"We Frontloaded A Tremendous Market Rally" Former Fed President Admits, Warns "No Ammo Left"

Tyler Durden's picture

In perhaps the most shocking of mea culpas seen in modern financial history, former Dallas Fed head Richard Fisher unleashed some seriously uncomfortable truthiness during a 5-minute confessional interview on CNBC. While talking heads attempt to blame China for recent US market volatility, Fisher explains "It is not China," it is The Fed that is at fault: "What The Fed did, and I was part of it, was front-loaded an enormous rally market rally in order to create a wealth effect... and an uncomfortable digestive period is likely now." Simply put he concludes, there can't be much more accomodation, "The Fed is a giant weapon that has no ammunition left."

Must watch, when a shocked Simon Hobbs (at 5:10) is unforgettable: "Will The Fed come on and say 'we're sorry, we over-inflated the market' when it crashes?" We doubt it.


Here is CNBC's higher quality video, which for some reason seems to have edited out some of the more informative parts of the interview.

Fisher appears to be undertaking  a major "cover-your-ass" episosde, proclaiming that he was against QE3 which is what has forced "valuations to be very richly priced."

In my tenure at The Fed, every market participant was demanding we do more... "It was The Fed, The Fed, The Fed... in my opinion they got lazy.. and it is time to go back to fundamental analysis... and not just expect the tide to lift all boats... and as [The Fed] tide recedes we are going to see who is wearing a bathing suit and who is not"

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
RSDallas's picture

What is new here folks????  You have had your head is your (you know what) if this is at all a surprise.  The Fed Officials believe that the banks can withstand an average to maybe above average loss ratio right now versus what they saw in 2008.  In 2008 they knew that almost every, if not every, large international mega bank or financial institution was insolvent.  Now they feel that the institutions can withstand the market forces that are coming.  The Fed should be scalled back to a staff of probably a dozen and go back to providing the services that they were commissioned to initially do.  Let's sit back and see what happens.   Please pass the popcorn!  

williambanzai7's picture

Nail guns all around

Clowns on Acid's picture

On Fisher's next interview he will outline how Robert Rubin, Sandy Weill and Larry Summers conspired to repeal Glass Steagal with a compliant, exposed, and completely corrupt Bill Clinton. That event was the beginning of the crimewave.

The Fed merely came on after the event to continue the crime. Fisher knows this. Rubin. Weill, and Summers are far away noe in their bunkers. Don't ever let them get away.

Bastiat's picture

The current wave began in 1913 but I couldn't agree more that the last "set" of tsunamis was set off by the repeal of Glass Steagal or that Rubin Weill, Summers and Clinton are responsible . . . or that Brookley Borne was the only one in office to cry foul. 

HYMN's picture

I would like to make the Fed digest on one end and uncomfortable on the other. If in fact their acts were criminal and not just despicable they ought to be charged and let the full letter of the laws broken be enforced upon them. As is they have nothing to fear for they have engineered bail-in policies into the law I believe. The Fed the Central Banks/planners will walk away richer by far and the little guy will once again be left holding the bag. These people have no scruples or moral compass. Hang 'em and Hang 'em High !

bid the soldiers shoot's picture

Forgive them, Father Greenspan, they know not what they say.


Who shall tell the angry ZH elite gathered here that the alternative to the "front-loaded rally" as described by Pilate Fisher was the "six feet under rally?"

Not me.  I want to have lunch one more time at the Four Seasons, before it has to close its doors.

PrimalScream's picture

Nice to see a few honest words from a (former) Fed member.

I think that Mr. Fisher 'gets it' partly - what he did as a member of the Fed was in direct contradiction to the free market economy of the United States.  And every time that the Fed unleashed those policies, they were directly undermining the economic freedom of all Americans.  This is not some trivial issue. THe USA fought a whole Cold War with the Soviet Union on the premise that a "free market" is the truly right way to  go.  The whole discourse, the whole rationale for American actions, was based on Freedom.  So when the Fed stepped in and started jiving the markets - they were in direct conflict with America's principles. 

But I still see the members of the Fed living in some type of La-La land.  Really - they are still pursuing "The Wealth Effect" and other doubtful theories about economics?  What they have done is to completely  destroy the principle of Price Discovery in western free markets.  And they did this at a critical time - when the global economy badly needed to find new directions.  It was impossible for the world economy to adjust to a new balance, a new distribution of global consumers (to replace the American consumer)  ... with these types of market interventions happening.  AND still hsappening!!

Don't ask why we are teetering on the brink of major world wars and a Global Depression. 

Arthur Schopenhauer's picture

as performed by Pat Travers (and pretty much everybody else)

I never felt this mad before

When I just found out she don't want me no more

If I get her in my sight

Boom boom! COME ON! Out go the lights!

No kiddin'

I'm ready to fight!

I've been lookin' for my baby all night

If I get her in my sight

Boom boom! ONE MORE! Out go the lights!

jubber's picture

and this Cunt waltzes off into the sunset with his $500,000 a year fucking pension

jubber's picture

I guess he is also admitting slaughtering Gold & Silver then.

the grateful unemployed's picture

the Fed doesnt really know what the shadow banking system is doing, there is bookoo credit creation outside the Fed controlled economy, the interest rate RRPO gambit addresses the problem, and its pretty smart. why the Fed isnt paring down assets reflects their real concern about liquidity. RRPO is adding 400B to the bank reserves without draining reserves. come on people where is the Fed getting that money?

so we front loaded a rally, thanks, now go back to your abacus. and the fed is paying interest to treasury, whats that about? RRPO will get control of credit creation in shadow banking we have already seen high yield come in, and thats good. interesting that gold is doing pretty well, which tells me the CBs are done buying for a while and number one gold buying CB is China who now has to reinflate its stock market again. no money to buy gold this month.

in the end i would worry that this little bit of RRPO (QE lite) ie the rate hike will not be nearly enough to keep the flight to safety buying from driving treasury yields negative. the Fed is in the position of buying the Chinese stock market or buying their US Treasury bond reserves so they can can buy their own stock market. it may be that there is a couple trillion parked at the Fed off the balance sheet which the Fed pays the nominal interest back to Treasury to somehow smooth the transition in China. new paper for old, what if they want money? 




VWAndy's picture

Dont worry there is still lots of money to be made on the way down right?

jubber's picture

and futures now rallying, all US futures bright green zzzzzzzzzzzzzz

mosfet's picture

And here's Fisher in 2012 (only 2 weeks after QE3 announced), saying that the Fed isn't to fault for throwing everything they have to artificially prop up markets.


Why aren't these admissions of corruption headlines in national news?


Goldbugger's picture

The FED engineered the enormous return, at least he admits it.

venturen's picture

I assume he is retired giving $100k speechs for criminal bankers?

elephant's picture

"The Fed is out of Ammo"

-April 2009


saveUSsavers's picture

FUCKING TOOL TRYING TO REWRITE HISTORY , look how the fuckass voted !

Bear's picture

Trying to rewrite history when it is still in the future ... My question: Does everybody have to lie?

shantyman's picture

He is sending a message..... Otis, where's the next due company's??? Sorry Boss, John Wayne time... Dig in Dammit!!!!

Abbie Normal's picture

My internet connection is slow, so does this clip end the same as that scene in Mr. Robot where the guy being interviewed puts a gun in his mouth?

Tenshin Headache's picture

Market, hell, they front-loaded the entire economy, several times.

lester1's picture

Someone should ask him directly about the Federal Reserve's Plunge Protection Team and what they do.