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Enough Already! Raise The Rate To 3 Percent
Submitted by Calibrated Confidence
Enough Already! Raise The Rate To 3 Percent
Raise the Federal Funds Rate (FFR). Move the range to 0.25-0.50 percent and do it on a surprise announcement. We should raise the rate to 3 percent overnight. TV and all the pundits look at the same headline data and say the economy is strong.
The analysts have their confidence in their proclamations regarding the impact of raising rates according to the recent flood of equity specific “defensive” notes. One economist who emailed Benzinga believes any increase in rates will benefit banks through the interest paid on reserves, provided the monetary bases keeps expanding, as the Fed typically sets the IOER paid on reserves to the upper-bound of the FFR. Let us see how well the money managers have taken advantage of all this time to diversify and prepare for any impacts from a rate increase, whether detrimental to prices or beneficial to regional banks like popular opinion says (risk parity strategies be damned).
The 10-Year Real Rate has rebounded from negative territory and currently sits at 2.21 percent as of August, below the average of 2.40 percent since Jan 1962. Looks like the economy is saved following the brutal beating unleashed on the savers of this country in order to achieve balance in the universe by making sure GDP maintains 3 percent growth Y/Y, which it didn’t but don’t tell anyone.
Introduce a little anarchy. If the economy is so strong and everyone is so well prepared, then take the rate to 3 percent overnight. Why pretend to walk the FFR up in 25 bps increments for 18-24 months? The weakness in regional Fed District Economic Conditions Index 3-Month Average as reported in the most recent Beige Book does not appear to be impacting the future earnings expectation of the S&P 500 constituents as the index remains elevated since conditions declined beginning around Q4 2010:.
Take FFR to 3 Percent overnight. Just do it! What are you waiting for? Yes you can, just do it!
Since data isn’t being analyzed in the proper perspective we can just say Net Interest Margins are growing, it’s all awesome, hike those rates and expand the monetary base and keep the QE alive for the banks (although it’ll be more subtle and we know how much the Fed likes to be subtle):
Everything is so wonderful that a rate hike would equate to saying the Fed has won. Seven years of ZIRP and a few selling periods when the Fed stopped POMO’s and QE injections, we can easily say with extreme confidence that the Fed won. And by won we mean didn’t ruin the system entirely. Except they did.
We still have elevated levels of people not working who want a job now and a skewed participation rate thanks to demographics in the US:

....our debt is at an unfathomable, unrepayable and national security threat level.

It's all awesome again! So much so that we should take the FFR to 3 percent overnight, not just 0.25-0.50 bps. Remember, everything is awesome again! Oh yeah, and everything is priced in according to the TV people so there’s nothing to even worry about right? Right. Wrong. We're repeating 2011 and we've wasted a year of price discovery now that we're under 2014 levels for this same time last year.

Sector ETFs have broken down but that doesn’t mean the economy isn’t awesome. The only data that appears to be important this time around is Housing/Auto Sales and the Jobless Rate (Unemployment Rate).

Consumers who have heard from their evening news channels and regional newspapers that everything is so rosy have gone out and boosted expenditures while maintaining a flat savings rate (savings as a percent of disposable income).
People are consuming, oil is low, and, according to analysts, the recent selloff in equities has provided households with a windfall opportunity to buy companies well-positioned in sectors with strong-growth prospects and historically low EV/EBITDA multiples. Things are so fantastic right now that no one even cares about the Margin Debt levels and the fact that the borrowing of capital is being used to get long the market. For the sake of this piece we will ignore this and never focus here again because a 3 percent overnight hike in the FFR would have no impact here or anywhere else right? No but let’s get back to the bullish story about sun-drenched fields and Unicorns on Rainbows.
The Buffett Indicator is a mere 2 Standard Deviations away from its mean and still below the peak in 2008, so clearly we are in a stable and rational economy given the percent of Corporate Earnings to GDP, everything is still awesome until we hit at least three Standard Deviations right?
This piece is meant to be tongue in cheek. The current state of global markets is unstable at best. The underlying fundamentals used to place value on assets are skewed and have become severely disconnected from the pricing mechanism. Recently Ray Dalio’s Risk Parity trading has been blamed for the market correction. The strategy has been around since 2010 and blaming it for the current turmoil is dangerous mostly because it ignores China’s FX actions, the 19+ central bank interest rate cuts in Q1 2015, and the growth of equity-linked OTC Derivatives according to data from the Bank for International Settlements aside from the FX drama, Greece, and Australian "default".
The seriousness attached to the speculation of a bounded range increase in FFR to 0.25-0.50 percent from 0.00-.0.25 percent is ridiculous. If the economy is so strong, as has been reiterated daily in newspapers and on TV, then 25bps should be nothing. If things are so great, let us go for 3 percent. The Swiss National Bank removed its 1.20 Euro peg and the Franc has retraced more than 78 percent of that initial move. Why can’t the Fed show some conviction and spike rates? Here’s to 3 percent FFR on amazing US economic strength!

If it truly is widely believed things are so awesome then take rates to 3 percent and get some ammo back in the Fed’s pocket because we’re going to need it when one of these unstable and overly indebted sovereign nations begins the next leg of the epic current war. Maybe then the CME can stop incentivizing the US Fed and global central banks to trade S&P 500 e-mini futures:

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3%? QE 1, 2, 3 worked so well they can raise to 13%!
What I said this morning!
http://www.zerohedge.com/news/2015-09-14/ransquawk-week-ahead-video-now-...
700 T in derivatives might have some bearing on a rate increase.
Seriously everyone, they aren't going to raise rates because the 90d/3m isn't signalling a rate increase. They'll just say they will assess conditions later.
That's the old way... they are now looking at the IOER/RRP as the rate mechanism
Well, if they do a rate increase, then it will suggest they are no longer using 3m as a mechanism. As of the moment, I am not seeing anyting that disagrees with the premise that they are still using 3m.
"Raise The Rate To 3 Percent"
That is the correct thing to do. But, they won't. They'll keep blowing up the bubble for an even more spectacular pop.
At 3% the interest on the national debt will be about $600 BILLION every year. Putting that in perspective, NASA's annual budget is about $20 Billion.
The rate should be 5% or more, not 3%. Even 3% is way too low to prevent retirement plans from hitting the fan, or to keep fixed-income from being eaten alive by real inflation - never mind the capital accumulation requirements for actual sustainable growth (vs. heroin-hit Fed-fueled fake growth from speculation and malinvestment).
3% and watch the 10 year go to 0. the fed will do a few 25 basis point experiments and then remove these increases and resume qe as soon as the pain is too great. the market knows this, so it might not crater right away.
its all a game of perception and the fed has the markets back. this bs could go on for several decades.
The way I read the FRED chart is that employment is at 62%, +/- 10%. Which in economist red-eye goggles, correlates to 5.2 or 5.3 percent unemployment nationwide.
Did I interpret correctly, using current Keyansian theory?
Arguably 1.2 + quadrillion.
The FED is done. Hike rates.... don't hike rates.... irrelevant.
25 basis points.... lol.
QE4 is a certainty.
Never mind that ticking sound, its just termites.
Yep, derivatives, bonds and other "sure thing" bets that Wall St. and the mega-banks made were predicated on things staying the same. There's a ton of toxic paper out there floating around, and a good hiccup in the markets could show just how naked the emperor really is. If you include that things are likely to go south in the middle of an election cycle where the politicians will have to 'prove' their on the sheep's side would make TBTF damned hard to justify.....
maybe they should stress test that 700 trillion book....oh wait let's have DB, GS and JPM do it, i'm sure the results will come in just fine
$700T in dirivatives is chump change for Belgium
I double-dog dare you, Janet.
Janet's a pussy, she'll never do it. Besides, she too has to follow the party line. The music is playing and marionette Janet must dance.
The effing moneychangers have taken over the effing temple, and we are all effing sitting on our effing arses watching the effing house burn down.
We are all effing fracked!!!
;-D
Janet you miserable cunt
What about a 0.25-0.5% hike and a -0.1% on excess reserves? They could increase that in Dec to 1% and -1%.
I think this would flood the market with all those excess reserves acting like QE, while raising the target rate. What am I missing?
Strange, 2013 is not in the 10 year rate table.
Mint video!
Classic! Shia's a trip. What happened to that Dude! Did he blow a Gaskit?
https://www.youtube.com/watch?v=o0u4M6vppCI
My kids showed me this one just a couple of days ago.
Ha ha... It's like Cirque du Soleil. Word on the street is the guy Just had it with the illuminati types. Now he just mocks them.
.
"Introduce a little anarchy"
Yeah! That's what I'm talking about right there! Show us your labia Janet and invert that yield curve bitch!
https://goo.gl/QCeMJl
thats just uncalled for, fucking gross bastard.
Lol.... Thanks ;->
lol as well, I figured you'd take it as intended.
I'll double dog-dare her, just to make everyone look.
...then puke
they wont raise until 2016, if ever. QE4 is on the way with a different title attached to it.
Right. $57 Trillion in new global debt has been added since 08. Any disruption will
cause a massive deflationary collapse. It's a scheme. The debt has to grow in exponential form or the scheme collapses. Don't listen, it's mis-direction. http://banksterbubble.com/debt-explosion-199-trillion-global-debt-disast...
TOP TEN TITLES FOR NEW QE
10. Switcho-Chango
9. Dosy Doe
8. FuckbamaFree
7. Scamegeddon
6. Printpalooza
5. PrestoPrint!
4. CopterCash
3. WeimarWad
2. 3 card Yellen
...and the #1 name.....CASHFORGOLD!
I'm going to go with:
1) Madoff
2) Let's Twist Again - to the music of Chubby Checker's title with the same name
At this point, yes, the federal funds rate is irrelevant, go ahead and raise it.
Jump you fuckers!!!
Everytime I see a picture or Mr. yellen, I wonder what our resident pumpkin fucker could do with that mug...
Ugh, Every time I see that HAG with her eyes shut, head flipped back, and that creepy shit eating grin on her face as she laughs at all of us peons I want to fucking scream.
That's her having an orgasm.
That's her face when she's spraying her sticky, white, love piss on Greenspan.
......lol........geeeezzzzzzuuussssss
Is that Phil Knight ????
/s.
Our debt is at an unfathomable, unrepayable and national security threat level
US debt is over $210 trillion or over $1,720,000 per taxpayer. Greek debt is $65,000 per taxpayer
Will you take an out of state check for my share of the $1.72 Million?
Is it at least two party?
IOU's from lottery winnings?
Greece should bail out the U.S.
The economy is like a production plant, you don't just abruptly yank up the set point. You gradually move it up and monitor the progress.
You could use her nose for a clothes peg I reckon.
http://www.zerohedge.com/sites/default/files/imagecache/fp_thumb/images/...
The world is a collapsing.
They can't just keep saying they're going to do it, though, and then not do it.
Hmm... Where's a good war or terror attack when you need one to justify NIRP and more QE?
Dear Sir/Madam
Please refrain from using the expression 'Tongue in cheek' in the same post that has a picture of Yellen in it.
You will be receiving the dry cleaning bill for my vomit stained suit in the post.
Yours Faithfully
Snake (Hang that fucking bitch Yellen) Pliskin.
All just a scam, the only way to win is by not playing.
@ SD-1
With you there, Bro.
We couldn't pay the interest on the debt if rates were raised. I don't understand why more people can't grasp that.
-Argenta
>The 10-Year Real Rate has rebounded from negative territory and currently sits at 2.21 percent as of August, below the average of 2.40 percent since Jan 1962
The what? You accept that inflation is really zero?
But I agree with the overall message, if the economy is even a tiny bit strong then a tiny raise like this does not deserve all this hoopla, just do it already.
I didn't know that slant eyed cunt was Chinese.
I thought she was a KIKE roach
So is it your goal that all new people coming to ZH for information should just shrug ZH off as some racist extremist website? I know. You're secretly an NSA paid cockroach.
My bet is that they are not going to raise.....they just cant now...they are to scared to do anything....but print...
Once they raise it will be like a lays potato chip
Put ears and a tail on that creature and it'll knaw its way out of any dungeon it is thrown into.
Every day we have to hear will raise or will not raise the rates, and nothing is decided by the fed, seems as if they really have no idea themselves what to do: Playing around cat and mouse, the cat grows tired and the rat dies.
They won't raise rates until we have a Republican president. Then all these economic problems will come out with anew crash and be blamed on the R's. Thus leaving Obammy's reputation as the greatest president ever intact. What a mess.
Pretty much the pattern I've observed for many years now...
Everyone and their grandmother has came out and said "please don't raise rates Ms. Debtfire."
I say raise em, raise them and end this shitshow with a bang...not a whimper. Let the mother of all unwinds and margin calls ensue.
That scenario would create hell for all of us... but especially for the bankers. That is something that I'm afraid is totally necessary though and I'm willing to endure it if you are. So I agree... bring it on and don't by shy about it.
rat kike decision on 17th
thank you jew-fed
and dont forget jew holiday until tomorrow
In a free market, interest rates are set by individual contract. it seems to me, any person arguing for a common set rate is arguing for the existence of a monopolistic central bank.
The power to charge for the use of money will always be exploited.
Doesn't really matter who does the exploiting.
If you have large supplies of cash (or whatever passes for cash these days), and you loan it out against assets of equal or greater value and demand more money back than what you gave (especially with compounding interest) and especially when the money you lend out never existed in the first place....., you are pretty much going to "win" at global monopoly eventually.
Banking is the business of counterfeiting money and making loans.
That's what banking is.
That's why they call it banking, the banker is banking on taking (stealing) profits before the pitchforks and torches come knocking.
In a free market, cash is only one form of money, and not a good one at that. A monopoly of money cannot exist with the freedom to contract in any form of money. The fixation on an interest rate goes away if a free market is allowed to exist.
The monopoly is self-forming, consumers are not educated, they will always go to the most convenient form of money, thus helping create a monopoly.
In the old days, gold-smiths held the monopoly on gold, and they cheated by diluting the gold (mixing it with copper/tin/whatever).... till the coins were more copper than gold.
The same thing happened today, now the paper money is more digital bullshit than paper.
At some point the digital bullshit, will become more bullshit than digital.
And at some point the bullshit will start to hit the fan, in some aspects it already has.
The consumer is not going to start trading 900,000 tomatoes for real-estate.
There will always be a money monopoly.
If it was gold currency, the jewelers and banks holding large reserves of gold would loan out 1oz and demand 2oz back.
It doesn't matter what affix you put after the digits, if the underlying math and model of currency is the same (debt based inflation and coin shaving) and there is no checks and balances to prevent counterfeiting (what banks do as a general business practice) you will always endup with a "money master".
I am not advocating for a fixed rate btw, I am calling for strict regulation on currency creation..... as in stop these banks from counterfeiting money to create loans and if we ever went to gold-backed currency again to prevent them from shaving coins/bars.... namely I call for "strict weights and measures" to protect the sanctity of our currency.
Its just disgusting, these banks sit there, counterfeit money on their own books, loan it out and then foreclose on 20Million Americans when there aren't enough chickens in circulation to come home to roost.
Each counterfeit dollar a bank puts out in the form of a "mortgage" or "loan" is like another notch in a fishing net, they dump all this fake shit out, and then call it all back and behold when more money is returned than existed in the first place... they reap all the assets. . . for free . . . then turn around and demand the FED makes the shit they just stole (real-estate) go up in value by fueling a bubble... ^^... its madness and its defrauding the American people.
In anycase, assuming the same currency model sticks around for 30 years, the least the govt can do is ban compound interest and put in place some anti-usury laws, this would lower the reward banks get for making loans, less loans being created means lower asset prices, lower asset prices means people dont have to get into debt in the first place to buy a house, you will have people working, saving and buying homes cash or 50+% down (which is sustainable).
You cant expect the market to put a price on money, when the people selling money have an unlimited supply lol its completely illogical to think that it could happen with the current system.
Monopolies do not "self-form" in a free market.
Gold smiths have never had a monopoly on gold.
The only way an entity can control money is to eliminate all competing monies; this explains legal tender laws.
http://cdn.meme.am/instances2/500x/1862941.jpg
The 80s with those high interest rates was a great time for manufacturing business. It was the heyday of the computer boom that led into the telecommunications boom.
IBM, Compaq, Apple, DEC, Control Data, AT&T, Northern Telecom, Microsoft, Sun Micro, GE, HP, Intel ... it was what should be going on in China right now.
Here in the US there was a lot more commercial electronics development and a lot less military/government electronics.
Man, so much for ZH's Notice on Racial Discrimination. People's views don't really bother me but it's just intellectual clutter I have to sift through.
jewish banksters dicriminating everyone and no one cares
you want to play the race card? i am a migrant
you want to play the antisemite card? im of jewish descent
i could be now sitting in a desert in israel on your taxmoney
there something you dont know due to fake history and lack of eyewitness
i wonder why no one is blaming the kurds or the gypsies for manipulating all markets and creating world money systems
pffffff https://www.youtube.com/watch?v=dUejNFJYN2I
Using that logic Hitler and his henchmen were murderers and fascists so all Germans should be exterminated. You're fucking brilliant.
please tell me, where did i say you need to kill anyone? in all of my posts over the years i never said to kill anyone
i know what you want to say, but many jews are zionists, and in reality jews are parasitic (my family included)
-migrate to a country, reach highest education degree, perform best payed job, kick out competitors, buy up media, get into politics and business,
take over money system and management and play victim-card so easy
and please do not come up with hitler on me
the idea of "hitler" was to give a man with the idea of attacking the east (russia) to secure land
hitler was funded by western elite germany was lacking all kinds of recources
germany broke treaty of versailles - west did not intervent
lunatic hitler attacks russia, western jews betray hitler, hitler lose war usa takes over half of europe
45 yreas later soviet collapse- western jew-bankstes take over eastern europe
russian jew oligarchs share russia
corruption always wins agains ideology, while zionism is based on corruption, thats why they never lose (at least until now)
communist jews in russia killed 20-30 million russian people - no one cares
communist jews kill 7 million ukrainian people - no one cares
communist jews insert communism into china result in millions of dead - no one cares
britain and usa and soviet russia agree on israel, palestinian gonicide - no one cares
real terrorist israel says iran is a terrorist country - iran bacomes the terrorist country
" . . . so all Germans should be exterminated. "
Well on the way.
psst. The fed does not raise nor lower the federal funds rate. Banks are not lending to banks for a whole lot of reasons, including the fed paything interest on excess reserves, which means no bank lending. All of this is nonsence.
Um...what Nike sez
not an endorsement to either buy or sell shoe company stocks
thank you..carry on
Can you imagine 3% with no immediate impact on yields across the board?
LOL
I can, but for how long?
That would be like lighting fuses on sticks of dynamite.
Without a peep from the 3 stooges (ratings propaganda firms).
Raising rates and tanking the economy is exactly what the Democrats want. Once it happens, then they get to come out with all of their stimulus BS and put cash directly into the pockets of the people they know will vote for them. They know most Republicans will try to block it and will use that against them in 2016. Besides, the Republicans are going to be busy shutting down the government over Planned Parenthood funding. You guys forget that the deficit/debt is irrelevant to most Democrat voters. Another QE is exactly what the Democrats don't want because they know most people realize that none of it ever trickled down.
The problem with raising rates is that the US guv pays for it through higher coupon rates.
If the market is willing to accept zirp ROI's for bonds, WHY THE FUCK WOULD THE US GUV PAY MORE????
Raising rates rockets the USD too - a complete and unmitigated global economic disaster.
Yeah, let's hike rates bitchez!
What’s wrong dude!? You Yellen!, Ahahahahaha that’s what I thought Yellen Pelly http://youtu.be/0c-UIkfsk1U?t=1m49s
How exactly does a government of either party survive a 3% interest rate? Deficit increases exponentially just to make interest payments and the developing world economies crater followed closely by the developed ones.
Or is that what you want to see. Me? I like Mad Max at the movies but I don't really want to have to become a road warrior.
Terminator 3% Rasing The Rates
In the "Do It!" video, someone needs to edit and superimpose some farts ..
Surprised they haven't begun discussions on rebranding Operation Twist. The Federal Reserve is becoming a terminal cancer patient.
Just like a little boy who asked one wish before he passed away. Long time ago, true story.
Korn- Justin - YouTube
OK, the Fed needs to prove the US is as tough as the Russians. Raise 'em up to 18%!
"Take FFR to 3 Percent overnight. Just do it! What are you waiting for? Yes you can, just do it!"
Roughly what I posted to another article. Come on Janet, just a little 1/4% rate rise to show the Markets who is boss. Get this show on the road.
You had all the "DATA" signals you need a couple of weeks ago in World markets.
Please do it. Don't worry about all the collapsing stock markets. _JOHNLGALT.
Who is John Galt?
Since therr first QEs, more funds have moved under the control of global traders. Of course, they can add to the flood with their priniting presses. It is not how much M2 that you want based on the real economies (assuming that you are doing it right), it is Who are in charge of the global fund flows together with its expansion and contraction. It has been good rides for those who just wrestle with CBs that should be the Gamekeepers. Until they change, bring it on...the global traders are ready.