"The Fed Is Preparing To Make The Rich Poorer": BofA

Tyler Durden's picture

Remember when - for years and years after the grand, global QE experiment started - any suggestion that central bankers are the primary cause behind global wealth inequality, and thus directly responsible for such political outcomes as Brexit and Trump - was branded as a conspiracy theory  by bloggers living in their parents' basement? We do, because we were accused over and over of just that (our position on the Fed and other central banks should be familiar to all by now).

Well, as of this morning, none other than the chief investment strategist at BofA, Michael Hartnett, is a basement dwelling, tinfoil hatter because in his latest Flow Show report, writes that "central banks have  exacerbated inequality via Wall St inflation & Main St deflation."

Of course we knew that, you knew that, and pretty much everyone else knew that, but those whose jobs depended on not admitting it, kept their mouths shut terrified of pointing out that the central banking emperor is not only naked, but an idiot. Well, the seal has been broken, and even the biggest cowards from within the financial establishment, most of whom can be found on financial twitter for some inexplicable reason, can speak up now.

However, it's what Hartnett said next that was more notable, namely that the "massive outperformance of deflation assets versus inflation assets shows central bank failure in War on Deflation...they have failed to boost wage expectations, inflation expectation, “animal spirits” on Main St."

And, according to the Bank of American, now that central banks are in full reverse mode, there are "two ways to cure inequality...you can make the poor richer...or you can make the rich poorer..." 

So for anyone still confused, about what is taking place right now, the "Fed/ECB are now tightening to make Wall St poorer" because it is "no longer politically acceptable to stoke Wall St bubble."

Sooner or later the market will get it, and when it does, those who sell first will be happy. Everyone else will be stuck with a market that is locked limited down, with no position sales possible indefinitely, maybe in perpetuity.

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GunnerySgtHartman's picture

I'll believe that when I see it.

buzzsaw99's picture

+1 that's the biggest fucking lie i've ever read.

HenryKissingerBilderberg's picture

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.... I believe that banking institutions are more dangerous to our liberties than standing armies.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. <<Thomas Jefferson>>

ZH Snob's picture

wall street doesn't only make money when the stock market goes up.  they can also make a fortune by shorting the hell of it on its way down.

isn't that the crux of the derivative monster lurking behind every trade?

Stuck on Zero's picture

When Wall Street collapses so will the pensions and 401Ks of millions of middle class Americans.

buzzsaw99's picture

the fuck you say.  they gave fucking buffett another ten billion last night bitchez. full of shit asshole.

totenkopf88's picture

$12B- but who's counting?

buzzsaw99's picture

my bad.  i was thinking of the $10B he made off the GS warrants.  it's hard to keep track.

Bigly's picture

I know.



(they really mean upper middle class and small biz owners)

Overleveraged_and_Impatient's picture

Yup, OK Bank of America. The Fed has one sole purpose, and that is to make rich people very much richer. The way they do this is to artificially create new money and pump it into the Stock Market. The fact of the matter is that if they wanted to let this market crash, it would have happend in 2014, 2015 or before the election.

I'm not buying it. The only thing "I am buying", are the Dips in the S&P 500. This is because I am thinking we will be at my price target of 3000 by year end and 4500 by Q1 2019. There is too much at stake and the powers in charge of the markets know the real deal. I am holding onto my 3x Leveraged Long S&P 500 shares until death due us part, or until 4500+. Do you really think the President's Working Group on Financial Markets would allow a crash? LOL no! Crashes are no longer possible due to all the liquidity floating around.

There has never been an easier time to make money in history. I am in fact hoping to quit my job later this year after accruing massive gains in my Merril Lynch account.

spanish inquisition's picture

It should be the "Poor Rich Poorer", anyone that has equity will be stripped from the bottom up. Stopping with the owners of the FED.

totenkopf88's picture

That peckerwood, Buffett, just made a cool $12B off of his BofA holdings.

bshirley1968's picture

Pure insider trading.

They brought him in to bail out BAC at pennies on the dollar,  after they told him they were about to unleash this thing called QE. Buffet is a poster child shill for the "markets".  He is like the continual billboard for "Come Win with Us" you see casinos put up along the highway

Who do you think makes more money?  Buffett on Buffett or Wall Street on Buffett?

realmoney2015's picture

Does that include Warren buffet and his buddies, sucking off the teet of the fed? 

I'm guessing not...

GestaltNine's picture

I am sure that GoldmanSachs.gov is going to go for this.

buzzsaw99's picture

god almighty the whole fucking thing is rife with lies.  hartnett you fucking turd.

zzzz88's picture

fed is wall st

order66's picture

A 20% move down in stocks would be literally cataclysmic across the globe.

GunnerySgtHartman's picture

When it hits, it's going to be far more than 20%.  I would not be surprised to see 40% once it bottoms out.

Muppet's picture

Illinois going junk status could ignite the tinder.   Institutional holders of the hundreds of billions of Illinois debt will have to liquidate those bonds once they lose investment grade status.

The big institutions including pension funds and insurance companies can't hold junk.

Not sure why "the Illinois event" has not created greater shockwave concerns?



GunnerySgtHartman's picture

Along with the situations in Connecticut and Maine, things may get VERY INTERESTING next week.

Umh's picture

The middle class will get hosed again. There are way to many lossy shots in political finance, the middle class is hit most of the time. Whether that is intentional or not depends on how gullible you are.

I am Jobe's picture

Middle  Class , ha, too busy with vaca, 4th of July celbration, waving the fucking flag and singing God Bless America and watching Netflix  and Lost shows. Useless fucks will not see anything coming. 

Bill of Rights's picture

If Main street is deflating someone needs to get the memo out. Restaurants, fun parks, beach rentals, Home depots, Lowes, and so on all packed where I reside,.

totenkopf88's picture

Then the Fed should normalize rates instead of pissing around with .25bps raises/year. 8 years of ZIRP is not a sign of a healthy economy

redtie's picture

I see no real problem in South Ga. Wal-Mart and McDonald's at full compasity and all the doublewide are rented out.

Nobody For President's picture


I LIKE that word. 

Now we need a definition for it.

urhotdogs's picture

I guess they haven't implemented the 15/hr minimum wage there yet

marcel tjoeng's picture


Yellen seems to be informed of, perhaps more likely, seems to be 'made to remember' her Piketty and Warren Mosler now,

in her last Bloomberg appearance.

Now what is left to do for you insane crazy americans, is rid yuorself of Trump and his wild KKK bunch

(or that will catch up with you in a very unpleasant way I promise ..)


bshirley1968's picture

Did your dumbass just wonder over from CNBC?  

You couldn't spell KKK,  much less know anything about it, because if you did, you'd be laughing at yourself right now the way we are.

Got The Wrong No's picture

That "I Promise" sounds like a threat. This deranged Snow Flake will be shooting GOP softball players in the park next week. 

Arnold's picture

Can he do man pulling rope or man climbing stairs?
How 'bout man peering through glass?

Silver Savior's picture

I am not laughing. The two go together.

Doom and Dust's picture

Making the rich poorer is a 100% legitimate way to reduce inequality.

All wealth is relative.

onthedeschutes's picture

Considering some of the largest stockholders in the world now are central banks...Hartnett's Main Street/Wall Street view is a bit simplistic.  This is a whole new world now.

NMA's picture

Just to clarify - rich here doesnt mean those insiders or the buffet / soros types..... it means the small / medium business owner who started from scratch and now has a decent business with a good income, life with some luxury..... house without mortgage........ they will be made poorer...... 

Blankfuck's picture





Conax's picture

Where's the equality in this? Here's what they should do. Once a week draw a poor people name out of a hat. Put one Billion Ctrl-P fiats in an account for that person.

Poor people know how to spend money, right? That's why they're poor, spending all the shit soon as they get it.

Like myself, I would promptly buy a bunker in Colorado and a yacht in Tampa. Then I would never go there, too busy bangin debutantes two at a time in Brazil. Giving away free Benzes to muh posse, buying dranks for the house, tipping hooters girls with diamond earrings, shooting craps in Morocco.. Man, I would burn through some of them fiats pretty quick.

Thus stimulating the economy.

onthedeschutes's picture

What next from Hartnett?  Will he have us believe that mark-to-market will be making a comeback, too?  

These grifters are parasites.

Lost in translation's picture

Six decades living on this mud-ball called Earth and I've never seen anyone lose except the Middle Class.

Arnold's picture

Here cuz, hold my beer.

--Michael Moore

JailBanksters's picture

They have been doing this for over 100 years now.

Maybe some people just don't realize how sinister the Federal Reserve Act was and is.

Imagine if you owed $1,000 on your Credit, While you can repay the Capital, to repay the interest owing, the only way is borrow more money to pay back that interest.

That is basically how the Fed works. Once your in, you can never get out. You are constantly borrowing more to repay the previous Interest. This is Wealth Transfer.

Eventually the Feral Reserve will own 100% of America, it's a mathematically certainly.

It's a Money Turbo, the more money you take out, the more money you need to keep pumpong back into it. What happens when you over rev a cars turbo ?

Crypto-World-Order's picture

Too much boost, yo. The fed already owns america, they own all the politicians and everyone under them. The turbo will not blow up however, it will slowly  spin down and the shift from the current ponzi will transition into a more diabolical monetary system.

GooseShtepping Moron's picture

This article is deeply flawed. While I agree that the Fed is about to pop the stock bubble (and I applaud them for that), it is completely idiotic to suggest that they failed to boost animal spirits on Main Street. We are blowing around in a veritable tornado of animal spirits right now -- a wind so strong that even the turkeys can fly. 100 million people are not working because they don't have to, not because they can't find a job. They're all still eating and buying things.

You want to see a real lack of animal spirits? Wait until the unemployed no longer have their free shit.

Youri Carma's picture

Nop they won't because the first in line to suffer, when the FED hikes rates, are the Joe Pack of notin’s, the street Muppets via their more expensive credit cards and that of course my friends, spells trouble.

Things That Traditionally Increase When the Fed Increases Interest Rates;

The recent rise in the Fed funds rate will likely cause a ripple effect on the borrowing costs for consumers and businesses that want to access credit based on the U.S. dollar. That has an impact across numerous credit categories, including the following:
- The Prime Rate
- Credit Card Rates
- Savings CHECK!***
- U.S. National Debt
Things That Are Largely Unaffected When the Fed Increases Benchmark Interest Rates:
- Auto Loan Rates
- Mortgage Rates
Things That Traditionally Decrease When the Fed Increases Interest Rates:

- Consumer Spending
- Business Profits
- Home Sales

FROM: The Impact of a Fed Interest Rate Hike

***Savings Rate Soars To 8-Month Highs As Trumphoria Fades
Cozy Vanilla Sugar's picture

I doubt it - but to the extent the Fed can give the rentiers and toll both collectors a summer buzz cut - ready the clippers, Miss Yellen. 

Falconsixone's picture

There can be only one.


Blankfuck's picture

The rich fuckers you cant take down! The only way is to bankrupt our country-again, yes again!  It was for a moment untill the FED FUCKERS PRINTED MONEY AND GAVE TO THE BANKERS.  Now these fuckers have a hold on hard assets, real estate etc.. its was a no loose for them

Silver Savior's picture

Why even invest in the stock market when you can make more gains in crypto? Especially when they want to pop the stock bubble. The stock market is boring as shit. 5% returns in my 401k on a good day. That's nothing.