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Hilsenrath 'No Rate Hikes In 2015' Hint Sparks Buying Panic In EM FX And Japanese Stocks
Between the plunging market-implied rate-hike probabilities and Fed-Whsiperer Jon Hilsenrath's WSJ piece this evening strongly hinting at no hikes in 2015, the 'relief' rally in Asian FX (and Japanese stocks) is - in a word - insane. If the world's central banks mandates are "price stability" in whatever format they believe that to manifest, they have well and truly failed. The Won has jumped most since 2011, Ringgit and Rupiah are soaring over 2%, and Nikkei 225 is up over 400 points from the US session close...
The rate-hike odds are collapsing...
And as WSJ's Hilsenrath notes, confirming the market's bias...
The chances of a Federal Reserve interest-rate increase in 2015 are diminishing amid new signs of anemic economic activity, a disappointing development for central bank officials who have been hoping to move this year after a prolonged period of easy-money policies.
Lackluster readings on consumer spending, inflation and jobs have virtually eliminated the chances of a move this month. Already, two Fed governors expressed doubts this week about whether the timing will be right this year, and the recent trove of data hasn’t reassured top officials about the economic outlook.
Sparking panic buying in Nikkei 225...
But EM FX is soaring against the USD...
As the following chaos shows...
- *KOREAN WON SET FOR BIGGEST GAIN VS DOLLAR SINCE NOV. 2011
We would note though that the USD weakness is starting to stall out any BoJ-hope-strewn JPY weakness which supports the world's equity markets...
Between the pace of hot money flows and illiquidity, the yo-yo-ing "markets" are as fragile as anything we have seen since Lehman.
Charts: Bloomberg
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And the faggotry continues unabated (no offense to the Gay community)
The Fed is trapped. All the CB are trapped. The fund managers and the fixed income managers and the muni budget managers are all trapped.
Janet Yellen is so trapped it pains me. I don't even know her and it pains me just to know how trapped she is.
It's a giant sticky tar pit made of debt obligations and IOUs, and everyone down to the janitor is trapped in it, up to their eyeballs in it.
Tied to the rails and the train is coming. You're gonna die mutherfuckers. All you rich fuckers are gonna have to live through watching it all vanish in a single night and even the janitor is gonna jump out a 10th floor window when it does.
And as a consolation with those trapped rats being eradicated the house can then be restored and reoccupied.
Or, just raze the whole thing down and rebuild it from the ground up.
I can't take much more of this.
For the bankers, there's more money to be made, moaaaar wars to be fought, and more control to impose on the helpless sheeple - the US taxpayers. This is going to take a little longer to wind down. They're not just gonna walk away from the empire they've been building for hundreds of years.
Um, did he mean 2015, 2016 or indeed ever? He's just (as we already know) playing along with The Fed. We already know there will be no rate hikes in 2015 so The Fed wants to continue to pretend that there MIGHT be rate hikes in 2016 because, by then, the economy will again be "Awesome". This is just more total BS and I am amazed that anyone would continue to believe this (Except of course the media and Wall Street who are all on the same team). IMHO there is ZERO chance of a rate hike in 2016 and the chance of QE4 is MUCH greater....
Well no shit they can't raise rates. It's called a sovereign debt trap for a reason. Once they go in (borrowing at low rates to "stimulate" the economy to such an extent they can no longer afford debt servicing costs when rates normalize) they cannot get out.
NVM all these stupid Listed company's borrowing up to their eyeballs for stock-buy back without the relevant increase in capital assets (save stock at inflated prices due to the stock buy-back), thus many .Coms like .gov cannot afford raised rates.
We'll see QE4 before we see a rate hike. You know it. I know it. The American people know it. (Ok, they probably don't).
The only way to prolong the inevitable is to keep feeding the middle class into a wood-chipper. They are destroying their own consumer base. How much time is left? No one knows. Japan keeps surprising us. Perhaps the US will as well, and we'll be sitting here in a decade with gas costing $25 a gallon, bread costing $9 a loaf & average salary sitting at $100k, minimum wage at $30 an hour & a $1,000 per month cell phone bill. Overnight interest rates will be at -1% & the Fed will have $10 Trillion on its balance sheet. Could happen. Average idiot will think he is making a fortune while paying $500 to fill up his car.
only flaw i see is the wages to pay for that 25 gas and the loaf at 9. san fran mac and des' is the template. so with a blossoming robot industry and 100 million(net) hungry unemployed plebs, things could get interesting fast.
..... and 80% of households on some form of government assistance.
Somewhere, Peter Schiff can't stop laughing.
FORWARD FEDERAL SOVIET!
We are trapped and they are the trappers. They'll continue to hand out high percentage credit cards to savers in lieu of being ass raped for the last 15 years. Over 10 trillion has been stolen through these usurious rates, at least. As the Japanese like to say, thats a rot a stimurus.
These bankers either need to die or be driven from the country. The reason is the right of those who are still alive – folks like your parents and mine and America’s children -- to make their living from this land, to have a dream and make it come true, not to have it wiped away by the greed of the bankers.
America needs fighters to reestablish the principle that our forefathers fought and died for: “It’s the proposition of a free people living in a free land” – a principle systematically being destroyed by this cruel pattern of greed and sinister scheming and financial manipulation that has been unfolding in America since the bankers assumed control.
We won’t get justice unless we fight for it. As Wayne D. Overholzer wrote in Buckaroo’s Code: “It’s strange how much trouble there is in life, all because of greed. There was no reason why we should have been bothered. Dad never harmed anyone.” Neither did the savers, nor the pensioners, nor those who lost their home equity or their careers… They all tried, in their own way, to stay away from the bankers.
Blankfein and Dimon and Lew and Rubin have everything they could possibly ask for; yet this economic devastation of America’s middle class is all of their doing.
Donald Trump sums it up:
“’You know who gets hurt the most? People who practice the American dream and did what should have been the right way — the people that went through 40 years of their life and saved a hundred dollars every week [in the bank].’
“He paused, shaking his head before adding: ‘They worked all their lives to save and now what happens is they’re being forced into an inflated stock market and at some point they’ll get wiped out.'” --Trump: Economic bubble about to burst, The Hill
http://thehill.com/homenews/campaign/256851-trump-economic-bubble-about-to-burst
They need a Hilsenrath article to figure that out? If so we are more screwed than i thought, and thats a lot.
In the midnight hour she cried MOAR! MOAR! MOAR!, with a rebel yell she cried MOAR! MOAR! MOAR!
MOAR, MOAR,MOAR,MOAR,MOAR------echo effect MOOOOOOAAAAAAAARRRRRR!!
https://youtu.be/2PqyMCDTaSE
looks like the treasury selling is finally having the desired effect of devaluing the dollar without causing a rise in interest rates. i wonder if this is what the repo action is all about.
Probably not. The repo action must have been something huge. Like DB trying to not blow the fuck up.
Repeat after me boys and girls: "QE4! QE4! QE4! QE4!"
This is good news for bears!
Making more on gold, oil and miners than loosing on puts. Finally!
Been happy since Black Monday.
For how long though?
For the bankers to take risks with the economy is unconscionable
Chief of the thieves is Goldman Sachs Chief Executive Lloyd Blankfein, already having personally copped 1000 millions from the system in just nine years.
He has no intention of quitting, of course. As he said: “A job like this is hard to come by.”
Confirmation the world economy is shit, send stocks soaring adding billions to market caps.
Is this supposed to make sense?
Recessionary prints are bullish. Imagine saying that 20 years ago. It really needs to end.
Hawking is an idiot. The biggest threat to the world is the group we call central bankers. There is no capitalism in central banking. Theoretical physics is as much of a science as economics. Supposedly smart men claiming they know something without proof, inventing things that make the formulas work and then making people search for its existence.
Move along. Nothing to see here. Move along. It's all contained...
As expected.
Slowly turning the 'tightening ship' to a 'CTRL-P ship'.
Steady as she goes.
Dive! Dive! Dive!
Great help to the after hours iliquid market manipulation / opening ramp front-running in getting us back above all the price action of yesterday so all shorts open tomorrow underwater. Their covering will help tomorrows opening ramp momo ignition algos in triggering the stops, their combined force should close us well in the green despite the sure to be abysmal news stream. They have mastered market manipulation with computers, news releases and FED action; another 50,000 layoffs? extra bullish!
Wake me up when Russia on the middle eastern front and China on the Pacific front, decide it's time for the final $knee-capping event/s. And they won't even have to fire a shot if they choose not to...
I believe we'll see a short term High for the S&P500 this Friday/Monday, as they represent Cycle Turn Dates based on my own developed model. Yesterday, I closed the shorts entered OCT 13 @ 2017 at the Support Trend Line 1990 area, Target Price for that day. If you're interested, you can read more here:
http://tripstrading.com/2015/10/15/sp500-a-short-term-high-for-oct-1619/
http://tripstrading.com/2015/10/08/sp500-tripstrading-cycle-model-3/
http://tripstrading.com/2015/10/10/sp500-suffering-from-low-energy/
http://tripstrading.com/2015/10/09/sp500-how-cycles-take-their-time/
The fact that this fuck-off Hilsen-rat can move the /ES up 12+ points by "whispering" a story that everybody already knew just takes insanity to a whole new level. Im not a violent person by nature, but my Karma is suffering greatly from my thoughts of what I'd like to happen to all the bastards in charge of our entire system...
Totally agree.
DavidC
This ongoing FED flim-flam fiasco is insider trading at its worst, right in plain sight where all the "investing" fools will see it, and ignorantly assume they understand what is going on in the "markets".
The problem with any such completely non-market-related influence in the "markets" as Hilsenrath's FED leaks represent, is that these well-crafted and well-timed predilictions will hold true until harvest day, when with a sudden turn of direction, the insider-leak will no longer hold true. At which point the floor will open up to reveal the nearly bottomless pit that has long been prepared for all the common unwary "investing" simpletons that have their money bet on the trading floor. At which point all ships will sink, torpedoed by this unabashed FED con-job. After all, there is nothing to be ashamed of, if you end up the winner in this crooked game. And the ultimate winners will only be those bankers with good connections at the FED that really are in on the ruse, those that will then will be buying a sea of shorts under the waves of which, the whole world of investing ships will sink, pensions, municipalities, investors, and even hedge funds.
It's as slick as it is, because it has been done many times before. This time-worn flim-flam is what makes the Wall Street rich, rich. It's not about "investing" at all.
Anyone that plays this game of follow-the-leader into the slaughterhouse is completely ignoring human nature. Hilsenrath and the FED will eventually lead every fatted calf following this bullshit-flim-flam to their own appointed meat hook.
This flim-flam is what the "markets" are designed to do. This flim-flam has always been what the "markets" are designed to do. Any other contention about what the "markets" are designed to do, is pure puffing ultimately designed to get all the victims walking down the chute to their well-planned demise.
"A child of three beats the pros, and makes 100 million dollars trading stocks!"
Gata wonder if ole Hilsenrat is front running his own releases. Perhaps the SEC could investigate. But it's pornweek over there so little likelihood.
He might as well have just finished the story. Because even ZH readers know where it ends: "No rate hike in 2015, 2016, 2017. Maybe a little more QE. Then we have a bank holiday and re-issue the new red colored currency worth about 40% of the present dollar. Social security will be cut 30%, and taxes will rise about 15-20%. OK, I'm going to lunch now." Or perhaps scenario 2: "No rate hike in 2015, 2016, 2017. Next year cash will be gone, everyone on digital money which gets devalued to 40% of present dollar. Maybe a little more QE. Then we confiscate people's savings as needed to save the banks yet again, cut Social security 30%, raise taxes 15-20%. OK, I'm going to lunch now." For Christ' sake, how else can it end?
Perhaps "Maintain humanity under 500,000,000 in perpetual balance with nature.". Population reduction to fix the hyperinflation?
https://en.m.wikipedia.org/wiki/Georgia_Guidestones
Fed: Damn, I REALLY wanted to clean out that filthy garage, but it looks like rain, so I'll just stay inside, read Keynes and serve my guests more candy
They will raise rates when they are ready to start a new monetary system.
All currencies, currently, are fiat currencies drawing on debt as collateral. A unit of currency is a check drawn on the Central Bank against a unit of debt.
TWO REASONS WHY INTEREST RATES CANNOT RISE UNTIL A MONETARY RESET:
1) BECAUSE OF HOW CURRENCY IS CREATED: The Central bank puts a unit of debt on the asset column of the balance sheet. It can then create an equal amount of currency on the liability side of the balance sheet.
BUT THE DEBT BEARS INTEREST - SO THE DEBT IS ALWAYS OF GREATER VALUE...AND FOR THAT REASON CENTRAL BANK DEBT CANNOT BE REDUCED WITHOUT A DISPROPORTIONATE REDUCTION IN CURRENCY. Instead when CB-held debt is mature (due for repayment) it MUST BE ROLLED OVER IN A LARGER AMOUNT, an amount large enough to cover both the principal AND THE INTEREST of the old debt. Just like a debt consolidation loan, this results in the portion of the debt representing accumulated interest to grow, and the percentage that is the original principal to shrink.
It is the same as if you bought an expensive piece of equipment, say a caterpillar, for $100,000...and then refinanced it ever year or two for several decades, without ever doing more than paying the interest payment. At the end of 30 years tha debt would be for several hundred thousand dollars. If the rate were never more than 3%, then after 30 years the debt would be worth $242,726.25. $100,000 of that is the caterpillar. $142,726.25 of that is the interest. If you refinance it longer, the principal will not grow, but the interest will. But it is still the same caterpillar, and can only generate so much cash flow. When the finance cost ( $142,726.25 in this example) is larger than the revenue from the caterpillar can service...the loan will default.
Debt based currency works the same way. Only with currency the 'caterpillar' is actually every product and service in the economy. If technology makes the 'caterpillar' more productive, then the loan gets paid back...which for a central bank means that currency drawing on the value of that debt disappears - DEFLATION. On the reverse, if productivity growth does not keep up with the compounding interest, then eventually the 'caterpillar' won't produce enough to service its loan...and the loan will default, leading to the evaporation of the currency that draws on it - DEFLATION.
The Central Banker's job is to guage productivity growth, and to finely set the interest rate on the debt backing the currency such that the loan doesn't get paid, and the loan doesn't become impossible to service. But because the natural tendency of such a system is to collapse into deflation, and because governments really like the extra money this gives them to spend, the bias is towards producing too much money.
2) BECAUSE OF THE NATURE OF WHAT HAPPENED IN 2008. As noted with the 'caterpillar' example... when the growth of the loan is greater than the ability of the caterpillar to service the loan must default. That is what happened to the monetary system in 2008. But they had no alternate curency system waiting in the wings. This process of debt expansion puts newly printed money into the hands of bankers and governments. They don't primarily worry about the health of the caterpillar, but about their own power and luxury. So the caterpillar gets a seat for a government watch-dog, and the bankers riding on it get air-conditioning, neither of which makes it more productive...and the caterpillar reaches 2008. In 2008 they rolled over the caterpillar for near 0%....but QUADRUPLED the size of the debt, such that the service costs would not be much less.
If they raise rates now, or ever, the caterpillar - the economy - will be in default because there is BY DEFINITION not enough money in existence, given the inefficiencies the debt-based money has generated, to service the debt.
It is that simple. Without a new monetary system they cannot raise rates in real terms EVER.
P.S. Central banks also hold one unique asset, which has no counterparty, and which is (or was ...depending on CB honesty) a physical commodity. They could reset the system by revaluing that asset upwards until it equaled the value of the debt, then wipe out the old currency and debt all at once, and then issue new currency. Why don't they do this? Probably because the major central bankers can't agree on what the price of the asset needs to be to do it. Country A needs it to be around $60K/oz....Country B needs it to be $100K per ounce...and Country C, though still carrying it on their books, has leased it all out into the market for 30 years or more, and will be naked in any attempt to reset the currency system.
P.P.S. QE4 no later than April