Here Is The Hilsenrath Rumor To Save The Day

Tyler Durden's picture


In a market which was left for dead with virtually no hope of a CTRL-Peus Ex Machina, and which otherwise would have tumbled to close at the lows, we realized that something was missing. In fact we noted it less than an hour ago:

Sure enough, moments ago, with minutes left in the trading day and week, here comes the Fed's favorite leaking scribe, advising the market that not all is lost, and that Pavlovian dogs can, and in fact should continue to salivate at ever poster of a half naked toner cartrdige.

  • Our Jon Hilsenrath: Weak Jobs Data Increase Likelihood Of #Fed Action, But Don't Ensure - WSJ
  • Our Jon Hilsenrath: #Fed Hawks Want To Reserve Action For More Serious Threats - WSJ
  • Our Jon Hilsenrath: Some Officials Interested In #Fed Mortgage Bond Purchases - WSJ

In other words Bill Gross was right again, and the next thing the Fed will buy will be MBS. However, will it do anything to fix the economy, create jobs, or fix inflation: of course not. But at least it should push the S&P that little big higher.

Here, specifically, is what the Fed told the WSJ to write:

Friday's disappointing jobs report increases the likelihood that the Federal Reserve will launch a new bond-buying program to boost economic growth, though it doesn't ensure such a move.


Fed officials emerged from their policy meeting in late June frustrated by the slow pace of the recovery and worried that the economic outlook was deteriorating. Economic data released since then have done little to allay those concerns, according to public comments by some officials and interviews with them before Friday's employment report.


Yields on 10-year Treasury notes fell to 1.54% on Friday, near the lowest levels in generations, reflecting market gloom about the economy and also possibly the anticipation of more action by the Fed. Bond-buying programs are meant to drive down long-term interest rates to spur spending and investment and to drive investors into riskier assets that might support economic growth, such as stocks.


The central bank's more activist camp believes more action is already justified because the economy isn't making progress toward reducing unemployment and inflation is low. Its hawkish wing, which worries more about inflation and which has been skeptical of the central bank's responses to financial crisis and recession, accepts that more action might be needed but wants to hold it in reserve for serious threats like recession or deflation.


"If we get some kind of major global disturbance or some kind of problem here in the U.S. and the growth outlook deteriorates sharply, then I think more action could be warranted," James Bullard, a Fed hawk, said in an interview last month.


The activists have tended to win out in many of these debates during Mr. Bernanke's tenure as chairman, though the hawks have helped to restrain the aggressiveness of Fed actions.


Some Fed officials in the middle don't have as high a bar to action as the hawks but are waiting to see if the outlook deteriorates anymore. "I am more leaning toward the view further action would be a response to deteriorating conditions and a deteriorating outlook," Atlanta Fed president Dennis Lockhart said in an interview with Dow Jones Newswires last month.


Officials could decide to wait through the summer to watch the economic data and revise their forecasts before making their next big decision. Many Fed officials want to be deliberate because economic data are hard to read right now. Still, the recent spate of disappointing figures—including feeble job gains and falling factory output, retail spending and consumer confidence--raises the likelihood that a bond-buying program will be discussed when they meet in July.


Bond buying, also known as quantitative easing, would be a controversial move inside and outside the Fed. When the Fed launched a $600 billion program of long-term Treasury bond purchases in 2010, critics assailed it for risking higher inflation and trying to push down the value of the dollar.


Since then, Fed officials have become less concerned that their policies are doing the damage critics warn about. But some have doubts that the policies are doing much good at a time when banks are reluctant to lend and consumers and businesses are wary of borrowing. However, Mr. Bernanke has made clear he believes Fed policies can boost growth.


"Monetary policy still does have some capacity to strengthen the economy by easing financial conditions," he said at his news conference.

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Fri, 07/06/2012 - 15:26 | 2592976 veyron
veyron's picture

Wake me up when QE3 is announced ...

Fri, 07/06/2012 - 15:33 | 2593002 JackT
JackT's picture

You'll have to wake up quick, half-life is down to about 3 minutes. 

Fri, 07/06/2012 - 15:38 | 2593038 francis_sawyer
Fri, 07/06/2012 - 15:42 | 2593059 CClarity
CClarity's picture

More heroin will help you feel better temporarily . . . but doesn't fix the underlying problem of why you "need" the heroin.  

Substitute QE for heroin and growth in economy for you.

Fri, 07/06/2012 - 15:50 | 2593085 idea_hamster
idea_hamster's picture


BTW, peus" is latin for "gold shield" according to google translate -- any classics folks care to comment?

Fri, 07/06/2012 - 15:58 | 2593121 FEDbuster
FEDbuster's picture

QE 3 should be code named "5 Hour Energy", because that may be how long the impact will last.

Fri, 07/06/2012 - 16:13 | 2593167 The Gooch
The Gooch's picture

"Five Hour Green Energy"


Fri, 07/06/2012 - 18:22 | 2593451 Tippoo Sultan
Tippoo Sultan's picture

Hilsenrat. Calls to mind a scene from "The Godfather, Part II:"

Senator Pat Geary: Mr. Cici, was there always a buffer involved?

Willi Cici: A what?

Senator Pat Geary: A buffer. Someone in between you and your possible superiors who passed on to you an actual order?

Willi Cici: Oh yeah, a buffer. The family had a lot of buffers!

Fri, 07/06/2012 - 15:50 | 2593089 NewThor
NewThor's picture

I somehow doubt heroin dealers are as dishonest and scummy as the ones giving out QE3. 

Fri, 07/06/2012 - 15:55 | 2593110 blunderdog
blunderdog's picture

Not intentionally, but they're not real bright.  Some distributor had the brilliant idea to cut his H w/fentanyl about a year ago, killed 12 good customers.

Derp derp.

Fri, 07/06/2012 - 15:59 | 2593127 whstlblwr
whstlblwr's picture

Bernanke, be my bitch, too. Let's take market out of market. Just tell me when to buy IWM, or Apple. The price to buy and the price to sell.

Tell momma on foodstamps so she can open her Etrade account.

Fri, 07/06/2012 - 15:48 | 2593074 spastic_colon
spastic_colon's picture

VIX is's been trying to say something all day (like another weekend rumor is imminent)

Fri, 07/06/2012 - 15:52 | 2593101 J 457
J 457's picture

More like VIX was up all day and then reversed course for no reason (rumor) to close lower.  On no news...

Fri, 07/06/2012 - 15:53 | 2593103 J 457
J 457's picture

More like VIX was up all day and then reversed course for no reason (rumor) to close lower.  On no news...

Fri, 07/06/2012 - 15:49 | 2593080 old naughty
old naughty's picture

"half-life is down to about 3 minutes"

Well, what can you do,

millions sperms can swim up channel;

billions can die with push of a button;

trillion lie-bors can be traded by HFT.

Glorious 3 minutes.

But then, if it goes further down to, say ZERO, what can you wake up to, hedge?

Fri, 07/06/2012 - 15:33 | 2593009 NewThor
NewThor's picture

The FED buying MBS = Big Boost in Hiring

Shaving your dick off with a cheese grater = Good Sex

Drinking Drano = AWESOME FEELING

1984 = Kim Kardashian's booty

Debt = Heaven 

Fri, 07/06/2012 - 15:37 | 2593025 TruthInSunshine
TruthInSunshine's picture

Hilsenrath the Scrivener

by: Herman Melville


Soon, anytime equity indices dropped more than 0.00001%, especially into close, Jon Hilsenrath struck up what soon became his stock rumor to keep the jowels of Wall Street Cronies slobbering: "Market whisper of additional round of QE."

Fri, 07/06/2012 - 16:05 | 2593042 barliman
barliman's picture


You should be able to catch up on your beauty rest ...

The key takeaway

Our Jon Hilsenrath: #Fed Hawks Want To Reserve Action For More Serious Threats - WSJ

I have raised this point before:

Where will the EU Zombies turn IF they get to pick Germany's bones clean?

But this one is new for all of you:

QEEND - How much money will it take to be remotely credible as forestalling the EU/euro freefall?

Answer: Anything less than $ 10 trillion USD is laughable .... but anything more than $ 5 trillion USD will let loose the bond vigilantes on the U.S.


Fri, 07/06/2012 - 15:39 | 2593046 debtor of last ...
debtor of last resort's picture

Kill me when QE3 is announced.

Fri, 07/06/2012 - 16:19 | 2593186 Sockeye
Sockeye's picture

Good news, you live aNother day!

Fri, 07/06/2012 - 20:25 | 2593728 CynicLaureate
CynicLaureate's picture

Good news!  In spite of the tsunami warning, the ocean waves continue to pull back from shore!

Fri, 07/06/2012 - 16:13 | 2593160 Randall Cabot
Randall Cabot's picture

They look like some lame roomerers, especially the first too:

  • Our Jon Hilsenrath: Weak Jobs Data Increase Likelihood Of #Fed Action, But Don't Ensure - WSJ
  • Our Jon Hilsenrath: #Fed Hawks Want To Reserve Action For More Serious Threats - WSJ
  • Fri, 07/06/2012 - 17:06 | 2593282 vast-dom
    vast-dom's picture

    Amazing! Hopium levitation up! Illegal Fed central bank actions, again! 

    Fri, 07/06/2012 - 15:28 | 2592986 GrinandBearit
    GrinandBearit's picture

    Weak.  I'm surprised they couldn't come up with something more juicy.

    Fri, 07/06/2012 - 16:11 | 2593165 Turd Ferguson
    Turd Ferguson's picture

    Spam...but so be it. I can't post pix here.

    Fri, 07/06/2012 - 15:28 | 2592987 dick cheneys ghost
    dick cheneys ghost's picture

    Wake me up when the PetroDollar is dead............

    Fri, 07/06/2012 - 15:39 | 2592988 slaughterer
    slaughterer's picture

    New T-shirt worn by the unemployed: "Will work for QE3."

    Fri, 07/06/2012 - 16:04 | 2593140 roadhazard
    roadhazard's picture

    They might as well ask for a job. QE does not extend to them. It is only stimulus for the big boys to keep partying.

    Fri, 07/06/2012 - 16:19 | 2593187 resurger
    resurger's picture


    Fri, 07/06/2012 - 15:29 | 2592989 It is a bargin ...
    It is a bargin my friend's picture

    You people are sick as

    Fri, 07/06/2012 - 15:29 | 2592990 veyron
    Fri, 07/06/2012 - 15:30 | 2592992 Rich Bagg
    Rich Bagg's picture

    Don't short the stock market.  

    Sat, 07/07/2012 - 18:38 | 2595475 LooseLee
    LooseLee's picture

    Eat shit and die you conformist fascist dreg! A noose awaits you...

    Fri, 07/06/2012 - 15:31 | 2592995 francis_sawyer
    francis_sawyer's picture

    Musta got his tweet in just b4 the sabbath started...

    Fri, 07/06/2012 - 15:35 | 2593019 American34
    American34's picture

    Mr. Durden, you should give the "market" a boost by Tweeting, "New genetically engineered breed of printer cartridges begin breeding like rabbits!"

    Fri, 07/06/2012 - 15:34 | 2593011 Stoploss
    Stoploss's picture


    Fri, 07/06/2012 - 15:34 | 2593012 timbo_em
    timbo_em's picture

    Come on S&P 500! Show me some green figures!

    Fri, 07/06/2012 - 15:34 | 2593015 RobotTrader
    RobotTrader's picture

    Pretty predictable to see this hockey stick turnaround, KRE and XRT have been climbing all day, and VNQ is still pinned at 4-year highs.


    TGT, KSS, JWN, and the usual suspects are leading the way.

    Fri, 07/06/2012 - 15:37 | 2593028 SheepDog-One
    SheepDog-One's picture

    WHOA RoboTarder is back? So what did you do re-open your Widows and Orphans Fund again?


    Fri, 07/06/2012 - 15:55 | 2593112 TruthInSunshine
    TruthInSunshine's picture

    RoboTard has his mom's remaining retirement funds (a very small account that was once much larger and actively managed by RoboTard at that time using Gorilla Trades - as seen on CNBSC) all in Groupon.


    Fri, 07/06/2012 - 18:14 | 2593163 LouisDega
    LouisDega's picture

    Robos back ..Welcome home sensei. 

    Fri, 07/06/2012 - 15:48 | 2593079 GrinandBearit
    GrinandBearit's picture

    Funny how you call things AFTER they happen and then say it was "predictable".


    Fri, 07/06/2012 - 15:52 | 2593102 SheepDog-One
    SheepDog-One's picture

    Classic RoboTarder.

    Fri, 07/06/2012 - 16:20 | 2593192 Agent P
    Agent P's picture

    I equate Classic RobotTrader with pictures of hot chicks.

    Fri, 07/06/2012 - 15:34 | 2593016 SheepDog-One
    SheepDog-One's picture

    Please buy stawks for the weekend! No really, theres still a chance for QE#WHATEVER we promise REALLY!

    Fri, 07/06/2012 - 15:36 | 2593024 SmoothCoolSmoke
    SmoothCoolSmoke's picture


    Fri, 07/06/2012 - 15:37 | 2593035 fonzannoon
    fonzannoon's picture

    How many times do we keep watching equities pulled from the gutter while commodities get left there and keep saying unreal? Paper assets over real assets all day long. fkin bizarro.

    Fri, 07/06/2012 - 15:36 | 2593026 Hype Alert
    Hype Alert's picture

    Insanity: doing the same thing over and over again and expecting different results.
    Albert Einstein

    Fri, 07/06/2012 - 15:37 | 2593029 johngaltfla
    johngaltfla's picture

    The Fed should get the Nobel Science Prize this year. Who else can transmit bullshit via electronic transfer in the volumes that they do?

    Fri, 07/06/2012 - 15:41 | 2593058 TruthInSunshine
    TruthInSunshine's picture

    From Bernank's lips to Hilsenrath's ears to the rumor mill faster than the speed of light.

     Higgs boson is vindicated.

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