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Epic Failure In Fed's Price Stability Mandate As Treasury Curve Shift Is Most Abnormal In 30 Years

Tyler Durden's picture


As Diapason's Sean Corrigan demonstrates, the Fed has failed at not only every single explicit mandate, such as keepin inflation and unemployment under control, but in its most important implicit one as well, that of preserving price stability, following an 8 week 2s30s curve shift which has been the greatest such move in 30 years, and a nearly 3 sigma event. 3 SIGMA... In boring government bonds...

Chart: Bloomberg


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Wed, 09/21/2011 - 15:39 | 1694052 jbc77
jbc77's picture

Bernake is a fucking dirt bag in bed with the loser ass Obama admin. Fuck him, hope he gets hit by a car.

Wed, 09/21/2011 - 15:42 | 1694074 monopoly
monopoly's picture

But let's not stoop to their level. Think we are all better than that.

Wed, 09/21/2011 - 16:02 | 1694192 max2205
max2205's picture

IWM closing at 66.66 WTF

Wed, 09/21/2011 - 16:03 | 1694196 buzzsaw99
buzzsaw99's picture

You might be better than that but I'm not.

Wed, 09/21/2011 - 16:19 | 1694253 TruthInSunshine
TruthInSunshine's picture

The Bernank sayeth loudly:

Everyone - Get out of equities and into tnotes, or else yield will be the least of your worries, bitchez!

Wed, 09/21/2011 - 16:45 | 1694391 tbd108
tbd108's picture

Well then how about a very small car that only bumps him hard in the crotch?

Wed, 09/21/2011 - 15:43 | 1694079 Spitzer
Spitzer's picture

Only silver whisle blowers get hit by cars.

Wed, 09/21/2011 - 15:48 | 1694115 Gubbmint Cheese
Gubbmint Cheese's picture

Spitzer you magnificent bastard.. you owe me a new keyboard.. :)


Wed, 09/21/2011 - 15:52 | 1694134 tmosley
tmosley's picture

He's just doing his part to stimulate the economy.

Wed, 09/21/2011 - 15:57 | 1694157 DoChenRollingBearing
DoChenRollingBearing's picture

^--- Great comments in this subthread!

Wed, 09/21/2011 - 15:59 | 1694170 Cognitive Dissonance
Cognitive Dissonance's picture



Epic Failure In Fed's Price Stability Mandate As Treasury Curve Shift Is Most Abnormal In 30 Years

"Most" abnormal in 30 years is the new normal.

Wed, 09/21/2011 - 16:02 | 1694191 Cleanclog
Cleanclog's picture

Will this be another way to funnel to Primary Dealers - the big banks - again?  If almost everything with a maturity longer than 5 years is due to be neutralized by Fed buying after the fact . . . will dealers gobble up the auctions with a wink and a nod that they'll be taken out of those same positions in ensuing days?  Let's watch.  Certainly could be.  What does Mr. Pimco say?

Wed, 09/21/2011 - 16:13 | 1694239 Smiddywesson
Smiddywesson's picture

Cut them some slack,

they're doing there best to stabilize prices, (PM prices)

Wed, 09/21/2011 - 17:07 | 1694476 Manthong
Manthong's picture

Why should short term money have all the fun?

A dying currency need a little verve on the way out.

Wed, 09/21/2011 - 16:19 | 1694268 GeneMarchbanks
GeneMarchbanks's picture

Economy lobotomy

Wed, 09/21/2011 - 15:59 | 1694174 JohnG
JohnG's picture

Did a little "percussive maintenace" myself....on the FED nothingburger, commods selling off, equities hammered.

Fuck you Bernank you're a fucking maniac.

Thu, 09/22/2011 - 05:33 | 1696045 BorisTheBlade
BorisTheBlade's picture

you owe me a new keyboard

New financial instrument, keyboard-backed IOU. New unit issued every time someone spills coffee on his keyboard.

Wed, 09/21/2011 - 15:57 | 1694158 OOONONO
OOONONO's picture

"silver whisle" - is that a euphanism for something, Client #9?  was that your favorite? 

Wed, 09/21/2011 - 16:00 | 1694180 JohnG
JohnG's picture

Adrian Douglas.

Wed, 09/21/2011 - 16:02 | 1694186 GeneMarchbanks
GeneMarchbanks's picture

Speaking of Ag, JP Morgue hitting new lows = silver spike imminent?

Wed, 09/21/2011 - 16:10 | 1694218 fuu
fuu's picture

That was beautiful. Ended on a new 52 week low. Silver:JPM now 1.3066.

Wed, 09/21/2011 - 16:15 | 1694250 GeneMarchbanks
GeneMarchbanks's picture


Just the dude I was looking for. This ratio of yours, you're a big beliver eh? So tell me any chance they unwind the silver short soon?

Wed, 09/21/2011 - 16:27 | 1694292 fuu
fuu's picture

The ratio is too simplistic to be all that meaningful. I just enjoy watching it change.

I am not convinced they are short.

Wed, 09/21/2011 - 16:31 | 1694324 xtop23
xtop23's picture

I think they unwound a ton of their silver shorts in May 

Wed, 09/21/2011 - 16:36 | 1694341 fuu
fuu's picture

I tend to agree.

Wed, 09/21/2011 - 16:36 | 1694343 GeneMarchbanks
GeneMarchbanks's picture

Small potatoes. That was an overture.

Wed, 09/21/2011 - 16:12 | 1694236 orangedrinkandchips
orangedrinkandchips's picture

I'll smoke an ounce to that!!!!!


Wed, 09/21/2011 - 16:13 | 1694241 orangedrinkandchips
orangedrinkandchips's picture

someone will be texting they boyfriend and will hit the fucking mutt....fuck drunk driving...text driving is worse!

Wed, 09/21/2011 - 16:15 | 1694246 covert
covert's picture

join one or more barter clubs and hide your gold and other metals.


Wed, 09/21/2011 - 15:41 | 1694067 depression
depression's picture

Winning !

Wed, 09/21/2011 - 15:55 | 1694069 TruthInSunshine
TruthInSunshine's picture

Ben Bubbles&Bananas Bernanke Broke All Markets.

Good job, Bennie Boy!

*News reports (unconfirmed at this time) that Paul Krugman, upon hearing the announcement, tried to commit suicide by jumping from a 1st floor window in the NYT Building.

Wed, 09/21/2011 - 16:04 | 1694201 buzzsaw99
buzzsaw99's picture


Wed, 09/21/2011 - 16:29 | 1694313 Falcon15
Falcon15's picture

Abby. Abby Nooormal.

Wed, 09/21/2011 - 15:43 | 1694075 GenX Investor
GenX Investor's picture


Wed, 09/21/2011 - 15:43 | 1694078 King_of_simpletons
King_of_simpletons's picture

Century of "American Nightmare".

Wed, 09/21/2011 - 15:43 | 1694081 SheepDog-One
SheepDog-One's picture

FED just won the all-star *fail* trophy.

Wed, 09/21/2011 - 15:43 | 1694082 bania
bania's picture

three standard deviations... is that all you got Bernank?

Wed, 09/21/2011 - 15:45 | 1694096 Western
Western's picture

I know right? I thought the mandate-du-jour was to go big or go home, 7 sigma at least.

Wed, 09/21/2011 - 15:44 | 1694086 zorba THE GREEK
zorba THE GREEK's picture

Unintended consequences. I have a feeling we will be hearing that term more and more as desperate measures

become the game plan in the final days before " THE GREAT COLLAPSE "

Wed, 09/21/2011 - 15:43 | 1694087 Sequitur
Sequitur's picture

Prints - market starting to go down big.

Frankly, this is good. Deflation is here, everything will drop. Everything. Including gold, silver. Let the debt destruction commence, dollar rises.

Wed, 09/21/2011 - 15:48 | 1694110 Waffen
Waffen's picture

200 points aint big.


QE holding up the markets has been the meme for a long time here and in the metals community.  We have not had overt QE, so we need a real plunge in the markets or all of us have been wrong.

Wed, 09/21/2011 - 15:54 | 1694145 Spaceman Spiff
Spaceman Spiff's picture

Did they hint/cock tease more overt QE in the statement for some later date?  They really feathered the market's testes with that at Jackson Hole.

Wed, 09/21/2011 - 16:03 | 1694195 Sequitur
Sequitur's picture

Was going to be bigger than 200, we have to be close to 300 by now, the sell orders were coming fast and furious at the close.

Wed, 09/21/2011 - 16:15 | 1694249 Waffen
Waffen's picture

Still not terribly impressed.   Lets hope for a continued market sell off this week in epic fashion.

Wed, 09/21/2011 - 18:33 | 1694092 dan10400
dan10400's picture


Wed, 09/21/2011 - 15:45 | 1694099 economics1996
economics1996's picture

Deflation helps me.  

Wed, 09/21/2011 - 15:50 | 1694109 Stax Edwards
Stax Edwards's picture


Wed, 09/21/2011 - 16:18 | 1694261 scatterbrains
scatterbrains's picture

Hugh is that you ?

Wed, 09/21/2011 - 15:46 | 1694101 youngman
youngman's picture

You know I see this as a sideline...I think they are rushing back to work on the European problem right now...that is front and center...a trillion or two there first to save those funny speaking bankers over there...over de da

Wed, 09/21/2011 - 15:49 | 1694113 zorba THE GREEK
zorba THE GREEK's picture

If it was the Fed's plan to strengthen the dollar, then it looks like a great success. 

Wed, 09/21/2011 - 15:50 | 1694123 economics1996
economics1996's picture

Stax yes 

Wed, 09/21/2011 - 15:52 | 1694135 John McCloy
John McCloy's picture

All this to what...get the already 60 year low mortgage rates to 0.5% desperately believing that will kickstart home prices? Clueless

Wed, 09/21/2011 - 15:59 | 1694171 tarsubil
tarsubil's picture

People refinance, more cash each month, more demand for Margarittavilles, economic recovery. So simple! I'm using my extra cash for Au, H2O, and Pb so I'm going to be left out of this partay. :(

Wed, 09/21/2011 - 15:53 | 1694141 gjp
gjp's picture

Momos are clutching to Robo's favourite names with everything they got.  As robo says, safe havens to be found in US treasuries and triple-digit PE consumer bets like AMZN and GMCR.  Insane.

Wed, 09/21/2011 - 15:54 | 1694142 junkyardjack
junkyardjack's picture

Please move single file toward the exits, no need to panic we can all get through...

Wed, 09/21/2011 - 16:44 | 1694387 BrocilyBeef
BrocilyBeef's picture

ahh, fire!

Wed, 09/21/2011 - 15:55 | 1694148 monopoly
monopoly's picture

It is mind boggling to me that anyone would sell their gold at this time as the carnage continues. 

I don't care how high the dollar goes. It is broken, and cannot be fixed. Just biding my time, again.

Geesh, look at those interest rates.

Wed, 09/21/2011 - 16:10 | 1694220 B-rock
B-rock's picture

Traders move the markets remember... Not investors.

Wed, 09/21/2011 - 15:56 | 1694155 reader2010
reader2010's picture

BTFD says Marc Faber.

"I should add that for the investor, who has a well-diversified portfolio of assets and has high cash flow (personal income and income from investments), downside volatility offers an opportunity to acquire assets at distressed prices or add to his positions at a more favorable entry point.

However, for the investor without any free cash flow, downside volatility can be extremely problematic because the option to increase positions at distressed prices is not available to him."

Wed, 09/21/2011 - 16:48 | 1694399 WonderDawg
WonderDawg's picture

Marc Faber is really Captain Obvious? What a surprise.

Wed, 09/21/2011 - 15:57 | 1694159 achmachat
achmachat's picture

Weren't precious metals supposed to RISE on these news?!

Wed, 09/21/2011 - 16:01 | 1694185 Sequitur
Sequitur's picture

Not if you understand we are in a deflationary environment, and bank debt i.e. credit greatly exceeds printed dollars. If they print, PMs up. If not, lower.

Wed, 09/21/2011 - 16:02 | 1694193 Waffen
Waffen's picture

We didnt get QE, so no.. Its why I was begging for QE.

Wed, 09/21/2011 - 15:57 | 1694163 r101958
r101958's picture

The market would be down much more if TBTF's and PPT were not selling paper PM's to stop the drop. You might also note with oil that WTI is down much more than Brent. Brent is only down 1/4%. WTI means nothing anymore.....just an extend and pretend billboard.

Wed, 09/21/2011 - 15:58 | 1694167 lizzy36
lizzy36's picture

Hey, isn't there a greek teleconference today? Or some rumor to ramp markets 100 pts into the close?

Wed, 09/21/2011 - 16:40 | 1694361 TruthInSunshine
TruthInSunshine's picture

It was cancelled.

Austerity means they no longer get call waiting or conference calling.

Wed, 09/21/2011 - 15:59 | 1694169 JR
JR's picture

A small group of ambitious men, most of them Jewish, have plotted and are finalizing plans to take over, dominate, and control the money and resources of the world. There’s no evidence whatever that this statement, falsely called theory, is anything but crystal truth.  And in their quest these men reason that the best way to rule the world is to accumulate and control its wealth.

The economic system they’ve attempted to put in place is Keynesian, is socialistic, and now it’s beginning to fall apart.  Big Time.

These bailouts are not for the country or the citizens, but are to replenish the power of the banks that took horrific, world-boggling financial risk, and lost.

The private owners of the Fed are stealing from 90 percent of the people; and for the man in the lower 47 percent who pays no taxes, they are stealing his future; it won’t be long before there will be even fewer employers to employ him.

Wed, 09/21/2011 - 15:59 | 1694172 adr
adr's picture

The thing is, isn't this the outcome we want? It would have been better if the Fed just announced nothing at all, but a stronger dollar will help America. The big banks dying will help America.

The America I am talking about is not the cheap money debt fueled paper billionaire America, but the work hard, build something of value, not everyone needs to be a millionaire America.

The Forbes billionaire list that came out was such a total joke. Most of the people on the list aren't actually billionaires yet. They are only worth billions on paper when they eventually get to sell their shares. If Facebook never goes public how much money does Zuckerpuke actually have?

When your value is only on paper, you actually have no value.

Wed, 09/21/2011 - 16:10 | 1694224 qussl3
qussl3's picture

It also helps China, as they're dollar holdings increase in value, letting them corner off more assets at much cheaper prices.

Plus its going to do wonders for its trade surplus.

Wed, 09/21/2011 - 18:10 | 1694767 Anonsters
Anonsters's picture

What have you built that is "of value"?

Wed, 09/21/2011 - 16:00 | 1694183 Mutatto
Mutatto's picture


I coined that just now.

basically, it means "out of bullets" or "ineffective stimulus".

I'm working on "Transitoryflationist".

I'm not sure what it means, but Ben's picture will be there next to it.....

Wed, 09/21/2011 - 16:04 | 1694202 DeadOnArrival
DeadOnArrival's picture

Cramer said "U" vs. "V" recovery, Buy!-Buy!-Buy!...or is it Bye-Bye-Bye?

Wed, 09/21/2011 - 16:04 | 1694205 YesWeKahn
YesWeKahn's picture

With all my respect, Bernanke is an idiot.

Wed, 09/21/2011 - 16:10 | 1694223 mt paul
mt paul's picture


and respect 

in same thought.....



Wed, 09/21/2011 - 16:05 | 1694207 d00daa
d00daa's picture

IQ45???  Staxx????  you guys still long and strong???  LMFAO!

How's that "up $12,000 on SPY" trade going for ya IQ45?????  Let me guess, sold at the top right?????  trolololololololololololololololololololol

Wed, 09/21/2011 - 16:12 | 1694234 jdelano
jdelano's picture

schadenfreude!  try it, it's tasty!

Wed, 09/21/2011 - 16:07 | 1694213 Thunder Dome
Thunder Dome's picture

F$$$ this market.  A lot of stocks are cheap but they are not finished going DOWN!  


Praying for momentum to build on the downside.  Hope it all blows straight to hell.

Wed, 09/21/2011 - 16:11 | 1694227 PulauHantu29
PulauHantu29's picture

What does a "pancake" curve mean? Does this include no syrup?

No whipped cream?

Wed, 09/21/2011 - 16:12 | 1694231 FranSix
FranSix's picture

The stabilité in the ¥ is breathtaking.

Wed, 09/21/2011 - 16:12 | 1694233 eddiebe
eddiebe's picture

Bernank is not an idiot. Try to remember what he and the gang are after: Your money! Look at the beauty of the scam: Oh we gotta depress the bond down to nothing to save the world. Everybody into the long bond!!!!

 Next scene, act III: Oh now we have to raise interest rates to save the world from runaway inflation. Everybody quick got out of the bond before it tanks!!!!  Wow, that was close, but we saved the world ( again ).

Wed, 09/21/2011 - 16:14 | 1694245 High Plains Drifter
High Plains Drifter's picture

just like george carlin said. they want it all. they want it all. 

Wed, 09/21/2011 - 16:13 | 1694237 High Plains Drifter
High Plains Drifter's picture

come on ben. we can't make it without your help. please help us so we can you all believe all of this bullshit?  unbelievable.......

Wed, 09/21/2011 - 16:13 | 1694240 No One
No One's picture

it's 12 after.. has Leo been fired yet?

Wed, 09/21/2011 - 16:16 | 1694254 Mitch Comestein
Mitch Comestein's picture

Welcome to the depression, bitchez!  Nervous?

Wed, 09/21/2011 - 16:44 | 1694390 BrocilyBeef
BrocilyBeef's picture

your mom is.

Wed, 09/21/2011 - 17:08 | 1694483 Esso
Esso's picture

Two words: Sop bread.

Learn it, live it, love it.

Wed, 09/21/2011 - 16:23 | 1694270 papaswamp
papaswamp's picture

So Moody downgraded banks before the Fed announcement...don't suppose they had a heads up? The flattening is extremely dangerous to weak banks...were the sacraficial cows just announced? Power and wealth being concentrated? I smell a set up.

If true this tells me things are about to get much much worse. Thus a sacrafice(s) must be made satisfy the people and prevent wide spread riots.

Wed, 09/21/2011 - 16:23 | 1694288 Surly Bear
Surly Bear's picture

How is the twist good for us? Yeah, sure, the world doesn't end today, but.... Can somebody tell me? My degrees in accounting and finance aren't helping me figure out how this is nothing more than a slow motion train wreck.

Wed, 09/21/2011 - 16:56 | 1694427 Alex Kintner
Alex Kintner's picture

This link explains the Twist.

Sounds like a mini-QE to me. Maybe that's what Bernake will do from now on. Chinese water torture of Twists (drip drip drip).

...But it also was a description of what the Fed wanted to do: twist the so-called yield curve by selling short-term bonds and buying longer-term securities. That would bring short-rates up and long-term rates down.

Wed, 09/21/2011 - 16:24 | 1694289 msmith
msmith's picture

The Markets are really creating some major technical damage to the downside.  The bulls are losing many of their levels that they previously defended.  It appears that we will revisit the August lows on the S&P really soon.  Here is a summary:  S&P/ES down, EURUSD, down, Crude Oil/CL down, Gold/GC down, and USD up  Just as expected after the Bernank.

Wed, 09/21/2011 - 16:32 | 1694312 virgilcaine
virgilcaine's picture

SD 1 and VC with a nice call on  NO QE,  This was based on  the fed being boxed in in a stagflationary environment.

Wed, 09/21/2011 - 16:54 | 1694369 virgilcaine
virgilcaine's picture

No pomo or expansion of the balance sheet the "mothers milk of speculation".. that teet has run dry.  It's actually a good call by the bernank, the speculators needed to be weaned off the fed nipple.


Wed, 09/21/2011 - 19:12 | 1694926 T-Bond
T-Bond's picture

I used to think he was just a misguided academic. Every single forecast and policy move has been a complete disaster. I am now starting to think this guy is very malicious and trying to take the place down.

Thu, 09/22/2011 - 00:53 | 1695725 udecker
udecker's picture

In my twisted, "always the optimist" mind, I like to pretend that Greenspan knew exactly what he was doing as well: pumping the system exactly how it should be pumped to break it.... just to prove a point.  Some Randian, 60's era Greenspan point.  Then, to feign surprise and regret. :-)

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