• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Bill Gross Was Right: Fed Board Member Tarullo Calls For Restart Of MBS Monetization

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Thu, 10/20/2011 - 18:18 | 1795025 AldoHux_IV
AldoHux_IV's picture

I wonder how many shares of XLF that weasel Tarullo owns.

Thu, 10/20/2011 - 18:30 | 1795057 anynonmous
anynonmous's picture

MBS is just part  1, here's the second leg of Campaign 2012 under the heading free houses for all:

 from the above above "if certain non-monetary policies were changed...For example, action could be taken to bring the benefits of refinancing to underwater borrowers "



Thu, 10/20/2011 - 18:59 | 1795212 Quixotic_Not
Quixotic_Not's picture

And all the OWS sheeple shouted hooray!!!


Little pink RMBS slips for you and me...

Thu, 10/20/2011 - 20:12 | 1795464 max2205
max2205's picture

Somebody please check the serial #'s on these MBS. Holy fuck, how many times can the fed buy the same thing. This is out of control

Thu, 10/20/2011 - 20:48 | 1795568 macholatte
macholatte's picture

I want to buy some. How do I do it?

Thu, 10/20/2011 - 20:50 | 1795571 macholatte
macholatte's picture

Is this bullish for Freddie & Fannie?

Fri, 10/21/2011 - 10:26 | 1796891 eureka
eureka's picture

Yeah, right - and if only China had the balls - it would dump it holdings of US garbage paper, cash and bonds on the world market - and destroy US empire in a day

they're gonna get fucked anyway, so why don't they... - are you reading this, China?

which brings me to RE "expectation that the US will bail out China all over again"... WTF...?  The whole world has been bailing out the US Empire Elite Fuck-Scum for the past two generations... get the facts straight, Tylers - US doesn't bailout anyone, rather it takes from, and gets bailed out by, everyone else - all which, of course, only benefits the US EMpirial Elite, and not the 80% of US'ians, who make the US domestic slaves.

Thu, 10/20/2011 - 19:33 | 1795353 knukles
knukles's picture

That very proposition was outlined on the front page of the WSJ several days ago.
Actually mentioned that it might not be any too fucking popular with folks still paying their mortgages....

Thu, 10/20/2011 - 20:51 | 1795579 centerline
centerline's picture

Funny how the divide and conquer comes back to haunt them.  Now, whichever way they turn, there is moral hazard and a pissed off group of people with the power, if motivated, to fuck things up pretty bad.  Nothing would be more spectacular that a mass rejection of debt by the millions upon millions who are still paying and finally get confirmation that the golden ticket is "not" to pay.


Thu, 10/20/2011 - 23:16 | 1795845 IndicaTive
IndicaTive's picture

Like me.

Fri, 10/21/2011 - 07:06 | 1796254 WatchnSee
WatchnSee's picture

That is the plan Steven Lerner (former SEIU, now OWS rabblerouser and Obummer marxist) layed out a year ago. Only a matter of time now.

Fri, 10/21/2011 - 10:40 | 1796955 eureka
eureka's picture

NO NEED FOR TPTB TO DIVIDE AND CONQUER - US'ians were never unified - rather, they hate each other - ref.: "the culture wars", the ideological divide between liberals and right wingers, between old-cons and neo-cons, isolationists and globalists, hegemons and producers... etc etc etc

the cult of individualism gone icon-worship... versus aimless collectivist consumption... and gone is classical values, classical education and classical morality - i.e. any real consciousness... because the US itself is too big to fail and thus needs to be bailed out by the rest of the world - and for that, one has Empire, that is to say, The Elite has Empire - and the 80% mass of US domestice slaves follow blindly and serve their masters, while squabling over the insignificant symbols of division....

it is - your own fault, US'ians - for being so fucking, pathetic nitpicking, knucleheads...


Thu, 10/20/2011 - 19:36 | 1795361 SwingForce
SwingForce's picture

Is Kassie back to $13 yet? "BUY MY BOOK! Back to Under, I'm Jim Cramer Buy Bank of America at $14"


Thu, 10/20/2011 - 19:50 | 1795407 Widowmaker
Widowmaker's picture

None, because not one lying cheating sack of Chinese shit saw it coming.

Thu, 10/20/2011 - 20:03 | 1795446 Snidley Whipsnae
Snidley Whipsnae's picture

"And there you go: watch as the market rips on the expectation that the US will bail out China all over again. Oh wait, at this point China couldn't care less what happens to the GSEs stack."

Lest we forget: China decided to dump GSEs when the US Gov refused to put "Their Full Faith and Credit" behind them. I know, it seems like ancient history now... But this CRS Report was issued Sept 12, 2008... Page CR5 contains these less than crystal clear observations...

"Who Invests in the GSEs? There is little information available about who

holds GSE stock, bonds, and MBS. The Fed reports statistics for combined

ownership of government agency and GSE debt and GSE MBS. At the end of 2007,

non-United States investors held $1.479 trillion of $7.397 trillion. Other large

investors were U.S. commercial banks ($929 billion), life insurance companies ($388

billion), state and local government retirement funds ($317 billion), mutual funds

($566 billion), asset-backed securities issuers ($378 billion), and the GSEs

themselves ($710 billion).

?Full pdf link here... Lots of interesting misinformation tucked away in this link.


Thu, 10/20/2011 - 21:09 | 1795614 sgt_doom
sgt_doom's picture

Great timing re: the content of this posting:


BOMBSHELL -- Massachusetts Supreme Court Rules That Most Foreclosure Sales From Previous 5 Years Are Void

No need to convince me......

Thu, 10/20/2011 - 23:42 | 1795903 doomz78
doomz78's picture

QE to infinity and beyond..   They are putting make-up on Courtney Love.  But it's still her.  With the red lipstick all over her cheeks.  Maybe she just needs more. 

Thu, 10/20/2011 - 18:19 | 1795028 Shirley Wilfahrt
Shirley Wilfahrt's picture

No Banker Left Behind


Thu, 10/20/2011 - 20:39 | 1795542 ragequit
ragequit's picture

Muad'Dibernak: LET THE SPAM FLOW

Thu, 10/20/2011 - 23:35 | 1795886 Killer the Buzzard
Killer the Buzzard's picture

He who controls the Spam, controls the universe.

Thu, 10/20/2011 - 18:21 | 1795034 Piranhanoia
Piranhanoia's picture

Betting on MBS, but going long!   HAHAHAHAHAHAHAHAHAH

Thu, 10/20/2011 - 19:31 | 1795348 knukles
knukles's picture

If one wants to add duration, one does NOT fucking use Mortgage Backeds for 2 very important mathematical reasons.
1.) The average MBS's duration is so far short of the duration space of a long treasury that they don't even make apples and used condoms comparisons.  Black and white.  Not even a Kettle and Pot Black Relationship.  So if it was a decline in long rates Billyboy was looking for, he'd a bought 30 years.
EOC (as in end of conversation)
2.) The math of MBS is such that they have a mathematical characteristic known as Negative Convexity, which means that as rates move, the greater the move, the duration effect is actually defeated by other mathematical principles.  MBS's best world is one of rising rates, not falling.

So.... Billyboy didn't buy this shit in anticipation of Operation Twist.  (As in "do the twist" would have excluded the ownership of Mortgages and in fact demanded a barbell portfolio for any given duration target... barbell like cash and 30's....
My own opinion, guess, hunch is that Pimpco has an inside track with TPTB (as this just goes to further sort of enshrine) and they knew that was gonna be a topic discused and floated.
Talk about having Somebody Big Fucking Time Charlie Talk Your Book For You. 


Thu, 10/20/2011 - 19:39 | 1795371 SwingForce
SwingForce's picture

Or buy their own fund ZROZ.  They are shaking the Eurozone tree.

Thu, 10/20/2011 - 20:13 | 1795460 riley martini
riley martini's picture

 Full  Front page of Barrons today in bold type "BUY THE BANKS " all of them. Looks like Bill isn't the only inside fascist.

Thu, 10/20/2011 - 20:57 | 1795590 centerline
centerline's picture

Bill has his lips wrapped around what?  What a shock.  LOL.  IMO, the catestrophic blow will come when the pension funds are wiped out.  Keeping Bill in the game keeps the lid on things - for now.

Thu, 10/20/2011 - 18:21 | 1795035 Henry Chinaski
Henry Chinaski's picture

communications strategies = more lies

Thu, 10/20/2011 - 18:23 | 1795039 buzzsaw99
buzzsaw99's picture

By increasing demand for MBS, such a program should reduce the effective yield on those MBS, which in turn should put downward pressure on mortgage rates...


They love to say shit like that.


By increasing demand for MBS, such a program should increase the price on those MBS, which in turn would hand the front-running banks an easy profit thus ensuring bigger bonuses...


Fixed it.

Thu, 10/20/2011 - 19:08 | 1795261 SwingForce
SwingForce's picture

And yet banksterz STILL not issuing new mortgages!


Thu, 10/20/2011 - 19:50 | 1795405 knukles
knukles's picture

"They" just do not fucking undersatnd that we are in a liquidity trap in the classic of the classic economic sense and that the only way out is regardless of how much money one jams into the system, people aiont' gonna borrow until they see an opportunuity accompanied by an increase in confidence.  Which is not a component of monetary policy...
That's a Job for Suoerman and the Daily Planet
(pretty good analogy to the PTB and media....  LOL... best of luck, don't lie in the sun too very fucking long..) 

Thu, 10/20/2011 - 18:30 | 1795046 JustObserving
JustObserving's picture

Was Twist QE3 and this will be QE4? Luckily for the Fed, the number set is infinite.  The Debt monster is insatiable.

Fri, 10/21/2011 - 00:47 | 1795989 nyse
nyse's picture

What is the point of even counting them anymore? 

Thu, 10/20/2011 - 18:26 | 1795050 Belarus
Belarus's picture

They can't announce LSAP until Europe explodes, right?

Thu, 10/20/2011 - 18:32 | 1795064 Manthong
Manthong's picture

If they let Europe detonate and the US market tank 30-40 per cent, they could do anything their evil, little hearts desire.

Thu, 10/20/2011 - 18:27 | 1795054 Tic tock
Tic tock's picture

Or, the purchase of MBS is a cheap way of buying the other Bank assets, in the fairytale where they once implode...

Thu, 10/20/2011 - 18:31 | 1795071 bogey4
bogey4's picture

Bill Gross is so good at front-running that his Total Return Fund has underperformed his benchmark by 460 bps this year to date and underperform 90% of comparable funds.

How's that for "front-running?" 



Thu, 10/20/2011 - 18:33 | 1795083 Tyler Durden
Tyler Durden's picture

At $245 billion in AUM? Pretty damn good.

Thu, 10/20/2011 - 18:44 | 1795143 kito
kito's picture

i thought one was only as good as his last trade? 

Thu, 10/20/2011 - 18:53 | 1795198 Shirley Wilfahrt
Shirley Wilfahrt's picture

Dear Fellow 99%er,

Have you seen this?


Thu, 10/20/2011 - 23:22 | 1795867 DaveyJones
DaveyJones's picture

so goddamn true

Thu, 10/20/2011 - 20:29 | 1795514 disabledvet
disabledvet's picture

i thought he had a trillion aum? I guess things really are shitty. During the biggest bond rally relative to equities since "the 19th century" no less. Perhaps if he hung of picture of Queen Victoria on his wall that would help "channel the correct vibes."

Thu, 10/20/2011 - 18:54 | 1795196 buzzsaw99
buzzsaw99's picture

Ever since Bill Gross said this:




he hasn't done so well. Like J. Paulson, once the criminal collusion stops they perform worse than average.



Thu, 10/20/2011 - 20:33 | 1795530 Snidley Whipsnae
Snidley Whipsnae's picture

Right you are BuzzSaw99...

And if one reads about the life of Keynes, one finds that the same happened to him when he lost contacts in high places... Like most, Keynes did not see the crash of 1929 coming and lost a fortune...

"Ten Great Economists from Marx to Keynes" Joseph A Schumpeter

I like this book because it was written in 1952 and filled with the prejudicies of that era... not the current prejudices


Fri, 10/21/2011 - 00:52 | 1795999 ReactionToClose...
ReactionToClosedMinds's picture

will eventually go out and buy then read this on your highlight just now.   Schumpeter is one of the great unheralded minds of the 20th Century

Thu, 10/20/2011 - 18:33 | 1795081 lizzy36
lizzy36's picture

Even better Fed mouthpiece Hillsenrath (WSJ) just announced this being considered:

Federal Reserve officials are considering a new program of buying mortgage-backed securities to boost the ailing economy, though they appear unlikely to move swiftly in this direction.

The idea would be to target any new efforts from the central bank at the parts of the economy that are most severely impeding a recovery--the housing and mortgage markets--by working to push down mortgage rates.

Lower mortgage rates, in turn, could encourage more home buying and mortgage refinancing, and help the economy more broadly by freeing up cash for consumers to spend on other goods and services. Moreover, Fed officials believe their past purchase programs helped to lift stock markets, by driving investors from low-risk investments toward riskier investments.

In the dictionary beside the defination of insanity is the FEDERAL RESERVE crica 1990-2012.

Thu, 10/20/2011 - 18:35 | 1795094 Tyler Durden
Tyler Durden's picture

In other words, Hilsenrath just did what he always does: pitched verbatim what Tarullo said, with an article ready to go as soon as the embargo was lifted, with the data in hand weeks earlier, and in the meantime may or may not have told friends and neighbors of just what was happening.

Thu, 10/20/2011 - 18:38 | 1795106 jdelano
jdelano's picture

If this happens I will join ows.

Thu, 10/20/2011 - 18:46 | 1795153 NotApplicable
NotApplicable's picture

Where you will find them dancing in the streets at their "win" for the little people. So, you might as well smack yourself upside the head now, and get it over with.

In other news, our local occupation is down to a couple of people guarding all of the stuff that's beginning to pile up.

Thu, 10/20/2011 - 18:56 | 1795209 jdelano
jdelano's picture

Id be a little less cavalier about mocking ows, unless it's because it scares you. It certainly worries me a bit. Right now ows is in it's adolescence--still ungainly and awkward, but when highly intelligent, established folks start joining their ranks the movement will evolve, producing a Trotsky or a Lenin, factions will grow and radicalize like some recursive virus, and when it starts to get really ugly out there you'll look back and curse yourself for a fool asking "how did I not see this coming?"

Thu, 10/20/2011 - 19:17 | 1795286 Quixotic_Not
Quixotic_Not's picture

the movement will evolve, producing a Trotsky or a Lenin

No worries, it took 19 years from the Marxist Russian Social Democratic Labour Party formation to the October Revolution, so I'd say we've got at least 19 months (extrapolating for advances in technology, and the proliferation of sheeple in 'MeriKan culture) before the next Clinton, Dubya or Obummer show up...

With that in mind, the trend remains solidly in place:  TBTF/TPTB will continue exponention growth of ALL debt until economic collapse...

Trade/prepare accordingly - Do not believe rumours that ANYTHING will *STOP* CBs on the quest for the Holy Grail.

Everything else is just smoke, mirrors and braking wind!

Thu, 10/20/2011 - 20:08 | 1795457 B9K9
B9K9's picture

Yep. Everything else, including the daily profusion of articles, debates, analyses, et al (ZH being one of the chief culprits), is all noise. All one has to understand is that the debt-money system will be defended down to the last clueless soldier in service of their true masters.

My advice has been fairly consistent: stay long the Empire, while preparing for its eventual demise. Attempting to short the PTB before it is time is suicidal. Discard obsolete sentiments like the 'rule of law', or that old chestnut "representative republic" and focus on what's really happening.

When its apparent the wheels are about to come off, then it's the time to finally get out of Dodge and bet long sustainable regions. Whether BC or TX, the name of the game is to avoid the rampaging FSA.

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