This page has been archived and commenting is disabled.

"The Economic Outlook Keeps Getting Better And Better" Says Fed President Who Last Week Unveiled QE4

Tyler Durden's picture




 

If one didn't know better, the clinical assessment of everyone at the Fed, from such alleged former hawks as St. Louis Fed's James Bullard, whose bullshit last week unveiled the Dow-Dependent FedTM and was sufficient to get him the honor of the Friday chart of the day, to such permadoves as San Francisco Fed's John Williams, who also last week infamously halted the market crash and launched the "Moar QE" rally when he said that "More QE may be needed if economy falters" is that they are all schizophrenics, every last one of them, one day demanding an end to QE, the next day saying the liquidity firehose is not big enough.

Of course, one does know better, and what is going on here is that all the Fed's clueless presidents are simply all terrified of what will happen when the Fed finally does lose control, because that would be the end of their centrally-planned ivory tower (for more details see: USSR). As a result they will say whatever is necessary to urge the market ever higher even as the rally runs out of its 6 year long, artificial sugar-high, central bank liquidity.

Case in point, less than a week after Williams hinted at QE4 being just around the corner if the stock market rout doesn't stop, earlier today he released a speech that could easily have come from a biopolar, mentally-ill patient.

Some of the more chemically imbalanced excerpts:

I’ll be honest: These speeches get more and more enjoyable as time goes by because the economic outlook keeps getting better and better. Instead of gloom and doom with a scattering of hopeful notes, things are now pretty upbeat, with only a couple of standard economist’s caveats thrown in.

 

To wit: After a dip in the first quarter, real GDP bounced back sharply in the second quarter. All the data point toward momentum having been sustained entering the second half of the year, with solid gains in consumer and business spending. Taking all the pieces of information together, I expect real GDP to grow at about a 3% annual rate over the second half of this year and next (Liu 2014).

For those buying ES, the good news abounds. For everyone else, there is hope:

Why hasn’t wage growth picked up more as the economy’s improved? A recent study by Daly and Hobijn (2014) at the San Francisco Fed found that there was something of a floor on wages during the recession and recovery. Employers are generally reluctant to cut wages outright, so as the recovery has unfolded, wages have in many cases stayed stagnant, making up for the losses they didn’t—or couldn’t—incur during the depths of the recession. That is certainly a contributing factor. But, as unemployment continues its move down, we should see those effects wane and wages gradually move up.

Any minute now.

I’ve said it often enough that I should probably have a T-shirt, but let me reiterate: The decision to raise rates will be data-driven, not date-driven. Based on my current forecast for economic growth, employment, and inflation, it would be appropriate to start raising the fed funds rate sometime in the middle of 2015. If the economy or inflation heat up faster than I expect, we should lift rates sooner. If progress on these fronts slows, we should wait longer.

What he really meant is Dow-driven. It's an easy mistake to make.

And while I think the Bureau of Labor Statistics and Bureau of Economic Analysis do fantastic jobs of collecting and distilling inflation data, I also look at—and point critics to—more straightforward assessments like the Billion Prices Project (2014) from the Massachusetts Institute of Technology. This tool scrapes the Internet for prices, giving a daily reading of, well, billions of prices of myriad products. It lacks the complicated adjustments and methods that characterize the government agencies’ models. Nonetheless, it does track pretty closely with the official numbers. What’s more, it gives an independent assessment of consumer prices that is helpful for those who may distrust official federal data. While the BPP’s numbers run a tad higher on average than the official indices, it shows that price inflation remains low and shows no sign of taking off.

That's odd: we thought only tinfoil fringe site cash the BLS' data fudging.

And since no Fed speech would be complete without the speark confirming they have no idea at all how to exit a $4.5 trillion balance sheet, here it is again:

First, we’ll pay interest on reserves held at the Fed. That is, when banks park their money with the Fed, we pay them interest on that money. By increasing the rate we pay to banks for the money they hold with us, we give them the incentive to keep their reserves with us, rather than having funds flow into the market and overheat the economy.

Second, we have a new tool, the reverse repo facility, which folds nonbank financial institutions into that process as well. They’ll have the ability to keep their cash with us in exchange for temporarily holding our assets, with a return that’s below that on excess bank reserves.

These and other tools will help us keep good control as we raise the target range for the federal funds rate. And, like all tools, we’ll use them appropriately. The reverse repos in particular will be carefully managed, and we’ll eventually eliminate their use when they are no longer needed.

It's all very technical though, so just take his word.

Instead of going further into more extensive technical explanations, I’ll note that this is how policy is best managed: having a well-thought-through plan. Once you have the plan, it’s just a matter of executing it. I have every faith that we’ve looked at this from every angle and that we can manage the transition over time.

Indeed, just trust the Fed. After all, have they ever been wrong before.

So the message is that things are getting better. We’re on track to end our asset purchases and we’re preparing for the time the economy can sustain an end to accommodation. We’ll want to see improvements in unemployment, wages, and inflation, and we’ll be driven by the data. But all in all, it’s good news—with just a few of those requisite caveats thrown in.

For those who don't know whether to laugh or cry, how about both? The chart below should help:

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 10/20/2014 - 14:07 | 5355801 10mm
10mm's picture

Bipolar. 

Mon, 10/20/2014 - 14:12 | 5355825 Gen.Ackbar
Gen.Ackbar's picture

Its a Trap!

Mon, 10/20/2014 - 14:14 | 5355844 Manthong
Manthong's picture

“All the data point toward momentum having been sustained entering the second half of the year, with solid gains in consumer and business spending.”

 

I guess the bozo does not understand his own f’n data.

http://research.stlouisfed.org/fred2/series/M2V/

Mon, 10/20/2014 - 14:20 | 5355846 nope-1004
nope-1004's picture

White collar criminal lying POS.

 

 

Oh... what's that?  We just happen to have Dicky Fischer on the phone?  Dick go ahead and spread your monetary propaganda this morning.

Mon, 10/20/2014 - 14:26 | 5355877 hedgeless_horseman
hedgeless_horseman's picture

 

 

...less than a week after Williams hinted at QE4 being just around the corner if the stock market rout doesn't stop, earlier today he released a speech that could easily have come from a biopolar, mentally-ill patient.

Talking the market up, or down.  The sad thing is that it works so well.  More and more people are blind to obvious contradictions, lies, and horseshit.

Mon, 10/20/2014 - 14:27 | 5355901 Save_America1st
Save_America1st's picture

Sociopaths tell lots of lies...

just sayin'...

Mon, 10/20/2014 - 14:50 | 5355997 NotApplicable
NotApplicable's picture

Just the fact that the "Milken Institute" exists blows my mind.

Mon, 10/20/2014 - 14:55 | 5356018 TeethVillage88s
TeethVillage88s's picture

Psst, hey Buddy. QE is a Psyop. Pass it on.

Mon, 10/20/2014 - 15:11 | 5356094 NoDebt
NoDebt's picture

Causality, friends.  Causality.

It's getting better BECAUSE he announced QE4 last week.

Mon, 10/20/2014 - 15:36 | 5356212 Honey Badger
Honey Badger's picture

"I'll be honest..."  Too funny!

Mon, 10/20/2014 - 15:41 | 5356238 The9thDoctor
The9thDoctor's picture

Gas prices are down; silver and gold are down; despite the DOW's little dip in the road, stawks are at all time highs; real estate is up and up and good for boomer's selling, I would say with all of this central manipulation things look so great on the SURFACE.

Fundamentally things are... ha, oh yeah fundamentals are so '70s.

Mon, 10/20/2014 - 19:16 | 5357052 BringOnTheAsteroid
BringOnTheAsteroid's picture

He's got that same bugeyed look of euphoria of an evangelical christian. 

Tue, 10/21/2014 - 12:44 | 5359744 WTFRLY
WTFRLY's picture

US Citizen, Press TV reporter dead in car crash near Syria 2 days after Turkey calls her a spy

http://wtfrly.com/2014/10/20/us-citizen-press-tv-reporter-dead-in-car-cr...

Mon, 10/20/2014 - 14:25 | 5355897 ebworthen
ebworthen's picture

He's getting instructions from the headset via the command module for the Grays controlling him.

Mon, 10/20/2014 - 14:49 | 5355995 trulz4lulz
trulz4lulz's picture

Can't be, he just said, "Better and Better". To me, thats pretty much as better as it gets.

Mon, 10/20/2014 - 17:33 | 5356698 WOD
WOD's picture

au contraire mon frere.. betterer and betterer would be more betterer!

Mon, 10/20/2014 - 19:18 | 5357066 BringOnTheAsteroid
BringOnTheAsteroid's picture

I'm confused. If it's getting better and better why did he suggest QE4 may be needed.

If he isn't insane he sure as hell looks insane.

Mon, 10/20/2014 - 14:15 | 5355851 F0ster
F0ster's picture

Its just a confidence game

Mon, 10/20/2014 - 14:59 | 5356050 TeethVillage88s
TeethVillage88s's picture

Psst, hey Buddy. QE is a Psyop. Pass it on.

I mean totally a Psyop. Run by the NSA or CIA.

I heard the CIA, NSA, DCI, DNI, DIA, FBI, J Edgar Hoover, William Colby, Allen Dulles, Wild Bill Donovan all Joined with the Owners of the FED to secretly control the Whole World.

But keep it a little big under your hat. But pass it on. They have always just created money out of thin air when ever they wanted it. Steal gold, counterfeit currency, lander black market drug money, whatever.

Mon, 10/20/2014 - 15:45 | 5356253 The9thDoctor
The9thDoctor's picture

@teethvillage88s

That joke would have been funny in 2009. Get with the times.

Mon, 10/20/2014 - 14:15 | 5355853 jcpicks
jcpicks's picture

Winter is right around the corner...

One little snowstorm may change your entire 'outlook'.

Mon, 10/20/2014 - 14:20 | 5355876 just-my-opinion
just-my-opinion's picture

And we didn't know this was gonna happen?  There is only one reason to do this.....The markets are broken....and they know it!

Mon, 10/20/2014 - 14:29 | 5355916 stinkhammer
stinkhammer's picture

rope, check  lamppost, check

Mon, 10/20/2014 - 14:48 | 5355991 Colonel Klink
Colonel Klink's picture

I HATE being bipolar, it's AWESOME!

Mon, 10/20/2014 - 15:29 | 5356186 Bunga Bunga
Bunga Bunga's picture

Bistable.

Mon, 10/20/2014 - 16:47 | 5356537 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

Birecovery

Mon, 10/20/2014 - 17:26 | 5356681 Colonel Klink
Colonel Klink's picture

You forgot the best one biflation.

Tue, 10/21/2014 - 02:44 | 5358316 CASTBOUND
CASTBOUND's picture

my neighbor's half-sister makes $63 /hour on the internet . She has been out of work for 10 months but last month her pay was $16551 just working on the internet for a few hours. More Info... www.job-reports.com

Mon, 10/20/2014 - 14:08 | 5355802 ShrNfr
ShrNfr's picture

Any more improvement in the economy and the median earnings will drop to $25,000 a year. Just because this blowhard siphons off big bucks does not mean the serfs are getting any. Quite the reverse.

Mon, 10/20/2014 - 14:19 | 5355874 DonutBoy
DonutBoy's picture

Lighten up, and buy a Chevy Volt and a new house.

Mon, 10/20/2014 - 14:07 | 5355803 angel_of_joy
angel_of_joy's picture

The FED must have some sort of negative selection process for their members. The dumber, the better...

Mon, 10/20/2014 - 14:18 | 5355865 DullKnife
DullKnife's picture

Things are getting better for THEM (and their buddies). Just not for the "little people.

Things would get better for me too, if I could also print unlimited piles of money.

Then I too, would be optimistic (and rich).

But alas, I am not one of THEM.

Rather am one of US, the "little people".

 

Mon, 10/20/2014 - 15:40 | 5356232 angel_of_joy
angel_of_joy's picture

Maybe. But most of them would look smarter if they would just shut up...

Mon, 10/20/2014 - 14:08 | 5355806 Bioscale
Bioscale's picture

What difference does it make?

Mon, 10/20/2014 - 14:10 | 5355819 Bill of Rights
Bill of Rights's picture

Joseph Goebbels I presume.

Mon, 10/20/2014 - 14:30 | 5355922 disabledvet
disabledvet's picture

Yeah, no shit. "Mass death is really a good thing!  Its great news that you voted for your own annihilation! Now ponder a world where Wall Street is running everything into the ground..and then call it great news! What's the problem!"

Mon, 10/20/2014 - 14:11 | 5355823 espirit
espirit's picture

Williams has latent stand-up comic tendencies.

Mon, 10/20/2014 - 14:11 | 5355826 Jack Sheet
Jack Sheet's picture

Open up the Bic Mac package and there is a diarrhea- burger inside.

Mon, 10/20/2014 - 14:13 | 5355829 madcows
madcows's picture

Bulltard Baffles with Bullshit.  He's got more mood swings than a pregnant bipolar pubescent teenage girl.

Mon, 10/20/2014 - 14:12 | 5355830 sodbuster
sodbuster's picture

Asshole.

 

Mon, 10/20/2014 - 14:14 | 5355835 Uber Vandal
Uber Vandal's picture

Usually I find myself saying "things keep getting better and better" as it is raining shit on me, and then something worse happens.

Mon, 10/20/2014 - 14:14 | 5355836 CrimsonAvenger
CrimsonAvenger's picture

Anytime someone starts a sentence with "I'll be honest," understand that the rest of the sentence is an absolute lie.

Mon, 10/20/2014 - 17:39 | 5356710 WOD
WOD's picture

Just like anyone who says.. "I believe in the Second Amendment, but.."

Mon, 10/20/2014 - 14:14 | 5355837 nakki
nakki's picture

"Take this quarter, go downtown, and have a rat gnaw that thing off your face! Good day to you, madam." I know its a microphone but that's all I could think of when I saw that picture.

Mon, 10/20/2014 - 14:22 | 5355886 sodbuster
sodbuster's picture

HaHa- first thing I thought was-"Whats that piece of shit on the ass-end of that wart?"

Mon, 10/20/2014 - 14:13 | 5355838 limacon
limacon's picture

"Passing floors 13 , 12, 11 and all is well !"

Mon, 10/20/2014 - 14:14 | 5355842 mademesmile
mademesmile's picture

He's right you know.  For the .01 percent, which is all the FED cares about, it's never been better. They just can't grasp why other Americans aren't buying assets.

Asshats.

Mon, 10/20/2014 - 14:15 | 5355845 astoriajoe
astoriajoe's picture

I wonder what metric they use to quantify bullshit, as their compensation is obviously tied to it.

Mon, 10/20/2014 - 14:18 | 5355861 nope-1004
nope-1004's picture

+1

Mon, 10/20/2014 - 14:18 | 5355848 Colonel Klink
Colonel Klink's picture

I guess I'll have to spend even less now.  Punish the Fed via the eCONomy!  Vote with your wallet, live a simple life until the Fed dies.  It's pretty much the only power you have any longer.

Mon, 10/20/2014 - 14:15 | 5355854 madcows
madcows's picture

10 year at 1.91 last week.  Now at 2.2.  nothing like a Bulltard comment to swing the market 15%.

Mon, 10/20/2014 - 14:17 | 5355863 Kaiser Sousa
Kaiser Sousa's picture

KILL THEM ALL...

Mon, 10/20/2014 - 14:19 | 5355867 madcows
madcows's picture

i'm starting to figure this out.  just wait for a Fed-Tard to make some public statement, and move your assets accordingly.  I don't know why it took me so long to figure that out. 

Mon, 10/20/2014 - 14:27 | 5355902 nope-1004
nope-1004's picture

Define "accordingly".  One slip up and all your assets are belong to Fed.

 

Mon, 10/20/2014 - 14:21 | 5355873 besnook
besnook's picture

if we can just get a few million more people to stop working we will be at full employment. let the good times roll!

Mon, 10/20/2014 - 14:20 | 5355878 yogibear
yogibear's picture

F-in BSer. There was a time when the Federal Reserve had some respect and credibility.

These current people are a joke. It's a circus.

If these people are managing the economy you can imagine how bad it really is. 

They have Hilsenrath as their joker. 

 

Mon, 10/20/2014 - 14:22 | 5355881 i_call_you_my_base
i_call_you_my_base's picture

The jawbonings are getting closer together.

Mon, 10/20/2014 - 14:23 | 5355885 LoneStarHog
LoneStarHog's picture

The Cliff Notes one word summary for those on-da-go:  PUKE!!!!!

Mon, 10/20/2014 - 14:22 | 5355887 fatlibertarian
fatlibertarian's picture

Zombie banks are cool.

Mon, 10/20/2014 - 14:48 | 5355986 TeethVillage88s
TeethVillage88s's picture

When the bankers heard we formed a Union, they didn't hear it the way Main Street heard it.

Union to them is privatizing the Profits and Socializing the Losses.

Union Army... just before the Robber Barons made all that money in Railroads, Steel, and Oil.

Together we stand... all part of the System that is linked Financially, so that we all fall together in a collapse.

Federal Reserve... Federal in that the US Government would be Rich with Fiat which It Will Direct To Wars, To Commodities when National Stock Piles are Needed, and toward Big Contracts for the Banks.

Mon, 10/20/2014 - 14:24 | 5355891 Sam Spade
Sam Spade's picture

"But all in all, it’s good news—with just a few of those requisite caveats thrown in."

Would it be too much to ask just what those caveats might be?

Mon, 10/20/2014 - 14:25 | 5355896 saveUSsavers
saveUSsavers's picture

NOT A HELL BIG ENOUGH for these bastard manipulating arsewholes!

Mon, 10/20/2014 - 14:27 | 5355903 ebworthen
ebworthen's picture

Yeah, and Chipotle at $649/share is sustainable.

Mon, 10/20/2014 - 14:29 | 5355913 agstacks
agstacks's picture

"So the message is that things are getting better."

Keep Calm and Slave On ™


Mon, 10/20/2014 - 14:32 | 5355935 Frank N. Beans
Frank N. Beans's picture

is this Earth, or bizarro Earth?

Mon, 10/20/2014 - 15:36 | 5356210 SheepDog-One
SheepDog-One's picture

I've been wondering for 6 years or so if earth maybe went thru some kind of weird space wormhole and now we're in 'Bizarro Universe'.

Mon, 10/20/2014 - 14:35 | 5355947 Keltner Channel Surf
Keltner Channel Surf's picture

"data-driven" rate increases translated:  behind the curve by 4-6 months, unconcerned if loaves of bread sell for $8.00, or Kashi bars shrink to 2.4 centimetrs in length.

Mon, 10/20/2014 - 14:43 | 5355974 ElvisDog
ElvisDog's picture

I disagree with the premise of this article. The Fed governers and the bankers who control them know exactly what they are going to do and when. All this flip-flopping BS is purposely intended to sow confusion, the "fog of war" and all that. Simply don't listen to what they say. Watch what they do, namely will they stop QE after this month (they will), and will  they start raising interest rates early next year (they will).

Mon, 10/20/2014 - 14:55 | 5356019 geekz_rule
geekz_rule's picture

exactly

 

expand expand expand.. BANG contract. thats the history of thse bastards. this si not ignorance. this is cunning.

Mon, 10/20/2014 - 14:46 | 5355981 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

I look forward to this quote from Dullard several years hence....

 

"I actually did vote for QE4 before I voted against it."

Mon, 10/20/2014 - 14:48 | 5355988 sbenard
sbenard's picture

That guy should be in an insane asylum. No sane person could possibly be that delisional!

Mon, 10/20/2014 - 14:47 | 5355989 bbq on whitehou...
bbq on whitehouse lawn's picture

This is what always happens just before the lights go out, and they realise they are trapped in a tomb.

Mon, 10/20/2014 - 15:06 | 5356077 gatorengineer
gatorengineer's picture

All trying to keep the blue team in power.  Give the market a Quaylelude and then give the American People a Quaylelude.

Mon, 10/20/2014 - 15:34 | 5356197 SheepDog-One
SheepDog-One's picture

Schizo market.

Mon, 10/20/2014 - 15:34 | 5356205 Goldbugger
Goldbugger's picture

LIES> MANIPULATION> and BULLSHIT> Nothing new under the sun. Saying and doing the same things over and over and over and expecting different results. LMB - INSANITY.

Mon, 10/20/2014 - 15:37 | 5356211 Bemused Observer
Bemused Observer's picture

My God, I hate to say it but I wish these people would just drop dead already. Preferably right in the middle of speeches like this.

Mon, 10/20/2014 - 15:43 | 5356248 CHX
CHX's picture

Hey, look over there, even the mushrooms grow way into the sky. WOW...   

Mon, 10/20/2014 - 15:45 | 5356264 Ariadne
Ariadne's picture

Heeyyy! You trusted us! This is all your fault!

Mon, 10/20/2014 - 16:39 | 5356512 walküre
walküre's picture

Great to hear that the US economy is totally immune and isolated from an ebola ridden, ISIS trodden, debt to default ladden global economy.

That family in Greece is probably listenting to the speeches of these Fed guys to keep themselves warm. You know, when you laugh hysterically, you don't feel the cold as much.

Mon, 10/20/2014 - 16:48 | 5356542 homebody
homebody's picture

Bagdad Bob

Mon, 10/20/2014 - 17:25 | 5356676 FreeNewEnergy
FreeNewEnergy's picture

But, as unemployment continues its move down, we should see those effects wane and wages gradually move up.

UNPOSSIBEL! I am only on my firstest bloody mary (of many more, prepping for MNF and a large pizza followed by an even larger shite), but I know that wages cannot actually rise unless one is employed in the private sector, such as police, firemen, teachers (I hated teachers when I was a kid, and now I know why), paper-pushers of any and all varieties and politicians and their slaves, er, liars, er, staffs, all of which are PAID FOR by people in the private sector, who have not seen wage increases since ABBA was all the rage (as if it ever was).

 

So, the point of Mr. Fedspeak was that all of you tax-slaves in the pub-lick section are getting your COLAs and the rest of the people will be paying for it with all the extra monay they're not making. This should work out just swell, eventually, like, by the third quarter of next century, when al of us just spit up dirt because food is not good for us anymore now that we've evolved into more advanced forms of life.

Yes, I tell ya, with all due uncertainty, things are getting better all the time. da-da-da, better better better. Thanks to the Beatles, whe know, I used to be mad at my skool, teachers who taut me weren't kool - no I can't complain - holding me down, turning me round, filling me up with their rules.

But whe likee that now. Suck long time.

Mon, 10/20/2014 - 20:15 | 5357347 Chuck Knoblauch
Chuck Knoblauch's picture

We know their names and where they live.

Yet they keep miling?

Mon, 10/20/2014 - 20:46 | 5357473 Irving Phelps
Irving Phelps's picture

Bullard and Obama must blow each other. They are both fucking idiots who don't give a rats ass about the truth.

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