Market Surges As Petulant Fed Dissenter Promises ZIRP To Last Longer Than Mid-2013

Tyler Durden's picture

As expected the latest spike in the market is on nothing more than a central planner usurping the role of the Fed and making it appear that the Doves are in charge. In this case it is the first Dovish dissenter on the FOMC in years, Chicago Fed's Evans who just petulantly said that he expects the policy rate to stay low for longer than mid-2013. Indeed, the guy who got slapped down by none other than Bernanke forcing him to "dissent" is now making his outlier opinion seem to be fact. That this is identical in credibility to Hoenig saying that he expects the Fed to hike the rate to 4.5% by the end of the year is irrelevant: the market has smelt liquidity blood and is in a frenzy for a few more minutes until the realization that the only variable here, the ECB, has just said it will not monetize.

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HelluvaEngineer's picture

Only problem is that perpetual ZIRP is already priced in...


ZIRP to 2013 is priced in. ZIRP to 2113 is not.

trav7777's picture

new credit/money is not being requested.  Therefore, they have to print the coupon.  Simple math

Max Fischer's picture



And why is new money not being requested?

Max Fischer, Civis Mundi 


walküre's picture

They will give us at least a "lost decade" to 2018 and 50+ years of mortgage amortization.

Wanna see their tools, baby?

malek's picture

Only 50+ years?
And you forgot they will make mortgage debt non-dischargeable in bankruptcy.

GeneMarchbanks's picture

Yeah, but every so often they want to refresh our memory. For example, "hey are you a saver?" Yes,sir "well, just want to remind you we are still right behind you plugging away at your sphincter"

And so it goes... totally necessary if we're going to break that DOW 15.000 mark.

slaughterer's picture

Warned about this yesterday. Evans and CNBC: a lethal combo for bears.  Sorry, the guy is deluded, but, hey, we can rename the Santa rally, the Evans rally.

A Man without Qualities's picture

no recovery as far as the eye can see = bullish...

a growing concern's picture

I'm FAZ'd to the gills at the moment.  Just waiting for that 8% gap down morning.

Cdad's picture

...sending WTI into a bid lifting tizzy, further lowering quality of life in the US.  The criminal syndicate at its finest.

GeneMarchbanks's picture

Do not panic. Another roughly $10 up and it'll collapse. Of course the new recession/depression will arrive...

whatsinaname's picture

WTI yes but not gasoline - markets pretending that prices at pump will not follow crude oil path. How long will this charade last ?

Cdad's picture

Answer:  impossible to answer.  WTI is so far out over its skis right now, that it is hard to imagine that it can drag gasoline up that hill.  Contango coming into WTI suggests that the WTI surge is simply a market mechanical response to spread compression in WTI/Brent trade.

Furthermore, WTI is currently a crutch for the S&P...with the syndicate trying to keep that bloated trade working.

Odds favor both oil and gasoline retreating, but in the two local gasoline markets I experience, pricing has been inverse, providing zero annecdotal evidence of anything.

Sell them both.

wang's picture
wang (not verified) Nov 15, 2011 10:07 AM

Monti out?  stay tuned


BBG reports Primo ministro in waiting in unshced meeting with  presidente

A Man without Qualities's picture

Some reports simply suggest they have gone for lunch...

wang's picture

I know but everything is choreographed and this was not scheduled and one would think that Monti might be a bit busy hustling   potential supporters, whatever the markets would totally implode if he were to throw in the towel

vast-dom's picture



There is NO WAY this shithouse ain't gonna fold and NO FED MANIPULATION shall prevent the GREAT PURGE. ZIRP for FOREVER won't do shit.

firstdivision's picture

Riots will be occurring long before 2013 at this rate.  If people are only complaining that they cannot get a job, wait til they cannot afford food and food stamp programs are reduced.

LawsofPhysics's picture

Maybe, but based on my experience doing business in Russia in the 90's I would predict that there will be two economies (one state-run and one underground), paper will be abundant (we will all be billionaires) but supply chain disruptions, bribes, corruption, and black markets will be in abundance.  Whether or not you can "afford" food, water, and energy will be irrelevant, availability will be the issue.  TPTB have no problems with genocide, know your history and hedge accordingly.

firstdivision's picture

We have long had the bribes and corruption here in the US.  The only thing that seperates us from the post cold ward Russians is the the supply chain disruptions. 

LawsofPhysics's picture

No shit, my point was that the bribes will get worse and become very public, almost like a policy.  The supply chain issues will be what pushes average Americans over the edge.  You are dealing with several generations who have never really walked into a store and experience bare shelves.  One of my Russian friends once told me that the state officials in Russia told him that the reason store shelves in Russia were sometimes bare was because the Russian people were much "richer" than Americans and could afford to buy the products in stores.  The state official also told him that the reason American stores were always packed with product was because most Americans were too poor to afford to purchase any of the products.

I wonder if the same propaganda will be used on Americans in the future when their shelves are bare?

optimator's picture

In those days they'd also say Americans were starving.  One Russian who came over here said, "They were right, most Americans I talk to are starving -- dieting!"

Potemkin Village Idiot's picture

Re: Hadrian - Roman Emperor

I consider it good policy that the prince did not neglect the theatre or the circus and arena, as he well knew that there are two things which the Roman applaud especially—the distribution of grain, and games.

The neglect of the important thing [grains] causes great harm, of the frivolous thing [entertainment] greater hatred—the crowd hungering more for games than for bread, because by the gift to the people [congiarium] only those who are authorized to receive the grain will be gratified, while by the games the whole population is pacified.

—Fronto, Prim. Hist., p. 249, ed., Barthold Georg Niebuhr.

Raymond Reason's picture

It is also interesting to look at Kosovo in the late 90's.  They had a social reversal.  The country mice became the winners, the city mice became the losers.  In Russia, Ukraine, etc., people went to their "datchi" (homes in the villages), and vegetable gardens to survive.  These Slavics already understood what hardship means, though.  Here in America "hardship" will be a new concept, and will not be received well.   There will be weeping and gnashing of teeth. 

hannah's picture

russian had a black market system for decades....we dont. when the corporations fold, that supply will disappear and there arent any other cant compare the russian collapse to the american one coming. they collapsed 1 day after the revolution. we dont have public transportation, black market food systems. we dont 'own' our homes and neither does the we will eventually be kicked out etc etc etc.....the usa will be much worse off after the collapse.

GeezerGeek's picture

I'd rather see voters reject big government entirely next November, assuming things don't blow up before then. But will they? Obambi will promise to take care of everyone and blame the problems on those Rascal Republicans. Boehner will cry and say it's not his fault. Pelosi and Reed will lie through their teeth, saying the Democrats need to control both houses of Congress.

I'd rather see everyone just sit on their hands - do a John Galt, in a manner of speaking. Let's all refuse to spend any money on non-essentials (screw the retailers) and instead donate to charities. Let's all take our money out of banks and keep it at home for a month. Let's stop flying around the country for a month and watch the TSA employees molest each other. Let's stop using credit cards for a month. What would TPTB do if We the People decided not to participate for a month?

pods's picture

Check on all.  I actually told my boss the next time I am going to get on an airplane it will be in a pine box with a "Fed Ex" sticker on it.


HelluvaEngineer's picture

Unfortunately the only way to reject big government entirely next November is to not vote.

LawsofPhysics's picture

The only way to reject government is not to pay taxes.

catacl1sm's picture

Unfortunately, they reject you back by having you ass raped in prison.

stewie's picture

You could also do everything in your power to support Ron Paul.

mendigo's picture

that's loser talk son

My thinking is that I will vote in every election and I will never again vote for any democrat or republican (or republican wannabe's).


SteveNYC's picture

Evans is a dangerous dude. Can't somebody in DC remove this guy from the Fed? Oh, that's right. The Fed does not answer to the people nor their representatives.

How did that happen again?

Sophist Economicus's picture

Can't somebody in DC remove this guy from the Fed?


And why would the fine folks in DC want to do that?   His message is their wet dream!

GeezerGeek's picture

Is there a way to remove DC? As in "remove from the United States"? DC and it's debt can become a separate nation. We the People can finally regain our freedom.

Astute Investor's picture

Evans should stop fucking around and just say that he expects the policy rate to stay low ad infinitum.

Roy T's picture


Also, at about 9:35 Bob Pisani reported that some German on a German Economic Board said that the ECB should be the lender of last resort or something like that.



Taterboy's picture

Bob Pisani-Living proof that everyone is somehow employable.

Potemkin Village Idiot's picture

Bob Piss-on-me...

"Year end bonuses are saved... The crowd (on the trading floor) goes wild!"


Cult_of_Reason's picture

Yep, I think it was Pasani misinterpreting comments from one (out of ~10+) German adviser to Merkel – implying according to Pasani that ECB should be a lender of last resort.

Commodities spiked up parabolic on Pasani’s ECB printing money hope.

Mactheknife's picture

>the ECB, has just said it will not monetize.

But, but, but....surely they jest. Yeah, the're just messin with us.  NOT!

lizzy36's picture

When did we move from an enviroment where the Fed had a mandate, which was 99% carried out by tinkering with interest rates to one where is became acceptable for them to tinker with every corner of the economy at will?

I understand what the Fed did in 2008 was perhaps necessary. But NOW, they should shut up and go back to being seen and not heard (and audited often).

How is that a Fed governor who has no idea about how capital markets work and no clue how broken the transmission mechanism is, has the power to move markets?

All of this Macro tinkering is very counterproductive to any recovery (i know very debatable on the recovery part).

When did Fed Governors get their Superman capes?

Tsar Pointless's picture

When did Fed Governors get their Superman capes?


January 20, 2009.

DormRoom's picture

you assume the tinkering is done to help the 99%.  wrong.  it's done to sustain the 1%--To prop up the institutions, and structures that keep their power absolute over the 99.


That is why the market will never collapse, like it should.  Like Winston Smith, you cannot defeat Big Central Bank:=Wallstreet  And in the end you will hold 2+ 2 =5.  Or that is to say you will hold the simultaneous beliefs that we live in prosperous economic times, as everything around us degenerates.


In newspeak, totalatarianism is capitalism plus plus (+privatizing of profits, +socializing risk)