No QE3; ZIRP Extended Thru 2014 As Jeffrey Lacker Objects - Full December-January Statement Comparison
Little of note in the statement: no QE3 explicitly in the form of LSAP, which an S&P over 1300 and crude at $100 made prohibitive. Instead the Fed is extending ZIRP through 2014, from 2013, which as commentarors, primarily Goldman had expected, and which means sub-3 year rates will never be above zero again. Our prediction for a €100 trillion 1 week MRO is not looking quite as insane anymore. Since this is incremental easing, the reaction in gold says it all.
Summary headlines via BBG:
- FED EXPECTS TO MAINTAIN `HIGHLY ACCOMMODATIVE' MONETARY POLICY
- FED SEES `EXCEPTIONALLY LOW' RATES THROUGH AT LEAST LATE 2014
- FED TO KEEP REINVESTING HOUSING DEBT INTO MORTGAGE SECURITIES
- FED SAYS INFLATION `SUBDUED'
- FED SAYS HOUSING `REMAINS DEPRESSED'
- FED REITERATES `SIGNIFICANT DOWNSIDE RISKS'
Gold:
Lacker objects as he "preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate." Complete redline comparison attached.
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Instead the Fed is extending ZIRP through 2014, from 2013.
Gold just got a woody. Was that as good for you as it was for me?
ZIRP is the new QE, or is the other way around?
0% interest is the new QE
Keep buying phyzz until they raise the interest rates BITCHEZZ
Silver woody detected BiTcHeZ!
Spike up, spiked back down. These cocksuckers are going to lose all control and then go missing.
Fed seems to have a new mandate to be sure Treasury can roll over debt at "affordable" exceptionally low rates - holding debt saturation, where we can't afford the roll overs, at bay.
and back up!
I love your saloon.
“And startin’ tomorrow morning, I will offer a personal $50 bounty for every decapitated head of as many of these godless heathen cocksuckers as anyone can bring in. Tomorrow. With no upper limit! That’s all I say on that subject, ‘cept next round’s on the house. And God rest the souls of that poor family.
And pussy’s half price, next 15 minutes.”
I don't think it was injuns.
With red dots, or without?
Silver up 4.5% on this news.
This has QE written all over it, in spite of Fed denials.
ZIRP means QE for all practical purposes.
ZIRP is effective only when combined with printing, because there's always more government debt flowing into the market and someone has to buy it.
LTRO is QE with a buy-back promise. In 3 yrs it will simply be rolled over another 3 yrs, no way will banks be able to buy it back.
LTRO will come to America and the Fed. It's the only way to keep the ponzi scheme going short of outright QE.
Bankers are able to keep this ridiculous ponzi scheme going because 99% of people couldn't care less. They don't even know what the Fed is.
Ok maybe it's 98% now. Another 1% of people have taken an interest in these things during the past 3 years.
So we're up to 2% now. That's why there hasn't been a revolution.
But it wouldn't matter if 50% of people were interested, there still wouldn't be a revolution, just a lot more whining & bitching.
You got it. Nothing will change in earnest until critical supply lines are cut (read- food and fuel) or simply cannot be delivered. Japan 2.0, fuck The Fed.
Yes, last 3 years have demonstrated not one single structural problem will be fixed.
ZIRP and currency printing to keeping the sovereign debt ponzi scheme going is the game plan as far out as anyone can see.
USD and Euro will steadily lose value along the way. Prices will continue rising ...except housing which will continue falling because more of peope's income will go to food, fuel, and other necessities.
It's the long slow ride through economic depression to hyperinflation and currency collapse.
Yes, we'll see DOW 20,000. RoboTard will be delighted.
But gas will be $10 / gallon too.
Actually, 3/4 today know what the FED is. But that's about it unfortunately.....
I think Bill Gross said "QE 2.5".
There is NO dissenter..from my interpretation, Lacker didnt really dissent. He just objected to placing a timeline on the 'perpetual' ZIRP. This whole thing is like a criminal on trial who is being punished for his crimes, and 9 of the judges saying that the man should be electrocuted and the the tenth judge objects because he feels that he should be guillotined. This FOMC is a true gong show.
yep, got that right....
The telegraph lines between Bill and Ben are intact. Way to go Bill, you 'guessed' right again!!!!
I think Karl Denninger is still muttering something about gold being a terrible investment.
silver got one also...up 80 cents in 15 minutes...i guess we have to wait for the 4 hour woody
A rhinotillexomanian moment.
http://en.wikipedia.org/wiki/Nose-picking
(giggle, giggle, snort, snort)
Zirpes. The gift that keeps on giving.
NOS, bitchez!
There is a war all right. It's a war on savers. This wealth transfer from savers to debtors has got to stop!
Perhpas.
But it will NOT stop. Count on it.
The Fed doesn't care about savers. Only promulgation of TPTB and right now that means Treasury being able to continue to fund our massive debt. Can't do it at the more normal 4%, or average 6%, never mind the over 10% of the early 80s.
They will have a more difficult time controlling how credit other than Treasuries and Agencies start to price though. Banks and market will widen risk premiums on private borrowings and compress P/E ratios. Those companies with plenty of cash and not much bond debt are where to buy.
This is the economic equivalent of Democracy imposed. An attempt to force consumption and malinvestment by punishing prudence and saving.
I feel actually physically ill.
The US is going to have ZIRP indefinitely. We are at the end of the debt super-cycle where a return to normal interest rates would lead to total financial collapse.
Bingo. Give the man a cigar.
Soon it will turn into a case where if they don't pay you money to take their money it will all lead to financial collapse.
Everything leads to total financial collapse... it's only a matter of timing.
ZIRP4EVA is going to destroy the currency. This is a very dangerous policy decision the FED has embarked on. Hopefully, for the survival of the nation, it starts to fall apart this year in time for Ron Paul to surge to victory and defeat the FED before we go bananas and have run-away inflation.
It doesn't "start" to fall apart this year... it started in earnest over 40 years ago (or 100 years ago, depending on you POV). There is nothing that Ron Paul can do to "fix" it. Ron Paul would be the perfect person to hit the reset button after the collapse, but the collapse is coming. ZIRP doesn't destroy the currency, math does. ZIRP is merely extending the charade. Ru-away inflation or deflationary depression... doesn't matter.... both simply serve as the end of the "dollar" in its current form.
"ZIRP4EVA is going to destroy the currency"
Either they don't care or that's the plan. Take your choice.
This is so depressing.
Especially if you tack on $5 trillion of new debt service within 3 years. if 10 years were to go back to their historic norm of +/- 5% KA-BOOM
You're completely correct, but what they have left is to announce that slowly, step by step.
So promise ZIRP to remain another year longer (at least) every other Fed meeting or so.
5 year and 10 year...wow
Is anyone surprised by this?
No. No they're not.
The market is certainly pretending to be surprised by this.
USD off the cliff.
/ES going parabolic.
And this with No QE announcement?
WTF...you just gotta laugh. The alternative is just too grim.
Not at all, the days of QE are over. I've been telling people that for a year, ever since we were at DOW 9,800 and everyone started pricing-in the 'certain QE3 at any minute'.
I just wonder who will be the first seller of size to call the top and hit the sell button.
SD1: With all due respect (no really) you cannot seriously contend that they won't QE this mess to the moon and back. What choice do they have? Politically, austerity is a non-starter given the degree this would be required. The US alone has entitlement requirements on SS and Medicare that would mean printing for at least 20 years just to avoid default and political chaos. They have no other tools except the printer, they will print, and damn the consequences.
And there will be consequences oh yes but they cannot look at that nor care, because they have no choice.
This is an end-game. There is no credible future beyond this event horizon. There is no possible Plan B. There is nothing now except desperate measures and pantomime.
They. Will. Print.
Well you and many others got that already baked in, and thats just normalcy bias...but read my post below about watching out for the thing out of left field. Problem is, everyone only thinks in terms of economic FED policy, same as everyone thought on Sept 10th 2001.
No, I do not believe 'the endgame plan' is to just print at 0% to infinity at all, sorry.
He has been right so far, and I still owe him a pasta dinner next time I'm in town.
Hey thats right I'll have to get in touch next time Im up to visit my dad and we can get some stuffed shells at Jay's!
Why not just come out and say ZIRP Forever? After all...isn't that what they mean?
Repeating and reminding the 'market' on occasion gives the appearance of control. In actuality China is one step closer to hanging them with their own rope. They'll continue to buy T's and import wage deflation more effectively than the US can export inflation. Look for China to devalue the RMB further probably by summer.
Dow and Euro sure seem to like "Little of note"
"dont worry.....be happy...."
GOLD AND SILVER MOTHER FUCKERS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Thank you Fed.. my long bonds just got a boner.
Fed says untill moral improves the rape and pillage will continue.
"moral" != morale, which did you really mean?
Low rates and zero growth to infinity. Dow - 200 by the close.
Bernake is Buzz Lightyear.
Here's his theme song.
[quote]
A pistol was still smoking, a man lay on the floor.
Mister Oswald said he had an understanding with the law.
He said he heard about a couple living in the USA.
He said they traded in their baby for a Chevrolet.
Let's talk about the future now we've put the past away.
Turn up the TV; no one listening will suspect,
even your mother won't detect it,
no your father won't know.
They think that I've got no respect
but everything means less than zero.
Hey, ooh hey, hey, ooh hey.
[/quote] -- Elvis Costello, "Less than Zero"
Good news .... Will pay my MIAMI holiday ...
Silver sky rocketing
Rick Santelli: "Welcome to Japan."
LOL!
Buying Gold at the next dip.
Please Jesus, just let my employer keep me on until March 15th so I can collect my bonus and trade toilet paper for something with a bit more heft. 7 weeks and counting...
D-day isn't until the 20th, so you should be good. If your boss disagrees tell him/her to call me.
Don't worry, the euphoria should wear thin by next week. We'll be back in the 1100 range on the SPX, and WTI at $78 by late-February, so that come March, QE3 can march on the masses.
Why does that cause the market to go up?
Because news is bullish, bro!
Bernanke stepped in some dog shit- ES up 15.
Reference the role of a "fluffer" in the adult film industry.
Appropriate term for Fed and the Bernank. Wish I'd thought of it. A FLUFFER!!
just more bullshit to give conservative investors no options, and to try to push us all back into the wallstreet casino, fuck that. Rather stuff my money in my bed.
Just more of the same shit, different day.
As long as by "money" you mean in relic form.
late 2014 ? what a joke they can't even predict the weather for next week. What will the world look like end 2014 anyway. Welcome to absurdistan. You can check out any time but never leave.....
ZIRP4EVR.
Liquidity traps are awesome. See Japan.
Exact opposite of what the Fed should be doing. Normalization of Fed policy is what should be happening.
Alas with 100% debt/gdp it is the US government that cannot afford normalization of fed policy.
Us monetary policy really is in dangerous terriority.
#btfd
btw, joked last night if only US can export some more inflation, kill the USD, it can bring pay some slave wage jobs from China. Look like i wasn't joking. One has to ask if this is really what American exceptionalism has come to.
`HIGHLY ACCOMMODATIVE' for debtors while 'HIGHLY DISCOMMODING' for savers.
Unless your savings are in gold and silver.
Damn straight.
Bernanke, meet Rubicon
BB crossed that river about three years ago. No looking back now...
SURPRISE!
I tried to say earlier, these fuckers are going ALL THE WAY with this shit.
That's because the world is ruled by Thatcher's TINA.
http://en.wikipedia.org/wiki/There_is_no_alternative
Why does Bernanke hate the retired people?
what I'm I gonna do with my mom.....damn
He doesn't hate them. He just wants them to hand over their money to the stock market so they eventually get fleeced. Wait...maybe he does hate them. But, he hates them equally with the rest of the 99%. So, there really isn't any discrimination, which is nice.
No, he loves them. He really, really loves them.
Every conman needs rubes.
Great for granny and her savings account....lol....this is the future...Bond vigilantes are dead....they can not play anymore...they have been removed from the playing field...just the refs playing now...so I predict 20 trillion in debt in three years
Me's a diggin' on that gold, baby.
Round up those $5 shovels and stake yer claim(s)...
But hinted at Mortgage QE! And after Bernanke's speech to Congress, they WILL do it.
http://confoundedinterest.wordpress.com/2012/01/25/fed-likely-to-hold-fed-funds-target-at-0-25-and-where-bond-markets-stand/
I love how they blamed all of our problems on keeping rates to low for too long, yet they are willing to keep them at zero indefinitely.
'Yep, we really fucked up here....but its all we've got we're goin with it'!
Damn total debaucle. But its just marching in place, not the plan at all.
You can stick a fork in this rally.
Yea, stick in the ass with a fork to get it to go higher.
They aren't about to let the equities even fucking CONSIDER going backwards. It's got John Q. 401(k) holder all sedated and feeling like a pig in shit. They aren't about to let that go.
Markets still not back to 6 months ago levels. I thought they might get back to that DOW 12,700 where the markets last tanked big time, looks like they cant even hold green on the day I just dont see the continuation of any rally-on mode here.
Oh, they'll gas it higher. We'll go +5 handles minimum.
REITS, my favorite unbelievably rigged shitfest, are just sailing higher and higher with the IYR cracking 60 for no apparent fucking reason.