Dear Janet, This Was Not Supposed To Happen

Tyler Durden's picture




 

The Treasury yield curve has collapsed since Janet and her band of inverse Robin-Hoods hiked rates into the worst earnings and manufacturing recession since the crisis. In fact, the spread between 2Y and 10Y rates has plunged 15bps since December's FOMC meeting to its flattest since 2008... so we ask simply - Dear Janet, please explain?

"Policy Error" much?

 

The flattest since 2008...

 

And while everyone and their cat knows the "butthe yield curve has not inverted and so we can't be in a recession" meme... we show the following chart which may just show a different perspective as the constant manipulation of interest rates over the past 40 years has in fact changed the nature of the absolute yield curve and maybe, just maybe, 120bps is the new "Inverted" and we are in fact "in recession."

 

Certainly - every industrial (and now some services) indicators are flashing red warning lights.

 

Charts: Bloomberg

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Fri, 01/08/2016 - 13:31 | 7017918 Squid Viscous
Squid Viscous's picture

LOL at all the azzhats that said to load up on banks on the Fed hike

Fri, 01/08/2016 - 13:34 | 7017928 Looney
Looney's picture

Dear Janet, please explain?

Janet is busy reading “How to fake a stroke”.  ;-)

Looney

Fri, 01/08/2016 - 13:55 | 7018012 Kagemusho
Kagemusho's picture

Given how many personages of power over the past 60 years have had convenient strokes and other 'Acts of God'  removing them from the scene during times of national emergency, perhaps she's trying to insure that she doesn't have one. IMHO, she's the 'fall guy', and her male colleagues will be glad when she takes the bullet for them, as they scuttle like crabs into hyper-wealthy obscurity.

I don't believe that she was faking her distress back in September. If anything, she knew what was coming, and it was crushing her. Bet she has a Xanax IV pump under those clothes.

Fri, 01/08/2016 - 13:57 | 7018029 knukles
knukles's picture

I love the smell of a bull flattener early in the morning

Fri, 01/08/2016 - 19:48 | 7019683 philipat
philipat's picture

Which part of "Policy error" does she not understand? Either that or they believe in their own omnipotence to the point they believe they can change reality? As Ayn Rand once famously said "You can ignore reality but you cannot ignore the consequences of reality".

Fri, 01/08/2016 - 14:58 | 7018354 Groundhog Day
Groundhog Day's picture

I have a funny feelin Yellen and other central bankers will pull a Ken Lay and fake their deaths

 

long plastic surgeons

Fri, 01/08/2016 - 13:34 | 7017933 Soul Glow
Soul Glow's picture

What hike?

Fri, 01/08/2016 - 13:35 | 7017937 The Saint
The Saint's picture

Quick Ol' Yeller, hike those rates another quarter before they fall back.  Let's get the coming Obama depression jump started.

Fri, 01/08/2016 - 13:35 | 7017938 Xibalba
Xibalba's picture

gotta clear the book somehow...

Fri, 01/08/2016 - 13:38 | 7017943 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

You can see what's going to happen with the DOW today...up, down,  up, down, up, down...finished wit ha big up. It's obvious to see as the next black NFL star being cught shooting up a strip club with his nine.

Fri, 01/08/2016 - 13:40 | 7017958 yrad
yrad's picture

Where. The. Fuck. Is. Jon. Corzine?

 

Not Everything Is Jon Corzine’s Fault, You Know

 

 

Fri, 01/08/2016 - 14:48 | 7018245 The Saint
The Saint's picture

You're right.  Some of it is Obama's fault.

It's Obama's Fault

Fri, 01/08/2016 - 17:01 | 7019055 Angel_Eyes
Angel_Eyes's picture

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Fri, 01/08/2016 - 17:18 | 7019130 AGuy
AGuy's picture

Not to worry, only 19 days go before the rate cut (Next FOMC meeting)... and the beginnning of NIRP in the USA!

 

Fri, 01/08/2016 - 13:32 | 7017919 Dr. Engali
Dr. Engali's picture

You think this is flat? Just wait, you haven't seen anything yet.. Turning Japanese:

 

https://youtu.be/mgekmOqCFTU

Fri, 01/08/2016 - 13:33 | 7017925 KnuckleDragger-X
KnuckleDragger-X's picture

The Fed is merely following historical (hysterical) precedent of doing the wrong thing at the wrong because their crystal ball said so.......

Fri, 01/08/2016 - 13:37 | 7017947 ThroxxOfVron
ThroxxOfVron's picture

Looks more like Yellen took the Magic Eight Ball bowling..

( insert Lebowski and/or Flintstones jokes here )

Fri, 01/08/2016 - 13:38 | 7017956 KnuckleDragger-X
KnuckleDragger-X's picture

Definitely the Flintstones on acid......

Fri, 01/08/2016 - 14:54 | 7018315 Squid Viscous
Squid Viscous's picture

i think she is related to Badluck Schlep-rock ?

Fri, 01/08/2016 - 14:53 | 7018320 The Saint
The Saint's picture

I think the Fed sees a recession down the road but doesn't have any bullets left.  So, they need to try to raise rates now and hope the economy will handle it so they will have a little ammo when they need it later.  Unfortunately, for them (and us) the economy is probably too weak to handle the increase.

 

My 2 cents anyway.

Fri, 01/08/2016 - 13:33 | 7017930 AccreditedEYE
AccreditedEYE's picture

Nice to see ZH support the large asset inflation program fueled by Fed ZIRP. Which way do you guys want it? Fuck asset prices. Raise rates and crush Wall Street. Low rates put us here anyway.

Fri, 01/08/2016 - 13:36 | 7017946 Dr. Engali
Dr. Engali's picture

How in the world do you take away that the Hedge is supporting asset price inflation from this? If anything the take away is how idiotic the central planners really are.

Fri, 01/08/2016 - 13:41 | 7017934 Janet Shalom Be...
Janet Shalom Bernanke's picture

This time is different.............this time is..............much worse

 

Actually, by whynmar standards, the fact that yields have not SPIKED is actually success by the Fed.

What other nation has been able to print $5 TRILLION and increase their debt by $10 TRILLION and not see rates spike?

it's a miracle!!!   enjoy it while it lasts, because blind faith in FIAT is ALL you have left.  

 

Fri, 01/08/2016 - 14:04 | 7018057 LawsofPhysics
LawsofPhysics's picture

"What other nation has been able to print $5 TRILLION and increase their debt by $10 TRILLION and not see rates spike?"...

Japan, China, the EU...

basically, everyone except south america.

Yes, global Weimar!

Fri, 01/08/2016 - 13:35 | 7017939 shantyman
shantyman's picture

Tylers- FOR THE LOVE OF GOD STOP BUSTING JANETS BALLS ON THE RATE RISE!!!!!!!!! As the bulk of your support is manic, preppers, survivalist, gold bugs, all rooting for a fair and efficient market, this constant backfisting of Janet is counter productive to our collective wealth strategy....

 

We want interest rates to rise, we want this inflated fake market to collapse....knock this crap off....

Fri, 01/08/2016 - 13:37 | 7017951 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

Go max out your 5 CC's and then support your NFL team nad let the real men take care of things. 

Fri, 01/08/2016 - 13:40 | 7017961 shantyman
shantyman's picture

No reason to be caustic...best of luck in your investment model...

Fri, 01/08/2016 - 13:42 | 7017964 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

Doing quite well, thanks. 

Fri, 01/08/2016 - 15:50 | 7018626 cheech_wizard
cheech_wizard's picture

>collective wealth strategy....

$18.849 trillion in debt and climbing.

Standard Disclaimer: What's "collective" about that?

Fri, 01/08/2016 - 13:35 | 7017942 kevinearick
kevinearick's picture

Case Closed

As this case clearly demonstrates, participation is irrelevant. Government is a gravity machine, a waste of time and resources, being systematically liquidated accordingly. You might want to do something more productive with your life, or not.

Experts in stupid deciding who will and who will not have children is pretty damn stupid, but there you have it – Obamacare chasing its own tail, consuming everything in sight. Consumers cannot learn, and the majority is always consumers being told to what to do by agency, neither of which can see beyond their own self-obsession in the eyes of others, a test of popularity. The critters need automated cars so they can continue looking at themselves in the mirror.

That medical equipment is junk, antibiotics suppress the immune system, and immunization causes autism over generations, distilling DNA away from natural water, oxygen and nutrients, for those who want to live in a box, who are welcome to it. The economy is in great shape, excluding all the gas leaks. And Pollyanna is the canary.

Humanity’s only limitation is its own stupidity, willful ignorance. Can you imagine what this lot would do with the ability to traverse the universe?

Space travel is not an intellectual or physical problem. Communism, capitalism and socialism in a symbiotic, bipolar relationship, always results in fascism. You don’t give the car keys to a spoiled two-year-old.

There’s nothing new about kidnapping children to enforce economic slavery, under Islam, Christianity, or the US Constitution. They all have Family Law in common, with a different dress. They all promise due process, beginning with a conclusion and seeking data to support it, blaming the individual for system stupid.

The data is whatever the experts in stupid say it is, and as you can see, they have no interest in the cause of the symptoms they create, to take advantage of each other. The test is always one of intent. If you Googled best places to have children, you would get the worst places, beginning with San Francisco, easily confirmed by demographics and the resulting financials. Why do you suppose that is?

Feudalism rules work out, with more and more infrastructure to nowhere, an intellectual vacuum for the sake of fashion. The isms deserve each other, along with the government they produce, liars lying to liars expecting a better outcome. Don’t venture into other people’s marriages expecting a happy outcome.

The ivory tower morons have created a positive feedback loop between credit and surveillance, rewarding compliance with the rent and penalizing non-compliance with the debt. They have given credit to capital, the upper middle class, the middle middle class, and the lower middle class, on a gradient, all to no avail other than natural resource liquidation, and the people they haven’t given it to don’t want it. The flipside of participation is non-participation., in the actuarial ponzi.

Government is a human being, absent responsibility and accountability, and sadly, US Government is as good as it gets, better seeing best as the enemy. Labor doesn’t need the petrodollar, the cleanest dirty shirt in the money laundering scheme. And crypto-currency is just a more efficient hashed stack, the latest and greatest outlet for money launderers.

There simply is no substitute for Grace, that which is truly rare and valuable, which no government in History has yet produced, travelling backwards in time, fixated on the rear-view mirror, popularity in the eyes of others similarly self-obsessed, in denial, anger and depression – tldr. Three-phase is an implicit compiler of functions, two operands and an operator, and vice versa. Where does the power come in, the dc controller is irrelevant except as a counterweight, and where does the power exit?

The Persians are still the most elegant programmers. Don’t let the dress fool you. And not everyone in California is the fool of Empire.

What is the relationship between the speed of light, frequency and division by zero?

Fri, 01/08/2016 - 13:45 | 7017965 Yen Cross
Yen Cross's picture

 I'm listenening to this fucktard from Wells Fargo investment on the blowhorn saying that retail investors have $ on the sidelines, and should BTFD!

 I can't stop laughing!!!! What 62% --- was it, of Americans are living paycheck to paycheck?

  They don't even have $1,000.00 saved to pay for a car repair, or medical expenses.

 The fucking banksters will stop at NOTHING to extract every last ounce of wealth! That asshole belongs in an Supermax Prison, for extortion...

*He must have read my comment... lol

Fri, 01/08/2016 - 13:46 | 7017983 buzzsaw99
buzzsaw99's picture

that's why "the market" can't go down. not enough bagholders yet.

Fri, 01/08/2016 - 13:52 | 7017997 Yen Cross
Yen Cross's picture

 I don't know if it's wisdom, or the lies are so blatantly obvious from the 'Ministry of Truthisms' buzz. ;-)

Fri, 01/08/2016 - 13:45 | 7017973 buzzsaw99
buzzsaw99's picture

evans made a bearish statement and stocks replied "up yours bitchez!"

nobody believes the fed. zero credibility.

http://www.marketwatch.com/story/feds-evans-would-like-fewer-than-four-r...

Fri, 01/08/2016 - 13:45 | 7017981 Be_Optimistic
Be_Optimistic's picture

Whats the inverse Robin Hood joke? Steal from the poor to give to the rich? 

Fri, 01/08/2016 - 14:19 | 7018136 buzzsaw99
buzzsaw99's picture

it's no joke

Fri, 01/08/2016 - 13:51 | 7017998 LawsofPhysics
LawsofPhysics's picture

"Past performance does not guarranty future results"

Eventually the supply lines for essentially commodities do break and we start killing each other in earnest.

Probably the only thing that history is clear on at all.

hedge accordingly.

Fri, 01/08/2016 - 13:52 | 7018003 wmbz
wmbz's picture

The next rate raise will be an inverse rise.... called NIRP!

Fri, 01/08/2016 - 13:55 | 7018016 moonmac
moonmac's picture

Mondays and Fridays in the sales office at our factory has become 5 people sitting around twiddling their thumbs. This isn’t going to end well folks.

Fri, 01/08/2016 - 14:01 | 7018030 Grandad Grumps
Grandad Grumps's picture

"the worst earnings and manufacturing recession since the crisis"

Not sure what you are talking about. It is really only the highly leveraged, highly collateralized businesses that are NEGATIVELY affected by lower raw material costs. (oh, right, that is what Wall Street and Harvard have been preaching the last few years ... leverage to the hilt on inflating assets.)

We love lower material costs. We make higher margins because we do not have to give all of the cost savings to the customers ... at least not right away.

So, just as the very dubious benefits of inflation only help a section of the economy, lower costs only hurt a section of the economy.

We will take slightly lower revenue and significantly higher profit any day. Thank you banks for screwing yourself and helping us and our customers.

Fri, 01/08/2016 - 14:16 | 7018124 LACHAD
LACHAD's picture

Look no further than Japan for the perfect example...no inverted yield curve since the 90s,, yet 4 recessions since...in a ZIRP world, historical precedents no longer apply.

Fri, 01/08/2016 - 14:28 | 7018183 LawsofPhysics
LawsofPhysics's picture

Correct. unfortunately you can have ONE ZIRP country if everyone else is still treating capital and resources with respect. There is no such thing as a "ZIRP world" yet...

Look at rates in South America for example.

A ZIRP world would in fact be GLOBAL WEIMAR.

Fri, 01/08/2016 - 15:38 | 7018577 daveO
daveO's picture

This chart should have included debt levels. Peak debt->ZIRP->deflation or NIRP. The bankster slave masters won't allow real credit deflation, so we are guaranteed QE+NIRP.

Fri, 01/08/2016 - 15:14 | 7018436 stant
stant's picture

No going back in Stawks until the bonds blow. And even you will be better off in cash , for awhile

Fri, 01/08/2016 - 15:47 | 7018611 fowlerja
fowlerja's picture

Janet is just inheriting the "titantic" fed from greenspeak and burrankee... the .25% rate hike is mostly symbolic..  the economy folds because of a puny rate hike? ...that is pathetic...wall street acts like a kid who was given some M&M's and then the giver wants a piece back....boo ho ho...panic on wall street...give me a break!

Fri, 01/08/2016 - 16:53 | 7018999 sTls7
sTls7's picture

Janet doesn't give a flying F what happens... she's doing what she is told to do.

Fri, 01/08/2016 - 17:58 | 7019273 InnVestuhrr
InnVestuhrr's picture

US treasuries are going UP UP UP in spite of the FED

AND

they pay interest and face value at maturity :-))

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