Hilsenrath Once Again With The 3:55 PM Sticksave

Tyler Durden's picture

Just like last time around when stocks were plunging with no knight in shining armor in sight, until the Fed's faithful mouthpiece-cum-scribe Jon Hilsenrath showed up with a report, subsequently disproven, that more QE is coming minutes before the market close on July 6, so today stocks appeared poised for a precipice until some time after 3 pm it was leaked that none other than Hilseranth once again appeared, at precisely 3:55 pm, with more of the same. Ironically, the market only saw the word Hilsenrath in the headline, and ignored the rest. The irony is that this time around the Fed's scribbler said nothing that we did not know, namely that the Fed can do something in August, or it may do something in September, or it may do nothing, none of which is actually news.

From the WSJ:

Fed Officials See Action If Growth Doesn't Pick Up Soon

3:55 PM Eastern Daylight Time Jul 24, 2012

Federal Reserve officials, impatient with the economy's sluggish growth and high unemployment, are moving closer to taking new steps to spur activity and hiring.  

Since their June policy meeting, officials have made clear-in interviews, speeches and testimony to Congress-that they find the current state of the economy unacceptable. Many officials appear increasingly inclined to move unless they see evidence soon that activity is picking up on its own.  

Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move. Central-bank officials could take new steps at their meeting next week, July 31 and Aug. 1, though they might wait until their September meeting to accumulate more information on the pace of growth and job gains before deciding whether to act.  

Fed officials could take some actions in combination or one after another. Fed Chairman Ben Bernanke, in testimony to Congress last week, listed several options under consideration, including a new program of buying mortgage-backed or Treasury securities, new commitments to keep short-term interest rates near zero beyond 2014 or an effort to push already-low benchmark short-term interest rates even lower.  

Determined to keep trying to get the economy going without causing inflation, the Fed is exploring other novel measures. One idea mentioned by Mr. Bernanke in his testimony would be to use a facility the Fed calls its discount window to provide cheap credit directly to banks that make new business or consumer loans. But it isn't clear such a program would do much good when banks already have ample access to cheap credit and this kind of program doesn't appear to be winning favor at the moment.  

Mr. Bernanke told Congress he wants to see more progress in reducing unemployment and he expressed frustration the economy appears to be "stuck in the mud." The Fed chairman has spoken in the past about the importance of the economy achieving what he calls "escape velocity"-growth that is fast enough to give the economy forward, self-reinforcing momentum.  

New worries are emerging at the Fed that the economy is falling short of that speed. The Commerce Department is expected to report this week that the economy grew at a rate substantially below 2% in the second quarter after expanding just 1.9% in the first quarter. The unemployment rate, at 8.2% in June, has moved little since January. Retail sales have been soft in recent months and financial markets, particularly in Europe, have become strained in past weeks. Some officials believe the outlook for growth has worsened a bit since the Fed's June meeting, when the central bank marked down its economic projections.  

Several officials have expressed both frustration with the disappointing recovery and a willingness to act if growth and employment don't pick up. Sandra Pianalto, president of the Cleveland Fed, said in public comments earlier this month she would be prepared to act if weak economic data persisted. Dennis Lockhart, the Atlanta Fed president, said more action could be needed barring a "step-up of output and employment growth."  

Fed "hawks"-who tend to worry more about inflation and have opposed more action to stimulate the economy-have softened their tone and acknowledged the frustration. "I know people feel like we haven't made enough progress," James Bullard, St. Louis Fed president, said in an interview this month. He said he would be prepared to act if inflation falls too low or if a new shock hits the economy.  

There are several reasons why Fed officials might wait for their September meeting to decide whether to proceed. By then they will have seen two more monthly unemployment reports and two more months of data on output, spending and investment. Fed officials update their economic projections at the September meeting and Mr. Bernanke holds his a quarterly news conference after, which would give him an opportunity to publicly explain the Fed's thinking.  

Moreover, some officials believe the Fed's June decision to continue a program known as "Operation Twist" through year-end could help the economy and want to give it time to work. Under that program, the Fed is buying $267 billion worth of long-term Treasury securities and selling an equal amount of short-term securities in an attempt to push down long-term interest rates to spur spending and investment.   The most controversial option on the Fed's list is a large bond-buying program in which the Fed would acquire long-term securities with newly created money-a step known to many as "quantitative easing," or QE.  

In the Fed's first round of QE in 2009 and early 2010, it bought $1.25 trillion worth of mortgage-backed securities and $300 billion of Treasury securities and debt issued by Fannie Mae and Freddie Mac. In its second round in 2010 and 2011, the Fed bought $600 billion of Treasury securities. A third round could involve similarly substantial sums. Many officials have signaled a preference for buying mortgage securities. One reason: They fear that if they buy many more Treasury securities, the Fed could become too large a presence in that market and disrupt trading.  

For years, critics have warned that such programs would spur inflation, a collapse in the value of the dollar or a new financial bubble. Most measures of consumer price inflation, however, are close to the Fed's 2% goal, and broad measures of the dollar exchange rate have strengthened in the past twelve months, which has dampened the power of these warnings.  

Mr. Bernanke, meanwhile, has argued that the programs are helpful, while acknowledging their effects can be limited under certain conditions, such as when interest rates are already very low and demand for credit remains weak.  

A new round of bond-buying would be politically controversial so close to the November presidential election. During Mr. Bernanke's testimony last week, Democrats made clear they wanted the Fed to act and Republicans said it should proceed cautiously. The Fed chief has said repeatedly that the central bank will seek to do what is best for the economy, regardless of political pressure.  

Another option is a change in the Fed's public communication about its plans. Since January the Fed has been saying it doesn't expect to raise short-term interest rates until late 2014. The Fed could change its policy statement in September to move that date into 2015. Such pronouncements about the expected path of short-term rates tend to reduce long- and medium-term interest rates. The Fed thinks this supports near-term spending and investment.  

Officials also are looking at changing the interest rate paid on money banks deposit at the Fed. This interest on reserves is now 0.25%. Some critics say the Fed shouldn't be paying banks even this small amount for money that they choose not to lend.  

Fed officials haven't been very enthusiastic about this idea. Some officials think the benefits of reducing the rate would be small, and some worry cutting the rate could disrupt short-term money markets. Still, officials might choose to reduce the rate in combination with other moves in an effort to give the economy a little extra lift. The European Central Bank cut its bank deposit rate to zero earlier this month.   The Fed could also try to push its benchmark interest rate, the federal funds rate, a little lower. Since late 2008, it has targeted a range for the rate between zero and 0.25%. It could narrow that range closer to zero.   

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HD's picture

Maria actually wets the NYSE floor screeching QE! WSJ said QE!!! When you have Liesman come on to be the voice of reason you know she's just lost it. Disturbingly hilarious.

flacon's picture

Hey HilsenWrath, guess what? FUCK YOU!

FL_Conservative's picture

He better never be jaywalking where my bus is traveling.

flacon's picture

I'm breeding killer hornets. Just wait until he puts on his underwear tomorrow morning.... LOL!

gmrpeabody's picture

Apparently, talk really is cheap....

iDealMeat's picture

How are these "announcements" not market manipulation again?

gmrpeabody's picture

I am sure his kids trust or his mothers IRA turned quick profits.

The Monkey's picture

What a cast of idiots. I'm disgusted my country supports an institution that encourages recklessness, either via incentives to take on credit, or incentives to speculate.

The Fed is a discrace.

TruthInSunshine's picture

- Ben 'Michael Corleone' Bernank;


"That's a terrific story. And we have newspaper people on the payroll, don't we? And they might like a story like that."

cbxer55's picture


Michael Corleone joined the Marines and fought in Nam.

He's a hero!  ;-)

TruthInSunshine's picture

I think it was WWII and the U.S. Army, no?

Ah well, minor point.

cbxer55's picture

You are correct. It's been a long time since I last saw the movie. 

I did buy the entire set at Sams Club a few weeks ago. Have not watched them yet.

financial apocalyptic contagion's picture

he wasted a 1000 words on shit most people would use 12 for:
"I have frickin clue when Bernanke will print but i'm sure he will"

dumb bastard.

TruthInSunshine's picture

I hereby officially decree Hilsenrath, infamous scribe of The Bernank's jawbone (and soon-to-be 'Bartleby The Scrivener' - i.e. I would prefer not to" when TSHTF), The Interrupting Chicken.

max2205's picture

This is becoming beyond criminal.

Fu k they put regular people in jail for this fucking BS

This shit has got to stop!

ihedgemyhedges's picture

No need to hurt him like that.  He probably bought a bunch of Netflix last week.  He's getting his pain right now.............

gmrpeabody's picture

I'm hoping he piled in on Apple 30 minutes before he let the story go.

The Monkey's picture

Whether or not this idiot owns Apple, he is encouraging others to load up.

The Fed needs to be dismantled and the cast of clowns locked away.

francis_sawyer's picture

Frau Blucher [horse whinnies]...

Soul Train's picture

Central Planning - proven by the USSR, Euroland, etc - does not work.

These guys are pretending to micromanage???


Spin, smoke and mirrors, angles - it is today's God the Profit financial poetry in motion.

fonzannoon's picture

Can we all agree now that the fed DOES NOT need stocks to drop to give them cover to do QE? If they did why would they keep interrupting it from happening?

flacon's picture

When questioned, Bernanke the other day said he had only ONE TOOL LEFT, and that was COMMUNICATION (propaganda lies). 

john39's picture

bingo... who needs QE when simple lies are enough to keep the market up?

fonzannoon's picture

John wait until Sept comes and goes and he does nothing.

It will be epic.

Debt-Is-Not-Money's picture

Lies = market viagra!

It's not gambling, it's investing!

ZippyBananaPants's picture

I heard some whore on CNBC talking about this.

JohnnyBriefcase's picture

I read an article from CNBC a couple of days ago that said if the economy doesn't improve we might be facing a recession.

financial apocalyptic contagion's picture


cnbs has lost it.

thats why santelli is mad as hell 24x7, the rest of them are fucking jokers and he can't take it anymore.

John Bigboote's picture

It is best to bite one's tongue if one wants to keep an income. No managers want to keep paying a guy that doesn't believe in growth opportunity. Your manager has the same problem. Just need to keep playing along. It will come down on its own. No need to sacrifice yourself out of principle just yet.

Tippoo Sultan's picture

Not to put too fine a point upon it, but, who watches CNBC anymore ?

JohnnyBriefcase's picture

I recently cancelled my cable so now I browse the internet MSM for laughs. Naturally CNBC was my first choice for quality lolz,

smiler03's picture

I look at www.cnbc.com daily, top left corner, for the laughable "market overview"

The tabs are US/Europe/Asia/Gold/Oil

Today we have:

US - Stocks Recover, but Dow Logs 3rd Triple-Digit Loss

Europe - European Shares Close Slightly Lower

Asia - Asia Gains Capped By Spain Contagion Fears

Gold -Gold Edges Up on Euro-Zone Fears, Dollar Limits Gains

Oil - Oil Settles Near $89, as Euro Zone Worries Weigh


So it's official, every market is affected by Europe, except the US. It amuses me anyway ;O) 

GMadScientist's picture

"I heard some whore on CNBC talking about this."

You're going to need to be more specific.

bdc63's picture

fonzannoon says "if they did why would they keep interrupting it from happening?"

Are you serious?  That's your read of when what just happened at the end of the day today?

fonzannoon's picture

my read is qe is coming. announced...unannounced...i don't care when either. i will leave it to everyone on here to work out the details

Solon the Destroyer's picture

Because the Fed would rather do nothing coming up to the election. They'd rather have Hilsenrath headfakes do the work instead.

fonzannoon's picture

how many headfakes does he get....10? 20?  i don't think so. he has until sept. thats just my humble opinion.

Sofa King's picture

O'boy, cats out of the bag.  Now the world knows what she sounds like when she cums.

dow2000's picture

Hilsenrath? His name is more ominous than Voldermort...

Joke Heros's picture

Barfiroma is absolutely unwatchable. Screeching and raising the pitch of her voice when she disagrees with her 'guests.' And what studio manager thought it'd be wise to give her a "Final Thought" opinion segment to end her show? She should've been canned (like the rest of them) after the crisis of '08.

smiler03's picture


"Screeching and raising the pitch of her voice when she disagrees with her 'guests.'"

Judging by American Film and TV that seems to be the norm for American females. A very scary species, no wonder most male ZH readers are unhappily married.

knukles's picture

Yes, Jon said absolutely nothing that was summarily disporven by the Fed.

Neethgie's picture

when will the market stop falling for this idiot's writings im sure it cant be long, the reaction was muted at best today, he might very well have used up his credibility, which i sincerely hope he has;.

NotApplicable's picture

Umm... you've got the entire thing backwards. There is no market left to react to these idiots.

Instead, the idiot provides cover for the rigged casino as it mimicks a market stupidly responding to an idiot.

graneros's picture

"Instead, the idiot provides cover for the rigged casino as it mimicks a market stupidly responding to an idiot."


What a great and oh so true line. Wish I had said that.

Cursive's picture

Hilsenrath = Blue Horseshit