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The Fed's Balance At The End Of 2013: $4 Trillion

Tyler Durden's picture




 

What happens next:

  • Imminently, the Fed's Open Markets Operations desk will commence buying $40 billion in MBS per month, or about $10 billion each week. Concurrently, the Fed which is continuing Operation Twist, will still purchase $45 billion in "longer-term" Treasurys, sterilized by the $45 billion or so in 1-3 years Bonds it will sell until the end of the year at which point it runs out of short-term paper to sell.

End result: every month through the end of 2012, the Fed's balance sheet expands by $40 billion in MBS.

  • Beginning January 1, 2013 the Fed will continue monetizing $40 billion in MBS each month, and will continue Operation Twist, however it will adjust the program so that it continues to increase its long-term holdings at $85 billion per month, without sterilization as it will no longer have short-term bonds to sell. It will also need to extend its ZIRP language "through the end of 2016" so all bonds 1-3 years are essentially risk free, as they are now, in effect eliminating the need to sell them.

End result: every month in 2013 the Fed will increase its balance sheet by $85 billion, consisting of $40 billion in MBS, and $45 billion in 10-30 year Treasurys, or the natural monthly supply of longer-dated issuance. The Fed will therefore monetize roughly half of the US budget deficit in 2013.

Putting it all together, the Fed's balance sheet will increase from just over $2.8 trillion currently, to $4 trillion on December 25, 2013. A total increase of $1.17 trillion.

This is what the Fed's balance sheet will looks like:

 

Another way of visualizing this is how many assets as a percentage of US GDP the Fed will hold on its books. Currently, this number is 18%. By the end of 2013, the Fed's historical flow operations will be accountable for 24% of US GDP.

Why is this important? Simple: when the time comes for the Fed to unwind its balance sheet, if ever, the reverse Flow process will be responsible for deducting at least 24% of US GDP at the time when said tightening happens. If ever.

What is scariest, is that as of this moment, all of this is priced in. Any incremental gains in the stock market will have to come from additional easing over and above what Bernanke just announced.

And finally: Fed's DV01 at December 31, 2013: ~$4 billion

 

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Thu, 09/13/2012 - 19:00 | 2792525 Conman
Conman's picture

I'm just excited that bad news should now really be bad news like ZH pointed out. Oh please let this mean bizzaro worl trading is done at least i nthe enar term?

Thu, 09/13/2012 - 19:05 | 2792552 Democratic koolaid
Democratic koolaid's picture

More fiat currency equals the dollar loosing value (nazi germany and zimbabwea). That is a Possitive for Comoditys.  Then the democrats use the white tax payers money to give Mexicans healthcare and subsidize black music, that a BET.

Fri, 09/14/2012 - 01:35 | 2793599 gggunchi
gggunchi's picture

This is surprisingly accurate.  Save for the Nazi Germany comment, you"re thinking Weimar republic. 

Thu, 09/13/2012 - 19:17 | 2792595 g speed
g speed's picture

well it looks like everybody else pretty much got what they wanted--for now anyway--   me --I just got a sinking feeling in the pit of my stomach.

Thu, 09/13/2012 - 20:44 | 2792906 Pareto
Pareto's picture

Yeah.  I wonder how long it will take for the Dollar/Yen cross to reach 1?  Ben Bernanke = Zippy the Pinhead.  You can throw his friends Janet Yellen, Joseph Stiglitz and Paul Krugman into that fucking circus side show as well.  Gold to $2850, VIX to 0 and oil (WTIC) to 160 by December.  All hail the ass clown for effecting the impossible as well as the stupid.

Thu, 09/13/2012 - 20:44 | 2792907 Pareto
Pareto's picture

Yeah.  I wonder how long it will take for the Dollar/Yen cross to reach 1?  Ben Bernanke = Zippy the Pinhead.  You can throw his friends Janet Yellen, Joseph Stiglitz and Paul Krugman into that fucking circus side show as well.  Gold to $2850, VIX to 0 and oil (WTIC) to 160 by December.  All hail the ass clown for effecting the impossible as well as the stupid.

Thu, 09/13/2012 - 19:23 | 2792628 Pejorative Requiem
Pejorative Requiem's picture

Putting a number to the Fed's balance sheet assumes that someone has objectively and accurately made public ascertained the real value of the Fed's assets. Tic-toc, folks.

Thu, 09/13/2012 - 19:41 | 2792640 Yen Cross
Yen Cross's picture

  Pejorative Requiem     it's a global thing.     Nice post by the way.

  Enjoy the " new" linkk, http://www.economist.com/content/global_debt_clock           

 

     .

Thu, 09/13/2012 - 19:32 | 2792655 GlomarHabu
GlomarHabu's picture

 

 

censorship, yeah.

Thu, 09/13/2012 - 19:37 | 2792668 The.Oracle
The.Oracle's picture

Hey--I know the answer to this one! What is: hyperinflation!

Thu, 09/13/2012 - 19:41 | 2792682 Quinvarius
Quinvarius's picture

We are still on track for an $85,000 trillions national debt by 2113.  That would be the same increase as the last 100 years.  The deflationists will still say we are deflating.

Thu, 09/13/2012 - 19:43 | 2792694 Toronto Kid
Toronto Kid's picture

For the love of all that is Holy, why in hell would a man deliberately spin his country into the despair that is hyperinflation?

Don't tell me Bernanke doesn't know, because he does. He knows damned well this will result in hyperinflation.

I just want to know why?

Thu, 09/13/2012 - 19:56 | 2792705 khakuda
khakuda's picture

Seriously, it is how power mad governments gain totalitarian authority. Fuck up the system and cause it to fail. Claim it was the free market that led to the decline and argue that more regulation and taxes are needed to make it better. Keep debasing the currency and raising taxes, force the people into debt to survive and you own them. They are beholden to you for their survival.

People dont know what is happening. That is what is happening.

Thu, 09/13/2012 - 19:58 | 2792713 Law97
Law97's picture

I think the previous posts have pretty well answered it, but here it is again in a nutshell.  We're fucked any way you look at it, so if you are currently an oligarch, you use the levers of power that you still have to loot what you can, buy real assets with the free Fed money, take a 5 year vacation to Switzerland, Belize, Singapore, or wherever, and maybe come back later when the dust has settled. 

What they are doing is national financial suicide, but the oligarchs are pretty sure they can escape with a huge take in the process, and sadly, they are probably right. 

Thu, 09/13/2012 - 20:03 | 2792767 Big Ben
Big Ben's picture

Because Romney talked about replacing Bernanke if he won. So Bernanke concluded that an Obama victory was necessary in order for him to keep his job and decided to put the monetary pedal to the metal so the stock market indices will look good in November. The consumer inflation won't arrive until after the election.

Thu, 09/13/2012 - 20:10 | 2792788 New_Meat
New_Meat's picture

Ben: I'm not sure that Mittenz had any influence on the Bernank.  No argument that BB is worried about his being fired should the regime change. I just think that this is the pre-determined trajectory and BB is off to prove his academic theorum, God Damn the consequences.

But I'ma' thinkin' that this was baked into the cake long, long, time ago.  And, as you say, inflation doean's arrive until after decision-time.

- Ned

Thu, 09/13/2012 - 20:52 | 2792932 helping_friendl...
helping_friendly_book's picture

****** BB is off to prove his academic theorum*******

It's not his play!!!! He learned it from the Japs and look where it has gotten them! They ate all their old people!

Thu, 09/13/2012 - 21:58 | 2792750 chump666
chump666's picture

Wow.  I would have thought, thought being a possible moment of clarity of the insane, that the Fed would have held off due to the middle east about to blow and the oil price that should blow Obama's chance of re-election (Romney will ride this hard).  But, lesson learned, trade with the insane until they blow this whole thing apart.  Modern busts now, will not be implosions, but explosions.  And central banks have lit the shortest fuse.  Mind boggling.  Still, only hope is that the backlash (Germany) against madness in Europe will extend to the US.

The Fed has made a massive error with their yield bs calculations, as the 30 and 10 will start to rise, if they keep printing to hold them down, then oil will break out over 100.  Either way, the market has to correct on inflation and yield blowouts.  Next is Asia namely China that just had a wave of inflation thrown it's way (it has been fighting inflation, namely oil corps, by buying USDs).  Bernanke is crippling America.  Iran now has America by the balls, China has Iran's back (oil) and the middle east can export pain back to the US.

It's a sad day and I'm just a dirty trader, but I know when something steps over the line.  Bernanke just sent America into the abyss.

Patient gold-bugs, all the power to you, run with it.

Thu, 09/13/2012 - 23:15 | 2793384 blunderdog
blunderdog's picture

    middle east about to blow and the oil price

My take is the exact opposite.  It seems natural to me that the guy with the reserve currency wants to inflict max pain for the rest of the world whenever he gets the opportunity.  This looks like a perfect time to apply a bit more pressure.

BB could be worried about regime change, but I don't see why.  The next Fedhead's going to continue the same strategy.

How else could ANYONE try to save the big banks?  That's his real focus, "mandates" be damned.

Thu, 09/13/2012 - 20:04 | 2792769 Freewheelin Franklin
Freewheelin Franklin's picture

So, how is the Fed going to purchase MBS? Technically, it's against the law. Are they going to set up another Maiden Lane(s)?

 

10 For X = 1 to infinity

20 Create "Maiden Lane(X)"

30 NEXT

 

http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1004&context=w...

 

In addition, section 14(b)(2) permits the Fed to purchase assets not only
backed by the United States directly, but also those guaranteed by a
United States government agency. 127 This means that all purchases made
by the Fed, as opposed to loans issued by the Fed, are limited to those
obligations in which principal and interest are either owned by the United
States or fully guaranteed by it or one of its agencies. Noticeably missing
from this authority is the power of the Fed to purchase privately owned
assets outright. 128
The Act does provide the Fed with more expansive powers in certain
emergency situations:

 

"In unusual and exigent circumstances, the Board of Governors of the
Federal Reserve System, by the affirmative vote of not less than five
members, may authorize any Federal reserve bank, during such periods
as the said board may determine, at rates established in accordance with
the provisions of section 357 of this Title, to discount for any
individual, partnership, or corporation, notes, drafts, and bills of
exchange when such notes, drafts, and bills of exchange are endorsed
or otherwise secured to the satisfaction of the Federal reserve bank:
Provided, That before discounting any such note, draft, or bill of
exchange for an individual or partnership or corporation the Federal
reserve bank shall obtain evidence that such individual, partnership, or
corporation is unable to secure adequate credit accommodations from
other banking institutions. All such discounts for individuals,
partnerships, or corporations shall be subject to such limitations,
restrictions, and regulations as the Board of Governors of the Federal
Reserve System may prescribe.129"

 

Essentially, the Fed attempted to use legal trickery to disguise its
illegal purchases of private assets from these companies. As one
commentator described the situation. The Fed created a wholly-controlled limited liability company (LLC) to engage in purchase activities that the Fed was barred from doing itself by
the Federal Reserve Act.' 35 In fact, the Fed implicitly admitted as much in
later disclosures: "Maiden Lane LLC (ML LLC) was formed to facilitate
the merger of the Bear Steams Companies, Inc. and JPMorgan Chase &
Co. The New York Fed extended credit to ML LLC to acquire certain
assets of Bear Steams.' 136

Despite this statement, the Fed went on to claim that by "loaning"
money to Maiden Lane to purchase Bear assets, rather than purchasing the
assets directly from Bear Steams, it somehow complied with the Federal
Reserve Act: the transaction constituted a lending activity for which the
Fed has broad rights, rather than a purchasing activity. 37

 

 


Thu, 09/13/2012 - 20:39 | 2792895 helping_friendl...
helping_friendly_book's picture

You saying the FRBNY is crooked? 

HAHAHAHAHAHAHA.

I don't mean to have fun at your expense but, what you gonna do?

Sue 'em?

Call Eric Holder?

The local Sherriff?

I think the best you could do would be to call his Rabbi and, you both, consult the Talmud to see if screwing Goyem is fair game?

HAHAHAHAHA

Thu, 09/13/2012 - 20:40 | 2792897 Kayman
Kayman's picture

Technically, it's against the law.

You said it.  The Law... why, that's just a technicality.

Ben

Thu, 09/13/2012 - 21:19 | 2792775 devo
devo's picture

So bullish for PMs they're going to have to replace the talking heads with matadors.

Thu, 09/13/2012 - 20:08 | 2792780 Kina
Kina's picture

Empire USA is dead. The body is entering shut down mode. Stand clear of all orifices.

Thu, 09/13/2012 - 20:11 | 2792781 BBullionaire
BBullionaire's picture

Jezz, So they done it. We all knew they would. Well at least ZH readers knew, it was inevitable. Everything changes today, or at least gets simpler. No more deflation (What will Mish do?) Been reading ZH since it was a blogspot blog back in 09. When I meet people I often want to ask "do you read ZH?"(Financial) or Naturalnews(Pharmacriminolgy) Just to see if they are awake, but I have never  met anyone that does. No one, only us 'ghosts' on the internet read ZH and I salute you all. ZH changed my life and for the better and I thank the editors sincerely. Because of you, amongst others. I sold my house in 09 and bought $200k of metals. The last year has been hard but the rocket is now primed and about to soar, which will provide for my family during the collapse that we all know will come and that we will be discussing in retrospect a few months/years from now.

I have a blog http://bulletsbeansandbullion.blogspot.co.uk/ I don't write I just track RSS feeds, you should check it out (it's non profit) Many thanks Tyler, you have changed  lives, mine at least. Keep up the good work

Thu, 09/13/2012 - 21:10 | 2792990 Sockeye
Sockeye's picture

I have 3 close friends that read ZH. I'm lucky!

Thu, 09/13/2012 - 20:16 | 2792810 helping_friendl...
helping_friendly_book's picture

I think "open ended" QE is the beginning of the end of QE. The election will see Bernanke, probably by choose, retired and some dissenter, such as, Jeff Lacker, tightening the screws on Jamie Dimon and the rest of the crew saying "give it back!!!".

We need a Southerner in charge of monetary policy. The yankees have screwed everything up. Fuck NYNY!!!!!

Thu, 09/13/2012 - 20:17 | 2792814 gonetogalt
gonetogalt's picture

So how are gold equities going to hold up? Short term? Long term?

Thu, 09/13/2012 - 20:42 | 2792900 devo
devo's picture

Supposed to be a nice out tonight--go out and look at the moon.

Thu, 09/13/2012 - 20:46 | 2792911 Kayman
Kayman's picture

I think I'll go out with my Rotties and howl at the moon.

Thu, 09/13/2012 - 20:17 | 2792815 Yes_Questions
Yes_Questions's picture

 

 

What Next?

Student loans?

If not, then maybe fresh consumer credit, all unsecured and dischargeable through BK when the hoped for bubble out of this bursts?

 

 

No?

12/21/12?

 

 

 

 

Thu, 09/13/2012 - 20:22 | 2792840 Zgangsta
Zgangsta's picture

Well, at least that chart isn't hyperbolic.

Thu, 09/13/2012 - 20:25 | 2792856 Kina
Kina's picture

Well with the Fed with an infinite printing policy the US can cut all taxes to Zero. Deficit $1trillion $5 trillion, they don't matter so why bother with taxes, when you can print what you want.

Heck why don't all countries do that, recessions and despressions gone forever.

Utopia bitzhes.

Thu, 09/13/2012 - 20:28 | 2792865 Yes_Questions
Yes_Questions's picture

 

 

HA!

 

Just turned to CNBS to see if maybe they had any post mortem on this and its a show called Crime Inc.

 

HA!

 

 

 

 

Thu, 09/13/2012 - 20:32 | 2792879 1835jackson
1835jackson's picture

There will be blood.

Thu, 09/13/2012 - 21:19 | 2793019 chump666
chump666's picture

Rivers.

Thu, 09/13/2012 - 20:41 | 2792899 technicalanarchy
technicalanarchy's picture

The fed doesn't as much cntl p as just  hit the send icon do they? And it's my understanding no one really knows who and how much they send to who.

Like the gold and sliver "contacts" to physical and printed dollars to debits and credits in "accounts". Who really can see through wool? If you're in a room of smoke and mirrors do you trust what you see?

 

Thu, 09/13/2012 - 21:05 | 2792976 Dr. Gonzo
Dr. Gonzo's picture

Mortage Backed Securities are for pussies. I won't be happy till they back their balance sheet with baseball cards and replace the pictures of dead presidents on our money with famous clowns...and I want them printed on magazine type paper in full color. 

Thu, 09/13/2012 - 21:18 | 2793014 chump666
chump666's picture

Oil nearly on the 100 (futures)

Nice, Bernanke nice, get the homeowners out of neg equity, then slam then with oil/food inflation. 

Obummer, you are finished.

Thu, 09/13/2012 - 21:24 | 2793032 FischerBlack
FischerBlack's picture

Well they got me today. I didn't think they would come out guns blazing like this. Sitting on a bit too much cash right now for my liking (33%), but what can I do? I have all the equities I want to own right now, I have all the PM exposure I care to take, real estate, too, so I should probably just take a vacation for a bit. And now that I think of it, that's exactly what I'm going to do.

Thu, 09/13/2012 - 21:28 | 2793044 sasebo
sasebo's picture

Big banks must be in bad shape, getting delusional asshole Bernanke to but all their worthless MBS at par.

Sounds scary --------------

Thu, 09/13/2012 - 21:34 | 2793053 printmoremoney
printmoremoney's picture

The FED having 25% of GDP on their balance sheet is only a good start. 

They want 100%, or more. 

Then us bitzhes get our 1/2 cup of rice ration per day, if we don't complain. 

Complainers get a bullet (paid for by the FED but listed as a liability on the BShseet)

Funny how you can be robbed blind and still look to the Robber as your savior.

The FED is killing you and your family off. 

You are a SLAVE, pretending to be FREE

And we call ourselves Investors?? We are nothing but vaseline assed slaves, taking it.

Thu, 09/13/2012 - 21:38 | 2793070 Dr. Gonzo
Dr. Gonzo's picture

Shit. I'm guessing the Asians are going to have a field day with the PM's tonight too. and oh my God, Europe tomorrow. Wonder when the next offical Moody's downgrade is coming for the U.S. Gold might retake the $1800 handle before sun up. All time high next week? I'm always skeptical about head fakes in the PM's but after Bernake opened his pie hole today I said "HOLY SHIT!" Why would a foreigner want to own our currency for more than a minute to get change for oil? All these dollars will come back to our shores and we will be drowned by them. 

Thu, 09/13/2012 - 21:41 | 2793079 GS-DickinDaMuppets
GS-DickinDaMuppets's picture

What if Bennie and Jets (FOMC) are LYING. What if they are just "JAWBONING" to make things appear better, but they don't buy any MBS, or Ctrl-P???  Who the hell would know any better- they are NOT audited?  They could be lying all the way to the bank! Just kiddin'.....had you goin there for a minute didn't I.   HHHHHAAAAAHHAAAHAHAHAHA

Bitches! (I abhor misspelled words)

 

 ...doing GOD's work...GS-DickinDaMuppets

Fri, 09/14/2012 - 00:32 | 2793537 yogibear
yogibear's picture

Jim Rogers claimed Bernanke and the Fed were already doing QE before the announcement today.

International investor Jim Rogers says that the Federal Reserve is secretly printing money to avoid "getting egg on their face again" after previous attempts to kick-start the faltering economy with more than $2 trillion of quantitative easing failed.

http://www.moneynews.com/FinanceNews/Rogers-Fed-QE3-easing/2012/09/04/id/450676

 

Thu, 09/13/2012 - 21:42 | 2793085 chump666
chump666's picture

You simply cannot make up the insanity of Bernanke.  C'mon China, send a wake up call to that moron in Washington who actually pays the bills:

0127 GMT [Dow Jones] China onshore IRS are up sharply after the Fed's bond-buying plan triggers concerns over imported inflation. The one-year IRS is 11 bps higher at 3.20%-3.30%, the five-year IRS is up 14 bps at 3.33%-3.43%, and the one- to five-year spread is 3 bps wider at 13 bps. "IRS' quick reaction may have already priced in the so-called QE3, which means limited upside in the near term. But the curve may flatten in the long term as we will probably face both high inflation and slow growth," says a Shanghai-based foreign bank trader.

Thu, 09/13/2012 - 21:42 | 2793087 diesheepledie
diesheepledie's picture

The price of toilet paper will be skyrocketing.

Thu, 09/13/2012 - 21:46 | 2793100 PoorMan429
PoorMan429's picture

dup...junk some more..

Thu, 09/13/2012 - 21:46 | 2793101 PoorMan429
PoorMan429's picture

Connect these Dots:

Banks have new Capital requirements that most US banks are falling short on, and new increased collateral requirements for derivatives trading...

Hence:

Banks dont want to lend to business, or individuals.

Banks are give jack shit on deposits. 

Big Banks are gobbling up small banks, remember "small banks are typically well capitalized " - b. bernake

Banks are going to sell their toxic assets to the Fed to clean up their balanace sheets. 

This is good bank/bad bank a la Citi Holdings on a systemic scale...Its all in the effort to provide the required capitalization for when the spigot stops, and the market collapses, and ensure the survival of the financial systems, and the TBTF banks. Nobody gives a shit what the quality of the asssets at the FED are. They have no P/L. The profits are deposited in the treasury, and the losses are conviently discarded.

This is preparation for the coming deflation, and a preparation tactic to survie it.

Look at money velocity, look at deposits at banks, banks are hoarding CASH not gold... 

http://research.stlouisfed.org/fred2/categories/24

Decide for yourself...Im betting on the banks surviving. 

Now, let the junking commence..

 

Thu, 09/13/2012 - 21:54 | 2793108 yogibear
yogibear's picture

Assumed no derivative chains blow up or any other larger purchases. What other international purchases will they end up doing?  

Since the fed can print as much as they need what does it matter? LOL, monopoly  money.

Draghi has joined the print monopoly money  party.

The US government can do the same thing. Create the department of monopoly-money and  transfer all the obligations and to that department, print payments.

Have one big print-fest like Argentina or Zimbabwe.

 

 

 

Thu, 09/13/2012 - 22:14 | 2793196 Dogbark
Dogbark's picture

Karl Marx is looking from the above and is thinking - this is fucking genius. No revolution, no blood, I should’ve destroyed capitalism this way when I was alive to. 

Thu, 09/13/2012 - 22:16 | 2793199 Dogbark
Dogbark's picture


 

Thu, 09/13/2012 - 22:15 | 2793200 helping_friendl...
helping_friendly_book's picture

Maybe this scheme has been going on for 10,000 years but, nobdy knew because we didn't have the internet?

 

Thu, 09/13/2012 - 22:35 | 2793260 Peter K
Peter K's picture

The height of irresponsibility. :(

Thu, 09/13/2012 - 22:44 | 2793289 rsnoble
rsnoble's picture

Where's Phoenix Capital at today? LMFAO!!!

Thu, 09/13/2012 - 22:43 | 2793290 andyupnorth
andyupnorth's picture

The bottom right shoulder on the USD/CAD is going DOOOOWWN!

Thu, 09/13/2012 - 23:05 | 2793357 Fecklesslackey
Fecklesslackey's picture

Maybe on the one minute chart ... on daily it looks like up up and away

Thu, 09/13/2012 - 23:00 | 2793346 Yen Cross
Yen Cross's picture

 What happens next?  Inflation is "lied about" hidden in core "ppi/Cpi" #.   A gallon of gas costs $5.

   Turn that shithole into a glass/ parking lot!  These monkeys don't care. NUKE it all

Thu, 09/13/2012 - 23:05 | 2793349 Monkeyfister
Monkeyfister's picture

Seems I remember something that happened a few years ago, when a bunch of Banks got all leveraged-up on Mortgage Backed Securities. If I remember correctly, that didn't work out too well. But, this time for sure! To quote Han Solo: I've got a bad feeling about this.

I'd like to call him Ben Folds, but that would be insulting to Ben Folds.

ETA: I suppose the returns on Treasuries will start to rise once the tightening starts. When... That's the question. But I see it as a good time to buy Treasuries while they're cheap.

Thu, 09/13/2012 - 23:06 | 2793361 Fecklesslackey
Fecklesslackey's picture

I don't know ... their MBS haven't lost much ... picked up by FED on a 1-1 dollar basis

Thu, 09/13/2012 - 23:18 | 2793388 Monkeyfister
Monkeyfister's picture

Those MBSs and Derivatives are still quite toxic, and still floating around. They've just been crutched-up for the past few years. The HAMP-fuelled Fraudclosure is still on-going, and Home and property values are still seeking bottom. Since 2007, I've said that we would recover from this crash until 2017, or so. That QE3 through 2016 policy just put a fine line on it.

Seems to me that the FED is now openly in the Money-Laundering business. 

Thu, 09/13/2012 - 23:05 | 2793356 Yen Cross
Yen Cross's picture

risk/reward "nuke that shithole"! I'll deal with domestic issues!

Thu, 09/13/2012 - 23:12 | 2793375 YouAreBliss
YouAreBliss's picture

The FED just handed Obama the election and Romney the middle finger.

 

And old Mittens has praised them every step of the way - time for an "etch-a-sketch" moment

Thu, 09/13/2012 - 23:29 | 2793415 Yen Cross
Yen Cross's picture

Unfortunately, you make sense! A greenie for ya!

Fri, 09/14/2012 - 05:25 | 2793766 gggunchi
gggunchi's picture

Romney is screwed now.  Not that it would make much of a difference, the Fed just bought the election for Romney. 

Thu, 09/13/2012 - 23:27 | 2793410 Yen Cross
Yen Cross's picture

Bill O'Rielly is a hoot. Bill take a nap. I started my first (real)businees when I was 16!

Thu, 09/13/2012 - 23:54 | 2793463 YouAreBliss
YouAreBliss's picture

For Bill it's not a "real" business without corporate lobbyists shoveling money into his and Rove's pockets

Fri, 09/14/2012 - 00:32 | 2793534 Yen Cross
Yen Cross's picture

 ya forgot his "sidekick" Dennis knows all Miller!  The Monday Night Football "wanabe"!

   Mind you, I'm a "conservative" sans the "Bill/Shit"!

Thu, 09/13/2012 - 23:56 | 2793469 YouAreBliss
YouAreBliss's picture

Too bad FNM is still not around  - what a buy at .02$ - on it's way to $400 (sarc)

Fri, 09/14/2012 - 00:08 | 2793473 Yen Cross
Yen Cross's picture

 Here is the Asian, and M/E central banks making me laugh! They are going to get "pounded" in N.Y. They are trying to inch up (aud) to 1.06 level. I'm laughing my ass off!

   Effin towel heads, selling goats again!

I'm sure a Dutch clearing house is moving all those worthless (euros) for the SNB as well. The Swiss National bank is a JOKE!

  Get ready to be pounded back down to eur/chf1.2000 again.

Fri, 09/14/2012 - 00:26 | 2793528 chump666
chump666's picture

China's bonds collapsed, forwards are now priced for brutal inflation.  The Chinese are going to be super pissed, they will set up the sell off, like they did last time with their 'bad' data.

Market is going to get pounded...any day now.

Fri, 09/14/2012 - 00:35 | 2793540 Yen Cross
Yen Cross's picture

China has been devalueing the "YUAN" like a " dis avowed step child". China will print a REAL GDP of 5.5-6.5% and every whisper number confirms it!

Fri, 09/14/2012 - 01:43 | 2793608 chump666
chump666's picture

yen you see the short position starting to pile up?  time for the profit take now QE3 is out of the way and crazy mario jawbone.  AUD will be a juicy short as will some index trades. maybe, maybe a correction.

or crash (finally)

hard to say, but on the cards.

Thu, 09/13/2012 - 23:59 | 2793477 walküre
walküre's picture

Ben had his BIG hoppla today. Once everyone had a chance to digest this supposedly BIG BAZOOKA, they will find that there's actually not much to hype about for investors and the economy. Sure, banks can offload their MBS crap to the FED. Nobody could find out if and when it happens. $40 billion per month is an average. The number is so clean cut, it can only be from Ben's excel spreadsheet he prepared for the meeting. Maybe the banks will give $40 billion worth of MBS to the Fed, maybe they won't. Regardless, the banks have an opportunity to sell MBS and get freshly printed cash in return. Of course the money won't be printed. It will be ETF deposit and the bank's balance sheets will improve. Technically the bank has a better cash position and could technically try and lend the money into circulation hoping to get a good return. The bank could also be buying UST and be safely living off the taxpayer. Even 0.25% on $40 billion is $100 million per month. Bankers love that kinda free money.

How is any of this positive for the economy? How will this STIMULATE the economy and create employment? Can anyone offer a reasonable explanation how this would be positive for the economy and jobs? In the face of a global slowdown and anything from recession to outright depression, I fail to make the connection. The spinners on CNBC et al will tell Americans whatever the Fed wants them to hear but anyone interested to dig a little deeper and go beyond the headline that the Fed is providing new liquidity into the economy will be sorely disappointed.

This is NEITHER a stimulus NOR is it a QE in the sense that the Fed is buying USTs well after the end of 2012. The "markets" overreacted today. How much of the euphoria was real and how much was in fact manipulation by the guys who are rigging the game? Even the moonshoot in paper gold and silver at the time of the announcement could have just been orchestrated background to suit the narrative.

Think about it. There's actually no new money in the economy unless the banks provide loans to people or businesses who are asking for loans and who are still qualified enough to get a loan. If nothing else, the banks will be buying UST with the new cash and living the high life without lifting any fingers. Watch for bank's profits to soar. Watch for your bank manager to buy him/herself a new Mercedes. And that will be the full extent of this "stimulus" effect.

Fri, 09/14/2012 - 00:11 | 2793498 blindman
blindman's picture

Pete Anderson "Working Class" Live at KDHX 5/7/11 (HD)
http://www.youtube.com/watch?v=E86BNFjp-R8

Fri, 09/14/2012 - 00:39 | 2793543 Yen Cross
Yen Cross's picture

I see a "Daily" inside close on everything "RISK"! I sure as hell wouldn't be buying anything right now!

Fri, 09/14/2012 - 00:46 | 2793554 Squid Vicious
Squid Vicious's picture

most insane is the XRT, with gas ripping through $3.90... I can just hear robotarder yelling "Get me filled on retailers and restaurants and fad apparel stox, tell me where I bought 'em later..."

Fri, 09/14/2012 - 01:41 | 2793604 chindit13
chindit13's picture

Our unelected Central Tautologist, whose models prove that his models work, has today tried to channel Franklin Raines, resurrect Countrywide Financial, and assume the role previously held in the private sector by AIG of outlawing risk and making any and all allocations of capital wise and efficient.

How successful might this new Hail Marriner Pass be?

From the BLS' own website come these statistics:

Total NF Payroll November 2008 (start of QE I):  135,300,000

Total NF Payroll Today:  133,040,000

"We lose jobs on every QE, but make up for it in volume"

Putting myself for a moment into the mind of a registered Fedophile such as CNBC's Steve Liesman, I think I have found the hidden gem.  It's the "NF", or non-farm element.  It's not inclusive enough.  Apparently Bernanke includes in his self-proclaimed "success" all of those Americans facing unemployment and rocketing prices by starting backyard gardens as farmers.  He might even include those who peddle their SNAP cards for cash, as they clearly add as much value to society as MBS salesmen.

As bad as it is now, one wonders how Bernanke will ever extract himself after cornering the risk and debt market?  Julian Assange, in his indictable Swedish Moment, found it easier to withdraw his stimulus than Bernanke will have it.

 

Fri, 09/14/2012 - 01:42 | 2793606 q99x2
q99x2's picture

How much wealth can they move to the banksters. There isn't that much left. It has to come from somewhere. I guess by diminishing the upper and upper upper middle class might equal the amount they intend to steal.

So, expect to start seeing even the worst treasonous NWO mainstream media outlets start to leak real news from time to time as their employees and management get fucked by the banksters.

Maybe it has to be this way until political turmoil begins to scare them.

Fri, 09/14/2012 - 02:17 | 2793635 Die Weiße Rose
Die Weiße Rose's picture

this will be a continued dive into the black hole for more Debt,

"cheap" Credit and Currency Devaluation

between the USD/Euro/Japan/Zimbabwe.

The Bernank US FED is playing "beggar thy Neighbour" and "Chicken"

with the ECB's "Piss-weak Mario Drag-EU down"

No Jobs, No net Profits, just a whole World-Economy

based on more and more Debt, Slave labour and currency devaluation.

This is what 3000 years of civilization has amounted to:

a complete and total Fuck up of the Global Economy

a complete and total Fuck up of the Global Commodity Trade

a complete and total Fuck up of all Global and Financial Markets.

what more can I say ?

not much !

wr;)

Fri, 09/14/2012 - 02:55 | 2793667 LACHAD
LACHAD's picture

Where are the accountants?  

Doesn't the end game look more like...the assets expire (treasuries/MBS/etc) and the Treasury then owes the principal back to the Fed?  The fed never has to unwind per se...it can keep adding to its assets by buying treasuries and the treasury can repay principal with future Fed purchases.  What am I missing?  It doesn't seem as crazy as possible.  To me the real key is where is the Fed's money coming from.  If it is indeed unlimited then that's the problem.  Where does it get its cash on hand to buy $4 trillion worth?

 

Credit Cash/Debit Asset (Treasury) Today

Credit Asset/Debit Cash Principal Tomorrow

The key is that the Treasury is just adding more debt to its future obligations it seems by means of the Fed buying.

 

Fri, 09/14/2012 - 03:46 | 2793712 fabmax
fabmax's picture

So the problem was PIIGS-ruled Europe, right?  Americans always forget who and what originated this huge shit.

Now Uncle Ben and Uncle Goldman and Uncle Morgan and Uncle Jamie Dimon are showing you your naked king.

That said, don't worry, there are plenty of wars popping up anywhere in North Africa, Middle East; many opps to reset.....

 

 

Fri, 09/14/2012 - 03:53 | 2793719 VyseLegendaire
VyseLegendaire's picture

The balance sheet never has to be 'unwound' as the dominance of the US Empire is collateralized by US military dominance and hegemony.  Only when that power and dominance falters, likely due to an abrupt military defeat or clear political loss of favor will the Empire begin to feel the true effects of reality.  As for now, gravity does not have to set in because we can bully our way into the # 1 spot in global affairs as far as gunboat diplomacy and corporate piracy can take us – until we can't breathe from choking on our own vomit-pollution.

Fri, 09/14/2012 - 06:21 | 2793785 resurger
resurger's picture

Well done Ben Fucker! we will soon get back to this post in the future

Fri, 09/14/2012 - 06:42 | 2793794 reginald
reginald's picture

Nothing is going to happen. That line will keep going up and up until $20 trillion looks like chump change.
It was not that long ago that a trillion dollars was an unfathomable amount. Now it is the new billion.
Onwards and upwards... This is the new normal.

Fri, 09/14/2012 - 06:48 | 2793798 tocointhephrase
Fri, 09/14/2012 - 07:19 | 2793851 erlebach
erlebach's picture

Tyler, 

You write: "What is scariest, is that as of this moment, all of this is priced in. Any incremental gains in the stock market will have to come from additional easing over and above what Bernanke just announced."

 

How do you know it is priced in. If there is much money out of the market, can't it flow into the market and raise it by quite a bit? How does one determine what is priced in and what is not, quantitatively? 

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