Yellen Says Fed Buying Stocks Is "A Good Thing To Think About" And Could Help In A Downturn

Tyler Durden's picture

Having hinted overnight that The Fed could buy stocks "maybe in the future," Janet Yellen blurted out confirmation that buying assets other than long-term U.S. debt is on the table. Despite the total and utter failure of SNB and BOJ direct equity buying to create increased consumption, Yellen explained "it could be useful to be able to intervene directly in assets where the prices have a more direct link to spending decisions."

Speaking via videoconference in response to questions raised at forum of Kansas City Fed minority bankers, Fed Chair Janet Yellen says there could be benefits to Fed buying equities or corporate bonds, yet would also likely be costs that have to be considered.

The idea of expanding into areas like equities might be “good thing to think about,” yet is not “something we need now,” Yellen said, noting that (for now) The Fed is more restricted in which assets it can purchase than other central banks.

 

"If we found, I think as other countries did, that they could reach the limits in terms of purchasing safe assets like longer-term government bonds, it could be useful to be able to intervene directly in assets where the prices have a more direct link to spending decisions."

And as Reuters notes, the Fed could get benefits from buying assets other than long-term U.S. debt if in a future downturn it could not buy any more government bonds, Fed Chair Janet Yellen said on Thursday.

So let's see how those "other countries" equity buying schemes have done.

Japanese Equity ETF purchases have utterfly failed to spark a rebound in Japanese Household Spending...

 

Let alone even maintain Japanese stocks!!

 

As we noted previously, we are certain that there was a time when neither the BOJ nor the SNB imagined they would have to officially intervene in the stock market to keep it propped up. However, as the hole the central planner shave dug themselves by not being able to admit impotence, the WSJ notes, "Yellen’s tentative openness to changing the law suggests Fed officials have been giving a lot of thought to new ways to jolt the economy in an era of low inflation and low interest rates."

Alas, in a time when the Reuters writes that "any ECB scheme to buy stocks could total 200 billion euros", to keep hammering the idea that central bank purchases of stocks are just a matter of time, we get the feeling that the spot Yellen envisions as being "somewhere in the future" is not that far off.

Pure Einsteinian Insanity... but the textbooks said it would work!!

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Hitlery_4_Dictator's picture

Wow just wow, they won't stop until someone forcefully stops them or they own the entire world.  I have a deal for them, if they unwind and sell their "assets" from their black book, then they can start buying again. How about that?

Seasmoke's picture

CORRECT. No what are you(we) going to do about it ??? 

NoDebt's picture

"it could be useful to be able to intervene directly in assets where the prices have a more direct link to spending decisions."

Yes, spending decisions by top executives in the bank.  Should I go for the 120 foot yacht or the 160?  Ah, hell, Yellen's got my back, I'm going for the 160.

I thought I couldn't be shocked by the utter insanity and corruption of CBs any more.  I was wrong.

 

NoDebt's picture

And another thing.  If they want to "intervene directly in assets where the prices have a more direct link to spending" what's to say that only means stocks?  How about full-on wage and price controls under the Fed's decisionmaking, nationwide?  That would certainly have the effect of directly linking asset prices that affect spending decisions.

 

Hitlery_4_Dictator's picture

"Why do you hate America. A functioning stock market is good for America." - Signed a stupid debt slave

beemasters's picture

"Yellen Says Fed Buying Stocks Is 'A Good Thing To Think About'"

Relax...she's only saying just to think about. She's not advocating actually buying them.

kizell's picture

I have said many times on these boards that the days of huge stock market crashes are over.....The fed will jump in every time to save the market.  They will allow corrections from time to time as 'cover' for not raising rates ever, but no crashes will be allowed henceforth. 

Manthong's picture

Great idea.. everyone should be counterfeiting mountains of their own currency and buying equities, bonds, MBS and even the corporate debt of companies with a few hot dog trucks.

kizell's picture

In my opinion this is how fascism will come to America.   Not through an iron fist type leader, but through complete corporate ownership of citizens and governments made possible by fed monetary policy.

f_symbols's picture
f_symbols (not verified) kizell Sep 29, 2016 5:58 PM

My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... http://tiny.cc/2jncfy

SafelyGraze's picture

now is a *great* time to be front-running the fed, which has already signaled its intentions to maintain strength in equitiies

me and my clients, we're buying it up by the fistfulls

hugs,
hughendry

by the fistsfull

the fistsfulls

 

indygo55's picture

Of course they will buy stocks. They already buy the bonds and treasuries and mortgages. So why would they NOT buy stocks? Its about buying everything under the sun for free money created out of thin air. They will buy and they will own everything and then we will have,,,,, communism. 

lincolnsteffens's picture

How much worse could it be than the Fed. giving currency at  0% to their member banks and other central bancks to buy stocks and corp. bonds. "What does it really matter now?"

I want my Republic back!

Clockwork Orange's picture

TRUMP the money changers.  Then hang them in Time Square.  Yellen, Ben & Maestro first. 

Pay per view. 

In GOLD.

oops's picture
oops (not verified) NoDebt Sep 29, 2016 5:04 PM

Saudi Arabia is dumping assets following Congress's stupid Sept 11 Bill. https://goo.gl/oehIgG

JRobby's picture

Is it fucking up your trading strategy? Should we go easier on SA?

"Saudi Arabia Uncovered"

https://www.youtube.com/watch?v=NLtLeK7YLGY

JRobby's picture

Just like BOJ! It's working out great there!!!

bob_bichen's picture
bob_bichen (not verified) JRobby Sep 29, 2016 5:12 PM

As is ALWAYS true with alcohol, sex, drugs, and rock-n-roll, so it is with Central Bank Policies:

"If a little is good, a lot is better, and more is better yet!"


Paul Kersey's picture

Yes, Janet, run up that debt trillions of dollars more, in order to keep those financial engineers and big bondholders from taking losses on their ponzi corporate assets, while impoverishing the majority of Americans for years to come. You must continue to do the bidding of the Lords of Finance in order to keep their quest, to crush the debt serfs, alive. Psychopaths rule the world of finance.

gatorengineer's picture

as you stated spending decisions by the top 1% another angle might be to preserve pension funds.  If you look at their top 10 holdings, then you may get an early tip as to what they are doing.

SHockingly they dont even have the decency like the japs do of proposing to buy ETFs.

auricle's picture

That would be taking to the absurd. Where's Loony?

Antifaschistische's picture

printing money out of thin air....and buying something other than thin air...is always a good idea for the one who gets to print the money, and own the asset.

nibiru's picture

If something didn't work - LET'S DO IT AGAIN TTID, TINA #IWantToBelieve

 

God, those central planners are very slow when it comes to learning new tricks 

QEpp's picture

They will do whatever it takes to get Hillary elected.

sprintjump's picture

"they won't stop until someone forcefully stops them or they own the entire world"

 

This is a key point. It has been said for years now... everything is getting bought up. The banks loan, building takes place, the market pops, and the banks come and take away. Add to it, rising property taxes, and it is not long before 'John and Jane White' has nothing... and the banks and their cronies (foreclosure 'buyers'), own it all.

 

Even business is being taken over from within, by the left. Growing administrations are utilizing 'affirmative action' to place their cohorts. In the NCAA, the Senior Womens Administrator's are now teaming up with academia's administrations to push Title IX into the academic settings. This is a fact. The NCAA is being taken over, right now.

 

Watching all of this unfold, is very strange, and disappointing. 

sun tzu's picture

The bankers should worry. Those who have nothing have nothing to lose. Over 300 million goyim with nothing to lose can be dangerous to the bankers.

Hitlery_4_Dictator's picture

Don't worry they are prepared for that...they got the gov and police and military buying billions of rnds of ammo and millions of plastic coffins. They got hier bases covered. 

sun tzu's picture

Bankers create money out of thin air and buy up everything. Nice gig to screw over the goyim. No wonder Hitler was pissed off. 

bada boom's picture

Ain't that a load crap.  The fed already has partners in crime doing their buying for them.

Hohum's picture

She might as well do all of her public appearances in pajamas.

cognitive dissident's picture

operating from the bowels of the Eccles Shrine, kind of like Lazslo Hollyfeld in "Real Genius"?

bob_bichen's picture
bob_bichen (not verified) Hohum Sep 29, 2016 5:18 PM

There will come a time, very soon, when she will be found in a fetal position in those PJs, sucking her thumb, hiding in a "fort" made of blankets under the desk of her Eckles Building Corner Office, crying for mommy to bring her another HotPocket (Kosher HotPocket, of course).

buzzsaw99's picture

we all knew it was coming. the sound of inevitability.

CorporateCongress's picture

Let them play their fucking games. I'm not playing in your casino

Hitlery_4_Dictator's picture

Well, then prepared to be broke. This is very bad for people who are wise to them and expect them to fail. We are screwed. Sadly, if you happen live on planet earth then you are playing in their casino. This exact situation is the worst nightmare I have hoped could be avoided. This has to be stopped at all costs. 

cognitive dissident's picture

geeez, I was under the impression that such "actions" by the Fed were illegal... perhaps the print that somehow allows Fed's direct equity purchases was just too "fine" for me to read.

 

carry on then, coconut-head and co.

NoDebt's picture

Correct.  Currently the Fed is prohibited from purchasing equities (and not for no reason, I'll add).  So what they have to do now is give OTHER central banks like the ECB the money to buy them.

 

Yen Cross's picture

  Moe Howard still has Citadel, and the exchange stability fund.

 Plus--- Is purchasing unsecured options, actually purchasing equities?

 *We have a new serial junker.

medium giraffe's picture

God damned weasel downvoters. 

 

 

The Duke of New York A No.1's picture

The Jaw-Boning will really ratchet up as the Dow Junk Industrials go sub 18K.

cognitive dissident's picture

the TA "gurus" say 17,992 is the "line in the sand"... lmfao

bob_bichen's picture

Did you mean to say "Jew-Boning"?   [What a difference a vowel makes.]

MickV's picture

When the state "buys stocks" or gives market makers the money, free of charge, to buy stocks, then there is no "market".

offwirenews's picture

The "market" will just cease to exist. But seriously, if we let these criminal bankers get away with all of this scot-free we deserve it