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Jeff Gundlach Warns "The Fed Is About To Make A Big Mistake" (& That's Why Bond Yields Are Crashing)
Since The FOMC's "hawkish" statement, bond yields have utterly cratered as near-record speculative short positioning in bonds unwind the long-end (and worries about international problems - "and readings on financial and international developments"). However, fundamentally speaking, DoubleLine's Jeff Gundlach explains, the Federal Reserve is on the brink of making a big mistake simply put, "if Fed Chair Janet Yellen goes ahead with this plan (to raise rates for 'philosophical reasons'), she runs the risk of having to quickly reverse course and cut interest rates."
Bond yields crash...
Jeffrey Gundlach says the Federal Reserve is on the brink of making a big mistake.
U.S. central bankers have been talking about raising benchmark borrowing costs this year even though the outlook for global growth is worsening as oil prices tumble. If Fed Chair Janet Yellen goes ahead with this plan, she runs the risk of having to quickly reverse course and cut interest rates, according to Gundlach.
“There’s no fundamental reason to raise interest rates,” Gundlach, chief executive officer at DoubleLine Capital LP, said at a conference yesterday in Hollywood, Florida. “My idea is the Fed raises rates for philosophical reasons. That may be short-lived.”
..
Despite this backdrop, most analysts expect central bankers to go through with some sort of tightening this year. Money-market derivatives traders are pricing in a rate increase in the fourth quarter, too.
“This is the triumph of hope over experience,” Gundlach said.
* * *
Still plenty more shorts to squeeze...
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This is identical when the BOJ raised the discountrate once in the past 24 years with 50 bp to see the economy and stocks crater. The US is the new Japan.
A rate hike is not imminent. Best guesses are mid-2015. The Fed still has plenty of time to back away from a rate hike if they think the situation warrants. This is just Gundlach talking his book, much like Gross did in the past.
Well. You could make a strong case for the situation worsening already. They don't seem to have detected it yet.
Please, Tell Me Something That I Don’t Know
Jeff Gundlach: "The Fed Is About To Make A Big Mistake"
Mr. Gundlach, the mistakes (trying to keep growing an Empire in a finite planet) have been done already. We are all just keeping the illusion going.
Symmetry breaker, at OFW:
“For maximum growth, we need everyone together.”
Wrong.
Aggregation produces both positive-pressure binding energy and a negative-pressure bound state. When the former dominates over the latter, the system grows but becomes more fragile. When the latter begins to dominate over the former, the fragile system instantaneously implodes.
Growth peaks when 50 percent of the initial disaggregated elements have been aggregated (cf. Peak Oil reached when 50 percent of the initial resource has been extracted).
Therefore, for maximum growth, we need 50 percent of everyone together.
http://ourfiniteworld.com/2015/01/06/oil-and-the-economy-where-are-we-headed-in-2015-16/comment-page-3/#comment-52364
The Fed raises short rates, the long guy goes to 1%, the 10 year will be at 0%
I shit you not.
The economy is terrible, sends a sophist message, ignores global reality.
In fact, seems to be just about 100% a disassociative disorder in practice.
The Criminal Fed is & has been the biggest mistake EVER.
The mistake, of a rate increase, will only make Q3 and Q4 the juciest short in history. Because what they will unleash besides setting the table for a real war, will be an economic nightmare for the sheeple. Meanwhile, they dropped a hint in the FOMC statement that they claim they are ready for what is happening now:
The Hidden Gem in Today’s Federal Reserve Statement: Preparing for the Currency War
...is the triumph of hope over experience,” Gundlach said.
No, it's a "triumph of the will".
Indeed.
Yellen would probably love to have someone as skilled as Riefenstahl working for the Fed...
"The Fed raises short rates, the long guy goes to 1%, the 10 year will be at 0%
I shit you not.
The economy is terrible, sends a sophist message, ignores global reality.
In fact, seems to be just about 100% a disassociative disorder in practice."
---------------------------------------------
+100! Excellent analysis, Knuck!
But I'm sure you know...
One reason why Yellen was appointed...
Was to try to add credence to the Obozo Admin lie...
That all is well with the economy and it is GROWING!
Of course, anyone with one ounce of brains...
Knows that is utter horseshit!
Can we just END this Ponzi Scheme already !
Why do we even talk about it like it still actually means ANYTHING?
It would seem so but the great FED fuck is yet to be fully reveiled.
The Federal Reserve Banks are about to vaporize! You heard it here first.
The Fed ain't a 'mistake'.
It's at the heart of a criminal enterprise which runs the planet. It is their counterfeiting arm.
Just imagine what the Mafia coulda done if they could counterfeit money and pass it freely.
Well these guys did exactly that & they make the Mafia look like choir boys in comparison.
Not a mistake, a crime.
Nailed it knukles,
We've been talking about this for 2 years now. Bond market will only move to bear when they have a incentive to believe the world is growing beyond their dirty price. No amount of fed prod can deflect that point of argument. On the other side, if the Fed does not test a hike, it is far easier to walk back 1 or 3 moves vs. never doing it at all as per the Greenspan adventure. IF the tail does buck on its own accord, assuming liquidity can provide enough roll, then it will also have the double effect of forcing non-NAFTA and the general term structure of gov. policy debate to own up to their excessive practices. In this scenario, ECB will finally have the street cred necessary to force Germany and France to fix their shit properly, and other nation states to own up to their malinvestment.
Go with Orange. Pink is for Reserior Dogs and Valley Girls only.
Yes you could. Or you could make the case that the weakness is currency related, thus reinforcing my point that a rate hike is not imminent and they still have time to take it off the table.
Its worsening alright. Zero rates just mean that money has less value in the future than in the present, assuming the amount of currency in circulation increases (which it will with QE). If money has less value in the future, that is a very pessimistic view, especially considering the rapid pace of technology. Don't you want to buy a self driving car or a holographic TV? Then money would have more value.
These nervous banksters and bond whores don't give a crap about 'rates', they're worried the free money flow may actually be choked off a bit.
ding ding ding!
But if we don't bail out the speculators WE ARE DOOOOOOOOOOOOOMED!
this kinda of free money flow?
u guys/gals gotta read about ms payne middle of article
http://dealbook.nytimes.com/2015/01/26/investment-riches-built-on-auto-l...
the endless search for yield in a zero-yield environment
Exactly, also if it looks bad (and it does with Canada looking to be in recession soon) the US will back off from that ledge.
Its true you will see the US Fed do the same thing as the Japan Central Bank has done as well as the ECB will also be doing the same as Japan. We are all facing the same issue. Its all about the population demographics in the US at least we have a echo boomer generation coming up in 2025ish but Germany and Japan are screwed. The answer isn't more debt that has done nothing for Japan and will do nothing for us. The bubbles must pop the invisible hand must be allowed to do its work.
We will end up like Japan because all these dipshit central bankers follow the same playbook. They will point to Japan when they start printing moar money too, saying that they have printed far more on a % basis than the US, and they haven't had hyperinflation yet. The case of Japan is also why I don't think this fiasco is going to really blow up anytime soon. Japan suffered a huge stock market crash, and their country and currency didn't implode, and they still haven't gotten to their previous all time highs. This will muddle along for longer than any of us can imagine.
"The US is the new Japan"
It's true, we did attack ourselves with planes
Economically perhaps but the USA's social problems are 10K times worse.
I understand why you may think that, but as a person who has lived there I can tell you unequivocally no.
Japan is so uptight students are often not on first name basis (a sign of friendship is being able to call a person my their first name)
People are not reproducing at all, and Neet culture is destroying the generation. (Think MGTOW but without the careers)
The while culture is imploding stuck between extreme social conservatism and destain for same.
They culture will only survive at all because they have no immegration.
Always remember this is the country that stopped selling used women's panties in vending machines only because it was outlawed.
High radioactivity levels?
They couldn't just import undies from Malaysia?
Deleted
Lower rates have not worked. Time to increase.
http://www.nbc.com/saturday-night-live/video/china-cold-open/n12611
Thanks, that's a good one.
Can you believe it's been five years?
Yeah I can
The Chinese are a patient people but they've run out of it with the Obozo administration which they never admired anyway
They want their money back or they're going to cause a LOT of shit with Japan and team up more with Vlad.
Read the book "Blood in the Streets" if you haven't cause it predicted everything that's happening today
Obama. The man who lost America
And the Middle East, and China, and Venezuela, and Ukraine, and Libya, and California, and counting...
NEXT TIME MONETIZE 100 BILLION TRILLION!
the sentence reads so much better from the other direction
I have said for years, that the real first domino that China will target is Taiwan. I see nothing to make me believe that has changed. China will continue to use NKorea as a pawn to destabilize the region and shit all over 0zer0. Then China will "offer" to "control" NKorea in exchange for Taiwan and 0zer0 will gladly take it.
just purchased "Blood in the Streets" along with "The Creature From Jekyll Island".
Gene Rosen
I wish I had known about that clip over the last 5 years.
God forbid seniors and savers make a few dollars in their safe money
The financial Logan's Run
Davey - You nailed it, one hell of an anology. + 1000
Yes, but for the primary dealer banks FIRST.
These fuckers and the financiers have have access to hundreds of billions at ZERO interest for six fucking years already.
Retribution time motherfuckers.
Break out the Bullard --- after seeing the market reaction, FedSpeak this week will be dovish
Ah so the jaw bone dove shit storm will flow down hill on CNBC tomorrow morning.
ZH drinking game: drink every time a headline reads crash, plunge, or collapse. Better be stocked up.
loL
add capitulate and you'll be drunk all day for the rest of the year.
"We can jump in the water, stay drunk all the time"
https://www.youtube.com/watch?v=Hf0Dm-OaTNk
Too late!
As if I need an excuse to drink. How bout I drink 'cause I feel like drinking?
Crowded pond of short duration..? seems like it
http://hedgeaccordingly.com/2015/01/a-look-at-hedge-fund-crowding-q3-201...
The banks have assured Yellen that they still have iron clad balance sheets and can survive anything, just like in 2008. They never lie to instill confidence.
I can smell the Rats covering as I type.
The Fed. has erased their "margin of discretion", and will be forced to Japanification.
Gundlach is correct/
Yen, sometimes I wonder about the rest of the crowd here.
Me to Knuks... I understand why you're reluctant to contribute.
It's sometimes tough when you've already said it 18 different ways. I've been saying a Japan scenario is the most likely course practically since I got to ZH. It's the only course available where you don't instantly inflict major pain on a lot of different groups. And, obviously, it can persist for a long period of time.
If you cringe at the thought of sharing a point of view, remember a trick I learned from the BLS: just don't count the down arrows.
Are you kidding me? Most of here are probably like me (most is key). They came here knowing something was wrong but were not sophisticated enough in regards to economics to really understand what. Most of the time we learn silently (most is key). Once in a while we toss what we think we've learned into the ring to see if it gets shot down. Either way, it is interesting.
You guys are informative, although knuks is way funnier. He'd make a great cabbie or bartender. Maybe a priest, that would be hilarious.
What I don't understand is why you guys continue to discuss this like it is all just one big mistake after another and they (TPTB) should have known better. If we are late in the 2nd half and every pass from my QB during the entire game has been complete to the other team I might KINDA FUCKING WONDER IF HE"S DOING IT BY DESIGN.
Still, please keep posting. Respectfully o7
"He'd make a great cabbie or bartender"
We all have a promising career ahead of us in the custodial or food services industries. "Guest hospitality" careers for the really smart ones among us.
I'm hoping for grave digger but I don't really plan to do any work figuring there are going to be so many bodies the task will literally be impossible to complete before they rot and disease spreads.
Buy design. I totally agree, They didn't just ship American industrial base to China and steal the last gold buy accident. America is doomed, the fed will raise rates and finish the job. Isolating America as the stupid patsy that it has become. Where's the guns and ammo going to be used ?. Don't forget they have a gay black man with a tranny wife for a leader. What a fuckin joke that there's even a debate.
so if they pay you to hold 10y paper the same as they pay you to hold 30y, AND they can only force rates to zero and not much negative, why the fuck wouldnt you buy gold?
6000 years barbaric relic..
That's what I keep trying to understand. ..... Gold should be going up !!!!!!!
Yes.. its all timing... there could be real deflation with a .25% increase or even before that...gold would go down...BUT how long could the neo Bolsheviks at Obama admin and Fed hold out before they panic and begin to print full retard? Thats when gold goes on a diffusion jump process to $3000 in a week. It's just timing lads...its just timing..
breakout to negative as the time value of money approaches zero, baby zero.
vested to zero return, but surely a safe bet. buy the alltime fucking low return! btaflr
fuck a duck...
fad
Can the antcipation of a stronger dollar drive foreign investors into US equities and bond holders outweigh the discount effect of higher rates on P/E ratios?
That sounds more like a statement of fact than a question, as in safe haven. The FED started the monetary low tide when they ended QE in Oct. They're now sucking money out of foreign countries. They can keep it going, and probably raise rates a little, until US banks start loosing more than all those 'free reserves' the FED gave them plus the safe haven seekers' money. The faster they raise rates, the faster it all collapses.
Banksters are sounding nervous....at least we got that going for us.
shitten peach seeds!
Keep this in mind what "Mr. Yellen" said in 2010:
http://www.reuters.com/article/2010/03/12/usa-fed-nominees-yellen-idUSN1...
rope a dope??? ---is she Volker in drag--a closet hawk??? inquiring minds want to know--
More like Get a rope for a dope.
Raise rates and invert the curve, yeah right.
it would be a "janet got no clothes" moment
i shudder at the image
Kind of like seeing Jabba the Hutt naked.
Doc. I see where you're coming from, but for all intensive purposes the "yield curve" is already inverted.
The yield curve is in contango. When short term yields rise "eventually" it will push the curve back out.
The problem is that inflation, NOT deflation has inverted the curve.
Erosion of purchasing power, and over capacity need to come back into line.
Doc you're a smart guy, you've seen the massive global expansion and inflation since the mid 90's. It's been insane!
What I find even more idiotic, is the tree'huggers.
Come on, guys. If we all just go Gore, we'll be OK. I mean he is a smart cookie, admits he invented the Internet.
And we're in good hands with Barry. His best buds, the religion of peace said they wanna behead him in the White House.
Everything's cool guys, chill.
Actually, best stay frosty
Imagine Fed getting net short 20-to-1 and loading up on puts and crashing the market on first reports of shots-fired between USSA-Russia (good scapegoat). Boom-- national debt paid off in a month, and all the politicians can get back to even bigger pork barrel politics next year.
The fed is about to finish making their multi-year quick money mistake: pay-day-loans alright, for the 1%.
“My idea is the Fed raises rates for philosophical reasons. That may be short-lived.”
i read their playbook long ago ... a few quarter point ceremonial moves ... declare victory ... and quit raising
unfortunately, i think they're outta time
'no reason to raise rates' - except to restore a semblance of normalcy and fairness to a system that is clearly corrupt to the very core and benefitting only plutocrats ...
but of course Janet works for the Plutocrats, so don't worry, she won't raise rates - this is all a big head fake like every other time for the last six years ...
US yields plunging and king dollar just goes higher - wtf?? this is one epic clusterfuck, it can't be long now.
plus 100 - plutocrats!
yale harvard and princetons' best minds doin there handy work...
Big mistake? Haha! Banks fully saved - mission accomplished! Time to slaughter the sheeple.
Archetype, you're exactly correct...they've triaged the walking dead, who've slimmed down and jettisoned the deadwood, and they've reinforced their designated winners.
on the bright side ... with interest rates tanking ... Federal Reserve balance sheet ($4.5+ trillion) should have hundreds of $billions in unrealized capital GAIN ... would be an excellent time to unload some for a PROFIT
then yields would rise
Janet Yellen is Lucy with the football holding for Charlie Brown, when Lucy promises to hold the ball for Charlie Brown is the exact same thing Yelllen says to American savers, credit buyers, workers, "I'm not gonna print anymore" is a lie.
She can't even slow the pace of unbacked printing or the Obama base gets evicted to homelessness.
When she says "i'm gonna raise rates soon or watever" she's lying.
She won't ever raise rates, Americans will have to pry the printing presses away from her cold dead hands.
Actually, the FED can raise rates a little while foreign money is pouring in. That way they look like they know what they're doing in the MSM. Then, when markets start the next inevitable free fall, they have political cover for the next QE. I think it's part of their script. They need a stock market (where most of the pension money is located) crash to justify more counterfeiting (QE, multi-generational theft). Just a matter of when.
*Jeff Gundlach Warns "The Fed Is About To Make A Big Mistake"
Obviously this fellow is a complete idiot, has he not been spectator to the most expert of financial handling by the un-fed. They have forgotten more than he will ever know.
The un-fed and all of their cohorts know that the USSA can not and will not ever repay it's debt. So they are doing what any good dead beat would do...Ride this bitch right off the cliff. We still have a ways to go but we are at full gallop.
Actions always speak louder than words!
remember the good old days when a mm account drew 5.25%? yeah, me neither.
Buzz, maybe I'm a miss. I don't think Gundlach is looking for handouts.
I realize he's a bond guy, so highers rates are his arch nemesis. If you're correct that fucker has a lot of answering to do!
That means he's long all that Euro peripheral trash via the carry trade.
The FED hasn't raised rates since June 2006. Who believes anything they to have to say at this point?
Evans? Bullard? Kocherlakoda? Fisher? Yellen? LOL...yeah, lots of honesty and integrity in that crew.
If you were long gold when the Fed announced taper....well, let's face it commodities AND non dollar anything.
Seriously...take the Fed seriously. The lack or recovery is your denominator...the Banks calling your bluff is the numerator.
I have ZERO sympathy for the speculators in oil.
We'll see if we have a second massive leg down here.
I would not be long refining that's for sure.
Talk about a Pig in a Python....
The Deflationary DRAG of ZIRP is huge and not much is said about it. Most all of us, except millenials, grew up taking our money to the bank for interest. The retired crowd is in shock over NO interest and it affects their spending. I would venture to say that trillions used to be paid out in interest on MM, bonds and investment. Dividend yields reflect ZIRP because Corps dont need to pay anything to compete for your money. I am surprised GDP has not tanked due to ZIRP. Actually I think it has and is being hidden and propped up with shennanigans such as ObamaCare spending and revisions.
Fantastic comment! "Dividend yields reflect ZIRP because Corps dont need to pay anything to compete for your money."
This gentleman gets it! Well spoken hotrod
Hey Gundlach - the big mistake is the FED itself, not what it decides.
Gundlach sounding like Hank Paulson and "tanks in the streets" here.
My screens are starting to show a possible black Friday to Monday 3% decline to places like SPX 1960 and DJI 16,900, and a long weekend for the kool aid crowd, or is the Tulip mania mentality going to temporarily push prices higher one more time?:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=SPX&insttype=&freq=1&show=&time=7
They didn't raise because (1) our market isn't doing as well as they seem to imply. The market read this 'patience' as such. (2) The rest of the world would be hurt.
But they would like some financial rescue arrows in their quiver.
...the Federal Reserve is on the brink of making a big mistake...
Yes Jeff...
And your point is that the latest attempt at following through with the announcement last month on rates will somehow make things worse after 6 years of the same?
Worse than what???!!!!
History calls this 'pulling out the rug'.... same pattern everytime...only this time this financial farce is merely an adjunct to the 'wars' which mainly serve to distract people from the real problem of a major cosmic pattern about to repeat... the return of the main comet cluster... this time freshly renewed by our binary buddy, our dark star or brown dwarf... ie, all that 'dark matter' is set to reveal itself...right on schedule... give or take a couple of years. Take a look at the rise in meteor sightings etc.... lack of solar activity which points to a 'little ice age' at minimum... if it weren't for the fact that our interglacial period is also set to end... they only last so long, and all of this ties together with our human civilizations that 'rise and fall' along with these other patterns... read up on Birkeland currents and understand why this 'dark star' is important as it comes in and then leaves... us with what follows through the Oort CLoud.... that infamous comet cluster that's been deleted from the history books... like most truth....leaving us with mostly lies... as our govt is rather infamous for these days... same as every empire. Same pattern everytime.
The sooner they raise rates, the sooner the guillotines can eat.
The banksters need to repay us.
Hey KC...I am pretty good around here getting "ups", but I am having a hard time keeping up with you :-)
I enjoy your posts.
Down 230 DJI points in 90 post-FOMC minutes? Love it when Mr. Market takes over the microphone from Ms. Janet:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=DJIA&insttype=&freq=9&show=&time=1
Change that: Down 280 DJI points in 100 minutes, with 20 minutes to go: Wednesday-Thursday may be the new Black Friday:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=DJIA&insttype=&freq=9&show=&time=1
The guy is clearly stuck in the wrong side of the market. Some cheese please to go with all this whine! : ) )
Yellen is stuck between a rock and a hard place.
The carry traders are starting to cover. They are having to cover(sell) borrowed $usd from other currencies. They're buying back $usd to settle their contracts.
This is the spike you're seeing moving into the Asian markets. It's not $usd buying, but rather $usd denominated contracts being settled. (sold back/covered)
I'm gonna buy some MOAR high yield currencies.
Fuck......and where might those be?
This financial index BKX may be about to make an 18 month low, stopping down 7% or so. That would be 15,900 for the DJI. Re-think your next Federal Open Mouth Committee speech, Janet:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=bkx&insttype=&freq=1&show=&time=9
What a novel idea, raising the interest rate, go on then, raise it just up to the averaged normalized norm of 5.25% I fucking dare you Mr Yellen...
For a start Mr Yellen, if you did such a thing, just how in fuck would you pay for the interest on the debt you printed from thin air, without not just bankrupting your fellow man, but destroying the very system you reckon you can uphold? And thats without a single fucking brass cent going towards the principle? More QE? How much? More by the magnitudes greater than already printed with the backs of your fellow man stamped upon could you issue?
There will be no interest rate rise. Zero, none.
Bank on it.
Cunts.
Naw...the Fed is loving the drain of yields. They raise rates and it will be back to november levels at worst. This is playing perfectly into their plans...almost as if they controlled it.
What the Fed is not understanding is the transmission of their efforts only reaches equities... It never makes it to the peasantry (95%). The result will either be Japan 3.0 or a degrade to Greckoish situation. The real key is at what point the peasantry realizes they have been fucked.
Rates are going no where.
It's bullshit
too many adz on this site
gotta pay the bills somehow! lord knows our shinies investments haven't been paying them
"Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest" Matthew 25:27
I have a feeling that Jesus would have told a different parable were he among us today.
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P.S. Where's 'Ying Yang' these days? He got me hooked on Linux.
Jeff Gundlach Warns "The Fed Is About To Make A Big Mistake"
The big mistake was made years ago.
And what about these Reverse Repos? We are talking about $50 to $150 Billion of Reverse Repos every day! http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE Allegedly to keep a floor under the (short term) rates. Has somebody seen this floor? I think it’s just an other form of QE to keep injecting funds into the financial system.
Fed Will Continue Reverse Repo Tests Through January 2016 http://blogs.wsj.com/economics/2015/01/07/fomc-minutes-fed-will-continue...
These REPO's?
You're gonna laugh hard!
http://www.newyorkfed.org/markets/pomo/operations/index.html
If you search for buy operations for 2014, the last one was a bit after the mid october neckbreak episode. From Oct 27 2014 to today, the S&P is basically flat.
There's a big difference between Reverse REPO's and REPO's.
Repo's buy debt. Reverse Repo's sell debt, and repurchase it VIA the ponzi bond market.
“There’s no fundamental reason to raise interest rates,” Gundlach, chief executive officer at DoubleLine Capital LP, said...
There is no fundamental reason for the S&P 500 to be up anywhere near where it is. Fundamentals don't matter any more.
“This is the triumph of hope over experience,” Gundlach said.
Bernanke wrote in 1988, that QE doesn't work. The Japanese experience proved him right, yet he QE'd the U.S. anyway.
I don't think the triumph of hope has anything to do with why the FED seems intent on raising interest rates.
Raise rates, flush out the system of all its rotten debt then economy starts picking up in the medium term and then they get their 2-3% inflation target and money velocity up too.
Success!
money velocity could go negative if the monetary base starts shrinking. consumers have no way of managing inflation in things like rents. although it might give the housing market a boost.
The FRBNY killed the real estate market by buying $45 billion per month in CMBS.
There is, diffinitely , an oversupply of housing. All the overbuilding is suppressing rents. Why buy when you can rent for half the cost? Or squat in vacant unit for free?
Bernanke screwed every level of free market and the smart guys have sold all their real estate and put it in the market.
I sold my properties last year and rent which cut my monthly nut in half. I am in a better neighborhood too!
I just signed for a second year in a the best part of the city.
No more PITI for me.
We will wait for housing to crater again and then pay cash.
Am I the only one that thinks the rates should be automatically adjusted based on market conditions by some super computer? and not by the "feelings" of some woman no one ever heard of before a year ago?
I mean if you go to walmart and buy all the milk they have in stock, some computer probably kicks in and tells managers to hike the price of milk a few points.
But when it comes to managing the endless supply of Fiat currency that could one-day send the planet into a death spiral . . . we base the price of money on "feelings".
Wonder who the Fed will prance out this pm and tomorrow am for the stick save? 79 degrees here, think I'll go deflate some golf balls with MDB....
I'm more political than financial...
Can someone explain this? If yields are crashing and Yellen is proposing a rate hike, isn't that a tug of war in opposite directions? Can the crash overcome any hike meaning there is no hike?
there is a disconnect between rates and inflation. (or a lag effect) if inflation ticks up then the appropriate action is to raise rates. (you may ask why would inflation tick up with crude oil at $50, exactly, that sort of price drop is going to increase economic activity, shipping costs are lower, if the fed leaves the loose money zirp (risk on) the specs will buy up all the $50 oil. you have specs controlling what was essentially a supply demand market. they can hold oil off the market and cause shortages. if you had a million right now you could buy physical crude and store it, your risk is pretty low, and if you can borrow a million for next to nothing....
yellen has to kill that deal, but she will probably kill the goose as well companys buying back shares on the same spec, she cant say, yeah you there you can have easy money to buy stocks, but no you over there, you cant borrow money to buy oil. hence energy credit is in the tank.
now if rates are two percent and inflation is two percent her hands are clean. in the meantime QEuro came along at a nice time, they can put a floor under uS stocks, but everyone can see through that deal, meanwhile 2% is also enough to keep too much of the loose money from going into gold, gold could through the fucking roof, but not when yields are rising.
there is still enough liquidty sloshing around to keep the stock market going for years to come. meanwhile the fed shrinks its balance sheet, otherwise the rise in rates will make them insolvent, and those proceeds are a hot potato, which i suppose QEuro was made to absorb some of that. as long as they can play mark to myth with that stuff each time they sell it to each other, they can pretend its worth face value.
Wait, which rates are they raising? The overnight federal funds target rate? Because banks lend money to each other right now? Or that rate even remotely matters anymore?
Banks are still get paid on reserve held at the fed. Until they LOWER that rate, nothing matters. The fed can stop POMO and raise the overnight target rate and the discount rates all they want. It doesn't matter. They're still printing money and giving it to the banks.
Europe is still the real scene
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Are you fucking kidding? The Fed won't raise rates, EVER! The Giant Reset is all we have to look forward to and that will be ugly enough.
How about the market sets rates...freely?
But I wax romantic...
Maybe he hasn't looked at any of the decisions that the Fed has made in order for them to have gotten to where they are today.This guy should step back,look at the track record which is shit-ass last.The Fed has been wrong so many times,you'd think that a bunch of morons were running the show in order to bust The United States in some kind of grand conspiracy that only a bunch of crooked banksters could pull off.Don't be surprised though,this guy is probably right, they'll be wrong once again.
They can't and won't raise rates. Period. (no wait - I mean they won't)
They own trillions in bonds but they know they will crash the very banks that own them if they raise rates.
Bond rates are crash for their own reasons. Rich people are seeking return on their money knowing bond rates can't go up and left with no other alternatives. 10 years ago rates on 10yr notes was at 4.25%. That was extremely low back then. Today it's unheard of. In 10 years 1.72% will be considered better than the negative interest rate you get at the bank. :0
1.72 is still a pretty good return on investment, that was printed out of thin air and given out for free.
she runs the risk of having to quickly reverse course and cut interest rates."
What could be more bullish than that?
No rate increase until 2016 at earliest.
Look the FED are just playing a little game.
They need to pretend the economy has recovered due to their policies before the next crash.
If the economy has recovered, they need to raise interest rates.
They know it hasn't so they say they will raise rates some time in the future, it will never actually happen.
When the crash comes they can say everything was fine and dandy and they were just about to start raising interest rates.
The crash of course is another balck swan just like the last one.
People believed that defaulting on sub-prime NINA and NINJA mortgages was a black swan event last time, they will believe anything.
They know they haven't got long before the next crash, so the plan must be put into play now.
The FED game plan.
Our policies were sound, we were in full recovery and just ready to raise rates before another one of those pesky black swans came along (they borrowed the idea from Scooby Doo).
How much of a raise in rates will it take for the budget deficit/the interest on the national debt and that debt itself to achieve escape velocity?
And kiss our keisters good-bye?
The only way out is WAR! The NWO sure has been busy lately, poking that Bear in the cave. They slammed the oil prices down, overturned the latest government, put sanctions on the bear, then doubled down on the sanctions, yet again! They also ordered the S&P to rate their bonds as junk, compared and rated their news organizations alongside the worst terrorists in the world and working up a plethora of false flag operations and propaganda that would make Goebbels grin like a Jack -o- lantern!
There's a saying going around: There are a hundred ways to roust a bear out of the cave, but they haven't found a way to get the bear back in...
Yellen is on the board of the BIS, along with some other big name cronies. I wouldn't be surprised if the interest rate is in favour of crashing the dollar to establish a new global currency. That's when Communism will take care of some folks when the world wakes up and realises the dollar is over inflated and dead. They just need your guns first or a bigger state army for now.
Yellen and her Fed are against the wall...
She will raise rates at some point, even if a fraction of a point; the Fed has no choice. They have been blowing about the possibility far too long, and risk whatever credibility they think they have if the action continues to be postponed.
BUT...WHEN she does, the fan is going to start accumulating feces.
If they stubbornly stay that course, hell breaks loose.
If she winds back, hell breaks loose.
If she stalls, and does NOTHING yet, credibility is shot, and hell breaks loose.
What everyone really needs to be on the lookout for is a major diversion, like another 911, or worse.
It is the only thing that can create the patsy justification for an otherwise inevitable financial collapse.
m
to the commentators that are saying
'the only way out is war'
how about fleshing that out a little for us that are not 'in the know'
war with who?
war with what?
who are your allies?
Core position is long silver, but I actually started putting on some shorts this week, starting with this turd