In Its Latest Nonfarm Payroll Mea Culpa, Goldman Stumbles On THE Answer... And Changes The Rules Of The Game

Tyler Durden's picture

One has to read very carefully and all the way through the latest Jan Hatzius NFP post-mortem, to catch what may be the most important piece of information Goldman has ever telegraphed to clients, and thus, to the Fed. But first, why the note? As a reminder, after predicting correctly just what the impact of the record warm weather would be on today's NFP print (recall "Is A Bad NFP Print Days Away - Goldman Says Warm Weather Added 70,000-100,000 Jobs; Now It's Payback Time", something Zero Hedge warned first 2 months prior in "Is It The Weather, Stupid? David Rosenberg On What "April In January" Means For Seasonal Adjustments", but that's beside the point) yesterday Goldman was kind enough to tell us precisely what to expect when it hiked its NFP forecast from 175,000 to 200,000 ("If Goldman's recent predictive track record is any indication, tomorrow's NFP will be a disaster.") Of course, betting against Goldman's clients continues to be the winningest trade of the year, if not the millennium.

But that's not the point. Neither is Goldman's attempt to mollify what little muppets are left following its latest faux pas ("we believe that the underlying trend in payroll employment growth is around 175,000 as of the March report"), or to once again shift its focus to a bearish one having flip flopped worse than Dennis Gartman in recent weeks (see The Muppets Are Confused How Goldman Is Both Bullish And Bearish On Stocks At The Same Time) after saying that "we would expect the headline number for April to fall short of this figure, partly because the weather payback is likely to be substantially larger in April than in March and partly because the underlying trend may be decelerating slightly." Nor is the point that Goldman once again attempts to handicap the next latest and greatest New iPad, pardon, New QE. What's the point - QE is inevitable, and it will happen. But at a time that Obama deems appropriate - the one overriding consideration this year is to boost Obama's popularity into the election by any means possible, with structural inflation and employment taking a back seat.

No, all of these are secondary items. Here is what is of absolutely critical importance in the just released Goldman letter, nested deep in Hatzius' final paragraph, where it would otherwise be missed by most:

...we have found some evidence that at the very long end of the yield curve, where Operation Twist is concentrated, it may be not just the stock of securities held by the Fed but also the ongoing flow of purchases that matters for yields...

For those who are aware of the Fed's sentiment vis-a-vis the debate of stock vs flow of money effect, this will be a stunning revelation. Especially since it vindicates what we have been saying since day one, namely that when it comes to securities price formation in a centrally-planned regime, it is flow not stock that matters. And as those who follow the Fed's thinking know too well, the Fed is convinced it is stock, not flow that serves as a consistent catalyst for subjective risk valuation. The above quote is just the first crack in the Fed's thinking, because if Goldman now believes this, so will Bill Dudley, following his next meeting with Jan Hatzius at the Pound and Pence, and shortly thereafter, it will become canon at the Fed.

One way of visualizing what this means is to think of a shark which has to be constantly in motion in order to survive. Well, the allegory of Jaws can be applied to liquidity addicted capital markets. Translated simply, it means that it is irrelevant if the Fed's balance sheet is $1 million, $1 trillion or $1,000 quadrillion. A primacy of flow over stock means that UNLESS THE FED IS ACTIVELY ENGAGING IN MONETIZATION AT EVERY GIVEN MOMENT, THE IMPACT FROM EASING DIMINISHES PROGRESSIVELY, ULTIMATELY APPROACHING ZERO AND SUBSEQUENTLY BECOMING NEGATIVE!

We don't have sufficient time to go into the nuances of what this revolutionary run-on sentence means on this good Friday, suffice to say that it makes virtually all the literature on modern monetary theory (in practice of course, the theoretical part is such gibberish that only fans of MMT and Neo-Keynesianism care about it - something nobody actually in the market gives a rat's ass about) obsolete. It also means that absent "flow" or instantaneous Fed monetization engagement at any given moment, risk will collapse, regardless of the actual size of the Fed's balance sheet (which of course has other structural limitations). What is most critical is that this one statement from Hatzius sows the seeds of doubt, and provides a decoupling between prevalent risk prices, and explicit levels of historical Fed monetization. Because what the ascendancy of the flow model means is that unless the Fed is willing to telegraph that it will monetize devaluing assets in perpetuity, thus providing the "flow", the Fed is assured at failing at its only real mandate: keeping the Russell 2000 pumped up.

And while the Fed may be happy to sacrifice its balance sheet at the altar of Dow 36,000 just to preserve the Wealth Effect fallacy, the other counterliability, the US Treasury stock, which by implication will have to rise as it will be the security monetized the most to keep the deficit funded, may not be quite as pliable, and eager to rise parabolically, especially in a time when more and more question the reserve status of the USD, when faced with the ascendancy of the CNY.

Finally, the market still having a trace of discounting left in it, will become quite aware of all these considerations and deliberations, and will promptly demand a practical application of the "flow" model. Which also means that absent constant, ongoing monetization, either sterilized or not (although as we pointed out earlier this week, the opportunity for ongoing sterilization by the Fed is now almost finished as it will have just 3 months of short-end bonds left to sell past June), stocks will crash.

Unwittingly, Goldman may have just resorted to the nuclear option to force the Fed to engage in monetization much faster than it would have otherwise done so, by diametrically changing how Goldman, the Fed, and thus the market perceives Fed intervention.

Or maybe it was all too "wittingly"...

Full Jan Hatzius note:

US Views : Payback (Hatzius)

 

1. The March employment report was a disappointment. Although the unemployment rate fell, this was due to a drop in the labor force as household employment gave back some of its prior big increases. More importantly, the job gain in the establishment survey of just 120,000 fell well short of anyone's estimate. The big question is how much of the slowdown from February’s 240,000 gain was due to special factors, including “payback” for the unseasonably warm winter, and how much reflects weakness in the underlying trend.

 

2. We do think the warm weather has been an important driver of stronger payroll numbers over the past few months. As we have shown, all of the acceleration in nonfarm payrolls since the fall has occurred in the (normally) cold states, and our state-by-state panel analysis suggests that weather has boosted February’s level of payrolls by 100k or a bit more (see “Payroll Payback?” US Economics Analyst, 12/14, April 5, 2012). This state-level model suggests that none of the inevitable payback for this boost should have occurred yet, since March was just as warm relative to the seasonal norm as February. That said, weather-sensitive sectors such as mining and building construction did show some weakness, so we would pencil in 10k-20k for weather “payback” in March.

 

3. In addition, the 37,000 drop in retail employment was partly related to one-off job reductions in the department store industry, and should probably not be included in an estimate of the underlying employment trend. Taken together, we believe that the underlying trend in payroll employment growth is around 175,000 as of the March report. At this point, we would expect the headline number for April to fall short of this figure, partly because the weather payback is likely to be substantially larger in April than in March and partly because the underlying trend may be decelerating slightly (as suggested, e.g., by the drop in temporary help services employment in March).

 

4. Largely because of the weakness in the employment report, our standard metrics for evaluating the US data flow have also started to send a less upbeat message. Our current activity indicator (CAI), which summarizes all of the key monthly and weekly activity data, is showing a preliminary 2.5% for March, down from 3.5% in February. Likewise, our US-MAP, which compares the data with the Bloomberg consensus, has averaged negative readings since late February, after six months of positive surprises. All this reinforces our view that the discrepancies in the US economic data will be resolved mainly via deceleration in the job market indicators rather than acceleration in GDP.

 

5. We admit to being puzzled by the twists and turns in Fed communications over the past few months. On January 25, Chairman Bernanke said that under the FOMC’s projections, he saw a “very strong case” for finding “additional tools” to support economic expansion. But in the March 13 minutes, only “a couple” (i.e., two) of the committee’s ten voting members—a number so small that it probably does not include the chairman, whose position makes it unlikely that he would be in such a small minority—thought that additional stimulus could become necessary, and even that only “if the economy lost momentum” or inflation looked likely to undershoot. All this would make perfect sense if there had been a sharp upgrade of the committee’s central forecast over the past few months. But the minutes also said that “…the economic outlook, while a bit stronger overall, was broadly similar to that at the time of their January meeting.” And Chairman Bernanke, in particular, last week went out of his way to cast doubt on the not on that the stronger jobs data through February were indicative of a sharp pickup in growth. Our conclusion is that there has been a shift in the Fed's reaction function back to the hawkish side, and there may be a bit more complacency about the risks to the outlook than suggested by the committee’s decision to retain the assessment of “significant downside risks” in the March 13 statement.

 

6. So what can we expect from the Fed? Easing at the April 24-25 meeting looks highly unlikely, although the tone of the statement and the Chairman’s press conference may take a fresh turn toward the dovish side. Easing at the June 19-20 meeting, in contrast, still looks more likely than not, at least under our forecast of weaker activity and benign inflation. Our baseline remains a renewed asset purchase program which involves Treasuries and MBS and whose impact on the monetary base is sterilized via reverse repos or term deposits, but it is also possible that the committee would extend Operation Twist; there is approximately another $200 billion available, and it would only take a small reduction in the flow of purchases to make this number last until yearend.

 

7. Stepping back from the tactics, we still see a strong fundamental case for following up Operation Twist with a successor program. First, even under its own forecast, the committee expects to be far from fulfilling the employment side of its mandate by 2013-2014, so it is easy to sympathize with Chicago Fed President Evans’s call for more action. Second, growth could well disappoint the committee’s forecasts, given all the usual uncertainties around the weather impact, the inventory cycle, energy prices, and the “fiscal cliff” at the end of 2012. Third, a failure to do more might imply a tightening of conditions, assuming financial markets are still discounting some probability of easing. In addition, we have found some evidence that at the very long end of the yield curve, where Operation Twist is concentrated, it may be not just the stock of securities held by the Fed but also the ongoing flow of purchases that matters for yields. And fourth, the risk of a material inflation overshoot seems low given the still-large amount of spare capacity, not to mention the Fed’s ability to reverse course and tighten financial conditions substantially via forward guidance, rate hikes, or even asset sales should the need arise.

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Raymond K Hessel's picture

Anyone who has studied Ken Hatten knows about the value in flow of funds vs capital as a store of value. 

RoadKill's picture

Of course it’s all about flow!  In fact STOCK actually work’s in the opposite direction.  The fact that the Fed already owns Trillions of stock, means they have to SELL it before we talk about moving away from ZIRP and get back to normal.  It’s like the lockup period after an IPO.

The government needs to issue $1ttn+ of new debt each year PLUS rollover $2-$3 trillion of maturities.  But the smart money has already figured out that this is a game of chicken/musical chairs.  The only question is WHEN it blows up and how – not IF.  The problem is – not knowing the when and how can still mean you lose everything between then and now.  That’s what the gold bugs don’t get.  They assume gold is 100% ordained to be considered money in the “New Normal”.  But it’s not.  Nor will other property rights necessarily be respected the way you think they should.  The world is going to wake up one morning and find that massive amounts of wealth it thought it had doesn’t exist (pensions and other retirement promises).  People will find out that they worked for 30-40 years assuming they’d be able to retire at 65 – but it’s only the people that got into the Ponzi scheme FIRST that were allowed to leech of society for the last 30 years of their life.  People (countries) will find out that they worked hard, spent less then they made and lent that excess to people (countries) that spent more then they made – and they will never get paid back (China and OPEC I’m looking at you).

The smart money knows the US is SCREWED in the long run.  The Dems aren’t willing to take the pain of SEVERE austerity (cutting government spending by 35%-50%) and the Republicans aren’t willing to raise marginal tax rates back to where they were after WW2 to pay off the debt (not that they could if they wanted to – I’d leave the country if I caught wind of that – IT’S NOT MY DEBT).  The ONLY choice a rationale politician looking to get reelected can make is to let this thing run to its inevitable conclusion over the next 5-10 years – A US DEFAULT!

Back to the importance of float.  The Japanese and Europeans have even worse money problems then the US.  The Russians and Chinese are starting to catch wind that the trillions of debt they already own is impaired – and don’t want to buy more.  And PIMCO/Wall Street is only willing to buy if the Fed guarantees they will buy it back at a higher price.  So who but the Fed is left to buy $3 trillion of US debt every year.

So of course its flow and not stock.  Forget UNWINDING QE1 or QE2.  The Fed MUST continue with QE3, QE4, QE5…. or the whole thing will blow up on them.

Whether we go into hyperinflation or deflationary default is still an open question.  The Dems clearly prefer hyperinflation.  I think the Repubs prefer deflation.  But after they see what deflation really looks like – who knows!  Personally I think from a global perspective we will swing between ever increasing bouts of deflation and inflation.  Greece was small, and yet it caused the SPX to go from 1,250 to 1,000 (Summer 2010)  to 1,350 (late 2010 and early 2011) to 1,100 (summer 2011) to 1,450 (current).  You can already see the seasonal adjustment BS rolling over and setting up Sell in May and Go Away.  I expect these swings to get larger and larger as the defaulting countries get bigger and bigger.  At some point the Fed/ECB/BOJ will lose control and we will bust through 666 or 6,666 – or maybe both in the course of 3 months.  It’s going to be the most exciting time in Finance EVER, and this time we have triple levered ETFs to play with.  Since at the end of the day I expect the government to try and take everything I’ve got, I may as well try and make enough money to buy a yacht and private security force first!  :)

surf0766's picture

So taxes were not cut after WWII.. hmmmmmmmm

Everybodys All American's picture

Give me deflation with a strong dollar. Get rid of Bernanke and the current FED. Give me a president who is willing to call China a parasite on our jobs and economy. Give me my personal freedom back with a much smaller federal government and I'll be willing to bet we can reduce this deficit to zero in ten years.

WTFx10's picture

Declare a world war on the crminal banking cabal . Then the governments of the world can use whatever the cabal has stolen or created since its inception to pay the debts off to the enetities that deserve them, S/ince the majority of the current syndicate will be prisoners of war or dead. The world can then decide on a new monetary system without the monopoly of the cabal or the input from any of its former members. Bloody or not its the cartels choice. I can not fathom why the world lets this monoply continue, cut out the middlemen BANKSTERS and the world will benefit.

fonzannoon's picture

Go ahead and play those triple etf's. Let me know how it goes with tvix.

dolph9's picture

You can't beat them at the digital game, so don't try.

Think physical, in everything.  What do you physically have under your possession, at all times.  It's much, much harder to confiscate physical wealth.  They literally have to go door to door, and if they ever tried it, you would ultimately have revolution and civil war.

In my very humble opinion, the only things that are relatively safe are land/property owned outright, goods that can be bartered, cash, a basic bank account, and physical metals or an equivalent account of allocated metal.

They can hyperinflate, but then you'll still have goods and metals, and the whole system will reset anyway.  They can deflate, but then you'll still have cash rather than depreciating financial assets like stocks and bonds. 

Amagnonx's picture

I'd better get clarification here - you think a basic bank account is safe in what terms?  I wouldn't be putting money into a bank account at this stage of the game - except if you are forced to use an electronic payment by some vendor.  You also suggest allocated metals account?  Again, I think at this stage of the game this is extremely risky - more than risky, its foolish.

 

The best thing people can do is increase their own level of self sufficieny as much as possible - this really isn't going to end well, and perhaps we do have 10 more yrs before a total catastrophe occurs, but we shouldn't be niave as to things that can and will happen before total collapse occurs.

 

The other thing that I highly recommened is to divorce yourself from your government - write a social contract and ask people you know to sign on to it - with some basic rules you all agree on, so you have some functional community in the event there is no other social structures left.  Divorce from the government means begin using alternative currencies RIGHT NOW - start building a community of people who you know will accept silver, gold, bitcoins or whatever else you might be forced to use in future transactions.

Sutton's picture

"...Not to mention the Fed's ability to reverse course and tighten financial conditions substantially via forward guidance, rate hikes, or even asset sales should the need arise."

HaHaHahaHaHaHahaHaHaHahaHaHaHaha.................................................................................................................................................

BlandJoe24's picture

My understanding is

 

1a.  There is an astronomical amount of global debt (duh ;-)   Much of it will vaporize in a black hole of credit destruction as the global ponzi collapses, but a significant amount will remain.

1b.   The big creditors of this debt will want to be repaid in a currency that has value, one that they can use. ie; They need a reserve currency.  That currency has been the US Dollar.

2.  The overwhelming majority of the global debt is demoninated in US Dollars.  

3.  Debtors wish for the USD to be devalued, so their debt burden is effectively reduced.

4.  Creditors will want the USD to maintain value. 

5.  Whomever has more power - debtors or creditors - will determine if to devalue the USD or keep it as the reserve.

 

 

Ned Zeppelin's picture

Exactly, hence my prediction that the value of the FRN fiat will be enforced at gunpoint in the context of martial law, and all PMs will be outlawed and confiscated.  There will be no "gold winners" allowed.  Unless, of course, there is a revolution. . .

ali-ali-al-qomfri's picture

‘5. We admit to being puzzled by the twists and turns in Fed communications over the past few months. On January 25….. 

.…really?….

i feel sick, again.

noob's picture

don't worry they're... "7. Stepping back from the tactics, ..."

ffart's picture

Cliff's notes version: The market is a heroin addict that needs another fix?

Smartie37's picture

Flow, flow, float the boat, gently down the stream

Merrily, merrily, merrily, merrily, fiat's just a dream

OH NO, RAPIDS AHEAD !!!!!!!!!!!!!!!!!!!!!!!!!!!!

Time to bail OUT, hurry !  

Did Sack see the Rapids Approaching this week ???

chet's picture

"We don't have sufficient time to go into the nuances of what this revolutionary run-on sentence means on this good Friday..."

You have to love Tyler criticizing others for writing run-on sentences :)

sschu's picture

I surmise Bam has given Bennie his marching orders for the rest of 2012: 

1. Get oil under $80 (which means PMs are also down)

2. Keep the SP above $1,300 (which implies more liquidity injection)

3. Find a way to finance the deficit (does anyone have an extra $1.6T sitting around?)

Bennie adds his own objective of keeping his owners in the game and there you have it.  At this point Bam has the upper hand as he is promising the status quo if he gets elected, has threatened to expose their criminality if they do not cooperate and a Repub President is more of a wild card for this WS criminal class.  So Bennie will do Bam’s bidding until November.  After that, who knows, Bennie etal are more likely in the driver’s seat.

Doing all of these is a real balancing act and who knows if even Bennie and his WS cronies can pull it off.  Stocks up, oil down and monetize the deficit?  Yea sure.

sschu

lolmao500's picture

Risk collapse : bad for everything.... commodities, treasuries, stocks...

razorthin's picture

Albeit new all-time highs any sooner than 5 years from now would be an inflationary farce and sharpen the blades of the pitchforks, a take-down is needed first (now or soon) in order to make those new highs by the election.

Withdrawn Sanction's picture

it may be not just the stock of securities held by the Fed but also the ongoing flow of purchases that matters for yields.

Really, Sherlock?  Yeah, a $2T balance sheet is huge compared to its pre-crisis levels of $800 to $900 billions for years.  But the real game is in the churn.  The Fed ran $26T, according to the GAO, through its balance sheet from the crisis onset until recently ($16T in various domestic programs, and $10T in CB swaps).

It was the same thing w/the housing GSEs (Fannie, Freddie and the oft-forgotten FHLBs) in the mid-2000s.  Their balance sheets were growing fast along w/the housing boom, but the real trouble was in the amount of ST CP being funnelled through their consolidated statement of cash flows...$4T a year, or nearly 10Xs their annual run rate for their book of business.

Yeah, stocks (levels) matter, but the flows will get you every time. Not sure what to make of Goldman's recent regaining of consciousness...they're either really stupid, or they think we are.  

Michelle's picture

'UNLESS THE FED IS ACTIVELY ENGAGING IN MONETIZATION AT EVERY GIVEN MOMENT, THE IMPACT FROM EASING DIMINISHES PROGRESSIVELY, ULTIMATELY APPROACHING ZERO AND SUBSEQUENTLY BECOMING NEGATIVE!"

What this means is that the big players of the game keep sucking all the injected liquidity out of the system! The moment it finds its way into an asset, the players suck it right back out! What a scam! Same with the BLOWJOBS BILL - ANOTHER SCHEME TO MAKE SURE POOR PEOPLE REMAIN POOR BY INVESTING IN LIGHTLY REGULATED FRAUDULENT COMPANIES.



 


Mary Wilbur's picture

Nobody forces them to make stupid decisions about how to spend their money.

Motley Fool's picture

You are starting to catch on Tyler, though you still need to broaden your view.

 

The spice must flow. ^^

Tyler Durden's picture

What part of "it vindicates what we have been saying since day one" is unclear.

Zgangsta's picture

Was that a question or a statement?

no life's picture

Easy... They are setting the stage for more "LSAPs".  No offsetting sales, no "sterilization" bullshit.  We're going back to the 11 am can't miss ramp up on POMO days.  This is what makes it easy enough for Goldman and every other trader to follow.  It's a touchy subject so they wanna ease into it. Of course they will leak the information way beforehand.. once we start cratering it's the final piece of the puzzle, to usher it in officially.

 

 .

Bob's picture

No doubt about it. 

As to GS's seemingly evolving appreciation for flow, it seems pretty damn likely to me that this shift is occurring "wittingly." 

Regardless of the Fed's cover story for their actions, I would guess they have a larger view of the genuine situation. 

My question is why would GS be springing the truth on the muppets now?

Quinvarius's picture

There is only one asset class that cares about stock and does not need flow for success. Sound money of the non paper kind.

strangeglove's picture

What would MDB do?

CrashisOptimistic's picture

And once again, not a word about oil.

They understand nothing.

Centurion9.41's picture

"good Friday"

It's Good Friday.

Goldtoothchimp09's picture

a.k.a. religious zealots and fanatics peak out on their symbology and mythology

WTFx10's picture

I call them SYFY fans. The fartheat thing from science but enough fiction to keep them faithful.

Everybodys All American's picture

It's time to get rid of the head of this ugly ignorant Fed policy. Let the market find it's own way Bernanke. Step aside and admit you are a failure. Everyone else already knows how this ends and you soon will as well.

monopoly's picture

Next meeting at the "Pound and Pence". LMAO.

Why do I get the feeling Tyler does not have any of his accounts in Squid Land.

logicalthought's picture

This doesn't exactly sound like rocket science-- I mean, the price of ANYTHING is determined by the marginal buyer... Isn't that what Goldman is saying here? Additionally (and equally obvious), as long as the U.S. keeps racking up massive deficits, the Fed is like Lucille Ball on the chocolate factory assembly line, whereby it CAN'T stop buying or rates will soar.

Tyler Durden's picture

Who cares what it sounds like: the Fed has explicitly stated over and over that it is the stock that matters, not the flow, as doing so would be a first step to confirming it is all one big ponzi.

There is a lot of literature on the matter. Feel free to read it

WallowaMountainMan's picture

with the greatest of respect, ty zh for bring me along so quickly as to my being able to actually understand stock vs flow. i have been many places slightly behind those who were ahead of the game, and you zh are the top of the top.

 

as of this week, the fed has told congress that additional swap line authorization may be needed. that is tacit admission of need for flow.

its seems an attempt at continued insanity, but...

the flow could be stopped by not printing.

stopped flow is stock.

by accumulating stock and limiting the flow out (printing), the fed could (but may well not) let the dollar rise and crash commodities. u.s. corps are a-ok cause they got big cash increasing in relative worth. stock market falls, but new strong usa theme takes hold. common folk happy too. low commodity mean more job.

once in a life-time, bernak. once in a life time.

whether accurate or not, time will tell about my 'tale of the usa'. but it is coherent. only because i've read zh.

:)

island's picture

The game will continue until the sheeple wake up, or every last dime has been redistributed to the 1%.

Eric L. Prentis's picture

Because the stock market is a discounting mechanism, it is “flow of money,” rather than the “stock of money” that is important. The flow is the future, stock is the past. The consequence of this is the Fed Quantitative Easing Paradox: the Fed cannot stop quantitative easing, nor can it continue.

 

The Federal Reserve, with QE1, makes the credit crisis twice as bad by postponing the economic crash. With QE2, the problem becomes four times worse. With Operation Twist, our credit crisis is now eight times as bad.

 

IT IS IMPOSSIBLE !!!!!!!!!!!! for the Fed to unwind their electronic printing without the US economy experiencing the economic crash we should have had in 2008, but now, eight times worse.

 

If the Fed delays the crash again, with QE3, the eventual economic crash will be 16 times as bad. The Fed is killing us by monetizing the debt, which Bernanke told Congress he would NOT do. This is why we have laws that prevent monetizing the debt, which the Fed and politicians ignored. Now we are all screwed.

css1971's picture

Or they can make it 1 times as bad for 16 times as long.

WallowaMountainMan's picture

"The flow is the future, stock is the past."

disagree.

the flow is now, and only now.

stock was a moment that provides opportunity for comparision at that moment.

the flow, control p, is chosen not given. results vary given the choice the fed makes. slowing, relatively, our act of printing vs. the other major printers, results in the accumulation of flow here in the usa and transforms flow into stock (aka assets) here.

etc., as mentioned in above posting to another.

ReactionToClosedMinds's picture

excellent ZH ...... have wondered alot lately if the key is the 'dynamic' versus the 'substance' (aka 'flow' & 'stock').  And 'gold' (aka Precious Metals) are 'flow' resistant one could argue ....   Deleveraging needs oxygen (aka 'flow') just like the shark needs water flow to breath ... otherwise you stop 'buying time'.

When all else fails,  initiate the riots ... who cares what the reasons are .....

 

q99x2's picture

Did the Easter Bunny steal the Goose's golden egg or wasn't that chocolate you were eating?

Do you walk to work or carry your Bernanke?

Tax the flow not the Hiatus.

Do you prefer teargas or a higher tuition.

This does not computer.

Daisey Daisey ...

 

Bansters-in-my- feces's picture

Seeing as no one brought it up,I guess I will,FUCK Goldman Sachs.

Clifhanger's picture

All well and good, but rising commodity prices will crush the economy and the Fed is already taking lots of heat for that (as the sheeple/muppets are beginning to realize). Either way they're so screwed (and so are we)!

Dre4dwolf's picture

"changes the rules of the game" yea they tend to do that when they break the rules and get caught.

Zgangsta's picture

"Just when you think you have all the answers, I change the questions!" - Roddy Piper.