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Here Comes The Hilsenrath Leak: "Fed Considers More Action"
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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You know. I use to think my parents lived helluva lives given the history they witnessed. Thankfully they are still alive.
They already gambled my future and now they are taking my historicals too? How many historical moments can a single generation get?
Fuck You Bernanke you piece of shit. Its coming Benny, the end is coming. The only thing we can be sure of is that he will do the exact wrong things for all the wrong reasons, a typical stem. I'll just continue to short Europe until something changes, then I'll go long the worst countries like Spain and Italy. Start shorting the dollar once again, right after we ring out the long position profits.
Things have been so easy in the several months that I'm afraid to keep a position open over a weekend, so to be safe I spend a lot more on transaction fees. No doubt its worth it, their likely to make an announcement when it will have the biggest impact. Something has to be done somewhere by somebody about something - right? C'mon people, fucking do something even if it is completely impotent, which is likely, everybody is waiting and waiting and waiting. You do not want to piss off Ben otherwise he'll take that piece of shit Euro paper trash to $1.90, he only has to wave the magic wand!
The CBs ought to come out with a consolidated plan of attack, I realize that isn't likely but in a normal world where people actually would want to solve the problems that would be the way to go. A coordinated approach to devaluing currencies, imposing appropriate rules, etc is clearly the best way to solve the problem - for everyone. As I've said several times, I'm amazed they are willing to expose the currency and the union to so much risk. This can't be all about a game of chicken can it?
BTW, will anybody in Spain be hanging that fucking Rajoy dickhead? maybe put it on a pole and stick it in front of some Spanish monument. How about we throw in Draghi and Merkel and Juncker and the rest? As the dollar continues to strengthen, funny how they never mention how that factors into their decision about policy...
Fuck You Bernanke, dickhead.
Bernanke will be remembered as the Ronald Reagan of the Fed. Despite the ill consequences of current Fed policies, pundits and historians will credit him for (1) averting the Greatest Depression, (2) keeping interest rates low (3) improving unemployment from 10% TO 8%, (4) mitagating the contagion from the European crisis and (5) goosing stock values. When the housing recovery does come, he'll get credit for that, too, the way Ronnie did for the collapse of the Soviet Union years after his final term.
Thanks for the chuckles...
You are right, Bernanke has performed Herculean feats, nobody would have dreamed that a central banker could have:
1) Skied the SPY 80% in 3 1/2 years with the worst economy on record. Led by retail stocks and REITS.
2) Successfully "whipped" inflation by doing actually nothing but flapping his gums and crashing the CRB Index in record time.
3) Engineered the QE programs and Operation Twist to crush interest rates to 60-year lows while the U.S. is running hockey stick deficits.
4) Deftly maneuvering the gold and silver markets to make sure 100% of all XAU breakouts result in massive failures, thereby discouraging any inflation expectations.
Bernanke will be written about in textbooks for the next 150 years.
He will be seen as the man that destroyed America. You my friend are living for today, what Bernanke has done to America will take DECADES to fix. A monkey with a note could have done the same job Bernanke has done, hand out fiat money that was created out of thin air to anybody who would take it in exchange for worthless IOU'S!
Maybe Tahoe, maybe.
I'm sympathetic to your view, but another part of me wonders if Bernanke will remembered as the man who destroyed the Euro and Yen, ushering in an era of USD as de facto one-world currency. You know... the USD is the world's worst fiat currency, except for all the others.
It would be nice if you were correct, but, I doubt it. Bernanke's popularity is likely to wax and wane with the market. The larger trends for this market are all pointing down now. This is the beginning of a bear market and there is nothing the Fed can do to stop it.
I wouldn't bet on that. This market has wanted to go up on vaporous nothings for this entire calendar year, so far....
Even though we're a little soft right now on the S&P, a suitably aggressive intervention by the Fed (coordinated with their European bozo colleagues) will return us to that dubious nirvana. If they pull out the bazooka (Full, unsterilized intervention in asset markets) the SP will add 100+ points in a week. If the Euro-scabs at least appear to play nice, and Spain accepts Germany's conditions for EFSF/ESM bail-out, that might be worth another 100. It won't solve the problem of course, but then since when do markets get run by humans who think about actions and consequences? As long as the algos are happy.
I would sell, cover up, or sell some puts as protection against any short position going into Greek Election / FOMC meeting / ECB-Euro-Trash Conclave. There's simply too much rocket fuel laying around for a big short squeeze. I'll likely sell outright my XLF puts, leg into a put spread on my FB puts, and roll my calendar put spread on CRM into something more defensive. Prudence, gentlemen.
Agree that we'll get a relief rally, but we're not going to see 1422 on the S&P again this year.
It looks like Bernanke is geting a gang bang.
And The Wurlitzer Plays On....
You have reached the Department of Action
If you know the type of action you are looking for you may dial it at any time
...and when qe does come, you can expect $500 frn's coming to a bank near you.
Looks like gold approves of this leak. Although they cannot let her really rip until after it's official.
The folks on pensions are gonna love these guys as their purchasing power dies in front of their eyes. But hey, just print a flag on the bills, have them say the Pledge and tell them to vote for Obomney and it'll all be good. Oh yeah, and unquestioningly support the next war too. The Boyzzz know how to herd the sheep.
LA DE FRICKEN DA...Look at where we are today? Four years of intervention has got us WHERE? NOWHERE!
I continue to think Political Fears May Keep ECB Easing On Hold and the Fed will hesitiate for similar reasons. US stocks have seemingly held up well in expectation of further QE. However, another 10% drop in stocks may be what's necessary for another QE unless unemployment starts rising more rapidly.
Buffet says no recession. Looking forward to looking back on this call...
http://www.huffingtonpost.com/huff-wires/20120605/us-buffett-economy/
Here we go again:
As Taxes Dry Up, Greece Warns of Going Broke
ATHENS — As European leaders grapple with how to preserve their monetary union, Greece is rapidly running out of money. Government coffers could be empty as soon as July, shortly after this month’s pivotal elections. In the worst case, Athens might have to temporarily stop paying for salaries and pensions, along with imports of fuel, food and pharmaceuticals.
Officials, scrambling for solutions, have considered dipping into funds that are supposed to be for Greece’s troubled banks. Some are even suggesting doling out i.o.u.’s.
Greek leaders said that despite their latest bailout of 130 billion euros, or $161.7 billion, they face a shortfall of 1.7 billion euros because tax revenue and other sources of potential income are drying up. A wrenching recession and harsh budget cuts have left businesses and individuals with less and less to give for taxes — and growing incentive to avoid paying what they owe.
Does this mean the gold and silver sale is over? Dammit!
This leak will up the metals and little hint on Thursday metals up more and then at the meeting no QE everything tanks including metals (short term) - Shakes out more people that can't hang on. For the most part Zero hedgers make logical arguments and should prove right in the long term but make no mistake Bernake is three moves ahead of all us.
I know that the bills have to be paid, but do I have to see BHO's face in a political ad every time I come here? I don't search on the name or even politics, so it is not context-driven.
I see Tyler spelled Hellsinrats name wrong.
No QE, no recession! The global economic bottom is here, I would like to personally diss Jim Grant, the extraordinary forecaster and his May '11 call here on ZH for QEs into perpetuity--articulate moron.
Don't forget that the FED has a partner in crime called the US GUBMINT. The Obama administration has leverage to influence FED decisions, especially in an election year. Do you believe the kenyan pretender is just going to sit back and hope for the best? No, he is leaning on the FED to rally markets. June may be to soon to do this however. On the other hand, if the market tanks, it may cause irreversable damage that can't be mended before the election. Tough call either way. The key is europe. I suspect what happens there is much more important to markets than the June announcement. Expect an annoucement before then on a european "fix" strategy. Make no mistake, more OE WILL come, the only question is will it be sooner rather than later. Bill Gross is seldom wrong.
Recent DJI peak: 13359.60
Correction territory: 10% drop from peak
DJI correction threshold: 12023.1
DJI close today: 12127.95
Just over 100 points to go and then we get the next QE. The bluster you've heard recently is just mentally preparing the rubes for the inevitable.
Sometimes things just are what they are, but because nobody actually comes out and says what are is, it just stays invisible in the middle of the room.
This creature called "the Fed" is a private corporation initiated by people of loyalties other than to the USA, tasked with the controlled demolition of the once mighty Republic. Everything they are doing is in fulfillment of that mission.
It's as if you had thieves in your home who talked so earnestly and well informed about subjects close to your heart that you simply forgot to pay attention to the bag stuffing of the silver plate going on right in front of you.
And when they've got everything...they're gonna blow up your house, right in front of you, to hide the evidence of the crime!
Lets begin with the facts:
"Fed Considers More Action Amid New Recovery Doubts."
1. This is lie number 1, there isn't or ever has been any indication of a recovery what has transpired is a covering up of poor investments with printed money and lying to the public about labor markets.
Lie #2 is that QE stopped. This is a complete fraud and Bernanke is the lead liar.
2. The US is buying 70% of all debt it is issuing and that is being done with printed confetti. Call it twist, money printing, QE or any name you want and it is the same thing, a fake out and a fraud on the public.
The Federal Reserve Bank must be abolished and we must purge the sytem of all of the Jewish influence from Summers, to Rubin to Greenspan, to Volker, to Dimon to Blanfien, to Paulson, Geithner and Bernanke, they have ruined this country the same as their ancestors destroyed Germany and for the same reason, ...GREED. This group is incapable of your trust and must go away. If not, ypu will have no country, no morals, no oppurtunity and no future.
Previous USDX retracement & SPX rally warning is now confirmed & good (counter trend) equity upside expected.
http://www.zerohedge.com/news/2012-12-24/market-analysis
fed to destroy potential long term recovery again, is what the headline should read. Just when oil prices were going to give the us consumer a break and give them some discretionary money to put into the economy, the fed will engage in another qe and destroy any chance of a real recovery.
Or headline could read:
Fed to bail out europe: asset prices are putting strains on european bankss, since the ecb isn't doing qe, we need to save our multi millionares and bankers. So once more we will raise global asset prices and bail out the bankers from their mistakes.
You know that lenon song imagine, a line should have been put in there: imagine central bankers telling the truth
the economy gets better because asset pricesz have fallen, then they destroy the fragile recovery by making sure we hav e no free spending money. I honestly think those at the fed are worse than mass murders
No fraud too big. No failure left behind.
The counterfeit cartel is alive and well, fucking savers every day.
"No one will see it coming, your pain is for your protection."
ZH get a clue, QE IS the plan, confiscation of your purchasing power through racketeering.
WHERE ARE THE ZERO QE FUCKTARDS NOW?