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Here Comes The Hilsenrath Leak: "Fed Considers More Action"

Tyler Durden's picture




 

Three months ago, just when things looked like they were about to turn south, the Fed's trusty mouthpiece, Jon Hilsenrath, made it clear that the market can stop falling as the Fed was "considering" sterilized QE, or more Twist, something we explained later would be impossible in the current format as the Fed would run out of sub 3 Year paper by the end of August. It did however halt the drop in stocks for a month or two until Europe became permanently unfixed. Hilsenrath then cralwed back into his WSJ cubicle. Until today: two weeks before the all critical June 20 FOMC meeting, the faithful Fed scribe has been charged with his latest leak commission: "Fed Considers More Action Amid New Recovery Doubts." And as it has been leaked (now that people have actually done the appropriate math), so it shall be.

From the WSJ:

Disappointing U.S. economic data, new strains in financial markets and deepening worries about Europe's fiscal crisis have prompted a shift at the Federal Reserve, putting back on the table the possibility of action to spur the recovery.

 

Such action seemed highly unlikely at the central bank's April meeting, when forecasts for growth and employment were brightening. At their policy meeting this month, Fed officials will weigh whether the U.S. economic outlook is deteriorating enough to justify new measures to boost growth, according to interviews and Fed speeches.

 

The Fed's next meeting, June 19 and 20, could be too soon for conclusive decisions. Fed policy makers have many unanswered questions and have had trouble forming a consensus in the past. Top Fed officials have said that they would support new measures if they became convinced the U.S. wasn't making progress on bringing down unemployment. Recent disappointing employment reports have raised this possibility, but the data might be a temporary blip. Moreover, the Fed's options for more easing are sure to stir internal resistance at the central bank if they are considered.

 

Their options include doing nothing and continuing to assess the economic outlook—or more strongly signaling a willingness to act later if the outlook more clearly worsens. Fed policy makers could take a small precautionary measure, like extending for a short period its "Operation Twist" program—in which the Fed is selling short-term securities and using the proceeds to buy long-term securities. Or, policy makers could take bolder action such as launching another large round of bond purchases if they become convinced of a significant slowdown.

Another question: does Twist end in 25 days, or will the market have a violent revulsion to a world without constant central-planner artificial "flow" creation (because as first noted here months ago, only Nobel prize-winning economists still think "stock" is even remotely relevant).

Mr. Bernanke must decide whether to let the program end. The Fed has enough short-term securities left to extend it for a few months [ZH: good to see that Hilsenrath is finally doing the math that refuted his own articles 3 months ago] as a precaution while it watches how the economy develops. If officials become more convinced about a growth slowdown they could expand the Twist program or launch another round of securities purchases—an approach known as quantitative easing—to try to boost growth.

But the most important question: with the 10 Year already at the idiotic 1.50% level, does anyone seriously believe that more risk taking will be provoked by pushing yields to 1.40%, or 1.30%? Or how about 0.00%? In fact, why doesn't Bernanke just pull a Bank of Japan, and stop beating around the bush, instead buying up all the SPY, and REITs he can find. One ETF he doesn't have to buy will be GLD: that one will go up on its own. Very, very fast.

Finally, as Zero Hedge explained patiently last night, while the economists, pundits, and sellsiders all have their self-serving theories, the bond market, at least for now, has spoken, and sees not more LSAP but a simple expansion of Twist from 0-3 to 0-4 year maturity sales: an outcome which to the market will be the worst of all worlds.

 

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Tue, 06/05/2012 - 19:14 | 2497786 NotApplicable
NotApplicable's picture

I thought it was getting a little too quiet lately.

If only Europe had a Hilsenrath of their own...

Tue, 06/05/2012 - 19:24 | 2497821 HelluvaEngineer
HelluvaEngineer's picture

Fuck you Bernanke.  I'm long euro, GDXJ to offset my shorts.

Tue, 06/05/2012 - 19:26 | 2497829 fightthepower
fightthepower's picture

I say this from the bottom of my heart, Fuck You Bernanke!

Tue, 06/05/2012 - 19:49 | 2497875 Troll Magnet
Troll Magnet's picture

does this mean i should buy facefuck fuckface facebook stocks?

Tue, 06/05/2012 - 20:01 | 2497900 Richard Chesler
Richard Chesler's picture

Bear rape forward!

Tue, 06/05/2012 - 20:34 | 2497992 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bob Chapman RIP

Tue, 06/05/2012 - 20:47 | 2498018 Sakka
Sakka's picture

I think that Mr. Chapman was a great American.  I hope anyone fighting cancer will consider Cannabis extract, e.g. "Phoenix Tears".

 

Sincerely

Tue, 06/05/2012 - 21:08 | 2498066 Thomas
Thomas's picture

I think the mistaken notion is that QE is to push down rates. As I see it, QE is to monetize trash. In this case, it is likely to be Eurotrash. I think it's treasonous, but what do I know.

Emund Burke, writing two centuries ago, accurately predicted the French Revolution (in its infancy at the time of his writing) would turn "murderous". Good call, Eddie. He also hated intellectuals (read: Bernanke) because they meddled with the complex interactions between complex institutions without understanding them at all. He was the father of the Law of Unintended Consequences, and he seemed to lay a lot of the foundations for Hayek's "Fatal Conceipt". 

Tue, 06/05/2012 - 21:23 | 2498089 Go Tribe
Go Tribe's picture

Very good point. As long as the banks are holding toxics, the Fed's business isn't done and we don't have time to wait for Merkel and whoever is running Spain to agree on anything.

Wed, 06/06/2012 - 01:05 | 2498436 barliman
barliman's picture

 

QE is intended by Bernanke and his ilk to put a hard deck under the markets via the banks.

Benny has the Hah-vahd conceit of believing he is smarter than anyone else.

Anyone. Anytime. Ever.

Hubris is always fatal.  In his case, he may actually end up being tried for treason if he stays on the path he has set out for himself.

I would enjoy his trial ... immensely.

barliman

Wed, 06/06/2012 - 01:12 | 2498446 The Big Ching-aso
The Big Ching-aso's picture

 

 

Ok.  So he does QE.  Then crude counteracts that in spades.  Looks 2 me like the middle-class still gets screwed but WS makes more money.  Sounds like a decent plan for a better future for WS and a more phucked past for the middle-class taking it once again up the ass.    Go Ben.

Wed, 06/06/2012 - 01:19 | 2498453 amadeusb4
amadeusb4's picture

OK, let's take this further. If oil shoots up, then prices at the pump shoot up and this makes Obama's reelection campaign that much harder. Would Bernanke take his chances with Romney or prefer Obama? My guess is that given that Romney's election is a long shot, Ben is going to stick with the current boss and hence no QE until after election.

Wed, 06/06/2012 - 01:26 | 2498457 The Big Ching-aso
The Big Ching-aso's picture

 

 

I think that makes a lot of sense.   But again, remember who we're talking about here regarding good cents.

Wed, 06/06/2012 - 07:27 | 2498714 j0nx
j0nx's picture

Long shot?? I mean I don't really like the guy either but after the disaster that Oblamebush has presided over for the past 3+ years, Bush himself could run again and get reelected over Obama. I mean you could put a hamster on the ballot and they would beat Obama at this point. And things will ONLY get worse and MUCH worse at that for the next 5 months. Obama really has no chance at another term and has pretty much sullied the chances of another black man ever taking the office of President again in the near future. I think that's the worst part of all of this is that Obama has reenforced the stereotype that blacks can't lead a nation. There are plenty of other incredible choices we could have had as our first black President and we get saddled with this dipshit instead.

Tue, 06/05/2012 - 21:22 | 2498086 LongBalls
LongBalls's picture

I made more money listening to Bob than anyone or anything else. Bob brought upon my awakening. Thank you MR. CHAPMAN. My God Bless your soul. I shall seek you out in the great beyond to give you my thanks for your care.

Wed, 06/06/2012 - 01:24 | 2498451 The Big Ching-aso
The Big Ching-aso's picture

 

 

You're a little premature but I'm sure he looks forward to you seeking him out relentlessly in the afterlife.

Tue, 06/05/2012 - 22:00 | 2498142 Gringo Viejo
Gringo Viejo's picture

An American Patriot. Thanks Bob!

Tue, 06/05/2012 - 22:01 | 2498144 rqb1
rqb1's picture

His blog said he is still with us, said that it was a soccer player with the same name who passed

Tue, 06/05/2012 - 22:59 | 2498263 bigkahuna
bigkahuna's picture

Bob Chapman is alive.

Wed, 06/06/2012 - 01:16 | 2498442 The Big Ching-aso
The Big Ching-aso's picture

 

 

Thank God.     I just found out so is Tina Delgado.   She's alive, alive.

http://www.youtube.com/watch?v=MX1MY7NzCA0

Tue, 06/05/2012 - 20:43 | 2498006 CPL
CPL's picture

OIL CHARGE!!!!!! This time analysts can set their watches to how fast it jumps right over 100 and makes a b line to well past 140.

Tue, 06/05/2012 - 20:55 | 2498034 Michael
Michael's picture

I must have complete and total Annihilation of the whole fucking financial structure on the entire fucking planet.

You go right ahead Mr Bernanke and do all the QE3 I guaranteed to happen and whatever you need to do to finish stretching the rubber band just a little bit further. 

Don't listen to these bozos on this site Ben, just follow in my hero's and your predecessors footsteps Alan Greenspan and finish destroying what may be left of the place by doing what you do best. 

 

 

Wed, 06/06/2012 - 01:01 | 2498432 The Big Ching-aso
The Big Ching-aso's picture

 

 

I'm sensing Ben and you go way back and have fond childhood memories growing up together. 

Tue, 06/05/2012 - 21:29 | 2498098 FL_Conservative
FL_Conservative's picture

And his little mouthpiece (Hilsenrath) too.

Tue, 06/05/2012 - 20:08 | 2497918 Crab Cake
Crab Cake's picture

Get a rope...

Tue, 06/05/2012 - 20:49 | 2498023 Goldtoothchimp09
Goldtoothchimp09's picture

nice ouroboros!

Tue, 06/05/2012 - 20:51 | 2498028 franzpick
franzpick's picture

Ben-Dover: when the SHTF, keep your soap on a rope...

Tue, 06/05/2012 - 20:22 | 2497959 Eireann go Brach
Eireann go Brach's picture

There will be a spare lamppost and plenty of rope available for him too!

Tue, 06/05/2012 - 20:42 | 2498005 phungus_mungus
phungus_mungus's picture

Full on rock hard market woodie in 3, 2, 1... 

Tue, 06/05/2012 - 23:14 | 2498290 boogerbently
boogerbently's picture

.....ON THE OTHER HAND

It may be a good time to QE, now. QE dollar destruction offset by EUrodive dollar strengthening.

I STILL need it adequately explained to me why the freshly printed bucks go to GS, JPM, MS,......

but WE have to pay them back !

Tue, 06/05/2012 - 21:11 | 2498070 Caviar Emptor
Caviar Emptor's picture

Told ya, told ya, told ya! 

Despite the protests from the aging whore that she "never sleeps with men on the first date", all global central banks, governments, and their cronies are always ready. willing and able to print to bail themselves out and make sure that you repay your debts to them

Tue, 06/05/2012 - 21:23 | 2498088 Rich Bagg
Rich Bagg's picture

Shalom is a good man.  If it weren't for him, our financial system would have melted down long ago and we would have had a total breakdown of society.  He's holding the system together while waiting for organic growth to resume.  You don't get to teach at Princeton if you're a dumbass.  Shalom is smart and his moneychanging roots serve him well.

 

 

Tue, 06/05/2012 - 21:28 | 2498096 Lore
Lore's picture

And colorless green ideas sleep furiously.

Tue, 06/05/2012 - 21:45 | 2498128 ElvisDog
ElvisDog's picture

while waiting for organic growth to resume

Hah, you are one funny he/she, Rich Bagg.

Tue, 06/05/2012 - 22:16 | 2498177 IndicaTive
IndicaTive's picture

You're slacking off. Shouldn't each premise be a separate post?  Preceding a few bullshit cliche's drawing a lame-ass troll conclusion?

Tue, 06/05/2012 - 21:48 | 2498130 Right-on Left-off
Right-on Left-off's picture

Hasn't anybody noticed what cash & carry gold and silver are going??

Lift-off has occurred!

... and while you are at it ... take a gander at the Fx.

Tue, 06/05/2012 - 21:48 | 2498131 Gringo Viejo
Gringo Viejo's picture

Off Topic: As per Drudge, the communists are losing their recall attempt in Wisconsin by a margin of 58% to 41% with 6% of votes tallied. This despite a voter turnout of 119% in Madison. PUBLIC SECTOR UNIONS ARE A CONTRADICTION IN TERMS! IF YOU WANT TO LIVE OFF THE TAXPAYER AND THE MONEY'S NOT ENOUGH, GO OUT IN THE PRIVATE SECTOR AND COMPETE! FUCK THESE COMMUNISTS!

Wed, 06/06/2012 - 07:38 | 2498731 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

Lucy, Charlie Brown and the football !

Wed, 06/06/2012 - 08:11 | 2498788 UBIGDummy
UBIGDummy's picture

Hilsenwrath says "Here have a paper carrot you stock donkeys"

Wed, 06/06/2012 - 13:01 | 2499908 techperson
techperson's picture

Bernanke only has 18 months left on his term and doesn't seem to want another one. He doesn't care who's President.

Tue, 06/05/2012 - 19:15 | 2497790 The Monkey
The Monkey's picture

I would guess there is some lamenting that the bears didn't really bite.  Risk on from these levels - that would be gutsy to say the least.

Tue, 06/05/2012 - 19:18 | 2497802 NotApplicable
NotApplicable's picture

Gutsy? Nah, they're merely front-running the ZIRP Express (or sitting on the sidelines waiting for Benron's call).

Only 155 bp left to go!

Tue, 06/05/2012 - 19:49 | 2497876 The Monkey
The Monkey's picture

Let's quit with the bullshit.

Bernake should offer some forecasts for secuity prices in conjunction with their effort to improve policy communications. For instance, "we will pursue expansive operations until the Russell 5000 is @ _____ AND copper is @ _____ AND CC1 credit has ____ spread to the 10 year treasury."

Tue, 06/05/2012 - 19:15 | 2497791 SHEEPFUKKER
SHEEPFUKKER's picture

Haven't they FUBAR'ED  the world enough already?

Tue, 06/05/2012 - 19:19 | 2497807 NotApplicable
NotApplicable's picture

Not as long as they've got potential FUBAR remaining. (think activation energy)

Tue, 06/05/2012 - 20:27 | 2497974 Crab Cake
Crab Cake's picture

Not as long as the concepts of constitutionality, national sovereignty, personal freedom, and lasseiz fair free markets still exist has the fed done its "job."

Tue, 06/05/2012 - 19:16 | 2497793 CClarity
CClarity's picture

Unless the Fed buys up sovereign European periphery debt, lower rates in the US won't help anyone.

Tue, 06/05/2012 - 19:51 | 2497883 narnia
narnia's picture

They aren't managing the yield curve or fx. They are genuinely concerned about deflation & they should be.

Tue, 06/05/2012 - 20:29 | 2497978 Reese Bobby
Reese Bobby's picture

Our Central Planners have convinced you deflation is the boogeyman?  That is sad.

Tue, 06/05/2012 - 21:06 | 2498054 narnia
narnia's picture

I don't believe in the boogeyman, but I know trillions of $ in the highly leveraged global financial system have very little collateral behind them. When fractional banking cracks, credit evaporates. It's hard to keep up with that.

Tue, 06/05/2012 - 21:14 | 2498071 Reese Bobby
Reese Bobby's picture

Charles Ponzi had the same problem.  It didn't end well.

 

We should guarantee bank deposits, let banks fail and capitalize some new ones.  It's not complicated.  Now getting out from under the Global Bank Cartel that controls most everything, that is complicated.

Tue, 06/05/2012 - 21:31 | 2498104 Lore
Lore's picture

...And not without personal risk, if past attempts are an indication.

Tue, 06/05/2012 - 21:35 | 2498111 narnia
narnia's picture

Temporarily cheap credit beind extended to finance worthless government spending (like wars, bailouts, other stupidity) seems to precede major deflationary purgings.

Your method is simple & preferred, but certainly not without pain.

Tue, 06/05/2012 - 23:10 | 2498283 post turtle saver
post turtle saver's picture

It is. If it wasn't, we wouldn't have ZIRP or Cash for Clunkers or any other "rob the future to buy growth now" baloney going on. Go out and try to get a loan right now. Sure, rates are as awesome as have been seen in a generation but it doesn't matter. People that need the money don't qualify for it and people that qualify don't need the money and don't want it - there's no reason to take on debt cheap or otherwise because there's no growth coming down the pipeline to justify it. Banks don't want to loan anyway because they need to cover up their toxic waste. Result... contraction of money and marked-to-market credit = DEFLATION. Gold may do well regardless but if you think the US dollar needs to become worthless for that to happen you're wrong. The days of "cash is trash" are loooooong gone.

Tue, 06/05/2012 - 20:35 | 2497994 max2205
max2205's picture

I noticed the long bias 3 days ago. Buy the dips and hold overnight till the trend line breaks. Kept adapting

Tue, 06/05/2012 - 20:36 | 2497996 max2205
max2205's picture

TNA up 10% off the lows so far. Nice

Tue, 06/05/2012 - 20:48 | 2498021 Reese Bobby
Reese Bobby's picture

Stick with the dice.  The odds are better.

Tue, 06/05/2012 - 19:16 | 2497795 Boilermaker
Boilermaker's picture

SURPRISE!!!

Tue, 06/05/2012 - 20:46 | 2498015 LongSoupLine
LongSoupLine's picture

Lol...I rather look forward to that now.

Tue, 06/05/2012 - 19:17 | 2497800 Everybodys All ...
Everybodys All American's picture

Pushing on a string. Good luck Ben. You've f'd it up for years to come.

Tue, 06/05/2012 - 19:19 | 2497810 Boilermaker
Boilermaker's picture

Agreed, but, that's what makes him and his cronies so fucking dangerous.  They have nothing to lose.  If their Hail Mary isn't caught, they'll have pitchfork tines against their throats.

They'll keep doubling down until this fucker literally implodes upon itself.  Believe dat.

Tue, 06/05/2012 - 19:58 | 2497890 lakecity55
lakecity55's picture

Yep, it's Berlin, 1945 again, but Wenck's 12th Armee will be unable to relieve Bennie in the FedBunker.

The way to The FedBunker was blocked by vast mounds of impenetrable default-swap IEDs. The soldiers were crushed by collapsing piles of CDS and crumpled fiat.

Death by Fiat, Timmah!

There is enough left to burn you to a crisp, mein printmeister! The peasants will find nothing to use their pitchforks on!

Tue, 06/05/2012 - 19:23 | 2497803 Paul Atreides
Paul Atreides's picture

I hope we have a systemic collapse before the June 20 meeting, growing tired of this BS...I feel like every day is groundhog day.

Tue, 06/05/2012 - 20:27 | 2497956 Quisat_Sadarak
Quisat_Sadarak's picture

Me too. But then I am feeling a bit schizophrenic today for some strange reason.

Tue, 06/05/2012 - 20:25 | 2497966 walküre
walküre's picture

You may get your wish, sir.

Greece is voting on June 16th.

Matters sweet fuck all what Fed is saying or rumoring at this point.

Only the most ignorant of psychopaths will gamble other people's money in equities.

Everyone else has located the exits and is slowly walking towards them, cashing in on the way out.

Tue, 06/05/2012 - 23:22 | 2498305 boogerbently
boogerbently's picture

That will kickoff a very interesting week. FED talks June 19/20.

Tue, 06/05/2012 - 19:22 | 2497811 GubbermintWorker
GubbermintWorker's picture

QE to Infinity!!!

 

and beyond!!

Tue, 06/05/2012 - 19:21 | 2497812 midgetrannyporn
midgetrannyporn's picture

fed maggots care only about bank bonuses and bank balance sheets.

Tue, 06/05/2012 - 19:38 | 2497814 ebworthen
ebworthen's picture

QE3 just in time for Fourth of July, fly that flag!

The red and white stripes will represent the debt prison bars for U.S.S.A. citizens.

50 banks and corporations instead of states to represent each star; which ones? 

Let's start a list:

1.  J.P. Morgue Chase

2.  Bunk of Amurika

3.  Citibunk

4.  AIG

5.  GM

6.  Goldman Slacks

7.  WalMart

8.  McDonalds

9.  Fannie/Freddie

10.  Ally Bank

?

Remember to salute your banking/corporate overlords (er...flag) when "QE3 bail out the kleptoligarchy debt orgy part III" is announced; we pay and lose, they collect and win.

Tue, 06/05/2012 - 21:35 | 2498114 Lore
Lore's picture

You may have nailed it. A summer market crash is hardly conducive to patriotism, especially during an election year. Gentlemen and ladies, place your bets.

Tue, 06/05/2012 - 19:24 | 2497822 Dr. Engali
Dr. Engali's picture

I am looking forward to  gettting a negative yield mortgage and have my house pay itself off.

Tue, 06/05/2012 - 21:21 | 2498084 ExploitTheMarket
ExploitTheMarket's picture

"I am looking forward to  gettting a negative yield mortgage and have my house pay itself off."

LOL... ++++ best comment today.

Student loan debt consolidation too... Negative rates for all!! 

Wed, 06/06/2012 - 13:07 | 2499918 techperson
techperson's picture

Tyler has already written about the Working Group recommendation to the Fed to adopt NIRP and floating rates.

Tue, 06/05/2012 - 22:32 | 2498212 Hulk
Hulk's picture

I like the way you think !!!

Tue, 06/05/2012 - 23:15 | 2498293 post turtle saver
post turtle saver's picture

Well, if you think about it, when banks are unwilling to foreclose and effectively pay you to squat on the property so things look right on their books... a negative interest rate may actually be an improvement in that situation. They wouldn't even have to re-negotiate the principal of the loan, just redo the term of the loan with a new rate well in your favor. You know, it's crazy enough that it just might work.

Tue, 06/05/2012 - 19:25 | 2497827 duncecap rack
duncecap rack's picture

Would the Fed easing be useful while Europe is in such disarray? Don't treasuries get enough of a boost from the safe haven inflows? I would have thought easing would be a more useful tool when there wasn't so many other sources of demand for US paper. I would love answers if anybody has an opinion.

Tue, 06/05/2012 - 20:10 | 2497925 Everybodys All ...
Everybodys All American's picture

and that is why they will do nothing. If Fed governor Bullard is saying it's unlikely we see more QE then I believe they will sit pat. They are levered way to high to do much of anything any way you look at it. How exactly would buying any new assets matter at this point. The answer is it would make little to no difference in my opinion. We are already at historic low interest rates. We shall see very soon. I think the Fed will jawbone about they can do more but I don't see it coming in the form of actionable purchases.

Tue, 06/05/2012 - 20:22 | 2497958 AbelCatalyst
AbelCatalyst's picture

duncecap-rack: You are absolutely correct! The problem is its the only tool left - when you have a hammer everything looks like a nail. At the end of the day, we're going to see some nasty downside and when the dust starts to settle everyone will look to their drug-dealer-in-chief for more free money...

Bernanke will have no choice - he's already set himself up as the Saviour of the world... When people realize he can't walk on water then the real sinking will begin...

Gigantic ego 101: people who think they can save the world usually end up in a dark place... And the first shall be last, and the last first - I mean seriously, does anyone read any kind of history. This crap happens over, and over, and over, and over... Total insanity...

Tue, 06/05/2012 - 21:43 | 2498123 The Monkey
The Monkey's picture

The only effect QE can have now to weaken the dollar and alter investor risk perception. The actual playbook that Bernanke is using was scripted by Irving Fisher in 1933, "Debt Deflation Theory of Great Depressions". Unfortunately, Fisher did not go into the dynamics of a global crisis with prior excesses that make the 1920's look tame.

No matter, shitty earnings are stiil shitty earnings, so, they run the risk of losing credibility by sending investors the wrong way during the downside of the economic cycle.

Tue, 06/05/2012 - 23:53 | 2498353 Bonesetter Brown
Bonesetter Brown's picture

Amen, Monkey.

Ben can try to ring fence the troubled sovereigns with the Fed's balance sheet, growing or morphing said balance sheet to keep as many credits as possible inside the "zone of safety".

It is the politics of the situation that Ben has to deal with -- ones that Fisher can ignore in his paper -- that makes it damn near impossible to run the Fisher playbook.

And I'm not saying Fisher's prescription solves the problem, but it is the course being followed by Bernanke.

Wed, 06/06/2012 - 01:05 | 2498438 The Monkey
The Monkey's picture

QE...

As a speculator, maybe I get a better price on the inverse ETFs? Not sure what else it accomplishes with this backdrop. Maybe it relaxes the dollar rally. No matter, I'm certainly not going to buy junk bonds or stocks in this environment regardless of the Fed's action.

The only thing that will bring me back into this market is much lower prices, and I believe they are indeed on their way.

Doubt the Fed intends to help short sellers, but if supports for the market are played early, then it does nothing but take risk off the table for the bears.

Tue, 06/05/2012 - 19:27 | 2497830 LeBalance
LeBalance's picture

there are those who receive word and from their conscience leak info to the pubic.

and there are those who write yellow words in the snow with their pee while taking a leak.

gee Mr. Hilsenrath which tpe of leak was this one?

and are you a serial leaker?

Tue, 06/05/2012 - 19:30 | 2497839 world_debt_slave
world_debt_slave's picture

 I consider this more BS

Tue, 06/05/2012 - 19:34 | 2497847 Boilermaker
Boilermaker's picture

CNBS Breaking News:  Fed's Evans calls for 'Extemely Strong' policy accomodation, says willing to buy mortgage bonds.

 

A bazillion jillion dollars or some other retarded shit.

Let this reset already.  This is getting well beyond absurd now.

Tue, 06/05/2012 - 21:05 | 2498058 disabledvet
disabledvet's picture

he's always called for this. "The Chicago Man." No surprise there...yes, yes?

Wed, 06/06/2012 - 03:00 | 2498522 AurorusBorealus
AurorusBorealus's picture

They will buy MBS: to open the money spigots on investment banks, pension funds, and IRA / 401Ks (PIMCO has made a large move into MBS).  So once again the Fed and the government become the market... they pick and choose which crony capitalist and which group wins. 

Tue, 06/05/2012 - 19:39 | 2497858 Boilermaker
Boilermaker's picture

and....the ES goes straight up.

Well played.  This will SURELY work THIS time.

What god damn pathetic joke this is.

Tue, 06/05/2012 - 21:01 | 2498046 New_Meat
New_Meat's picture

dude, use the time well to prepare as well as you can.  It will happen in its own time and "unexpectedly." - Ned

Tue, 06/05/2012 - 19:41 | 2497860 q99x2
q99x2's picture

Are stocks going to go up or down? Ok here is an easier question: is FB going to go up or down?

Good.

Now the FED is going to favor bonds over stocks with the next give away of my mother's social security prescription medication money. That will not cause enough flow of money to inflate stocks and the market will resume its downward spiral.

And, Europe is going to go bust in any case.

But, if the central banks don't move everyone's money to the banks the derivatives market will implode. But if they do inflation may start riots due to food shortages and countries won't be able to pay the interest on their debts.

I think I have it now. I'm going out to buy more bags of rice and a little silver.

Tue, 06/05/2012 - 20:00 | 2497898 Dr. Engali
Dr. Engali's picture

You better be buying some lead with that silver.

Wed, 06/06/2012 - 09:13 | 2498928 Winston of Oceania
Winston of Oceania's picture

Werewolves?

 

Tue, 06/05/2012 - 19:41 | 2497862 Boilermaker
Boilermaker's picture

And, right in line with the WSJ, here is the CNBS shill story.

Unreal.  Seriously.

 

Charles Evans, president of the Chicago Federal Reserve Bank, speaking just days after a government report showed paltry U.S. jobs growth in May, warned that the economy could suffer long-term consequences if the Fed does not act now.

 The Fed is already considering more action and will discuss new measures at its policy meeting this month on June 19 and 20, the Wall Street Journal reported on Tuesday night.

"With huge resource gaps, slow growth and low inflation, the economic circumstances warrant extremely strong accommodation," Evans said in remarks prepared for delivery to the Money Marketeers of New York University.

"The damage intensifies the longer that unemployment remains high. Failure to act aggressively now will lower the capacity of the economy for many years to come."

Evans, who does not have a vote this year on the Fed's policy-setting panel, has argued repeatedly that the Fed, which has already taken unprecedented steps
to help the recession-battered economy, should do more, including possibly buying more mortgage-backed securities. It's unclear whether his fringe views will carry more weight when Fed policymakers next meet on June 19-20.

Pressure has intensified on the central bank to buy more long-term assets after the disappointing jobs growth in May, with the jobless rate rising for the
first time in nearly a year, to 8.2 percent from 8.1 percent in April. In addition, employment growth was revised down in April and March, revealing a three-month swoon in the labor market.

Evans said he expects unacceptably high unemployment for some time to come, which carries the risk that skills of out-of-work Americans will deteriorate.

Repeating a familiar refrain, the policymaker argued the inflation outlook remained "well contained," even with more policy accommodation, and that the
inflation rate will likely remain near or below the Fed's 2 percent target "over the medium term."

"With inflation near target, relatively moderate economic growth expected for several more years, potential productive capacity at risk, and a symmetric 2 percent inflation target, we should resist the sirens' call to prematurely raise rates or tighten our policy in any way," Evans said.

"Instead, we should be providing more accommodation, in particular by better articulating the economic conditions under which our policy moves will be linked to the achievement of our mandated economic goals."

Evans sits on a Fed committee meant to improve communications. He has long advocated the central bank adopt a stance in which it will not raise rates until
certain conditions are met, for example unemployment falls below 7 percent or inflation rises above 3 percent.

The Fed in late 2008 slashed interest rates to near zero and has since bought $2.3 trillion in long-term securities in an unprecedented drive to spur growth and revive the economy after the worst recession in decades.

Yet the recovery, especially in jobs, has been slow and economic growth has been erratic, leading the central bank to say it expects to keep rates "exceptionally low" at least through late 2014.

Tue, 06/05/2012 - 19:52 | 2497885 Bay of Pigs
Bay of Pigs's picture

The only thing "well contained" is his head way up his ass.

 

Tue, 06/05/2012 - 20:09 | 2497924 walküre
walküre's picture

Evans said he expects unacceptably high unemployment for some time to come, which carries the risk that skills of out-of-work Americans will deteriorate.

Nice touch. As if Evans really gives a shit. All he cares about his keeping his job and his obscene salary and bonus for doing absolutely nothing productive.

Evans cares about skills? What about his own freakin' skills? What fucking skills does he have?

What skills do any of these money monkies have?

Tue, 06/05/2012 - 20:40 | 2498002 max2205
max2205's picture

Most of the printing will go to Europe. Oh well piss it away

New lend lease!!!!!

Tue, 06/05/2012 - 21:30 | 2498101 Plymster
Plymster's picture

Evans, who does not have a vote this year on the Fed's policy-setting panel

So then who gives a shit what this windbag says?

Wed, 06/06/2012 - 01:28 | 2498463 The Monkey
The Monkey's picture

There is nothing new here. Evans is always looking to print.

Wed, 06/06/2012 - 08:26 | 2498816 rufusbird
rufusbird's picture

Creating the illusion that somebody is able to control the situation...

Tue, 06/05/2012 - 19:56 | 2497887 deflator
deflator's picture

 Of course he is going to push on the string... what else can he do? Here we go, just like Raoul Pal said, maybe 6 months left in this thing then the Zombies take over.

 I wasn't necessarily afraid of Raoul Pal's comments until I heard the status quo thinktanks complaining about him. He is orders of magnitude ahead of the curve in comparison to government think tanks.

Tue, 06/05/2012 - 19:54 | 2497888 Bansters-in-my-...
Bansters-in-my- feces's picture

Fuck YOU HellSinRath.

Tue, 06/05/2012 - 19:59 | 2497893 Goldtoothchimp09
Goldtoothchimp09's picture

Thank You ZH -- best real-time reporting out there

Tue, 06/05/2012 - 20:00 | 2497896 Racer
Racer's picture
Hils en rath

rath en hils

ROT IN HELL

Tue, 06/05/2012 - 20:02 | 2497897 lakecity55
lakecity55's picture

double

Tue, 06/05/2012 - 20:01 | 2497899 tony bonn
tony bonn's picture

"...Amid New Recovery Doubts.."

how can there be doubts after 2+ years of green shoot fertilized by hilsenrath, cramer, and obama?? isn't obama running on his robust growth record as though the indonesian-in-chief could actually do anything for the economy other than destroying it through nationalization and debt repudiation?

i am all for sending every american a check for 1 trillion usd add fuel to an already robust recovery....

Tue, 06/05/2012 - 20:34 | 2497990 Al Gorerhythm
Al Gorerhythm's picture

Green shoot crop failure due to change in economic climate?

Tue, 06/05/2012 - 20:02 | 2497901 sschu
sschu's picture

They drove WTI to $83 and now they will pump it back up with more free Bennie Bucks.

This is an old story, the idea that somehow monetizing government debt and driving rates down will somehow fix a debt saturated economy is absurd.  

We have been doing the same thing since 2008, there have been limited positive results, but we will just do more of the same?

sschu 

Tue, 06/05/2012 - 20:04 | 2497902 Bansters-in-my-...
Bansters-in-my- feces's picture

So I am going to go out on a limb here and guess "spur recovery" means larger banker bonuses and profits.

See.!

I am catching on to Banker Talk.

Tue, 06/05/2012 - 20:01 | 2497904 deflator
Tue, 06/05/2012 - 20:05 | 2497909 besnook
besnook's picture

euro weakness gives them huge room to do a massive print and even include obamney's thingamajig program.

Tue, 06/05/2012 - 20:06 | 2497914 lemonobrien
lemonobrien's picture

BUY! BUY! BUY!

Tue, 06/05/2012 - 20:09 | 2497923 Raymond Reason
Raymond Reason's picture

"doing nothing —or more strongly signaling a willingness to act"   I want this job.  

Tue, 06/05/2012 - 20:13 | 2497935 Hedgetard55
Hedgetard55's picture

I say tie Hisenrath to Bernanke and all the rest of the Fed Board and feed them to the Nile crocs at the DC zoo!

Tue, 06/05/2012 - 21:00 | 2497950 Conman
Conman's picture

Interesting, seems like a very desperate move as always. Must really mean ECB will not do a thing tomorrow.

 

Also the rest of the wsj article that the headline doesnt hint at states:

On the other hand, the Fed's wing of policy skeptics came out against further action Tuesday.

"During the next few weeks as I contemplate the future course of monetary policy, I will be asking myself what good would it do to buy more mortgage-backed securities or more Treasurys when we have so much money sitting on the sidelines," Richard Fisher, president of the Dallas Fed, said in a speech Tuesday at St. Andrews University in Scotland. "I believe that were we to go down the path to further accommodation at this juncture, we would not simply be pushing on a string but would be viewed as an accomplice to the mischief that has become synonymous with Washington."

 

Furthermore fuck Evans. He's not even a voting member this year.

2012 Members of the FOMC

 

Tue, 06/05/2012 - 21:17 | 2498079 Bay of Pigs
Bay of Pigs's picture

And not one decent honest banker among the group here.

Just sad...and utterly sickening.

Tue, 06/05/2012 - 21:40 | 2498119 Goldilocks
Goldilocks's picture

Clarke and Dawe - Australian Political Scientist
http://www.youtube.com/watch?v=ylaz3pVZ2V8 (2:18)

Tue, 06/05/2012 - 20:23 | 2497965 columbo
columbo's picture

The fact is is that anyone who has any money left will take anything to store their $....a mattress, whatever.  These policy making morons are obviously not chatting with any regular people or I should say any other humans.  The fact is we all realize in this venue that time is short and that the "so-called" officials will just print more money but the velocity will continue to be decelerating since people are really scared so purchasing will continue to diminish until they say "holy shit"...I have no F****** brain.   The govt will no longer take care of me.

Tue, 06/05/2012 - 20:24 | 2497967 death_to_fed_tyranny
death_to_fed_tyranny's picture

FUCK YOU BEN BERNANKE! THE END IS NEAR! Well I hope so.

Tue, 06/05/2012 - 20:27 | 2497972 Poor Grogman
Poor Grogman's picture

Fed considering more action...

Everyone who knows whats going on is considering more action...

China India and all hedge funds considering more action....

Even Granny and Pop are considering more action..

Not to mention Robotarder and MDB who are both also considering more action...

Everyone welcome Ben Bernanke to busy town...

Tue, 06/05/2012 - 20:27 | 2497973 insanelysane
insanelysane's picture

Almost out of bullets but might as well fire them all and then.......throw the gun at the problem.

Tue, 06/05/2012 - 21:35 | 2498113 WmMcK
WmMcK's picture

Always loved it when the bad guys threw the gun at Superman -- final act of the desperate. Bring it.

Tue, 06/05/2012 - 22:55 | 2498255 optimator
optimator's picture

And I always laughed when the man of steel ducked when that gun was thrown.  Wasn't afraid of bullets that bounced off, but that thrown gun.......

Tue, 06/05/2012 - 20:41 | 2498004 Atomizer
Atomizer's picture

No Banker Shall Be Left Behind Protocol Awaits..  Down Jones will claim another victory lap tomorrow.. LOL 

 

Rally Time Rally Monkey

Tue, 06/05/2012 - 21:31 | 2498106 Goldilocks
Goldilocks's picture

House of Pain - Jump Around
http://www.youtube.com/watch?v=U9Q0jPyrja0 (4:02)

House of Pain - Boom Shalock Lock Boom
http://www.youtube.com/watch?v=8RVzIDlDnLE (3:40)

Tue, 06/05/2012 - 20:43 | 2498008 Ned Zeppelin
Ned Zeppelin's picture

This announcement timed to cushion Europe's open as the Brits return to work after celebrating the Silver Jubilee. The Fed is waving an empty gun.

Tue, 06/05/2012 - 20:46 | 2498012 pissing_excellence
pissing_excellence's picture

I remembered that "flow"article from before, steel trap tylers, great timing on the reinforcement.

Tue, 06/05/2012 - 20:48 | 2498019 WiretapWilly
WiretapWilly's picture

Just buy up everything with real value with your fake money while you can Ben and then give a big hahaha to all the paper bagholders.

Tue, 06/05/2012 - 20:50 | 2498024 RobotTrader
RobotTrader's picture

Looks like the lows are in.  Bernanke the Genius did it again.

He successfully jawboned inflation expectations to a negative position, cut the CRB Index in half, and single-handedly created the biggest Fixed Income Boom ever seen.

Now he's going to take "extraordinary measures" to enforce the stable employment mandate and he'll start skying stocks again.

Of course, commodities will follow, but once the CRB Index gets close to the highs, he'll simply utter some "words" to jawbone prices lower again and create yet another flight to safety into bonds.

The guy is a genius.

If only we had Krugman as the N.Y. Fed govenor, we never would have been in this jam in the first place.

Tue, 06/05/2012 - 21:01 | 2498045 Reese Bobby
Reese Bobby's picture

Do you remember the specific day you jumped the shark?

Tue, 06/05/2012 - 21:22 | 2498085 nmewn
nmewn's picture

He's no better than a "public employee" union member now...what's the upside for me...waaahhh...lol.

To incompetent or timid to short, just another statist long pump & dumper revealed.

Tue, 06/05/2012 - 21:15 | 2498075 disabledvet
disabledvet's picture

Well we do have Obama for President so "two out of three ain't bad" i guess. I'm sure Rahm is plotting something totally worthless and anti-American as i write this "just in case." The irony of course is that The Sphinxer will merely announce "he's extending mortgage ass purchases through to 2020" and without even laying a penny out the rates will drop to 1 percent. Unfortunately old Charlie Baby of Cry-Town who's been yammering about this incessantly since he came out of the womb will be shocked when he watches the prices drop another 50 percent as a consequence. There's just no pleasing people! I mean honestly "slap the word free on a house" and you'll see HOWLS of protest. yes, yes?

Tue, 06/05/2012 - 21:29 | 2498099 Mae Kadoodie
Mae Kadoodie's picture

I don't know who's a bigger putz , MDB or RT?

Tue, 06/05/2012 - 22:40 | 2498225 jomama
jomama's picture

and i thought i had no sense of humor.

Tue, 06/05/2012 - 23:53 | 2498347 Matt
Matt's picture

From this post, I suspect RobotTrader and MillionDollarBonus_ are one and the same; it seems he was accidentally signed in as RobotTrader when posting with the writing style and character of MDB. Oops.

Tue, 06/05/2012 - 22:26 | 2498201 IndicaTive
IndicaTive's picture

More effort please. Where is Max Fischer when I need a laugh?

 

Tue, 06/05/2012 - 20:54 | 2498031 Mark123
Mark123's picture

I laughed when some people said back in 2009 that the fed would print all this money, it would not work, and that they would just keep doing it over and over and over until the whole system blew up.

 

How right they were.  Un f'ing believable!!!!!!!!!!!!!!!!!!!

 

The only benefit that seemed to come out of all this money printing was to enable the great wealth transfer to continue while we all pretend that banks, pension funds, etc are solvent, ongoing operations.

Tue, 06/05/2012 - 20:58 | 2498038 orangegeek
orangegeek's picture

Overspent, maxed out debt, 0% interest rates and high unemployement (actual is closer to 17%).  That's the US.

 

And Europe - I wouldn't believe a thing coming from that part of the work.  China?  Communists.  No need to continue here.

 

QE failed.  Austerity will fail.  Default is all that will be left.

Tue, 06/05/2012 - 21:13 | 2498072 surf0766
surf0766's picture

Europe austerity>> meaning higher taxes and fake decreases in spending.

The actual version that is needed >>Big decreases in spending and tax cuts. 

Tue, 06/05/2012 - 21:02 | 2498051 bernanke's wors...
bernanke's worst nightmare's picture

Evans is not a voting member of the Fed.  With the 10 yr yield where it is and Europe imploding, they won't rush to catch a falling knife.  All they have is jawboning.  Ben believes that in the absence of real stimulus this will work just as well if they "credibly threaten to do so". Rus2k at 600 by July, lower thereafter.  And before I forget - fuck you, Robo.

 

Tue, 06/05/2012 - 21:11 | 2498067 surf0766
surf0766's picture

more toilet paper for everyone !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Tue, 06/05/2012 - 21:13 | 2498069 dolph9
dolph9's picture

Everytime there's a hint of deflation, Bernanke will threaten to pull out the bazooka.  Doesn't matter if he does it or not.

There's already alot of fiat floating out there.  The metals will absorb much of it, proving the goldbugs to be right in the end.  And we'll be right permanently this time, not like 1980 when Volcker did something which could only be done once.

Bernanke is a patsy, and maybe he realizes it.  Maybe he realizes, "I've been handed a shit sandwich by the greedy fucks who came before me."

But Bernanke is not man enough to admit this in public.  He is simultaneously a tragic and pathetic figure.  Trying desperately to fight the Depression 2.0 platter which was handed to him.

But, you know what?  Fuck him.  Fuck anybody who lies, even if they do it because they are scared.

Wed, 06/06/2012 - 10:20 | 2499142 post turtle saver
post turtle saver's picture

The past four years aren't a hint of deflation, they're a "slapped upside the head with a wet trout" announcement of deflation. We've been attempting to attach more zeroes to everything since 2008 to keep "planned inflation targets" propped up but it's not going to work. Consumers are tapped and banks are green from toxic overload. Marked-to-market credit, which far outsized the money supply, has contracted severely. Deflation, bitchez... old thinking: "cash is trash", new thinking: "cash is stash".

Tue, 06/05/2012 - 21:30 | 2498102 BlackholeDivestment
BlackholeDivestment's picture

...evil, just plain evil. 

http://www.youtube.com/watch?v=k_5afbAOnRM 

Tue, 06/05/2012 - 21:34 | 2498109 khakuda
khakuda's picture

At 7:30 Barack orgasmed in his pants and investment managers cheered as news of the pump job arrived just in time to boost fee-able June 30 assets.

Too bad they couldn't let the economy benefit from low gasoline prices for more than 3 weeks before pumping them up to slow the economy and kill jobs yet again. The incompetence and corruption is beyond words.

Tue, 06/05/2012 - 21:40 | 2498120 alien-IQ
alien-IQ's picture

but but but...this til it'll work....right?:-(

Tue, 06/05/2012 - 21:44 | 2498126 Jake88
Jake88's picture

When rumor is all they need to move the market up why not.  They'd be fools to not send out rumors whether they intended to QE or not. It costs nothing.

Tue, 06/05/2012 - 21:49 | 2498133 HD
HD's picture

Not sure it's going to matter this time. Market has already priced in a white knight riding to the rescue, so unless they actually get "something" - I doubt jawboning is going to hold the market up much longer.

Tue, 06/05/2012 - 21:50 | 2498134 10044
10044's picture

is that why gold popped $7 already??

:RIP Bob Chapman:

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