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On Bernanke's Columbus-Like Voyage To The End Of The Monetary Policy World

Tyler Durden's picture





 

Whether the optics of a jobs-related target for the Fed's QEternity are election-based public relations, from-the-heart sentiment of an ivory tower academic neck-deep in the reality of his failed ethos, or well-intentioned more-of-the-same Krugmanite 'we need a bigger boat' print til-we-stink policy; it is relatively clear that the Fed has changed course. The longstanding problem at the Fed has been that while each policymaker more or less agreed that guiding policy by a rule made sense, they could not collectively agree on the rule. Morgan Stanley's Vince Reinhart notes perfectly that at its September meeting, the Fed effectively evaded the issue by setting QE off in a general direction, much in the same way Columbus pointed his three ships West and expected eventually to land in India. The history books admire the audacity of a man with a vision. Columbus sailed in the direction toward the known world’s end. Of course, he also sailed further than expected and landed on a completely different continent than planned. If the Fed has not acted consistently over the past few meetings, how will market participants infer future action?

 

Morgan Stanley: Charting the Course

Most analyses of unconventional central bank action agree that policy works best if it links the instrument reliably to economic data or forecasts. The logic of such conditional policy rules (also known as open-ended programs) was worked out in Bernanke and Reinhart in 2004 and has been a running theme in the work of Michael Woodford, who summarized this view at Jackson Hole.

The fixed point on the Fed’s compass is jobs. As its statement related,

“If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.”

Market participants will be able to price expected future Fed actions only to the extent that the Fed acts consistently. The same two reasons why we were wrong about the Fed’s willingness to launch QE3 worry us about how the Fed plots its course.

  1. We thought that the Fed thought it acted appropriately in June. Policymakers had the opportunity to reset the monetary policy bar in June. They chose to extend Operation Twist until year-end. This seemed to us to show that the Fed was resigned to poor economic performance because that policy initiative neither pulled the unemployment rate below its long-term norm nor pushed inflation up to its goal. To accept this outcome revealed doubts either about the efficacy of or its ability to use its policy instruments. Between the June and September meetings, data disappointed. The Fed’s own Survey of Economic Projections (SEP) puts the central tendency of GDP growth for 2012 three-tenths percentage point lower over those months. But the complete picture is more mixed. The traditional inputs in monetary policy rules – the unemployment and inflation rates – are, respectively, unchanged and three-tenths higher in the SEP. Meanwhile, financial conditions eased considerably, more on the back of the assurances of ECB President Draghi than those of Chairman Bernanke. With the economy no worse and financial conditions easier than in June, the Fed nonetheless provided more policy accommodation in September. Take your pick, either the old stance of policy or the new one is wrong.
  2. We thought that they had an intelligent plan for December. In its decision to extend Operation Twist to year-end, the Fed created a perfectly unobjectionable opportunity to revisit the size and composition of its balance sheet at its December meeting. Part of the Fed’s current legitimate concerns about the economic expansion traces to the ongoing strains spawned by the sovereign and banking crises in Europe and the elevated risk of a sudden stop in the US federal budget on New Year’s day. At their December meeting, Fed officials will know a lot more about both as the ECB translates words into action and the US election puts the fiscal cliff in stark relief.

Even more important, delaying a decision on the balance sheet would have given Fed officials a bit more time to hammer out a compromise on coherent conditioning language to tie action to the economic outlook.

Conclusion

The history books admire the audacity of a man with a vision. Columbus sailed in the direction toward the known world’s end. Of course, he also sailed further than expected and landed on a completely different continent than planned.

If the Fed has not acted consistently over the past few meetings, how will market participants infer future action? Has it adapted a hierarchal mandate in which it will work first to reduce unemployment until it reaches some barrier of distaste on inflation? Or was the phrase “in the context of price stability” snuck in to trump policy activism?

 

We shall trust them by their works, which will be learned in the fullness of time.

 


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Sat, 09/15/2012 - 17:02 | Link to Comment LULZBank
LULZBank's picture

Stop making logic out of plain money printing Bitchezz!!!

Sat, 09/15/2012 - 17:05 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I genuinely don't understand the dramatic, hyperbolic & now nearly unanimous over-statement & misinterpretation of Bernanke's announcement on Thursday.

Wthout repeating every word explaining why, here's a link to my post made in the thread below on this subject matter:

---->2799159

Sat, 09/15/2012 - 17:07 | Link to Comment Precious
Precious's picture

Bernanke just put the nail in the coffin of the land of opportunity.

Sat, 09/15/2012 - 17:16 | Link to Comment bilejones
bilejones's picture

Really?

 

I thought Brazil would be amongst the least effected.

Sat, 09/15/2012 - 18:19 | Link to Comment Coldfire
Coldfire's picture

Brazil is the land of opportunity. And always will be.

Sat, 09/15/2012 - 18:28 | Link to Comment AldousHuxley
AldousHuxley's picture

then why did that jewish facebook kid immigrate to US go to harvard, make billions off of bs IPO, then "move" to singapore?

 

 

Sat, 09/15/2012 - 19:31 | Link to Comment NF
NF's picture

Because he's a Jew?

Sun, 09/16/2012 - 09:19 | Link to Comment Non Passaran
Non Passaran's picture

AlthoughStoopid!

Sat, 09/15/2012 - 20:32 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Actually the real quote is much better:

"Brazil is the country of the future...and always will be"

Sat, 09/15/2012 - 18:22 | Link to Comment Michael
Michael's picture

Please do not respond to this comment, it's for information purposes only.

Let's not forget what set off the Muslim countries revolutions.

Reason #1; Police and Government Tyranny and Torture.

Reason #2; US Federal Reserve Corporation exporting food inflation with their monetary policy all over the planet.

Tunisia

Suicide that Sparked a Revolution

http://www.youtube.com/watch?v=47d6fyaOjRM

Egypt

Justice for Khaled Said, End torture in Egypt

http://www.youtube.com/watch?v=VQfgSg1Vvlo&feature=related

Weekend Viewing;

PROPAGANDA | FULL ENGLISH VERSION (2012)

http://www.youtube.com/watch?v=6NMr2VrhmFI&oref=http%3A%2F%2Fwww.google.com%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3Dpropaganda%2520north%2520korea%2520documentary%26source%3Dweb%26cd%3D2%26ved%3D0CCYQFjAB%26url%3Dhttp%253A%252F%252Fwww.youtube.com%252Fwatch%253Fv%253D6NMr2VrhmFI%26ei%3Dc1BNUObRK4-68wTfn4H4CA%26usg%3DAFQjCNEO9kvD9fOiiYR7gbzTHN_9dVVn1w

Complete and Total Worldwide Economic Collapse 2012

http://www.youtube.com/watch?v=WI8dfFN7H1w

Matchbox Twenty - Back 2 Good (Video)

http://www.youtube.com/watch?v=Rg93Lac49-Y

Dutch Bilderberg member openly says that everyone who attends, agress to uphold "the Bilderberg Code".

http://www.youtube.com/watch?v=tI_FSBElww8

On another note, I don't think the CIA, Mossad, and MI5 will ever again be able to pull off the shit they did to the Muslim world, the American people, and the rest of the planet ever again.

See what they did weekend viewing assignment;

Primmer video I made to this series;

The Precautionary Principle Who Benefits?

http://www.youtube.com/watch?v=4GIkWuuq45I

The Power of Nightmares, (Part 1/3), "Baby it's Cold Outside"
http://www.youtube.com/watch?v=YwrQZwMI6No

The Power of Nightmares Part 2: The Phantom Victory -- by Adam Curtis
http://www.youtube.com/watch?v=-05CAnMONHM

The Power of Nightmares Part 3: The Shadows in the Cave
http://www.youtube.com/watch?v=1o4PrJkS7nI

Sat, 09/15/2012 - 19:22 | Link to Comment El Oregonian
El Oregonian's picture

Cristobal Colon is my ancestor, and Ben Bernanke, I can assure you, is no Christopher Columbus...

Sun, 09/16/2012 - 11:06 | Link to Comment falak pema
falak pema's picture

he never said anything about MArs! 

Sat, 09/15/2012 - 17:54 | Link to Comment SafelyGraze
SafelyGraze's picture

link to fed mbs program:

http://www.newyorkfed.org/markets/AMBS/PurchasesArchive/ambs_purchases.html

they state $6.5B per week in net purchases

it's hard to tell what's taking place. the fed buys an unnamed number of 30 year 3.5 coupon shares for 7 billion and sells back an unnamed number of 30 year 3.5 coupon shares for 1 billion a week later.

were they the same shares? did the fed merely launder them? buy 'em high, sell 'em back low. if so, what a ridiculous charade.

it would have been simpler just to issue the 6 billion difference by crediting the account of FredFan.

 

Sat, 09/15/2012 - 18:17 | Link to Comment SafelyGraze
SafelyGraze's picture

truthInSunshine says

I genuinely don't understand the dramatic, hyperbolic & now nearly unanimous over-statement & misinterpretation of Bernanke's announcement on Thursday. ..

thanks for the link to the previous post. good point about existing fed printing for MBS at $25B/mo.

viewed from that perspective, the Nank was saying
"hey, I've been shelling out 25B/month to Vanguard and BlackRock (via FedFan), but jobs are STILL DOWN.
so listen up -- now I'm giving 40B/month to Vanguard and BlackRock, and I won't stop until there are MORE JOBS.
actually, even then I'm not going to stop.
are we clear? jobs or no jobs, I'm giving an additional 15B/month to Vanguard and BlackRock, because they own shares of FredFan which is obligated to pay for tranches of bundled mortgages on abandoned houses.
there is absolutely no connection between giving money to Vanguard/BlackRock (via FredFan) and job creation.
there is no connection between this continual gift and the number of people living in houses.
there is no connection between this gift and house prices.
it's just a gift.
thought everyone would like to know. 
transparency, etc.
meanwhile, blah blah wealth effect and blah blah price inflation and blah blah velocity of money and blah blah employment."

Sat, 09/15/2012 - 18:28 | Link to Comment SafelyGraze
SafelyGraze's picture

PS - are you listening, vanguard? I said 15B/mo!

http://www.opensecrets.org/pacs/lookup2.php?strID=C00410266

Sat, 09/15/2012 - 20:57 | Link to Comment oldman
oldman's picture

@Truth

Thanks for the link. It confirms my impression that the situation is so far out of hand that no one knows what to do---especially the Fed. Bernanke does give the seems to be like a 5 year-old lost in the forest and just wandering in circles until the light fails. He now seems to be completely in the dark--and no wonder--it is too late to change course.

I am curious, however, regarding your comment of the 'Big Short'. If it is convenient to do so, I hope that you will flesh that out a bit more--in the sense of time and asset classes.

Thanks again for the post, Truth----om

Sat, 09/15/2012 - 22:42 | Link to Comment TruthInSunshine
TruthInSunshine's picture

If my interpretation is closer to the mechanics of what was announced than what the herd consensus is proclaiming, any high beta asset classes are going to have the Fed "put" pulled out from under them, and consequently, yields on bonds and other low beta instruments are about to see some of their largest YoY increases in % terms that we've seen in quite a long time.

Once the market digests the reality of what was said, they'll call The Bernank on this clearly calculated attempt to jawbone higher inflation expectations, and then it really will be time for The Bernank to put up or shut up (especially with treasury/bond yields rising).

I genuinely believe that on Thursday, Bernanke passed the baton back to Congress & The Executive Branch, essentially admitting he can not jump the looming fiscal cliff.

Sat, 09/15/2012 - 20:59 | Link to Comment dolph9
dolph9's picture

I'm going to disagree here.

What we are reacting to is not the numbers per say, but rather than finality of it...open ended operations, extending low rates out (which means they'll be extended even further when the time comes), etc.

The Fed tacitly admitted two things:

1)  It doesn't know what the fuck it's doing.

2)  Nonetheless, it will keep doing those things pretty much forever.

Now, any sane person has to react to this, in some fashion.  Let us not take the knee jerk reaction and dump all of our cash and buy Apple stock and go into debt to live in a McMansion.

Rather, let's keep on stacking and dropping out / preparing with even more gusto, with even more certainty that this won't end well.

Sat, 09/15/2012 - 22:10 | Link to Comment TruthInSunshine
TruthInSunshine's picture

If flow (in this case, of fresh and un-sterilized fiat, to primary dealers) is what boosted commodities, equities and other 'risk-on' classes of assets based on prior episodes of Quantitative Easing, while suppressing yields on bonds, then the FOMC announcement on Thursday not only merely boosted that flow by a mere 15 bln USD per month (based on incremental increase in MBS monthly purchases), but it actually shut off the spigot for the flow of un-sterilized fiat based on deficit monetization by the Fed.

 

Like I said, I can't remember any instance whereby the gap was wider between what the Fed did and what it was reported that the Fed did, so emphatically, by so many.

If this was the "Bazooka" that many claim, and a paradigm shift for the Fed, then....wow....words fail me.

Sat, 09/15/2012 - 23:13 | Link to Comment socalbeach
socalbeach's picture

From the Fed statement,

http://www.federalreserve.gov/newsevents/press/monetary/20120913a.htm (emphasis mine)

"the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month... and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities."

So if they were purchasing $25b/month before (from reinvestment of principle payments), I interpret their language as saying they are going to purchase $65b/mo now.

Sun, 09/16/2012 - 00:54 | Link to Comment TruthInSunshine
TruthInSunshine's picture

This is the text from the FOMC release, and while it's poorly written, I am relatively confident that the 40 billion in MBS monthly purchases referenced will be the total (since they never specifically referenced MBS purchases by QE previously, and those MBS purchases were a somewhat significantly less 25 billion-ish monthly).

FRB: Press Release--Federal Reserve issues FOMC statement

"To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month."

Plus, the FOMC statement goes on to reiterate the total purchases of MBS+Treasuries (non-sterilized) as 85 billion monthly:

"These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."

 

 

When I find verification (or not) I will post source/link.

Sun, 09/16/2012 - 11:51 | Link to Comment socalbeach
socalbeach's picture

The total of $85b is for "longer-term securities" which is consistent with my interpretation imo.

$85b = $45b Twist long term Treasury purch + $40b long term MBS purch + $25b long term MBS principle reinvestment - $25b long term MBS & agency debt principle paydown.

Maybe John Hussman will clear up the confusion in Sunday's (9-16) commentary: http://www.hussman.net/

Sat, 09/15/2012 - 17:08 | Link to Comment SafelyGraze
SafelyGraze's picture

who gets the 40B/month? Freddie and Fannie?

Who are the major stockholders of Freddie and Fannie?

And who owns the stock of these (institutional) stockholders of Freddie and Fannie?

I want to follow the flow, but the river goes underground at this particular point.

Someone shine a light, please.

Sat, 09/15/2012 - 17:23 | Link to Comment francis_sawyer
francis_sawyer's picture

Well... fuck it... you asked 4 it... (Someone shine a light, please)

~~~

http://www.youtube.com/watch?v=Ppkzmxs3I4o

Sat, 09/15/2012 - 17:50 | Link to Comment SafelyGraze
SafelyGraze's picture

thanks for the link

now the dancing starts

Sat, 09/15/2012 - 17:06 | Link to Comment Yen Cross
Yen Cross's picture

Can I commision that "artist" , to do some "man cave art"? We are all going to be living by the "torch", on a"cliff", when this shit ends!

Sat, 09/15/2012 - 17:19 | Link to Comment LawsofPhysics
LawsofPhysics's picture

There is no fucking eloquence in fucking printing. Let it all collapse already and let's find out the real value of everyone's labor. Time for humanity to learn what wealth really means, fucking bring it, bitchez.

Sat, 09/15/2012 - 20:08 | Link to Comment itstippy
itstippy's picture

"Let it all collapse already and let's find out the real value of everyone's labor."

Sonny, there was a time (about 30 years ago) that I felt the same way.  I'm no longer at my peak. I can't pull 70-hour work weeks and stay razor-sharp anymore.  Shit, this morning (Saturday) when I woke up I had to fumble for my glasses so I could locate my hearing aids and find out what the fuck Mrs. Tippy was blathering about in the kitchen.

My labor has been quite valuable over the years.  Now, I'm no longer the right guy to run the show.  That's OK.  I'm down to a 30-hour work week.  I serve in an advising and consulting capacity, and I keep the books. Still valuable, but not like the Old Days when I was runnin' with the younguns and kicking serious ass. Fortunately I converted a lot of my valuable labor into wealth over the years. I got some breaks along the way, I know.

I don't run the show anymore, but I do still own the majority stake.  For that I get an extra cut of the take and I ain't ready to give it up.  Collapse comes our way the young go-getters are going to face one Hell of a rear guard action from this old timer, provided I can locate those fucking hearing aids and my bifocals don't interfere with the cross hairs on the Leupold.

Maybe we should team up against the opposition instead?

Sun, 09/16/2012 - 09:40 | Link to Comment SmackDaddy
SmackDaddy's picture

My opinion completely depends on what you did.  Were you in financial serrvices?  Fuck you then.  Producers, however, will be spared.

Sun, 09/16/2012 - 16:31 | Link to Comment itstippy
itstippy's picture

"Producers" are spared, eh?  Does that include trash hauling?  Endless dumpsters full of stinking, nasty, rotting garbage.  That's been Tippy's bread and butter.  Also a sideline in lead remediation and other toxic hazmat cleanup (Nephew's idea, and a good one).  We don't produce shit; we get rid of it.  Someone's gotta do it.

Sun, 09/16/2012 - 16:53 | Link to Comment SmackDaddy
SmackDaddy's picture

Yeah, maybe I should have said "people who actually do shit".  Trash hauling definately counts...

Sat, 09/15/2012 - 17:08 | Link to Comment bugs_
bugs_'s picture

how far? how far? to the point of no return

Sat, 09/15/2012 - 17:26 | Link to Comment francis_sawyer
francis_sawyer's picture

was it you that said?

Sat, 09/15/2012 - 17:09 | Link to Comment Jam Akin
Jam Akin's picture

The Big Question is what is it that really spooked the Fed into taking the new course of action at this time?   Also:  This is most ironic coming from MS...who represent a potential answer to that question themselves...

Sat, 09/15/2012 - 17:13 | Link to Comment news printer
news printer's picture
Euro Union changed for the worse

On Thursday will be my weekly column in the Official Gazette of Legal Fri "European Union changed for the worse." In the text, showing the interest they clash in Germany, and what would this imply for the future of the euro zone. The following excerpt:
"A key area of clashes banksters who created the alliance with the Government of France, and German manufacturers is the European Central Bank. Manufacturers need stability, which is more important to them than to keep the euro, and guarantees the stability of an independent central bank, as once guaranteed the Bundesbank. ...

http://translate.google.com/translate?sl=pl&tl=en&js=n&prev=_t&hl=pl&ie=...

http://www.rybinski.eu/2012/09/euro-zmienia-unie-na-gorsze/

Sat, 09/15/2012 - 17:13 | Link to Comment blunderdog
blunderdog's picture

Pay today or pay tomorrow.  Tick-tock.

Anyone remember this guy?

http://www.youtube.com/watch?v=ZHh0V7UjVXI

RIP.

Sat, 09/15/2012 - 17:14 | Link to Comment Nid
Nid's picture

Conclusion: Election rigging by the fed.

Sat, 09/15/2012 - 17:23 | Link to Comment Dr Benway
Dr Benway's picture

Is there a "most sane fed" or "best central bank" or "best fed policy"?

Sat, 09/15/2012 - 17:24 | Link to Comment kalum
kalum's picture

bernanke. May he RIH

Sat, 09/15/2012 - 17:55 | Link to Comment Racer
Racer's picture

Rotting as long as it is eternal....

Sun, 09/16/2012 - 11:04 | Link to Comment falak pema
falak pema's picture

RIH = Reap in heaven? 

Sat, 09/15/2012 - 17:27 | Link to Comment Yen Cross
Yen Cross's picture

 As [ EKM ] so observantly, amongst other Z/H contributors , (POSTED).    The " Chair Satan" is clearly long " pharmaceuticals"!

  Quivering lips always lie! If I'm wrong then I'll start a "Parkinsons research foundation chapter!"

Sat, 09/15/2012 - 17:26 | Link to Comment falak pema
falak pema's picture

1453 to 1492 to 2013 is a 560 year odyssey; from fall of Constantinople to discovery of new world to loss of monetary compass; a world made rudderless. 

We are back to Renaissance days, we have to reinvent it, once again. 

Sat, 09/15/2012 - 18:49 | Link to Comment Tippoo Sultan
Tippoo Sultan's picture

Refreshing indeed; Falak: a student of the chronicle of Mankind, accurately relating the current of History.

Sat, 09/15/2012 - 17:26 | Link to Comment Sofa King
Sofa King's picture

To summarize::

1. Something spooked the Feds.

2. One of the Big Banks was tanking.

3. This will help clean their books.

4. Hundreds of thousands of financial industry jobs are saved.

5. Fuck everyone else.

6. Mission accomplished.

Sat, 09/15/2012 - 17:31 | Link to Comment uno
uno's picture

talk was Morgan Stanley, if it goes so does the other zombies (JPM, BAC,Citi, GS)

Sat, 09/15/2012 - 18:22 | Link to Comment Coldfire
Coldfire's picture

Margin Stanley.

Sat, 09/15/2012 - 20:31 | Link to Comment Whoa Dammit
Whoa Dammit's picture

SunTrust. 

Sat, 09/15/2012 - 18:03 | Link to Comment JohnKozac
JohnKozac's picture

Bingo!

 

My guess is one of the Big Banks repo'd Billions of Detritis and the other side panicked and wanted their money back without rolling over the repo 105.

Sat, 09/15/2012 - 18:27 | Link to Comment WallowaMountainMan
WallowaMountainMan's picture

"1. Something spooked the Feds."

agreed.

i think its china. china is the bubble. and it has burst.

just my thoughts.

Sat, 09/15/2012 - 17:28 | Link to Comment Piranhanoia
Piranhanoia's picture

Morgan Stanley Wheelbarrows,  Can I help you?

Sat, 09/15/2012 - 17:31 | Link to Comment Peter Pan
Peter Pan's picture

Bernanke is indefensible but the reality is that the intellectual pygmies in Congress are the ones that need to chart a better course for America other than the one that is full of pork barrelling, insatiable war and legislation either aiding or abetting Wall Street scum etc etc.

It is beyond my understanding how good governance can be substituted by a central bank manipulting interest rates and printing money. It's like playing with the thermostat and beleving you can change the seasons.

Sat, 09/15/2012 - 18:21 | Link to Comment AurorusBorealus
AurorusBorealus's picture

You are correct.  Bernanke (and the ECB) is to Wall Street and Washington (which is the same entity) as Cardinal Richeliou was to Louis XIV-- the man who stitched together the finances of a collapsing ancien regime in the face of endless wars, lavish palaces, stifling legal and tax codes, special priveleges for the aristocracy, and price controls on bread and meat.  Take a long look at the fall of the ancien regime... that it held together as long as it did was because of the endless robbing Peter to pay Paul strategies of Richeliou.  And what is Bernanke doing... robbing Peter to pay Paul... on behalf of the aristrocracy and D.C.  Unfortunately, in this case, the regime is the whole of the West and the new Robespierre or Napoleon, who emerges from the reign of terror, will command a police state unlike anything the world has ever seen.

Sat, 09/15/2012 - 17:45 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

No! ...the long standing policy of the Fed is ''Novus Ordo Seclorum''. If You do not know what that means, why then you are an idiot. http://www.youtube.com/watch?v=2VAIamFKtI0

Sat, 09/15/2012 - 19:11 | Link to Comment Yen Cross
Yen Cross's picture

  annuit cceptis

                                                                        

Sat, 09/15/2012 - 19:17 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

...you have a Yen for poetry. http://www.youtube.com/watch?v=3Y_8AVd80cc

Sat, 09/15/2012 - 19:32 | Link to Comment Yen Cross
Yen Cross's picture

 You are a pretty proficient teacher. I tried to post something else, but Tyler is extremely perceptive!

Sat, 09/15/2012 - 17:54 | Link to Comment Racer
Racer's picture

Yes but Columbus only took 3 ships with him

The ChairSatan is taking the whole WORLD's inhabitants with him and dicing with hyperinflation of things they need in order to stay alive

Sat, 09/15/2012 - 18:30 | Link to Comment The Shootist
The Shootist's picture

Pretty much, but we're not all dumb enough to join his Corp of Discovery. Those with brains are prepping to ease the effects of his misadventure.

Sat, 09/15/2012 - 18:00 | Link to Comment JohnKozac
JohnKozac's picture

++Simon Popple: History tells us, the bull market is just getting started. During the 1970s, gold soared 2,329%. We’ve not even seen a fraction of that move yet today, with just 500% in gains since 2001. That’s despite the fact that today’s economies carry more debt, paper money, and inflation than at any other time in history.

 

++Governments are stockpiling gold by the ton. Rich governments, particularly the Chinese, are already cornering the gold markets. According to The Market Oracle, “China is getting out of paper and into gold as fast as she can.”

 

++Central banks are STILL printing money… Here in the UK… in Europe… and in Japan, the printing presses have been going strong. This “money” isn’t backed by anything at all. Not gold, barrels of oil, sales of cars, or toy soldiers. It’s just made up out of thin air. When there’s this level of money printing going on, people rush for the safety of real asset like gold. …whilst they secretly buy gold!

 

++Behind closed doors, the “guardians” of our currency (central banks) are piling in to the gold market, reportedly buying over 450 tonnes of gold bullion last year alone. We could be on the verge of a major supply crunch. Demand for gold is soaring right now. In fact, gold expert Mike Maloney has warned that as demand soars, “physical bullion might become unobtainable regardless of price.”

 

Lifted from The Daily Reckoning...a great daily read.

Sat, 09/15/2012 - 18:00 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

Who is kidding who here?  Really.

We have lost Jobs because Corporations can manufacturer their goods a lot cheaper overseas.  They have closed American Plants and opened them in China, India, Japan, etc. 

The Unions destroyed Companies profits.  Look, I am not against Unions because they helped the average worker years ago with fair treatment but they got out of hand with their demands on Companies to the point that many Companies had to close their doors.  Example the Steel Industry, and now Car Manufacturers. Even the Telecommunication of Firms are handled overseas.  How many times have you called your Credit Card Company, Bank, etc., to get someone in India that does not speak very good English.

These Jobs are not coming back to the US.  Face it.  No matter how much Bernanke prints these Jobs are not coming back.

Plus, the Companies do not want to bring the Jobs back because they want to keep their earnings overseas to shelter them from US Taxes.

I think that any Corporation that payes wages Overseas should be Taxed for that privledge and if they are based in the US then all income including Overseas Income should be taxed by the US.  Even if the income was made Overseas.

Bernanke's printing is just an excuse to continue to rob the American People of their wealth and their Country.

Sat, 09/15/2012 - 18:48 | Link to Comment Threeggg
Threeggg's picture

Waterfall,

You ever think that that the movement of jobs was done more for the strength of the dollar as the cheaper labor may have been the carrot ? If employment was allowed to fester in this country (now) the Production, Investment and Output would create so much inflation, coupled with fractional lending it may kill the dollar and the use of the Petrodollar worldwide. All while they try and print the world banks and financial institutions back to solvency.

?

Sat, 09/15/2012 - 19:17 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

I do not think it was done due to the strength of the Dollar.

We have to remember way back in the 60's and 70's.  Even though we had inflation wages were rising as fast as inflation.  So, people were not suffering as their incomes were increasing as fast as inflation.  They did not notice a change in the amount of goods and services they could buy with their wages.  Also, the interest rates on savings were very good.

Today we have stagnet or reduced wages with higher inflation.  Many People have taken Jobs paying less than they made before or are working 2 lower income Jobs.  So, they have been hit twice.  Once with lower wages and income and again with higher prices thru inflation.

This will not stimulate the economy.  As People make less and pay higher prices it will only reduce the standard of living of most Americans, or push them into poverty.

Sat, 09/15/2012 - 19:23 | Link to Comment dark pools of soros
dark pools of soros's picture

see my other comment about Globalization.  As for the 60' & 70's we had raising standard of living for workers for 150 years up till the 70's.  With women joining the workforce and globalization sending jobs oversees, we have had stagnate standard of living for the working class the last 40 years.  Any idea of wealth increase has been on influx of easy credit to all.  It is all in the decline from here. 

Sat, 09/15/2012 - 19:28 | Link to Comment Threeggg
Threeggg's picture

I was responding as it was a build from the ground up years ago, to be at the point we are today.

Sat, 09/15/2012 - 19:55 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

I just do not see how you make a connection with Jobs overseas and a stronger Dollar.

I would think that if there were more and better paying Jobs that it would strengthen the GDP of the US and the Dollar.  The people would be making good money would spend it in the US, create a robust economy and strengthen the Dollar.

But, I am not an economist.  I am just logical.

Sun, 09/16/2012 - 17:55 | Link to Comment dark pools of soros
dark pools of soros's picture

weak money chases wealth away from it

Sat, 09/15/2012 - 19:19 | Link to Comment dark pools of soros
dark pools of soros's picture

You have short logic.. Unions didn't demand more money, they had benefits that skyrocketed from dollar debasement.  But yet if you put your money in gold/silver you are smart, but if Unions asked for real compensation instead of fiat, they are the devil.

It is a class war against workers. Just admit it.  You want workers to be clueless lemmings. Globalization is a race to the bottom for slave labor, don't kid yourself about 'competitive wages'

Globalization is a short term gain that has run its course. The wealth leaves the middle class and now the economy shits on itself.  Globalization is only sustainable with slave labor and rulers. 

 

 

Sat, 09/15/2012 - 18:17 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

Also,  with so many Stocks at their 52 week high, at least for me, it is almost impossible for me to even consider buying here.  Maybe they will go higher but if they go down they have a very long way to fall.

The same with dividend stocks they look great with their yeild but what happens if the bottom falls out of the Market?  You could lose 75% of your Principal.  Plus, you have the potential of loss with any Income Tax changes on Dividends.  I remember when SPG went down to 25$ a share during the meltdown.  It is now trading at $162.70.  I would not buy that in a million years even for the yeild knowing if we had a meld down it could go to 25$ a share.

What Bernanke is doing is irresponsible.  I am not buying Stocks at all time highs like AAPL, GOOG, SPH, etc.  I will stay on the sidelines and let all of the Money Managers that are supposed to be stewards of other Peoples Money buy them.  P. S. that is why I would not buy into a Mutual Fund as you know they will use your Money to buy at the Top for preformance and leave you holding the bag.

Sat, 09/15/2012 - 19:15 | Link to Comment Threeggg
Threeggg's picture

The only reason it would fall (now that they have the ability to print unlimited dollars to buy anything) would be "cover" to print even more money "in the market". by........................

Running the market up with equity purchases mandated by law on the suckers (you and me through our 401k's & IRA's) with the assistance of corrupt money managers each week. Then the big trading houses and financial institutions collude and create stock certs out of thin air selling them "naked short" extracting the newly created money from the spread; as they reclaim those same counterfeited pieces of paper and place them on the shelf until the next coordinated naked raid. 

Wash, rinse & repeat

Pretty simple ain't it ?

 

Sat, 09/15/2012 - 19:26 | Link to Comment dark pools of soros
dark pools of soros's picture

completely correct

Sat, 09/15/2012 - 19:40 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

Amazing how everyone forgets about the Naked Shorting scam.  Although, I do believe there are still millions of Naked Shorts that cannot cover.  Even today.  All they can do is to continue to keep the stock price down indefinitely.

Just check out KKC, TASR, SIRI, RAD, OSTK, AMD, etc.  They will never let those Companies recover as they cannot afford to cover all of their Naked Shares.

So, today they find a new scheme like HFT to detract from old schemes.  Flash Crash, etc.

I also agree with you about counterfiting shares to short. With Naked Short selling they are selling shares that do not exist.  The goal is for the Company to eventually go out of business and there would not be any accounting.  I do not know why they do not do a tally when a Company goes out of business to see if the Short shares equal the Long shares as someone would be left in the cold if there were not enough long shares to match the short shares.  But, that is what happend with Bear Stearns, Ambk, Lehman and so many other Companies.  They got shorted into the ground and the Naked Short sellers got paid off for counterfit shares.

Sat, 09/15/2012 - 20:21 | Link to Comment Threeggg
Threeggg's picture

If every share had a "share Number" which they do and that number was transparent in every trade there could never be a naked short executed. With computers this system would be so easy to impliment and stop the fraud of naked shorting, as the individual stock cert number could be traked through each transaction.

 

But Nooooooooooo !

Sat, 09/15/2012 - 18:18 | Link to Comment yogibear
yogibear's picture

Bernanke, Dudley and Yellen want to stoke the animal spirits. The bots would make all sorts of money with that.

Sat, 09/15/2012 - 18:23 | Link to Comment Coldfire
Coldfire's picture

Ship of fools.

Sat, 09/15/2012 - 18:43 | Link to Comment Haager
Haager's picture

Morgan Stanley...

At least they admit that they were wrong - but do they get it right now? I doubt that.

If they see similarities to Columbus, ok. - That guy heavily underestimated the size of the world and he really didn't reach the desired destination, which he thought he would do if sailing to the west.

The situation in Europe looks different than Keynesians would expect. There is a lot of all the damned central planning, Brussels as the Headquarter - and these guys in Brussels are well paid for beeing One-Europe thugs.

The funny thing is that the situation with all the Euro countries looks similar to the situation in Germany 40-30yrs ago. More capable states - 11 then - started to pay money to support the lesser faring states. Efficiency was raised, exports became more and more important, welfare in the whole country - at some ideological costs - increased. Union rights during these years were consistently but slowly reduced, unions did not much more than increasing the wages at quite low rates compared to the improvements in productivity. The price of the products to be exported were not that low, despite any productivity improvements. But every nation preferred these products due to quality and durability. The DM was quite stable, most people trusted the DM more than  any other currency. No way anyone would agree in devaluation bach then.

Will this trust come back to the Euro? The stronger the Euro gets the more the people willt trust it. Will this currency turn out to be THE reserve currency of the decades to come? 

Sat, 09/15/2012 - 18:41 | Link to Comment booboo
booboo's picture

collapsing demand for oil means less petrodollars means less money flooding in buying treasuries means the US is slowly being starved to death. Is the fed enabling congress or is congress enabling the fed? chicken or egg?

Sat, 09/15/2012 - 19:49 | Link to Comment blindman
blindman's picture

have you considered a world where the "fittest"
are the most conforming to arbitrary authority
and "settling" of the land is just the enforcement
of that judgement? and it really has more to do
with the mind and spirit than the land, or it is
about energy in all its forms. sorry for that train of thought.
.
i do not understand why the experts can not
see what an idiot and blind fool such as myself
comprehends so easily? the job of the fed is
to do one thing, only one thing. it takes
one brain cell and one synapse, ok. two cells,
and some interstitial fluids.
.
they intermediate money creation through
debt distribution, money, avoiding/delaying
insolvency for the owners so the owners can remain owners even though they are bankrupt. that is what
the fed does. its only mandate is to assist power
in maintaining and extending its power. if you were
powerful it would do the same for you, but you're
not, so there. we don't need the fullness of time
to figure this out. it is what they have done and
will do every time even though they must tell misleading and contradictory stories to be effective.
.
keywords: distribution, legitimacy.
.
mortgage (n.) late 14c., morgage, "conveyance of property as security for a loan or agreement," from O.Fr. morgage (13c.), mort gaige, lit. "dead pledge" (replaced in modern Frech by hypothèque), from mort "dead" (see mortal (adj.)) + gage "pledge" (see wage (n.)). So called because the deal dies either when the debt is paid or when payment fails. O.Fr. mort is from V.L. *mortus "dead," from L. mortuus, pp. of mori "to die" (see mortal (adj.)). The -t- restored in English based on Latin.
.
hypothecate 1680s, from hypothecat-, pp. stem of M.L. hypothecare, from L.L. hypotheca, from Gk. hypotheke “a deposit, pledge, mortgage,” from hypo- “down” + tithenai “to put, place” (see theme). Related: Hypothecation.
.
@ gully ..
thanks for reminding me of this.
MODERN HUMANS ARE WALKING DEAD!~JOHN TRUDELL
http://www.youtube.com/watch?v=igJnApEtg1I&feature=related
.
".. i would say to anyone protect your spirit,
protect your spirit, because you're in the place
where spirits get eaten." john trudell.
.
best advice out there.

Sat, 09/15/2012 - 20:08 | Link to Comment q99x2
q99x2's picture

Thought Morgan Stanley went bankrupt. The unemployment thing has to do with Obama's election spin not the economy. The end is near and the banksters like the oil companies try to do as much raping and pillaging before it hits. Happens every time. There is really not much to analyse and decipher. Actions speak louder than words. Neh neh neh neh neh nah.

Sun, 09/16/2012 - 01:42 | Link to Comment Falkor
Falkor's picture

To sum it up: System is screwed.

Sun, 09/16/2012 - 14:36 | Link to Comment European American
European American's picture

"it is relatively clear that the Fed has changed course"

 

If their plan was designed to destroy the Dollar (the MiddleClass and the American way of life), then I'd have to say, they've been right on course since the Fed's inception.

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