Deutsche: The Fed Has Created "Universal Basic Income For The Rich" And Now It Can't Get Out

Tyler Durden's picture

Two weeks after Aleksandar Kocic highlighted the moment in 2012 when the market stopped caring about newsflow and reality, and, in a word "broke" with pervasive complacency setting in regardless of macro uncertainty...

... Deutsche Bank's post modernist master of stream-of-consciousness narrative is back with a new essay dissecting his favorite topic, the interplay between the Fed and markets, the so-called "umbilical limbo" that connects the two in the form of ultraeasy monetary policy and QE in general, and more importantly, the narrative that the Fed has spun over the past ten years, which while supportive of risk assets, has concurrently resulted in what Kocic calls a "permanent state of exception" from normalcy as a result of the Fed decision to defer the financial crisis indefinitely.

It is the unwind of this exceptional state, created symbiotically between the Federal Reserve and the markets, that is the source of consternation for markets, and manifests itself in the upcoming "tricky" renormalization of both the global rate structure, and the unwind of central banks' balance sheets and trillions in monetary stimulus. And, quick to revert to his favorite philosophical abstraction, Kocic notes that more than anything the Fed is hardly eager to "disown" the power it has been exercising for years in its attempt to avoid, or at least delay the next crisis:

The Fed (and central banks in general) carries an implicit responsibility for orderly re-emancipation of the markets, which makes stimulus unwind especially tricky. This highlights the deep dichotomy of power: While a state of exception is an exercise of power, there is a clear tendency to disown that power. And the only way to avoid facing the underlying dilemma is to never give up the power. This creates a new status quo -- a permanent state of exception.

In practical terms, this confirms what we have been warning about for years, namely that the Fed is increasingly "acting as a non-economic actor" - and a price-indescriminate one at that - whose "communications with the markets (“removal of the fourth wall”), excessive accommodation, unconditional support for risk, convexity supply to the market, etc. in place, its role is aimed more and more at achieving “social” and not necessarily financial goals."

In some ways, this was to be expected at a time when the traditional defender of social goal, key among them stability - the government - is increasingly unable to perform its duties due to a record and growing ideological chasm between the left and right, which has forced the Fed to resort to preserving the social order through the only "monetary channel" under its control: pushing asset prices to ever higher nosebleed levels, in hopes of boosting the confidence of the general public that "all is well, just look at the S&P", a trope most recently adopted by none other than Donald Trump.

At its simplest, this boils down to merely perpetuating the capital markets' status quo, or as Kocic calls it "Monetary policy continues to be supportive for stocks, bonds and USD at the same time."

This has been a radical departure from traditional relationships across different assets (in the long run, the two can only rally if the third one sells off). These correlations are the gift to the market. In the past years, owners of US risk assets and bonds (as a “hedge”) have been enjoying persistent positive externalities allowing them to make money on both stocks (the underlying) and bonds (the “hedge”).

To market participants who observe the lack of solid economic growth coupled with a global market cap that just hit a new all time high, this divergence creates a sense of deep confusion, yet one which few are willing, or able, to challenge in keeping with the mantra of "don't fight the Fed."

Still, problems are increasingly emerging, most recently from Bank of America, which in a note yesterday urged the Fed to finally "take that punch bowl away"...

... and warning that the longer the Fed's status quo persists, the greater the risk of a violent renormalization, i.e., crash. 

If we are wrong and central banks do not take away the punch bowl, things will get much messier eventually. “Bubbles” may form that will eventually burst, leading to much higher volatility than necessary. Keeping rates low in response to persistent positive supply shocks that keep inflation low could lead to imbalances, with a painful eventual correction. Central banks did this mistake before the global crisis and kept monetary policies too loose as inflation was low, ignoring very easy financial conditions, excessive and sometimes irresponsible credit expansion and a housing price bubble. We do not believe, or at least we hope, they will not repeat the same mistake twice.

 Amusingly, BofA was hopeful that central banks had learned their lesson from "making this mistake before the global crisis" adding that "we do not believe, or at least we hope, they will not repeat the same mistake twice." And yet, last week's events cast significant doubt on this "hope."

There are other problems with perpetuating a "permanent state of exception",not least among them the fact that the market will remain broken via an "indefinite suspension of traditional market exchange" which also means that the Fed must reinforce its control over risk prices every day through a "continuous uninterrupted exercise of power."

In essence, it is all about diluting the possible downside of stimulus unwind -- an attempt to have an option to obfuscate without losing one’s credibility. With traditional market rules and relationships breaking down, central banks appear to be chasing the illusive target, which means that victory and the final goal are not well defined, which in turn insures the persistence of the “battle” and indefinite continuation of the state of exception. This implies indefinite suspension of traditional market exchange, which means continuous uninterrupted exercise of power that must be won every day.

Kocic previously touched on this topic, calling it a state of market "metastability", in which the "persistence of low volatility causes misallocation of capital. This is how complacency leads to buildup of risk it is the avalanche waiting to happen."

He continued:

Complacency is a source of metastability. It has a moral hazard inscribed into it. Complacency encourages bad behavior and penalizing dissent – there is a negative carry for not joining the crowd, which  further reinforces bad behavior. This is the source of the positive feedback that triggers occasional anxiety attacks, which, although episodic, have the potential to create liquidity problems. Complacency arises either when everyone agrees with everyone else or when no one agrees with anyone. In these situations, which capture the two modes of recent market trading, current and the QE period, the markets become calm and volatility selling and carry strategies define the trading landscape. But, calm makes us worry, and persistent worrying causes fear, and fear tends to be reinforcing.

Fast forward to Friday, when in his latest tangent he points out that in order to minimize the "fear" experienced by market participants caught in the metastability trap, they have no choice but to be comforted each and every day by the central bank exercising its "power" by perpetuating the "indefinite suspension of traditional market exchange", something it can only do if the motives of all actors - central banks and investors - are aligned:

Everyone is incentivized to participate in the reinforcement of the state of exception, while various forms of contestation of the power are inhibited. For example, attempts at shorting bonds are penalized by a steep curve, protection against volatile unwind is discouraged through wide vol calendars, negative carry etc.

And yet this daily interference leads to the abovementioned build up of imbalances, which for a Fed now focusing on its "social" role results in a layering of paradoxes:

The fuzziness of its objectives, as seen through obfuscation of the objective function and metrics (a.k.a. moving the goalposts), has become a policy tool that undermines the power of a reality check. Collapse of short-dated volatility is a referendum on the near-term power of central banks, and softening of long-dated (and forward) vol represents first signs of acceptance of its extension and possible permanence.

Therefore, when going back to the original postulate, the discontinuity between existing and future policy, it is clear why the Fed is concerned, especially at a time when as the Deutsche Bank strategist writes, QE has become nothing more than "universal basic income for the rich."

The accommodation and QE have acted as a free insurance policy for the owners of risk, which, given the demographics of stock market participation, in effect has functioned as universal basic income for the rich. It is not difficult to see how disruptive unwind of stimulus could become. Clearly, in this context risk has become a binding constraint.

Putting it all together, Kocic - perhaps not surprisingly - urges his readers to revert to a state of learned helplessness, to borrow a term, and effectively not fight the Fed, at least as long as the Fed remains dovish:

In our view, as long as the Fed remains dovish, there is little upside in holding gamma. Although the market is vulnerable to event shocks, in the absence of additional information, it would be difficult to endure the time decay of a long gamma position. If anything, reshaping of the curve is likely to lead to steepeners and more curve volatility. Curve gamma is currently trading at all-time lows and could be perceived as a better value as a potential hedge against event risk.

Yet while the current episode of metastability appears firmly entrenched - in fact the longer it persists - the more volatile the outcome, although here in a surprising relent, even Kocic appears to have given up and and suggests that the "permanent state of exception" may indeed be... permanent:

"Vega is a different story. Given the continued tension between the Fed and the market, from this vantage point, higher vol in the future looks almost inevitable, but given a possibility of a (semi-) permanent status quo and the state of exception, this might be a long shot."

Still, not everyone has thrown in the towel: as BofA's Michael Hartnett wrote two weeks ago, "monetary policy will have to tighten to raise volatility, reduce Wall St inflation, and reduce inequality. There are two ways to cure inequality: you can make the poor richer, or you can make the rich poorer. The Fed will reduce its balance sheet in the hope of making Wall St poorer." 

At this moment, whether or not Hartnett is right, is the most important question for both the market and Janet Yellen.

* * *

Kocic' full note below

Umbilical limbo

 

For a short while, last week’s FOMC meeting and Janet Yellen’s testimony were perceived as a disruption of the Fed’s narrative from relatively hawkish towards a softer, more dovish, version. Subsequent bull steepening has signaled the Fed’s convergence to the market. In our view, this apparent change in Fed rhetoric should be understood in a broader context. Since it was first announced, unwind of stimulus has been a source of anxiety for both the markets and the Fed. And, as the Fed had already established a channel of communication with the markets, in the recent months, their dialogue has revolved mostly about the two sides reassuring each other. Although the recent shift towards a more dovish stance might be seen as an inconsistency, on a deeper level it is perfectly in line with the existing order of things.

 

Permanent state of exception and a new status quo

 

Crises are about contradictions, but when we move beyond the crisis things become paradoxical -- we are no longer content with rehabilitation of the traditional rules and values, but require a different type of thinking. And, while contradictions usually have resolutions, paradoxes generally don’t, although their understanding is not always beyond conjecture. Some 18 months ago we argued that the concept of the state of exception offers another perspective on the post QE market functioning (FIW Derivatives, 29-Jan-2016). We summarize it briefly again, to have everything in one place.

 

In its core, policy response to the crises was an extension of what in a political context is known as the state of exception: Market laws had to be suspended to restore normal functioning of the markets. The intrinsic contradiction of this maneuver is resolved only by understanding that suspension is temporary. Stimulus will have to be unwound. However, the accommodation has been in place for a very long time, during which traditional transmission mechanisms have atrophied and investors’ mindset has changed in a way that has altered irreversibly their behavior, the market functioning and its dynamics.

 

Engineering a state of exception comes with considerable risk. The Fed (and central banks in general) carries an implicit responsibility for orderly reemancipation of the markets, which makes stimulus unwind  especially tricky. This highlights the deep dichotomy of power: While a state of exception is an exercise of power, there is a clear tendency to disown that power. And the only way to avoid facing the underlying dilemma is to never give up the power. This creates a new status quo -- a permanent state of exception.

 

In essence, it is all about diluting the possible downside of stimulus unwind --  an attempt to have an option to obfuscate without losing one’s credibility. With traditional market rules and relationships breaking down, central banks appear to be chasing the illusive target, which means that victory and the final goal are not well defined, which in turn insures the persistence of the “battle” and indefinite continuation of the state of exception. This implies indefinite suspension of traditional market exchange, which means continuous uninterrupted exercise of power that must be won every day.

 

Everyone is incentivized to participate in the reinforcement of the state of exception, while various forms of contestation of the power are inhibited. For example, attempts at shorting bonds are penalized by a steep curve, protection against volatile unwind is discouraged through wide vol calendars, negative carry etc. The fuzziness of its objectives, as seen through obfuscation of the objective function and metrics (a.k.a. moving the goalposts), has become a policy tool that undermines the power of a reality check. Collapse of short-dated volatility is a referendum on the near-term power of central banks, and softening of long-dated (and forward) vol represents first signs of acceptance of its extension and possible permanence.

 

The Fed is acting as a non-economic actor. With its communications with the markets (“removal of the fourth wall”), excessive accommodation, unconditional support for risk, convexity supply to the market, etc. in place, its role is aimed more and more at achieving “social” and not necessarily financial goals. Monetary policy continues to be supportive for stocks, bonds and USD at the same time. This has been a radical departure from traditional relationships across different assets (in the long run, the two can only rally if the third one sells off). These correlations are the gift to the market. In the past years, owners of US risk assets and bonds (as a “hedge”) have been enjoying persistent positive externalities allowing them to make money on both stocks (the underlying) and bonds (the “hedge”) . In this way, the accommodation and QE have acted as a free insurance policy for the owners of risk, which, given the demographics of stock market participation, in effect has functioned as universal basic income for the rich. It is not difficult to see how disruptive unwind of stimulus could become. Clearly, in this context risk has become a binding constraint.

 

In our view, as long as the Fed remains dovish, there is little upside in holding gamma. Although the market is vulnerable to event shocks, in the absence of additional information, it would be difficult to endure the time decay of a long gamma position. If anything, reshaping of the curve is likely to lead to steepeners and more curve volatility. Curve gamma is currently trading at all-time lows and could be perceived as a better value as a potential hedge against event risk. Vega is a different story. Given the continued tension between the Fed and the market, from this vantage point, higher vol in the future looks almost inevitable, but given a possibility of a (semi-) permanent status quo and the state of exception, this might be a long shot. We see forward volatility as the best way to hedge this risk without the consequences of time decay. We favor intermediate sector for buying forward vol, either outright or synthetically. Although the lower right corner, which takes advantage of the inverted surface, is trading cheap and has nominally better ageing properties, it remains vulnerable to supply.

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Peacefulwarrior's picture

This post fits better here: With so much money parked in Term deposits etc. in this new Age of Distortion, get Schwartzman etc. to get it off the sidelines with an even greater return incentive than the FED window can create and put it into projects that at the very least provide temporary growth drivers! The FED and CB's really do need to raise interest rates to save pensions etc. and they need any form of inflation to help even if it's manufactured by Private Equity.

BaBaBouy's picture

"Universal Basic Income For The Rich"

While the Sheeple & Plebes got Fed Fecked...

techpriest's picture

No wonder Zuckerberg likes UBI - he thinks it can work for everyone, when in reality it only works if a few get it at the expense of everyone else.

toady's picture

Trickle down doesn't work.

markar's picture

It does if you look at if from a urologist's point of view

Déjà view's picture

Had Karl Marx been born 200 years later...

Beige Book is now Little Red Book...

Peacefulwarrior's picture

FED was an instrument to ebb and flow money supply during economic expansion and contraction... It's use is now being magnified to save us from a Monster created by not allowing Free markets to exist. Things are far more dire existentially than we can imagine.

Deep Snorkeler's picture

About 1984, they learned to fake 

an entire world economy by pushing money

into the hands of the upper elite caste.

Then they faked the data.

Then Americans elected the Sun-King

of the Elite Caste as president.

Their system is working perfectly so far.

Peacefulwarrior's picture

At a certain point the Machine becomes a self-sustaining organism after human behavior has been modified to feed it, so essentially there isn't any need for more diabolical maneuvering.

CPL's picture

Die Janet Yellen, die.

Die Lael Brainard, die.

Die Gary Cohen, die.

Die Jamie Diamond, die.

The Real Tony's picture

You forgot Ben Bernanke.

Lost in translation's picture

You could photoshop that picture of Yellen and replace the mic with something else, pretty easily.

Lost in translation's picture

The sordid thoughts were all yours, Tiffany.

Sorry to have triggered you, Miss. I see you're new here.

CPL's picture

Google image search, there's hundred of schoops.

Temporalist's picture

I am Elmer J Fudd; millionaire. I own a mansion unt a yacht.

https://www.youtube.com/watch?v=j7dCTwlAI8Y

Zepper's picture

That is actually accurate. Hellicopter money for the rich since 2007 at the very least, probably since 1988.

 

I say we vote for a univeral income from the fed. Just enough to keep the herd happy, housed and fed. No need for governments to go into debt when we have a fed that can print money on a whim.

 

I would love to see the fed audited... can you imagine the fucking crap these cunts have funded, families, bullshit all around the world. These cunts are their own fucking shadow government!

Last of the Middle Class's picture

Two things QE does right off the bat. First is Guarantee business as usual for the 1% who have and will continue to make bad business decisions, to say nothing of completely disrupting a level playing field for open capitalism. Secondly is effective block any wage increases and thus buying power through stealth inflation such as sub prime purchasing. The third, after the one-two punch is the savaging of cash through outrageous premiums for Obamacare (which is actually guaranteed income for insurance companies who don't have to do the previous two_ You have therefore created a society that is doing well and another that cannot possibly recover. THAT, is what massive federal intervention does to a society.

earleflorida's picture

with the 99% being 'GOYS' and the 1% being 0.0666 % Zionist... what does one expect

seriously--- has there ever been a FRB System Chairman not a Zionist Jew since the beginning (* qualifier incl. having a jewish mother or wife)

Herdee's picture

The Fed suffers from Double Vision. They're drunks, they're Keynesian quacks that can't drink enough of the Kood-Aid. This song describes their dilemma:

https://www.youtube.com/watch?v=36hdcn_3ekI

gregga777's picture

"Deutsche: The Fed Has Created "Universal Basic Income For The Rich" And Now It Can't Get Out"

 

That is a fitting summary, because the motto of the Goldman Sachs Feral Reserve System just happens to be:

 

"We steal from those who can least afford it and give to those who least deserve it."

SpanishGoop's picture

It is a douche bank but they are right on the nose.

 

44magnum's picture

On May 23, 1933, Congressman, Louis T. McFadden, brought formal charges against the Board of Governors of the Federal Reserve Bank system, The Comptroller of the Currency and the Secretary of United States Treasury for numerous criminal acts, including but not limited to, CONSPIRACY, FRAUD, UNLAWFUL CONVERSION, AND TREASON.
The petition for Articles of Impeachment was thereafter referred to the Judiciary Committee and has YET TO BE ACTED ON.
 

 "Mr. Chairman, we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the Government of these United States and the people of the United States out of enough money to pay the Nation's debt. The depredations and iniquities of the Fed has cost enough money to pay the National debt several times over.

 "This evil institution has impoverished and ruined the people of these United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Fed and through the corrupt practices of the moneyed vultures who control it.

 "Some people who think that the Federal Reserve Banks United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lender. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain International propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.

 "These twelve private credit monopolies were deceitfully and disloyally foisted upon this Country by the bankers who came here from Europe and repaid us our hospitality by undermining our American institutions. Those bankers took money out of this Country to finance Japan in a war against Russia. They created a reign of terror in Russia with our money in order to help that war along. They instigated the separate peace between Germany and Russia, and thus drove a wedge between the allies in World War. They financed Trotsky's passage from New York to Russia so that he might assist in the destruction of the Russian Empire. They fomented and instigated the Russian Revolution, and placed a large fund of American dollars at Trotsky's disposal in one of their branch banks in Sweden so that through him Russian homes might be thoroughly broken up and Russian children flung far and wide from their natural protectors. They have since begun breaking up of American homes and the dispersal of American children. "Mr. Chairman, there should be no partisanship in matters concerning banking and currency affairs in this Country, and I do not speak with any.

 "In 1912 the National Monetary Association, under the chairmanship of the late Senator Nelson W. Aldrich, made a report and presented a vicious bill called the National Reserve Association bill. This bill is usually spoken of as the Aldrich bill. Senator Aldrich did not write the Aldrich bill. He was the tool, if not the accomplice, of the European bankers who for nearly twenty years had been scheming to set up a central bank in this Country and who in 1912 has spent and were continuing to spend vast sums of money to accomplish their purpose.

 "We were opposed to the Aldrich plan for a central bank. The men who rule the Democratic Party then promised the people that if they were returned to power there would be no central bank established here while they held the reigns of government. Thirteen months later that promise was broken, and the Wilson administration, under the tutelage of those sinister Wall Street figures who stood behind Colonel House, established here in our free Country the worm-eaten monarchical institution of the "King's Bank" to control us from the top downward, and from the cradle to the grave.

 "The Federal Reserve Bank destroyed our old and characteristic way of doing business. It discriminated against our 1-name commercial paper, the finest in the world, and it set up the antiquated 2-name paper, which is the present curse of this Country and which wrecked every country which has ever given it scope; it fastened down upon the Country the very tyranny from which the framers of the Constitution sough to save us.

croecko's picture

I made this analogy last year - we have had monetary pollution for the rich for years, UBI is just extending it to the poor, sort of like how we have polluted our atmosphere for years, and now are considering launching particulates into the atmosphere to mitigate the effects of the earlier pollution: https://www.mises.ca/monetary-pollution/

ThanksIwillHaveAnother's picture

Remember all groups fight each other in some form, and the elite when having a lot of fake money at risk usually start wars of all sorts.

gregga777's picture

Based strictly on their percentage of the general US population of 2%, the probability that the current and previous 2 chairman of the Goldman Sachs Feral Reserve System would be Jews is:

 

p = (1/50) * ( 1/50) * (1/50) 

  = 0.000008

or 8 in 1 million.

 

See?  The whole system is rigged.

 

buzzsaw99's picture

they don't want out and db knows it. the fed wants billionaires and bankers to get fatter and richer forever.  look at greedscam and the bernank.  they don't volunteer down at meals on wheels.

techpriest's picture

It's a shell game: articles like this call for a way to "help the poor," which will lead to something that appears to be free money, except that you never hold it and it goes right into a crony's hands on your behalf.

For example: "college tuition assistance," in which you never see the cash, and the tuition prices rise so that you don't actually get more for the numbers that are printed on your tuition statement. Meanwhile, that particular set of cronies (university administration) get richer and richer while everyone else is poorer in spite of the "assistance."

Pollygotacracker's picture

All of this is only bothersome if you are convinced that money is the most important thing in life. A horrible system, to say the least. It will all come crashing down around their ears. Fraud.

Grandad Grumps's picture

Sure, they can get out any time they want. They just do not want to.

And, we know as had been proven many times through history that trickle down is a cruel lie told to the masses.

chosen's picture

The simple fact is the Fed is the tool of the wealthy.  Notice how almost everybody has suffered from Lehman except the wealthy, who are the ones who caused the mess.

Bureau of compliance's picture

First Bill Gates then Dimon, now DB all so concerned with the plight of the unwashed. WTF do these crimers have planned?

Pollygotacracker's picture

They know this will not end well. They are positioning themselves. 

Fartboxbuffet's picture

3 to 1 says janet has a 8 inch cock

EHM's picture

Come on no way her cock is that big.

Tonterias's picture

Thanks Hellen... We all love you, keep on the good job. God will pay you!

I Write Code's picture

>the Fed is hardly eager to "disown" the power it has been exercising
>for years in its attempt to avoid, or at least delay the next crisis

yes

>This creates a new status quo -- a permanent state of exception.

yes

>its role is aimed more and more at achieving “social” and not
>necessarily financial goals.

yes

>metastability

Yes, but at this point I think Kocic fumbles the ball. 

It's metastability, but real stability is not where it used to be.

The goalposts have moved, the referees are wearing purple, and the ball has been replaced by a rabid dingo.

>Vega

Huh?

Anyway, overall a very good piece, just don't ever expect a return to the status quo ante.

TrainReck's picture

The best thing to do is keep waiting for the time soon when the music stops. Then capitalize on the way down to sub zero. There's going to be a trigger. The trigger could be one of many. China, Japan, the Euro. All teetering on the brink. The stage is set. Who is in going to be in the lifeboat & who will still be rearranging deck chairs on the Titanic when it hits.

Heliotential's picture

Developed economies are stagnated almost by definition

VW Nerd's picture

There are certain people in high places who need to have an M50 taped into their mouth and asshole and lit off simultaneously resulting in the need to eat and shit out of a tube the rest of their life.

I almost deleted this before posting, but felt it needed to be said.

Pollygotacracker's picture

I've got a better idea. Burn them at the stake...using their own fiat currency as fuel.

Rick Cerone's picture

Yellen died in 1998.

Blazing in BC's picture

and still qualified for the job

JailBanksters's picture

The FED run by Fake Jews and owned by Fake Jews.

Jews always survive, just like cockroaches, you can never get rid of them.

The FED is no different.

EndOfDayExit's picture

My thoughts exactly. The Fed bought out the top 10% - with rising stock and house prices – these people have nothing to complain about. Just keep spending their new unexpected “wealth” thus creating a gradient in society, where those less fortunate could now work and sell their “services”. To give the Fed some credit, as cynical as this is, is is still better than giving money uniformly to everyone – which would produce inflation without any benefits whatsoever. So this is a reasonable plan -  it will only stop when those bottom 90% come with pitchforks… electing Trump may have given the Fed a clue that those pitchforks may be coming a lot sooner.

...Now the top 10% may find their new unexpected “wealth” taken away, at least, somewhat.

wisebastard's picture

there has been very little word about QE sense 12/12/12 when the Fed started buying $40 billion a month in US treasuries...... so why now??? ......WTF is up with this type of jargon....