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Are The "Many FOMC Members" Looking At The Same Economy?
The FOMC minutes were full of doom and gloom: if things get worse then we'll save the day; the economy is deteriorating; growth is not great etc. All of which for one glorious moment raised speculation that the 'many' may get their way on the committee sooner than some think. However, a funny thing happened since their last meeting - US Economic Data has improved dramatically relative to expectations. As the chart below shows, the rise in Citi's economic surprise index in the last four weeks is nearly record-breaking since the crisis began. Perhaps, the 'many' could explain which economy they are looking at and just what their economic projections look like now?
Here is the point: while
"Many member expressed support for extending the committee's forward guidance"
they
"agreed to defer a decision on this matter until the September meeting in order to consider such an adjustment in the context of updates to participants’ individual economic projections and the Committee’s further consideration"
Well, the individual economic projections are all green across the board members.
Chart: Bloomberg
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cant lose money in this 'market' either way. $winning!
oh wait, where was this mentality before.... right before the housing crash... no relations to our bond bubble.
The reasons the FOMC provides for their actions and the real reason for those actions have nothing to do with each other. First, they decide what they need to do, then they come up with a reason that sounds good that they tell everyone else as to why they're doing what they do.
If they were being honest, they'd just say, "the banks and government are going broke, so to keep them from going belly up, we're going to have to take resources from current dollar holders and redistribute those resources to the banks and government."
Agree, they do whatever they need to do in order to transfer toxic assets from the banks balance sheets to the holders of dollars and dollar equivalents (bonds), and inflate away the Fed.gov debt.
Green shoots kill the QE and the rally.
Only b-cups can say green shoots
The Neo-Great Moderation!
Can't have a recession going into a national election. Not when Romney/Paul are talking about auditing the Fed.
'They' fuckin know something...
we don't.
Some very special evil scum bags are holding the blue print to this whole damn manipulated sad puzzling life on this planet.
And! it didnt have to be this way.
However, we (the masses) are part to blame...we let it happen.
The economic surprises to the upside are courtesy of BLS. Any questions?
I wish they would simply wish us all a nice day and shut up. The markets will eventually go back to normal. But, if they keep on jawboning and god forbid start messing around, then, god help us all.
http://www.youtube.com/watch?v=XZwVCjhq3YI
The Fed just signalled that they will turn on the liquidity leading to the S&P 500 and gold to rise and T10year yield to fall.
http://confoundedinterest.wordpress.com/2012/08/22/feds-fomc-minutes-no-surprises-sp-500-and-gold-rises-10-yr-treasury-yield-falls/
Minutes are 3 weeks old? So what. Why spoil the rally:)
They are going to do it and push oil well into triple digits to "help" the economy. They're almost there anyway. Thanks so much.
The "doom and gloom" is simply them revising their previous outlooks. From 2008.
Rumors rumor rumors. I was totally wrong about rumors. I thought by now the market would call bullshit. Now I think rumors could keep this game going for a long long time. Fow months of bad data=increase in rumors followed by surprise upward data=less need for qe. Simple equation.
I'm with you Fonz.
Momentum and inertia. Still too easy and lucrative to go with the flow, lots more pain needed at all levels to break the equilibria. The key is perception management, and it's all the Fed, BLS, Dept of Labor, NAR, White House, et al care about.
As long as the economy continues to limp along and not pose any threat to the status quo; there will be no QE. If, however, some event (black swan or not) should occur then they will print to infinity.
TLT is interesting. Looks like everyone is pilin into treasuries despite this supposed risk off rumor release. I guess everyone wants in before this supposed qe happens.
fun video
https://www.youtube.com/watch?v=kTj2NYQlHaE&feature=youtube_gdata_player
In evaluating economic conditions, I'd choose to look at more than just the CITI economic surprise index.
I say macro data points to a negative economy for the next few years at least.
If the Fed. does anything, it would just reinforce the complete bullshit lies about , Jobs/Housing/GDP/CPI/PPI #'s they have been feeding us!
the fed will be relevant again when inflation expectations are running at 3.8% - 4%
Here is my theory on today. The algo's had no one left to chase down. Slaughterer has said he went short aapl, crude and now silver. Three trades that made an incredible amount of sense. The algo's went after him.
As long as there is QE and turkey sandwich hope the momentum trade is on. My thoughts are that we are going to wake up one day wondering just what the heck happened to the market, because by the time one should be short the whole thing will have vaporized and nobody will have made any money. Until then Ben is not going to let this market fall, he has rolled the dice and bet his whole reputation on the "wealth effect".
Doc let me ask you this...do you think that because it seems realistic or because it would actually be preferrable to watch the dust cloud and start rebuilding? I think the more realistic scenario is every panicked selloff gets met pretty quickly with someone quickly putting a floor under it. Fudged data etc. just keep us mired in this mess for a long long time.
Your scenerio is what they are doing now. This market wants to sell down but the fed won't let it. When the selling does come in mass there won't be any shorts because the fed has chased them all away, and don't forget the shorts add liquidity because they buy at lower levels to take profits. The shorts,believe it or not, help to provide that temporary floor. The feds may move this market up so high that there is zero liqudity , this thing flash crashes a couple thousand points in ablink of an eye. I've been doing this a long time, and I've seen some pretty illiquid makets,but nothing like this.
When the selling comes where does that money flow? With zirp/nirp where is that money going? Is that your scenario that drives the ten yr sub 1%? I can see that. But to me that is just more of the same. When there is panic selling and yields are rising that will have my undivided attention.
That's my belief the next wave of selling takes the ten year to sub 1 %. To be clear I think slaughterer has on some good trades. I just don't like to get squashed with the shifting momentum. Look at what Apple gained back today.
So money still flows to the treasury and usd....it is very plausable. But it's just more of the same.
Slaughterer has got some cajones. I went completely flat, a couple of hours before. We will get a nice retrace in Asia, especially if the China (PMI) numbers are crappy.
Thanks Fonz,
I realize over the last few days that it is counter to my interests to post my actual trades on ZH as the ZH website is no doubt algo scanned.
Nevertheless:
AAPL short was real, we made an incredible amount of money
Crude short was real, we are losing a little money.
Silver short was real, we are shorting silver above 29.65 on this pop.
We are also short GES, and short HPQ today int AH earnings-- if the algos need to know.
Are we the only shorts left? We are not EUR/USD short, we are not Russell 2000 short, but the laterr makes a lot of "sense."
I think you have brass balls for psoting those trades. I also think that post labor day it's a whole other story. Better to be early.
TLT blows my mind. Treasuries are rallying which only can mean that someone thinks they are frontrunning the bernak. That tells me that despite 100 crude etc etc etc. they think the fed comes in. Or consequently people are piling in because once they realization sets in that nothing is coming we plunge. Which is it? Or does it even matter....
TLT is technically oversold. TLT will form a double top most likely in September, so all aboard. We are heavily playing HYG and JNK. In fact, HYG is our biggest leveraged position--flipping from long to short intraday sometimes more than once.
From their report:
With crude oil prices expected to decline a bit from their current levels, the boost to retail food prices from the current drought in the Midwest anticipated to be only temporary and relatively small, longer-run inflation expectations remaining stable, and substantial resource slack persisting over the forecast period, the staff con-tinued to project that inflation would be subdued through 2014.
Yes, oil has certainly tanked from $77 when you guys announced twist 2 to $97 now.
The FED will not run overlapping TWIST 2 and QE3 programs. I am on the Goldman page: no QE until 2013.
I, too, originally thought twist was a way of keeping them out of the politics through the election, then they would do QE in 2013. However, I'm starting to think that the FRB is overly dominated by money printers and there aren't enough sane ones left. I think they really believe that there will be no inflation in the near term no matter how much they print (which may be true) and that they can always pull the stimulus out fast if inflation sets in (Ben said as much on 60 minutes, and this may not be true). Thus, they sit around and say, "Well, what harm can it do to print a ton? We don't want to be accused of doing too little, so better to overshoot and pull it out if need be. We have a mandate to get unemployment down and we're not doing it fast enough."
Full on admittance that stimulus has failed and the economy is in the crapper.
And without more.... further into the rabbit hole we go.
Apple added an HP to it's market cap in less than a week. Can it add a Dell in the next four days?
gimme a break. The iPhone sucks donkey ass.
Two people (up to now) didn't came along your last sentence - or they still believe that there is more than just thin air injected into AAPL.
Gold is at the 200DMA. That's the last inflection point. It's already broke out above 3-month old resistance levels.
The economic data is b.s. It doesn't matter. What matters to the Federal Reserve is manipulating the data and stock market to make money for member banks.
Don't you understand their irrelevancy?
Fed membership of even leadership is simply an academic position.
When it comes to decision they are simply order takers.
This is so blatantly obvious, why is it so difficult to accept?
Orders from whom exactly? These are the fucktards running the show, are they not?
printprintprintprintprintprintprintprintprint
No man, no.
Congress and WH are the show runners.
In that case, Ron Paul for Prez!!! Otherwise, this house of cards ends in a river of tears.
The TBAC and the private member banks.
or check cashers??
Some do believe they are doing what needs to be done. That's the nature of academe. Give a man a doctorate degree, he thinks he's god.
Unconventional time demand non standard measures. OK, any times demand non standard measures. Hey, it's only money. :)
Zoidberg/FMOC: "Economy is good, so you should feel good!"
Alternate take: "Economy is bad, so you should feel bad!"
Why not Zoidberg?
Fuck the FED, bunch of pigs.
Looks like a nice run-up into the Jackson Hole meeting for the metals. I still expect jawboning with no actual action from the Hole, but I'll be long so I don't care. As long as Bernanke brings his A-game, the run-up should continue into the Sept meeting, but then the Fed finds itself in quite the web. I can't imagine how they can possibly do QE3 with oil in the $90s, so we'll see when it gets closer, but that's a tough call politically. I'll probably go in flat, looking to get short on the disappointment play. By then, I'm looking for silver in the $32's, gold pushing $1700, Euro pushing 1.28 or even 1.30.
I would personally give Bernanke a reach-around to just say no in Sept.
Reality Check: The FED has capital of about 50 billion dollars, portfolio of about 3 trillion dollars. So it´s leveraged 60-1 against its own capital. Falling prices, rising yields it effectively gets wiped out fairly quickly.
I think they are looking at their balance sheet and saying hey wait a second as well. 60-1. Are you sure? I thought it was half that which is still outrageous.
I doubt we get a massive run-up. Maybe max 144.2 on SPY. You have to ask yourself the Janjuah question at some point. Am I willing to chase another 3% upside with maximum risk, or do I want to invest in a 15-25% plunge by 2013? THAT is the question everybody here should be asking--to the extent they are still running portfolios and not just buying metals.
Anyone on here that thinks Obama won't put the kabash on oil speculators if this keeps up is insane.
Price control, sure. But I don't think they want to project an image of a presidency that is that desperate and weak that it needs to enact price controls.
Blaming speculators won't work that well: by now, everyone has seen the video of Nixon blaming dollar speculators when he closed the gold window
Markets up. Move along now.
The price of U.S. govt. debt is presently about 4% below a recent 200-year high. It´s very likely to hit new highs in the coming months and years. It has been a very long and very consistent bull run. Just look at the trading channel for the last 25 years or so. These are some real brain boxes.
they need to manage the situation/ expectation until tje election with their traditional BS
The obvious move for fed is to say no change until
2015 so banks buying the 3ys the fed is selling
know they can fund it with 0 rate fed funds then
they have the curve locked up again
So is the sky falling or not?