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Flummoxed Fed Sparks Insta-Buying Binge In Bonds & Bullion, Stocks Hit By Hindenburg
Economic expectations tumbled but rate hike expectations surged... labor market hopes rose but economic growth is expected to weaken... so buy stocks you retard! Artist's impression of the last 2 days in The Eccles Building...
And furthemore... *YELLEN SAYS FED STRONGLY BELIEVES 2008 AIG ACTIONS WERE LEGAL
The result of all this confusion... A 3rd Hindenburg Omen in the last 5 days...
Futures show the full day's vol...
Futures eneded up dumped back perfectly to VWAP...
Cash Indices on the day
Since Friday, Trannies remain ugly...
While stocks are back in the green from Friday, VIX remains higher
And Credit remains thoroughly unimpressed...
Bonds bought with both hands and feet...
The Dollar was monkey-hammered...
Gold and Silver stacked... (and crude and copper playing catch up)
* * *
Post FOMC performances...
Stocks...
Bonds...
Commodities...
Charts: Bloomberg
Bonus Chart: Still Confused after today's FOMC?
Someone found THE perfect gift for FOMC days. Especially when Yellen speaks -> http://t.co/h8YoYWyMoO $SPY $TLT pic.twitter.com/VeaTxqDqM6
— StockTwits (@StockTwits) June 17, 2015
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Fed is trapped. Everything overpriced except bullion. Bullion trend is up from here in all scenarios.
No...
Fed...
Hike...
[Not... Gonna... Happen]
"You can't taper a Ponzie-Scheme." - Max Keiser
Trapped like rats. That torture comes to mind where they'd put rats on you and force them to eat through your stomach to get away from the heat above. It's about that time.
I think they should paint their stomachs with pork fat, then file down those rat teeth and claws. Make 'em work for it, but also make it worth their while.
I think the bullion market is so distorted that most people in it now, just hope for continued lower prices, just like the Chinese and eastern markets.
It is so bad, the propaganda and suppression so blatant, you just keep buying as if completely numbed by the idiocy of all markets and mainstream lies stacked on top of lies.
"Understand fed speak"
What is the point of understanding lies better?
I feel like I have to say this over and over....the fed doesn't believe what it says. They lie. They have been lying forever. And arguing that their lies aren't sound logic is stupid. Just call them fucking liars and look at what they do. What they say is irrelavant.
Everyone, to the FOMC: "I'm not going to insult your intelligence by suggesting you believe what you just said"
Mr. Yellon said today that the Fed is transparent. At least we have that going for us.
Yep, we can see right through them
We can, but seeing everyone hanging on their words like flies on shit, is pathetic.
Note the surgical choice of Weasel Words: "Yellen strongly believes..."
"Believes"? WTF? Is this Fed math or Fed religion that she's peddling?
All this effort in first class bullshitting, for a lousy 30 Dow points... These guys are pathetic.
Charles Evans of the Chicago Fed loves the FOMC's karaoke team-building event, where his reputation for belting out 70s classics is unmatched:
“The Boys are Back in Town” by Thin Lizzy
Guess who just got back today?
Them Keynesian boys that had been away
Haven't changed -- got too much to say
But man, I still think them doves are crazy
They were asking, Ben, if you were around
How you was, is any of your beard still brown?
Told them you work as a rodeo clown
Driving your pal Greenspan crazy
The doves are back in town (the doves are back in town)
You know that Chair that used to print a lot?
Twice a year she'd be on the floor of Congress pumping up the Dow
Man when I tell you she was dovish, she was white hot
I mean, she was flaming
And that time over at Bullard's place
Well this hawk got up and she slapped Janet's face
Man -- we fell about the place!
If that hawk don't want QE4, forget her
The doves are back in t-o-o-o-o-w-n
Just spread the word around ...
Friday night, we’ll all eat our fill
Steaks on Lacker's backyard grill
The Keynes will flow toward that Friedman shill
And if that hawk wants a fight, he’s gonna get it!
The boom box on his porch blasting out my favorite song:
“Easy Money” – so you know it won't be long
Won't be long 'till QE comes
Now that the doves are here again
The doves are back in town (the doves are back, the doves are back) ...
I cannot possibly give this enough thumbs up!
'The fed funds rate will be .625 at year end ' .... funniest thing I heard all day.
That and "Hindenburg Omen". I can't help but giggle uncontrollably at the utter absurdity of the constant regurgitation of this non-"technical"!
Is anyone keeping count of the "failed" Hindenburg Omen warning we've had in the last handful of years? Don't folks realize that this time is different?
Still like the ZH Headline: Stocks hit by Hindenburg.
I need to catch up on my "Three Stooges" re~runs.
Hey, Moe! Woob-woob-woob.
curly = zero hair length policy
The FED cannot raise rates because the economy is soo strong (DUH!). Just take the money to the Wall Street Casino. All is well. Keep calm and buy on.
How many hindis now since 2008?
Yeah... zzzzzzzzz.....
Paper returning to it's intrinsic value.
"Bonus Chart: Still Confused after today's FOMC?"
nope. right before each fed announcement, speech and press conference, i slam my head in the steel door at least 10 times, until i have a real good stream of blood flowing and then i proceed to drink a bottle of jack in 10 minutes. then i listen to the Fed and it seems so clear.
Expand you?? WTF?? now we have photoshop typos too? lolololol
I agree: Bullion trend is up from here in all scenarios.
Bonds? 30 year Bubble. Stocks? On the verge of a 60% collapse, minimum. Cash? Uh, no. Where is one gonna put his money in the uncertain times ahead? PMs.
On weekly and daily it was bottoming for too long period, thats not a good sign. If buyers had such an advantage we should see a sharp reversal not this rubbish performance. Just sayin`.
WHIMPS....OK....CHIMPS.....OK.....FEATHERLESS CHICKENS......
THE WHOLE ASS....DAMN ARE THEY FUCKING UP. NO BALLS IN PH.DUMBASS.
AND I'M A DOCTAH !
Time for Blazing Saddles and Young Frankenstein tonight....and Little Shop of Horrors....Doctah !!
Aaaand gold remains safely under $1200.
Hey Moe! Im a victim too, of CIRCUMSTANCE...yuwk yuwk yuwk,
Millenniels and Gen X'rs....go wipe your jobless asses with your $ 90,000 debt Lib - college degreed toilet papers, in Keynsian economics,
Ill front run, you, ya schucks, in LA, thirsty? go sell your houses.
You know...
In the last seven years there have been dozens and dozens of Hindenburg Omens. None of them were followed by anything extraordinary that I recall...except for, maybe, some more Fed easing.
I am not sure that Omen means what people say it means.
We need a space shuttle omen, there's altitude difference with this next blow up
Watching SPY tape today after FOMC made me piss my pants. What a fucking HOOT. And watching spreads on Bid/Ask on SPY options was like watching a sci fi movie.
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=14001
JESSICA DESVARIEUX, PRODUCER, TRNN: Welcome to The Real News Network. I'm Jessica Desvarieux in Baltimore.
So the big question in the world of economics is whether or not the Federal Reserve will raise interest rates and end their bond buying program known as quantitative easing. Chair Janet Yellen will give a quarterly economic and interest rate forecast at a meeting between June 16th and the 17th. But what would her announcement mean for everyday people? Joining us to discuss all this and the man behind the Hudson Report is Michael Hudson. Michael is a distinguished research professor of economics at the University of Missouri, Kansas City. His latest book is Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.
Thank you, Michael, for joining us.
JESSICA DESVARIEUX: So Michael, just briefly can you start by explaining how quantitative easing works, for our viewers?
MICHAEL HUDSON, PROF. OF ECONOMICS, UMKC: The Federal Reserve created $4 trillion worth of credit electronically on its computers when the economy was in trouble in 2008. It could have used this $4 trillion to write down the debts. It could have used it to spend into the economy and create sort of a recovery. But instead it gave all the money to the banks, and its claim was that if you give $4 trillion to the bank reserves this is going to help the economy, because the bank is going to lend more money to the economy and drive it in, $4 trillion deeper into debt.
This was a crazy idea. Here we were in a debt crisis, and the Fed said what the economy needs to cure the crisis and get employment moving again, is more debt. So the banks got the $4 trillion. And of this was so much money that interest rates were driven down to 1/10th of 1 percent on government bonds. And the Fed was lending money to the banks at 1/10th of 1 percent. So the idea was, the pretense was that now the Feds can lend mortgage money at hardly anything at all, and people can [bid] prices, house prices even higher. And that will save the banks from losing all the money on their liars' loans--the liars were the banks--on their junk mortgage loans. Or the Fed will lend the money to industry, and corporations will now say gee, we can borrow so cheaply that all we need to do is make maybe a three or a four percent profit, and we can hire enough labor to make people all fully employed again.
DESVARIEUX: All right, Michael. Hold on, hold on, one second. Now that the federal government though is talking about ending quantitative easing, also known as QE, who would be the winners and losers of this policy ending?
HUDSON: Well, in order to say who would be the winners and losers I have to say what happened when they did the easing. When they did it it drove interest rates down to, as I said, to a fraction of a percent, what did the banks do with the money? They didn't lend to industry to hire, they lent to industry to essentially arbitrage. They lent to corporate raiders to buy out industrial corporations, and they, most of all, they lent to companies to buy back their own stock.
So in the last, for this year alone, Standard & Poor's and other agencies guess that the winners are going to be the corporations that are going to spend over a trillion dollars in buying back their own stock. Because they can borrow so cheaply, why not buy back their own stock with interest rates so low.
So this trillion dollars is not going to be invested in new goods and services and production. It's not going to be invested in hiring labor. So who will be the winners? Well first of all, the pension funds have been complaining that interest rates are so low that they haven't been able to make enough money in their funds to be assured to pay the pensions that are falling due. The cities and states, California, New Jersey now, Illinois, are all saying wait a minute, we're so far behind in our pensions because we haven't been able to make the money, that we need higher interest rates in order to make enough money to pay the pensions. And the insurance companies have said, well, look, we need higher interest rates to solve the problem that we're making so little money securely that we promised to pay all these annuities, and we may go broke.
So in principle the whole idea is to help the pension funds, insurance companies and retirees make enough money to live on. That's the promise. But it's a false promise. It's just really the cover story. Because what's going to happen, as is so often the case, solving one problem creates yet new problems.
So look at who the losers will be if the Federal Reserve stops quantitative easing. Well for one thing, if they raise interest rates here--and when they say stopping quantitative easing, Janet Yellen really means let's raise interest rates and get them high again, as if that's going to help the economy. Well the first thing is if the United States raises interest rates that's going to push the dollar way up against the Euro, and most of all against third world and Asian countries. This means that countries that owe foreign debt, that's almost all denominated in dollars, especially to the International Monetary Fund or the World Bank, they're going to have to pay much more money in higher-priced dollars for their own currency. So this is going to aggravate debt deflation and defaults in third world countries.
Secondly, all of a sudden when they raise the interest rates, all this arbitrage that's been occurring to bid up the stock market, to bid up the bond market and to bid up real estate markets is going to be reversed. Because if interest rates rise, banks are not going to lend as much money to buy stocks and they're not going to make as much money to lend real estate.
So the economy's really painted itself into a corner. Nobody's able to win at this point, that's the problem with the economy. And in that sense you can say it's not that we really have a problem. We have a quandary. And a quandary is something where there isn't a solution. Mathematicians call this the optimum solution, or the optimum position. The optimum position is one where you can't make any move without making things worse. And that's the position the United States is in right now. This is as good as it gets, which is another way of saying it's all downhill from here.
DESVARIEUX: Michael, you don't see any way of us being able to get out of this sort of, debt deflation, this worst case scenario options here? Do we have any sort of options that allow us to kind of get out of this?
HUDSON: There is one way to get out of it, but it's, they're not willing to do it. The way to get out of debt deflation is you write down the bad debts. And this is what should have been done in 2008. As a matter of fact, when President Obama was running for election he promised to write down the bad mortgage debts to bring the mortgages in line with what people could pay. Well, right now you have a lot of interest on mortgages. You have a lot of principal coming through. You have a rise in defaults on mortgages because the debts are not written down.
And as soon as Obama was elected, Barney Frank went to him and said look, I've got the Republicans to agree and Paulson at Treasury's agreed we can write down the debts. And Obama said, I changed my mind, I'm not going to do what I promised. I'm appointing Tim Geithner as the bank lobbyist in charge of the Treasury Department, and he said we have to help the banks and forget the voters. And so the debts are not written down. If you don't write down the debts, the economy is going to have to use its money to pay down the mortgage debts, to pay all the corporate debts.
Let's look at these corporations that are buying their own stock, for instance. They say, well, look. If our stock is paying, maybe, 6 percent dividend, or 5 percent, or even 4 percent, let's borrow money from the bank and buy the stock. But now if the interest rate goes up, the stock market may fall easily by 20 percent. That's what people are so worried about. Whenever Janet Yellen talked about ending quantitative easing, the stock market takes a couple of hundred points' plunge.
So if the stock price goes down, say, 20 percent, then here are these companies that have borrowed to buy their own stock. And instead of making a two or three percent gain, the difference between the 1 percent they borrow at and the 4 percent, say, that the dividend rate is, all of a sudden they lose 20 percent and they're in trouble. They've taken a huge loss.
So all of this seeming gain, this sort of fictitious capital that's been created is going to be wiped out if you don't simply write down the debts. And because you, the government and the politicians, Congress, have all said we're assigning economic policy outside of the government, we're letting the Federal Reserve be the central planner, well, the Federal Reserve is loyal to its customers and its owners, the commercial banks. So basically Congress and the executive branch has said we're going to save the banks, not the economy. And saving the banks means you impose debt deflation on the economy, you shrink the economy. There's not going to be a revival in employment under these conditions. There's not going to be rising wages. And the capital gains that have been spurring the stock and bond markets, and the real estate recovery, are going to be reversed.