This page has been archived and commenting is disabled.

"The Fed Must Stop Pandering To Markets" Or Face The Unintended Consequences

Tyler Durden's picture




 

The Fed needs to "let the market cry itself to sleep," warns Triple T Consulting’s Sean Keane, and can't "keep pandering to each selloff because traders fear that the lights are going to be dimmed."

 

 

As Bloomberg reports, Keane adds that

Each Fed response to "such market episodes" will make the eventual exit harder and more painful; it should be hoped that Fed "sticks to its plans" and ends QE

 

Few now believe Fed’s asset purchases are boosting the economy;

 

Some argue the Fed is "accentuating a distortion in the markets" that's already having "unwelcome and unintended consequences."

Likely that FOMC statement will offer some "palliative to the markets by making clear that ‘considerable’ period language remains"

However, be careful what you wish for...

If Fed were to delay QE's end because of recent volatility, the market would "probably grow alarmed" that the central bank was more worried about global growth than had previously been assumed

 

Fed’s messaging would become subject to another round of market criticism and its eventual exit would become even "more difficult to execute."

*  *  *

Two words - boxed in!

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 10/27/2014 - 14:22 | 5383114 InjectTheVenom
InjectTheVenom's picture

END. THE . FED.

Mon, 10/27/2014 - 14:41 | 5383203 Bloppy
Bloppy's picture

Fedheads will NEVER listen. Public input is beneath them.

 

Elsewhere- SA paper blames American "rednecks" for Ebola response:

http://tinyurl.com/o8ngfkg

Mon, 10/27/2014 - 15:53 | 5383514 sun tzu
sun tzu's picture

Obviously Cletus in the trailer park in Georgia is responsible for ebola. 

Mon, 10/27/2014 - 14:22 | 5383115 LawsofPhysics
LawsofPhysics's picture

"Markets"....

 

LMFAO....

Mon, 10/27/2014 - 14:22 | 5383117 AccreditedEYE
AccreditedEYE's picture

Ya, ya, whatever. Prove this is valid. I don't see a lot of fear + loathing out there.

Mon, 10/27/2014 - 14:24 | 5383126 Ivanovich
Ivanovich's picture

I just sent this post to Bullard and his entire staff.  Always funny to send these on when they make themselves look like goats.

Mon, 10/27/2014 - 14:30 | 5383131 buzzsaw99
buzzsaw99's picture

what bulltard did makes perfect sense. the fed wants trading volume, churn, whatever. as for the end of qe it is meaningless because the fed has friends all over zee place and when that fails out comes the untaper. as for rate hikes, don't make me laugh.

Mon, 10/27/2014 - 14:34 | 5383178 Bell's 2 hearted
Bell's 2 hearted's picture

setting aside my point there ain't enough "stuff" for another QE (for now)

 

i fully expect yields on the long end to drop when QE over ... if i'm right, what will Yellen's excuse be for further QE (assuming possible)? ... rates too high? haha 

 

i just don't see them coming out and saying we're doing it for the stock market ... the lower 70% who have very little if any equities ... won't be too happy with naked bailout of the "haves"

Mon, 10/27/2014 - 14:26 | 5383134 Dr. Engali
Dr. Engali's picture

The problem for traders is that they are right. If the fed doesn't continue it's lights out..... period. People have an itchy trigger finger and at the first sign of trouble they are bailing.

Mon, 10/27/2014 - 15:16 | 5383376 Wait What
Wait What's picture

the Fed's trying to execute a Triple Lindy and it's not as easy as it looks in the movies:

http://www.youtube.com/watch?v=rDMMYT3vkTk

"is that hard?"

"it's impossible"

Mon, 10/27/2014 - 14:27 | 5383149 NoDebt
NoDebt's picture

Arrrrr!  Steady as she goes, matey!  It be too late to turn back now.  It's either a one-way-trip to Davey Jones locker or carry on until we fall off the edge of the map!

So.... Ye be men or ye be mice?  Good.  Now get those sail aloft!

Mon, 10/27/2014 - 14:27 | 5383151 Bell's 2 hearted
Bell's 2 hearted's picture

something about barn gate ... and horses already in mexico ... dead and buried

Mon, 10/27/2014 - 14:28 | 5383156 Hohum
Hohum's picture

But, but, the stock market is all we've got!  (So sayeth the Fed in private.)

Mon, 10/27/2014 - 14:37 | 5383187 Bell's 2 hearted
Bell's 2 hearted's picture

no doubt ... but they're near the Fail/Safe point re bond market (if they don't stop now ... they'll have to buy it all ... good bye good collateral ... can i interest you in some JC Penny bonds for collateral??)

Mon, 10/27/2014 - 14:29 | 5383157 aliki
aliki's picture

oil green on the day - gartman going to be on CNBC making the case for $10 a barrell oil

Mon, 10/27/2014 - 14:34 | 5383182 disabledvet
disabledvet's picture

Long only worked great in 2008.

Forget the Fed...why do we even have Wall Street?

We already have 8 million barrels of oil production a day soon heading to twelve. Where is the liquidity shortage?

Clearly an Ebola outbreak is deflationary...

Mon, 10/27/2014 - 14:45 | 5383215 Hohum
Hohum's picture

Not heading to 12 unless oil price rises a lot.  But I am sure you can provide a link showing the awesome positive cash flow of shale oil plays.

Mon, 10/27/2014 - 15:55 | 5383515 LawsofPhysics
LawsofPhysics's picture

"We already have 8 million barrels of oil production a day soon heading to twelve. Where is the liquidity shortage?"---  You do realize that the U.S. still consumes close to 19 million barrels per day.  Last time I checked even 12 was still less than 19.

Mon, 10/27/2014 - 14:39 | 5383180 RaceToTheBottom
RaceToTheBottom's picture

Live by the printer, die by the Gold bar to the head

Mon, 10/27/2014 - 14:44 | 5383208 Kaiser Sousa
Kaiser Sousa's picture

just heard Matt Miller of bloomberg compare the "fear" surrounding the ongoing Ebola situation to the fear "gold bugs" reference to the collapse of the dollar as reason to encourage others to accumulate real money....

says its completely irrational and just propaganda to drum of those pushing Gold funds and such...

Ebola + Gold accumulation = Irrational Fear and Con.

i kid u not.

Mon, 10/27/2014 - 14:48 | 5383229 Quinvarius
Quinvarius's picture

The Fed hoped the economy would catch up to their market manipulation.  It won't.  And the banking rule changes made will always keep the economy second fiddle to leveraged trading.  It is going to suck when the bankers all go short balls out using free Fed margin money.  And that is exactly what is going to happen when the pump ends.

Mon, 10/27/2014 - 15:58 | 5383526 sun tzu
sun tzu's picture

All they money they are printing is going into the stock and comodities markets, not capital investments. Cost of living is artificially inflated, which means the 99% have less disposable income after paying for inflated food, energy, and housing prices. 

I'd like to call them stupid, but they know what they are doing. They are serving their Wall Street masters. That evil little troll Yellen then pretends to be worried about income inequality. 

Mon, 10/27/2014 - 14:52 | 5383253 Clesthenes
Clesthenes's picture

“unwelcome and unintended consequences.”

So, what makes you think a slaughter of real estate values (with rising interest rates), current real unemployment over 20%, real inflation 8%-10% et cetera are “unintended consequences”?

Every financial crash is intended.  For example, French monopolists and money lenders intentionally withheld food from markets to cause as much panic, and blood in the streets, as possible.  Owing to this withholding, French peasants (farmers), shop keepers and those with a little foresight also withheld or with drew supplies from the market.  Accordingly, monopolists and bankers blamed peasants, shopkeepers and private hoarders for the crisis.  They (peasants et cetera) had their supplies seized and were arrested and paraded thru Revolutionary Tribunals before being carted away to the guillotine.

We saw the same during the Judeo-Bolshevik slaughter in Russia: those who tried to protect themselves by withholding supplies had their supplies seized, were arrested and paraded thru Revolutionary Tribunals… before receiving a shot in the nape of the neck.

Why should we be concerned about these facts of history?  It’s because the American Department of Homeland Security is modeled after French Committees of Terror (1792-4), the Judeo-Bolshevik Cheka (and its successors), and the Nazi Schutzstaffel (SS); all of which were designed to protect criminal and useful-idiot classes from their victims; that is, to suppress those who ask too many questions, or show a trace of intelligence, sense of justice, or independence.

So, why do you think those criminal and useful-idiot classes established the DHS… and what do you think the Federal Reserve, FBI, Congress and CIA are trying to provoke?

When shortages appear, who do you think DHS jackboots will first visit… those who have prepared for the crisis… so-called preppers?  Of course they will be first.  Why should a copy of French Committees of Terror be any different from the original?

I would say they are well prepared for a slave uprising driven by blind ignorance.

We can’t stop such consequences… but we can take measures to save those who know better.

But there’s a major problem: Americans have the power to redress any grievance that could be named – and thus, exercise sovereignty; but they REFUSE to use that power. There are three main reasons for this failure: one is that they have no knowledge of such power; the second, they’ve been herded into a kind of impotent stupor by medication and indoctrination; the third, that they aid, benefit or were complicit in such evil (full article).

Mon, 10/27/2014 - 15:00 | 5383295 DOGGONE
Mon, 10/27/2014 - 15:02 | 5383298 BouncyTheWonderbunni
BouncyTheWonderbunni's picture

Don't worry we still have a V.A.T. tax to enact and all our problems will be solved...

 

 

Can I get a amen.

Mon, 10/27/2014 - 15:04 | 5383324 bbq on whitehou...
bbq on whitehouse lawn's picture

Pandering? The market is flying on wings of wax. Without the shade of the Feds cloud will the burning truth of the sunshine not melt its wings and lead to an unrecoverable plummet?

You cant have just a little truth or a little reality, it is or is not. Like the hope and prayer holding up this mobsterish market. Its a fake, and lie. You cant just say heres reality and not expect this thing to up and die.

Pandering is not what the Fed has been doing, this market is to far from anything remotely reality like. A real market doesnt price stupic this high. A real market demands 14% dividends, and 7% on government debt. S&P would be under 500, is that pandering at these prices. Those machines can price reality faster then you can turn them off. At these prices the Fed is the market.

Mon, 10/27/2014 - 15:55 | 5383522 SheepDog-One
SheepDog-One's picture

FED shit hawks, flying on wings of shit!

Mon, 10/27/2014 - 15:25 | 5383412 toros
toros's picture

Everybody likes QE

Mon, 10/27/2014 - 18:50 | 5384089 bid the soldier...
bid the soldiers shoot's picture

everybody likes Sarah Lee.

but at least you can eat Sarah Lee.

Mon, 10/27/2014 - 15:54 | 5383517 SheepDog-One
SheepDog-One's picture

'Unintended' consequences? That's quite an assumption....those being too smart by half will get bitten hardest.

Mon, 10/27/2014 - 16:26 | 5383580 Pee Wee
Pee Wee's picture

Tyler this is rich.   By unintended consequences do you mean firsthand knowledge of people with a clue selling everything never to return?  Young, old, in between, I can speak of many where this is absolutely the case.  You name it -IRA's, portfolios, etc - smart money is out for good.

These are GENERATIONS of people who have completely lost faith in creative destruction and this pile of horse-shit special interest masking as a "market."

People aren't dumb, they know institutionalized racketeering when they see it.  The Fed has torched the list of clients for the next three decades.

"Let them jump out a window."

 

Tue, 10/28/2014 - 02:40 | 5385106 bid the soldier...
bid the soldiers shoot's picture

People aren't dumb, they know institutionalized racketeering when they see it.

On which planet do these these undumb people reside?

Mon, 10/27/2014 - 18:45 | 5384073 bid the soldier...
bid the soldiers shoot's picture

 

 

UNWELCOME AND UNINTENDED CONSEQUENCES

 

which is sometimes called 

 

FLYING BY THE SEAT OF YOUR PANTS

Mon, 10/27/2014 - 23:26 | 5384877 red1chief
red1chief's picture

There will be more QE's, and the market will not be alarmed as that is now what is expected.  The only thing that would alarm the market is if participants seriously thought QE would permanently end.

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