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Fed's Lockhart Sends Stocks Reeling; Dollar, Bond Yields Soaring

Tyler Durden's picture




 

"Priced in?" Atlanta Fed's Lockhart is the un-Bullard as he proclaims that September would be "appropriate time" for rate hikes to begin... Stocks have roundtripped from initial excitement to lows of the day, short-end bonds are ugly as the curve flattens dramatically and the USD index is surging...

 

As The Wall Street Journal reports,

Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy is ready for the first increase in short-term interest rates in more than nine years and it would take a significant deterioration in the data to convince him not to move in September.

 

"I think there is a high bar right now to not acting, speaking for myself," Mr. Lockhart said in an exclusive interview with The Wall Street Journal.

 

Mr. Lockhart is watched closely in financial markets because he tends to be a centrist among Fed officials who moves with the central bank's consensus, unlike those who stake out harder positions for or against changing interest rates. His comments are among the clearest signals yet that Fed officials are seriously considering a rate increase in September.

The only problem - the data does not support this bullshit at all...

 

So why is The Fed so desparate? It seems the gap between markets (30Y) and fed credibility (ED short end) has never been wider as bonds track weak macro lower...

 

Charts: Bloomberg

 

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Tue, 08/04/2015 - 14:02 | 6390408 JustObserving
JustObserving's picture

More lies by the Fed.  Pretend that the US economy is doing well even as China dumps US Treasuries.

If it weren't for lies, the Fed would have nothing to say

Tue, 08/04/2015 - 14:04 | 6390419 Haus-Targaryen
Haus-Targaryen's picture

It is no market when someone just has to say a thing or two, and a couple trillion in equity is created out of thin air.  

Insanity.   

Tue, 08/04/2015 - 14:13 | 6390472 Osmium
Osmium's picture

Yellen must have downvoted you!

Tue, 08/04/2015 - 14:17 | 6390500 Four chan
Four chan's picture

lol

Tue, 08/04/2015 - 14:25 | 6390540 Haus-Targaryen
Haus-Targaryen's picture

Can you imagine the rally if Yellen was to "leak" a 

"Yeup, I'll print another few trillion before I'll ever let equities correct."

S&P 20000!  

Tue, 08/04/2015 - 14:37 | 6390589 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Maybe I'm living in the Twilight Zone, but my dealings with people for the last month has been downright depressing. The real sentiment right now is in the dumpster. The FED is either clueless, or fully aware and this is an act of desperation to scrape together some “ammo” for what's coming. Of course the stawk market is more clueless than ever, it gets worse with every cycle.

Tue, 08/04/2015 - 14:04 | 6390421 Occident Mortal
Occident Mortal's picture

Fed needs to begin tightening before the oil price begins to rise.

 

Tue, 08/04/2015 - 14:07 | 6390436 Bay of Pigs
Bay of Pigs's picture

Tightening? Yeah...a huge move of .25%.  s/

What a fuckan Clown Show ther FED is...

Tue, 08/04/2015 - 14:13 | 6390474 mtndds
mtndds's picture

The FED sends one of their idiots out to speak to see how the market will react if they mention rate hike in September.  If the market freaks out then they know they probably should not raise in September.  They may then hold off until December.  Its all a game with the FED.

Tue, 08/04/2015 - 15:28 | 6390834 Kaervek
Kaervek's picture

They have to realize that if they continue this game they might aswell never raise anything and be done with it. Markets are going to freak, because they are addicted to QE like dope-fiends now. There is no raising rates without crushing some sheeple in the process, but I think this might've been their plan all along, smart money is moving out - maybe they need a proper crash to really make some money off those bag-holders?

Tue, 08/04/2015 - 14:14 | 6390476 kliguy38
kliguy38's picture

THEY are Clownassniffers to you Pig...........

Tue, 08/04/2015 - 14:16 | 6390491 Occident Mortal
Occident Mortal's picture

Do you really think they will tighten as much as that??

 

Have interest rates ever been doubled before?

 

 

I expect them to tighten to 0.375%

Tue, 08/04/2015 - 14:16 | 6390495 r00t61
r00t61's picture

Yes, I seem to recall "hawkish" (meaning controlled opposition) mouthpiece Richard Fisher from Dallas Fed saying similar things over the past few years; and yet we are still sitting on ZIRP to infinity.

I think this is Fed's attempt to jawbone the effects of a hike without actually having to raise rates.  Kind of a "there is no spoon" deal.

Tue, 08/04/2015 - 14:05 | 6390428 seek
seek's picture

"If it weren't for lies, the Fed would have nothing to say"... or reason to exist.

Tue, 08/04/2015 - 14:08 | 6390450 KnuckleDragger-X
KnuckleDragger-X's picture

It's not so much a lie as a firm belief that if they can successfully manipulate their models, they can do the same to the real economy. As a wise man once told me "Never believe your own bullshit".....

Tue, 08/04/2015 - 14:11 | 6390465 LawsofPhysics
LawsofPhysics's picture

Yes, what does "full faith and credit" really mean in a fiat world?

Nothing, motherfuckers.  Prepare for global weimar.

Tue, 08/04/2015 - 16:26 | 6391063 sun tzu
sun tzu's picture

We've been preparing since 2007 but when is it coming? This game of musical chairs could go on for another 20 years for all we know.

Tue, 08/04/2015 - 14:12 | 6390466 booboo
booboo's picture

Just the tip sweety, pinky promise.

Tue, 08/04/2015 - 14:24 | 6390534 DavidC
DavidC's picture

"We didn't mean it, we didn't mean it!"

DavidC

Tue, 08/04/2015 - 14:02 | 6390410 lehmen_sisters
lehmen_sisters's picture

I hope they do. Start the unraveling anytime now, keep shipping that gold out of the COMEX, lets get the party started. 

Tue, 08/04/2015 - 14:05 | 6390426 joseJimenez
joseJimenez's picture

Yeah,  I am sick and tired of all the bullshit and lies from these criminals.  I agree with you lets get going and put this crap behind us

Tue, 08/04/2015 - 14:02 | 6390412 Four chan
Four chan's picture

a chainge is gonna come and it aint higher interest rates.

Tue, 08/04/2015 - 14:05 | 6390418 Fukushima Fricassee
Fukushima Fricassee's picture

Lying shits they all are. The FED will not raise rates, even if they do .25 they will reverse immediatly.

Tue, 08/04/2015 - 14:39 | 6390606 Athemos
Athemos's picture

Nope it is time for them to complete the destruction.  I dont understand why so many on the board think an interest rate increase will serve good.  They have looted everything through inflation of asset prices but not wages for the working class to afford their own stuff.  Now it is time to wipe them through deflation in what little assets they have left and make them worth less. People still think the Fed is just ignorant.  Quite to the contrary this is extraordinary engineering on their part.  It just sucks they are such psycopathic evil fucks they are probably sucking Satan's asshole just to get high at this point.

Tue, 08/04/2015 - 15:31 | 6390847 Kaervek
Kaervek's picture

Thing is they do get high off this shit, while we suckers are left to bury the bones of our dead children

Tue, 08/04/2015 - 14:05 | 6390429 BullyBearish
BullyBearish's picture

They must REALLY have to take the punchbowl away...what are they seeing that so exceeds their ability to stay calm and continue raping the currency, constitution and saver?

Tue, 08/04/2015 - 14:06 | 6390437 Seasmoke
Seasmoke's picture

How many times can the liars cry Wolf !!!!

Tue, 08/04/2015 - 14:07 | 6390445 Panafrican Funk...
Panafrican Funktron Robot's picture

Would be pretty funny if they announced rate hike + QE in Sept.  Pretty sure that would break most algos in half.

Tue, 08/04/2015 - 14:16 | 6390493 NoDebt
NoDebt's picture

Funny, yeah.  But not like "ha ha" funny.  More like "oh, shit" funny.

Tue, 08/04/2015 - 14:08 | 6390449 phoolish
phoolish's picture

Wake me when we get to 5.25% Savings Accounts.

Tue, 08/04/2015 - 14:14 | 6390481 Osmium
Osmium's picture

You are going to be asleep a long, long time.

Tue, 08/04/2015 - 14:21 | 6390513 Four chan
Four chan's picture

i still dont understand why someone would dump a utility stock that's paid 4% plus for the last hundred years when the fed says its raising interest rates .25%. is some fool selling the giant yield for a next to nothing yield? its nonsensical to me.

Tue, 08/04/2015 - 14:44 | 6390643 Consuelo
Consuelo's picture

 

 

Ah - the days...    When a 'passbook' savings account was a youth's first introduction to 'banking'.   And 5 & quarter percent rate-on-savings was considered just that --- 'for children'...

 

What would a 'paltry' 5% do to this inverted (Debt & consumption vs. Savings & Production) modern economy...?

Tue, 08/04/2015 - 15:41 | 6390886 Kaervek
Kaervek's picture

Shitty companies surviving on cheap loans would get utterly destroyed, which is long overdue. Shitty CEOs would lose their jobs, shitty investors would finally lose their paper wealth. The middle class would prosper, real value would be created and the economy could revive itself. Saving would again be something every little child does, just how it should be - why not save some money for bad times? Fuck this debt-slavery.

It would re-establish sanity - that's why it's never going to happen.

Tue, 08/04/2015 - 14:09 | 6390453 the not so migh...
the not so mighty maximiza's picture

yeah sure buddy they are going to raise rates,  and i am married to a porn star too,  assclown

Tue, 08/04/2015 - 14:09 | 6390456 Panafrican Funk...
Panafrican Funktron Robot's picture

Timing is interesting too.  Sept rate hike + what is likely to be an earnings bloodbath for Q3, seems like a good time for the Fed to start jawboning QE.

Tue, 08/04/2015 - 14:11 | 6390464 you enjoy myself
you enjoy myself's picture

This really is hillarious.  The funniest part will be when everything starts crashing at .50% and Fed has to pretend it has ammo left by.....dropping to .25%

Tue, 08/04/2015 - 14:15 | 6390485 NoDebt
NoDebt's picture

I think they get all the way to .75 before they are forced to unwind it all and then announce QE4 @ $160 billion/mo.

Tue, 08/04/2015 - 14:15 | 6390484 wmbz
wmbz's picture

These Bankster assholes love fucking with people!  Spit out a few words, then sit back and watch the reaction.

While humming "I've got the power" to themselves!

Tue, 08/04/2015 - 14:15 | 6390486 Secret Weapon
Secret Weapon's picture

The problem claiming to be the solution. 

Tue, 08/04/2015 - 14:17 | 6390499 Yancey Ward
Yancey Ward's picture

If the recession hits with ZIRP still in place- something orthodox economics proclaims is impossible- it makes the Fed look like morons.  That is why they are desperate to raise rates- so they can blame it for the next recession.

Tue, 08/04/2015 - 14:26 | 6390547 back to basics
back to basics's picture

The recession has already hit with ZIRP still firmly in place, that's why they are panicing. To say that they painted themselves in a corner by their moronic refusal to let this fake market correct even by 5% is an understatement. 

Tue, 08/04/2015 - 14:20 | 6390510 Bitcoin Meiser
Bitcoin Meiser's picture

And she'll have fun, fun, fun
Till her daddy takes the T-bird away...

Fun, fun, fun...till her daddy takes the T-bird away...

 

:(

Tue, 08/04/2015 - 14:24 | 6390531 vq1
vq1's picture

welcome to casinoconomy!

 

no reason to miss the days of Efficient Market Hypothesis

 

"If youre not making money in this market you're a fool"

that or you dont have a server room and some quantitative analysts and talented software engineers in New Jersey. 

Tue, 08/04/2015 - 14:26 | 6390545 Quinvarius
Quinvarius's picture

TRANSLATION:  I just got stopped out of Apple.  So fk you all!

Tue, 08/04/2015 - 14:27 | 6390557 Bitcoin Meiser
Bitcoin Meiser's picture

Everyone is losing their freakin mind! What?

Tue, 08/04/2015 - 14:30 | 6390570 Consuelo
Consuelo's picture

 

 

"Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy is ready for the first increase in short-term interest rates in more than nine years and it would take a significant deterioration in the data to convince him not to move in September."

 

Clever little bit of telegraphing right there...

Tue, 08/04/2015 - 14:39 | 6390610 Rathmullan
Rathmullan's picture

"significant deterioration" in macro data as in aapl under $115

Tue, 08/04/2015 - 14:46 | 6390657 djsmps
djsmps's picture

REELING???.

Tue, 08/04/2015 - 14:49 | 6390668 MFL8240
MFL8240's picture

When all else fails, go with a winner!  Send one of the fools out to lie!

Tue, 08/04/2015 - 14:50 | 6390671 arbwhore
arbwhore's picture

... and now markets are back to unch and only the PMs remain down. Once again, jawboning seems to work. Rate normalization? Not in my lifetime.

Tue, 08/04/2015 - 14:52 | 6390678 Lin S
Lin S's picture

Cashed out of my IRA last month. 

Sold off all of my stocks, today.  I sold down and lost some money but it's better than losing even more in a month or two.  Or so I figure.

I hope I did the right thing. 

Tue, 08/04/2015 - 15:46 | 6390899 Kaervek
Kaervek's picture

You did the right thing, question is whether manipulated markets will reward you for it - who knows anymore?

Tue, 08/04/2015 - 14:57 | 6390703 robertocarlos
robertocarlos's picture

Canadian dollar was up a bit this morning and it just lost 40 cents in about an hour.

Tue, 08/04/2015 - 17:34 | 6391332 In.Sip.ient
In.Sip.ient's picture

So the BoC strategy to support the US$

and contain its interest rate hike is

working?

 

Or is the BoC trying to get the current government

out in the current election???

 

I wonder...

 

Tue, 08/04/2015 - 15:07 | 6390741 chisler
chisler's picture

Test shit balloon.

Tue, 08/04/2015 - 15:07 | 6390744 TeethVillage88s
TeethVillage88s's picture

Strategically September represents one Year to the Presidential Election and allows a short period under Obama and an Opportunity for the new President to come in and do little for Jobs or the Economy... He can just reinforce the False Meme that the "FED", Federal Reserve, is the organization responsible for the whole US Economy, Trade, and US Jobs.

Janet Yellen's Mafia screw Households 3 ways to Sunday, Screw Small Businesses, Screw the Business Cycle, Create Mal-Investment out the Ying-Yang...

And the FED Mafia are allowed to Serve Satan without a word.

It's another Meme.

They say it "IS" the System. That IS Our System.

Bull Crap. Politicians are either Stupid, Corrupt, or Devious Racketeers.

Tue, 08/04/2015 - 15:18 | 6390794 kreso
kreso's picture

Dear Mr Tyler,

I fail to perceive consistency in your recent posts.

If Chinese have to drop 1$ Trillion in UST bonds, to protect CNY and Chinese stock market, wouldn't Fed benefit / be forced to raise interest rates? 

Didn't low interest rates push capital in stocks, as it was perceived that US companies will emit their own bonds with higher rates, effectively displacing Fed as a credit creator? Didn't this create bubble in stocks? And to create the safe exit for pension funds, interest rate have to rise, for a political reason as well?

Please don't use the word b**t 

Kind Regards,

 

Tue, 08/04/2015 - 15:24 | 6390820 robertocarlos
robertocarlos's picture

Some guy in Belgium bought all 1 trillion worth of those Chinese sold US bonds. Possibly it was the monestary guys who make beer.

Tue, 08/04/2015 - 16:53 | 6391179 g speed
g speed's picture

who will hold to maturity making the bonds go to zero after giving China printed zeros (on a balance sheet) which China will promptly use to service it's debt taking the balance sheet to zero-----its all zeros folks ----just zeros. 

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