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Fed's First Rate Hike In 9 Years Sparks "Goldilocks" Buying Of Risk Assets
What else is there to say...
Despite an initial disappointment in stocks, once Janet started speaking, traders started panic-buying... coz everything is awesome...
But notice that stocks extended gains and EURUSD tumbled (USD bid) as Yellen answered a question confirming the "soundness" of the financial system despite credit concerns...
Best 3 days since October...
Panic-Buying NFLX as soon as Yellen started speaking...
But for all the excitement, The Dow remains red for the year...
Oil dumped and stocks pumped post-Yellen... (it looks like the move was all pegged on her jawboning beginning at 1130)...
HYG rallied once again - unable to fill the gap from Thursday...
And credit was not as exuberant as stocks...
Energy credit market continued to collapse (and energy stocks fell)...
And bond yields were considerably higher heading in to the decision, the long-end dumped right after the decision (policy error) before yields surged back higher along with every risk-on asset as Yellen spoke... 2s30s was ucnhanged!!
Bond started dumping as soon as Yellen spoke...
The USD was sold on the "news" but quickly bid to hjighs as Yellen started speaking..
Commodities were mixed with some big swings around 8amET (PMs surged) but crude tumbled after the DOE data and copper faded...
Gold's early surge held but the machines ran all the stops after The Fed statement hit...
Crude plunged...
Charts: Bloomberg
Bonus Chart: Taper Tantrum Deja Vu?
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taking my gramme of soma early today, nighty night
The markets reaction is ridiculous and won't last, this chart says it all.
Market reaction IS the policy in a made up market.
Baltic Dri Index did not get the memo.
I give this reaction a half-life of 72 hours max.
Good call. Let's discuss the reverse-repo policy....
The USTs are flipped to banks for cash. Now the overindebted banks have more liabilities and less assets. They can daisy chain the debt via rehypothication, but to whom? They would need a buyer. The cash was useful as it was able to fund fractional reserve lending mechinisms.
So why would any bank participate in the reverse-repo policy the Fed wants to initiate? Or in other words, who holds the power to participate in finanace - the Fed or their member banks?
Silver higher on Stronger dollar.....the manipulation is complete
In other news, skittle color unicorn and flying pig is mid air collision over Washington D.C. Black swan is blame.
http://twitter.com/BorisAlatovkrap
Quite right. There are 10x claims for each asset that has been rehypothecated.No way all 10 'claimants' will get to claim the asset in question. when this domino falls look out below! This is the brilliant math skills of the 'Ivy League' in action. Morons...
72 hours is a lot of short covering... thus a lot of points can be achieved.
All with retail longs chased high-PE higher.
Yesterday started the pain and today dialed the pain up to high
Broadbased rallies destroy the concept of market segment diversification
Painful..
One can only hope the longs desire to lock in gains overrides the greed of "lets see how high this will run"
We've seen this movie before, many times. By next Tues. everyone will have forgotten and the market will close below were it started today.
Does anyone think the PPT was doing some preemptive work yesterday and today? Just feels so counterintuitive.
The PPT works in the interest of the market makers in a short term cpacity. If it feels counterintuitive that's because the PPT is only thinking short term but they have the world on their shoulders.
I was wondering if you wanted to explain this comment given today's events:
http://www.zerohedge.com/news/2015-12-10/feds-painted-itself-most-dangerous-corner-history-why-there-will-soon-be-riot-casino#comment-6907272
QE3 bought massively equities because there was little else left to buy. Stocks will stay where they are for a while longer, maybe go a bit higher even but we won't see the same increases since start of QE and especially QE3.
Fed owns much of the markets and they can unwind the debt paper now that they bought on the cheap. They're not unwinding stocks (yet).
Satan Claws Rally? Stocks are the least unlikely to unwind to zero, as they represent tangible value?
yeah good call. Just like all the other 'effed up calls the ZH fanboys have been making the last few years.
"The Fed will never tighten - they can't" Yeah right...
"if the Fed tightens, equities will implode..." Another brilliant call.
When are you guys gonna learn to shut up because you've been wrong so long you don't even know what right is any more?
Market reactions are not an immediate thing. You could be right here but maybe give it more than 3 hours to see how the markets actually react. Maybe give it 3 weeks & then commence the gloating.
He is attempting to manage perspective.
Appearance is more important than substance in his perspective.
I just love the Baltic Dry Index plummeting.
That measures actual substance and is a reality which he cannot manage.
Friday...Looking forward to Friday.
When appearances fail....
When she raised rates then I got what I wanted. It guarantees the outcome.
I want her to continue until it all implodes as you cannot reflate burst bubbles.
Bit early for a victory lap wouldn't you say, chum?
It is just like that banner that proclaimed "Mission Accomplished".
Yes the Mission to get us in that decade long quagmire of Iraq was accomplished. I must agree.
And corporations will be filing for Bankruptcy in record numbers in Q12016 as nobody spends money this Christmas as nobody has it to spend while the Credit Markets tighten.
And I hope that they are able to soak up more Mutual Funds into those bankrupt stawks and drain America's Middle Class of all of their wealth.
It just serves to quicken the time that his mother fucking body will be hanging from a lamppost along with the rest of his ilk.
Yes. It is victory. I must agree.
I want the layoffs. I want people to go hungry and starve. In that way they will revolt.
See. I know that people can spend $5 faster than they can spend $100 Million to replace that which is destroyed by $5.
It will be a most wonderful Civil War.
I'm with you on that, Tall Tom. Something's gotta awaken the flame of discontent. Hunger seems a likely candidate.
So shall we make a game of banker and stock trader scalps? Sounds like 'Justice' to me...
*
Isn't that an asshole???
whats a good alternative to ZH? Oh I think I found one-
http://www.positivelyhappy.com/forums
plays xmas music automatically - check
top threads:
"What is your top tip for keeping positive when times get tough?"
"Where is your favourite happy place?"
ah, I feel at home already. Bye bye yall, off to green pastures! so glad the worst is behind us!Careful. I heard it's a gun-free place.
What about that ES 1800 call from the JPM "quant boy" and Deutsche? Lots of put hedging going to result in gigantic losses in two days.
Jim Grant getting rather doomie on the BlowHorn right now.
He says rates are going back to zero, not rising.
Jim Grant is right ... America is finished!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! What an absolute F%$$#@#$VG FARCE!!!
Crazy panic buying will only end in tears!
The agenda rolls on......
http://beforeitsnews.com/conspiracy-theories/2015/12/as-events-spiral-out-of-control-its-time-to-take-a-closer-look-at-agenda-2030-video-2472972.html
Peter Schiff is PISSED
Did he predict stocks would collapse immediately on a rate hike? I didnt think he made those sorts of calls.
He has been saying that they will raise only to quickly lower for the last few months now. We will see...
he was pretty quiet on twitter.
"They are in a monetary roach hotel, and they will never be able to raise rates back up."
I understand that the newsletter writers have got to make a living, but what always bothered me about the "The Fed will never" talk is that the context of the statement is always, "it would kill the economy or the markets".
But why does the Fed care about that? Their job is to look out for their member banks who are their owners and which are controlled by individual men even if they have stock outstanding.
I dont follow closely enough to know the positioning of all the member banks, but what if (as but one example) they have enough cash parked in excess reserves at the Fed to keep the lights on for 10 years even if they are insolvent in the classic sense right now? In the meantime, they take possession of all the collateral in the system as the desperately cash starved public defaults on their debts. Then when the "reset" finally happens, they use their influence to have their balance sheets taken care of.
You didnt even have to pay me to read that prediction which is good because it probably won't go down like that, but the point is you gotta think laterally. Someone on here today intimated they are gonna push the markets down rather then wait for them to fall. Fucked if I can prove that wrong.
I predict 'they' will not live long enough to collect...
Actually, he said they may go through with a hike and then realize, afterwards, that they made a policy mistake and have to unwind their hike....and then some.
yes and in that sense he may be right still. Time will tell.
He said Yellen's sex change and alien invasion are more likely than rate hike. He's probably in hiding now because his credibility is gone.
Don't forget Rickards: 'As I said in 2014, Fed won't riase rates in 2015' after Sep hold.
Lets see if they hike to meaningful levels (5% say). They're probably only going to make a couple of pathetic 0.25% hikes just so they can cut rates later and not look like complete failures for maintaining 0% rates from the last reccession to this coming one.
Whos gonna pay?!
I do not think the Fed is out of the woods yet! A great financial collapse is not built in one day. D-Day for Fiat Credit System:https://youtu.be/v_5QBJx0Im8
so let me get this shit straight...
our fake ass economy is now going to be guided by the arrangement of some fucking dots the clueless mother fucking economic/monetary idiots have arranged on their chalkboards????
GET THE FUCK OUTTA HERE WITH THAT BULLSHIT....
and the fucking Dow rallys 250 on that load of shit????
FUCK OFF.
Just imagine how much it would have rallied if they had not raised, or raised more.
the same amount. I like the comments below that say this rally happens in every alternative universe. These markets defy all logic, mathematics, physics and respect to god.
.... Geez, take it easy man, the dots are big improvement over the last several years when we had to rely on bad new and terrorist attacks to rally. Funny how they were all the rage among the taking heads today, the new game in town is connect the federal fucking dots for fun and fortune.
Just wait till next year when the CNBC anchor jokes, "You'd think the Fed's forcast color wheel was showing purple instead of orange given all the negativity on Zero hedge".
Pinko Fascist Commie Logic. Did you expect anything less? I know; that is the bottom of the 'brains' logic...
2PM ZH shutdown for ~35 minutes was velly intelesting no?
We have a hacker on our PPT, I had him shut-down the EH site. We at the Fraud are sick and tired of reading the rantings of the anti-monetarists at EH.
Based on the ramp we caused, it looks like our decision to raise rates was "well received" by the markit. Keep the faith in fiat! Up up and away!!! WEEEEEEEEE!!!
Janet Ben Dover Fellen, over and out.
p.s. we are monitoring everything....we can't predict shit, but we monitor everything
I need a drink if I'm going to think everything is awesome.
<Bay leans over and pours his old pal a stiff drink>
[Smiles, sips]
Cheers
:)
"Based on current estimates from analysts, the S&P should experience profit growth of 7.1 percent in 2016. The problem? At this time last year, the forecasts predicted growth of 6.9 percent for 2015, and now it's looking as if the market will be lucky if it doesn't post a decrease in earnings for the year. "
http://www.bloomberg.com/gadfly/articles/2015-12-16/stocks-rally-on-federal-reserve-rate-increase-but-for-how-long-
so for the past fucking 10 years these assholes didnt raise and it was considered bulish and now they raise .25 basis points and that is fucking bullish as well?
they wiped out all of last weeks losses in 3 days this week, this shit is so fucking rigged .
jim cramer right now is on cnbc with the biggest smile on his face. this will be one of those bear stern type videos where we can play it back and laugh. saying things like buy appl, goog, fb, amzn, everything is great, there is no danger in sight,etc.
hes having a fucking orgasm on live tv.
Relax, friend. Jim Cramer's on the 'List'. He's in the 'Top 500'....
Nice to see everything is back to normal, now that Jack Yellen has shown us the way, with her soothing dulcet tones.
Capt. Jack Data has got our backs, so we can all sleep well now.
2016 promises to be a grand and glorious year!
Everything was going up no matter what the announcement said. A complete joke.
If anyone thought this "market" was going anywhere but up on the big fed day, then just write me a check because you shouldn't be anywhere near money.., or promissory notes.
I did, but all I have is paper gold. Will that suffice?
the land of make believe
Land Of Make Believe
Chuck Mangione ft Esther Satterfield (1973)https://www.youtube.com/watch?v=1mLdUFw4Xfc
tnx for this! - lots of energy and sweet vocal :-)
At least there is good music in the world.
THE OPTICS OF FOMC DAY! TO LEARN HOW TO TRUELY MANIPULATE "EVERY' MARKET WORLDWIDE - SIMULTANEOUSLY - JUST ANALYZE THE TECHNICALS OF TODAY!
Ok so where all those guys who were adamant the fed would never Raise.. we had a couple bar room bets, and I'm Thirsty
Janet's subtext was that "despite what we're seing in reality, we have to raise rates." she made note of this when she mentioned the FOMC needed room to maneuver in case of downside shocks.
Wait What has been adamant that they would raise rates once, before everything started to crumble. Now they've tipped their hat to financial stability. Nothing more needs to be done until 2009 lows are taken out, which should happen shortly in several asset classes.
George Taylor: "you did it... you finally did it! you blew it all up! god damn you! god damn you all to hell!"
March 2016 = 1st rate cut in the new looseing cycle.
<-- FOMC watched the rally and thought "whoa that was unexpected."
<-- FOMC didnt bother to watch the market because they already knew what would happen.
Reactionary trades northward on FOMC day, which fail to breach any significant technical levels, don't qualify as a "rally." Not in my book, anyway.
That's a lot of what's wrong with ZH commenters on these kind of events when the markets don't enter the Zombie Apocolypse day-of.
My advice: ZOOM OUT.
histerical - WFC, BAC, C, etc. couldn't raise the prime rate / lending 25 bps fast enough BUT not willing to raise bps the pay on deposits.
Just watch emerging markets over the next several trading days. The fed. has to drain liquidity, in order to attain their PUNY 25 basis point rise.
This rate increase isn't about credit cards, mortgages, or lending domestically... 25 basis points is going to destroy emerging markets and accelerate the wave of deflation from the East.
I've never heard so many contradictions in a fed. statement... The unemployment rate is 5%, but the participation rate remains low. WTF?
And these contradictions sell us the buy.
It appears the move from early November in the SP500 is corrective and probably a double zig-zag. From a technical perspective, it does look at the moment like we're probably in for new all-time highs. How long we have to wait though is unclear. Santa Claus rally is on.
I was close in my prediction today:
http://www.zerohedge.com/news/2015-12-16/complete-fed-decision-preview-a...
I said there will be a rate hike and it will go up 300 points.....so it went up 224 points, not bad.
I'll bet your mother is proud of you.
With the the Fed and PPT it's always fantasyland. It always has to go up.
They haven't DONE shit yet. Let's see what happens when they actually try to do it, rather than talk about it.
comment of the day!
Sure hope you're right because otherwise, WTF.
They do it tomorrow.
The Fed may have been responsible for the junk bond outflows.
once Janet started speaking, traders started panic-buying...
she is such an INSPIRATIONAL leader speaking so confidently about all sorts of topics. so no wonder!
<== I've gone FULL FANG pre-yellen
<== I went out and bought physical bouillon pre-yellen
The market reaction today was entirely predictable and entirely appropriate.
Lots of traders sold short, in the past week or two, anticipating that the Fed would do what they did.
So when they did it, the traders closed out their positions as quickly as they could.
Its simply another case of "Sell (short) on the rumor, buy on the news!"
In fact, if you will go back in time and look at other days when the fed hiked, you'll see this pattern repeated over and over.
Tomorrow, of course, will be another story; and especially after Friday when all the put options expxire.
Then you will start to see red ....
It will be interesting to see if the crash comes tomorrow,also interesting to see what the Chinese markets do today.
Dun dun dun! It begins!
Everything is manipulation. Doctors poison; preachers utter blasphemies about God; schools prevent children from getting an education; the Department of Defense attacks and the EPA destroys the environment.
This is Kali Yuga, baby. The Black Iron Prison, Plato's Cave, and the Demiurge's interpolation of reality. I guess you may as well enjoy the spectacle, because very little like this is ever seen in the cosmos.
Yes it is. All what you said. Especially the second paragraph.
LONG FUBAR! LONG INSANITY! because hopefully it will soon top out some day and crash...
Until then, laugh at the bs that you see everyday...
Rate Hike...Schmate Hike...BFD...Ugly Old Yellin'.
Finally now it gets interesting ...
So how long can the FED hold?
Until people stop valuing the liabilities they issue. So probably at least until the supply lines break. Even then, with a little finesse they can change the pictures on the paper money and 90% of people will say, "hey look, new shit, I want it! and besides the guys who designed it went to Princeton so it will be different this time!"
The Fed raises rates and the market goes up. Does anybody know what's going on?
I don't know why wall street is loving this rate increase. A stronger dollar will kill balance sheets and cause many bankruptcies and lost jobs. It's either going to bring down the economy or start WW3 due to low oil prices. Either way, we lose.
Now to put this into perspective ya went from 1/4% to 1/2%.
Not enough, normal in my lifetime has to be in the order of 7.5% so it is kind of a joke in the overall game.
None of these charts mean anything anymore.
"Goldilocks"? Meh. What I see on the ES chart is more than a year of sideways action, punctuated by a massive downdraft in early September. And since the "recovery" from that, lower highs and lower lows.
I called my bank. I can get 1% APR return on a CD. yay. I would rather lose it on silver. Thank you for your time.
I found a video depiction of the Fed's rate hike.
Interest rate "liftoff" starts out good - then ooops.
https://www.youtube.com/watch?v=TjrqN02gUdk
The financial "Orgasmatron" spews again!
Today was carefully choreographed by all the speculators to fill their pockets....and they will do the same when it rapidly deflates again by Friday. The little blue Fed pill is only good for a day...then it's back to limp dick for days on end...
Fed is still in control. Today.
Cargo cult. If we raise rates like we could in a situation of good growth, then growth will come. If we light the fires along the runway, the free food will arrive in cargo planes.