Fed Credibility Chart Tumbles Most Since October

With 15 days left until the day that will live in monetary policy infamy, it appears investors are beginning to lose faith...

Following today's ISM/PMI data collapse (and everything else recently), the odds of a December rate-hike have plunged most since the October FOMC meeting...

Perhaps this is why?

As we noted previously, here we are in the lull just as we were before that Sept. meeting, And what is happening this time? Well, don’t look now, but there indeed looks to be trouble brewing on the global stage (or should I say “international developments”) that could turn out to be just as big of a headache to the Fed’s reasoning’s on whether or not to “just do it.” Just one of those issues is – once again: China.

How long before Christine Lagarde raises some doubts? Again! And crushes The Fed's credibility once and for all.

One thing is sure - despite Stan Fischer's exclamation that The Fed will not surprise 'the market'; given the massive short posiitioning...

The Fed better not let them down - The last time the world was this short Treasuries, the 10Y yield collapsed from 3.94% to 2.39% in just 3 months.

Comments

[Hitlery_4_Dictator]

Investors can suck my dick they are complicit in this scam of scams. They know damn well the FED's game, yet they play into it because of greed and bullshit paper gains. When this falls apart this will be awesome.

[FreeShitter]

All hope and no brains.

[philipat]

"They" play along with it because "They" is The Fed and the TBTF Banks who, between them, control 70%+ of the "Market". The TBTF's aren't going to go against The Fed because they ARE The Fed. What Main Street thinks, even if it were fully enlightened, makes not an iota of difference.

[ShorTed]

Getting really tired of waiting for that elusive,  "...when this falls apart".  The market can remain irrational much longer than i can remain liquid.

[SILVERGEDDON]

I lost faith in the Fed when i found out which banks were running the biggest Ponzi scheme in history - the FED.

[Groundhog Day]

raise ...no raise....raise... no raise

duck season....rabbit season....duck season..rabbit season

muppet season...muppet season

[scintillator9]

I miss those old Bugs Bunny cartoons

[NihilistZero]

I knew the country was in a full downward spiral a few years ago when I woke up on a Saturday and found that their were no Classic Looney Tunes on any channel, anywhere.  A Saturday Morning without Bugs Bunny and Daffy Duck just isn't a Saturday Morning...

[spastic_colon]

I'm still stuck on "Fed Credibility" my new favorite oxymoron

[maneco]

I do not think it really matters what the Fed do on the 16th. Yellen and co. are running out of ammo and makeup!

This is an interesting video about what's going on with the economy and bond yields. https://www.youtube.com/watch?v=d8kLV-H1Yqk

[spastic_colon]

they are doing their best to change the narrative to "raising is good for the markets" they may have succeeded.  todays VIX smash at 3:59:45 will only be outdone by the one on 12/15/15 to make sure.

[margincall575]

Fed never had any.. Point to the time when? They could care less about credibility at this point if there ever was any. They have raped this country and stripped every last piece of meat off the dead carcass for their Jooo war. How else would they have been able to fund the Greater Isarea-hell Project?  Same old tired discussion. Like the Fed wants credibility and the have been "stupid" or "foolish" the last 9 years. They know EXACTLY what they are doing and what they will. or in this case "not"

[maneco]

What credibility?

[Bill of Rights]

Tiss the season you cheap bastards...

$500,000 check placed in Salvation Army kettle

[pebblewriter]

The only way they'd have even a shred of credibility is if they resigned immediately.

[moonmac]

Don't raise rates we need to build a few more strip malls that will sit empty for 2 more decades. They can join the old strip malls that are now empty.

[the grateful un...]

you are in China right?

[T-NUTZ]

in 15 days the Fed announces QE4, leaves rates unchanged.

[the grateful un...]

what if they announce QE4 and they raise rates, how about that?

[alfbell]

The blind leading the blind. Rinse... repeat.

[kelley805]

Here are some signs of a coming recession.

1. Factory orders continue to drop

http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row

2. Default risk spikes

http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high

3.  M&A set record

http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/  

4. Fed sees 2 bubbles

http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/

            o  Commercial Property higher than pre-2007 level.

http://nreionline.com/finance-investment/cre-prices-are-now-officially-above-pre-recession-peak

            o  Global Corporate Debt Market hits $5 trillion.

http://fn.dealogic.com/fn/DCMRank.htm

5. Iron ore prices tumble

http://www.marketwatch.com/story/iron-ore-prices-keep-crashing-adding-to-global-growth-fears-2015-11-30

6. Baltic dry shipping index tumbles

http://www.marketwatch.com/story/shipping-index-falls-to-all-time-low-stoking-fears-about-global-growth-2015-11-19

Here is how to prepare.

http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/

Here is how to get your mind off this stuff.

http://michaelekelley.com/category/humor/

Good luck!

[the grateful un...]

http://hussmanfunds.com/wmc/wmc151130.htm

see the chart in the bottom of this article, if CPI rises and the 10yr bond yield remains the same you have a negative return. that is good for stocks. nobody wants a negative return, bond buyers turn away from the ten year.
if CPI falls (energy tanks some more for instance) and yields stay the same, or even rise a bit, then the real return on the bond is positive and that's bad for stocks. raising rates faster than inflation is bad for stocks, now if you are Janet Yellen what should you do??? you should do what's good for stocks. to keep the real return on the 10year negative, and save the stock market, with a falling CPI you need QE4. now CPI is pretty tricky right here. energy is the only thing keeping it down, what if energy came roaring back? there are two paths from zero inflation forward and they are clearly not the same. if rates and CPI correlate, as they should then stocks could get monkey hammered, which is reason enough to not follow the path well travelled. on the other side if inflation picks up and the Fed just picks its nose and does nothing to rates, the market is happy but bond buyers get MOAR pain. i say they vote for MOAR pain for bond buyers, and a stock market rally. after 5% CPI the two paths converge and the chart behaves linearly but we ain't there yet.

[madbraz]

There is no inflation, there will be no inflation, there is no and will be no growth.  Long-term yields don't respond to Fed funds hike, they respond to demand.  They (long term yields) go up with speculation prior to tightening, they crash when tightening begins as yield curve will invert

Hike or no hike, the long end is golden.  Stocks are a dead duck, game over. 

[Wild Theories]

nailed all points bro

[the grateful un...]

no inflation no growth what is this Mars? we're talking about the 10yr here. pretty soon they will put a 100 point par bid under the market right now the fed will pay you to take their paper, and take it you might. stocks have another 1-2 years of growth, bond buyers get the shaft, all this prior to and before after tightening malarky is for the chumps

[duck dodgers]

I think theres a 0% chance of a rate hike...might even annouce QE.  Im gonna swing for the fences with NUGT weeklies the day before the meeting.