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FOMC: Goldman's Take

Tyler Durden's picture




 

Goldman Sachs: No Action But ready To Move

 

KEY POINTS:

1. The Federal Open Market Committee announced no new policy measures today and made only a few small—but important—changes to its policy statement. In particular, guidance that “economic conditions…are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014” was unchanged, and no new asset purchase or other programs were announced. Once again, Richmond Fed President Lacker dissented, this time in objection to providing a specific time period for the interest rate guidance.

2. The statement did reflect the generally weak tone of economic data since the previous meeting in late June. First, it noted that “activity decelerated somewhat over the first half of this year” (the previous wording was “the economy has been expanding moderately”). Second, employment growth was described as “slow”. Third, the statement more clearly acknowledged a soft pace of spending growth (the previous statement was framed tentatively, suggesting spending “appears” to be growing more slowly).

3. Most importantly, the final sentence of the statement suggested a strengthening of the committee’s “easing bias”. Whereas before the statement indicated the FOMC’s willingness to “take further action as appropriate to promote a stronger economic recovery”, the sentence now reads “The Committee will closely monitor incoming information…and will provide additional accommodation as needed to promote a stronger economic recovery”.

4. Our interpretation of the forward-looking language in today’s statement – especially the phrase “will provide additional accommodation as needed” – is that some form of monetary easing at the September 12-13 FOMC meeting is the current baseline. Although easing is by no means a foregone conclusion, we suspect that the incoming information needs to improve materially in order to forestall it. Under our own forecast of a only a slight improvement in output and employment growth, we believe a small easing step – most plausibly a lengthening of the forward rate guidance – is the most likely outcome for September 13, with asset purchases financed by renewed balance sheet expansion following in late 2012/early 2013.

 

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Wed, 08/01/2012 - 15:20 | 2669881 Cognitive Dissonance
Cognitive Dissonance's picture

Countdown to the Sept FOMC meeting begins.........NOW.

aka (delusional) hope springs eternal.

Wed, 08/01/2012 - 15:22 | 2669894 joemayo
joemayo's picture

If the fedsters think the same old song and dance isn't working anymore they can always go back to the old trick of surprise, or 'making a move' between meetings.

Wed, 08/01/2012 - 15:31 | 2669939 The Big Ching-aso
The Big Ching-aso's picture

 

 

Goldman's Take:   Billions & Billions From Muppets.

Wed, 08/01/2012 - 15:46 | 2669990 AlaricBalth
AlaricBalth's picture

"...we believe a small easing step – most plausibly a lengthening of the forward rate guidance – is the most likely outcome for September 13, with asset purchases financed by renewed balance sheet expansion following in late 2012/early 2013."

In other words GS is saying, let us get our sycophant re-elected first then, Ben, you can print until the machines burn out.

Wed, 08/01/2012 - 17:18 | 2670300 4horse
4horse's picture

another kinda News Flash:

evidence aside__
Our annual performance figures are as follows:
2009 We made a profit of 23.89%
2010 We made a profit of 158.66%
2011 We made a profit of 40.95%

                                 __successful trader claims blindside of just this now latest discoveryas smack-up-the-side-of-the-head obvious
                                                        yet which in his riches and abrupt wisdom opines virtually everyone else has failed to spot it as well.

http://www.silver-prices.net/home/have-you-overlooked-comprehending-this-piece-of-the-us-econo.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+SilverPrices+%28Silver+Prices%29

fine trader. and in the silver market . . . !

how blind is denial . . .  ?  . . . and/or alibi

 

Wed, 08/01/2012 - 15:33 | 2669953 TruthInSunshine
TruthInSunshine's picture

Today's Summary:

 

The Bernank Will Make It Rain In September Or Sooner

 

#WhenUwishUponUnicornsDon'tBeShockedAtEquestrianGoldenShowers

Wed, 08/01/2012 - 15:43 | 2670001 CrashisOptimistic
CrashisOptimistic's picture

This is all utter bullshit.

The Fed is out of bullets and Goldman's FIRST release is a pump for September.

The Fed didn't QE.  There were reports all last week saying they would.

They didn't. The reports were bullshit and this one is, too.

Wed, 08/01/2012 - 17:27 | 2670351 trebuchet
trebuchet's picture

"will provide AS NEEDED"  = same postion. Fed did NOT Change their policy position.  

end of.

trade accordingly. 

 

 

Wed, 08/01/2012 - 15:20 | 2669882 azzhatter
azzhatter's picture

How about just leave the fucking marketplace alone. Liquidate the debt and clear the market. Stay out of our fucking lives.

Wed, 08/01/2012 - 15:23 | 2669897 digitlman
digitlman's picture

*CLAP* *CLAP* *CLAP**CLAP**CLAP**CLAP**CLAP*

Oh, +100000 for this.

Wed, 08/01/2012 - 15:25 | 2669903 Law97
Law97's picture

Problem with that plan is lots of rich and powerful people will become a lot less rich and powerful.  Since they control the Fed and government, why npot use it to further enrich themselves?  They are wedded to their wealth more than to the intergrity of the free markets.  Same as it ever was......

Wed, 08/01/2012 - 15:26 | 2669914 Cognitive Dissonance
Cognitive Dissonance's picture

Those who control the reins of power will not willingly give them up.

Or as the local playground bully was fond of saying....."Make me you little squirt!"

Our move bro.

Wed, 08/01/2012 - 15:28 | 2669926 LawsofPhysics
LawsofPhysics's picture

Correct.  Clearing out the fraud in a world where those in power got that way through fraud is akin to asking them to indict themselves.


Wed, 08/01/2012 - 15:34 | 2669954 AnAnonymous
AnAnonymous's picture

Clearing out the fraud in a world where those in power got that way through fraud is akin to asking them to indict themselves.

__________________

On target. The story of 'Americans', especially the US of A who got that way through fraud.

And yeah, self indiction is a big thing in 'Americanism'

Wed, 08/01/2012 - 15:39 | 2669980 SoNH80
SoNH80's picture

Well, at least we don't cheat in badminton.

Wed, 08/01/2012 - 15:53 | 2670059 Panafrican Funk...
Panafrican Funktron Robot's picture

Indeed, didn't you know we invented fraud?  It literally did not exist prior to the founding of the United States.

Wed, 08/01/2012 - 19:56 | 2670083 TruthInSunshine
TruthInSunshine's picture

I hate broken markets sponsored by fractional central reserve witchcraft as much as anyone, but cheating entered the stream of human activity waaaaaaaaaaaaaay before the founding of these United States, and as just one of an infinite number of examples of this being so in recent history, I say unto you:

 

Waterloo & the story of a man who bought England and her citizens for a song and a dance on one June day in 1815 .

Coo Coo Ca Choo.

Wed, 08/01/2012 - 15:26 | 2669917 LawsofPhysics
LawsofPhysics's picture

But then the real value of their labor would be recognized for what it is - fucking zero.

Wed, 08/01/2012 - 15:27 | 2669922 Law97
Law97's picture

Problem with that plan is lots of rich and powerful people will become a lot less rich and powerful.  Since they control the Fed and government, why not use it to further enrich themselves?  They are wedded to their wealth more than to the intergrity of the free markets.  Same as it ever was......

Wed, 08/01/2012 - 15:29 | 2669932 Law97
Law97's picture

Oops, sorry for the double post.  There's goes what little credibility I had.....

Wed, 08/01/2012 - 15:32 | 2669943 Dr. Engali
Dr. Engali's picture

You're being too easy on yourself. You never had any credibility to begin with ;->

Wed, 08/01/2012 - 17:35 | 2670383 4horse
4horse's picture

our fucking lives

is what they live off labor and suck the life out of

Wed, 08/01/2012 - 15:23 | 2669898 A82EBA
A82EBA's picture

When the stocks drop 40% and all that 'wealth' evaporates, is that the same as un-printing?

Wed, 08/01/2012 - 15:24 | 2669904 Dr. Engali
Dr. Engali's picture

Cripes it's just like an election. They no sooner get done with one and they start looking forward to the next one.

Wed, 08/01/2012 - 15:25 | 2669906 Meesohaawnee
Meesohaawnee's picture

who cares  was GS thinks. just give us what ben put in the Algo computers today squid. Your Anal ysis means nothing.

Wed, 08/01/2012 - 15:25 | 2669907 DavidC
DavidC's picture

No Action But ready To Move.

Yup, exactly the same as July, June, May, April...

DavidC

Wed, 08/01/2012 - 15:34 | 2669955 fonzannoon
fonzannoon's picture

You are getting the idea now David. Kito finally got me to get it. I was in the QE camp up until last month. The reality is they can't do QE. When they shoot that gun and it turns out to be a water gun then everyone sees them for what they are. They will instead prop up the market and fudge data when necessary. If they do have to print they will just find a way to back door it. They hold all the strings and can pull them anytime they want. At some point they will lose control though.

Wed, 08/01/2012 - 15:26 | 2669909 Everybodys All ...
Everybodys All American's picture

Jawbone the market higher. That is what the Fed Reserve will continue to do especially with the Fed's already bloated balance sheet. That is all they have left and they will be satisfied with that as long as the market stays at these elevated levels.

Wed, 08/01/2012 - 15:27 | 2669913 SheepDog-One
SheepDog-One's picture

AW bullshit GS you said FED was definitely delivering QE months ago. 3 strikes and youre out bitchez, and for you its about 12 strikes so fuck off.

Wed, 08/01/2012 - 15:46 | 2670010 CrashisOptimistic
CrashisOptimistic's picture

Bingo.  Didn't Hatzius guarantee QE in fucking March?

The Fed Is Out Of Bullets.  

Goldman just wants to pump.

Wed, 08/01/2012 - 16:02 | 2670094 Panafrican Funk...
Panafrican Funktron Robot's picture

http://www.zerohedge.com/news/fomc-preview-rate-extension-no-new-qe

This was yesterday.  Hope the muppets enjoyed the show today.

Golman Sachs: FOMC Preview

Q: Will the FOMC ease monetary policy?

A: Yes, we expect the Federal Open Market Committee (FOMC) to ease at the upcoming July 31-August 1 meeting. The FOMC decision will be announced at 2:15pm on Wednesday August 1, and there will be no post-statement press conference.

Q: How will they ease this week?

A: We expect an extension of the current “exceptionally low…at least through late 2014” interest rate guidance to "mid 2015." Such a shift would roughly restore the forward guidance to the same three-year horizon as at the January FOMC meeting, when the "late 2014" formulation was first adopted. We would, however, regard this rate extension as a relatively modest step. Specifically, our estimates suggest that this might be worth 5-10 basis points on the 10-year Treasury yield and at least some of this appears to be already priced in.

 

 

Wed, 08/01/2012 - 15:27 | 2669920 disabledvet
disabledvet's picture

Dollar's..."firm".... don't understand all the whining. Not that prices aren't going to soar anyways of course.

Wed, 08/01/2012 - 15:27 | 2669924 Neethgie
Neethgie's picture

New easing... what can new easing even do anymore? its run its course, it cant boost the market anymore, the only tool the cb's have is the myth of easing which seems more effective than the reality

Wed, 08/01/2012 - 15:29 | 2669931 SoNH80
SoNH80's picture

If "ifs" and "buts" were candy and nuts, we'd all have Christmas.

Or Chanukah, if you're Goldman.  "Let's hope to G-d that Benny does the right thing next time!  Oy, it's no fun not having free ca$h to play around with!"

Wed, 08/01/2012 - 15:29 | 2669933 Jlmadyson
Jlmadyson's picture

Your take no longer matters.

Party's over.

Wed, 08/01/2012 - 16:11 | 2670118 Panafrican Funk...
Panafrican Funktron Robot's picture

<--- Needs a fucking truckload of weed.  The cog dis of this shit is just mind bogglingly painful.  

Thu, 08/02/2012 - 07:04 | 2671368 Disenchanted
Disenchanted's picture

 

from the RS link:

 

But the Wall Street Journal didn’t even win the prize for most preposterous response to the Weill episode. That award went to former Treasury advisor and semi-disgraced financier Steve Rattner, who wrote a truly incredible piece in the New York Times editorial page about why Weill is wrong.

 

Rattner’s piece, entitled, "Regulate, Don’t Split Up, the Big Banks," admitted that Weill’s comments "shook the New York-Washington axis."

 

"It was as if John D. Rockefeller had proposed the breakup of Standard Oil," Rattner wrote.

 

But he went on to say that Weill’s musings were "an ill-advised distraction." The reasons he gave for believing this are astounding. And what's astounding is not just that he has these opinions, but that his "reasons" got past the Times editors, who should have blanched at publishing such gross inaccuracies.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/ludicrous-times-op-ed-forgets-entire-year-of-wall-street-history-20120801#ixzz22NvG3SpY
I posted about Rattner's column in yesterday's Frontrunning thread( http://www.zerohedge.com/news/frontrunning-august-1-0#comment-2668021 ). Taibbi doesn't mention that Rattner thinks that any talk about Glass-Steagall is a "tiresome debate." My question is, why are little pukes like Rattner still being given the opportunity to mold public opinions and dish out advice in the NYT? This is like allowing Bush II era neo-cons to continue pontificating on foreign policies and war in major establishment corporate press mouthpiece outlets. Who is still dumb enough to value their opinions and take their advice...other than Mitt Romney of course(and Obama - neo-liberal, neo-con...same same).
Wed, 08/01/2012 - 15:35 | 2669965 SmoothCoolSmoke
SmoothCoolSmoke's picture

Buck Fernankie has figured out the power of an implied promise of smack to a junkie.  The junkie will hang around FOREVER waiting for the goods that never come.  

Nicely played Mr. Fed Chairman. 

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