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Are Bernanke's Fingerprints All Over Equity Indices?

Tyler Durden's picture


The link between nominal interest rates, inflation breakevens, and stocks has changed; especially with regard the last few years' seemingly increased dependence on the Central Bank to keep an anti-deflationary floor on breakevens (or conversely the Bernanke Put under stocks). UBS' macro team, while humbly professing not to be experts in corporate earnings (which have been dismal) or balance sheet ratios (which are positive but have deteriorated in recent months) believe in a big picture macro perspective that we have been vociferously commenting on for a year or two now.

SPX (green) vs 10Y Treasury rates (red) and 10Y TIPS Breakevens (blue-dots)


As official policy rates are frozen near zero and the Fed is likely to keep them there for at least two more years, one would need to look for different indicators quantifying market expectation of a future success or failure of the Fed’s stimulative effort. Breakeven inflation is a good candidate. The logic is pretty straightforward: we have been living in the low inflation environment for the past several years, and the Fed is quite intent on preventing deflation, so “successful” monetary policy should boost future inflation. The TIPS market reflects changing inflation expectations by repricing breakevens. Breakevens have reacted to the introduction of traditional and non-traditional policy measures, from new bond purchase announcements to extending the language regarding super low policy rates.


Specifically, they have noticed a potentially curious link between the way the market interpreted monetary policy signals and the large cap stocks in the US: the breakeven inflation rate on 10yr TIPS has tracked the S&P 500 very closely this year.

When the Fed is perceived to be successful in stimulating the economy, stocks benefit and breakevens also rise.


When the Fed’s potency is called into question, stocks fade and breakevens decline.


We have checked historical data to see if a similar pattern existed for the relationship between SPX and the nominal 10y Treasury yield in 2012. We found that relationship to be very statistically weak. We can point out to a pair of dates in 2012 when the 10y benchmark yield was essentially the same (1.83% vs.1.88%) while the S&P500 was 158 points higher on one date than the other.

Nominal Treasury rates have lost their 'signal' as UBS agrees with the point we have been making for a long time: central bankers and politicians, not economic fundamentals and inflation expectations, currently drive the nominal rate and equity markets.


Source: UBS


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Sat, 08/25/2012 - 19:00 | 2737721 Aziz
Aziz's picture

Bernanke hasn't been fingering.

Bernanke has been fisting.

Sat, 08/25/2012 - 20:44 | 2737831 LetThemEatRand
LetThemEatRand's picture

So probably a good thing for Ben's sake that they don't take knuckle prints.

Sat, 08/25/2012 - 21:31 | 2737880 Precious
Precious's picture

Bernanke?  Maybe Netanyahu.

Sat, 08/25/2012 - 21:36 | 2737888 Hedgetard55
Hedgetard55's picture

Not his fingerprints, his sperm.

Sun, 08/26/2012 - 02:56 | 2738092 Muppet of the U...
Muppet of the Universe's picture

I bet bernanke nuts in between two hundreds and tips valets with it.

Sun, 08/26/2012 - 05:44 | 2738162 Short Memories
Short Memories's picture

Its a "War against Deflation" I guess :-\

Sun, 08/26/2012 - 06:56 | 2738202 GetZeeGold
GetZeeGold's picture



Long lubricant me on this one.


Sun, 08/26/2012 - 13:36 | 2738690 The Big Ching-aso
The Big Ching-aso's picture



Be gentle Ben, be gentle.

Sat, 08/25/2012 - 21:03 | 2737849 Michael
Michael's picture

Let me see if I get this strait;

The Federal Reserve is handing its corporate member banks on a silver platter hundreds of billions of dollars in free money by collecting interest on Fed deposits in their banks. That's what the 28 trillion dollars is for?

Sat, 08/25/2012 - 21:56 | 2737901 Pure Evil
Pure Evil's picture

Makes you wish you were one of the corporate member banks doesn't it?

Ah, I love the smell of freshly printed money early in the morning. Its the best part of waking up, Ben Franklin in your cup.

Sat, 08/25/2012 - 22:15 | 2737911 mick_richfield
mick_richfield's picture

No -- if I got an extra trillion all of a sudden, it would just get me into trouble.

Sat, 08/25/2012 - 23:58 | 2737982 francis_sawyer
francis_sawyer's picture

These cards are MARKED...

They're a mess!

A chocolate mess!

Easy boys, the dirty dealer meant no harm...

Sun, 08/26/2012 - 00:11 | 2737994 Michael
Michael's picture

Remember Remember the 5th of November.

When you see what we have planned for the 5th of November, all your questions will be answered. We mean on that date a complete and total destruction of the Republican party as we know it today. Here's a hint what will happen; R for Revenge. Revenge is a dish best served cold.

Sun, 08/26/2012 - 00:47 | 2738016 Michael
Michael's picture

Full disclosure;
I have not seen the movie V for Vendetta till this evening. I'm about 3/4 of the way through it.
So far it isn't anything I haven't already thought of.

I believe the ending will be to my satisfaction.

Sun, 08/26/2012 - 01:24 | 2738022 Michael
Michael's picture

My analysis of the movie;
This is what real HOPE is all about.

Sun, 08/26/2012 - 07:00 | 2738206 GetZeeGold
GetZeeGold's picture



You do realize you're talking to yourself......right?


Sun, 08/26/2012 - 10:44 | 2738452 d edwards
d edwards's picture

Long story short: we're all screwed!

Sun, 08/26/2012 - 10:45 | 2738453 Stoploss
Stoploss's picture

All the way to the elbow...

Sat, 08/25/2012 - 19:02 | 2737724 kornholio
kornholio's picture


Sat, 08/25/2012 - 19:04 | 2737727 CunnyFunt
CunnyFunt's picture

BSB, bubble-builder extraordinaire.

Sat, 08/25/2012 - 19:20 | 2737744 Atomizer
Atomizer's picture

BURNanke exit strategy


The Adventures of Photoguy - Episode 19

Sat, 08/25/2012 - 19:26 | 2737746 CunnyFunt
CunnyFunt's picture

"Through 2014", what percentage of 10-year bonds will be self-purchased in order to maintain ZIRP? If the answer is below 75%, I will name my firstborn Ben Shalom.

Sat, 08/25/2012 - 19:35 | 2737749 DavosSherman
DavosSherman's picture

Ben S. Bernanke is a fucking moron.

Sat, 08/25/2012 - 19:53 | 2737750 ekm
ekm's picture

I have found a name for this stock market: TERRORIST MARKET

You see, a terrorist doesn't need to be succesfull each time. He wants to be succesful once only. We never know how many times a terrorist tried and failed, but we all know when the act is succesful.

Same this with this market: The market tries to hit and the Gov + Fed hit back. The market tries a bigger bomb, Gov + Fed dodge it. And so, on and on and on and on. The market keep throwing more sophisticated and more powerful weaponry finaly strikes.

The market had a good strike in 2008 and it seems that it's getting pretty easily used to cocainated easing 1 and 2, twists, stock and bond buying by Gov+Fed by use of Primary Dealers with the only goal to provide money to Primary Dealers to meet their margin calls, thus removing stocks and bonds from the market until............nothing would be left to trade.


Remember, the market needs to strike only once in a blue moon. The market is BY NATURE a TERRORIST MARKET. Next time: It will a be a great Market Crash since the market seems to have learned all the tricks by now.


Sat, 08/25/2012 - 20:23 | 2737805 Atomizer
Atomizer's picture



Very shortly, someone will be hollering.. Give me that Thought Crime Act on my desk to sign. Increase the penalty to one million dollars with served time up to life. We will no longer bargain with these Muppets. Our ideology of this new world will happen. Stiff penalties for dissenters will send the strong signal that we mean business.  

We have many work houses for criminals to work off STATE fees. You will be reprogrammed during your stay.. 

Christianity is stupid, communism is good 

Sat, 08/25/2012 - 20:40 | 2737821 ekm
ekm's picture

I lived thru that. I never really suffered  personally but I know a lot of people who did.

We were taught not to think independently. We didn't even knw what 'independent thinking was'.

I'm afraid the western world is going towards willingly.

Sat, 08/25/2012 - 20:58 | 2737843 Atomizer
Atomizer's picture

I think once they push the envelope too far off the table, they’ll regret how they overlooked the human bonding element bit.

Sat, 08/25/2012 - 21:24 | 2737873 malikai
malikai's picture

If they regret that, they're really going to regret that there will be nowhere for them to hide.

The whole world is in on it now.

Sat, 08/25/2012 - 22:31 | 2737923 Atomizer
Atomizer's picture

Yes. Think as if you flipped on the light switch, you know where they are hiding, extermination has now been contained.

Sun, 08/26/2012 - 01:43 | 2738042 FRBNYrCROOKS
FRBNYrCROOKS's picture


Thought Plice are, already, here.

They are aresting people for disenting on FB.

Sun, 08/26/2012 - 17:42 | 2738922 LMAOLORI
LMAOLORI's picture


"ekm Remember, the market needs to strike only once in a blue moon. The market is BY NATURE a TERRORIST MARKET. Next time: It will a be a great Market Crash since the market seems to have learned all the tricks by now."


Your Money Market Fund May Not Survive The Next Wall Street Panic


On June 21, 2012, Securities And Exchange Commission Chair Mary Schapiro testified about “Perspectives on Money Market Mutual Fund Reforms” before the Committee on Banking, Housing, and Urban Affairs of the United States Senate. In somewhat chilling remarks about today’s roughly $2.5 trillion money market funds, Schapiro dragged out the bloody corpse of the Reserve Primary Fund, which in September 2008 “broke the buck” and set off a cascade of panic that swept through other money market funds and flooded the short-term credit markets.




Breaking a Buck, Maybe, but Not Taxpayers’ Backs


MARK Aug. 29 on your calendar. It’s the day all of us could end up on the hook for a big future bailout.


The Securities and Exchange Commission is expected to vote that day on a proposal that would limit taxpayers’ exposure to the $2.6 trillion world of money market mutual funds. The plan would reduce the odds of having to rescue teetering funds when the next financial crisis comes — and it will.

Money market funds are a huge cog in the nation’s financial machinery. Many people think that these funds are as safe as federally insured bank deposits. In most cases, they aren’t. But then, in the dark days of 2008, a run on one fund, Reserve Primary, reverberated in the industry.

Investors fled, and the Treasury stepped in. It earmarked $50 billion to protect money market funds and to prevent them from “breaking the buck,” or having their shares fall below the sacrosanct $1 net asset value. Of course, if the government rides to the rescue once, the thinking goes, it will surely do so again.


Money Funds Step Up Fight --- Fidelity and Others Have Dedicated More Lobbyists to Beating Back SEC Rules


Mr. Aguilar, a former general counsel for Invesco Inc., the 13th largest money-fund company by assets, has said he doesn't believe there is sufficient evidence that additional reforms are needed. A spokeswoman for Mr. Menendez declined to comment. Mr. Aguilar declined to comment.






Per the Q4 2011 FDIC Chief Financial Officer's report to the Board, published on March 30, 2012, the FDIC's Deposit Insurance Fund had a balance of $11.8 billion dollars.


Bank deposits in the United States at the same time are estimated to be between $8 TRILLION and $10 TRILLION. Let's be conservative and say the number is $8TTT.

11,800,000,000 divided by 8,000,000,000,000 equals 0.001475, which I will round UP to 0.0015.

That is read as "fifteen hundredths of one percent". It isn't one percent, it is fifteen hundredths of one percent. That is how much the FDIC is carrying to back all of those little signs on the teller windows that say "Each Depositor insured to at least $250,000. Backed by the full faith and credit of the United States government."


Sun, 08/26/2012 - 17:45 | 2739153 ekm
ekm's picture

Wow. Fantastic work.

(Out of all links, the Ann Barnhart one did NOT go direct to the specific article about FDIC statistics.)

Mon, 08/27/2012 - 00:12 | 2740129 LMAOLORI
LMAOLORI's picture


It's a PDF file 96.7KB likely that's why it didn't work for you it has to be downloaded

Sat, 08/25/2012 - 19:52 | 2737771 Tombstone
Tombstone's picture

Benny, buy gold now.  Sell at $15,000, after you enact QE27.  Use proceeds to pay off debts.  Then take your commie brothers and leave for good.

Sun, 08/26/2012 - 07:30 | 2738230 GetZeeGold
GetZeeGold's picture're totally giving away our best stuff!


Sat, 08/25/2012 - 19:53 | 2737773 yogibear
yogibear's picture

There is no Bernanke exit strategy. Bernanke's puppeteer is Wall Street. Bernanke and the fed doves will print until the rest of the world chokes on the mountains of printed US dollars. Then reality hits the fed and market. Only when they loose control.

Sat, 08/25/2012 - 20:00 | 2737774 Atomizer
Atomizer's picture

Ben will… Nip It In The Bud


Bawhahahaha. Ooooooo KNOCK ME OUT!

Sat, 08/25/2012 - 20:01 | 2737778 proLiberty
proLiberty's picture

The Fed is distorting the market through Low Frequency Trading (LFT).

Sat, 08/25/2012 - 20:18 | 2737798 pauhana
pauhana's picture

"Are Bernanke's Fingerprints All Over Equity Indices?" (Yes, duh!)

What other purpose would there be for this insanity?  Need equities to be up until Nov. 7.  After that it won't matter.

Sat, 08/25/2012 - 20:23 | 2737804 Waterfallsparkles
Waterfallsparkles's picture

I am begining to believe that Bernanke wants the Market to stay high is due to all of the Pension Funds and Insurance Companys.

It is hard to believe what would actually happen if Pension Funds lost all of their Money and Insuance Annuity funds could not pay out the benifits they have promised.

Sat, 08/25/2012 - 20:35 | 2737817 sabra1
sabra1's picture


All customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank is the counterparty on the loans the FCM or depository institution takes out in order to fund its mega-levered proprietary in-house trading desks.

For the love of God, I don't know what more there could possibly be to say to snap you people out of your normalcy bias trance. You have GOT to get ALL MONIES out of the financial system NOW. This ruling sets precedence for every depository institution, not just futures brokerages. It is now legal in the United States for any financial institution to steal customer funds, borrow money against those funds for the uber-levered proprietary trading use of the financial institution, and the customers have ZERO CLAIM TO THEIR OWN FUNDS once they are in the custody of the financial institution.

The court has ruled that once your money passes out of your PHYSICAL POSSESSION, and I mean PHYSICAL possession, it is no longer yours, and you have no legal claim or legal recourse to it when it is stolen. This includes BANK ACCOUNTS. Money in a bank is in the possession of the BANK, not you. Do you comprehend this? The entire system is utterly devoid of any integrity or genuine security and is breaking down catastophically before our very eyes. You HAVE to comprehend that your money sitting in an account is no longer legally yours. You have to force your brain to process and comprehend this, no matter how incomprehensible it may seem. IT IS OVER. This is Marxist hell. We have arrived.

This ruling and precedent will be used by every brokerage, every bank, every insurance company and every pension fund to deny you your money when the financial system finally collapses, be it on Monday, or be it two years from now.


You have GOT to GET OUT.

Sun, 08/26/2012 - 08:47 | 2738298 DOT
DOT's picture

You don't own that account, somebody else owns that account for you. 

Sun, 08/26/2012 - 10:24 | 2738420 HappyCamper
HappyCamper's picture

Sage warning, but let’s take this one step further. Soon you may not own it even if it’s in your physical possession. (Precious metals) Our Marxist overlords will outlaw it, confiscate it, and exchange it for near worthless fiat in its place. Plan accordingly as best you can.  Accumulate food, necessities, and live in a community were you don’t fear your neighbors. The storm is coming so hunker down.

Sat, 08/25/2012 - 21:00 | 2737847 yogibear
yogibear's picture

I am begining to believe that Bernanke wants the Market to stay high is due to all of the Pension Funds and Insurance Companys.

That's a big reason to pump the markets. He knows if the pension funds with their 8%/yr gain fails the whole house of cards comes tumbling down. Like Bernie Madoff, Benny Bernanke has to keep the game going. Bernie Madoff didn't have an infinite printing press, Bernanke does.

Sat, 08/25/2012 - 21:06 | 2737855 ekm
ekm's picture

Not necessarily.

The only way to "protect" the price of an asset is to BUY the asset, hence it is to OWN  the asset. There's no other way.

Fed is providing ZIRP to Primary Dealers with the order to OWN the assets, slowly ending up OWNING the whole market, hence no volume since asset are being removed from the market.

Theoretically and practially it ends until the whole market is owned by the Primary Dealers. We may not be that far off that point. I think the market was at that point right before the crash in 2008.

Sat, 08/25/2012 - 22:42 | 2737931 ekm
ekm's picture

Hence, for all those who BELIEVE that Liqudity increases the Volumes and Trade, you are wrong.

Liquidity way and above normal, decreases volumes and trade since excessive liquidity REMOVES the objects to be traded, hence lower volumes and less trade.

Sat, 08/25/2012 - 22:24 | 2737918 holdbuysell
holdbuysell's picture

Greenspan in 2005:

"We can guarantee cash benefits as far out and in any size you like...we can't guarantee their purchasing power."
Sat, 08/25/2012 - 22:47 | 2737937 ekm
ekm's picture


That video is gold. I thak you from the bottom of my heart. I rarely say this and I always am quite serious when I say.

Thx again.

Sun, 08/26/2012 - 02:46 | 2738089 Nehweh Gahnin
Nehweh Gahnin's picture

Here's your $500k pension bitch.  Now go buy your loaf of bread.

Sat, 08/25/2012 - 21:53 | 2737900 buzzsaw99
buzzsaw99's picture

Interesting theory. Let's see, the bernank's plan to help the pension funds and insurance companies is to force them to pay outrageously high prices for stocks and bonds. The super low coupon and dividends along with the fraudulent trading activities will naturally help them all make a great deal of money. [/sarc]

Sun, 08/26/2012 - 02:07 | 2738059 andrewp111
andrewp111's picture

Bernanke told us that the purpose of QE is "to maintain the value of collateral" against existing debt, not to make it easier to add to the asset pile.

Sun, 08/26/2012 - 09:22 | 2738263 buzzsaw99
buzzsaw99's picture

when the pension funds and insurance companies have finally cashed in all their (trillions of) chips at today's levels or higher I will believe that. as it is they are still net buyers. imo the bernank will be long gone before they start selling. Ben's job is to keep the ponzi going as long as possible.

Sun, 08/26/2012 - 20:25 | 2739660 LMAOLORI
LMAOLORI's picture


buzzsaw99 "Ben's job is to keep the ponzi going as long as possible"

Treasuries Doomsday Is Four Years Away For Vanguard


Vanguard Group Inc., whose $148.2 billion of Treasuries makes it the largest private owner ofU.S. debt, says the nation has until 2016 to contain its borrowings before bond investors revolt and drive up interest rates.

“In the absence of a long-term credible plan, we are somewhere around four years away on where the markets are going to say ‘enough is enough,’” said Robert Auwaerter, head of theValley Forge, Pennsylvania-based Vanguard’s fixed-income group since 2003 and who this year was inducted into the Fixed Income Analysts Society Inc.’s Hall of Fame.

Sun, 08/26/2012 - 18:00 | 2739164 LMAOLORI
LMAOLORI's picture



SEC Chairman Mary Schapiro this week abandoned a four-year effort to adopt tougher rules for money funds as three fellow commissioners said they wouldn’t support her proposal. The announcement marks a victory for the fund industry, which had lobbied against the plan.

‘National Disgrace’

Former SEC Chairman Arthur Levitt called the decision by three commissioners to block Schapiro’s proposal a “national disgrace” and said the Obama administration should pursue the issue through the Financial Stability Oversight Council, or FSOC, the panel Congress charged under Dodd-Frank with monitoring the country’s financial threats.

“This is an important time for the President to weigh in” and for the Fed and Treasury to make “changes in how the system works,” Levitt said in an interview on Bloomberg Television.

FSOC is headed by Timothy F. Geithner, the Secretary of the Treasury. Other voting members include Fed Chairman Ben S. Bernanke, Schapiro, and heads of the Federal Deposit Insurance Corp., the Commodity Futures Trading Commission and the Comptroller of the Currency.

in full

Money Funds Test Geithner, Bernanke As Schapiro Defeated


Wall Street Gets Its Way in Washington



Every once in a while the financial industry lives up to its critics’ worst expectations: that it operates against the interest of the investing public, in cahoots with captive regulators andWashington’s powerful elite.

This is exactly what happened Wednesday, when Securities and Exchange Commission Chairman Mary Schapiro had to cancel an Aug. 29 vote on sensible new rules to make money-market mutual funds safer. Although Schapiro had the support of Federal Reserve ChairmanBen S. Bernanke and leading conservative economists, she knew that three of the five commissioners would oppose her. This came after an intensive and often-misleading campaign by the $2.6 trillion money-fund industry to gloss over the inherent instability of the funds.

Among those swayed by the lobbying was Luis Aguilar, a Democratic commissioner (the other is Elisse Walter) who usually sides with Schapiro. Aguilar, a former general counsel of Invesco, one of the country’s major sponsors of money-market funds, met 11 times with industry lobbyists this year




Sat, 08/25/2012 - 20:25 | 2737810 orangegeek
orangegeek's picture

The volume for the SP500 is in the tank.


Bernake, like the rest, will run out of spend to keep this market up - and then it's going to get ugly.

Sun, 08/26/2012 - 18:02 | 2739187 LMAOLORI
Sat, 08/25/2012 - 20:35 | 2737815 blueridgeviews
blueridgeviews's picture

Who else has the money and power to rig this market?


No matter how bad the World economy gets the market goes up. Kinda like oil prices, no matter how much a glut there is the price keeps going up. Makes one go Hmmmmmm.

Sat, 08/25/2012 - 20:42 | 2737824 Atomizer
Atomizer's picture

The small family called 'Quants' is holding the rickety ship together..



Sat, 08/25/2012 - 20:55 | 2737839 ekm
Sun, 08/26/2012 - 00:01 | 2737987 FRBNYrCROOKS
FRBNYrCROOKS's picture


Sat, 08/25/2012 - 20:54 | 2737837 Nid
Nid's picture

Fingerprints hell....he's been teabagging the mkts.

Sun, 08/26/2012 - 07:03 | 2738210 GetZeeGold
GetZeeGold's picture



he's been teabagging


Penalty on the play....fifteen yards for being a racist.



Sat, 08/25/2012 - 21:06 | 2737856 yogibear
yogibear's picture

The key is to trigger the HFT bots. You find an flaw in the Goldman, Morgan programs and you can take the ponzi down. What happened to knight was just a small example.

Sat, 08/25/2012 - 21:18 | 2737868 adr
adr's picture

Someone just has to BATS Apple. The ponzi is done after that. Maybe Samsung can pay off a chinese hacker to do it.

Sat, 08/25/2012 - 22:14 | 2737910 holdbuysell
holdbuysell's picture

Isn't APPL nearly 20% of the NASDAQ index?

Good thing they won that lawsuit. /sarc

Sat, 08/25/2012 - 21:16 | 2737866 adr
adr's picture

I've got a substantial amount of cash in the bank.  I want to get it out, but I worry about my wife finding the stash. With my luck the house will burn down and my fire proof safe will fail.

I think I already decided I'm screwed nomatter what in any city.

When the time comes we're all moving to my uncle's 60 acre home in the woods. He's got a nat gas and oil well, artesian spring, corn, fruit trees, plenty of deer, stocked lake, breeds german shepherds, and has a pretty good selection of rifles and handguns.

The only problem is his place has probably already been marked by drones.

Sat, 08/25/2012 - 21:56 | 2737903 Atomizer
Atomizer's picture

It’s a good thing your uncle is involved. Without your uncle, the TAVISTOCK effect would overlook you. Thank your uncle for me. God bless you son!

Sun, 08/26/2012 - 02:48 | 2738090 Nehweh Gahnin
Nehweh Gahnin's picture

Did you bother to ask your uncle about this arrangement?

Sun, 08/26/2012 - 10:42 | 2738450 Dollar Bill Hiccup
Sun, 08/26/2012 - 11:17 | 2738493 boiltherich
boiltherich's picture

ADR, will you adopt me?  I can help dig the bunker.

Sat, 08/25/2012 - 21:27 | 2737876 unununium
unununium's picture

Even the "inflation breakeven" is not being measured correctly.  And no, I'm NOT referring to bogus BLS numbers.

US productivity is up 50% since 1992.  US workers have ceded that additional output to others.  Sure, some of it went to those who made the innovations that made the productivity possible.  But a lot of it went to the money changers, starting with the easing in the early 2000's to avoid the dreaded "deflation".


Sat, 08/25/2012 - 21:38 | 2737883 dolph9
dolph9's picture

U.S. workers, are, for the most part, sheep who are are kept on a never ending treadmill in order to sustain a bloated Empire whose role is to divert most income upwards to a elite financial and governing class and their favored corporations, and to sustain a world currency system that allows massive waste of fossil fuel resources, which has enabled the human population to climb to 7 billion people.

The same 7 billion people, of course, who have to be fed by the American agriculture conglomerates, ensuring the world turns into a giant plantation for them.

And, of course, if the human population stopped expanding, Americans would be force fed images of starving children, so they could promptly dedicate the remainder of their income to "aid,", thinking, by false morality, that this is the charitable thing to do, when in fact they never learned the lesson that if you teach a man to fish, you feed him for a lifetime.

If any American ever figured this out, they would promptly refuse to work and "productivity" would fall to zero.  The population of the planet would proceed to plummet, and Israel would in due time be run over by angry Arabs.


Sat, 08/25/2012 - 21:38 | 2737891 holdbuysell
holdbuysell's picture



Sat, 08/25/2012 - 22:28 | 2737922 max2205
max2205's picture

Fuck Ben

Sat, 08/25/2012 - 22:42 | 2737930 JR
JR's picture

The Republicans are on track to nominate a sellout in Tampa. Romney has sold his soul to any interest willing to pay for it, from Israel’s Netanyahu to Bernanke’s Wall Street.

The primary race ended up with two candidates left standing: one sellout, Romney; and one non-sellout, Ron Paul. The non-sellout, Ron Paul, has ignited a nationwide movement that will not be stopped. In America’s history there have been many flash-in-the-pan third party candidates and takeover campaigns, but none were invested in the truthful final solution: namely, the removal from America’s government of the money interests that have brought its fate to this precipice.

The Ron Paul movement is permanent, serious, and growing. Tampa only delays the inevitable.

Why No RP Speech at the RNC?

Posted by Lew Rockwell on August 25, 2012 04:42 PM

A typically awful NY Times article contains this interesting info:

Mr. Paul, in an interview, said convention planners had offered him an opportunity to speak under two conditions: that he deliver remarks vetted by the Romney campaign, and that he give a full-fledged endorsement of Mr. Romney. He declined.

“It wouldn’t be my speech,” Mr. Paul said. “That would undo everything I’ve done in the last 30 years. I don’t fully endorse him for president.”

(Thanks to Bob Wenzel)

Sat, 08/25/2012 - 23:17 | 2737954 El Hosel
El Hosel's picture

Is the stink all over the shit?

Sat, 08/25/2012 - 22:44 | 2737933 Richard Chesler
Richard Chesler's picture

No shit Sherlock!


Sun, 08/26/2012 - 02:42 | 2738086 slewie the pi-rat
slewie the pi-rat's picture

case closed, clouseau!

how can a frenchman argue with this :> the breakeven inflation rate on 10yr TIPS has tracked the S&P 500 very closely this year.

book em, BiCheZ!

here come da judge:  the defendant gets off on a technicality:  central bankers and politicians, not economic fundamentals and inflation expectations, currently drive the nominal rate and equity markets.

true, but the crime, it is none.  instead of cashiering the asswipes OUR (bush) goobermint decided to bail-out and they (kenyans) even passed a FED-bankstering law over two years ago to govern the "action" of the political decision to just say fuk it and start pretending everything is fine

which it is by the way (of course)

we're sorry that the "economy" isn't working quite right yet but the crimes were enormous and they must be paid for.  by y.o.u.  that was the decision and now it is the law

maybe another 5 years if you're lucky!  we'll see when it comes up again in another year.

case dismissed!

Sat, 08/25/2012 - 22:57 | 2737944 gjp
gjp's picture

Of course his fingerprints are all over equities, and all other financial assets too.  Relentless central bank inflationism (in the name of fighting phantom deflation) is the only thing keeping markets afloat, even as economies die.

Doug Noland this week likens spiraling inflationism and the ludicrous, patently false, justifications therof to the acceleration in specific targeting of civilians in aerial bombardments in WWII.  A good comparison, and this is clearly far past the point of no return, but the Allied forces had more justification for their acts (fighting morally bankrupt Nazis and Japanese) than do today's central bankers / plutocrats who are only venally trying to hold their parisitical schemes together and skim even more as they do.  So ugly.

As Noland notes, the critics have gone quiet as the propagandists trumpet the great achievements of comrade Ben heroically lifting asset prices.  What is there to say now that we have so obviously decided on the path of denial with our heads in the sand and our hands clutching our iPhones?  Seems like this doesn't have much longer to go now, really.  August broke the pattern of 2012 being like 2011, going up instead of down.  I woulnd't bet on a smooth fall like 2010 or 2011 with all the risks and everyone on the same side of the boat. 

Sat, 08/25/2012 - 23:35 | 2737964 q99x2
q99x2's picture

central bankers and politicians, not economic fundamentals and inflation expectations, currently drive the nominal rate and equity markets.

Then the solution to a better economy is to get rid of central bankers and politicians.

Sun, 08/26/2012 - 00:15 | 2737995 intric8
intric8's picture

Backing out these clowns (Bernanke, CB, etc) from the financial system is the only real way to know how markets should naturally behave. Money goes to correct and deserving people, ala financial darwinism, whereas in the current set-up, it gets streamlined into the pockets of the friends of Bernanke, the CB, and the politicians. Till then, the joke will continue to be on us.

Sun, 08/26/2012 - 01:53 | 2738052 FRBNYrCROOKS
FRBNYrCROOKS's picture

Save cash so you can buy bonds when zirp fails and T-bills start paying 10% and 30 year bonds pay 30%. I will be able to recover currency devaluation on the backside, if I have cash available to buy those bonds. If your cash is tied up in juck, illiquid garbage you will miss the boat. It happened in the 80's and some are still geting paid.

The mastress is looking pretty sweet at this point.

Sun, 08/26/2012 - 03:22 | 2738102 css1971
css1971's picture

It's going to take a decade for bonds to get to those levels and America is going to look like a total basket case when it gets there. See Greece for an example.

Sun, 08/26/2012 - 13:39 | 2738492 FRBNYrCROOKS
FRBNYrCROOKS's picture

I think you have, way, to much faith in the FRBNY. If the Republicans win it will come a lot quick 'cause they will drop the Bernank' like a box of rocks, cut spending, sending seniors into a world of sheer terror. It will come either way. There is nowhere else to put your money that is liquid and won't devalue. The "80s" will be back. If you are tied up in JUNK. You'll miss the boat. 

Sun, 08/26/2012 - 11:56 | 2738559 GraveyardSpiral
GraveyardSpiral's picture

THAT, sir, along with some of the physical shiny stuff, is the only realistic play we (the little ones) have left!

Sun, 08/26/2012 - 18:26 | 2739251 LMAOLORI
LMAOLORI's picture

FRBNYrCROOKS "Save cash so you can buy bonds when zirp fails and T-bills start paying 10% and 30 year bonds pay 30%"

Dating myself but I remember those sweet rates bad environment for loans but if you had some cash you made big $$$$$ I agree the mattress looks mighty good the market's will soon force it.  People seem to forget the government has been partially funding operations via Treasury securities for decades this Ponzi can go on a lot longer then many believe.  Ben will soon have to yield on interest rates because if he doesn't that is when the real collapse will come. The powers that be don't want a collapse they want their pound of flesh.

Treasuries Doomsday Is Four Years Away For Vanguard


Vanguard Group Inc., whose $148.2 billion of Treasuries makes it the largest private owner ofU.S. debt, says the nation has until 2016 to contain its borrowings before bond investors revolt and drive up interest rates.

“In the absence of a long-term credible plan, we are somewhere around four years away on where the markets are going to say ‘enough is enough,’” said Robert Auwaerter, head of theValley Forge, Pennsylvania-based Vanguard’s fixed-income group since 2003 and who this year was inducted into the Fixed Income Analysts Society Inc.’s Hall of Fame.





Sun, 08/26/2012 - 03:40 | 2738109 ebworthen
ebworthen's picture

Someone please send Ben a Cotton Candy machine and a box of fudge?

Jamie Dimon?

Sun, 08/26/2012 - 07:31 | 2738231 KarlGDenninger
KarlGDenninger's picture

iam the prophet of jehovah.and.biff. come with me my bfothers for time is short

Sun, 08/26/2012 - 08:30 | 2738280 KarlGDenninger
KarlGDenninger's picture

when is your next sermon father john

Sun, 08/26/2012 - 08:33 | 2738281 KarlGDenninger
KarlGDenninger's picture

tuesday my brother. release your feelings. find strength in god. for biff the servant of jehovah has given me these words

Sun, 08/26/2012 - 11:07 | 2738481 boiltherich
boiltherich's picture

Benny B does have fingerprints on the stock markets both here and abroad I think, on top of Greenspan's before him, who as all Fed chairsatans before him knew about the clause "unusual and exigent circumstances." The Fed knew about it during the stock market crash in 1929 and the ensuing depression and did not use those powers broadly or unethically, but Greenspan did following 9/11 and they have fairly openly manipulated markets ever since. Though, I believe it started quietly long before that, I think they started under Reagan with the appointment of Greenspan in 1987.

This is the key section (my bold) from the Fed charter that essentially allows them to break any of our laws regarding commerce and money:

3. Discounts for Individuals, Partnerships, and Corporations

  1. In unusual and exigent circumstances, the Board of Governors of the Federal Reserve System, by the affirmative vote of not less than five members, may authorize any Federal reserve bank, during such periods as the said board may determine, at rates established in accordance with the provisions of section 14, subdivision (d), of this Act, to discount for any participant in any program or facility with broad-based eligibility, notes, drafts, and bills of exchange when such notes, drafts, and bills of exchange are indorsed or otherwise secured to the satisfaction of the Federal Reserve bank: Provided, That before discounting any such note, draft, or bill of exchange, the Federal reserve bank shall obtain evidence that such participant in any program or facility with broad-based eligibility is unable to secure adequate credit accommodations from other banking institutions. All such discounts for any participant in any program or facility with broad-based eligibility shall be subject to such limitations, restrictions, and regulations as the Board of Governors of the Federal Reserve System may prescribe.


But, the next paragraph defines what is to follow the actions taken to remedy the "exigent circumstances" once the actual emergency is dealt with....



  1. As soon as is practicable after the date of enactment of this subparagraph, the Board shall establish, by regulation, in consultation with the Secretary of the Treasury, the policies and procedures governing emergency lending under this paragraph. Such policies and procedures shall be designed to ensure that any emergency lending program or facility is for the purpose of providing liquidity to the financial system, and not to aid a failing financial company, and that the security for emergency loans is sufficient to protect taxpayers from losses and that any such program is terminated in a timely and orderly fashion. The policies and procedures established by the Board shall require that a Federal reserve bank assign, consistent with sound risk management practices and to ensure protection for the taxpayer, a lendable value to all collateral for a loan executed by a Federal reserve bank under this paragraph in determining whether the loan is secured satisfactorily for purposes of this paragraph.
  2. The Board shall establish procedures to prohibit borrowing from programs and facilities by borrowers that are insolvent. Such procedures may include a certification from the chief executive officer (or other authorized officer) of the borrower, at the time the borrower initially borrows under the program or facility (with a duty by the borrower to update the certification if the information in the certification materially changes), that the borrower is not insolvent. A borrower shall be considered insolvent for purposes of this subparagraph, if the borrower is in bankruptcy, resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any other Federal or State insolvency proceeding.
  3. A program or facility that is structured to remove assets from the balance sheet of a single and specific company, or that is established for the purpose of assisting a single and specific company avoid bankruptcy, resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any other Federal or State insolvency proceeding, shall not be considered a program or facility with broad-based eligibility.
  4. The Board may not establish any program or facility under this paragraph without the prior approval of the Secretary of the Treasury.


It goes on to define what is required of the Fed in the event they ever do create a lending program or facility:

  1. The Board shall provide to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives—
  2. not later than 7 days after the Board authorizes any loan or other financial assistance under this paragraph, a report that includes—
    1. the justification for the exercise of authority to provide such assistance;
    2. the identity of the recipients of such assistance;
    3. the date and amount of the assistance, and form in which the assistance was provided; and
    4. the material terms of the assistance, including—
      • aa. duration;
      • bb. collateral pledged and the value thereof;
      • cc. all interest, fees, and other revenue or items of value to be received in exchange for the assistance;
      • dd. any requirements imposed on the recipient with respect to employee compensation, distribution of dividends, or any other corporate decision in exchange for the assistance; and
      • ee. the expected costs to the taxpayers of such assistance; and
  3. once every 30 days, with respect to any outstanding loan or other financial assistance under this paragraph, written updates on—
    1. the value of collateral;
    2. the amount of interest, fees, and other revenue or items of value received in exchange for the assistance; and
    3. the expected or final cost to the taxpayers of such assistance.
  4. The information required to be submitted to Congress under subparagraph (C) related to—
  5. the identity of the participants in an emergency lending program or facility commenced under this paragraph;
  6. the amounts borrowed by each participant in any such program or facility;
  7. identifying details concerning the assets or collateral held by, under, or in connection with such a program or facility, shall be kept confidential, upon the written request of the Chairman of the Board, in which case such information shall be made available only to the Chairpersons or Ranking Members of the Committees described in subparagraph (C).
  8. If an entity to which a Federal reserve bank has provided a loan under this paragraph becomes a covered financial company, as defined in section 201 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, at any time while such loan is outstanding, and the Federal reserve bank incurs a realized net loss on the loan, then the Federal reserve bank shall have a claim equal to the amount of the net realized loss against the covered entity, with the same priority as an obligation to the Secretary of the Treasury under section 210(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

[12 USC 343. As added by act of July 21, 1932 (47 Stat. 715); and amended by acts of Aug. 23, 1935 (49 Stat. 714); Dec. 19, 1991 (105 Stat. 2386); and July 21, 2010 (124 Stat. 2113). As enacted by Public Law 111-203 (124. Stat. 2115), “any reference in any provision of Federal law to the third undesignated paragraph of section 13 of the Federal Reserve Act [FRA] (12 USC 343) shall be deemed to be a reference to section 13(3) of the FRA.”]


And here is the broad definition of exigent circumstances in US law:


Emergency conditions. 'Those circumstances that would cause a reasonable person to believe that entry (or other relevant prompt action) was necessary to prevent physical harm to the officers or other persons, the destruction of relevant evidence, the escape of a suspect, or some other consequence improperly frustrating legitimate law enforcement efforts.' United States v. McConney, 728 F.2d 1195, 1199 (9th Cir.), cert. denied, 469 U.S. 824 (1984).



So, I would be interested to read the reports to congress which should be public record of who got what when at what rate using what collateral and when it will be repaid. I would also like a statement made under oath what the exigent circumstances SPECIFICALLY were that prompted the creation and continuation of facilities and lending, and when the circumstances were if ever deemed to have been dealt with.

I will not be holding my breath till we see those, if we ever do I will be holding my nose. And, the lending and facilities we will see are so huge and so illegal in spirit of the law that there simply will be nothing that can be done, the scope will be beyond any legal means to repair the damage to the taxpayers.

There are many who dislike the Fed but do NOT want it's charter revoked because they trust congress even less than they trust private banking with the value of the dollar and how it is managed. And you would be surprised how many of those are on the right wing of the political spectrum, I say they are both in bed together and the damages done can't be undone, it is too late, the fabric of the USA and our society has already unraveled. It would have been one thing to repair the serious, ruinous damage done to the USA by Reagan and the BushCo terms in office, but now it is just too late, it would require a total dismantling of all our checks and balances and then a reordering of all our institutions and laws, a total redefinition of our justice systems and even a public reeducation of the very definition of "American" and what it means to be one. I say that cannot be done without a civil war that makes the Southern sessession look like a bar fight.

Sun, 08/26/2012 - 13:37 | 2738750 FRBNYrCROOKS
FRBNYrCROOKS's picture

You could always file a lawsuit against the NYFRB in the 9th Circuit Southern District NY to obtain the information you seek or damages if you can show Fed action broke the Staute and harmed you financially. If you have the time and the ballz. It seems you know the law.

Sun, 08/26/2012 - 15:31 | 2738934 boiltherich
boiltherich's picture

My training is in finance and economics not law, aside from the required business law courses in college all I know about the law is that it is meaningless unless applied equally by a blind justice system, thus we have really no law at all, just cliques and goosestepping fascists.  I know that "justice" is for sale and you have to be pretty well conected/wealthy to buy it.  I know I am a slave and that freedom is relative, like everything else there is no such thing as absolute in the world of human experience, other than birth and death.  I have experienced what any reasonable person would call a travesty of justice on a number of occasions, enough that I want nothing to do with the current US "justice system."

Sun, 08/26/2012 - 11:35 | 2738526 batterycharged
batterycharged's picture

It seemed really easy to predict the stock market prior to 2007, since then the market barely reflects reality.

You could have a nuke go off in Europe and the Dow index would soar. TOTAL DISCONNECT.

It makes you wonder if the fed is buying up equities to keep the market afloat. After all, most people look to the stock market as a way of evaluating the health of the economy. So what better way to serve the political and banking masters than control the stock market!

15% real unemployment, but the stock market surges....everything must be okay, right?

Sun, 08/26/2012 - 17:30 | 2739128 ekm
ekm's picture

When it's over, it's over. And all of it, thanks to Ron Paul. Bernanke is done.

Sun, 08/26/2012 - 22:56 | 2740018 ekm
ekm's picture


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