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Did Goldman Sachs Just Find The Smoking Gun In Today's FOMC Minutes?

Tyler Durden's picture




 

The market's reaction to today's FOMC Minutes was, to some, a little odd given the "December is on" hawkish narrative being sold to the public. Stocks rallied, longer-dated bonds rallied, gold managed gains, and the US Dollar sold off... not exactly the reaction one would expect from a 'hawkish' Fed statement. But there is one thing that would explain those moves... and it appears Goldman Sachs found it buried deep inside the 12 pages of Minutes...

 

First, we know that macro and micro data had deteriorated notably from the September meeting to the October meeting...

 

 

Second, the reaction across asset classes was 'odd' - Bonds and Stocks bid, Dollar down and gold up (and crude up)...

 

 

So, what would create that kind of market response? We'll let Goldman Sachs explain...

Minutes from the October 27-28 FOMC meeting indicated that most FOMC participants thought that the conditions for liftoff “could well be met by the time of the next meeting.” The minutes also noted staff estimates that the short-run equilibrium real interest rate is currently around zero and the long-run equilibrium rate would likely remain lower than was the case in previous decades.

 

1. Minutes from the October 27-28 FOMC meeting indicated that most Fed officials thought that the conditions for liftoff “could well be met by the time of the next meeting.” However, in part due to worries about “weaker-than-expected readings on measures of labor market conditions,” FOMC members agreed to wait for further information before raising policy rates. We expect that the stronger-than-expected October employment report will have assuaged many of these concerns, and that the committee now has a strong baseline to raise rates next month.

 

2. The minutes noted that “a number of participants” pointed to various other reasons for avoiding a further delay in raising the funds rate. The reasons included signaling confidence in the economic outlook, reducing uncertainty in financial markets, reducing the risk of a buildup of financial imbalances caused by low interest rates, and avoiding a loss of credibility.

 

3. The minutes included a discussion of staff presentations on the concept of “equilibrium” real interest rates (also known as the neutral/natural rate or r*). Consistent with earlier public comments from Fed officials, including Chair Yellen, the staff presentations estimated that the short-run equilibrium real rate was currently around zero. FOMC participants expected the short-run equilibrium real rate to rise over time, “but probably only gradually.” The minutes also suggested that participants’ views on longer-run equilibrium rates may be evolving: “it was noted that the longer-run downward trend in real interest rates suggested that short-run r* would likely remain below levels that were normal during previous business cycle expansions, and that the longer-run normal level to which the nominal federal funds rate might be expected to converge in the absence of further shocks to the economy … would likely be lower than was the case in previous decades.” The staff attributed the lower long-run equilibrium rate to a slower rate of potential growth, a consequence of slower population growth and weak productivity growth. These comments might foreshadow another reduction in the median “longer-run” funds rate projection in the Summary of Economic Projections (SEP) in December.

 

4. Participants also noted that the lower long-run equilibrium rate implies that the near-zero effective lower bound could become binding more frequently. As a result, “several” participants indicated that it would be “prudent” to consider “options for providing additional monetary policy accommodation” should the economic recovery falter.

In other words - as the bolded sections highlight -

The Fed is admitting that the neutral rate (to which they will theoretically raise rates before re-easing) will remain lower for longer...

...and therefore will reach ZIRP more frequently going forward...

...which means, as they state, using "additional monetary policy accomodation."

Which means, unless The Fed wants to implement NIRP (which it appears it does not), they will have to do more QE, more frequently going forward...

...basically admitting that the rate manipulation transmission channel is defunct for all intent and purpose.

*  *  *

So what Goldman discovered was the 'smoking gun' admission that this is no normal recovery and what was once entirely extreme and experimental monetary policy will be the new normal... and that may be why stocks and bonds rallied and why the dollar dropped and gold and crude gained.

Incidentally, all of this talk about the long-run equilibrium rate reminds us quite a bit of something Narayana Kocherlakota said back in July (that is, before he was replaced by Goldman alum and bailout architect Neel Kashkari). Recall this from Bloomberg:

Increasing the supply of assets available to investors “would push downward on debt prices, and so upward on the long-run neutral real interest rate,” Kocherlakota said Thursday in Frankfurt in remarks prepared for delivery at a conference hosted by Germany’s Bundesbank.

Lifting the so-called neutral rate, which prevails when Fed policy is neither stimulating nor restraining growth, would in turn benefit Fed policy makers by creating more space between the benchmark federal funds rate and zero, he said.

 

"I want to be clear at the outset that I am not saying that it is appropriate for fiscal policymakers to increase the long-run level of public debt. I am simply pointing to one benefit associated with such an increase: It allows the central bank to be more effective in mitigating the impact of adverse shocks to aggregate demand."

So when the Fed talks about considering "options" in light of a lower long-term neutral rate, will one of those "options" be to encourage the Treasury to issue more debt? If so, we know a new regional Fed President that's in good with the folks at Treasury...

 

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Wed, 11/18/2015 - 19:16 | 6811226 Government need...
Government needs you to pay taxes's picture

Just keep fucking the taxpayers.  They'll never notice.

Wed, 11/18/2015 - 19:28 | 6811249 Occident Mortal
Occident Mortal's picture

What is the nominal outstanding US debt? $18 trillion.

 

The interest on the debt has to come out of the national budget. If rates rise from 0.25% to 5% then .gov gotta find $1trillion to pay the bank each year. To do that the Fed has to keep buying stuff until they own everything at which point there is nobody left to transact with. At that rate they will exhaust the asset universe within a generation.

 

Obviously that can never be allowed to happen so they have to stop buying at some point and hold to maturity.

 

2008 was a $10 trillion shit sandwich for the public accounts. The Fed ate the sandwich and then crapped all over the people. If you don't like being crapped all over then don't live at the bottom.

Wed, 11/18/2015 - 19:37 | 6811312 Bay Area Guy
Bay Area Guy's picture

I've been preaching this for a while. Interest rates can simply never normalize without making the Federal budget completely collapse. We're in a debt spiral that, without significant decreases in Federal spending, must eventually end in a US default.

Wed, 11/18/2015 - 19:48 | 6811355 two hoots
two hoots's picture

Debt ceiling?

 

Wed, 11/18/2015 - 19:52 | 6811379 nope-1004
nope-1004's picture

Money debauchery, plain and simple.

Wed, 11/18/2015 - 20:22 | 6811461 knukles
knukles's picture

I've been reading Fed minutes for over 40 years and I do not understand what the fuck they're saying which means they don't either.

Wed, 11/18/2015 - 20:35 | 6811495 Aknownymouse
Aknownymouse's picture

"The minutes also noted staff estimates that the short-run equilibrium real interest rate is currently around zero and the long-run equilibrium rate would likely remain lower than was the case in previous decades."

Deflation anyone? What happens when the equilibrium rate is negative? What can the FED do then?

Thu, 11/19/2015 - 00:05 | 6812065 TahoeBilly2012
TahoeBilly2012's picture

I am still concerned with the Fed being my lender of last resort (mortgage, auto loan, etc.). Let's say they team up with DHS as the collection agency.

Thu, 11/19/2015 - 09:57 | 6812837 mtl4
mtl4's picture

This is all playing out almost exactly like the period right before the Great Depression (kept lowering rates, then finally raised them too late) but by the time they realize the markets are toast (capital flight) even the big guys will have trouble getting out.  People have been fooled by the QE thinking it is inflationary but it doesn't even get close to offsetting the deflationary forces in play currently.  Should provide a nice rip in the stock markets again though.

Wed, 11/18/2015 - 20:38 | 6811504 stormcrow
stormcrow's picture

They're playing the "baffle them will bullshit" card.

Thu, 11/19/2015 - 07:27 | 6812515 Bendromeda Strain
Bendromeda Strain's picture

Here's all I need to know: 1) The US is following Japan, like it or not. 2) ETFs are a special scam designed to end in tears for the players. 3) The BOJ now holds half of all ETF assets in Japan. 

Wed, 11/18/2015 - 20:44 | 6811523 Doña K
Doña K's picture

The most exact language in the world is Greek and for law is Latin. Second most exact happened to be English and the fed finds and invents words which have multi meanings, metaphors and or enigmatic ones which can be widly misinterpreted.

Welcome to FED speak.  

Thu, 11/19/2015 - 07:53 | 6812542 therover
therover's picture

I thought the most exact language in the world is math. Sadly that language can be manipulated is so many ways, no one can understand it. 

 

.gov and the Fed have mastered that fucking language. 

Thu, 11/19/2015 - 10:31 | 6812980 detached.amusement
detached.amusement's picture

There's math, and then there's statistics

Thu, 11/19/2015 - 11:18 | 6813234 roadhazard
roadhazard's picture

Math sez a helicopter can't fly.

Wed, 11/18/2015 - 21:16 | 6811611 No.Fifth.Turning
No.Fifth.Turning's picture

Hey Misters Durden, how about a "ZH for Kids" blog so I can keep up.  You could draft that "Home Alone" dude to pen it, the one that's always strung out on drugs and looking like Hell.  And why are we always using Goldman as a (honest?) source for anything when they seem to be a large part of the problem.  Hell, they're probably the ones that write the FOMC meeting scripts that make it appear there is disagreement by some, when we know they just follow what that "JY" lady says. I'm not getting that part. Just asking.

Wed, 11/18/2015 - 22:23 | 6811825 ebworthen
ebworthen's picture

FED/Treasury:  "Hey kids, I'll give you a cupcake if you clean your room - or I'll give you a cupcake and you can do whatever the hell you want; which do you choose?"

Wall Street:  "Cupcakes, and do whatever the hell we want!"

Old Neel "Kash-n'carry" ready to hand out cupcakes, again.

Wed, 11/18/2015 - 21:17 | 6811624 DeadFred
DeadFred's picture

Yet the 'matket seems to know how to react to something buried on page twelve of the notes anout 2 nanoseconds after they are release. Does that seem reasonable to you?... Not to me either.

Thu, 11/19/2015 - 00:48 | 6812122 vie
vie's picture

What is this market you speak of?  I've heard stories about such things.

Thu, 11/19/2015 - 08:38 | 6812637 kralizec
kralizec's picture

Me too.  Just whispers among pit bosses...

Thu, 11/19/2015 - 05:10 | 6812380 medium giraffe
medium giraffe's picture

Seems reasonable to me.  The news is taken advantage of to move the market.  That advantage means getting everyone else on the wrong side - otherwise who are they going to buy from?  It's not a 'market', it's a massively multiplayer online ripoff.

Thu, 11/19/2015 - 08:20 | 6812594 herkomilchen
herkomilchen's picture

I had exactly the same thought.  The logistics of that don't work.

Wed, 11/18/2015 - 22:11 | 6811794 PlayMoney
PlayMoney's picture

I had to stop reading. Would have read better if they had written it in pig-latin

Wed, 11/18/2015 - 23:45 | 6812029 o r c k
o r c k's picture

I'll bet we'd all love a job where you make billions and the only qualification is knowing some big words,. Not their meaning-just the words.

Thu, 11/19/2015 - 01:31 | 6812191 Farqued Up
Farqued Up's picture

It's like 4 kids rolling the Monopoly board dice with all of the properties owned and have hotels. Now, it is a dice game with no skill and collapse drawing nigh.

Wed, 11/18/2015 - 19:56 | 6811392 1stepcloser
1stepcloser's picture

There can never be a debt ceiling in a debt based monetary system.  More debt is always the answer and needed.

Wed, 11/18/2015 - 20:03 | 6811408 two hoots
two hoots's picture

Not sure the new speaker/repub Congress will support a debt increase to support the Feds failed monetary policy.  

Wed, 11/18/2015 - 23:23 | 6811999 lasvegaspersona
lasvegaspersona's picture

When things get bad enough even Rand Paul (Ron too) will be begging for 'more  money'.

I'm not sure how fucked up things can get but reading 'When Money Dies'  and 'Hyperinflation in France' we still have a way to go. So far no starving bodies in the streets and no capital punishment for priests and demons and royalty and bankers (truth be told qualifications for the dropping blade changed frequently). People usually turn to government for answers....which just shows we humans have a sense of humor even in the worst of times.

Wed, 11/18/2015 - 23:25 | 6812002 lasvegaspersona
lasvegaspersona's picture

dupe

Thu, 11/19/2015 - 12:13 | 6813539 grumpyoldgit
grumpyoldgit's picture

but America has to "pay it's bills"

 

that's why it's got to keep borrowing money

 

Obama told me so

Wed, 11/18/2015 - 20:32 | 6811429 herkomilchen
herkomilchen's picture

They can just print more money to pay back the debt.  When they can, at the press of a button, take however much of the wealth of everyone holding dollars anywhere on the planet away from them and apply that stolen wealth to paying off their own debt, debt is not really a problem, even at higher interest rates.

This is already happening at low levels in indirect ways.  But no new laws would even be needed to do it outright.  Right now the Treasury has the legal authority to mint a few dozen trillion dollar coins that the Fed buys with money it has the authority to create out of thin air.  The Fed holds these coins permanently on its balance sheet.  Government debt paid off instantly.  Interest rates don't matter when you have a printing press.

Wed, 11/18/2015 - 21:09 | 6811599 Consuelo
Consuelo's picture

 

Correct - it is a 'sealed system'.  It's only a problem when a competing nation is stockpiling gold, for reasons not yet completely understood, but what little is understood spells a very nasty comeuppance for the U.S. at some point in the future, as a direct result of misguided foreign policy.  

Thu, 11/19/2015 - 14:15 | 6814063 hxc
hxc's picture

Misguided is too soft a term for it.

Thu, 11/19/2015 - 01:22 | 6812173 RaceToTheBottom
RaceToTheBottom's picture

They will keep printing until all assets are allocated.

 

Keep an eye on Yellowstone.  When they sell that, it is time to put your head between your legs and kiss your ass goodbye.

Thu, 11/19/2015 - 12:15 | 6813547 grumpyoldgit
grumpyoldgit's picture

who'd want to buy an enormous caldera?

 

talk about tail risk!

Thu, 11/19/2015 - 01:23 | 6812175 dolbiere
dolbiere's picture

well that's just fine but as margaet thatcher famously said "until you run out of other peoples money".

Thu, 11/19/2015 - 04:46 | 6812362 Urban Redneck
Urban Redneck's picture

What Voltaire actually wrote was:

Une monnaie papier, basée sur la seule confiance dans le gouvernement qui l'imprime, finit toujours par retourner à sa valeur intrinsèque, c'est-à-dire zéro

The English translation leaves out: ",based solely on CONfidence in the government that prints it,"

It's actually an indictment of fiat, not paper per se

Thu, 11/19/2015 - 07:07 | 6812489 Urban Redneck
Urban Redneck's picture

A better indictment of paper money would be George Washington's 1786 critique to Jefferson of paper money in Virginia-

Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.

Which the French then screw up the translation of by generalizing the statement and removing the reference to Virginia-

Le papier monnaie aura toujours pour effet de ruiner le commerce, d’opprimer les honnêtes gens et d’ouvrir la porte à toutes les fraudes et les injustices.

Paper money always has the effect of ruining commerce, oppressing the honest, and opening the door to every fraud and injustice.

Thu, 11/19/2015 - 12:16 | 6813552 grumpyoldgit
grumpyoldgit's picture

"Interest rates don't matter when you have a printing press."

 

indeed they don't

 

10000000000%*0 = 0.00001%*0

Thu, 11/19/2015 - 13:28 | 6813822 SDShack
SDShack's picture

"Interest rates don't matter when you have a printing press".... plus control the bond market" Fixed it for you.

That's the key and is the explaination of what has been happening since at least 2008. The Fed can't just monetize the debt directly (although in effect that is exactly what they are doing). The Treasury has to issue Fed Bonds, which have to be bought and sold in a "market". Of course, we all know the bond market doesn't really exist, since the Fed and its Proxy CB's around the world just play a shell game with the debt/bond market. So the Fed with it's CB proxies essentially controls the majority of the bond market, and that has destroyed the bond vigilantes. Just see Greece and Cyprus as an example of what is going on on a global scale.

The result is there is no bond market, but just defacto monetization of the debt. The beauty of all this to a sociopathic banker is the Ponzi is self-sustaining at this point because of the nexus of Debt, Captured Bond Market, and Printing Press. The only way this blows up is if some external cataclism happens that TPTB cannot forsee or control. The only thing that is known is the longer the bubble gets blown, the bigger it becomes, so the larger cataclism will have to be to destroy it. That means the end is going to be epic, but when it happens, no one can really know... could be years off... or could happen tomorrow.

Wed, 11/18/2015 - 21:07 | 6811593 AGuy
AGuy's picture

"What is the nominal outstanding US debt? $18 trillion."

$18.67 Trillion. I believe the current debt cealing is $19.1T which will likely be reach in March/April 2016. The need to use the special measures to make it last until after the November elections. Although a recession will likely increase deficits as tax revenue falls and increased outlays (wealthfare, unemployment more people filing for SS, etc). I find it hard to believe the US won't be in a recession by the spring.

"We're in a debt spiral that, without significant decreases in Federal spending, must eventually end in a US default."

Decreases is Federal spending would not help. The US must keep rates at ZIRP or in NIRP, and continue to more QE to delay hard defaults. Technically the US is already in a soft default by printing money to by US Gov't debt.

 

 

 

Thu, 11/19/2015 - 12:17 | 6813556 grumpyoldgit
grumpyoldgit's picture

so bush will have managed to double the national debt in his 8 years and Obama will manage the same trick

Wed, 11/18/2015 - 19:47 | 6811351 Babaloo
Babaloo's picture

I used to worry about this as well, but keep in mind $4 trillion of that debt is owned by the Fed, and the Fed just turns around and sends its "earnings" back to Fed Gov.  And much of the other interest is taxed, so a portion of the interest is remanded to the federal gov't as taxes.  So, long story short, a lot of that interest just gets recycled.

Wed, 11/18/2015 - 19:59 | 6811390 two hoots
two hoots's picture

 

sends its "earnings" back to Fed Gov 

Except $1+B in operating expenses, 6% divy to members, paying interst on reserves, repo interest ++….without an audit.  I’d send some back also if I could keep what I wanted.

Thu, 11/19/2015 - 01:28 | 6812183 BeanusCountus
BeanusCountus's picture

Under your theory, if the fed just bought up all US treasury bonds we would owe nobody anything. Sound absurd? It is. Think about it.

Thu, 11/19/2015 - 06:42 | 6812439 new game
new game's picture

does anyone here really think the governments obligations are going to be paid? these are numbers that represent ONLY ONE THING: DEBT SERViTUDE. there will never be a default. the game is control of the monetary system and default means loss of control. now i ask: will a default happen?

they will find/create a way to "kick the can". create a new bond to suppliment the original and leverage its value into new value deemed a new life line to previous debt obligations. they make the fucking rules. they are psycopathic control freaks that would fuck your twin sister at age 12, while possing as an inocent well intended babysitter. They are fucking banksters.

to believe for one secoind that any of this will default is a fools game of not understanding what is at stake and who is in control.

this money we are captivated by is the very control they have over us. they certainly will not lose control.

outsiders of the western bankster system, assuming russia and china are actually competitors, would be the only risk to the dolla hedgemony. and that i doubt is true, just posturing...

see, it is the biggest conspiracy know to mankind right in our face.

we are captivated by the very monetary system they created  and control, backed by violence if neccesary...

part two would be the allocation(what it buys)of this money(control)...

Wed, 11/18/2015 - 19:39 | 6811318 Dr. Engali
Dr. Engali's picture

They'll never notice because the tax payers they're fucking now won't be born for a couple generations.

Wed, 11/18/2015 - 19:56 | 6811393 herkomilchen
herkomilchen's picture

And they'll be raised from birth to think it's all normal and as good as it gets.

Wed, 11/18/2015 - 20:07 | 6811421 Dr. Engali
Dr. Engali's picture

Exactly. The roaring 90s will be a history lesson of excess.

Wed, 11/18/2015 - 20:01 | 6811396 Normalcy Bias
Normalcy Bias's picture

I'm just going to say it: Neel Kashkari looks like a psychopath in that picture. I'm sure it's just coincidence.

Wed, 11/18/2015 - 20:25 | 6811469 GRDguy
GRDguy's picture

Well if he wasn't, he wouldn't be were he is now.

Wed, 11/18/2015 - 20:46 | 6811530 commishbob
commishbob's picture

Especially since the number of people who actually pay taxes keeps declining. 

Wed, 11/18/2015 - 23:26 | 6812004 rogerrabbithole
rogerrabbithole's picture

Too busy bitching about coffee cups.

Wed, 11/18/2015 - 23:52 | 6812046 tempo
tempo's picture

$44k/yr of benefits for each senior, millions retiring each year, so entitlements to seniors will cause new trillions in deficits within a few years, 10 retirees for every worker. its really hopeless.

Wed, 11/18/2015 - 19:18 | 6811237 buzzsaw99
buzzsaw99's picture

the squid basically runs the fed, the fbi, the sec, and everything else so any comments to the effect that they don't know what will happen are bogus.

Wed, 11/18/2015 - 19:22 | 6811246 SoilMyselfRotten
SoilMyselfRotten's picture

reducing uncertainty in financial markets, reducing the risk of a buildup of financial imbalances caused by low interest rates

 

Hmmm, wonder who is at fault there, i know it will come to me, it's on the tip of my tongue...

Wed, 11/18/2015 - 19:24 | 6811256 Bruce Gender
Bruce Gender's picture

ZIRP & QE = BUY BUY BUY

 

"We're all different; and that's not a bad thing...it's a good thing"

Wed, 11/18/2015 - 22:27 | 6811841 Cruel Aid
Cruel Aid's picture

Bruce Gender on box... clever +1   lol

Wed, 11/18/2015 - 19:25 | 6811263 Aussie Battler
Aussie Battler's picture

the only reason the natural interest rate is so low is because the Fed has created a bloated, debt-saturated zombie economy like Japan's. Disabled free market capitalism's carthatic processes. Fuckwits

Wed, 11/18/2015 - 22:31 | 6811852 Cruel Aid
Cruel Aid's picture

we're in the way. Systematic multi pronged long duration attack. Central bank/UN cabal fuckwits

Wed, 11/18/2015 - 19:30 | 6811277 H H Henry P P P...
H H Henry P P P Paulson's picture

I'm going to watch Justin Bieber's new music video Purpose.

My thoughts and prayers are with Cecil the lion.

I'm running low on my EBT card; Bernie Sanders needs to be the next president.

Does this dress look white and gold to you?

What time are the Kardashians on?

 

Wed, 11/18/2015 - 21:49 | 6811725 Give up. Realit...
Give up. Reality is not scientific nor even mathematical.'s picture

"I want to be clear at the outset that I am not saying that it is appropriate for fiscal policymakers to increase the long-run level of public debt. I am simply pointing to one benefit associated with such an increase: It allows the central bank to be more effective in mitigating the impact of adverse shocks to aggregate demand."

Oh yeah! Aggregate demand!

ObamaCare subsidies

ObamaDopeRehab-Funding

ObamaPhones

ObamaCars&Trucks

ObamaMortgages

ObamaImmigrants

ObamaEducationLoans

ObamaRides

ObamaStock-Buy-Back-ZIRP-Loans

Yes, the country definitely needs more aggregate demand, made up of welfare, more illegal immigrants, and more stock buybacks, all of which equate to more completely non-performing expenditures in the economy.

FUCK THE SAVERS AND THE SMALL BUSINESSES THAT ARE THE BACKBONE OF A HEALTHY ECONOMY!  THE SAVERS AND THE SMALL BUSINESSS OWNERS HAVEN'T ADDED TO AGGREGATE DEMAND IN EIGHT YEARS, AND THE FEW THAT ARE LEFT DON'T MAKE UP A LARGE ENOUGH VOTING BLOCK TO WORRY ABOUT.  (The government is the economy!)

Print so the scum-of-the-earth can spend.  Fuck bread and circuses.  GIVE THEM WHAT THEY REALLY WANT ---  HEROIN AND CRACK COCAINE!

 

Wed, 11/18/2015 - 19:28 | 6811278 Aknownymouse
Aknownymouse's picture

Does that mean QE is anticipated to lift stocks? Would't you think the law of large numbers will hinder them a little? Also don't you think a republican in the white house might alter those plans?

Wed, 11/18/2015 - 20:32 | 6811487 GeezerGeek
GeezerGeek's picture

Yes, no, and keep dreaming.

Wed, 11/18/2015 - 19:28 | 6811279 Xatos
Xatos's picture

Just another day. Keep stacking food and PM's. There's nothing else to do unless we have a revolution and apparently no one wants to, as I would guess the "line" should've been crossed years ago. 

Wed, 11/18/2015 - 19:34 | 6811298 FreeShitter
FreeShitter's picture

The turtle wins this race.

Wed, 11/18/2015 - 19:53 | 6811382 herkomilchen
herkomilchen's picture

Not if he's on a treadmill and they hold the speed control.

Wed, 11/18/2015 - 19:30 | 6811283 NDXTrader
NDXTrader's picture

Who didn't already know this. When they started saying that the long run growth rate was likely to be lower, as well, it was pretty obvious

Wed, 11/18/2015 - 19:37 | 6811314 Dr. Engali
Dr. Engali's picture

Wow, the squid is catching on. They're only seven years behind the curve. A couple moar years and they'll finally figure out that we are Japan.

Wed, 11/18/2015 - 19:40 | 6811327 Demdere
Demdere's picture

It still seems to me that the big problem the Fed has is delaying the date where nobody loans $ to Treasury of the US.

https://thinkpatriot.wordpress.com/2015/11/11/dynamics-of-national-colla...

https://thinkpatriot.wordpress.com/2015/11/10/a-measure-of-propagandas-p...

Wed, 11/18/2015 - 19:41 | 6811330 hangemhigh77
hangemhigh77's picture

That nut would look comfortable in a strait jacket and a rubber room or, of course, a corner office on Wall Street

Wed, 11/18/2015 - 19:43 | 6811337 spanish inquisition
spanish inquisition's picture

So did Goldman find the Schweppes Pineapple Gold can in the cargo hold that will delay liftoff?

Wed, 11/18/2015 - 19:51 | 6811343 herkomilchen
herkomilchen's picture

So the Fed is intentionally planning, will full foreknowledge and even bracing for the consequences, to take us down the same path as Japan.  Decades of unrelenting recessionary stagnation.  No way out.  No release because nothing is allowed to collapse.  Just drawn out suffering and perpetual rot with no end.  What great guys, our central planners are.

Wed, 11/18/2015 - 21:12 | 6811604 V for ...
V for ...'s picture

Kerrching!

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." (Henry Ford)
Wed, 11/18/2015 - 23:32 | 6812009 FixItAgainTony
FixItAgainTony's picture

Anything to speed that emancipation.

Mike Maloney's Hidden Secrets of Money Pt. 4

https://www.youtube.com/watch?v=iFDe5kUUyT0

Wed, 11/18/2015 - 19:49 | 6811364 TaxMeIAmCanadian
TaxMeIAmCanadian's picture

Tick Tok, Tick Tok,...It's not a matter of if the financial system will blow, It's a question of when.

These assholes have screwed the taxpayer over so bad they should all be in jail. We are witnessing the results of my Shit Floats to the Top Theory.

In any large oranization, only those that least threaten the promotion path of the promoter get promoted. Hence, the shit floats to the top.

That is what we are witnessing today. The Inmates are Running the Asylum!!!

Wed, 11/18/2015 - 19:55 | 6811385 frankly scarlet
frankly scarlet's picture

The Fed cannot raise rates other than symbolicly, 5-10 bp or it will start to collapse highly leveraged derivatives which will bring down the rest. If a position is leveraged say ten to one then a .10 bp rise will equal a 1% rise on say swaps that total in the trillions or at least 100s of billions causing a massive increase in the cost of holding a position. The Fed can only raise rates in a normal fashion if they want to totally crash the financial sector....which might not be that bad of an idea.

Wed, 11/18/2015 - 22:41 | 6811880 Panafrican Funk...
Panafrican Funktron Robot's picture

They can raise rates and unleash QE simultaneously, and that QE doesn't need to be advertised.  The Fed can literally do whatever the fuck it wants.  This is not well understood in the mainstream, for some reason.

Wed, 11/18/2015 - 20:00 | 6811401 Conax
Conax's picture

Centrally planned zombification for US, but the bonuses and gourmet luncheons, the hookers and the blow will keep THEM from being inordinately stressed in these dire times for our once great nation.

Wed, 11/18/2015 - 20:00 | 6811402 Sudden Debt
Sudden Debt's picture

Gotta pay those bills!

And unless America does a greek style austerity and take responsability, they'll need to print print print.

Let's talk about the 2015 deficit so far!

Wed, 11/18/2015 - 20:32 | 6811441 negative rates
negative rates's picture

Lets not and say we did, I can smell that stench mouth through my computer. Plus it's 2 in the fuckin mornin in europe, having trouble sleepin sweety?

Wed, 11/18/2015 - 20:00 | 6811403 Herdee
Herdee's picture

The nice shiny polished head and the way that he looks at you should tell you that he should be locked up in a mental asylum.Don't let'm near the kids.

Wed, 11/18/2015 - 20:04 | 6811411 Hohum
Hohum's picture

I fell asleep reading the Fed minutes.

Wed, 11/18/2015 - 20:03 | 6811413 Permanentvacae
Permanentvacae's picture

this is the crime of the millennium.
They think people don't know and never will do anything
But one day the elite and wealthy will be pillaged from there homes. There will be no place to hide. Every sign of luxury and elitism will be ravaged. No questions asked. No police to help.

Only after this occurs do we have a chance of any real life as humans

Wed, 11/18/2015 - 20:21 | 6811457 insanelysane
insanelysane's picture

I would love to see the FED's research on the publics' potential reaction to negative interest rates.  I am assuming it shows that negative interest rates during an election result would result in victories for "end the FED" politicians which would then end the FED.

Wed, 11/18/2015 - 21:20 | 6811623 V for ...
V for ...'s picture

They are masters of disguise. The mark rarely knows he's being swindled and often goes along with it, thinking he's getting something for nothing. Note the minutes stress 'confidence', and 'credibility'...just like any huckster would be most interested in appearances; no different than an international crime syndicate, looting with impunity; using carefully crafted words and smiles...with threats to blow up the joint if they don't get their way.

Remember ex Golem Sacks turned Treasury raider, Hank Paulson: gimme the money or else....

The gangster banksters.

Wed, 11/18/2015 - 20:22 | 6811464 bentaxle
bentaxle's picture

Well, hell,  if the Japs can keep doing it...why can't we?

 

s\

Wed, 11/18/2015 - 20:35 | 6811496 stewie
stewie's picture

Nothing new here. Jim Sinclair has been beating the QE Infinity for years. Made sense then, still does.

Wed, 11/18/2015 - 20:39 | 6811506 InnVestuhrr
InnVestuhrr's picture

Translation:

FED has discovered that:

1. ZIRP's economic stimulative effect has declined to asymptote
2. ZIRP's negative financial effects, eg ending money market operations, ending inter-bank lending operations, fostering reckless leverage, etc are continuing

Therefore FED has decided that next stage of monetary central planning and control will be:

1. Raise the FFR modestly, eg to between 50bp and 100bp, so that good stuff, eg money market operations,  inter-bank lending operations, etc are revived and bad stuff, eg reckless leverage is dampened
2. Use QE to suppress rates longer than 6mo to close off investor's access to fair and reasonable free-market fixed-income interest rate returns and force capital into higher-risk assets, eg equities, while also protecting the federal government from having to pay much higher interest expense on greatly increasing national debt

Therefore interest rate curve will be very flat for very long and if you want to earn more than 3% or so on your capital, then you will have to accept much greater risk than you want or are morally justified in not having to take. Note that the FED is also increasing all your costs by continuing to push inflation, while also increasing your risk and decreasing your investment income.

Wed, 11/18/2015 - 22:17 | 6811806 duck dodgers
duck dodgers's picture

So they will raise interest rates in december?

Thu, 11/19/2015 - 05:15 | 6812386 InnVestuhrr
InnVestuhrr's picture

As I explained, the FED will raise the FED Funds Rate (FFR), ie the overnight rate, in December, unless there is a downward economic event that is strong enough to scare them off, eg big drop in job hirings or big increase in layoffs, etc. This will reduce the political pressure on the FED, restart the money market, restart interbank lending, etc, while also putting a braking action on the worst of the excess financial leverage perpetrated by the big Wall Street financial players who can borrow at or near the FFR to gamble with LBOs, leveraged loans, etc.

Then the FED will continue to buy bonds, without calling an official QE program, to suppress interest rate curve duration by reinvesting the huge balance sheet of bonds that they accumulated under Bernanke's multiple QEs. This will allow them to keep the financing cost of loans for the proletariat, eg mortgages, car loans, etc in the current record low range, and also keep the government's debt interest payments controlled to current record low levels.

Then the FED will stand pat for a very very very long time, unless there is an economic slump, in which case they will launch another official QE program to suppress interest rates further and provide liquidity and stimulus.

I think that a critical mass of the central bankers, including their analysts, have discovered that keeping the FFR at zero, ie ZIRP, for extended periods is far more damaging financially and economically than it is economically stimulating, but they remain religiously committed to crushing and controlling the rest of the interest rate curve.

We will all live out the rest of our lives with interest rates that we can get on our savings at the rates you see now - or lower - so plan accordingly. I loaded up on 30-year treasuries at 3.1%.

Wed, 11/18/2015 - 20:47 | 6811528 Jungle Jim
Jungle Jim's picture
  1. So, does this mean gold is going to go down even more, or up? And if the latter, any time soon? By "soon" I mean *soon*, as in before the end of the year, not in three to five to seven to fifteen to thirty years.
Wed, 11/18/2015 - 20:53 | 6811549 luna_man
luna_man's picture

 

 

Oh Yeah, and I'm willing to wait these CRIMINALS out!...I know they're in trouble!

 

I think I'll add to my "short" positions...I'm gonna be rich, I tell ya

Wed, 11/18/2015 - 20:58 | 6811564 fowlerja
fowlerja's picture

What's Fedspeak all about Alfie?  Why it is explained here....In monetary policy of the United States, the term Fedspeak (also known as Greenspeak) is what Alan Blinder called "a turgid dialect of English" used by Federal Reserve Board chairpersons in making wordy, vague, and ambiguous statements.

Wed, 11/18/2015 - 20:57 | 6811565 Danno Anderson
Danno Anderson's picture

Baffle em with bullshit. 

Wed, 11/18/2015 - 21:01 | 6811570 V for ...
V for ...'s picture

 I've seen better looking light bulbs. The glare off the top of his head and those mad eyes give the feeling that he may not have anyone's best interests in mind...

Anyhoo, early last month I advised a friend that the Fed would turn us into Japan. Hey, presto! It's all there in their minutes. In the late 1800s, an obscure journalist for The New York Herald Tribune wrote about forced emigration; how ordinary farmers and workers were paid to leave Ireland and Scotland for the USA, as they were no longer required by the owners in Britain who could generate as much income and dividends without them. He forecast that the landlord and the managerial class would be replaced one day too. The owners just want to make the money, and fewer workers and managers are needed as new inventions and technology replace them; rather like American jobs have been sent overseas; robots are being introduced to replace workers; investments and income have stood still or declined for ordinary people.

But the owners retain their own wealth, much as the current crop of greedy .1% intend to do with their QE, ZIRP,NIRP. No worries. War, poverty and starvation will thin the herd. Plus ca change...

The name of the obscure journalist if you hadn't guessed: Karl Marx. He later went to work for the Rothschilds; best keep the thievery and analysis in the 'family group', eh...

Wed, 11/18/2015 - 22:11 | 6811790 blue51
blue51's picture

Didn't Marx also say, " Capitalism is innately designed to ultimately implode on itself" ? Empty factories, empty real estate ?

Thu, 11/19/2015 - 02:29 | 6812257 Clowns on Acid
Clowns on Acid's picture

Trim the sides ...shine the top...

Wed, 11/18/2015 - 21:21 | 6811630 Seal
Seal's picture

"There is no means of avoiding the final collapse of a boom brought about by credit expansion." ......

Wed, 11/18/2015 - 22:10 | 6811787 hedgiex
hedgiex's picture

"WE are not sure that raising Fed fund rate will deliver our 2% inflation target. However, keeping ZIRP did not do the job and that's empirical evidence. so raise it and see. Besides, it's good for our credibility and delivering to the expectaions of our friendly CBs elsewhere. If this triggers a traded paper assets collapse, we have the mechanism to catch the shorts". Isn't this what GS is saying with all its obfuscations ? Never mind the long term consequences on the real economy, they are just collateral damages.

Wed, 11/18/2015 - 22:14 | 6811798 El Hosel
El Hosel's picture

We can only hope Goldman soon finds something deep inside itself.

Wed, 11/18/2015 - 22:26 | 6811839 Downtoolong
Downtoolong's picture

 

That photo of Neel Kashkari says it all; worth 10,000 words; like something from Ali  Baba And The Forty Thieves; but truth is stranger than fiction.

 

The Fed is all about keeping the government and Wall Street funded as cheaply as possible, at the expense of middle class savers. If they take the risks the insiders and Fed want them to, they get raped and murdered in the markets. If they hang on to their cash and cash equivalents, they get eaten alive slowly but surely by inflation and currency destruction. It’s Central Bank extortion 101, and little more. It all comes to an end when those being robbed of their assets have nothing more to give up.

  

Thu, 11/19/2015 - 01:52 | 6812219 yogibear
yogibear's picture

Looks like that guy from "The mummy" movie.

 

Wed, 11/18/2015 - 23:13 | 6811967 Savyindallas
Savyindallas's picture

In other words-screw the economy and mainstream Americans  - just keep the looting and profits going for the Khazzarian joos and their bought off partners. It will work -unless the zombified amerikan sheeple wake up. 

Wed, 11/18/2015 - 23:46 | 6812026 FixItAgainTony
FixItAgainTony's picture

then burn the joint down, collect the insurance, and jet out to meet the next bunch of rubes.

Wed, 11/18/2015 - 23:36 | 6812014 wattsnotsaid
wattsnotsaid's picture

" If you bozos on Wall St don't want the IRS all over yah ass, then the market better go up on the next rate increase"

Wed, 11/18/2015 - 23:52 | 6812044 SSRI Junkie
SSRI Junkie's picture

if you understand that any data that .gov and the fed puts out is a lie, then it all makes sense.

Thu, 11/19/2015 - 01:07 | 6812151 TheBeatles
Thu, 11/19/2015 - 01:44 | 6812212 yogibear
yogibear's picture

US listed debt is $18.6 trillion now, sure to climb to $20 trillion with the debt ceiling suspended until 2017.

Thu, 11/19/2015 - 01:47 | 6812215 Sanity Bear
Sanity Bear's picture

the stealing will continue until morale improves

Thu, 11/19/2015 - 02:25 | 6812248 acetinker
acetinker's picture

Goldman didn't 'find' fuck all.  They wrote the script.

Of course they know what's in it.

Thu, 11/19/2015 - 08:30 | 6812619 Crocodile
Crocodile's picture

Just substitute the words "Policy Makers" to "Central Planning Committee" and it brings out the true context. 

 

In a couple of years, by the end f 2017; none of this will matter anyway.

Thu, 11/19/2015 - 08:37 | 6812634 Maestro Maestro
Maestro Maestro's picture

FACT:

Goldman Sachs, like all FDIC-insured major US banks operating in the US, is one of the OWNERS of the Federal Reserve Bank.

As such,

Goldman Sachs does not look for any 'smoking guns' in FOMC minutes. Goldman Sachs TELLS the Fed what to do. Goldman Sachs WRITES the FOMC minutes.

Goldman Sachs (just like JPM, BOA, CITI, etc.) IS the Fed.

Morons.

Thu, 11/19/2015 - 08:47 | 6812661 overmedicatedun...
overmedicatedundersexed's picture

the problem with sound money people, they are honest, they only see value in what is  produced of sweat and brains.

compare that to the fiat kings. i do not need to list their characteristics.

that they only produce lies and speak in ways to avoid common understanding is one clue.

" THEY LIVE"   digital money is a tool for our slavery., so it will be done.

 

Thu, 11/19/2015 - 09:49 | 6812826 Arthur Schopenhauer
Arthur Schopenhauer's picture

Here's Neel Kashkari as a child.

Here's Neel Kashkari relaxing at home, on weekends.

Here's Neel Kashkari after the Fed got audited.

Thu, 11/19/2015 - 12:35 | 6813624 exartizo
exartizo's picture

hmmmmm... no talk of what's really keeping rates down:

European and EM instability

Tue, 11/24/2015 - 14:39 | 6833523 DOGGONE
DOGGONE's picture

Thwart terrorists!

End this deception by omission now!
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