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No Laughing Matter: Fed Laughed As Bubble Burst
Whether it’s their remarkable ability to justify the creation of asset bubbles by claiming they are “smoothing out the business cycle” or something more subtle, like getting the day of the week wrong on an official conference call transcript, it’s hard not to chuckle at the Fed.
At the end of the day though, it’s important to remember that even as they transform modern markets into laboratories and market participants into guinea pigs in the name of figuring out whether high-minded economic theory works when applied to the real world, central bankers are people too, and it’s nice to know that every so often, they get a chance to have a little fun.
When we parsed the newly released 2009 Fed transcripts yesterday we were too busy looking to uncover things like a previously unreported plan to create a bad bank to look for signs of central planner levity, but fortunately, the research department at Bloomberg was looking for the important stuff. Thanks to their efforts we have the official Fed Chuckle Count for 2009 which, based on the graph below came in at 39.7 — there was oddly no word on what economists polled by Bloomberg were expecting.
Breaking this down, it’s important to note that recorded incidences of laughter at FOMC meetings hit their highest level on record in July 2007, which coincides exactly with the moment when the housing bubble finally burst (remember: they weren’t laughing at you, they were laughing with you). Here’s a quick rundown of exactly what was going on at “peak chuckle”:
On July 10, around four months after it warned on the market initially, Moody’s downgraded 399 bonds backed by subprime mortgages which together totaled some $5.2 billion. Meanwhile, S&P suggested it was close to cutting ratings on more than $12 billion in mortgage-backed securities due to declining home prices and rising default rates. On July 12, Fitch Ratings placed 19 structured collateralized debt obligations on Ratings Watch Negative due to a significant deterioration in the underlying portfolios of residential mortgage-backed securities. That same day, S&P cut its ratings on 498 subprime mortgage related bonds worth some $6.39 billion.
What followed for the Fed was a dramatic decline in spontaneous outbursts of laughter in the halls of the Eccles Building which lasted until March of 2009 the very month that the Fed abandoned the bank aggregator (bad bank) plan and decided instead to launch QE. You cannot make this stuff up.
Here are some highlights from 2009 via Bloomberg:
January — Cleveland Fed President Sandra Pianalto, on the general public's desire to get policy in order: "Our discussion yesterday about what the effect is of a $250 billion purchase of MBS or a $250 billion purchase of longer-term Treasury securities demonstrates that we just do not have certainty around the effects of those actions. Before this crisis began, the public had a fairly good grasp of our policy rule. Now they are trying to find the new rule, and I hope they do not find one before we figure out exactly what it is."
August — Richmond Fed President Jeffrey Lacker, on the FOMC's own confusion: "President Plosser and I discussed output gaps with Mr. Kiley at the June meeting. That conversation may have seemed a bit confusing. It was [confusing] when I read the transcript."
April — Chief Economist David Stockton, on his early introduction to green shoots: "While in high school, I had a brief job with a lawn service. One day while I was riding my tractor, a woman came running out her back door gesticulating wildly. It turns out that the patch of unruly weeds I had just mowed down were, in fact, the green shoots of her emerging asparagus garden. Two weeks later, I was working in a local slaughterhouse. That life lesson taught me that an inability to distinguish the green shoots from the weeds can have unpleasant consequences for one’s career path."
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Looks like he finally got a blow job.
Well, they actually did turn the entire U.S. and global economies into a big joke.
I don't get it.....
There's no laughter in heaven.
Mark Twain.
Don't worry, the laughter will end once the killing starts.
“I don't get it.....”
Look, they say they are targeting GDP inflation when all along they are creating ASSET inflation for the 1 percent and DEFLATING the economy the rest of the suckers live in.. it’s hilarious how everybody has fallen for the ruse.
Soon, it will all go bust and the 1 percent will pick up the pieces for pennies on the dollar.
What a hoot!
I don’t see how they can contain themselves.
Yes, that is the plan, but in the coming global weimar I am willing to bet that global supply lines break first. Where they gonna run too? Mars?
Shows how concerned they are about the real pain and suffering they caused the "little people". Hang 'em high!
Why would you want to run, it's the greatest opportunity of all time to come out on top. They have been buying gold and silver as well.
<= Dick jokes
<= "Let them eat cake!" jokes
<= “Let them eat dick” (bankster) jokes.
<= Cake jokes
:-)
It could be hysterical laughter. I was trying to help a man who was severely injured after being thrown from a horse. This woman was laughing like a hyena driving me insane. She thankfully stopped and I turned to look. Some guy knocked her out cold on the ground.
Miffed
Insane how those types of things need to happen now & then...
U never know where & when they may occur!
Mostly true for the goyim killing and being killed.
It will be interesting to see who laughs standing in front of the gallows.
Spring is nearly here.
Have them dangling from the DC cherry trees, plenty of room for all the bankers,
politicos, and presstitues.The blossoms will cover the smell of the carrion as a bonus.
I'm sure that at least a few of us in the audience will be laughing.
... Looks like he finally got a blow job.
Yeah, but from Janet !
If you're GOY... Consider yourself 'laughed at'...
You shouldn't worry yourself. You're talking about people that can't do anything outside of lying to others to get what they want.
You know, in all fairness to the money masters, they could be seeking to cool their nerves during those terrible times, with jokes.
Of course they did. More assets for them at firesale prices...
Retribution will be paid motherfuckers, it always is.
Then they'll be laughing out of the other sides of their faces.
The entire post Tudor artifice was one sick joke
The rot started again with Henry Viii 1545 usury law......
I wouldn't publish that stat, if I was them. There's just nothing good going to come from it.
Long nailguns.
Honestly I cannot make sense of Tim Geihtner's book to this day. Pretty damning stuff. It's pretty much a exhibit A for the guillotines.
something wicked this way comes.
Well of course, 'markets going down' was planned by the Fed they needed the fear and panic to pull off their big heist of the public.
That laugh count has to be off the charts in a hockeystick fashion from 2010-2014
Becky be nimble .... Becky be quick .... Becky jumped on my candlestick .... chart !
The social creditors have been proven 100 % correct.
Nothing comes close to their Observations of past current and future economic dark comedy sketches
Zeroes can thank Bernanke for the gold bull's epic run. Without him we'd still be looking at a three-figure gold price. And given the choice between our current monetary situation and someone who held the reins a bit tighter, Zeroes would pick Big Ben every time.
So, Zeroes, stop whining about Ben and Janet - y'all love 'em!
It sounds unappreciative when you want both what they can give you - a higher gold price - and the right to bitch, moan, whine and carp (okay, y'all also like to occasionally threaten them with bodily harm).
You have been here 4 weeks kid. Try again. Too schmoozy IMHO. Pretending to have some relationship with current opinion? The interjection of the "As ZH'ers WE etc." Wrong tactic. Stands out like the wannabe girls that nobody wants to dance with at the prom.
Back to the drawing board kiddo.
You are on the wrong troll path. If you want the bonus you have to up your game. And now you have to figure a way to cover your butt for this "above" comment. Or change your ID.
But YOU DO GET POINTS FROM THE SPELLING POLICE.
Sorry Bob, I've been here on and off for years.
You need a retort based on ideas, not ad hominem attacks. :-)
No potato for ya today ! That'll teach you...
Alright Amerikan Patriot.
Do you wonder what idiom of your writing gave you away?
Maybe Ben shalom has a future in stand-up, after his fed policies have been revealed to be a joke and no more $250k speaking gigs
Holding the reins a bit tighter........
I love that.
But you are the fucking horse.
It's generally accepted that these guys must have the monopoly of credit.
They own the commons and all the little busy rabbits that run on it.
Actually anyone can issue credit up to a point just by accepting IOUs as payment.
and every time I push one out I imagine some fucking banker with his little adviser fluffy floaty following him down the S Bend!! exciting times...oxygen fucking thief
Fuck Bernanke .... let's talk about Becky !
Agreed. Who's Becky?
She's the one that changes Warren Buffett's diapers.
The Great Reset will take place only when ALL economies/countries are completely destroyed.!
Agreed. You left out that all Central Banksters and their Minions are Hung too.
.
Bernanke would look really good in a Columbian Necktie.
Are you threatening the former FOMC chair, Bob?
You make that sound so negative when you say it that way.
And just what are you going to do about it, bitch?
Personally Bernanke needs decapitation for his crimes..
Your deceitfulness is tiresome.
And...You know where I live. I am generally home.
Looking forward to meeting you and your ilk.
I have finally accepted that gringos misspelling Colombia as Columbia is just a fact of life.