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The Fed's Long Awaited Decision Day Arrives, And Chinese Stocks Wipe Out In The Last 15 Minutes

Tyler Durden's picture




 

The long awaited day is finally here by which we, of course, mean the day when nobody has any idea what the Fed will do, the Fed included.

Putting today in perspective, there have been just about 700 rate cuts globally in the 3,367 days since the last Fed rate hike on June 29, 2006, while central banks have bought $15 trillion in assets, and vast portions of the world are now in negative interest rate territory.

As we noted yesterday, while the fed funds market implies a 32% probability of a rate hike one day ahead of the decision (which compares to 70% in 1994, 76% in 1999 and 92% in 2004) investors are even more torn, with 57% of respondents in an RBS survey saying the Fed should hike today, but only 42% expecting the Fed will announce a rate hike at 2pm. Of the 113 estimates on Bloomberg, 59 are calling for the Fed to stay put and 51 are calling for a 25bp hike, with the remaining 3 estimates calling for a 12.5bp move.

“Experts” and “pundits” haven’t reached a consensus either: Goldman Sachs, the World Bank, IMF, and people like Larry Summers are imploring the Fed to retain ZIRP for a little while longer while individuals such as Axel Weber (former Bundesbank head and current UBS chairman), Haruhiko Kuroda, the G-20, and a bunch of EM central bankers all want to see liftoff occur.

The Fed itself is not sure what to do: according to many a hawkish move would be not to hike but layer the statement with many caveats how strong the economy is (even as the Fed again chickens out) while the dovish thing would be a "one and done" rate hike with the Fed potentially unleashing a recession-inducing curve inversion.

Then there is the problem with the Fed's rate hike machinery: the Reverse Repo-IOER corridor has never actually been tried in practice, only in very specific "in vitro" settings: at such a turbulent time will the Fed risk crushing its only possible and very much theoretical rate hike mechanism, and perhaps as importantly, with China undergoing currency devaluation and a massive capital outflow, will the Fed risk blowing up the entire Emerging Market complex (even more)?

Finally, unlike any other rate hike in the past, there are the algos to contend with: in the 2004-2006 rate hike cycle HFTs barely existed; this time the Fed's "reaction function" has to take into consideration momentum ignition, spoofing, quote churning and countless other headline-driven market reactions.

So all eyes on the Fed's website at 2pm, if not perhaps for Goldman's - the firm that runs that Fed has spoken, and it see at least four more weeks of ZIRP, if not a zero-bound winter stretching well into 2016.

Should the Fed hike, the biggest question is not what stocks or the short-end of the Treasury curve do, but what the reaction of the long-bond is. After the usual initial kneejerk reaction, if the long-end concurs with the Fed’s view of economic recovery, then banks,
cyclicals and value stocks will receive a bid. Asset allocation toward “strong dollar” & “Fed tightening plays” will harden, with the exception that value will likely outperform growth. If the long-end rallies, signaling a policy mistake, then cash, volatility, gold &
defensive growth will be the way to go. Also, a quiet exit stage left may be prudent at this moment.

One thing that is certain is that while the Fed fiddles, China's market manipulators continue to burn in ever more spectacular fashion, and while yesterday the SHCOMP entertained Chinese market watchers with a tremendous surge in the last hour of trading, today it was the opposite, when the Shanghai Composite Index fell 2.1% to close at sessions low at 3,086.06, sinking in final 15 minutes after gaining as much as 1.7% on light volume. 

"The market continues to be rather volatile with investors becoming bearish at the slightest indication," says Gerry Alfonso, Shenwan Hongyuan director. "There seems to be significant expectations for some type of policy support." Well, and the market gets them... every other day. Then on days like yesterday when it doesn't, it panicks.

"The market is in recovering trend, but without any significant increase in trading volume to support that, greater volatility is inevitable,” Northeast Securities Shanghai-based analyst Shen Zhengyang says by phone, adding that "investors may be selling to lock in profits; there’s also uncertainty over Fed decision."

So in addition to US stocks, Yellen has China to worry about to. Oh, and the rest of the world too.

But going back to the overnight market, aside from China's last minute swoon, Asian equity markets traded higher, tracking gains on Wall Street where energy outperformed in the wake of the latest DoE release. ASX 200 (+0.9%) was bolstered by strength in commodities, while Nikkei 225 (+1.4%) was led by a rebound in Telecoms. JGBs saw tepid trade with volumes ahead of the Fed's decision, while the BoJ were also in the market for JPY 780bln in government debt.

The key event during European hours has been Altice announcing it is to buy CableVision for around USD 17.7bIn to see Altice (+3.3%) among the best performers in Europe. Price action elsewhere in equity markets has been relatively rangebound (Euro Stoxx: -0.2%), with no firm sentiment ahead of the aforementioned Fed rate decision. Similarly, Bunds reside in modest negative territory weighed upon by supply out of both France and Spain, while T-Notes are modestly higher to pare some of the losses seen yesterday after T-notes fell in sympathy with the gains seen in US equities.

In FX, the notable event of the European morning came in the form of the SNB rate decision, with the central bank keeping rates on hold as expected, with CHF strengthening on the back of the release after less dovish than expected comments from the central bank. The SNB noted that CHF has depreciated although consider it still to be overvalued, while also reiterating that they are to remain active in FX markets and downgrading their 2015 CPI outlook by 20bps to 1.20%. Elsewhere, FX markets have seen relatively light newsflow, with UK retail sales (Inc Auto Fuel Y/Y 3.70% vs. Exp. 3.80%) failing to see a sustained reaction and the USD-index residing in negative territory (-0.2%) and as such bolstering both GBP and EUR ahead of the key risk event of the week, the highly anticipated Fed rate decision at 2pm Eastern.

A look at commodities sees the energy complex with mild profit taking after yesterday's DoE inventories showed a build (-2104K vs. Exp. 2000K), with Brent and WTI futures both lower heading into the NYMEX pit open and the former failing to hold gains above the USD 50.00 handle. In terms of metals news, copper has seen strength overnight following reports that a magnitude 8.3 earthquake struck Chile, with the rest of the metals complex seeing relatively choppy price action.

On today's calendar, in addition to the most anticipated FOMC meeting ever until th enext one, we also get US housing starts, building permits, and weekly initial claims data as well as the Philadelphia Fed business outlook.

Market Wrap

  • US futures are down 4-5 points (down 25bp)
  • Asia: Japan Nikkei +1.43%, Japan TOPIX +1.31%, China -2.10%, Hong Kong -0.51%, KOSPI
  • 05%, Taiwan +1.35%, Australia +0.94%
  • EuroStoxx 50 +0.08%, FTSE -0.23%, DAX +0.16%, CAC +0.06%, Italy -0.16%, Spain +0.96%
  • USD (DXY) down 0.07%, EUR up 0.22%, GBP up 0.11%, JPY down 0.24%, AUD down 0.36%
  • Gold down 0.15% to $1,117.80
  • Silver down 0.34% to $14.84
  • Copper down 0.65% to $243.60
  • WTI Crude down 1.44% to $46.47
  • Brent Crude down 1.21% to $49.15
  • Natural Gas up 0.34% to $2.67
  • Corn down 0.52% to $3.84/bu
  • Wheat down 0.10% to $4.88/bu
  • Treasuries 2s yields are down ~0.8bps at 0.803%, 10yr yields are down ~2.1bps at 2.273% and 30yr yields are down ~2.5bps at 3.058%
  • Sov CDS Japan +0.33bps, France -0.70bps, Germany +0.11bps, Ireland +0.46bps, Italy - 0.72bps, Spain -1.25bps
  • Japan 10yr yields 0.355%, down ~0.5 bps on the day
  • France 10yr yields 1.152%, down ~1.1bps on the day
  • Italy 10yr yields 1.897%, down ~1.8bps on the day
  • Spain 10yr yields 2.108%, down ~1.3bps on the day
  • Germany 10yr yields 0.765%, down ~0.7bps on the day

Bulletin Headline Summary from Bloomberg and RanSquawk:

  • SNB keeping rates on hold as expected, with CHF strengthening on the back of the release after less dovish than expected comments from the central bank
  • European equities are relatively rangebound, while stock specific news has seen Altice announce it is to buy CableVision for around USD 17.7bIn
  • Today's highlights include the highly anticipated FOMC rate decision as well as US housing starts, building permits, weekly jobs data, Philadelphia Fed business outlook and EIA NatGas storage change
  • Treasuries post modest gains, curves little changed before Fed statement and updated SEP at 2pm, Yellen presser at 2:30pm as economists/analysts remain split on prospect of 1st rate increase in more than 9 years.
  • China’s stocks sank in the last 30 minutes of trading in thin volumes as traders tested the limits of state support amid the biggest price swings since 1997
  • China reduced its stake in U.S. government debt in July by about $82.7b, TICS data showed; calculation includes securities held in Belgium, which Nomura says is home to some Chinese accounts
  • Bridgewater’s Ray Dalio said in an interview with Bloomberg that he’s worried about the next economic slowdown because monetary policy will be less effective than in the past
  • The Swiss National Bank kept interest rates at record lows and signaled the recent depreciation of the franc hasn’t diminished its willingness to intervene in currency markets if needed
  • As Greeks prepare for their third vote in less than a year, election fatigue has set in, with voters are bracing for more economic pain no matter who’s elected
  • A glut of crude may keep oil prices low for the next 15 years, according to Goldman, with a less than 50% change prices will drop to $20/bbl; firm’s long-term forecast is $50/bbl
  • Sovereign 10Y bond yields mixed. Asian stocks higher with the exception of China and Hong Kong, European stocks mixed, U.S. equity-index futures decline. Crude oil, gold and copper fall

US Event Calendar

  • 8:30am: Current Account Balance, 2Q, est. -$111.5b (prior -$113.3b)
  • 8:30am: Housing Starts, Aug., est. 1.160m (prior 1.206m)
    • Housing Starts m/m, Aug., est. -3.8% (prior 0.2%)
    • Building Permits, Aug., est. 1.159m (prior 1.119m, revised 1.130m)
    • Building Permits m/m, Aug., est. 2.5% (prior -16.3%, revised -15.5%)
  • 8:30am: Initial Jobless Claims, Sept. 12, est. 275k (prior 275k)
    • Continuing Claims, Sept. 5, est. 2.258m (prior 2.260m)
  • 9:45am: Bloomberg Consumer Comfort, Sept. 13 (prior 41.4)
    • Bloomberg Economic Expectations, Sept. (prior 46)
  • 10:00am: Philadelphia Fed Business Outlook, Sept., est. 5.9 (prior 8.3)
  • 2:00pm: FOMC Rate Decision: Upper Bound, est. 0.25% (prior 0.25%); Lower Bound, est. 0% (prior 0%)
  • 2:30pm: Fed’s Yellen holds news conference

As usual, DB concludes the overnight wrap

A total of 3,367 days have passed since the Fed last raised rates. In roughly 12 hours we’ll know one way or another whether the Fed has decided to end this streak and go against the market and (slight) majority of economist expectations in commencing liftoff, or instead stand pat. Yesterday’s inflation data did little to help fuel support that a move is warranted and so we head into the final trading session before the meeting with a hike priced at 32%. That’s unchanged versus this time yesterday and we’ve been sitting in a small 4% range now for a couple weeks, but that’s well below the peak of 54% back in early August prior to the China devaluation and slightly above the YTD low of 21% back in July. As we’d noted earlier in the week it’s a much more evenly weighted split if you look across economist expectations. Of the 113 estimates on Bloomberg, 59 are calling for the Fed to stay put and 51 are calling for a 25bp hike, with the remaining 3 estimates calling for a 12.5bp move. We still maintain our long-standing call that a hike is unlikely this year, but for now it’ll be all eyes on the FOMC and Yellen tonight.

On this, DB’s Joe Lavorgna, while of the view that the Fed will hold off from raising tonight, is of the belief that Yellen will emphasize in the press conference shortly after that depending on near-term economic and financial market developments, a rate hike remains very much a possibility at the October or December meetings. Meanwhile, DB’s Alan Ruskin makes an interesting point on this too in that the Fed could feel that they could signal something about October closer to the October meeting instead, assuming they stand pat now which would likely be seen as a ‘dovish hold’. While Alan thinks a ‘hawkish hold’ is a more appropriate strong market consensus view leading into the meeting (holding but making October live), the Fed could instead choose to hold firm, not pre-signal October and wait on the data and probably more importantly markets.

Ahead of the outcome and fresh off the back of a decent day for global equities yesterday, bourses in Asia this morning are off to strong starts. The Nikkei (+1.15%) and Topix (+0.91%) have ignored any concerns following the one-notch downgrade of Japan’s sovereign rating by S&P yesterday to A+. The better sentiment is perhaps being helped by weaker than expected export numbers this morning (+3.1% yoy vs. +4.3% expected), down materially from +7.6% in July and which may help support expectations of a response from the BoJ. Elsewhere, in China the Shanghai Comp (+0.51%) and CSI 300 (+0.34%) have recovered from a soft opening start into the midday break, while the Hang Seng (+0.77%) and ASX (+1.32%) are also up. The Kospi (-0.09%) is the only index to see a decline this morning. S&P 500 futures are more or less flat and 10y Treasury yields are down 1.3bps. Credit indices in Asia are around a basis point tighter.

Back to markets yesterday. Indeed, it was a pretty supportive day all round for equity markets with the S&P 500 closing +0.87%, Stoxx 600 +1.53% and other DM markets up similar amounts. Those moves got a kick start from the big rally into the close in China (where the Shanghai Comp finished up nearly 5%).

This was followed in the European session by the news that SAB Miller had been approached for a takeover by AB InBev, helping SAB’s share price to rally nearly 20%. Then later in the day, some supportive US crude inventory data helped fuel a surge in the Oil complex which eventually saw WTI and Brent close up +5.74% and +4.19% respectively. That saw energy stocks lead gains, while the rest of the commodity complex also had a relatively decent day with broad BCOM commodity index up 1% and snapping a three-day losing streak.

The USD had initially traded with some early optimism, although that was quickly pared following the release of yesterday’s CPI data with the Dollar index eventually finishing -0.20%. While the data was pretty much as expected, importantly the release did little to advance the case for a hike today. Headline CPI printed at -0.1% mom as expected in August, leaving the annualized rate on hold at +0.2% yoy. The core reading was soft at +0.1% mom, or just 0.074% unrounded, which saw the annualized rate hold steady at +1.8% yoy (vs. +1.9% expected). The three-month annualized rate however did nudge down to 1.6%, a decline of two-tenths from last month. DB’s Joe Lavorgna also noted that along with the currently low inflation, 5-year forward inflation expectations are comfortably below 2% with the latest reading at 1.44% (down substantially from 1.99% when policymakers last met in July). Elsewhere yesterday, there was some better news on the housing front where the September NAHB housing market index rose 1pt to 62 (vs. 61 expected). Meanwhile, the latest TIC data confirmed a decent decline in Treasury holdings in Mainland China, down $30.4bn in July. 10y Treasury yields eventually nudged up 0.7bps to close at 2.295% while 2y yields (+0.8bps) extended their recent high after closing at 0.813% yesterday.

Data wise in Europe, much of the focus was again on the UK where there were some positive signs in the latest employment and wage growth reports. The July unemployment rate dropped one-tenth to 5.5% (vs. 5.6% expected), while the quarterly employment change of +42k was well above the +18k expected. Average weekly earnings rose +2.9% (vs. +2.5% expected) in the three months to July which was up three-tenths from June. That helped spark a strong day for Sterling which closed +0.97% stronger against the Dollar and +0.79% against the Euro. Comments from BoE Governor Carney also helped support some of that strength after he reiterated that should economic expansion be above trend, labour costs and wage growth continue to rise and core inflation accelerate, then the decision comes into much sharper relief around the turn of the year and as a result ‘it may be appropriate to begin to withdraw stimulus at that point’.

Wrapping up the rest of the data yesterday, Euro area CPI saw a slight downward revision to the final August print at both the headline (down 0.1pp to +0.1% yoy) and core (down 0.1pp to +0.9% yoy). European sovereign bond yields edged slightly higher during the session with DM markets up 2-3bps generally.

Onto the day ahead now. This morning’s focus will again be on the UK where we get August retail sales data. Prior to the main event tonight with the conclusion of the FOMC meeting, datawise in the US we’re due to get more housing data in housing starts and building permits while initial jobless claims and the Philly Fed business outlook are also expected. The focus will however be on the Fed and subsequent Yellen press conference.

 

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Thu, 09/17/2015 - 07:05 | 6559436 VinceFostersGhost
VinceFostersGhost's picture

 

 

Chinese Stocks Wipe Out In The Last 15 Minutes


......and it's gone.

Thu, 09/17/2015 - 07:06 | 6559442 ABB
ABB's picture

Can't wait no more. such exciting times....

 

NOT THE FED, COMEX VAULTS TO DRAIN THAT IS!  

Thu, 09/17/2015 - 08:15 | 6559594 Arnold
Thu, 09/17/2015 - 07:09 | 6559446 FranSix
FranSix's picture

Janet is just going to mumble 'negative rates are possible' and the roof caves in.

Thu, 09/17/2015 - 07:24 | 6559487 negative rates
negative rates's picture

Time to get your stuff out the house then, if you are a gamblin man, just sayin.

Thu, 09/17/2015 - 07:34 | 6559500 Oldwood
Oldwood's picture

With 18 trillion in debt, how much can the government "earn" if the Fed goes negative rates???

Thu, 09/17/2015 - 07:45 | 6559519 negative rates
negative rates's picture

The better question is how great of a pain in the neck does one have after "earning" all that money. Earning does not heal all wounds, yet time can if one budgets carefully.

Thu, 09/17/2015 - 07:46 | 6559522 FranSix
FranSix's picture

Instead of saying the roof caves in I really meant the unicorn throws up a rainbow.

Thu, 09/17/2015 - 08:16 | 6559603 lakecity55
lakecity55's picture

Happy I am out of debt.

If I just had not lost all my PMs when I failed to close to tailgate on the pickup!

Thu, 09/17/2015 - 07:10 | 6559449 Wannabe_Oracle
Wannabe_Oracle's picture

Geez - we all know they aint raising.

Thu, 09/17/2015 - 07:15 | 6559457 wmbz
wmbz's picture

Jack Yellen does not have to think or decide, all he has to do is what he is told. If Goldman said NO rate hike there will be no rate hike.

It's not complicated.

Thu, 09/17/2015 - 07:18 | 6559466 FranSix
FranSix's picture

Whoosh! That's a relief. Here I was thinking people were getting all stressed out about it.

Thu, 09/17/2015 - 11:19 | 6560255 Deathrips
Deathrips's picture

What are they going to do, cut off his penis again and turn him into a female hobbit again?

 

Conspiracies I tells ya!

 

RIPS

Thu, 09/17/2015 - 07:19 | 6559467 NoDebt
NoDebt's picture

If I was him I certainly wouldn't want to be the one left standing without a chair, hiking rates into a slowing global economy with a strengthening dollar and the market already doing the work of keeping rates low for him.

All of which probably means he'll raise rates anyway.  Never underestimate the hubris of an ivory-tower academic economist.

Thu, 09/17/2015 - 07:37 | 6559502 i_call_you_my_base
i_call_you_my_base's picture

The only reason they'll raise rates is to screw EMs. A geopolitical play. Otherwise, they will not.

Thu, 09/17/2015 - 07:55 | 6559540 conscious being
conscious being's picture

Mr. Yellen was obviously brought in as the fall guy.

Thu, 09/17/2015 - 08:16 | 6559599 gatorengineer
gatorengineer's picture

I think a rate raise will come if only to stick it up Chinas ass.  We get a quarter, I bet the dollar moves 5 percent stronger within 3 days.

Thu, 09/17/2015 - 07:15 | 6559458 Diplodicus Rex
Diplodicus Rex's picture

"central banks have bought $15 trillion in assets"

I object to the use of the word "bought". It lends a degree of legitimacy to a process which was nothing other than counterfeiting and theft. I couldn't "buy" those same assets in that context. Call it out for what it is - the wholsale printing of counterfeit currency out of thin air and thus theft.

 

Thu, 09/17/2015 - 08:33 | 6559683 Arnold
Arnold's picture

Actually, you and your kids and their children 'bought' it.

The return is distributed goods and services enough to forestall major violence and you get to live another day to be milked again.

Thu, 09/17/2015 - 07:16 | 6559459 buzzsaw99
buzzsaw99's picture

Good night, Westley. Good work. Sleep well. I'll most likely kill you in the morning. [/princess bride]

Thu, 09/17/2015 - 07:21 | 6559474 pndr4495
pndr4495's picture

Vizzini / Blankfein   Blankfein / Vizzini

Thu, 09/17/2015 - 07:35 | 6559495 VinceFostersGhost
VinceFostersGhost's picture

 

 

Slowly build your tolerance to iocaine powder.....it could come in handy.

 

Pretty sure that's what Bill Gates is gonna put in his special vaccine.

Thu, 09/17/2015 - 08:17 | 6559604 Nothing Ever Happens
Nothing Ever Happens's picture

Good night, Westley. Good work. Sleep well. I'll most likely kill you in the morning.

Oh, but who will be the new Dread President Roberts?

Kill me quickly.

Thu, 09/17/2015 - 07:44 | 6559518 Oldwood
Oldwood's picture

So it was predicted 65 years ago and still waiting. Predictions are pointless without a timeline.

Thu, 09/17/2015 - 08:02 | 6559563 WonderDawg
WonderDawg's picture

Do you remember 2000? 2008? Those were the result of credit expansion and rampant leveraged speculation. So, yeah, he was right. And he'll be right again.

Thu, 09/17/2015 - 08:18 | 6559613 gatorengineer
gatorengineer's picture

I will throw out there that it has already collapsed and the only thing that hasnt is the manipulated thing called the market.  MSM is 100% controlled, and the collapse will not be televised.

Thu, 09/17/2015 - 08:36 | 6559696 Oldwood
Oldwood's picture

We know none of this is sustainable. Our problem is that so many are gaming it even knowing its doomed. I content this gambling is what has leveraged and enabled the vast majority of this destructive policy and action. Predictions are premised on timing. Timing becomes a game of speculation. If we knew and Accepted that these behaviors were not sustainable, a rational mind not intent on gaining on destruction would not participate, much less ante up the bets.

Thu, 09/17/2015 - 07:19 | 6559468 smoke em if you...
smoke em if you got em's picture

What is Gartman saying?

Thu, 09/17/2015 - 08:26 | 6559653 bamawatson
bamawatson's picture

he says sign up for this sham https://jeffersoncompanies.com/landing/gata

Thu, 09/17/2015 - 07:20 | 6559470 whopper
whopper's picture

time for more bs from the tribe.  I wish I hadn't bet against the tribe, painful.

Thu, 09/17/2015 - 08:02 | 6559562 MSimon
MSimon's picture

The tribe know they are hated. They will act accordingly.

Thu, 09/17/2015 - 07:24 | 6559485 Tasty Sandwich
Thu, 09/17/2015 - 07:27 | 6559492 we built this city
we built this city's picture

If you've made your homework- you would have discovered that the correlation between S^P and Chineese stocks is only 0.15

 

Thu, 09/17/2015 - 07:30 | 6559496 NoDebt
NoDebt's picture

If it was -.15 we'd be hitting new all-time highs right now!

Thu, 09/17/2015 - 07:56 | 6559533 Tall Tom
Tall Tom's picture

Over what time period?

 

Anybody can pick and choose periods, small in duration, or large, where the sigma is low, in order to promote an agenda for propaganda's sake...

 

There is also a lag time.

 

What sigma do you think that American QE has with the Chinese Stawk Market over the past five years? What if that data was time corrected to take out the affects of the lag?

Thu, 09/17/2015 - 07:50 | 6559529 Downtoolong
Downtoolong's picture

 

Everyone is expecting a definitive announcement – either (a) we’re hiking and here’s the number or,  (b) no change for now.

 

Somehow I doubt the Fed will be as commital as that.

 

I’m expecting a fuzzier announcement, more intent than commitment, with subjective conditions and cancellation clauses. And then there’s the fact that the leading method they plan to raise rates (if they do) has never been tried before. So they won’t be committing to any actual results either.

 

The Fed has to cover it’s ass and keep us all guessing a little bit, otherwise their power is gone.

    

Thu, 09/17/2015 - 07:58 | 6559551 MSimon
MSimon's picture

The choices are Zimbabwe or 1929.

 

I'm betting on 1929.

Thu, 09/17/2015 - 08:20 | 6559624 gatorengineer
gatorengineer's picture

They have printed enough into a broken transmission mechanism to already have gone Zimbabwe....  

Thu, 09/17/2015 - 08:43 | 6559701 Arnold
Arnold's picture

Don't discount the FSA. I know they haven't.

 

Real purpose of Jade Helm maneuvers?

https://en.wikipedia.org/wiki/Mortuary_Affairs

Thu, 09/17/2015 - 08:07 | 6559570 Last of the Mid...
Last of the Middle Class's picture

I bet raise and then print like a mofo. You have to continue the party line that the economy is improving at ALL costs.

Thu, 09/17/2015 - 08:08 | 6559572 lakecity55
lakecity55's picture

Gee, I wish Hunter S Thompson was still alive, but writing for ZH. It would be a blast!

Thu, 09/17/2015 - 08:14 | 6559596 MSimon
MSimon's picture

Got an e-mail from him once. Said he liked my writing. I'd love to hear his "voice" again.

Thu, 09/17/2015 - 08:09 | 6559576 q99x2
q99x2's picture

I think they are going to raise rates and that's why they put a horrifyingly ugly old lady in charge of the FED: so nobody will consider beating her after she raises rates and the world blows up. Bernanke could have never gotten away with it.

Thu, 09/17/2015 - 08:31 | 6559675 Pure Evil
Pure Evil's picture

You can beat her, but she's encountered one too many ugly sticks to make much of a difference at this point.

Thu, 09/17/2015 - 08:43 | 6559729 Oldwood
Oldwood's picture

She doesn't come across as a particularly courageous person. I would imagine she would do little without consensus of her peers, and directive from "above".

For all those who give Obama a pass as only a puppet, I would suggest Yellen is a sock puppet with very little effort made to disguise the "inner hand".

Thu, 09/17/2015 - 10:38 | 6560163 nosam
nosam's picture

They say that if a lady is in charge its because no man wanted the job.

Thu, 09/17/2015 - 08:11 | 6559586 nosam
nosam's picture

If they do raise interest rates, I think there will be a perfect storm. A perfect shitstorm that will make the great depression look like a picnic. BTW, the great depression was also engineered by the Tribe.

Thu, 09/17/2015 - 08:16 | 6559602 MSimon
MSimon's picture

Well they know they are hated. They will act accordingly. And this time they are better armed.

Thu, 09/17/2015 - 08:12 | 6559589 SheepDog-One
SheepDog-One's picture

The only tricky part for the Fed today is figuring out something to say Goldilocks enough to trick algos into raising stawks while kicking the can, that's all.

Thu, 09/17/2015 - 08:26 | 6559655 gatorengineer
gatorengineer's picture

The consensus seems that we get a push and a much lower dot plot.  It wouldnt be a surprise to see them say something that the hike is q2 16.  I dont think they have to be goldilocks.  The only question is how much is priced in by the bots.  Its extend and pretend time.  If they raise its just to stick it to China, which I wouldnt rule out, and that is actually my base case.  Be interesting to see what the Bots do.

Every day that goes by the collapse has got to be more evident, to the common folks.

 

Thu, 09/17/2015 - 08:17 | 6559608 Sanity Bear
Sanity Bear's picture

with last night's political sideshow concluded, now the real rulers of the country will sit down to debate

Thu, 09/17/2015 - 08:19 | 6559618 trueFacts
trueFacts's picture

prediction: rate wil be raised 0.5 pct, and the market will rally on a mysterious deep-pocket buyer scarfing up infinite S&P futures, proving the strength and resilience of the economy for future rate hikes.  ...so easy to predict.

Thu, 09/17/2015 - 08:29 | 6559666 gatorengineer
gatorengineer's picture

Saying the bots will raise the market is a pretty gutsy call, are you sure?

Thu, 09/17/2015 - 08:27 | 6559657 TheKingsRules
TheKingsRules's picture

It won't change until we change it.
End the Fed.

Thu, 09/17/2015 - 08:28 | 6559661 Guru1294
Guru1294's picture

If the fed doesn't hike today then gold should rightfully be back above 1200$ although then again I don't even look at Paper price anymore 

Thu, 09/17/2015 - 09:02 | 6559808 BullishBear94
BullishBear94's picture

Rightful be back at $1200?  Why? Because you feel thats how much its worth? Based on what?

Thu, 09/17/2015 - 08:56 | 6559777 Milton Waddams
Milton Waddams's picture

Ol Yellen was inserted to act as a school marm. She isnt going to bow to the protestations of Wall Street.

Thu, 09/17/2015 - 09:01 | 6559801 BullishBear94
BullishBear94's picture

This article is hilarious.  Talk about confirmation bias.

Yesterday the Chinese stock market closed strong in the last 15 minutes. This site said that was a sure sign that China is doomed and they resorted to stock manipulation.

Today the Chinese stock market tanked in the last 15 mintues. This site is saying that is a sure sign that China is doomed.

So which one is it? Regardless if the China stock soars or tanks you say its doomed. Hilarious. I guess its time to start storing food and water right?

Thu, 09/17/2015 - 09:06 | 6559822 brada1013567
brada1013567's picture

Suwee, suwee, suwee, moar QE!

Thu, 09/17/2015 - 09:14 | 6559851 roadhazard
roadhazard's picture

I couldn't care less one way or the other. Back here in the woods we are enjoying the last week of summer and the beautiful green leaves.

Thu, 09/17/2015 - 09:49 | 6559998 rejected
rejected's picture

What's wrong with raising rates? This shit-storm fantasy land for the last 8 years ain't enough? When money has no vaue,,, it will fail.

The boys, girls and trans-whatever participants are accessories to the fact of the outright fraudulent crime abusing the Peoples money,,, no different than the thieving Fed and corporations themselves.Then when it fails squeaky clean you will be calling for heads on a platter. Not yours of course.

No matter,,, this ZIRP / QE / [fancy name here]  crap cannot last forever, regardless of how much people want it to. Markets always return to a somewhat norm which is why money printing has never worked. The megalomaniacs at the Fed and dot Gov know this. Each day it continues means many days of suffering for all,,, which is probably intentional to set up the world 'they' envision. All thanks to those BTFD Dupes.

Thu, 09/17/2015 - 10:01 | 6560044 ersatz007
ersatz007's picture

must. get. back. to. dow. 18K

Thu, 09/17/2015 - 10:40 | 6560169 starman
starman's picture

Just remember the Fed members grew up with circus' s and magic shows. 

Thus the similarities. 

Thu, 09/17/2015 - 11:28 | 6560279 optimator
optimator's picture

Yellen reported investments worth $4.8 million in 2012.  As of today she's worth 13.4 million.  If you did that you'd smile.  So, you know why she's laughing (at you).

Thu, 09/17/2015 - 11:53 | 6560362 To Hell In A Ha...
To Hell In A Handbasket's picture

Robert Paulson wrote........... "Despite the incessant jawboning to the contrary by Fed and central bank mouthpieces - who under an honest system would be charged with currency manipulation - there is zero possibility of a rate rise. You can't taper a Ponzi scheme, and central bankers are not about to give up their most effective tools for asset-stripping the 99% and transferring their wealth to the .1% in the financial sector.

The City of London and Wall Street must keep luring in new suckers and new money, and since the supply of Greater Fools is running out and the retail investor herd is starting to get spooked, the Fed has no option but to maintain ZIRP. Moreover, it will need to print new trillions in QE4/helicopter money and shower them on its TBTF banker cohorts to keep the Ponzi levitated long enough to lure in the last of the retail bag-holders before the pump & dump. So on Thursday Yellen will announce continued ZIRP and foreshadow a new round of "stimulus." No other outcome is possible. The con game is becoming more brazen even as people are finally waking up and rejecting the crony capitalist status quo, as seen by the meteoric rise of anti-establishment political contenders in the US and UK" 

I could not have explained my own position any better.  At best, the FED would make a token interest rate rise to give the illusion they are fair and honest brokers with the genuine interests of the U.S economy and its citizens in mind, but this late in the game and with the cat out of the bag, the kleptocrats cannot restrain their nature and so the greatest thievery in human history will continue unabated. "To the Q.E-4 system Data, ZIRP factor 9. Engage!"

Thu, 09/17/2015 - 12:24 | 6560532 theyjustcantstop
theyjustcantstop's picture

fed rate doesn't matter, to many American sheep.

WHO, BIS are more worried about , the eu,and em's, their citizens take to the streets by the millions, when their getting screwed, political, and finnancial landscapes change overnight.

millions againist a thousand politicians, bankers, and the .00001%ers.

 

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