war, while disease pandemics have been allowed to build in the background. Who can doubt that at some time in the near future the support will be removed and the weight thrown forward?

You know, the resulting crash is not a predictable event. I once executed such a move to near perfection... took my opponent to the ground hard enough that he was momentarily stunned. Unfortunately I also ripped the muscles all the way down the right side of my rib cage.

Anyone who thinks that the coming events favor them is a lunatic. Sadly, such lunatics have existed in abundance since the dawn of time.

Mon, 10/13/2014 - 09:09 | 5323530 AdvancingTime
AdvancingTime's picture

Well said!

What I like about numbers is that when they are not jockeyed, jerked around, and falsified they tend to tell the truth. Looking down the road the numbers do not work. Sometimes the old guys like Allen Meltzer who have seen it all have the most perspective and the guts to speak up because they have less to lose.

Allen H Meltzer is viewed by many economist as America’s foremost expert in monetary policy, Meltzer is the author of the three-volume “A History of the Federal Reserve.” For over 25 years he was the chair of the Shadow Open Market Committee, a group that meets regularly to discuss the policy of the Federal Reserve. “We’re in the biggest mess we’ve been in since the 1930s,” he recently stated. “We’ve never had a more problematic future.” More on his thoughts in the article below.

http://brucewilds.blogspot.com/2013/07/it-will-all-end-badly.html

Mon, 10/13/2014 - 09:15 | 5323555 Seize Mars
Seize Mars's picture

Lordflin
I got an erection from your first paragraph. Is that wrong?

Mon, 10/13/2014 - 10:54 | 5323862 Bastiat
Bastiat's picture

That depends on how you feel about being gay.

Mon, 10/13/2014 - 11:48 | 5324194 Seize Mars
Seize Mars's picture

I am so gay.

Mon, 10/13/2014 - 08:56 | 5323489 U4 eee aaa
U4 eee aaa's picture

If the market crashes it is because the Fed wanted it to and has be strangling the market quietly behind the scenes. If the market crashes before the election, then they plan on regime change. I assume they would be targeting the senate since most people will blame the crash on the president.

If they crash it after the election then they plan on bringing in some draconian laws. These will be use to 'rescue' America

Mon, 10/13/2014 - 08:59 | 5323498 TideFighter
TideFighter's picture

If not already, at what point does Ebola take a front seat weight on stawks? How many infections located in how many locations would stop you from traveling by air, car, train, or other public trsnportation? I still agree that we do not have enough information regarding the transmission of Ebola, but would 100 cases bring travel to a halt? 1,000 cases keep people from going outside? 10,000 cases create areas of low/no food and panic? 

Mon, 10/13/2014 - 08:59 | 5323501 Brokenarrow
Brokenarrow's picture

They got away with killing the Kennedy's. They got away with the biggest financial crime in history. They will get away with this. I see Hillary is ready to run. Her daughter and husband need a bigger apt in NYC. The ten million one isnt enough. The Clintons are a shameful couple to show their faces again. My contempt and disappointment in the us has no depth.

 

 

Mon, 10/13/2014 - 09:28 | 5323604 Government need...
Government needs you to pay taxes's picture

Just say 'No', and prepare for your first encounter with the illegal home-invasion team.

Mon, 10/13/2014 - 10:56 | 5323878 Bastiat
Bastiat's picture

You left one out.

Mon, 10/13/2014 - 09:00 | 5323503 eddiebe
eddiebe's picture

White man speak with forked tongue.

Mon, 10/13/2014 - 09:08 | 5323509 forwardho
forwardho's picture

They have no other choice but to keep on propping up the Fantasy.

EBT, Unemployment, Social Sec, medicare/caid, Disability, Section 8, Veterans Benefits, All .gov employees, Massive bond swaps between insolvent Countrys Ad infinitum.

If they don't extend the pretend "reality" hundreds of millions will literally starve to death. Those who rely on .gov for their very lives do not have a plan B they can turn to. For now, the entire world is buying into the Idea that the production of real goods of value are no longer needed to keep the ball rolling. They have to buy into the fantasy since the reality is that the world does not have the available cheap energy to keep 7+ Billion people alive. For now, we can pretend we do.

Each day I wake to a "normal" day of this global insanity I give thanks.

 

Mon, 10/13/2014 - 09:14 | 5323549 didthatreallyhappen
didthatreallyhappen's picture

plan B for those fine folks would be to take it (literally) from the middle class areas around them.  no need as long as the EBT is replenished, but what happens when it is replenished and doesn't buy what they expect?

Mon, 10/13/2014 - 09:29 | 5323607 forwardho
forwardho's picture

They will take and do anything they feel they need to in order to survive.

A Mob, is a truly ugly thing to behold.

"Man alone of all the animals, kills for sport"

Mon, 10/13/2014 - 09:25 | 5323589 SmallerGovNow2
SmallerGovNow2's picture

Agreed.  But what is the long term cost of another year of can kicking?  Another trillion on the pile of debt?  I don't have the answers but I know the cost is not zero and also know that it cannot continue forever - else - just print money and give out directly to all citizens...

Mon, 10/13/2014 - 09:04 | 5323513 AdvancingTime
AdvancingTime's picture

 An unholy alliance of the Federal Reserve, the government, and the too big to fail has left those of us who question the validity of the recovery in a precarious position. For the big boys, its insider information and computer trading, this includes computing patterns that exploit where stops are placed, this improves their ability to wash the timid and weak bears out of their positions in this manipulated market.

Over the years we have witnessed the type of market reversal the big banks supported by the Fed can generate with a concerted effort to buy S&P 500 index futures at crucial support points. This has proved more than enough to turn the markets from red to green in the blink of an eye. The article below looks into why even if they are right bears should not be confident.

 http://brucewilds.blogspot.com/2014/04/bears-have-little-reason-for-conf...

Mon, 10/13/2014 - 09:04 | 5323519 Fix It Again Timmy
Fix It Again Timmy's picture

When you have everyone and everything in your hip pocket and going to jail is about as likely as being hit by a meterorite, why would you not pull levers and push buttons to get exactly what you want?  

Add to that 100's of years of trial and error to perfect your malfeasance and the result is exactly what we have today...I know, it sucks; the question is how long can it go on and what will it take to end it?...

 

Mon, 10/13/2014 - 09:07 | 5323527 geno-econ
geno-econ's picture

So Cheney was right afterall---deficits don't matter, there were weapons of mass destruction in Iraq, and we should declare war on anything that stands in our way including our bird hunting partners. If Fed does not continue QU and ZIRP, destroy them with a drone attack.

Mon, 10/13/2014 - 09:18 | 5323563 Bumbu Sauce
Bumbu Sauce's picture

damn near all the muppets in DC said there were WMD in Iraq, Including Clinton the Rapist and his "wife".  

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