This Wasn't Supposed To Happen

Tyler Durden's picture




 

Two words - "policy" and "error"

Gold up 3%, Long bonds up 2%, Stocks down 5% since the Fed hiked rates: This was not supposed to happen!

 

And money markets are not buying what The Fed is selling.

 

What rate hike? The market is starting to whisper about an imminent rate cut.

What does it say about The Fed when one month after they confidently hike rates (for whatever reason they concocted), the market implies a rate cut is more likely to come next.

And this is what The Fed offers:

  • FED'S LACKER: CASE FOR HIGHER INTEREST RATES OUGHT TO BE CLEAR

Actually, not so clear at all, considering the US is now in an industrial recession, although as we joked last night:

And then there was this:

  • FED'S LACKER: DON'T ANTICIPATE NEGATIVE INTEREST RATES IN U.S. IN '16

At this point we would show a chart demonstrating the "accuracy" of Fed predictions but by now that would be redundant.

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Thu, 01/07/2016 - 10:50 | 7011021 MsCreant
MsCreant's picture

Your analogy makes it seem like you think the Fed made a valid choice "it's still running, they have it under control. I'm sure they saved a very valuable boat."

Thu, 01/07/2016 - 12:06 | 7011566 RmcAZ
RmcAZ's picture

That you Janet?

Thu, 01/07/2016 - 09:32 | 7010499 Dragon HAwk
Dragon HAwk's picture

Pop Corn for Breakfast  YEAH....

Thu, 01/07/2016 - 09:34 | 7010508 JohnGaltsChild
JohnGaltsChild's picture

 

The best way to destroy the capitalist system is to debauch the currency.

       -Vladimir Lenin

 

We be there.

Thu, 01/07/2016 - 09:43 | 7010563 conscious being
conscious being's picture

Over and over again.

Thu, 01/07/2016 - 09:38 | 7010528 Contrariologist
Contrariologist's picture

By saying "don't expect negative interest rates in 2016," Lacker just put the entire world on notice: Negative rates are lurking in the wings, waiting on a curtain call. We are ALL so screwed. There is no way out; the Fed will not admit that they are fucking EVERYTHING  up, and central banks around the globe have no incentive to stop the madness.

Thu, 01/07/2016 - 09:42 | 7010551 FrankieGoesToHo...
FrankieGoesToHollywood's picture

Yep.  Its as good as gone.  Whenever these talking heads say something, the opposite will happen. Buy another shoebox for hard currency storage.

Thu, 01/07/2016 - 09:40 | 7010534 rsnoble
rsnoble's picture

Perhaps the Fed's wanted to created a selling/buying opportunity.  For themselves.

Thu, 01/07/2016 - 09:40 | 7010537 secretargentman
secretargentman's picture

This is what happens when you paint yourself into a corner. At some point, any decision you make is going to be a policy error. Couldn't have happened to a nicer bunch of people.

Thu, 01/07/2016 - 09:48 | 7010599 Contrariologist
Contrariologist's picture

...but we all pay, and dearly.

Thu, 01/07/2016 - 09:41 | 7010548 WillyGroper
WillyGroper's picture

Whenezuela!

Thu, 01/07/2016 - 10:14 | 7010790 smacker
smacker's picture

Accompanied by a "vuvuzela"

Thu, 01/07/2016 - 09:47 | 7010591 Contrariologist
Contrariologist's picture

Martha and the Vandellas: No where to run to, baby, nowhere to hide...

The Fed and all Central Banks around the globe have NO INCENTIVE to do what is right...so they will keep doing what is wrong. We are all so screwed.

Thu, 01/07/2016 - 09:50 | 7010616 marts321
marts321's picture

USDCAD top <:-)

Thu, 01/07/2016 - 09:50 | 7010617 mister33
mister33's picture

easier said than done

Thu, 01/07/2016 - 09:53 | 7010644 Zymurguy
Zymurguy's picture

Mr. Obvious said back in 2010... "The Fed' has painted itself into a corner"

The paint is still wet, the Fed is still trapped.

Thu, 01/07/2016 - 09:59 | 7010696 css1971
css1971's picture

 

What does it say about The Fed when one month after they confidently hike rates (for whatever reason they concocted), the market implies a rate cut is more likely to come next.

It says buy gold. The real bits of metal stuff.

Thu, 01/07/2016 - 10:08 | 7010760 Surveyor4Pres
Surveyor4Pres's picture

Why buy gold when you can just sift it out of the river?

Thu, 01/07/2016 - 10:13 | 7010785 GhostOfDiogenes
GhostOfDiogenes's picture

I tried that once.

Sift away.

You might get an ounce in 1000 years.

Thu, 01/07/2016 - 10:17 | 7010814 css1971
css1971's picture

Then you're paying for your gold with energy instead of directly with money. Same difference.

Thu, 01/07/2016 - 10:02 | 7010720 rpboxster
rpboxster's picture

Waaaay off the lows.  WTF?

Thu, 01/07/2016 - 10:14 | 7010788 shutterbug
shutterbug's picture

QE-1001 for MOARRR Fairy Tale funny money so we all jump into Hell with the FEDs....

Thu, 01/07/2016 - 10:23 | 7010849 adjudged
adjudged's picture

This morning, Yahoo Finance quotes George Soros,

"It should be noted that the current turmoil distinguishes itself from 2008, when reckless lending, willful blindness to a mountain of credit sector risks and feckless and irresponsible regulation and supervision of markets were the causes of the crash, given that central bank policies have been encouraged and been wholly responsible for the current protracted bout of gross capital misallocation." 

Thu, 01/07/2016 - 10:28 | 7010883 Solio
Solio's picture

The flicker rate makes whatever real enough for most.

Thu, 01/07/2016 - 10:35 | 7010923 Cardinal Fang
Cardinal Fang's picture

Word for today, kiddies..."Emergence"

https://en.wikipedia.org/wiki/Emergence

Thu, 01/07/2016 - 10:36 | 7010931 BeerMe
BeerMe's picture

Will they get it green by noon?

Thu, 01/07/2016 - 10:38 | 7010941 savedeposit
savedeposit's picture

Time to convert some digital digits to hard to get and hard to find and process and costly to manufacture valuable assets

Thu, 01/07/2016 - 10:39 | 7010950 22winmag
22winmag's picture

New normal (again)

Thu, 01/07/2016 - 10:57 | 7011060 MsCreant
MsCreant's picture

Same as the old new normal.

Here, wear a pair of these, it will make it all better:

http://lairigmarketing.typepad.com/.a/6a00e5500aa5b98833015434c15b2d970c-pi

Thu, 01/07/2016 - 11:09 | 7011127 SillyWabbits
SillyWabbits's picture

If you don’t know the game – you don’t know the rules.

If you don’t know the rules – you don’t know the score.

If you don’t know the score – you don’t know whose winning.

If you don’t know whose winning – you don’t know how you’re losing.

Questions.

What’s the end game?

Who wins what?

Observation.

Probably not about money at all.

Thu, 01/07/2016 - 11:36 | 7011300 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Of course not. For the other side, it's about finally gaining the omnipotence they crave. 

For us, it's about survival as a species. 

The ultimate goal of our elites is transhuman immortality for themselves, and the replacement of the rest of the human race by robotic slaves able to do any useful task as well or better than humans, and far better equipped to conquer the galaxy than we are---and certainly far better suited for a socialist mode of production. Robots unfailingly produce according to their ability, and consume only in line with fuel and maintenance needs.

Basically, it's a twisted version of the Revelation with all pretense  of Christianity or a loving God removed. The elites joyfully await the happy day when those they consider unworthy are cast into the pool of fire and sulphur, and they, the elect, will get to live happily forever in a cyber-Jerusalem and on a planet cleansed of the stink of the lower orders of humanity.

Who knows? Once they no longer have to worry about earth being habitable by mere humans, they might even try making the sea as dry land, the better to get at the resources on the sea bed. Terraforming has endless possibilities!

Thu, 01/07/2016 - 11:27 | 7011242 Reichstag Fire Dept.
Reichstag Fire Dept.'s picture

If you like your rate hike, you can keep your rate hike.

Thu, 01/07/2016 - 12:33 | 7011776 Sanity Bear
Sanity Bear's picture

Rates need to rise despite being in an industrial depression. The causes of the depression are already baked in, those decisions were made a long time ago. We need now to have decisions made that will produce a better future, and that requires rebuilding the savings -> capital accumulation -> investment pipeline, which in turn requires interest rates high enough to make savings a reasonable option.

 

With real negative interest rates, why save when your savings will buy less tomorrow than they will today?

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