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Former Fed Governor Admits Market Controlling The Fed Is A "Very Dangerous Development"

Tyler Durden's picture




 

The constant changes to Fed policy targets and enslavement to the ticker must change, according to former Fed Governor Kevin Warsh. 

"The markets think they have Yellen's number," that she will never allow markets to go down, Warsh warns "that is a very dangerous development."

 

We must stop QE, Warsh chides, as the inflation goals are close enough to a comfort zone and arguing for QE because of lowflation is poor thinking "because our gauges are not even that good."

 

Dollar strength is The Fed's doing, he adds, since they have been telling everyone to do what we have been doing... and adds "The Fed talking about the dollar tells me they are more concerned about the dollar's impact on earnings."

 

What worries Warsh the most, however, is "The Fed's policies changing based on what happens on the ticker... The Fed should be thinking 3 to 4 years ahead."

 

Finally, he crushes the memes of all the malinvestment deniers... "people in the real economy who dont have big balance sheets have been suffering from wage pressures and stagnation..."

 

"We tried negative real rates in the mid 70s and the early 2000s and both ended badly."

 

As Jim Grant opined so eloquently... "The Fed can make things look better but can't make things better," and Kevin Warsh blasts buybacks and financial engineering as evidence of this.

 

"This is an experiment we should be taking with great care without some obvious conviction that there is no financial stability risks."

 

Investors "think good times can last forever," he warns... they can't...

 

Amid all the turmoil in global geopoltics, "you still don't see any of those risks in financial markets.. and I cant help but think aggressive central banks are responsible for that."

The Full Warsh...

 

* * *

Someone is not getting invited back on CNBC...

 

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Tue, 03/31/2015 - 08:24 | 5944916 no more banksters
no more banksters's picture
It's more than that: Fed's artificial crises
Tue, 03/31/2015 - 08:26 | 5944925 GetZeeGold
GetZeeGold's picture

 

 

Imagine a world in which the markets never deline......we call it Nirvana.

Tue, 03/31/2015 - 08:28 | 5944931 MsCreant
MsCreant's picture

I have heard another label-- hyperinflation.

Tue, 03/31/2015 - 08:32 | 5944948 NoDebt
NoDebt's picture

FORMER Fed Governor.  They're all tough guys after they're no longer in a position to do anything about it.

Tue, 03/31/2015 - 08:40 | 5944968 Thought Processor
Thought Processor's picture

This will play out like the recent German Airline crash.  The Fed / Central Banks will fly the markets on Auto Pilot until the time they decide to drive the whole thing into the ground, forcing a widescale monetary reset (on their terms).

 

Not a question of if, but rather when, at least if history is any guide.

Tue, 03/31/2015 - 08:48 | 5944981 SWRichmond
SWRichmond's picture

"The markets think they have Yellen's number," that she will never allow markets to go down, Warsh warns "that is a very dangerous development."

No shit, Shirlock.

Tue, 03/31/2015 - 09:00 | 5945011 Stackers
Stackers's picture

Blasphemer !!!

Burn him !!!

Tue, 03/31/2015 - 09:10 | 5945037 Falconsixone
Falconsixone's picture

Yellin just does what it's told just like bernspan.

Tue, 03/31/2015 - 09:25 | 5945073 froze25
froze25's picture

He might as well of said something negative about Israeli foreign policy.  Black ballible statement.

Tue, 03/31/2015 - 09:46 | 5945117 metastar
metastar's picture

The jaw bone's connected to the foot bone.

Tue, 03/31/2015 - 10:08 | 5945178 Tall Tom
Tall Tom's picture

"This is an experiment we should be taking with great care without some obvious conviction that there is no financial stability risks."

 

 

That says everything that you need to know. This is an experiment...

 

They do not give a damn about any damage that they exact upon you. You are nothing more to them than a Data point, that which needs adjustment and manipulation.

 

They cannot care any less about your suffering. They are heartless goons, psychopaths.

 

That is the mindset of these motherfuckers at the Fed.

 

Hold the Bankers accountable. Starve the Beast. The Banks must fail. Put your efforts into taking it down.

 

They were shielded from the Moral Hazard that you and I are expected to take the burden thereof.

 

I wonder if they will like my experiment.

 

Reminds me of that bet in "Trading Places"

Tue, 03/31/2015 - 15:31 | 5946272 TheReplacement
TheReplacement's picture

Connected permanently with a nailgun.

Tue, 03/31/2015 - 08:49 | 5944983 TruthInSunshine
TruthInSunshine's picture

The "markets" (at least equity variety) are behaving eerily similar over the last three months, roughly, as to how they did from August through November of 2007 - for what that's worth.

Tue, 03/31/2015 - 09:40 | 5945099 LawsofPhysics
LawsofPhysics's picture

Please, the public equity market is dead. It does not provide effective oversight mechanism for equity owners. It does not align interests between owners and agents. In fact, it guarantees the company will be run for the benefit of management, to the detetriment of the average equity owners, employees, clients and vendors.

Tue, 03/31/2015 - 10:04 | 5945175 daveO
daveO's picture

The banksters need another crash to justify the next round of counterfeiting. That's why they stopped QE in Oct. It's a setup, again. It will last as long as central banking.

Tue, 03/31/2015 - 10:24 | 5945229 Arnold
Arnold's picture

We request that you cease and desist using 'erie' in an association with the stock market..

 

Sincerely,

 

Eerie, Indiana

Erie, Pennsylvania

Tue, 03/31/2015 - 08:42 | 5944971 negative rates
negative rates's picture

That's what whistle blowing is all about, the law of numbers is astoundingly not in the whistle blowers favor here, all the barriers of defence to be breached make for a loney world in whistleland.

Tue, 03/31/2015 - 09:45 | 5945114 Falconsixone
Falconsixone's picture

He could get on at the Treasury. They just sit around and bitch about the fed.

Tue, 03/31/2015 - 08:44 | 5944974 Divided States ...
Divided States of America's picture

Kevin, snt life grand when youre married to Jane Lauder, granddaughter of Estée Lauder and Joseph Lauder, the co-founders of the cosmetics company Estée Lauder Companies. Another Jew owned entity.

Btw, the Fed controls the markets while the Joo owned MSM controls the content we see on teevee.

Tue, 03/31/2015 - 08:57 | 5945006 TruthInSunshine
TruthInSunshine's picture

There still are stock-share compensated (in large part) upper executives at publicly "traded" companies who need a pump (or at least save) of already fantastically high share prices (thanks, central banks!) to be able to sell vested shares before the whole thing crashes.

This whole thing is a now 5 year-old scam, involving central banks distorting the yield complex, public companies (even ones flush with cash) selling bonds/debt at artificially low yields (thanks, central banks!) to fund share buybacks, doing stock splits that are massively dilutive, etc., resulting in an incredibly surreal 3rd massive bubble (v3.0) in the last 15 years.

Tue, 03/31/2015 - 09:24 | 5945071 RagnarRedux
Tue, 03/31/2015 - 09:13 | 5945045 silver_stacker
silver_stacker's picture

"Someone is not getting invited back on CNBC..."

He should know better than telling the truth on mainstream media...nailgun alert!

Tue, 03/31/2015 - 11:52 | 5945455 Clarabell
Clarabell's picture

"...nailgun alert!"

Na, He's a member of the sacred inner circle of the tribe. He's bullet proof ( and nailgun proof)

Tue, 03/31/2015 - 08:30 | 5944941 no more banksters
no more banksters's picture


Imagine a world without markets. We call it evolution.

Tue, 03/31/2015 - 10:25 | 5945231 Tall Tom
Tall Tom's picture

Where there is human culture there will be a market.

 

Humans trade with one another. Whether the transactions are using money, or other forms of barter, if there are humans then there are markets.

 

Imagine a world without markets? Yeah. Right.

 

I call that EXTINCTION.

Tue, 03/31/2015 - 09:24 | 5945070 StupidEarthlings
StupidEarthlings's picture

"Imagine a world in which the markets never deline......we call it Nirvana."

 

Exactly..like the band Nirvana. .. and we know how that ended.

;)

Tue, 03/31/2015 - 09:23 | 5945069 geno-econ
geno-econ's picture

Fed is intentionally juicing  stockmarket because it is only way to increase asset values and therby convert artificial wealth creation into consumption and survival of pension equity fund growth assumptions.   Just increase stockmarket margin requirements and see what happens.  Even when we had irrational exhuberance under Greenspan , he did not increase margin requirements.  Now we are at a point of no return of a business cycle and are dependant on monitary dictatorship.

Tue, 03/31/2015 - 08:24 | 5944917 Lmo Mutton
Lmo Mutton's picture

Someone should not be watching CNBC.

Tue, 03/31/2015 - 08:26 | 5944921 J J Pettigrew
J J Pettigrew's picture

THe Fed is nothing more than a Central Planner, helping one group .. deliberately...at the expense of another.

The markets can not be FREE if the cost of money, interest rates are FAKE.   Bernanke felt bad for the retirees...

for a while, I guess.  Does Janet? 

Tue, 03/31/2015 - 08:29 | 5944934 MsCreant
MsCreant's picture

He wants to retire himslef and now he gets it. 

Tue, 03/31/2015 - 08:38 | 5944961 Caggge
Caggge's picture

He should put a bullet in his head for what he has done. That is......if he was a real man.

Tue, 03/31/2015 - 09:41 | 5945101 LawsofPhysics
LawsofPhysics's picture

Yes, Ben admits to fucking the children, now can we execute this motherfucker?

Tue, 03/31/2015 - 08:26 | 5944924 Kprime
Kprime's picture

One person was killed in a firefight that erupted Monday after a car with two people tried to ram a gate at the Fort Meade, Md., military base near a gate to the National Security Agency, according to preliminary reports cited by two U.S. officials.

The officials said a firefight ensued after the car tried to crash the gate, and at least one of the two people in the car died. Fort Meade is home of the NSA.

Both federal officials spoke on condition of anonymity because they were not authorized to discuss an ongoing incident on the record.

The NSA headquarters is on the sprawling Army installation near Baltimore. An NSA spokesperson declined to comment.

Tue, 03/31/2015 - 08:28 | 5944930 GetZeeGold
GetZeeGold's picture

 

 

Dressed like women clearly on a suicide mission.....still waiting for the punchline on this one.

Tue, 03/31/2015 - 08:29 | 5944938 NoDebt
NoDebt's picture

There was an article on ZH about it yesterday.  The NSA knew about it a month ago.

Tue, 03/31/2015 - 08:45 | 5944976 Infinite QE
Infinite QE's picture

And how come their Pre-Crime division did not predict it and stop it? Need more data?

Tue, 03/31/2015 - 08:54 | 5945000 NoDebt
NoDebt's picture

They would never tip their hand as to their true capabilities for such a minor incident.  

Tue, 03/31/2015 - 10:22 | 5945220 tokerhead
tokerhead's picture

What, no-one every heard of "trannys-of-mass-destruction" before?

Tue, 03/31/2015 - 08:27 | 5944927 MsCreant
MsCreant's picture

If the Fed just stopped, what would happen?

No Fed, no attempts to control the markets.

Hmmm....

Tue, 03/31/2015 - 08:29 | 5944933 TeamDepends
TeamDepends's picture

Free market capitalism?

Tue, 03/31/2015 - 09:20 | 5945062 venturen
venturen's picture

you mean crooked bankers go with out bonuses...ARE YOU INSANE? They can't create something for nothing....they have to have zero rate money...and lots of it! 

Tue, 03/31/2015 - 10:24 | 5945227 daveO
daveO's picture

With no rule of law, Russia, 1990's. Gangsters take over.

Tue, 03/31/2015 - 08:31 | 5944944 NoDebt
NoDebt's picture

Whatever it is, it's so bad and so spooky you better not ever even think about trying it.  

Tue, 03/31/2015 - 08:46 | 5944978 negative rates
negative rates's picture

But it will be tried, and when the Fed can't pony up their portion of the gold, they will have no say in the matter(s) at hand.

Tue, 03/31/2015 - 08:27 | 5944929 BandGap
BandGap's picture

All this back and forth jawing has set up a scenario where the Fed can now cause total chaos when the time comes, and thye get to pick the time.

3-4 years down the road? Please, stop that nonsense.

Tue, 03/31/2015 - 08:31 | 5944943 MsCreant
MsCreant's picture

So they have not caused total chaos yet...

Tue, 03/31/2015 - 08:36 | 5944957 GetZeeGold
GetZeeGold's picture

 

 

The programming worked to well......everyone sees it....but nobody cares.

Tue, 03/31/2015 - 08:50 | 5944984 BandGap
BandGap's picture

Range finding, probing what the public will tolerate. Throwing jabs before the knockout.

I'll bet there are even people who think they are going to walk away from this. CNBC viewers who will follow Cramer right off the cliff.

Tue, 03/31/2015 - 08:56 | 5945003 Arnold
Arnold's picture

Used to be called 'trial balloons'.

Now recognized as  'Hindenburgs'.

Tue, 03/31/2015 - 09:04 | 5945026 22winmag
22winmag's picture

CNBC viewership could easily fit into a shorty school bus.

 

Nobody watches that shit anymore and even if they did, more people sense the iceberg in the path of humanity than we give them credit for.

Tue, 03/31/2015 - 08:40 | 5944960 Arnold
Arnold's picture

Planned Chaos is still planning.

But you are correct that what the dietician has for them for lunch must somehow be reconciled with FLOTUS dietary guidelines.

Screw it , skip lunch, lets plan for dinner, and think about breakfast in the morning.

---- Courtesy of Federal Reserve Whitepaper.

(your welcome)

Tue, 03/31/2015 - 08:30 | 5944942 Quinvarius
Quinvarius's picture

Yea for words!  Now back to your non-market electronic blips that have nothing to do with reality.

Tue, 03/31/2015 - 08:34 | 5944950 newsoutlet
newsoutlet's picture

https://stopputinregime.wordpress.com/2015/03/31/under-putin-regime-russ...

 

Under putin regime – russians brainwashed to support USSR / Stalin crimes against humanity

 

This is USSR / Stalin crimes to humanity:

https://youtu.be/oVZjyyAE-78

And these are polls showing what is Russian attitude (under putin regime propaganda) to these war crimes:

45% - crimes of Stalin can be justified, but 3 years before on 2012 only 21 % thought so.
Now 57% - object calling Stalin a criminal.
2010 there where 18 - 19% of Russians who called Stalin's death as "great leader and scholar loss" now this number has increased to 24%.

http://www.vedomosti.ru/politics/articles/2015/03/31/vse-bolshe-rossiyan...

Also check out articles:

Majority of Russians Say Stalin Played 'Positive Role'
http://www.voanews.com/content/reu-poll-finds-majority-of-russians-say-s...

Stalin wiped from Soviet Gulag prison museum
http://www.bbc.com/news/world-europe-31711287

Did Vladimir Putin call the breakup of the USSR 'the greatest geopolitical tragedy of the 20th century?'
http://www.politifact.com/punditfact/statements/2014/mar/06/john-bolton/...

Tue, 03/31/2015 - 08:36 | 5944953 yogibear
yogibear's picture

So now they have another person substituting for James Bulltard?

Tue, 03/31/2015 - 08:41 | 5944962 BoPeople
BoPeople's picture

The markets will be intentionally moved down when those in control decide that the timing is right and benefitting the bigger plan. This is a very long range plan that we treat as if the day to day matters (it also explains why the day to day rationalizations for movement make zero sense). Unfortunately the vast majority of people are not only trusting in authority, but also have difficulty understanding large numbers and large time periods. We have short lives and short memories. We are children.

Try to think what you would be doing at this period in time if you were eternal and ruled this world. You care little for the bags of meat on the earth, but souls matter to you.

There "may" be changes happening, which you are aware of, but the public knows little of. You need to ensure your survival and the survival of your control.

"Pride cometh before the fall"
"First we are taught and then we are tested"

Tue, 03/31/2015 - 08:59 | 5945010 Bryan
Bryan's picture

Nothing like a wet blanket to spoil all the CNBC fun they are having. 

Tue, 03/31/2015 - 09:00 | 5945012 Chuck Knoblauch
Chuck Knoblauch's picture

It's all going according to plan.

JOKER says buy stocks.

Tue, 03/31/2015 - 09:08 | 5945032 fzrkid
fzrkid's picture

THis is 'their' way of putting the word out. Just like back in 08, they mocked  the many that predicted the coming crash. I think it is their way of saying huh we told you so.

 

Though on the side they continue to forcefeed the cheerleaders and BUY BUY BUY..

 

Gotz to read between the lines sometimes...

 

September 2016!!!

Tue, 03/31/2015 - 09:17 | 5945054 StupidEarthlings
StupidEarthlings's picture

"The Fed can make things look better but can't make things better," 

 

 

Friggin priceless. 

 

Tue, 03/31/2015 - 09:22 | 5945066 SheepDog-One
SheepDog-One's picture

Like on that Kraft shells and cheese ad.....'go on! GIT!'

Tue, 03/31/2015 - 09:28 | 5945082 q99x2
q99x2's picture

They only have to do this until they hold title to every asset on the planet and have the military prepared to kill us.

Tue, 03/31/2015 - 09:40 | 5945090 TomGa
TomGa's picture

"Cheap money will not induce manufacturers and merchants to increase their borrowings in an unsatisfactory business situation, Dr.Anderson declared. He cited the figures for commercial loans as reported by member banks of the Federal Reserve System in support of this contention.

But if merchants and manufacturers will not use cheap money, he said, speculators will. They will use cheap money in buying stocks, for the prospect of capital appreciation...."

 

"Cheap Money is not a Panacea"

NYTimes, April 13, 1930

 

History rhymes. Hell, it repeats. The Fed has screwed it up again.

Tue, 03/31/2015 - 10:30 | 5945245 daveO
daveO's picture

Would the NYT still print that? Or, a cheer leading article about how well things are going under our great leader?

Tue, 03/31/2015 - 09:39 | 5945098 Q-Q-Q
Q-Q-Q's picture

Everyone thinks Yellen will support the markets, the're correct, at whatever short or long term damage. If the markets started to fall people would actually look at the data!!!

Tue, 03/31/2015 - 09:54 | 5945140 RaceToTheBottom
RaceToTheBottom's picture

The WS has the FEDs number because there is no difference between the two.

Yellen (and the Bernank and the Greenspam before her) are just lower paid versions of the robber barons on WS.  

The illusion of a marketplace is a convenient pretense of a curtain between the two groups.

Tue, 03/31/2015 - 09:56 | 5945148 Falconsixone
Falconsixone's picture

When the fed starts printing yaun everyone can relax....aah real money

Tue, 03/31/2015 - 10:05 | 5945176 gswifty
gswifty's picture

Joe Kiernan is such a fucking whore. These talking bobble-heads have truly sold their souls to the devil.

Tue, 03/31/2015 - 10:17 | 5945208 Omega_Man
Omega_Man's picture

Entire banking system needs to be ended now... no more of this crap. no more primary dealers, no more FED no more nothing... 

 

need a new system run by the common citizens.... goy 

Wed, 04/01/2015 - 11:55 | 5948805 Encroaching Darkness
Encroaching Darkness's picture

Wall Street doesn't have the Fed's number, nor vice versa, Wall Street doesn't control the Fed - IDEOLOGY controls the Fed, in the form of Keynesian claptrap, and similar forms of economic nonsense. Vague theories that no sane man would defend keep them on a collision course with disaster.

ZIRP has not stimulated the economy - we are still losing jobs, markets, companies (that actually make / sell useful goods) ; years of ZIRP have not worked, but raising interest rates would  eat up all tax revenues as interest payments without diminishing the national debt.

But they can cook the numbers to APPEAR as if we are making some progress - so they do.

Lies, all around, supported and justified by more lies. Reality is TRUTH, and liars can't handle truth, but it's coming.

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