Fed Folds: Will Do Open-Ended MBS Buying, Extends Operation Twist

Tyler Durden's picture

Bernanke has acquiesced and is now the 4th branch of the status quo- and all is well in the world:

  • *FED TO KEEP POLICY STIMULATIVE FOR `CONSIDERABLE TIME'
  • *FED WILL ADD TO PURCHASES IF LABOR MARKET DOESN'T IMPROVE
  • *FED DOES NOT SAY WHEN MBS PURCHASE PROGRAM TO END
  • *FED TO BUY $40B MBS MONTHLY, CONTINUE `OPERATION TWIST'
  • *FED TO BUY MBS, EXTENDS ZERO-RATE POLICY INTO 2015

To summarize:

  • The good news: The Fed's NEWER, OPEN-ENDED and NEVERENDING QE is bigger, longer, and has a Retina display (however its battery life is far shorter).
  • The bad news: The Fed has now confirmed it is merely a sad, political, self-frontrunning caricature of what a central bank should be.

 

 

Pre-FOMC:

S&P 500 Cash    1437.9
S&P 500 Futures    1437
Dow    13345.43
10Y    1.7247
5Y    0.6522
30Y    2.8815
EUR    1.2895
MBS Spread    0.57993
Gold    1724.35
Silver    32.77
WTI Oil    97.23
USD Index    79.70237
Apple    676.91

Full statement link.

Full redline comparison to the August statement below:

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malikai's picture

Gross just came.

tsx500's picture

god what a disturbing visual  

camaro68ss's picture

Hyperinflation here we come baby. Destination, Emerika Bitchez

kaiten's picture

QE to infinity and beyond.

AllThatGlitters's picture

It looks like Gold and Silver to infinity and beyond:

 

Look at gold shooting higher in real time:  

 

http://www.pmbull.com/gold-price/

 

Nice for those holding bullion before the announcement!

fuu's picture

TURKEY SAMMICHES BITCHEZ!

unrulian's picture

...more like Cock-meat sammichez Bitchez

redpill's picture

Dropping dickburgers out the whirlybird, yeeee hawwww

RSloane's picture

Ugh....Jesus Christ...my egg salad sandwhich for lunch feels so inadequate now.

Michael's picture

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

dwdollar's picture

Why don't they just extent ZIRP to the year infinity???

Stackers's picture

Holy barbarous relic Batman !!!

Dalago's picture

How did it end for the Roman Empire, again?

Gief Gold Plox's picture

If only we could have a South African nation-wide miners strike in the near future. Oh wait...

redpill's picture

"The Fed has now confirmed it is merely a sad, political, self-frontrunning caricature of what a central bank should be."

 

What it should be?  How about killed?  Where's Andy Jackson when you need him....


JLee2027's picture

When JP Morgan's short position goes belly up in the Silver market, that will kill enough Banks to make Andrew Jackson proud.

Spastica Rex's picture

I can't remember exactly, but I think Alexandria was involved.

Glass Steagall's picture

Um, cuz that didn't work. Now you get NIRP, bitchez.

Sofa King Confused's picture

Can anyone explain why everybody is soooo excited about the FED buying MBS.  Does it really do anything else then just clear toxic shit off of bankers books?

viahj's picture

that's all it does.  that's all that QE was intended to do.  that is all the the Fed does (support ownership banks).

Michael's picture

Because this is my fucking Plan!

To have the Federal Reserve Corporation stuffed to its fucking rafters with mountains of stinking fecal toxic waste matter, that it destroys itself from within and blows itself up.

It's a very complicated plan. I've been working on this plan a very long time.

Now just go along with it and shut the fuck up about it.

nope-1004's picture

And where does the toxicity go?  It can't just disappear.  Someone, somewhere, is on the hook.  And that somoene is you and I, which we will never pay, so the only avenue to resolve is inflate away the debt.  Default won't happen, and neither will repayment.

 

hannah's picture

the fed cant lose money on mbs...they just print what they lose. we are the ones that take it up the ass with depredciation of the currency.

KickIce's picture

They don't care, it's imaginary money that they can trade for real assets.  It's worse than monopoly money, at least you have to work to buy the game.

eatthebanksters's picture

Repeat after Ben."Taxpayers are cunts...let them pay while we dine in the ivory towers!."

JohnKozac's picture

MBS buying now ....$1 trillion of Student Debt and Defaults to be bought next year (is my guess) .....Fed balance sheet will double (at least) again by 2015.

smlbizman's picture

i guess that home improvement loan just came through to fix up iran ...

nope-1004's picture

Imagine where gold and silver would be if allowed to trade freely, in an uncorrupt, open, market.  THE US ECONOMY IS A PONZI.

 

RSloane's picture

What do you mean 'the US economy"? Try the global economy.

knukles's picture

But the shit storm arrives.

Just think of it as in connect the dots.

Armageddon Ahoy!

Global monetization for all intents and purposes.
Gotta monetize any shocks to the system.
In other words (will date me, but the oldsters will remember the '70's oil embargoes and printing press reactions) gotta sterilize any increases in the price of oil...
Why's that Uncle Knukies?
Because my little one, with the Mid East going all bat shit killing people, invading US Embassies (sovereign territory, remember) over a film nobody ever heard of (false flag incendiary fuse?) then it would seem that the Islamists are mad as hell and not gonna take it anymore, some Western country (singular) is getting pissed on, which just so happens to have a fuckload of military might in the area....

And you all thought it was gonna be the Enterprise on the bottom.
Not so fast, me buckos.

It couldn't be any damned smoother.
Just like maybe the most relevant modern invention...
Stool softeners...
The shit flows really really effortlessly, so much you get to enjoy it, no unwarranted distractions....

Booyah, Motherfuckers!

Gog and Megog Ahoy!

eatthebanksters's picture

knukles, I always appreciate your unique and excelllent perspectives!

knukles's picture

Thank you, eatthebanksters.
While accolades and recognition are not something I overtly search for any longer (I'd tried that unsuccessfully for way too long!) and in fact are unattainable within a shroud of anonymity, the satisfaction of a job well done is a gift borne by comments such as yours.   Even as a casual observer of the human condition, a compliment here and there is appreciated. 

halleys5's picture

Nah, SOYLENT GREEN Sandwiches for everyone!!

Yes, implying that we are being force fed our own decaying future. 

saturn's picture

Penis extension to 2050.

knukles's picture

Nothin' could be finer
than to goose the metals and minahs
in the moooooo-or-nig

 

Holy B. Jesus, gonna let it all hang out!

EU/ECB/EMS/Whatevrethefuckallthemacronymsstandfor print print print

Fed Bend over and Open-ended print print print

 

What could go wrong?
This is gonna end badly.

So sayeth the Knukles.

FoxMulder's picture

"FED WILL ADD TO PURCHASES IF LABOR MARKET DOESN'T IMPROVE"

Playbook for the banks: buy more bonds and fire evryone.

Urban Redneck's picture

At only 0.5 TRILLION per year it will take Ben till hell freezes over to muck all the shit out of the banks.

Sooner rather than later (after the election)... and he already has the benevolent sounding excuse/cover ready to go.

bugs_'s picture

0.5T - perhaps there is one bank they are worried about.

Citxmech's picture

Keep reducing the labor participation rate - unemployment solved!

TruthInSunshine's picture

I guess I'll cut against the consensus here and just state that today's announcement, which focused on MBS, was an explicit admission that The Bernank & Gang are not committing to bridging the upcoming fiscal cliff (as of today, at least).

Unless the Fed turns Twist into steroid-injected Twister, the debt ceiling and deficit spending of unknown quantities going forward have not been addressed.

Let us see how this shakes out, but by focusing on MBS and not treasuries, this really could be a very big and tangible sell the news event, regardless of initial, kneejerk reaction.

Alea Iactaest's picture

And I'll just mention that the crystal ball was on full power yesterday:

Wed, 09/12/2012 - 16:08 | 2787227

WTF on VIX120919P14 ???

Anyone?

VIX now well under 15... LMAO

JPM Hater001's picture

Sniff snifff sniff***

Something is rotten in the state of Benmark...

sosoome's picture

Something tells me this is more about banks than goobermint. Then there's this little nugget from a few days ago refered to as Collateral Transformationhttp://www.bloomberg.com/news/2012-09-11/bny-mellon-says-derivatives-may-need-4-trillion-more-collateral.html

hannah's picture

thats what i was thinking......the shadow banking systems was getting close to something bad happening....

RopeADope's picture

Historically 75 to 80 percent of derivatives have zero value. This means that the shadow banking system needs another 500 trillion in collateral.

RSloane's picture

No problem, the only consensus so far has been about dick burgers.

defencev's picture

Sell signal? Dream on. B is desperately trying to keep O in the office. I just hope there will be a huge spike in oil prices which will bury Barry Presidency no matter how much of oil reserves freed up. Well, since we cannot do anything about that,

let us make some money.