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Dudley Sends Rate-Hike Odds Plunging, Hammers USDJPY, Slams Stocks
Comments from Fed's Dudley have sparked USD weakness as a sooner-rather-than-later rate-hike appears off the table. USD weakness drags USDJPY lower which in turn fun-durr-mentally slams US Stocks. September rate-hike odds slide to 26% from 28% yesterday...
Odds tumbling...
as are stocks thanks to USDJPY...
Charts: Bloomberg
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Unpossible. Markets go up always. Moar moar moar!
Can the dumb fuck bank analysts now shut the fuck up and go get a productive job swinging a hammer or turning a wrench or something?
http://www.zerohedge.com/news/2015-08-25/its-still-september-ignore-fed-...
The Fed cannot raise rates.
The U.S. gross federal debt currently stands at $17.548 trillion, and net interest payments to our creditors are the fastest-growing item in the budget. In 2014, the Congressional Budget Office projects that the nation will spend $233 billion on interest payments. By the end of the budget window in 2024, however, CBO forecasts that interest payments will nearly quadruple to an astonishing $880 billion. Every dollar spent paying our creditors is a dollar wasted—money for which we get nothing in return. Interest payments threaten to crowd out every other budget item. – Mises Institute, Canada
And from ZeroHedge
http://www.zerohedge.com/news/2015-03-18/here-why-fed-cant-hike-rates-ev...
In short, what Poszar is saying is that in a world in which the traditional broker-dealers and banks have indeed reduced leverage and instead use $2.5 trillion in Fed reserves as fungible collateral against which to buy credit derivatives (for example as in the case of JPM's CIO office and its attempt to corner the IG9 market) the buyside community, which as we have long discussed has largely avoided equities due to fears of a spectacular market implosion (and certainly minimized levered exposure in the space with the exception of several prominent HFT participants) has instead been forced to chase after fixed income products. And chase with leverage that would make one's head spin as can be seen in the outlier chart above.
And while Poszar may be quite correct in stating that most have missed the leverage creep he observes above... http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015...
Perhaps the key reasons why economists have missed the creep of leverage into the traditionally long-only world of fixed income mutual funds are the conceptual gaps in the way in which the U.S. Financial Accounts (formerly the Flow of Funds) depict the global financial ecosystem, and by extension, the limited mental map it gives to economists who use it to understand asset prices.
... one entity that does understand all this and grasps the momentuous implications of even the smallest quantum of interest rate increase, is the entity where Poszar previously worked: the US Treasury and the Federal Reserve itself.
And so, the next time someone asks "why is Yellen so terrified of even the smallest possible rate hike", show them this chart above and explain that the Fed vividly remembers what heppened when LTCM blew up. What the Fed doesn't want, is not one but one thousand LTCMs going off at exactly the same time in what is now the world's most levered trade...
How the Yen ever strengthens is beyond any reason. Biggest Ponzi scheme among all Ponzi schemes
just ask, who needs yen and why? if you borrowed in yen and you converted it to dollars or whatever else, to use somewhere else, and now you must repay that loan in yen, who needs yen? you do. so you sell whatever, buy yen/repay loan.
So what is causing all of this turbulence? The source is the massive misalignment of exchange rates, which finds its roots in quantitative easing. Case in point, consider Japan, which has weakened its currency by over 50 percent against the U.S. dollar, while China, Japan's largest trading partner, has basically pegged the renminbi (RMB) to the dollar.
Strains on the terms of trade between countries that have devalued and those that have not have built to the point that perpetuating these disparities is destabilizing to the countries that have staunchly fought devaluation. Witness China’s recent move to devalue the RMB versus the dollar, proving that artificial equilibrium is not only impossible to maintain, but ultimately disruptive to markets and economic growth.
Now we are facing the turbulent path to a new equilibrium. The coming weeks will be difficult and it is hard to hazard a guess as to when and how this will all end. Nevertheless, I place great faith in governments' willingness to use the printing press. It is a handy tool to prop up asset prices and temporarily spur economic growth. For that reason I don't see recession on the horizon for the G-7 nations or China either. - Scott Minerd - Guggenheim
QE4 leak to WSJ in 3,2,1...
A few posters pointed that out yesterday on that thread.
Remember that guys name. Guy Haselmann of Scotiabank.
Rate hikes?....we don't need no steenking rate-hikes!
Dudley sends gold higher
Looks like a dead cat bounce.
Yes I should have added for now..............
Stawks quiver in fear of potential rate hike. Fed comes out and says rate hikes less likely. Stawks quiver more. Sounds like a no-win scenario to me. Where's Kirk when you need him ...
https://www.youtube.com/watch?v=b9dEI-Ru1CI
I would buy the day before the non-announcement. Remember the first rule of intervention: Bad news is good news. Or, Bad News is bullish.
Maybe they will even drop the last quarter point to actual zero. Stocks will rise 1000 points on that kind of bad news.
Insanity is the new normal.
CLOSING TIME
They want DOW 16,000 or better at the close.
God knows how much CTRL-P it will take, but failure today is not an option.
Everybody's all tense and stuff.
The rate-hike odds were zero to begin with for anyone with an IQ above room temperature.
There is no real growth in the land of the free. Inflation is adjusted lower to create a fake growth
The Chapwood Index for 2014 was 9.7% and official CPI in the land of the free was only 0.8%. So the Nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.
The revised real GDP for years 2011 to 2013 worked out to -6.2%, -6.5%, -6.5% respectively.
What is the Chapwood Index?
"The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."
http://www.zerohedge.com/news/2015-05-29/inaccurate-statistics-and-threa...
What about Chocolate rations?
"What about Chocolate rations?"
Once again, they shall be raised from 40 grams to 30 grams.
Let me be clear, there is no Fed equity market put.
William C. Dudley, NY Fed CEO
Bernard M. Baruch College, New York City
December 1, 2014
psst: that means there is and I have the charts to prove it.
I wonder how much information the William Dudley leaks to his old buddies working over the Squid before he makes a public speech?
he doesn't tell them they tell him
Maybe I'm just a big dummy . . . . but looks like PMs and USD are asking if it even matters what this clown jawbones or what they do in September.
It helped gold too.
Yes, it would be bonkers to raise rates, much less near anything close to a historical norm, because the recovery is here: hiring improving, inflation down, home prices up, unemployment down. Better maintain ZIRP another 7 years and fire up QE4. It would be crazy to do anything else in this strong economy.
Hahahaha! The exact opposite of what they want it to do. If that isn't a sign that they are losing control I don't know what is!
All they've ever had is the ability to manage expectations via massively influencing markets. So... as long as they keep their facade of integrity shiny for one more day, they've succeeded.
Can someone help clue me in on why these two factors (usdyen and us stocks) correlate?
Simple. Machine - HFT- programs cannot think live - in real time. the human programmers have them do "one" thing (goal set) at a time - depending on news flow; and change the goal/program from time to time. So they need something to follow that is fairly dominate = usjpy fx. As it moves the HFT moves, watch it on any two charts at the one minute scale. Of course, usjpy moves are the very largest financial institutions moving very large amounts of money -goal directed- by their institutional client money flows. Riskon-risk off in fx is much bigger deal by a factor of 1000 than the stock market.
Just checked kitko's live silver chart. dumped below $14.00 just a few minutes ago, now recovering.
Funny thing is a tooth filling came out of my mouth the other day (from when I ate too mcuh candy as a kid - why didn't they warn us back in the 50s?) while munching on a nice pork chop. I saved it.
Thanks, Dr. Bianchi, you kucking butcher. I haven't been to a dentist in 40 years. True. Got most of my teeth, too, and I'm almost 62.
Fuck everything. I'm gonna go play out in the sunshine. These markets are such a total fraud, like the government, gun control, edmunication, etc., etc.
(Undecided whether I'd like to shoot a banker or a TV anchor first. Tough call. I'll stick to squirrels for now.)
This whole crash thing is Wall Streets way of informing the Fed that "......we don't need no stinkin' rate hike"
I come here for my daily dose of depression.
So i thought No rate hike is bullish for stocks. And Zerohedge is saying even that is negative for stocks.
Everyone, including Dudley-do-nothing, knows that there will have to be a normalization at some point ... be it with war, without war, with more people, with less people, with individual currencies, with a global currency, with many countries, with a one-world government, with the current global configuration, after a pole shift, with Satan and his minions or within Jesus Christ. etc., etc., etc.,
The combinations are endless. The only things to be enacted are the circumstances and timing whereby increasingly unstable system is realigned to a new stable system.
It is possible that the Satanic globalists' plans are being interfered with or it is possible that everything is still going to plan. However, be assured that there is a plan by which this is all taking place.
NOT sure that comments frm Dudley are driving the currency changes. Probably not. The Fed is NOT that influential.
Real changes are tied to unwinding of carry trades, and re-allocation amongst US-Japan-Euro markets. Money is looking for safe havens. Can you be surprised?