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Next Leg Of The Ponzi Revealed - Foreign Central Banks To Begin Buying US Stocks Outright Starting Today
We were speechless when we read this from Bloomberg.
The Bank of Israel will begin today a pilot program to invest a portion of its foreign currency reserves in U.S. equities.
The investment, which in the initial phase will amount to 2 percent of the $77 billion reserves, or about $1.5 billion, will be made through UBS AG and BlackRock Inc. (BLK), Bank of Israel spokesman Yossi Saadon said in a telephone interview today. At a later stage, the investment is expected to increase to 10 percent of the reserves.
A small number of central banks have started investing part of their reserves in equities. About 9 percent of the foreign- exchange reserves of Switzerland’s central bank were invested in shares at the end of the third quarter, the Swiss bank said on its website.
The investment will be made in equity index trackers and will include between 1,500 to 2,000 shares, among them stocks like Apple Inc. (AAPL), Saadon said.
More from Globes:
The Bank of Israel today began investing a small part of its $77 billion in foreign currency reserves in US stocks. The central bank's latest Markets Division report states that the new Bank of Israel Law (5770-2010) allows the Bank of Israel to make equity investments, and that it began to do so today.
The Bank of Israel will invest $1-1.5 billion in US stocks, 2% of its portfolio. The report adds that the Bank of Israel has been investing in public bodies in developed countries since 2010.
The Bank of Israel said that the investments in US stocks would be made through UBS AG (NYSE; SWX: UBS) and BlackRock Inc. (NYSE: BLK) The Bank of Israel's Markets Division, which specializes in bond investments, will not be handling the equity investments. It added that the traders will have very limited discretion, and that they may only quote leading indices, in order to reduce the risk.
"We have almost no exposure to countries with big problems. We constantly examine where we invest the foreign currency reserves, and I can promise you that you can relax," Governor of the Bank of Israel Prof. Stanley Fischer said at a closed conference in mid-January.
"The Bank of Israel does not disclose the currency composition of its portfolio, especially not the composition of its equity portfolio," says the Bank of Israel. At the January conference, Fischer said, "Imagine if we were to begin publishing where you invest, so when you stop buying the bonds of a particular country, and this is published, we'll get complaints. That is why we do not publish." He added, "We have an external committee that conducts the examinations. You can assume that we're aware to the fact that there are problems in certain countries."
In other words, while the Fed's charter forbids it from buying US equities outright, it certainly can promise that it will bail out such bosom friends as the Bank of Israel, the Swiss National Bank, and soon everyone else, if and when their investment in Apple should sour.
Luckily, this means that the exponential phase in risk is approaching as everyone will now scramble to frontrun central bank purchases no longer in bonds, but in stocks outright, leading to epic surges in everything risk related, then collapse and force the Fed to print tens of trillions to bail everyone out all over again, rinse repeat, until this chart becomes asymptotic. We say luckily, because it means that the long overdue systemic reset is finally approaching.
Chart: Diapason
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Unfortunately for most, who are entirely unprepared, either outcome will involve a lot of death.
Take a look at this video. People like this are going to die because they have no ability to evolve/adapt:
evolutionary Politics Revolutionary Politics Judge Judyhttp://www.youtube.com/watch?v=JKXkthHVDJk
And anyone wonders why the annual deficit exceeds $1 trillion ?
"Conversation with her is my rent, know what I'm sayin'?"
"What do you do? I'm me!"
What got me was when he kept thanking her repeatedly.
That guy was ecstatic that the case was dismissed! He left there thinking everyone was laughing with me! This day was great!
Or 3. we are all dead
I think the National Association of Retailers just creamed in their pants a little bit waiting in line for their turn at the fountain of paper.
If they came out with this story in March 09 - people would have gone insane. Today it's a good idea - especially jumping in for the next 500 bucks in AAPL!!
Well.........heres a few more trillion.....and how do they pick what to buy???? BS and Blackrock....your joking right....
youngman, someone has to earn those commisions ;)
Big balling ponzitude...
Suddenly, Dow 36,000 seems inevitable..
++
Printing money to buy stocks. There is no other possibilty.
I expected a deflationary shock first - but they are locked-in on preventing that.
As does the revolution.
Repatriation of $$ just under a different name. Gold, stocks, land, just get the hell out of dollars.
Now this I like...*
So its not really that foreign central banks are gonna trade their dollars for railroad stocks as they are trading their dollars for railroads, real-estate, oil rights, factories etc. America's dollars can come home without causing hyperinflation.
*Of course I don't "like" it, but fiendish evil has its entertainment aspects
Once I built a railroad, I made it run, made it race against time.
Once I built a railroad; now it's done. Brother, can you spare a dime?
@tortfeasor
That's gonna be one he'll of a margin call when it comes.
The unwind might spin the planet off its axis all together...
I usually don't mind when somebody tries to shift my pole.
I just do not believe what I'm seeing. Is this some sort of sick joke, or what?
I guess this means everyone go long stocks? Or does it?
Criminal is not the word............I'm speechless
This is the most top-ticking thing Ive ever seen!
I don't like it, but this is extremely bullish for nominal equity prices if the concept spreads, like I think it will.
But then again, your opinion is truly moot, because there's literally nothing about which you give a shit.
Great plan! We need more leverage in the ponzi to keep it alive. Meanwhile, stacking the shiny :)
Time to load up on ZNGA and NFLX
Cramer says I should be long GRPN and AMZN on their strong fundamentals.
Of course. Add to positions. Rotate out of PMs and into strong equities with good fundies. Nowhere to go but up fro GRPN...
BaZNGA!
Insane. I wonder if Plosser would categorize this as 'discretionary' or 'systematic' policy. What do you think?
http://www.dailycollateral.com/2012/03/01/an-honest-fed-plosser-proposes-concessions-over-the-frbs-reaction-function-in-exchange-for-central-bank-independence/
Let them invest in equities while us ZHers invest in silver.
One word: Stanley Fisher, bernanke mentor. Is it really that shocking.
That man certainly gets around doesn't he...
from: http://en.wikipedia.org/wiki/Stanley_Fischer
iPonzi
Even the Ponzi is ponzied.
Said in a more long winded manner:
According to the story I heard, Bernanke was giving a lecture on the central banking. After the lecture, a ZH Reader came up and told him that he had it all wrong. "Central banking is really a pyramid scam supported on the backs of taxpayers." Bernanke, looking as if caught red handed, asked "And what is the rest of the economy based on?"
To which the ZH reader triumphantly replied: "You're very clever, you fucker, but it's no use -- it's Ponzi all the way down."
Adapted from the "Turtles All the Way Down" story.
When the PPT pulls the algos and stops buying the futures, the kafucking bang will be so huge, it will be heard across the world!
Takes a big set to play with taxpayers money...how about giving it back to your people instead of fucking around in the market?
So who is the fool, those that cash in on the game or those that twiddle their thumbs while thier ass ets whither?
Only a fool believes that he can profit by making a deal with the devil.
Well now I know what caused this crackup boom in the U.S. stock market the past 2 months, the insiders front running this policy.
If anything, theyre really going short stocks.
That comes soon. Probably can get more suckers in first.
This has got to be a joke, not even a moron would buy DOW 13,000, 20% 2 month straight run-up....compounded with ISRAEL supposedly the buyer? I dont even believe 1 bit of this for a second.
If being a moron is wrong, Then i dont want to be right. Does it really matter?
Um.. how would you describe most everyone in the government?
idiot for an elite few and imbecile for the remainder.
Oh, that's crude and un-PC now? How about class II and class III retard?
"Evil" covers the vast majority of them nicely.
(PS: It is "almost everyone", NOT "most everyone" --- you cannot modify a noun with a pronoun.)
Just when you thought central banks couldn't be more crazy, out comes this news. Hello 2000 on the ES??
Should I buy Pets.com now or wait?
Wait until we make great pets.
You knew this would happen.
Next, all 401k's must have a minimum of 75% equities....it's the law. Don't worry Benerbama 's got your back
What a fucking joke.
Are central banks now being forced to chase yield?
Why equity? If looking to diversify why not AAA corporate debt?
Central Banks mandate SHOULD NEVER include equity positions.
When the hell did monetary policy include buying equity positions?
I shouldn't care. I don't want to care. Just follow the money and don't fight the CB's.
Well, it's pretty simple, I guess.
Central banks print. They buy up every asset in sight. Before you know it, the world's CBs own the world.
If any of the assets start declining, you just print a little faster. Problem solved. After a while, assets will never go down, because only CBs own them.
not only that, but we'll be on the hook for continual rents and annuitiZed returns on it, for them!
they fade everything, all the time; whatever happens, a little bit more falls into their laps
hey E_K! if i print "money" + lend it to you, + it is "legal tender": Q:: will either of us ever hafta "work" again?
Question is, who do they think the 'Greater Fool' here is? The bankrupt unemployed taxpayer?
Bank of Japan did it back in the early 90s (or was rumoured to).
To be honest, since most developed country CBs seem to have followed the BoJ's late-80s to mid-90s ever-so-successful playbook, perhaps this shouldn't come as such a great surprise...
& heaven forbid CBs buy more gold...
smells of desperation - circling the wagons
but if they don't let the market fall, how will Ben justify more QE
maybe they can just invest our military aid - Iran better hope the market tanks
Well now, that is convenient.
The ultimate risk on. Man oh man is this not gonna end well.
Soon the banksters really will own everything.
Bring on the collapse. I have been hoping for it since 2007. Always thought it was one of Cheney's ulterior motives.
Bernank opens an fx swap line with another central bank. Said central bank buys U.S. equities. Bernank buys equities without breaking the 'law.'
I want my Mommy.
John Law would be proud....
Ah, the war in the colonies is proceeding splendidly!
Israel says already "thank you" in advance for backing us in Iran! If this turns out to be true and not just another sick rumor, then get out of everything but PHYZZZZ!
Sovereign Wealth Fund 2.0?
this is more like..
Family Office..
hides behind..
foreign central bank for privacy..
buys tons of stocks.. barrows tons of money from the FED thru the Foreign Central Bank.. for once again a dea paper trail / privacy.
It is the same blue blooded fucks.. and to add insult to injury they release the PR that Israel is taking the lead! LOL!!
I mean FUCK YA'LL! ALL!! YA'LL!!! is what they are realy saying to the non-sheep!
and ALL I can really say is.. "Yes! shit is really that fucked up in America!"
We the Sheepeople! are SOOOOOOOOOOOOOOOOOOOOOOOOOOOOO! fucking stupid that this and any other shit sticks! that "The Powers That Be" throw!
These giuys arent even trying any more!
they are just fucking with everyone!
Look! Isreal is going to Prop Up the NYSE with Stock Purchases!! YAY!!
and America is SOOOOOOOOOOOOOOOOOOOOOO! fucking stupid that it doesnt matter what the PR release says!
as long as it is Not! Aliens! the American Public will bite!
Seriously.. if we as a group could not figure out that it was over before now!
we really have to ask ourselves what benefit there really is for being in the know?
so we can drive ourselves crazy?
becuase we are going to educate the sheepeople?
I am thinking about buying stocks! for the first time in a LONG time! on this news!
if this makes it right past the AMerican Public without so much as a Nod???
why would the FED stop or how does ANYONE?? see the FED being stopped?
Ron Paul?
Ron Paul is not bucking the ship if things are going well!
and we are in a sink or swim kind of down turn right now.
so??
Oops! I mentioned Saint Paul! sorry freaks!
The commie nightmare begins. As we all know asset protecting cartels always collpase. Yes ZH is right, the 'great re-set' is close. The market will start to throw out warning signs, starting with the bond bubble and CB printing into bond markets...unless they (CBs) are able to start producing synth oil. The inflationary final countdown will be brutal.
Your move Germany. Forget about Obama who may not make to the next election, your rogue ECB lead by a mad Italian will tear Europe apart.
OO
Bank of Israel they are buying stocks now? I thought they were in the process of bombing Iran, might not be such a good move perhaps.
so if we shorted AAPL we will be Anti -ISREAL
All these new car sales they are reporting today, and heavily financed no doubt, with the lucky consumers who get to fill them up with $10+ gasoline.
Why not birinyi just called for s&p 1700 this year, they must be on the inside! Oh wait, it was oversold aug 3rd according to them also. Close they only missed by 15%
Frightening. Beyond anything I could have conceived. It will take us to unimaginable heights....before an unimaginable fall.
Oh, almost forgot. ZIRP4EVA!
hfts are blowing out the dow. strange trading. sell off kicking in.
Wow..They just networked the money printing machine to the stock trading machine... What can go wrong!?!??!!?!?!?
I had always thought that the DPW/GOLD ratio would be 1:1 at around 4000. I guess it should be closer to 30,000.
FED is selling AAPL to Israel. Sounds more like a top is near...
How did that work in Japan with the NIKKEI ?
Their foreign currency reserves are USD denominated treasuries; they don't hold cash. They will sell bonds and buy stocks because there isn't enough physical gold to buy; this is a hyperinflation play. Stocks will outperform bonds or cash during hyperinflation. Just like weimar.
Sell bonds to WHO?
See http://nowandfutures.com/us_weimar.html and weimar.html for a detailed historical summary and chart correlation.
Jul22 was the liftoff point. Velocity and acceleration.
In the end (Nov23):
Gold in marks: 10^14
Silver in marks: 10^12
Marks per US$: 10^12
Stock market: 10^10
Copper price crashed all the way down around Aug23 for some reason.
isnt this the same as the chinese and middle east "sovereign funds" investing in the market as it was tanking several years ago? if so, this wouldnt be a precedent.........................
This is just the same as 'QE3' kito....
right, sorry sheepie, i forgot, everything is qe now...silly me.....with all of these qe happenings, funny i just dont see gold getting anywhere near its end of qe2 highs.........
if you don't get how the cBanksters are orchestrating multi-faceted QE, don't kick the dog, even in sarcastic scorn, please, kito
gold is 1720; silver is 35.50
Fiat currency, meet fiat equity. Talk amongst yourselves.
Mommy, make the paper monsters go away.
A Global Economy based upon everyone taking in each other's laundry.
Remarkable.
Ancient Chinese secret, huh?
http://www.youtube.com/watch?v=BJP5f-fsHrs
Never believe a THING Israel says, and youre very safe.
Print money and invest it in the equity markets. Get ready for the mother of all bubbles.
Or maybe the fed is getting ready to take down the commodity basket and know that all their hard work propping up the R2k will be for not at the same time.. In steps Israel to buy R2k with benny bucks after the take down.. question is how far do they plan on letting things fall before the pumping begins anew ?
Hey the Israelies can invest in war stocks then start a war. Nah they wouldn't do that....(crickets)
Next Leg? Is that the much smaller one between the other two?
You are the only one in Zero Hedge with a small 3rd leg.
Ride her till she bucks ya!
Its the honor system at its finest. Get on 'er and stay on 'er!
She offered her honor, he honored her offer. And all nite long it was honor and offer.
Are US Treasury Bonds to be left at the alter?
Monetary policy just got WAY more complicated.
This is the endgame.
The run into hard assets has started. Buy whatever hard asset you can as long you find an idiot accepting US Dollars.
sorry, but i dont see this as much of a story. foreign sovereign wealth funds, controlled by their governments, with government money, have been investing in u.s. equities for quite some time. why is israel's involvement much different?
It's different because the sovereign funds are all committed. This is now dipping into strategic savings of cash, which isn't supposed to be spent, er, I mean invested. If the Fed is truly backstopping the arrangement and using these countries as their proxy, then it is a desperation move to prop up U.S. stocks.
Exactly why they feel the need to do this and why it is desperation is something we will find out in detail later.
It's kind of like denying you aren't broke when you are hunting for change in your house in order to be able to buy dinner for your family.
"while the Fed's charter forbids it from buying US equities outright"
that doesn't stop lying treacherous mammon worshipping rockefeller-mic-yale-cia den of thieves from doing whatever the fuck it damned well pleases....
the three branches of government are the cia, fed, and un
Holy shift! Look at the asymptote on that mother function!
http://comedians.jokes.com/dwayne-perkins/videos/dwayne-perkins---asymptotes
oh my fucking god. There is no end to this nightmare is there?
well, I dont know about that collapse and bail out. From my view, the hofjuden, via their shtadlans, will purchase a large part of the World with electronic digits that cost them nothing to produce and we'll all be working, from there on, for the hofjuden. Central ownership of all assets. Perverted Marx/Engles/Lenin dogma.
It think the CBs are already in with both feet this is just a pump and dump(?), well its a pump and something. See the "other" category on the Fed's B-Sheet.
WORLD PLUNGE PROTECTION TEAMS, UNITE!
WELCOME TO WESTERN AUTHORITARIANISM!
Mind = Blown. Ponzi going insane.
Half an hour after reviewing this post in great detail - I am still stunned.
Depravity.
Horror.
Madness.
Well, I would prefer american stocks over the euro, too, at the moment.
AAPL.....the new currency....everyone dump your currencies and precious metals into Apple. Fractional shares to be issued soon..... Apple, the new global currency, has arrived. All other currencies may be cancelled without prior notice. Invest now and avoid the rush to exchange.
Apple, go ahead and take a byte you fools.
"There's always money in the banana stand"
Buck Futter
http://youtu.be/_7CQ7Eaecbg
Seriously, what happens when central banks own a controlling interest in American firms? Could they put interested men of their choosing on corporate boards (voting) and other positions in these firms? Could it create a conflict of interest, given their relationships with Governments, raising the specter of fascism? Would they put their fuduciary responsibility to the other shareholders secondary to national or banking cartel interests? Wasn't something like this described in "Atlas Shrugged" and it lead to Midas Mulligan going Galt?
Yes to all your questions. You shall be eligible to receive honorable mention at the next ZH comments awards.
A nice funding mechanism for wars we don't need-- great!
Am I the only one seeing the conspiracy theory here?
1. Jewish Bankers in the Homeland of the Jews take the unprecedented and ostensibly improvident step of investing Central Bank Reserves in stocks!
2. A stock spike/false rally ensues.
3. JBHJ buy/sell all the way up to bank profits.
4. Market tops, bubble pops, and market crashes.
5. JBHJ show losses from last-purchased stocks to market low.
6. U.S. Fed pays JBHJ the difference between last-purchased stock high and market low.
7. Money is thereby transferred from U.S. citizens to JBHJ directly through U.S. Fed.
8. Personal losses accrue to any privates in the U.S. not getting out in time (likely the uninformed/unconnected).
Or is it just me?
I'll finish some of it for you.
9. Since US fed can't pay JBHJ in monies JBHJ deems valuable(Bonds,FRN's,shit mortgages), they transfer the shiny stuff.
10. Jerusalem is now home to most of worlds gold.
11. Nations eventually invade Isreal for the wealth.
12. I probably left out some stuff.
Conspiracy YES, Jewish People NO.
Luciferian Illuminati YES.
The porta reekans aren't running the banks, the krauts aren't running the banks, the Africaneese ain't runnin' the banks, the chinks/japs/asialanders are not running the banks, the skimos,nativesofallvarieties are'nt running the banks. The wasp's ain't even running the banks. Why is it always a guy with a jewish momma? It's the old middle eastern terrorist application. After awhile the Jew label looks like it fits. I'm kinda getting tired of Jewish people. What the hell is a jew and what are they so proud of? Don't answer-I don't need a Biblical history lesson. great...now I'm a jew-hater. Whatever.
Israel is just a minor player among many countries. That there are several central banks involved is key. This is the Fed attempting to prop up stocks and not violating their charter by owning them directly. They have been funding Wall Street firms and doing the same exact thing for a few years now. That's why prices go up but volume has not.
What I had feared it's becoming clear.
THEY ARE BUYING UP ALL THE MARKET HOPING SUCKERS WILL COME IN SOONER OR LATER.
They ain't coming. No man, they ain't.
dont fight the fed, replacing pm with spx 4k calls will do the job, however in line with fed interest and hence with less regulatory and suppression manipulation risk...
I wonder if obomba, suggested to Israel they do this for backing to attack Iran?
Me too. Seems like a deal of some sort. If Israel can pump up AAPL another $100 maybe the IPad eaters won't care when gas is +$6.00
What happens when TBills and bonds don't provide enough of a return over inflation for even a Central Bank?
The Russells thank the Bernanke's.
I think for short term trading this might be good, long term it will cause some large distortions and eventually end up collapsing. I used to make my living on traditional investing and a somewhat real market. All this intervention is making very hard to be in the market. Other than some royalty trusts and MLPs and miners I can not really see myself participating in this "market". I fondly remember being able to research a company, time a buy and make a little money, I never tried to get the next Microsoft or Google, maybe a 10% or 20% gain. Not anymore, the market is so pumped up on Benroids and Draghi bucks the impending crash is always hanging over my head like the sword of Damocles. I feel like my Grandfather looking back on the good old days only mine were about 7 years ago and his were the late teens and twenties and then the fifties and early sixties. These CB guys are making my anxiety level go up big time. My only solace is that there are some like minded people here on ZH.
It's morphed into something other than the "free-market capitalism" we are used to, but I think it makes sense from a CB POV. Corporations are the new sovereigns: better balance sheets by far, and a proven ability to "tax" their "citizens". The corps utterly control their respective governments anyway. So we continue the move from the nation-state concept to the rule by the global mega-corporation, with their so-called "governments" and armies doing their bidding. Citizens United indeed.
What this really shows though is the stark reality of just how bad sovereign balance sheets have become. Sovereigns dissolve over time and we all get to live in an AAPL tv ad from the 1984:
http://www.youtube.com/watch?v=HhsWzJo2sN4
Yes, it's funny (in a twisted way) to remember how people who bought Macs back in the day were "fighting the man" and then to see how they now have become "the man".
But in regards to the point of your post, it is scary to think about how some corporations have higher GDPs than actual countries. I could see the day happening when corporations declare their "sovereign rights" as "people." Your comment about Citizens United is very perceptive, gives me the chills.
Hhmmm. Just the same, I think I put my money into the energy sector and physical. This is beyond inflationary in a relatively short run, especially once these banks need to be bailed out again.
Lets just call it what it is Systemic Fascism.
One domino at a a time. By the time the CB's get through milking those that are stupid enough to go along, they will own their countries, just like Greece.
All will be PIIGS.
Fascists took over business, and lets the GP believe they are stand alones, only to be RUN from behind the scenes.
The only name for that is Fascism...........and we be takin it Global.
look it can't even bust through 13000 and hold that support. even with the ECB/FED bailing out the whole EU. anyways a hft just shafted a whole lot of longs pos, nice,
Basically ZH pumped the market. About 2pm crude oil jumped up, almost simultaneous with ZH post.
This is proof that everybody reads ZH.
They are buying retail stocks in droves.
Retail Index priced in Euros is going to close at a new, world record high today.
http://stockcharts.com/h-sc/ui?s=XRT:FXE&p=D&yr=0&mn=9&dy=0&id=p09826292167
What theyre buying in droves is oil, fuktard....all time highs right now.
Make sure you spell that with a capital F... "Fuktard". Robo deserves our respect!
NA$DOLLARZ BITCHEZ
A-friggin-men
Zynga approaching new lifetime highs, up nearly 6% today.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=znga&ins...
Who needs gold?
Thank you, RobotCherryPicker.
It worse than just cherry picking... all his cherry picking is done in hindsight.
My mistake: RobotRearviewMirrorOneWeekTimeframeCherryPicker.
'lifetime' of 'gnat stocks'
and how long will that lifetime last?
This is no surprise.
The whole plan is a corporate takeover of what were Republics and their governments.
Everyone has been buying equitie in corporations for a long time. Shirakawa does it, the President's Working Group does it (and Bernanke brought them up in his Congressional testimony yesterday), so now they will be doing it even more publically. So what?
Your whole life has been beta tested for this moment, and now corporations, by the New World Order, will run this shit show of a culture and it's broken society.
Your whole life was a beta test for how the corporations could implement themselves into your life.
We will now all work for Nike, Boeing, and General Electric and be paid in stock. The dollar will only be used to denominate the issue. You will make a share a day, and when you need "dollars" you will cash the shares, or you can keep them in your retirement account....
Welcome to the Corporate Takeover- We have been waiting for you