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Did The Republican Letter To Bernanke Seal The Deal For Even MORE QE? JP Morgan's Take

Tyler Durden's picture


As we reported, last night a quartet of GOPers (re)sent a letter to Bernanke demanding no more QE. To be sure this was not the first such letter, and followed a nearly identical missive sent back in November of 2010. And while the ultimate purpose of this letter is unclear, and is unlikely to prevent the Fed from doing the only thing it believes it should do: i.e., spark the economy by reflating asset values, aka printing or duration extending - or the only things it knows how to do, did the republicans just shoot themelves in the foot and allign the dissenters against growing opposition to a full blown LSAP episode? Here is JP Morgan's Michael Feroli explaining why this may be the case.

Just when you thought economic policy-making in the US couldn't get any worse, last night elected Congressional leaders chose to pressure the central bank during an ongoing monetary policy meeting. Economists disagree on many things but one proposition that has near-universal assent is that sound monetary policy should be conducted free of political interference. What does the Congressional pressure mean for the outcome of today's meeting? One view is that since the letter to Bernanke warned against further monetary stimulus, the FOMC will be less likely to provide monetary stimulus -- through either Operation Twist or other means. It is also possible, however, to reach the opposite conclusion: at the margin the Committee may be more likely to provide stimulus in order to assert their independence and demonstrate that they will not be politically intimidated. Our view is that this Congressional letter will have no impact on the Committee's decision: the Chairman has no illusions about winning any Capitol Hill popularity contest and is more likely leading with an eye to how economic historians judge him many years from now.


Another question is how the political pressure will affect potential dissenters. In the absence of this letter we would expect up to three hawkish dissents once again -- provided the Fed takes some action -- and possibly one dovish dissent from Evans. However, the letter from the Congressional leaders cited in support of its view "significant concern expressed by Federal Reserve Board Members," among others. (Presumably the letter meant FOMC members, as Federal Reserve Board members have been generally supportive of Bernanke's policy). There is a chance that Committee members who have some reservations about Fed policy may now be less likely to dissent, to avoid validating the views expressed in the Congressional letter, as surely all on the FOMC -- hawk or dove -- would find this political meddling repugnant. It's probably still the case that we get another handful of hawkish dissents, though there is now a chance the Committee circles the wagons in response to the political pressure and we get fewer than three dissents.


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Wed, 09/21/2011 - 09:47 | 1692038 GeneMarchbanks
GeneMarchbanks's picture

OOO! OOO! I'll try.. ... ... ... yeah...

Wed, 09/21/2011 - 10:01 | 1692074 MillionDollarBonus_
MillionDollarBonus_'s picture

Federal Reserve officials need to make it clear that they will NOT be bullied by this completely inappropriate grandstanding by these republican congressmen. I can't understand why the American public is not OUTRAGED by this political meddling!

Wed, 09/21/2011 - 10:01 | 1692105 TruthInSunshine
TruthInSunshine's picture

As usual, you are correct.

It's about time that Ben S. Bernanke stops allowing the meanies to bully him around, and that he shows them what a boss he is.

The Bernank has the best interests of savers, retirees, students & the jobless/underemployed at heart, and he'll do anything he can to ensure that their opportunities only increase, and that they're purchasing power and employment options only expand, no matter what the banks try and do to crimp these egalitarian aspirations.

Wed, 09/21/2011 - 10:07 | 1692135 MillionDollarBonus_
MillionDollarBonus_'s picture

At least we can agree on the most basic of premises, such as the idea that the Federal Reserve should be able to simply pursue their dual mandate independently of political ramblings. There is no place for politics in setting monetary policy. The Federal Reserve was specifically set up to be INDEPENDENT.

Wed, 09/21/2011 - 10:10 | 1692150 Dr Hackenbush
Dr Hackenbush's picture

Youre correct sir, JPM is the Federal Reserve, and they are independent 

Wed, 09/21/2011 - 11:33 | 1692560 LowProfile
LowProfile's picture


I voted MM$bonus up for his hilarious sarcasm.

Wed, 09/21/2011 - 10:23 | 1692216 SimplePrinciple
SimplePrinciple's picture

If you think those 14-year terms for the Governors keeps them independent, then you overlook that virtually none of them serve out their whole terms.  There are just too many rewards awaiting them when they leave.

Wed, 09/21/2011 - 10:32 | 1692268 Beam Me Up Scotty
Beam Me Up Scotty's picture

Independent to serve their own best interests more like it. You really think they care about J6P and all the rest of the peons?

Wed, 09/21/2011 - 11:58 | 1692435 whstlblwr
whstlblwr's picture

How dare the Congress question the Federal Reserve. Do they know who they talk to, the most brilliant economic minds of our day. They should keep politics out of it so the Federal Reserve can do what the banks set it up to do. Bring the banks more money and to take taxpayer money to support any failed bank. How else can the Federal Reserve be expected to turn profit for the banks. Congress who do you represent? The people or the banks?

Edit: I forgot, according to Supreme Court and Mitt Romney, corporations, self-serving money motive, are people too.

Wed, 09/21/2011 - 11:14 | 1692467 Ned Zeppelin
Ned Zeppelin's picture

Independent of whom or what is the question. If you mean independence from accountability and the normal and appropriate controls of a republican form of government whose authority rests on the consent of the governed, that is true enough.

Wed, 09/21/2011 - 12:40 | 1692914 Elmer Fudd
Elmer Fudd's picture

Oh yeah, we need a FED and central banks to set monetary policy for the rest of us dumbasses.

Wed, 09/21/2011 - 12:58 | 1693014 Gold Man-Sacks
Gold Man-Sacks's picture

Dual mandate?  More like double penetration. 

Wed, 09/21/2011 - 12:59 | 1693015 Gold Man-Sacks
Gold Man-Sacks's picture

ZH keeps double posting my posts.  Hmmm, that sounds kind of kinky.

Wed, 09/21/2011 - 14:08 | 1693448 Beam Me Up Scotty
Beam Me Up Scotty's picture

Well, you were just talking about double penetration.  Too many Peter North movies on your shelf?

Wed, 09/21/2011 - 10:12 | 1692164 NeoCapitalist
NeoCapitalist's picture

Lol priceless... I am still in the camp that MillionDollar is not kidding.. he is just that dumb...

Wed, 09/21/2011 - 11:04 | 1692417 Axenolith
Axenolith's picture

IDK dude, being that dumb would almost preclude possessing even a brain stem, which would mean he couldn't even conduct the minute by minute act of respiration and as such, wouldn't exist...

Wed, 09/21/2011 - 11:59 | 1692674 Bring the Gold
Bring the Gold's picture

I tend to agree. His grasp of English, and economics leads me to believe he either is one tic shy of full blown autism barely lingering in Asperger's land, or more likely he's a guy who takes tremendous joy in being a Jolly Green Giant sized Troll. 

Wed, 09/21/2011 - 13:08 | 1693062 Bob
Bob's picture

My take, fwiw, is that he's the best satirical troll yet.  Bar none.  Including Hamy.  Hell, all the others who've passed into retirement may actually be the creations of this same artist . . . but this one is the best yet, in any case. 

True art. 

Hell, I don't know which way to vote on his shit, it's so good. 

Wed, 09/21/2011 - 22:02 | 1695410 Bring the Gold
Bring the Gold's picture

Yep, his handle is the give away. I am still shocked that people haven't caught on. I guess it's because this forum is rife with shills, useful idiots and status-quo government/wall street teat suckers, who make arguments basically identical to his.

Intentional or not, it's pure comedy gold.

Wed, 09/21/2011 - 11:15 | 1692474 Ned Zeppelin
Ned Zeppelin's picture

Nah, no one is that dumb. Right?

Wait. . .

Wed, 09/21/2011 - 11:33 | 1692564 LowProfile
LowProfile's picture

Think about it:  Who gets million dollar bonuses?

Would they post here?


Wed, 09/21/2011 - 10:04 | 1692117 WonderDawg
WonderDawg's picture

I can't understand why the American public is not OUTRAGED that we've allowed a private banking cartel to determine our nation's monetary policy.

Wed, 09/21/2011 - 10:22 | 1692214 LongBallsShortBrains
LongBallsShortBrains's picture


They don't care who determines policy.

The American public wants low rates for refis and new cars. And cnbs says low rates are good for the conomy.

The beast doesn't seem too bad when you have been nursing on the tit of the beast.

Just one (or two). More refis ..... Promise

Wed, 09/21/2011 - 22:01 | 1692686 Bring the Gold
Bring the Gold's picture

Well that's better than licking the balls of...wait...damn your avatar!

It was funny the first week or so, now it makes me cringe even if your philosophical response to the T&A is sound. Glad I work from home, no doubt ZH is blocked on a VAST swath of company/state computers.

Wed, 09/21/2011 - 10:04 | 1692120 DormRoom
DormRoom's picture

If the Fed doesn't act now, and the Republican-Tea Party take control of Congress & the White house, they won't be able to do anything in 14 months.  So they might as well go balls to the wall now.

Wed, 09/21/2011 - 10:46 | 1692342 walküre
walküre's picture

Makes no sense. The Fed will be able to deploy alot more and be more effective in 14 months when the Dollar looks better the money that is already in circulation has entered the economy instead of being hoarded at negative interest (considering inflation).



Wed, 09/21/2011 - 10:07 | 1692138 Ruffcut
Ruffcut's picture

Who is outraged by qualitative Evil and milliondollarboneheads?

Wed, 09/21/2011 - 10:17 | 1692185 mick_richfield
mick_richfield's picture

I can't understand why the American public is not OUTRAGED by this political meddling!

Um .. because this is supposed to be a republic?

I used to think that you were the best new troll on ZH, but I'm sorry -- you're not doing a good enough job of simulating a personality. 

Turing Test grade:  0.40  ( fail )

Wed, 09/21/2011 - 10:24 | 1692221 healey
healey's picture

That is retarded...abolish the FED. A State-run bank is one of the tenets of the Communist Manifesto.

Wed, 09/21/2011 - 09:59 | 1692078 Popo
Popo's picture

Tyler, don't fall for the Kabuki.  

The letter is an act, nothing more.  

The Republicans themselves are *deeply* in favor of more QE, but they're playing it this way so they can pretend to be the party of "fiscal conservatism". 

Everyone knows the Republicans are equally in the pocket of the bankers,  and if they were even remotely serious about stopping the Fed they'd be hard at work on the bill to audit the Fed (which they are almost universally opposed to).

There are no differences between "Banker Party D" and "Banker Party R".

Politicians -- ALL POLITICIANS -- are deeply in favor of more QE because it lets them kick the can down the road again.   There are no responsible politicians in Washington.  There are only the occasional performances of responsibility because they serve to damage the other party.

Wed, 09/21/2011 - 09:59 | 1692099 SWRichmond
SWRichmond's picture

Yes, and I also loved this: "sound monetary policy..."  Who do they think they're kidding?

Wed, 09/21/2011 - 10:00 | 1692101 SeverinSlade
SeverinSlade's picture

I'm pretty sure Tyler isn't suggesting that the Republocrats that wrote this letter actually believe a single word of it.  Especially considering that every man that signed it is in favor of Anglo-American imperialism.  Kind of hard to preach small government when you believe in using your military to police the world.  I'd ask all of them how they expect to pay for our military if the Fed doesn't continue to monetize US debt.

Wed, 09/21/2011 - 10:04 | 1692116 GeneMarchbanks
GeneMarchbanks's picture


You do realize that they need something to point to when the beheadings begin?

Repubs are Machiavelli compared to Dems...

Wed, 09/21/2011 - 10:20 | 1692196 mick_richfield
mick_richfield's picture

That's a good point.  In fact -- by analogy with the way politicians cast many of their votes -- this letter indicates that these men know that QE3 is already a done deal.

Wed, 09/21/2011 - 10:39 | 1692304 Spaceman Spiff
Spaceman Spiff's picture

There is a difference in the parties.   The leadership is another story where both want more QE, but on the individual level there is a difference.   I would say that between the two parties, there are more individuals on the pub side who bothered to pay attention to the fed and are outraged by the monetization.    There is just a massive disconnect with their leadership who pays lipservice to them.   (see this letter as opposed to taking action against the fed and their dual mandate).   I would say that those who believe in an active federal government are more likely to support the fed.   

Wed, 09/21/2011 - 10:53 | 1692367 walküre
walküre's picture

The letter is an act.

OF COURSE IT IS! Politicians are by extention ACTORS! I know enough of them personally and privately to say this.

Every statement and every "act" is politically motivated!

But you are mistaken about the motivation of this letter!

What is the main objective of a politician? Getting elected to win of course!

Further QE at this juncture will make Obama a hero and all but confirm his 2nd term!!!!

Giving Obama 3+ trillion Dollars is the equivalent to handing Nero a flame thrower! He can't MISS!

Wed, 09/21/2011 - 11:30 | 1692550 Rockfish
Rockfish's picture

Yes +1010

They all belong to the "Banker Party SQ (status quo)

Wed, 09/21/2011 - 09:47 | 1692039 Corn1945
Corn1945's picture

The Federal Reserve needs to go if this country is to have a future.

It is simply astounding that a bunch of unelected bureaucrats who have never held a real job before is allowed to make these decisions.

Wed, 09/21/2011 - 10:11 | 1692159 Nascent_Variable
Nascent_Variable's picture

Exactly.  And, the bankers who pull the strings behind the scenes are incensed that elected representatives of the people would dare to write them a polite letter asking them not to continue their disasterous policies.  The audacity of the banksters is astounding.

That said, this is pure political maneuvering by Boehner and Co.  They're doing the right thing for the wrong reasons.  But when the deck is stacked so heavily against the People, we'll take what we can get.

Wed, 09/21/2011 - 10:51 | 1692365 stirners_ghost
stirners_ghost's picture

"this country"

Are you referring to the grand extortion scheme called government, or its victims?

Or don't you make that distinction? Judging by the nationalistic brand identity you've chosen for yourself, I won't be surprised if you conflate them.

Look--as long as "the country" remains loyal to ideals of lords, subservient to patriotic spirits, and wholly bought-in to principles of Society, Humanism, and every other sacrificial altar of self... it has no future of its own, anyway.

Forget the Fed. The FRB's power derives from government's exclusive license to inflict violence on you for the "greater good" (invariably, its own good). Specifically, legal tender laws demand that you accept Federal Reserve Notes as settlement of debts and obligations. That gun in your back isn't held by the Fed; they only profit from it. Remove the gun, and the Fed's power over you vanishes.

Wed, 09/21/2011 - 09:47 | 1692040 monmick
monmick's picture

Now there is not even the pretense of independence...

Wed, 09/21/2011 - 09:47 | 1692041 somethingelse
somethingelse's picture

In other words...anything could happen.  

Wed, 09/21/2011 - 09:49 | 1692043 Josh Randall
Josh Randall's picture

Reverse Psychology B!tches!

Wed, 09/21/2011 - 10:50 | 1692112 jdelano
jdelano's picture



Wed, 09/21/2011 - 09:49 | 1692045 SeverinSlade
SeverinSlade's picture

"...sound monetary policy should be conducted free of political interference."

Because that's precisely what the founding fathers envisioned...A private bank to control the currency of the people...Ironic because that's precisely what they warned us about.

There should be no such thing as "monetary policy."  Central planning doesn't work.  Fuck it, I'm just preaching to the choir here.

Wed, 09/21/2011 - 10:00 | 1692103 SWRichmond
SWRichmond's picture

One of the reasons I spend less time here is because I have chosen to preach to those who need the message.

Wed, 09/21/2011 - 10:05 | 1692127 SeverinSlade
SeverinSlade's picture

I hear you.  It's tough though.  I use every opportunity I get daily to try and wake people up.  The general response I get is a blank stare.  Some idiots even go so far as to call me a conspiracy theorist by saying that the Federal Reserve is a private bank that is not a government entity.

Wed, 09/21/2011 - 13:28 | 1693229 Bob
Bob's picture

I was wondering about that, old timer.  Good to see ya!  Y'all right?

Fri, 09/23/2011 - 09:51 | 1700869 SWRichmond
SWRichmond's picture

Yeah man.  Busy.

Wed, 09/21/2011 - 09:49 | 1692047 equity_momo
equity_momo's picture

Fuck me thats some desperate rationalizing from JP Morgue.  Why dont they look at Bernankes Horoscope whilst theyre at it too.

Wed, 09/21/2011 - 10:09 | 1692149 fuu
fuu's picture

You can almost smell the desperation out of 270 Park Avenue.

Wed, 09/21/2011 - 09:50 | 1692048 John Law Lives
John Law Lives's picture

If the Fed does announce a bold policy move today, look for anti-Fed rhetoric to be dialed up a few notches by the Republican Party presidential nominee contenders.

Wed, 09/21/2011 - 09:51 | 1692059 SheepDog-One
SheepDog-One's picture

Exactly why Ben isnt going to touch the printing press at all until far down the road, if at all. 

Wed, 09/21/2011 - 10:10 | 1692153 John Law Lives
John Law Lives's picture

I would also be surprised if the Fed announces any LSAP plan today.  They have too much on their balance sheet as it is.

Wed, 09/21/2011 - 10:41 | 1692312 you enjoy myself
you enjoy myself's picture

Exactly why Ben isnt going to touch the printing press at all until far down the road, if at all.

wouldn't future political pressure be even more of a reason to go big now?  bernanke clearly sees whats coming unless he prints.  why make it an election issue that can be demogouged?  better to take some bad press now and announce LSAP's that extend into 2013.  not saying that's the right policy decision of course.



Wed, 09/21/2011 - 09:54 | 1692067 Don Birnam
Don Birnam's picture

Quite likely.

A/k/a, the "Lagasse Strategem:" Kick it up a notch.

Wed, 09/21/2011 - 09:55 | 1692070 SeverinSlade
SeverinSlade's picture

It'll happen sooner or later.  More class warfare and perpetuating the same right vs. left paradigm by utilizing the divide and conquer tactic.  Idiot Americans that are uninformed will blindly vote for the phony Republicans (i.e. Perry/Romney/Bachmann) thinking that they're actually standing up to the Fed and big government.  The idiot democrats will vote for Obumma because he's "making the rich pay their fair share."

Americans need to wake the fuck up.

Wed, 09/21/2011 - 09:54 | 1692073 HelluvaEngineer
HelluvaEngineer's picture

Look for Perry to steal more of Ron Raul's platform, you mean.

Wed, 09/21/2011 - 10:11 | 1692143 John Law Lives
John Law Lives's picture

I want Obama out at all costs. If Ron Paul wins the GOP nomination, I guarantee you I will vote for him AND actively support his campaign.

Wed, 09/21/2011 - 10:12 | 1692162 SeverinSlade
SeverinSlade's picture

How about voting for him either way in the 2012 elections and writing him in even if he doesn't win the GOP nomination?

Beyond that, why don't you vote for him in the upcoming primaries?  If you're a registered Democrat switch your party affiliation.  I did.

Wed, 09/21/2011 - 10:26 | 1692227 John Law Lives
John Law Lives's picture

"How about voting for him either way in the 2012 elections and writing him in even if he doesn't win the GOP nomination?"

Under that scenario, Ron Paul is far more likely to siphon votes away from people who would otherwise vote for the GOP nominee than a Democrat in the general election. I can not stomach the thought of 4 more years of Obumble. Yes, Obumble is that bad. In fact, he is so bad that I would not be surprised if Mrs. Clinton runs against him for the nomination.

I hold Ron Paul in high regard. I just don't think the GOP Machine wants him. They have a track record of pushing men with integrity aside.

Wed, 09/21/2011 - 11:25 | 1692525 ljag
ljag's picture

Voting? R U kidding? Ask big Al Gore about voting! Besides, who gives 2 shits about either party on this thread? We had our shot years and years ago but didn't take it. Now all we can do is watch the show, get prepared, and when the whole thing implodes, make our move. In the mean time, DON'T PAY TAXES! Even the sheeple know our taxes are wasted on banks, bonuses, etc. so why support 'em? However, if you are of the pacifist persuasion, go out and buy some OR popcorn and shut the fuck up!

Wed, 09/21/2011 - 10:04 | 1692121 fuu
fuu's picture

Only Johnny Come Lately candidates need to dial up their anti-Fed rhetoric. Real candidates have been dialed in on this issue for a while.

Wed, 09/21/2011 - 10:13 | 1692167 John Law Lives
John Law Lives's picture

Ron Paul has been consistent over the years re. his skepticism of the Fed. There is no doubt that other GOP contenders are trying to take the limelight on this issue.

Wed, 09/21/2011 - 10:40 | 1692309 RSloane
RSloane's picture


Wed, 09/21/2011 - 10:41 | 1692316 Spaceman Spiff
Spaceman Spiff's picture

I hope so.   Hell, I hope the pubs in DC actively try to limit fed power.   

Wed, 09/21/2011 - 09:50 | 1692049 j0nx
j0nx's picture

The central bank can and will answer to CONgress and the American people. It's just a matter of time at this point. Gas at $4.00+ and exponential increases in food are awakening the masses. I tell everyone I can what is causing the runup in the price of their food and gas. Most have never heard the correlation before thanks to our shitty leaders and MSM but they are listening and learning now. Just a matter of time.

Wed, 09/21/2011 - 10:16 | 1692178 Ruffcut
Ruffcut's picture

Never fucking happen. THe CB's run this country and are consolidating all ponzi countrys and those with resources.

You have a better chance of cutting off your balls so that your tight pants fit better.

Just a matter of time, when people will understand how they have been conned, misled and can't a fucking thing to stop it.

Wed, 09/21/2011 - 09:53 | 1692050 SheepDog-One
SheepDog-One's picture

'Spark the economy be reflating 'asset' values'....

Well it hasnt worked at all for 3 years, but now it will?

FED QE printing has NOT 'reflated asset values' at all other than stock indexes.

Total nonsense I call full BS, print now and we get $5.50 gas by election day. 

Wed, 09/21/2011 - 09:53 | 1692064 lano1106
lano1106's picture

Agree that it is total BS but even with high inflation in the UK and their riots, it didn't stop BOE to announce more QE. There isn't riots in the US yet so that leaves plenty of room to the Bernank for more printing!


Wed, 09/21/2011 - 10:11 | 1692155 DosZap
DosZap's picture


Total nonsense I call full BS, print now and we get $5.50 gas by election day. 

Well, if the Fearless Leader would LEAD, he COULD stop the exporting of REFINED gasoline and Diesel OUT of the US, and sell it here, and lower our pump prices a wad.


Then we would not have $3.50-$4.00 a gal gas.


Wed, 09/21/2011 - 10:41 | 1692313 RSloane
RSloane's picture

Preach it, Sheep Dog!!

Wed, 09/21/2011 - 09:50 | 1692052 DonnieD
DonnieD's picture

So Fed members make stimulus decisions out of spite. I feel much better now.

Wed, 09/21/2011 - 11:06 | 1692425 SheepDog-One
SheepDog-One's picture

Yes now our world leaders are like 3rd graders on a playground, its all about 'dares' and spiteful little rants.

Wed, 09/21/2011 - 09:50 | 1692053 walküre
walküre's picture

Is anybody even touching the markets morning? Seems like all have decided to "wait this out".

The tensions are palpable!

Sick to the core considering the power Ben holds over the financial world.

Wed, 09/21/2011 - 09:50 | 1692054 alfred b.
alfred b.'s picture


No one messes with the Fed!   (sic)

Wed, 09/21/2011 - 09:51 | 1692055 fdisk
fdisk's picture

Simple math.. If Bernank do not deliver, then Market will wipe

out couple hundred Bullion $ from US Equity Market and Trillions

world-wide, so he better shoot and shoot BIG.

Wed, 09/21/2011 - 10:05 | 1692125 Cole Younger
Cole Younger's picture

If the market is wiped out because of no action by the fed, its not the feds fault. Investing has risk...or haven't you heard?

Wed, 09/21/2011 - 11:08 | 1692432 SheepDog-One
SheepDog-One's picture

Cole yep indeed...and WHO out there in the market is sitting so fat and complacent theyd need a forlift to get off the couch? Equity bulls.

Sitting calm as Hindu cows in the 50 P/E stocks, absolutely certain no matter what, Ben Shalom has their backs? 

A couple trillion right there for easy Wall St pickins.

Wed, 09/21/2011 - 13:38 | 1693295 Bob
Bob's picture

Yup, the dumb money, including good old 401k and pension funds.  We can't have only SS served up, can we? That just wouldn't be fair--we need variety in our diet!

If I had to work for a living, I . . . actually, who needs to work when you can pick the pockets of suckers virtually for free?

Wed, 09/21/2011 - 10:07 | 1692131 equity_momo
equity_momo's picture

Oh he will shoot big all right. He will pull out his Elephant gun but deep down he knows it wont work. The market may rally , even into year end. And then the market will pull out an ICBM and turn the Eccles building into glass.

Bennys going to need a nuke. Which spells MAD for the economy.

Wed, 09/21/2011 - 10:44 | 1692330 Spaceman Spiff
Spaceman Spiff's picture

screw that.   let the markets be free.


Que Sera, Sera

Wed, 09/21/2011 - 09:53 | 1692056 TruthInSunshine
TruthInSunshine's picture

The Bernank will come out at 1 p.m. to announce he's a magician, pull a rabbit from a hat while telling reporters he's about to make it disappear, and then proceed to rip its fur off while announcing that the Fed Funds Discount Rate will now be 0% and that the Fed is tripling its balance sheet by purchasing Bank of America-Countrwide-MerrilLynch at an adjusted book value of each company as of 2006, along with Lisbon & the Greek Isles.

Wed, 09/21/2011 - 09:51 | 1692057 SeverinSlade
SeverinSlade's picture

Can someone in the international community grow a set of balls and formally charge Bernanke (and other FOMC members that voted for printing presses) with genocide?  It's pretty well understood by now that the Fed's monetary policies have directly led to the deaths of hundreds of thousands.  According to law, for genocide to be committed, one doesn't have to actually COMMIT the murder.  They simply have to set up the situation for the murder to take place.

Wed, 09/21/2011 - 09:53 | 1692060 What_Me_Worry
What_Me_Worry's picture

Republicans- Please don't do any more large easing programs until we win back the WH, ty bff's.

Wed, 09/21/2011 - 09:53 | 1692061 fuu
fuu's picture

"Economists disagree on many things but one proposition that has near-universal assent is that sound monetary policy should be conducted free of political interference."

Nothing to worry about here then, nothing Ben does is sound monetary policy.

Wed, 09/21/2011 - 10:43 | 1692324 RSloane
RSloane's picture

LOL! Soooooooooo true.

Wed, 09/21/2011 - 09:53 | 1692065 Robslob
Robslob's picture

Reality shows are better than this...

Wed, 09/21/2011 - 10:04 | 1692118 TruthInSunshine
TruthInSunshine's picture

MTV, in  conjunction with CNBS, plans on doing a reality show called 'The Real World: 33 Liberty Street,' wherein they film the The Bernank co-habitating with his roommates, and all the bickering, drama and sexual tension that develops among this hipster, dynamic group.

Wed, 09/21/2011 - 10:41 | 1692314 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Is Bawney Frank involved!?

Wed, 09/21/2011 - 11:34 | 1692569 TruthInSunshine
TruthInSunshine's picture

Yes, Barney Frank & Rick Santorum are forced to bunk together, and hilarious pranks and horseplay ensue.

Wed, 09/21/2011 - 09:54 | 1692068 Sellzem
Sellzem's picture

The blind leading the blind.  What a joke!

Wed, 09/21/2011 - 10:33 | 1692275 TruthInSunshine
TruthInSunshine's picture


"In the land of the blind, the one-eyed man is king."

--Desiderius Erasmus

Wed, 09/21/2011 - 09:54 | 1692069 TradingJoe
TradingJoe's picture

I am not going to "make me crazy" about what the FEDster will or will NOT do, if you are hedged, like me, you can relax, lean back and wait till 2:15ish and then we all KNOW :)))!

Wed, 09/21/2011 - 09:54 | 1692072 MrPalladium
MrPalladium's picture

Wishful thinking and naivete!

The Fed has been responding to political pressure these past 30 years. Feroli is just engaging in an effort to censor the Repubs through financial industry political pressure.

We shall see how that works out!

Wed, 09/21/2011 - 09:55 | 1692075 Sofa King
Sofa King's picture

So they will implement more Quantitative Easing just out of spite.  Cool.

Wed, 09/21/2011 - 10:11 | 1692158 pettolicious
pettolicious's picture

I saw former fed governor Larry Meyer say exactly that this morning on CNBS - something to the equivalent of "since they felt the need to tell us what to do, i would do triple what I had planned to do just to show them".

We are just totally fucked.


Wed, 09/21/2011 - 10:44 | 1692333 RSloane
RSloane's picture

Larry Meyer is a fucking moron which means he is representative of the 'thinking' of the Fed.

Wed, 09/21/2011 - 09:55 | 1692077 Melin
Melin's picture

"Economists disagree on many things but one proposition that has near-universal assent is that sound monetary policy should be conducted free of political interference."

So, the people who fund the "sound" monetary system (me, you, your neighbors, etc.) should have zero representation on its policies?  What a neat system.  What's it called again? 


Wed, 09/21/2011 - 10:05 | 1692129 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture


Wed, 09/21/2011 - 09:56 | 1692080 junkyardjack
junkyardjack's picture

Winter is Coming

Wed, 09/21/2011 - 09:56 | 1692081 Everybodys All ...
Everybodys All American's picture

No wonder the market feels psychotic.

Wed, 09/21/2011 - 09:57 | 1692086 D.O.D.
D.O.D.'s picture

"Economists disagree on many things but one proposition that has near-universal assent is that 6a6ylon iz 6urn"

Wed, 09/21/2011 - 09:57 | 1692087 youngman
youngman's picture

if you only went long stocks just because been was going to inflate the stock do you have something to learn...and lose...and that is exactly what is wrong with this market..people are not buying the company..they are buying the hope...more IPO´s please...lots of suckers out there right those Greek those Apple those US

Wed, 09/21/2011 - 09:57 | 1692088 walküre
walküre's picture

Tyler, can we see a summation of short interest on this day and this morning?

Seems relevant to know going forward to review this day from another angle.

Wed, 09/21/2011 - 09:57 | 1692090 gaijin
gaijin's picture

"Economists disagree on many things but one proposition that has near-universal assent is that sound monetary policy should be conducted free of political interference."

If politics is how we negotiate our fundamental disagreements without violence, then why would we (those of us who are not economists) consent to such a blank check vis-a-vis monetary policy? Stated another way, I presume we would all agree that monetary policy should be conducted free of violent inteference, so what recourse, other than politics, remains to we non economists?

Wed, 09/21/2011 - 09:58 | 1692095 ziggy59
ziggy59's picture

they are playing the political side..the repubs will come out and say that they were against the fed QE-ing , especially when it will fail. this will be done to garner votes..which it will..



Wed, 09/21/2011 - 09:58 | 1692096 UTICA CLUB XX PURE

Bend Over, I'll give her some stimulass!!!


Wed, 09/21/2011 - 10:00 | 1692102 agNau
agNau's picture

We are lost if we ever lose sight of this one thing.........
"sound monetary policy should be conducted free of political interference"

Money and Politics NEVER mix!

Wed, 09/21/2011 - 10:03 | 1692113 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

As I stated yesterday, this letter was merely a "guillotine waiver form".  These will become more popular as time passes.

Wed, 09/21/2011 - 10:01 | 1692106 LongSoupLine
LongSoupLine's picture

makes you wonder if the Morgue has unwound their silver short at this point.  Or maybe it's reverse-reverse psychology from Blythe (come on, you KNOW she's got the squeeze on Dimon's and Feroli's balls) knowing that the Fed will read their write-up and hence agree with the GOP.

bottom line:  It's ALL horseshit, and they are ALL in on the big scam.

Wed, 09/21/2011 - 10:02 | 1692108 Robslob
Robslob's picture

What would be really funny?

HEADLINE: FOMC agrees to have another 2 day meeting end of October

now that would be funny!

Wed, 09/21/2011 - 10:02 | 1692110 SeverinSlade
SeverinSlade's picture

The fact that the entire world financial markets move based on the words of one man shows that central planning is a complete and utter failure.

Wed, 09/21/2011 - 10:03 | 1692114 Confucious 222
Confucious 222's picture

At this point "The Fed"  is above the law, and CANNOT be reined in. Show me empirical evidence to the contrary if you can. I'd welcome it.

The analogy I'd use is that of a patient in the hospital who has cancer of the pancreas, liver, stomach, both lungs, brain, and throat. His friends and family are in shock and can't believe it. His doctor says "3 months at most" The wife says, "We're going to FIGHT IT, honey!"

Very noble, now, let's be realistic: Just exactly WHAT is going to remove all the late stage cancer that is known as "The Fed"???

Wed, 09/21/2011 - 10:03 | 1692115 viator
viator's picture

"Economists disagree on many things but one proposition that has near-universal assent is that sound monetary policy should be conducted free of political interference."

Hard to take anything seriously that contains that sentence. JP Morgan's Michael Feroli must live in a different universe.

Wed, 09/21/2011 - 10:05 | 1692122 richard fitzwell
richard fitzwell's picture

"how economic historians will view him?"  economic historians?  now there is a group to measure success against.  the weight guesser at the circus has more relevance

Wed, 09/21/2011 - 10:06 | 1692130 kahunabear
kahunabear's picture

Dunno about no letter, but twist, .1% rates, and any and all kinds of toxic trash purchases are in the bag. What did they used to say about Countrywide before it exploded in our face?

The Fed is on your side!

Wed, 09/21/2011 - 10:07 | 1692134 DosZap
DosZap's picture

There is a chance that Committee members who have some reservations about Fed policy may now be less likely to dissent, to avoid validating the views expressed in the Congressional letter, as surely all on the FOMC -- hawk or dove -- would find this political meddling repugnant.

Well, I wonder how MIFFED they might be if the CONgress decided to REtake the control of the presses away from the Fed, send them packing and start doing their JOBS as intended.(sound like a panel of elites to me, huh?).

Congress GAVE them the powers, and they can TAKE them back.(of course with the maniacs we have on the Hill, I am not sure if it would be better).

I really am firmly convinced it would be FAR better,as its a hell of a lot tougher getting 435 Reps to agree on anything.

Wed, 09/21/2011 - 10:07 | 1692137 Dr Hackenbush
Dr Hackenbush's picture

Please do not meddlle in JPM's outright manipulation 

Wed, 09/21/2011 - 10:08 | 1692145 Golden Receiver
Golden Receiver's picture

I've long been impressed by the lack of media leaks on days like today. I can see how Fed staff leaks would be career enders but surely there are some who are very tempted.

The press obviously gets pre-release transcripts but I've never seen the embargo broken (immediate black list I suspect).

Does the Fed give the President or Congress a heads up of any kind? The lack of leaks would indicate the answer is no.

I have to believe financial insiders get tons of leaks. Any hard evidence of that?

Wed, 09/21/2011 - 10:09 | 1692146 Golden Receiver
Golden Receiver's picture

double, sorry.

Wed, 09/21/2011 - 10:10 | 1692152 walküre
walküre's picture



Vote accordingly.

Wed, 09/21/2011 - 10:14 | 1692169 g speed
g speed's picture

and so the rumors are correct and validated by JPM talking heads--that Ben's actions are completely self serving and are based on his assumptions of what history will say about him.

Wed, 09/21/2011 - 10:14 | 1692172 Kina
Kina's picture

At the end of the day the corrupt banks and regulators in destroying everything for their own gain will leave the public with absolutely nothing, except for extreme anger and the desire for vengance.


The public will have nothing, but will feel some recompense in the imprisoning and occassional public execution of banksters for Treason. The banksters will have created a new world in which they are considered vermin.


However, China will thank them for all gold and silver they have helped them 'steal' from the west.

Wed, 09/21/2011 - 10:15 | 1692173 lano1106
lano1106's picture

If we agree that QE would bring more global inflation, one perspective that I have not  seen discussed is what would be the effect of more inflation cause by QE3 in the current european crysis? It seems to me that it would assure a complete failure of their austerity measures and might just accelerate the problem.


Wed, 09/21/2011 - 10:15 | 1692176 anony
anony's picture

wowo, you'd think that Alan Greenspan NEVER succumbed to political pressure to keep his job, wouldn't you?

Whenever there are more then one people in a room, you have political pressure, whether it's blatant or subtle.

The letter by the R's  is meaningless, good only for, what else?  Politics.

Wed, 09/21/2011 - 10:16 | 1692177 Timmay
Timmay's picture

This is neither heaven nor hell. We are in LIMBO.

Wed, 09/21/2011 - 10:18 | 1692190 walküre
walküre's picture

Repubs will take credit when Ben MUST disappoint today because there's simply no need for further QE.

Makes more sense than Repubs trying to establish a record that they advised against it.

If Ben goes "all in" today, Obama has several trillions he could deploy to rescue his legacy and potentially win a 2nd term.


Wed, 09/21/2011 - 10:18 | 1692191 Dr. Engali
Dr. Engali's picture

The republicans knew what the result would be. It is all political grandstanding so they can say "we tried to stop them" pure bullshit. You want to take a stand republicans...end the fed.

Wed, 09/21/2011 - 10:25 | 1692222 walküre
walküre's picture

No, I disagree. Repubs have determined to win the next election. They can't afford another 3 or more trillion in Obama's hands. That could do some serious damage to Repubs! They're motivation is genuinely trying to derail Obama's presidency and prepare for the election.

Sure the letter was political but not as you think. Repubs took a stand yesterday. They're going to fight the Fed tooth and nail or at least that is supposed to be the impression.

Obama with 3+ trillion Dollars is the equivalent to Nero with a flame thrower.

Wed, 09/21/2011 - 10:42 | 1692318 mr.5280
mr.5280's picture

Audit the Fed.

Wed, 09/21/2011 - 10:43 | 1692323 Au Shucks
Au Shucks's picture


"sound monetary policy"


"an eye to how economic historians will judge him in the future"


"to avoid validating the views expressed in the Congressional letter"




Wed, 09/21/2011 - 11:11 | 1692448 SheepDog-One
SheepDog-One's picture

Notice its the banks, GS, JPM, Citi, all with their 'expert opinion' on what the FED will do...ust like heroin addicts directing a methodone clinic!

Wed, 09/21/2011 - 11:14 | 1692465 decon
decon's picture


Yesterday you said this about the letter from the Repugnicans;

"And while the political undertone of the letter is all too obvious: i.e. prevent any additional Obama-benefiting stimulus in the economy through the only conduit Obama has left, courtesy of Fiscal stimulus being snarled for good due to the republican majority in the House,..."

And today you characterize it like this;

"And while the ultimate purpose of this letter is unclear..."


What's it going to be?  Hard to keep a consistent interpretation with all those Tylers running around!  Probably need to ride herd on them a little better Dan.

Wed, 09/21/2011 - 11:25 | 1692529 DavidC
DavidC's picture

"..the more likely leading with an eye to how economic historians judge him many years from now".

Errrm, y-e-s...


Wed, 09/21/2011 - 11:31 | 1692541 Georgesblog
Georgesblog's picture

The only institution more arrogant than Congress is the Federal Reserve. Pride goes before destruction.

Wed, 09/21/2011 - 12:13 | 1692740 deez nutz
deez nutz's picture

when even Congress can't control the monetary policy of the country you know facism has begun.

Wed, 09/21/2011 - 12:20 | 1692784 gabeh73
gabeh73's picture

It seems to me that this is the establishment method of dealing with the tea-party problem.


1. Inbed neo-cons as leaders of TeaParty TM. good job Cantor, Rick Perry and Sarah Palin


2 Have the "tea-partiers" engage in the hegelian dialectic of "Print vs Don't Print"

3 The tea party is now responsible for "Don't print" ...bad deflationary shit happens as the economy goes to the deep shit.

4. blame and discredit tea party...then print.

Wed, 09/21/2011 - 12:28 | 1692830 Mrs Kensington
Mrs Kensington's picture

Within a nano-second of Ben disappointing the bulls and bugs later, out will come the headline pieces saying he "left the door open" for next time, "next time's a dead cert."  ...yadda yadda.  In fact CNBC may even say something like "Bernanke: [enigmatic colon] QE3 Trillions certain next time!!!!  It would be painful if it weren't so embarrassing to watch the desperation to make money based on nothing but Keynesian corruption.    

Wed, 09/21/2011 - 12:56 | 1693002 Clowns on Acid
Clowns on Acid's picture

JPM only tells 1/2 of the story. Barney Frank is tabling measures that would replace the traditional Regional Fed governors with political appointees.

I know that Barney is a fudge packer...but now he is trying the pack the Fed.

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