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The One Big Problem With QE To Infinity

Tyler Durden's picture




 

There is one big problem with the Fed's announcement of Open-Ended QE moments ago: it effectively removes all future suspense from FOMC announcements. Why? Because the Fed has as of this moment exposed its cards for all to see from here until the moment it has to start tightening the money supply (which may or may not happen; frankly we don't think the Fed tightens until hyperinflation sets in at which point what the Fed does is meaningless). It means easing is now effectively priced into infinity. Now rewind back to that one certain paper by the New York Fed, which laid it out clear for all to see, that if it wasn't for the expectation of easing in the 24 hour period ahead of the FOMC meeting, the market would be 50% or lower than where it is now, and would have been effectively in negative territory in the aftermath of the Lehman collapse. What Bernanke did is take away this key drive to stock upside over the past 18 years, because going forward there is no surprise factor to any and all future FOMC decisions, as easing the default assumption. It also means that Bernanke may have well fired his last bullet, and it, sadly, is all downhill from here, as soaring input costs crush margins, regardless of what revenues do, and send corporate cash flow to zero. Unfortunately, not even in the New Normal can companies operate without cash flow.

This is the chart.

Than you Fed for telling us what comes next.

 

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Thu, 09/13/2012 - 13:49 | 2790784 fuu
fuu's picture

Thanks Ben!

Thu, 09/13/2012 - 13:55 | 2790840 ACP
ACP's picture

Exposing his cards is right. The only thing Madman Bernanke can do is increase the money printing. Nothing else. Forever.

Anything else would create a truly EPIC crash.

Thu, 09/13/2012 - 14:00 | 2790866 metastar
metastar's picture

Open Ended ... just another way of saying Unlimited.

Thu, 09/13/2012 - 14:19 | 2791033 derek_vineyard
derek_vineyard's picture

keep this party going until we pass out or die

Thu, 09/13/2012 - 14:36 | 2791165 THX 1178
THX 1178's picture

OOH OOH I KNOW! Infinity doesnt exist in the real world. That was an easy one.

Thu, 09/13/2012 - 14:54 | 2791302 YBNguy
YBNguy's picture

JPM is pleased

Thu, 09/13/2012 - 15:31 | 2791571 derek_vineyard
derek_vineyard's picture

don't worry my kids can pick up the tab

or kill us old fucks that allowed this

Mon, 09/24/2012 - 17:30 | 2825864 Offthebeach
Offthebeach's picture

What children? They've been outsourced. Production cost are cheaper. When able to be productive, they are allowed in. Foreigner breeding, raising new muppets that Americans won't ( Democrat FSA excepted.)

Thu, 09/13/2012 - 14:54 | 2791307 DavidC
DavidC's picture

It's going to come anyway - NOTHING has changed since 2008, except for debt on debt on debt. That's not sustainable.

DavidC

Thu, 09/13/2012 - 15:42 | 2791633 spastic_colon
spastic_colon's picture

Sorry but you're a bit off here Tyler(s) what the fed has done is made every, and I mean EVERY, less than good economic report bullish forever!

Thu, 09/13/2012 - 13:56 | 2790841 nope-1004
nope-1004's picture

Economic decay GUARANTEED from here forward.

 

Thu, 09/13/2012 - 14:04 | 2790914 Sofa King Confused
Sofa King Confused's picture

Everything going exactly as planed...........

Thu, 09/13/2012 - 14:28 | 2791089 LeisureSmith
LeisureSmith's picture

What are the daugther products of economic decay?

Thu, 09/13/2012 - 14:41 | 2791203 donsluck
donsluck's picture

Crime, starvation, war...

Thu, 09/13/2012 - 14:44 | 2791224 LeisureSmith
LeisureSmith's picture

Bingo.

Thu, 09/13/2012 - 15:11 | 2791427 Gief Gold Plox
Gief Gold Plox's picture

I knew it. I knew there had to be something sinister about the game only old people played. Oh, wait... 

Thu, 09/13/2012 - 14:00 | 2790870 LMAOLORI
Thu, 09/13/2012 - 13:49 | 2790785 4realmoney
4realmoney's picture

Silver Maples still at spot + $1.95 free shipping. No uptick in premium yet. Looking at www.GoldShark.com. Lowest is TexMetals: https://www.texmetals.com/silver-monster-box.html

Thu, 09/13/2012 - 14:09 | 2790959 SmallerGovNow2
SmallerGovNow2's picture

If you didn't buy the dip at 26, 27, or 28, then you are too late to be buying in now at 35 or 36...

Thu, 09/13/2012 - 14:29 | 2791102 12ToothAssassin
12ToothAssassin's picture

Still not too late but you certainly wont get the value you would have in the 26 range.

Thu, 09/13/2012 - 14:36 | 2791155 giggler123
giggler123's picture

Why say that? if open ended printing is for real and high inflation comes about because of it, than 35 might as well be 5 - so in that case following your logic, now is a good time to buy?  not hard luck at all.

Thu, 09/13/2012 - 15:05 | 2791380 Red Heeler
Red Heeler's picture

I wonder if you'll be around to say, "If you didn't buy the dip at $125, then you are too late to be buying in now at $150 or $160."

Thu, 09/13/2012 - 15:28 | 2791554 debtor of last ...
debtor of last resort's picture

I bought at 25, 26, 29, 83 whatever. Now and then when i had the money. Who cares about the price, shipping? BTFD till 31 december 2012. The rest is history.

Thu, 09/13/2012 - 16:17 | 2791862 OneTinSoldier66
OneTinSoldier66's picture

And the paper price of precious metals matters because.......?

Thu, 09/13/2012 - 14:30 | 2791107 Freegolder
Freegolder's picture

Silver is just an industrial metal, never going to be anything else.

Gold is going to resolve this mess, nothing else.

Thu, 09/13/2012 - 15:17 | 2791458 Zero Govt
Zero Govt's picture

Gold is an inanimate object, it cannot resolve or solve anything

we need a better way, it's called rather modestly, Freedom

Thu, 09/13/2012 - 22:16 | 2793204 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The only thing that is going to fix this mess is a proper gov't, honest leaders and a productive society. Nothing else matters.

Thu, 09/13/2012 - 15:29 | 2791564 debtor of last ...
debtor of last resort's picture

Today's silver is tomorrows gold. 

Thu, 09/13/2012 - 13:50 | 2790789 digitlman
digitlman's picture

Asshole.

Thu, 09/13/2012 - 13:50 | 2790790 redpill
redpill's picture

"I picked the wrong week to quit sniffing glue"

Thu, 09/13/2012 - 15:22 | 2791513 holdbuysell
holdbuysell's picture

And the visual of all the "I picked the wrong week to quit..." sequences:

http://www.youtube.com/watch?v=VmW-ScmGRMA

Thu, 09/13/2012 - 13:51 | 2790798 malikai
malikai's picture

Sounds like a winner.

Thu, 09/13/2012 - 13:51 | 2790802 Meesohaawnee
Meesohaawnee's picture

stunning. theres no other way to describe where this country is being taken. surreal. been nice to know ya middle class. id call this an inflection point. Gonna be fun when crude gets to 110 120. Theatre over the weekend.

Thu, 09/13/2012 - 13:51 | 2790805 1835jackson
1835jackson's picture

Ha- so now the BLS is new FOMC!!! What a cunty joke!

Thu, 09/13/2012 - 13:51 | 2790807 drink or die
drink or die's picture

But but but, if we elect Mitt Romney, then everything will be better!!!!

Thu, 09/13/2012 - 14:27 | 2791078 Theosebes Goodfellow
Theosebes Goodfellow's picture

But but but, if we elect Mitt Romney, then everything will be better!!!! /sarc off

Fixed!

Fri, 09/14/2012 - 00:39 | 2793544 dubbleoj
dubbleoj's picture

But but but, if we reelect Barack Obama, then everything will be better!!!!

Is there an echo in here?

Thu, 09/13/2012 - 13:51 | 2790809 camaro68ss
camaro68ss's picture

going long BOB's, BOV's, and a BOL

Thu, 09/13/2012 - 14:55 | 2791310 Coldsun
Coldsun's picture

Don't forget bread, bullets, and band aids.

Thu, 09/13/2012 - 13:52 | 2790812 drivenZ
drivenZ's picture

sure there is...he can announce a restart of unsterilized treasury purchases. I would imagine that would come into play if we fall off the fiscal cliff in Q1 13'

Thu, 09/13/2012 - 14:09 | 2790958 Hedgetard55
Hedgetard55's picture

+55

Bingo. And the market will be demanding it starting next week.

Thu, 09/13/2012 - 13:52 | 2790814 101 years and c...
101 years and counting's picture

STOP PAYING YOUR MORTGAGE.  BEN IS BUYING IT.  FUCK HIM. WELCOME TO AMERIKKA.  LET SOMEONE ELSE WORRY ABOUT PAYING FOR YOU TO LIVE IN YOUR HOUSE!!!!

Thu, 09/13/2012 - 14:50 | 2791085 Zero Govt
Zero Govt's picture

perfect definition of the Feds role for the Parasite Club

the Fed credit card is all fired up again, Wall Street and Washington can go on a debt-spending binge compliments of the imprudent, un-disciplined fiscal anarchist, bubble Ben

Thu, 09/13/2012 - 13:52 | 2790816 GolfHatesMe
GolfHatesMe's picture

Hilsenrath futures are way down

Thu, 09/13/2012 - 14:04 | 2790920 Village Smithy
Village Smithy's picture

Nice one! After today he has certainly become redundant.

Thu, 09/13/2012 - 13:54 | 2790817 gojam
gojam's picture

He could still increases the monthly amount from $40 billion

There is the 'surprise' QE or more QE.

Thu, 09/13/2012 - 15:28 | 2791558 Gloomy
Gloomy's picture

This is 100% correct. Anyone who thinks he is out of bullets or can't surprise the market, you have another thing coming. When you own the printing press you are never out of bullets. Don't think he can shock the market? How about 100 billion per month? 200 billion? More?

Thu, 09/13/2012 - 18:32 | 2792405 agent default
agent default's picture

Moar! Because moar!

Thu, 09/13/2012 - 13:54 | 2790823 foodstampbarry
foodstampbarry's picture

Time to buy stock in wheelbarrow manufacturing. Everyone will soon need one to carry their near worthless currency to the store for a loaf of bread.

Thu, 09/13/2012 - 14:04 | 2790917 Dr. Engali
Dr. Engali's picture

Invest in thumb drives since they will just be adding extra zeros to digital money.

Thu, 09/13/2012 - 16:13 | 2791009 JuliaS
JuliaS's picture

Who's got a barrel of currency about to go worthless? I know I don't. Food stamps and welfare checks don't take up that much space either. Weimar Germans were staying warm by burning Deutchmarks. Americans won't have enough paper for a single ass wipe.

Thu, 09/13/2012 - 14:31 | 2791111 Theosebes Goodfellow
Theosebes Goodfellow's picture

I'm venturing that a Mercury dime will suffice to buy a loaf of bread and a gallon of milk.

Thu, 09/13/2012 - 13:56 | 2790829 ssp2s
ssp2s's picture

Oh, I think they still can get plenty of pop by teeing up whether they will double the monthly amounts.  And so on.

Fri, 09/14/2012 - 04:03 | 2793726 StychoKiller
StychoKiller's picture

We'll crawl out of that bomb crater when it's safe...

Thu, 09/13/2012 - 13:55 | 2790832 HD
HD's picture

How does the Fed benefit from soaring gold, crude and commodities? How does it benefit from a 3% 30 year? What did today accomplish for Ben?

Thu, 09/13/2012 - 13:58 | 2790851 camaro68ss
camaro68ss's picture

bailing out his banker buddys and buying time for there bunkers to be completed. Everyone knows this.

Thu, 09/13/2012 - 14:03 | 2790908 LMAOLORI
Thu, 09/13/2012 - 14:01 | 2790869 Meesohaawnee
Meesohaawnee's picture

bonuses run wild for his buddies. they are sitting in the room right now. laughing how once again they just stuck  a big dildo in joe six packs ass.

Thu, 09/13/2012 - 13:55 | 2790833 LeftCoastRefugee
LeftCoastRefugee's picture

So negative economic news won't be taken as a positive anymore?

Thu, 09/13/2012 - 13:55 | 2790834 Essential Nexus
Essential Nexus's picture

GOLD

Thu, 09/13/2012 - 14:01 | 2790873 pupton
pupton's picture

SILVER!

Thu, 09/13/2012 - 14:05 | 2790928 camaro68ss
camaro68ss's picture

AMMO!!

Thu, 09/13/2012 - 14:22 | 2791047 Schmuck Raker
Schmuck Raker's picture

EGRESS.

Thu, 09/13/2012 - 13:56 | 2790839 Manthong
Manthong's picture

Maybe he fired his last bullet.. but he will go down knowing he did it for the Messianic Choomer.

Thu, 09/13/2012 - 14:58 | 2791337 Henry Chinaski
Henry Chinaski's picture

The FED ran out of bullets a while back, now they have run out of lies.

Thu, 09/13/2012 - 15:54 | 2791709 Colonel Klink
Colonel Klink's picture

Of course you know what everyone wishes he would have done with his last bullet!

Thu, 09/13/2012 - 13:56 | 2790843 rosiescenario
rosiescenario's picture

Lets have a moment of silence for those poor fools who are short silver....

Fri, 09/14/2012 - 04:04 | 2793727 StychoKiller
StychoKiller's picture

Time's up!  Bwahahahaha, suckerz!

Thu, 09/13/2012 - 13:56 | 2790845 Temporalist
Temporalist's picture

Ben was trying to put up a good fight until...

http://www.youtube.com/watch?v=WKVkAsg9MFA

Thu, 09/13/2012 - 13:58 | 2790849 Winston Churchill
Winston Churchill's picture

Zimbabwe Ben.

Thu, 09/13/2012 - 13:58 | 2790850 ThunderingTurd
ThunderingTurd's picture

Next on the agenda:  rising input costs, compressing margins, rising food costs, more unemployment, and lower interest rates (manipulated of course)

Thu, 09/13/2012 - 14:06 | 2790930 LMAOLORI
LMAOLORI's picture

 

 

Mission being accomplished right now

PPI: Some Like It HOT!

Claims: Yuck

Thu, 09/13/2012 - 19:46 | 2792701 g speed
g speed's picture

T T + 100     ---in a nut shell--everything "business" is going to grind to a screeching halt-- 70% of the jobs will die on the vine-- skillls will be lost along with infrastructure of the small business network. 

Few people on this site (my opinion) have lived in a third world country during political economic turmoil--- I''m afraid its in the cards for the USA. --Get used to the smell of bodies in the ditches-keep your kids behind high cement walls with broken glass on the top, and send the "help" out for groceries with a body guard. If you can't afford that then be prepared to fight and maybe kill for what you need.  Just sayin-- 

Thu, 09/13/2012 - 13:58 | 2790855 docj
docj's picture

I'm certain to get a fair number of junks for this, but I think it's instructive to read the following and remember that, according to TPTB and The Deciders, this woman was far too stoooooopid to be Vice President...

President Obama is clearly revealing his rapid loss of any grip on the economic and security issues that are of utmost importance to our country. His economic and foreign policy blunders are manifesting chaos. On the same day when we see more chaos erupting in the Middle East and President Obama declaring that Egypt is no longer considered our ally, the Federal Reserve announced that it will spend $40 billion a month to purchase mortgage-backed securities with no end date set. QE3 is upon us.

In a speech nearly two years ago, I asked: “If [QE2] doesn’t work, what do we do then? Print even more money? What’s the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually – inevitably – no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort?”

As predicted, QE3 is upon us. Is it any wonder that the dollar is down against major currencies? This temporary, artificial economic “stimulus” bought at the expense of high inflation is no substitute for a stable currency and genuine long-term economic recovery. This is what happens when big government centralized planners try to “plan” our economy. President Obama is no doubt happy, though, that this latest sugar fix comes 53 days before the election. - Sarah Palin

Junk away... but please, in the process, share what precisely she has said here that's factually incorrect.

Thu, 09/13/2012 - 14:02 | 2790898 drink or die
drink or die's picture

I'm sure that the people who wrote that for her (just like any other politician) are proud of themselves.

Thu, 09/13/2012 - 14:03 | 2790902 Temporalist
Temporalist's picture

Did she read that off her palm?  She is a petty thief of political talking points.

Thu, 09/13/2012 - 14:04 | 2790919 redpill
redpill's picture

When even Sarah Palin gets it, you know it's really fucking obvious!

Thu, 09/13/2012 - 14:39 | 2791181 DosZap
DosZap's picture

When even Sarah Palin gets it, you know it's really fucking obvious!

Yes, as a dumb ass, who was a successful  Governor, kicked out the GOP's good old boy club, and started sending oil revenues to the Citizens, (she is so stupid),beat the estab, and the oil companies,and resigned in her second term, she of course is terminally stupid.

Quit showing your Dem roots.

She is a lot more savvy than anyone thinks.The MSM would not have,never have crucified anyone they do not believe to be a major THREAT.

And, there are multiple millions of sheeple out there that still do not get it, until they GET IT(Franked).

Thu, 09/13/2012 - 14:43 | 2791206 redpill
redpill's picture

My DEM roots?  GFY, and please get over this red team blue team shit.

 

Thu, 09/13/2012 - 15:06 | 2791395 Theosebes Goodfellow
Theosebes Goodfellow's picture

HAHAHAHAHA!!!! Stop it, RP, yer' killin' me.

~"...please get over this red team blue team shit."~

RP, you can't have it both ways. If you trash-talk about Palin, (or any other politico), and then get ruffled by someone calling you out on it, you run out of room to claim to be apolitical.

In answer to your seemingly rhetorical question, I would think that the Obama administration and the clowns at the Fed are too stupid to see the obvious. So instead of doing what needs to be done, (with the undoubtable pain associated with it), they follow their Keynesian instincts and kick the can one last time. All we are gauranteed is even more brutal pain later. Buckle up, the ride gets interesting now.

Thu, 09/13/2012 - 16:12 | 2791777 redpill
redpill's picture

Quite the opposite.  Anyone with the slightest shred of objectivity can clearly recognize Palin is not the sharpest tool in the shed, it has nothing to do with politics.  That red teamers get so easily butthurt about it is the indication of being a slave to the party duopoly.  The same thing happens with blue teamers when anyone points out that Joe Biden is a complete moron.

 

Thu, 09/13/2012 - 18:00 | 2792277 Temporalist
Temporalist's picture

I concur.  And I'm pretty sure you are an RP guy...exactly the person I believe she tried to emulate, pilfer and replace with her "grass roots" bullshit shoveled on people by Fux "not" news.

If she had any courage or political honor she would have endorsed Ron Paul.  That shows all the stripes I need to see.

Thu, 09/13/2012 - 14:56 | 2791326 donsluck
donsluck's picture

Palin is a self-serving opportunist. Her intelligence is irrelevent. Would you quit your Governorship post (elected by her constituents to DO HER JOB) just because you do not hold the post for life? She didn't want to be a lame duck, but all politicians end up as lame ducks eventually. She has no credibility or accountability.

http://www.youtube.com/watch?v=UlMKFUy6KBc

Thu, 09/13/2012 - 15:13 | 2791443 Theosebes Goodfellow
Theosebes Goodfellow's picture

So let me get this straight. She's a "self-serving opportunist" and you and everyone else are "dedicated altruists"? She left the office of governor when she realized that staying would just expose her to more partisan attacks from her opponents. The fact that the Lt. Gov. would not  was one factor, plus she could spare her family, (to some extent), the exposure to those whose sole purpose was to demonize and destroy her.

Yup, that's pretty "self-serving" in my book. /sarc off

Thu, 09/13/2012 - 14:06 | 2790934 Brazillionaire
Brazillionaire's picture

I have always told my liberal friends that all they say about her may or may not be true... and yet she would still make a much, much better president than what we have now. Go figure.

Thu, 09/13/2012 - 14:58 | 2791333 donsluck
donsluck's picture

She would quit as soon as the going got tough. She is a coward.

Thu, 09/13/2012 - 15:23 | 2791524 Theosebes Goodfellow
Theosebes Goodfellow's picture

And you sir, are an idiot. So you think that she should have stayed and taken whatever scheming the Alaskan democrats were cooking up so as to satisfy your sense of bravery? Really?!? Add to that that the MSM goes apoplectic at the very mention of her name and would do anything to destroy her? Tell me of all the times the MSM has gone and witch-hunted Pelosi, Reid, Feinstein or Biden? If you want to be pissed off and find cowards, ask the MSM were they were when they were supposed to be vetting Barack Obama, either in 2008 or even now. Has any correspondent of the corporate media shown one ounce of interest in the fact that Barack Obama's SS# is from a state he never lived in? Or that the stamp on his Selective Service Card is an obvious fake? What about his digitally manufactured "birth certificate"? Speak not to me of cowards when a woman the media hates decides it is in her family's best interest if she no longer serves as governor. Asshat.

Thu, 09/13/2012 - 15:46 | 2791620 delacroix
delacroix's picture

 docj : she  quit the governor gig, and the case against her for financial malfeasence went away. coincidence?   the fed was already doing 40billion+ per month under the cloak of ignorance.

Thu, 09/13/2012 - 16:35 | 2791948 docj
docj's picture

Uh, what does this have to do with anything, perchance?

Thu, 09/13/2012 - 13:59 | 2790858 U4 eee aaa
U4 eee aaa's picture

Today the Fed officially became a joke. The clown posse of economic policy

America, what happened to you?

Thu, 09/13/2012 - 14:04 | 2790906 Meesohaawnee
Meesohaawnee's picture

america is toast. to have this happen so close to election with crude where it is.. ben and obama just said   F&^k  you to the middle class.

Thu, 09/13/2012 - 14:19 | 2791029 SeattleBruce
SeattleBruce's picture

http://www.4-traders.com/WTI-SPOT-2355639/news/OIL-FUTURES-Crude-Up-afte...

Spot oil up almost as much as the stock casinos today.

Thu, 09/13/2012 - 14:21 | 2791043 LMAOLORI
LMAOLORI's picture

 

 

This will be the greatest depression evah

Is President Obama's Depression Coming Our Way?

Thu, 09/13/2012 - 17:00 | 2792057 Pbn2Au
Pbn2Au's picture

Fine print just to clarify...America (a concept) is still very much alive in her protagonists.  The problem is the United States (a manifestation) has been hijacked by the government sworn to serve, protect and defend her.

Thu, 09/13/2012 - 14:04 | 2790867 Belrev
Belrev's picture

Money is power.

The Central bank has now decided to give up its power by devaluing its money.

The banks sure want to get their loans paid back to them in worthless dollars and politicians want worthless bribes.

 

On a serious note, if the Fed has fired its last bullet in its attempts to offset deflation then it is now trapped.
Either assets begin to deflate and economy collapses,
or interest rates begin to rise/bond prices to fall and take down balance sheets with them - which is again deflation.

Thu, 09/13/2012 - 14:01 | 2790872 Brazillionaire
Brazillionaire's picture

That should pretty much wrap up the election. Mitt shoulda never messed with Ben.

Thu, 09/13/2012 - 14:12 | 2790985 hedgehog9999
hedgehog9999's picture

I am not a Mitt guy, nor Obummer for that matter, but if the ec onomy goes to hell in a hand basket when oil hits 120 maybe even 200 if Israel attacks Iran, then Obummer will be finished.... 

Thu, 09/13/2012 - 14:05 | 2790876 Hype Alert
Hype Alert's picture

As long as the FED is funding the government with rubber dollars, the spending is not going to stop, the hits to business from this administration isn't going to stop and the problems we have are going to continue so therefore the FED actions will continue in an endless loop.

 

The terrible NFP numbers didn't move the market at all, nor did the death of an ambassador move the market.  The only things moving the market is central banker speeches.  FUBAR

Thu, 09/13/2012 - 14:03 | 2790878 Yen Cross
Yen Cross's picture

 Homer & Iliad come to mind. Bernanke lives in another tangent/dimension.

Thu, 09/13/2012 - 14:02 | 2790885 Fecklesslackey
Fecklesslackey's picture

The American public is so, so too stupid to ever think there is any politics behind trying to keep unemployment low and to ever think that the FED should have a responsibility to be involved in unemployment in the first place

Thu, 09/13/2012 - 14:02 | 2790889 Savyindallas
Savyindallas's picture

The bald little maggot is destroying america to enrich his gangster friends. They think they have it under control because of the patriot Act, NDAA, 30,000 drones soon to be, Fema camps, and dumbass Americans  -well-dumbass Americans can get smart real quick  -when they are hungry and scared.

Game on   -who wins  -thee banksters who seek to enslave us  -or the American people?    -the patriots have to awaken the dumbass Americans before the Banksters put them away in Fema camps  - it's a race. Not sure who will win, but I'll place my bets on the American masses.

Thu, 09/13/2012 - 14:02 | 2790893 Belrev
Belrev's picture

Money is power.

The Central bank has now decided to give up its power by devaluing its money.

The banks sure want to get their loans paid back to them in worthless dollars and politicians want worthless bribes.

 

On a serious note, if the Fed has fired its last bullet in its attempts to offset deflation then it is now trapped.
Either assets begin to deflate and economy collapses,
or interest rates begin to rise/bond prices to fall and take down balance sheets with them - which is again deflation.

Thu, 09/13/2012 - 14:03 | 2790901 Clayton_Bigsby
Clayton_Bigsby's picture

Piss poor money shot.

Thu, 09/13/2012 - 14:03 | 2790903 HaroldWang
HaroldWang's picture

Wow - things must be horrific in the economy if this is their reaction. God help us!

Thu, 09/13/2012 - 15:06 | 2791393 Zero Govt
Zero Govt's picture

not "the economy"

banking and Govt

Thu, 09/13/2012 - 14:03 | 2790904 CosmicDebris
CosmicDebris's picture

Sort of like the beginning of the end of what has already been a long ending...is about to begin again.  Yeah whatever. Confused forever.

Thu, 09/13/2012 - 14:04 | 2790911 Catullus
Catullus's picture

Correct. There is no end to this.

Someone at the Fed is not going to be able justify stopping. The "but the world will end" logic will always apply.

QE2 was when this was confirmed. There was no reason for it then. There's no reason for it now. There will be no reason any time in the future.

From now on, they'll be planning a global currency and global central bank.

Thu, 09/13/2012 - 14:04 | 2790916 hedgehog9999
hedgehog9999's picture

What the fed has just done also is effectively provide a backdoor bailout for Fannie and Freddie and the Treasury as life for Fannie and Freddie gets to be really hard after 2012 based on the story below:

http://www.fas.org/sgp/crs/misc/RL34661.pdf

Fed loves their backdoor activities........fuckers of last resort....

Thu, 09/13/2012 - 14:11 | 2790972 sockratte
sockratte's picture

nevertheless prepare for hyperinflation...

Thu, 09/13/2012 - 14:13 | 2790984 sockratte
Thu, 09/13/2012 - 14:33 | 2791101 earleflorida
earleflorida's picture

*9999* __ thanks 4 the link ;)

regards

Thu, 09/13/2012 - 14:58 | 2791345 hedgehog9999
hedgehog9999's picture

Welcome!!!

Thu, 09/13/2012 - 15:46 | 2791616 ekm
ekm's picture

Lovely. Puzzle solved.

If the fresh money is going to F&F, how's this a QE?

Destination matters.

 

Thu, 09/13/2012 - 14:05 | 2790931 earleflorida
earleflorida's picture

Bravo!!!    Tyler :-))

Thu, 09/13/2012 - 14:06 | 2790935 KidHorn
KidHorn's picture

So, without the FED meetings, the S&P would have become negative at one point. That would have been the time to load up.

Thu, 09/13/2012 - 14:06 | 2790936 chet
chet's picture

I'm a crappy market timer, but today I'm getting a strange sell-the-news kinda vibe.

Thu, 09/13/2012 - 14:17 | 2791017 Brazillionaire
Brazillionaire's picture

I think you're right. I'm going all in. As soon as enough suckers are lured back into this death-trap "market", it's toast.

Thu, 09/13/2012 - 14:07 | 2790939 Shameful
Shameful's picture

Ah but can't their be expectations of "MOAR PRINTING!!!"?  Sure the current QEInfinity is baked into the cake, but it's a matter how fast we get to the end of the line.

Thu, 09/13/2012 - 14:10 | 2790945 ekm
ekm's picture

This is worse than not doing QE.

No schedule = Insecurity.

At least, without QE, everybody knew what was going to happen.

 

1) How does one plan having absolute insecurity?

2) How much MBS is in private hands? Meaning, let's it there's 400 billion in MBS it will take 10 months to buy up the market. So theoretically, how long would it take for the Fed to buy up all the market if it goes ahead at 40 billion for each month?

 

Hmm. It sounds to me like the last effort to lure suckers.

Very fishy.

Thu, 09/13/2012 - 14:13 | 2790989 Yen Cross
Yen Cross's picture

Excellent post EKM. Speaking of luring suckers! The robo/signing settlement debacle comes to mind. Refi your house and pay "ordinary" tax on the 100k writedown, and absolve the lender, via "new (non robo) title". 

Thu, 09/13/2012 - 14:37 | 2791143 ekm
ekm's picture

Yen

They will be buying crappy MBSs. Ok.

Question: From whom? Fannie and Freddie? Primary Dealers? It makes a huge difference since it defines where the fresh cash is going to.

 

They're just twisting USTs.

It looks like the Fed is increasingly becoming a bad bank buying crap MBS from Fannie or Primary Dealers. It's like bailing out Fannie and Freddie, but without a schedule.

And again, it was for Fannie and Freddie bonds that China and Russia got paid 100% in 2008.

Very fishy, very, very, very, very fishy.

Thu, 09/13/2012 - 15:01 | 2791364 Yen Cross
Yen Cross's picture

Excellent pointe' EKM! The Fed.  Think of a giant corporation. Where is your unit cost going to give you the most bang for the buck, in unreal numbers. The median price of 1m-300k is 500k(about).  The median cost of a bag of (iphones) is much less.

  I'm talking semantics here EKM. Overall you are absolutely correct! :-}

Thu, 09/13/2012 - 15:01 | 2791367 hedgehog9999
hedgehog9999's picture

This is a Fannie/Freddie bailout!!!

http://www.fas.org/sgp/crs/misc/RL34661.pdf

Thu, 09/13/2012 - 14:11 | 2790964 monopoly
monopoly's picture

Sell the news fine. But I would not sell miners. And this is what we need. We will never have resolution until they all print and print. I have said it before....Until the printing press is taken away from The Bernank, there will be no change. But at that point it all collapses and then maybe we can do what is needed to save this country for our children. But it will be a while.

How can a few men destroy so much. So sad.

Thu, 09/13/2012 - 14:10 | 2790966 Headbanger
Headbanger's picture

A day of infamy !

Thu, 09/13/2012 - 14:11 | 2790971 U4 eee aaa
U4 eee aaa's picture

Why? Why? Weimar!

Thu, 09/13/2012 - 14:24 | 2791063 Everybodys All ...
Everybodys All American's picture

How do spell Zimbabwe?

Thu, 09/13/2012 - 14:58 | 2791334 Brazillionaire
Brazillionaire's picture

Trick question!

How do you spell Zimbabweanesque?

Thu, 09/13/2012 - 15:31 | 2791579 U4 eee aaa
U4 eee aaa's picture

you spell it: USA

Thu, 09/13/2012 - 14:12 | 2790975 Village Smithy
Village Smithy's picture

Germany must be pissed, QE to infinity means Euro to 1/2 infinity. I foolishly thought that behind closed doors POTUS had made a deal with the Germans to work together and save each other. This tells me that the Fed has decided the only card they have is the "we are the cleanest dirty shirt" card.

Thu, 09/13/2012 - 14:14 | 2790991 sockratte
sockratte's picture

Draghi can start his OMT now. ;-)

Sat, 09/15/2012 - 15:01 | 2799007 Haager
Haager's picture

Draghi really must be pissed for not playing in the same league as Ben. Today there's ni-ne again in germany, with Schäuble totally neglecting everything of the latest events in Germany (ESM, OMT).

Thu, 09/13/2012 - 14:15 | 2790996 U4 eee aaa
U4 eee aaa's picture

I guess the next step is Q squared....then Q cubed. Then, of course, four Q

Thu, 09/13/2012 - 14:16 | 2791008 tradertim
tradertim's picture

The only thing we need now to complete the trifecta, is an open-ended debt ceiling,

then we will have removed all surprises from the stock market in perpetuity.

 

Thu, 09/13/2012 - 14:17 | 2791013 1000yrdstare
1000yrdstare's picture

time to stock up on more Lentils...

Thu, 09/13/2012 - 14:23 | 2791053 Everybodys All ...
Everybodys All American's picture

Very much in agreement. Bernanke jawboning is over.

Thu, 09/13/2012 - 14:24 | 2791064 mholzman
mholzman's picture

divide by zero

Thu, 09/13/2012 - 14:28 | 2791087 mammoth mo
mammoth mo's picture

There is plenty to annouce after this.

QE the 13th

QE Rocky X

QE Halloween 17

QE Jaws 9

 

Thu, 09/13/2012 - 14:31 | 2791110 mammoth mo
mammoth mo's picture

As a Bear I felt this was obvious.  They had pretty much said it a couple of weeks ago.

I got out of my short positions and went long.

Oh I would love to see the Banks get what they deserve - but I still have to feed the kids too.

I will wait for the coming collapse.  But if you look at Japan it could be a while.

Stagflation until stagflation will not work anymore.

Thu, 09/13/2012 - 14:39 | 2791185 Big Swinging Richard
Big Swinging Richard's picture

Tonight, when I drive home, I'm going to look in the faces of my three young children and ask for foregiveness.  Forget mortgaging the future, we've officially ended any chance of stepping back from the abyss. Thanks Ben!

Thu, 09/13/2012 - 14:40 | 2791195 Vince Clortho
Vince Clortho's picture

So we enter the next stage of the madness.

Flood the planet with worthless FRN's.

The response from China should be interesting.

Thu, 09/13/2012 - 14:45 | 2791229 dexter_morgan
dexter_morgan's picture

D'oh

Thu, 09/13/2012 - 15:02 | 2791368 falak pema
falak pema's picture

only ONE problem?

Thu, 09/13/2012 - 15:05 | 2791378 CcalSD
CcalSD's picture

http://i.ytimg.com/vi/OCWa0Jv9o50/0.jpg

QE TO INFINITY AND BEYOOOOOOOND

Thu, 09/13/2012 - 15:06 | 2791396 ColoradoNugget
ColoradoNugget's picture

While it's true that the suspense has been taken out of all future Fed announcements as to whether they will be easing through asset purchases (until they don't), the Fed did leave open the possibility that they will make "additional asset purchases" if labor markets don't cooperate.  This means, I suppose, that $40 billion of MBS per month could become $50 billion.  Or $60 billion, etc.  And that other asset purchases could ensue, including corporates (Benny did mention corporates in his presser). 

So, while Benny is "all-in" today with open-ended QE, he could always go to the casino cashier (who works for him) and increase the size of his bankroll to do more.....and more.....and more of other stuff we haven't imagined yet.  He did say he has a "wide variety of tools" at his disposal still.  Lots of options.  Until that printing press in the form of a casino cashier is taken away, he is right.  Meanwhile, Benny keeps up his craps game by adding more and more chips on the table while others are betting on the numbers working.  And working, they will.  Until the "7 out" is rolled.  Or maybe I should just stick to the poker analogy!

Thu, 09/13/2012 - 15:10 | 2791420 Totentänzerlied
Totentänzerlied's picture

I'm gonna go ahead and say that this is not The Big One.

Yes, I read the "open-ended" part. In my opinion, there will always be another avenue for the Fed, and then the Treasury, and then the Federal government, to pursue to prop thing up until this country is literally hell on earth - because there won't be any revolultion in the foreseeable future. So the Fed and/or Treasury will be granted permission to buy literally anything it wants - it's all funny money - inflation will occur, undoubtedly, but this has happned countless times and it can go on for many years with or without civil unrest and market disruption, certainly very far beyond what most expect.

They will never simply capitulate and walk away to leave the market/country to its own devices, never. Cartels will be created, then monopolies, then nationalization of all major industries - we are already seeing plenty of this, but it can go much, much further.

Perhaps The Big One will never be announced as such, in which case I concede the point that this was the announcement. However, in terms of desperate policy actions on the part of the US government, we have not seen the anything 

Most of us are, I believe, waiting for a 9/11 or Black Friday type event, a black or grey swan, a discrete event lasting no more than a day which signals to all that prior predictions and plans must re-evaluated because "everything has changed" in some vague but naggingly persisntent way. Don't wait for another such event, history is not long stretches of nothing interrupted by discrete major events, though our cognitive biases and prevailing modes of historicity make it appear this way. Those who waited and waited in the days before crises past were also waiting for some unmistakable sign to spur them to action, such a sign never materialized and they suffered immensely.

Thu, 09/13/2012 - 15:27 | 2791550 holdbuysell
holdbuysell's picture

Did anyone notice Bernanke's voice today at the speech and Q&A? He seemed to be speaking more energetically and faster than he typically does at these events.

Thu, 09/13/2012 - 15:29 | 2791570 Theosebes Goodfellow
Theosebes Goodfellow's picture

It reminds me of Hemmingway's quote on how he went bankrupt.

~"How did you go bankrupt?"

   "Two ways, gradually and then suddenly."~

Thu, 09/13/2012 - 15:44 | 2791655 Binko
Binko's picture

QE accomplishes precisely one thing. It shifts wealth from the great majority of us who don't really matter to those few who do. We get zero rate of return on savings, declining real wages and the steady drumbeat of debilitating inflation. And they get increased corporate profits, massive paper stock market gains and the ability to keep the whole big ponzi rolling along for awhile longer. 

The only trick is to tailor the propaganda so the great idiot herd goes along with the show rather than rioting as they so rightly should. 

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