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The Scary Math Behind The Mechanics Of QE3, And Why Bernanke's Hands May Be Tied

Tyler Durden's picture




 

When it comes to the NEW QE, everyone has an opinion, and most seem to believe that the NEW QE will come next week, now that the US economy added "just" 96,000 people (but, but, the unemployment rate 'fell'). Certainly, and far more importantly, if the most recent FOMC minutes are any guide, the Fed shares this view. Sadly, as so often happens, most, and this includes the FOMC's various voting members, have once again made up their minds without actually evaluating the limitations posed by simple math. After all it is far easier to form an opinion, and actually think about the underlying facts later. The math, for those who actually have looked at the numbers behind the scenes, is scary (in UBS' words, not ours).

Here is the math.

As part of its Operation Twist, the Fed is buying long-term bonds, and selling short-term (0-3 years) bonds. As we reported in April, the biggest limitation for the Fed is that it is rapidly running out of short-term bonds to sell. There is a fix to this: the Fed will simply have to sell longer dated bonds from its SOMA portfolio, first up to 5 years, then 7, and so on. Of course, this will also force the Fed to extend its ZIRP language by an appropriate amount of time, through 2017, then 2019, and so on (which also means all bets that the Fed will hike any time in the next 5 years will be immediately null and void, and one can position accordingly in the Eurodollar space).

This move, however, will simply permit the Fed to extend Twist 2 beyond its year-end maturity. As a reminder, the primary role of Twist, aside from that stated one which is to keep the curve as flat as possible (i.e., boost housing which as we showed yesterday is not working, as refis have plunged recently despite record low mortgage rates), is to absorb virtually all the long-end supply: after all, it is all about the funding of the US $1 trillion+ annual budget deficit.

Said otherwise, when it comes to the 10-30 year sector the Fed is already monetizing all new issuance. This is part of the entire flow argument which we have been discussing for the past 6 months, and why we, correctly, say that Operation Twist is really QE 3 and QE 3.5 (for the recent extension of Twist). So far so good.

Here comes the important part.

Three weeks ago we presented a video courtesy of Stone McCarthy which showed a timelapse of the "takeover" of the Fed as the primary holder of public debt. For those short on time, here is how the Fed's holdings portfolio looked like then...

and now:

The shaded region is important for two reasons: this is where the Fed will be buying new bonds as part of any new QE Large Scale Asset Purchase program, and it tells us all there is to know about how big and how effective QE3 (really 4) will be. The bottom line, as calculated by UBS' Michael Schumacher and confirmed by anyone with access to the detail behind the Fed's SOMA holdings, which incidentally just hit a record 116 months two months ahead of Twist 2 schedule, is that "the Fed owns all but $650 billion of 10-30 year nominal Treasuries." Also as pointed out above, Twist 2, aka QE 3.5 is already absorbing all of the long end supply. And herein lies the rub. To quote UBS: "Taking out, say, $300 billion in long-end Treasuries almost certainly would put tremendous pressure on liquidity in that market....Ploughing ahead with a large, fixed size QE program could cause liquidity to tank."

In other words, anyone expecting a full blown LSAP focusing only on US Treasurys will very likely be disappointed as the Fed will certainly realize, quite soon we hope, that it has only $650 billion in total 10 year + bonds available in the entire private market!

Well, perhaps the Fed will just monetize MBS, as Bill Gross has been betting on for nearly a year now. It could do that... but when once factors in "math", the results are once again quite startling. Quote UBS again:

The alternative of tilting purchases toward MBS implies that the QE program would need to be quite protracted. Monthly supply of conventional 15yr, 30yr and 30yr GNMA has averaged about $85-90 billion over the past year and the Fed is already buying about $25 billion. The Fed might be able to buy another $40 billion without disrupting the market. Assuming that the Fed does a $600 billion program with 75% in MBS, it would need to buy $450 billion in mortgages, so in our estimation the program would need to last nearly a year. 

UBS conclusion is self-evident:

We doubt the market would respond well to that prescription from Dr. Bernanke.

Bottom line, if and when someone does the actual math on what the Fed can do, the results are quite disturbing, as they indicate Ben's hands are very much tied, and the Chairman no longer can conduct the type of bazooka event that most have expected. It certainly means that the Fed can not engage in anything remotely resembling the $1 trillion LSAP in QE3 (sic) that has been whispered.

Most importantly, all of the above actually confirms our biggest worry: the Chairman is well aware of the math behind this analysis, and is the reason why month after month he has been forced to pull a 'Girl with the Draghi Tatto' and jawbone the market into submission, hoping nobody else does the math on what Bernanke's real options are, because once the details are out there, and everyone can do the math on their own, only disappointment can follow.

As it turns out, Adam Yogi Berra Smith Dzhugashvili was right: there indeed is no such thing as a free lunch, especially not under central planning.

 

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Fri, 09/07/2012 - 13:03 | 2772199 jcia
jcia's picture

print more BITCHEZZ

Fri, 09/07/2012 - 13:14 | 2772226 SeverinSlade
SeverinSlade's picture

The majority of the market has been expecting the new QE for a while now...With the S&P at its 2012 highs, food and gas inflation surging, and the UI rate dropping (manipulated BS, but it dropped nonetheless) I fail to see how Bernanke will deliver this upcoming week...especially when you consider that once QE is annouced, the market will rally briefly and then plunge, as well over 100% of the new QE is already priced in (as pointed out by ZH numerous times).

PLUS, launching it now would make the Fed appear to be a politically motivated agency (something that a former Fed governor pointed out last week).

Fri, 09/07/2012 - 13:17 | 2772262 Comay Mierda
Comay Mierda's picture

Silly Tyler

Math is for Terrorists

Fri, 09/07/2012 - 13:46 | 2772412 Manthong
Manthong's picture

Simple math works when the real assets, liabilities, revenue and expenditures are revealed, honest and accurate.

So how much of our current Ponzi.. er, economy is revealed, honest and accurate?

Fri, 09/07/2012 - 13:56 | 2772462 Aziz
Aziz's picture

70% of outstanding is not an absolute limit. It makes sense, though, that Bernanke keeps asking for help from the fiscal side.... because it gives him a larger pool of treasury debt to buy.

Anyway, isn't QE3 supposed to be MBS more than Treasury securities?

Fri, 09/07/2012 - 14:07 | 2772507 Dr. Richard Head
Dr. Richard Head's picture

Isn't QE3 indirectly buying MBS's being that Fannie/Fannie have the implicit guarantee of the Treasury?  Everyone loves a good circle jerk.

Fri, 09/07/2012 - 15:04 | 2772724 nope-1004
nope-1004's picture

So bond buying is limited.  Huh, who knew?  <sarc>.  Next up - pension theft, IRA confiscation, broker theft, on and on.

Already here, actually.

So long, MS.

 

Fri, 09/07/2012 - 15:11 | 2772764 philosophers bone
philosophers bone's picture

Include War on your list of what's next up.  Canada apparently got the "heads up". 

From National Post:

"Canada severed all diplomatic ties with Iran on Friday, citing a long list of grievances including Tehran’s military assistant to the Syrian regime, rogue nuclear program and threats against Israel.  Foreign Affairs Minister John Baird said in a statement that Canada had closed its embassy in Tehran and that all remaining Iranian diplomatic personnel in Canada had been declared personae non gratae.

Fri, 09/07/2012 - 15:59 | 2772974 economics9698
economics9698's picture

Bernanke can have Geithner print and then buy the print.  All we need is a credit ceiling extension to $20 trillion this time.  Skip the $18 trillion and go for the 120% GDP/Debt gold ring so coveted by Italy, Spain, and Greece.

 

Fri, 09/07/2012 - 20:11 | 2773576 clymer
clymer's picture

I keep hoping that I am going to wake up from this bad fucking dream and learn that a myriad of patents for zero-point, charge-cluster, cold-fusion new technologies have been released into the wild, rule of constitutional law is restored with a complete reset of the tax code, federal govt. is decidedly shrunken to a government-fear-the-public-again, manageable level and freedom once again reigns to restore the promise of the human experiment to explore the stars and pursue honest endeavor and pursuit of happiness.

But until then I just keep living this groundhog-day existence where inbred-control-freak-globalist-can't-cunt, pencil-dicked pukes maintain a stranglehold on anything that resembles freedom and possibility. fuckers

Fri, 09/07/2012 - 23:23 | 2773881 Michael
Michael's picture

After crowd sourcing my idea on ZH, this is what I got so far;

 

Got Guns & Ammo? Good!

I just made this up last night. It's like that Got Popcorn?, Got Milk?(meme)

People should make bumper stickers out of this saying.

People should make T-Shirts with "Got Guns & Ammo?" on the back and "Good!" on the front, or vise versa. I'm making some to sell at the gun show.

There's no time left to be discreet. My idea is similar to the V for Vendetta mask, only you don't need to hide behind a mask in America.

This is my response to the 1.4 billion hollow point bullet purchase by the federal government to be used domestically.

If someone asks if you own a gun while wearing the T-Shirt and you don't know them, just tell them, that's none of your business, or to be pleasant, I don't give out that kind of personal information.

What if people walked around the airports and everywhere gathering in large groups with my t-shirts in an act of civil disobedience that is not, if you have the balls to do it?

It's expressing your 1st amendment right.

It's only four words.

Fri, 09/07/2012 - 23:47 | 2773888 Michael
Michael's picture

I'm giving it away for free.

You make thousands on it by printing hundreds of them and selling them before the market gets saturated.

Or before the Chinese do.

Sat, 09/08/2012 - 00:12 | 2773931 Michael
Michael's picture

The first person wearing this T-Shirt who goes through the invasive TSA pat down line at the airport, and gets it uploaded on Youtube first, is the winner.

Sat, 09/08/2012 - 02:26 | 2774013 Michael
Michael's picture

Jon Stewart, whom I think is on our side, and Stephan Cobert, whom I'm not sure about, has absolutely nailed the synopses of the RNC/DNC Conventions and the entire charade of disgusting display of acting presidential combat supremacy to a tee.

Those two are a sad but true display of the nation we have become brilliantly, in their owm magnificent performances. Divide and Conker brilliance, and we've all been had.

Shakes head for what is left of out country.

I wouldn't be surprised if the two of  them collaborated on each others shows.

I would love to have seen what a Ron Paul acceptance winner RNC convention would have looked like. Someting completely different from the same old shit.

Thank the creator Baby Go Go had better ratings.

Sat, 09/08/2012 - 03:20 | 2774091 Michael
Michael's picture

Comedy ChannelHD is really good tonight.

Sat, 09/08/2012 - 03:55 | 2774107 Michael
Michael's picture

Go sell your 9/11 Federal Government/MSM Pity Party some place else.

We're all stocked up here with the 5,000 homeless children streched across the 5 mile roadway of RT149 on route to Disney World, living in motel rooms, here in Florida.

Multiply that by the entire stretch of the USA.

Shove 9/11 up your fucking asses assholes.

 

Fri, 09/07/2012 - 23:34 | 2773885 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Is Chris Hedges president when you wake up?

Sat, 09/08/2012 - 02:47 | 2774047 e_goldstein
e_goldstein's picture

Did you catch this?

http://planet.infowars.com/video/alex-jones-show-wednesday-9-5-12-chris-...

I have absolutely no respect for Alex Jones. I have every respect for Chris Hedges. When the two agree on what is going on.... I'm pretty fucking sure that we have slipped over the edge into bizarro world.

jump to 1:12:00 to get to the interview and skip Alex's preaching.

Fri, 09/07/2012 - 22:52 | 2772528 Manthong
Manthong's picture

“Anyway, isn't QE3 supposed to be MBS more than Treasury securities?

Sure, but the nature, methods and nomenclature morph to suit their need to maintain the illusion.

This is "no holds barred" in a match where things to grasp dissolve with every new reach.

 hmm..  maybe I should write that down somewhere.

Fri, 09/07/2012 - 14:20 | 2772551 AldousHuxley
AldousHuxley's picture

problem is

 

GOLD = SPY = BIG OIL since 2009

 

 

No REAL wealth growth, but sheeple think they doubled their stocks and are now spending on shit.

 

 

 

 

Fri, 09/07/2012 - 19:48 | 2773539 TwoShortPlanks
TwoShortPlanks's picture

On a different note, a letter I just received

************************
THINK OR SWIM / TDAMERITRADE
************************

After assessing global requirements for conducting international business, TD Ameritrade regrets to inform you that we have decided that we will no longer open or maintain accounts for residents of certain international jurisdictions.

Effective 3 December, 2012 we will no longer be providing brokerage services to residents of Australia.

http://www.youtube.com/watch?v=SpilnOCUbP8

Fri, 09/07/2012 - 21:03 | 2773679 Dr Benway
Dr Benway's picture

Is this just generic demise of stockbroker due to stagnant trade volume, or is there some other background?

Fri, 09/07/2012 - 18:45 | 2773395 Griffin
Griffin's picture

There are 2 graphs on the picture below, the first shows a 20th century business plan under the influence of common sense and the second one shows a 21st century business plan under the influence of postmodernised risk management.

http://www.visir.is/halldor-07.09.2012/article/2012120909267

Simple things are made extremely complicated because of all the scams that are running and the tools that have to be made to make them possible.

This escalades to the point where the central planners no longer understand what they are doing or have any control or oversight.  When that happens they stall, until the time is right for a crash.

When that happens, Firewalls will be built and assets ringfenced to defend the trillions in various taxhavens.


Sat, 09/08/2012 - 06:09 | 2774158 samcontrol
samcontrol's picture

Cool, i feel better now.

Fri, 09/07/2012 - 14:19 | 2772516 LMAOLORI
LMAOLORI's picture

 

 

I found it hilarious the thought of Banana Ben having his hands tied just think how much interest they will rake in by adding all that debt when the market's (hahaha that's a good one) force their hands.  That's the claim isn't it after all that eventually the bond holder's will force interest rates to rise on the debt.  Get it?

 U.S. money-market rates are negligible anyway

Fri, 09/07/2012 - 18:35 | 2773372 Quinvarius
Quinvarius's picture

GE alone has 1/2 trillion in debt on their book.  Bernanke will find something to buy.  This all ends with the Fed giving all the banks and cronies a debt jubilee anyway.  Not you.  Just the banks and cronies.

Fri, 09/07/2012 - 19:49 | 2773544 spinone
spinone's picture

Giving them one?!?  If i could use dirty socks as collateral with the Fed too it would be the same as a jubilee!  They already got one!  They used it to pay bonuses!

Fri, 09/07/2012 - 21:00 | 2773674 Dr Benway
Dr Benway's picture

LOL, who would have thunk? If you become the only buyer, you affect the price. Then you can't get out without collapsing the price, and eventually you have to buy just to support it.

 

http://s1144.photobucket.com/albums/o489/_DrBenway/

Sat, 09/08/2012 - 05:45 | 2774146 Popo
Popo's picture

This is why the Fed won't be buying traditional paper.  We'll see a serious focus on equities and junk bonds next.   Of course, the problem will only compound as the Fed will find themselves 'stuck' in new asset classes with no ability to exit positions without collapsing markets.

The Fed can buy whatever they want.  Bernanke's initial "helicopter" thesis still stands.  The only thing that will stop Bernanke is oil.   (Not food).  America is capable of food self-sustenance, but America is still the biggest oil importer in the world.  It's the thorn in his side and it's eventually going to be the raging bull-cock tearing up his rear end.

 

 

Sat, 09/08/2012 - 08:55 | 2774276 BigJim
BigJim's picture

As long as OPEC's leaders keep accepting USD, the US will be fine.

And as long as THEY keep accepting USD, they'll be fine, with the US doing everything in its consideable power to keep their reign intact.

Fri, 09/07/2012 - 14:16 | 2772537 Terrorist
Terrorist's picture

Comay

There are plenty of European bonds left to buy.

Fri, 09/07/2012 - 21:57 | 2773756 Squid Vicious
Squid Vicious's picture

That is f'in brilliant ... the Shalom should announce a merger of the Fed and ECB, call it Bank of the NWO... no wait,maybe something more palatable...and then he can buy whatever PIIGS paper he wants... and of course some domestic MBS just to keep it kosher...

Fri, 09/07/2012 - 23:38 | 2773890 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Merger?  Brilliant...

I doubt the shepple would even utter a bahhh, bahhhh...

Fri, 09/07/2012 - 14:56 | 2772701 101 years and c...
101 years and counting's picture

we just need to step up issuance of 10-30 yr bonds.  Maybe O can get a $2 trillion stimulus thru and the fed can monetize all that.  Problem solved.

Fri, 09/07/2012 - 16:17 | 2773023 Dr. No
Dr. No's picture

Cant. Debt celing.

Fri, 09/07/2012 - 16:44 | 2773104 BooMushroom
BooMushroom's picture

Just have them take a voice vote. It worked out great at the DNC.

"As president, I hearby affirm that the 2/3 vote required has been met. The new debt ceiling is hearby 10x10^100, and the constitution and bill of rights have been suspended. A new era of peace and prosperity has begun!"

Fri, 09/07/2012 - 18:44 | 2773397 Dr. No
Dr. No's picture

I cant figure out which I like better, thr DNC method of revoting until you get the results you want or the RNC method of makinng the decision, then have a vote just to try to add legitimacy to the decision.

Sat, 09/08/2012 - 08:57 | 2774280 agNau
agNau's picture

The Japan model.

Fri, 09/07/2012 - 23:41 | 2773892 MiltonFriedmans...
MiltonFriedmansNightmare's picture

2 trillion stimulus?  Krugman just came at the thought.

Fri, 09/07/2012 - 15:46 | 2772917 midtowng
midtowng's picture

Those are amazing charts. Tyler should add in the chart showing the hundreds of billions of dollars worth of MBS the Fed already owns.

Sat, 09/08/2012 - 06:53 | 2774175 NewWorldOrange
NewWorldOrange's picture

"But Tyler's math doesn't count. Only our maths do. And our maths are based on simple math: i^2 = -1"

   -- Central Banker

Fri, 09/07/2012 - 17:38 | 2773227 HarryM
HarryM's picture

The even bigger question

 

When will it be safe to short again?

Sat, 09/08/2012 - 00:59 | 2773972 lewy14
lewy14's picture

Never. Next question?

Sat, 09/08/2012 - 01:46 | 2773410 vast-dom
vast-dom's picture

math huh? in other news 

Minnesota bank is year's 41st U.S. bank failure

http://www.marketwatch.com/story/minnesota-bank-is-years-41st-us-bank-fa...

 

hey Ty lets get a nice infographic of this year's vs. last 6 years bank busts? i guess TBTF requires a kind of collusive oligopoly and that's precisely what they're getting!

 

here is some more math (links show charts!):

http://www.propublica.org/article/the-bailout-by-the-actual-numbers

 

and a little more math -- scary:

http://www.businessinsider.com/prepare-for-the-coming-housing-collapse-2...

Fri, 09/07/2012 - 21:03 | 2773663 Atomizer
Atomizer's picture

Math is for Terrorists


LOL. The carpet munching squad has us scheduled to attend math thoughtcrime rehabilitation classes. Just think about the revenue stream cash cow. In Detroit.. you can now pay to put out fires.

Tourists paying to help fight Detroit's fires: Is this idea for real?

/sarc

 

 

 

Fri, 09/07/2012 - 13:22 | 2772287 Hype Alert
Hype Alert's picture

It's the anticipation more than the delivery.  I forget how many times the market has rallied on the same anticipation, but it can't be endless.  The game is about over.

 

It's like the ponzi that worked until there were no players left to get in.  It's just amazing that so many talk like it can continue.

Fri, 09/07/2012 - 13:27 | 2772318 SeverinSlade
SeverinSlade's picture

Precisely.  And Bernanke is well aware of this (as are all CB heads).  Hence why we get non-stop jawboning.

I still believe that formally announcing QE3 will signal the end of the dollar.  Won't happen overnight obviously, but the clock is ticking.  China isn't going to wait around until QE4, QE5, etc. to dump the USD and announce their ACTUAL gold holdings. 

Fri, 09/07/2012 - 14:14 | 2772530 iDealMeat
iDealMeat's picture

Not so sure about that..  China probably figures they'll never get paid back..  So they BTFD on gold and silver with both hands. 

Then they'll encourage QE N+1.

 

 

Fri, 09/07/2012 - 14:19 | 2772548 trebuchet
trebuchet's picture

Yep  - BOJ  are very pleased for a GROWING foreign Reserve despite their dirty floating currency.... 

 

... THEY STACKED ON GOLD!!  

 

China maybe looking to do the same thing - they are now in a position to let their Yuan appreciate a bit  cos their foreign reserve position is protected with their recent gold binge) ... opens up some monetary policy options a BIT

 

Sat, 09/08/2012 - 05:38 | 2774142 Mary Wilbur
Mary Wilbur's picture

Putin is also buying gold with both hands.

Fri, 09/07/2012 - 14:34 | 2772597 LMAOLORI
LMAOLORI's picture

 

 

You forget ultimately the plan is for a new world currency.  The U.S. may do nothing to Iran but Iran is in really bad shape economically and sometimes leaders have been known to use their citizens as cannon fodder to stop the problems at home.

Iran on the verge of severe financial crisis: intelligence report

Market Sees 'Helicopter Ben' Coming to the Rescue

Guess Which President Has Been Best for Stocks?

Fri, 09/07/2012 - 17:40 | 2773233 HarryM
HarryM's picture

Problem is this site has been saying The Game is amlost Over  , now for 3 years

Reminds me of the boy who cried wolf

 

Fri, 09/07/2012 - 18:09 | 2773307 tmosley
tmosley's picture

A doctor tells a man with a bullet wound he has ten hours to live.  The man slips into a coma, and lives for 10 days.

Clearly the doctor was an idiot crying wolf.

Fri, 09/07/2012 - 22:27 | 2773818 Jungle Jim
Jungle Jim's picture

Suppose the comatose gunshot victim had no medical insurance, and the hospital bill was, say, $3,500 per day. Do you see how that additional ten days might make a difference to whichever private party was responsible for paying the guy's bills?

Sat, 09/08/2012 - 02:15 | 2774021 Mr. Fix
Mr. Fix's picture

@tmosley:

Very good!

Fri, 09/07/2012 - 18:52 | 2773421 Law97
Law97's picture

And don't forget that right after the people stop believing the boy, the wolf shows up for real.

Fri, 09/07/2012 - 22:22 | 2773803 Jungle Jim
Jungle Jim's picture

Well, bring on the wolf already, sez I. I'm worn out with all this waiting and anticipating. Hmm, it seems like there was some Carly Simon song about forty years ago ...

Sat, 09/08/2012 - 16:08 | 2775067 DeficitAlchemist
DeficitAlchemist's picture

For such contempt - It seems you like to spend a lot of time around crying little boys?

Fri, 09/07/2012 - 13:30 | 2772331 bdc63
bdc63's picture

I agree.  Next week we get more jawboning - but it will sound like they are really, really, REALLY seriously considering it, and the wind-up toys on the street will buy every word of it.

No way Bernanke can blow his wad with the stock market at 12 year highs.  No Freakin Way.

Fri, 09/07/2012 - 13:34 | 2772354 SeverinSlade
SeverinSlade's picture

Wouldn't it be spectacular if we get no QE3 and at the same time the German high court rules the ESM unconstitutional?  Overwhelming majority say this scenario is extremely unlikely...I don't know.  I'm sure the high court is well aware of the growing push for legal action against the ECB...Maybe for once laws will actually be enforced properly.  Hey, we can all dream, right?

Fri, 09/07/2012 - 14:22 | 2772553 trebuchet
trebuchet's picture

if ESM is unconstitutional requires a change ot GERMAN constitutiion  Not EU

 

German constitutional court is a setback not a deal breaker

 

.. is it? someone with know whatsits enlighten please

Fri, 09/07/2012 - 15:44 | 2772902 _ConanTheLibert...
_ConanTheLibertarian_'s picture

http://www.zerohedge.com/news/dont-count-your-hahnchen-40-chance-german-court-does-not-ratify-esm

ESM, which contrary to the fiscal compact cannot start without Germany’s participation.

Sat, 09/08/2012 - 18:18 | 2775214 trebuchet
trebuchet's picture

Thx... thats pretty scary reading

Fri, 09/07/2012 - 18:18 | 2773333 xear
xear's picture

He may announce something like Draghi ... following through is a different story.

Sat, 09/08/2012 - 00:09 | 2773930 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Spectacular, although I place the odds at roughly 1 trillion to one.

Sat, 09/08/2012 - 00:48 | 2773960 palmereldritch
palmereldritch's picture

  Wouldn't it be spectacular if we get no QE3 and at the same time the German high court rules the ESM unconstitutional? 

And that decision by the German high court is due on September 12, the day after the 11th anniversary of a certain event.

 

Let's hope we get to hear that decision and allow the rule of law to prevail....

Fri, 09/07/2012 - 14:17 | 2772540 wagthetails
wagthetails's picture

But you forget....no one fucks Ben, Ben does the fucking.

My apologies for ripping off that 20th century poet, Andrew dice clay.

Fri, 09/07/2012 - 15:37 | 2772881 philosophers bone
philosophers bone's picture

Is it possible that Ben has actually fucked himself?  Calling Clint Eastwood!!

Fri, 09/07/2012 - 14:18 | 2772543 Stock Tips Inve...
Stock Tips Investment's picture

Obviously, there is no free lunch. Monetary authorities in U.S., Europe and Japan are trying to get a free lunch, or pay as little as possible. But I believe this puden get, asking more menu items and ask for the bill postponing. I think it's a very risky bet, especially if they do not face the real causes of the crisis. The world can not continue living and growing imbalances. The landing can be very painful. However, this can be better than a free fall. As a trader, what interests me is that the markets are kept as free as possible conditions. That way, if the markets go up, we can make money. And if the markets go down, we can also make money. Finally, we are not the cause of the crisis and it is our obligation to try not to be victims.

Fri, 09/07/2012 - 15:26 | 2772828 Silver Bug
Silver Bug's picture

QE to infinity is coming no matter what, They have no choice.

 

http://silverliberationarmy.blogspot.ca/

Fri, 09/07/2012 - 19:24 | 2773481 cranky-old-geezer
cranky-old-geezer's picture

 

 

Yes, and along with it comes currency debasement and eventual destruction.

The only question Bennie has to ponder is how fast he wants to destroy the currency and put everybody in poverty.

Problem is, he doesn't know where the tipping point is.  That point where the rest of the world says "enough" and dumps the dollar en masse.

One thing for sure, when it happens it'll happen fast, like overnight.  No time to front-run it.

Sat, 09/08/2012 - 01:11 | 2773992 Squid Vicious
Squid Vicious's picture

plunge? hmm... plunge...can I have the pronunciation and derivation of the word please...

Fri, 09/07/2012 - 13:10 | 2772232 BKbroiler
BKbroiler's picture

I wish they would print more bitches.  We could have bitch inflation, hoes everywhere, nobody would ever go to bed horny again.  No one would care about money.

Fri, 09/07/2012 - 13:35 | 2772361 DCFusor
DCFusor's picture

You don't know any bitches, do you.  They're all about money.

Fri, 09/07/2012 - 13:46 | 2772413 BKbroiler
BKbroiler's picture

Yes, but with every bitch printed, each bitch would be worth less than the previous bitch.  This glut of bitches would leave the market flooded and these bitches would just be happy to find a guy, nevermind a guy with money.  I think overall it's a better solution than Bernanke is offering.

Fri, 09/07/2012 - 13:58 | 2772474 ParkAveFlasher
ParkAveFlasher's picture

The math is, how much gold on your pimp hand nets how many bitchez?

Fri, 09/07/2012 - 14:32 | 2772592 cifo
cifo's picture

Q: What's the difference between a whore and a bitch? 

A: A whore screws everyone, a bitch screws everyone except you.

Fri, 09/07/2012 - 21:06 | 2773682 Atomizer
Atomizer's picture

No. One swallows and the other spits out.

Sat, 09/08/2012 - 08:26 | 2774237 Raymond Reason
Raymond Reason's picture

This scenerio was actually the norm through much of history.  Young men went off to war, and only half came home.  There was always an oversupply of bitches, and a shortage of young men, so men ruled. 

Fri, 09/07/2012 - 13:36 | 2772368 ONO47
ONO47's picture

I take it, you are not married?

Fri, 09/07/2012 - 13:47 | 2772416 kito
kito's picture

hes mormon..........if romney wins, it will be part of the new normal...................

Fri, 09/07/2012 - 14:09 | 2772517 Dr. Richard Head
Dr. Richard Head's picture

Whenever my wife accuses me of cheating, not so much these day, I always say to her, "You really think I would want to deal with two of you?"  I think she got the point finally.

Fri, 09/07/2012 - 14:33 | 2772595 kito
kito's picture

+1.........

Fri, 09/07/2012 - 20:55 | 2773665 Nikao7
Nikao7's picture

Four women have read your post :)

 

Fri, 09/07/2012 - 21:24 | 2773710 Marge N Call
Marge N Call's picture

Bitchflation, Bitchez! You are a genious.

Then they they will print more of the ones with the best asses. ASS-FLATION, I can't freaking wait!!

 

 

Fri, 09/07/2012 - 15:59 | 2772980 Ruffcut
Ruffcut's picture

QE is myth. They print every hour, every day, every month.

Mere distraction for the bitchezz.

Bullshit rules, as it has and ever shall be.

Fri, 09/07/2012 - 13:03 | 2772200 Jason T
Jason T's picture

milton friedman was the free lunch guy

Sat, 09/08/2012 - 01:53 | 2774010 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Hey now....

Fri, 09/07/2012 - 13:04 | 2772203 Jason T
Jason T's picture

QE 3 will send gas prices over $4 by election day... there's your catch 22.

Fri, 09/07/2012 - 13:07 | 2772214 Christoph830
Christoph830's picture

Won't matter if it can be blamed on a conflict with Iran....it is the perfect cover for more printing

Fri, 09/07/2012 - 13:07 | 2772223 surf0766
surf0766's picture

The U.S. will do nothing to Iran

Fri, 09/07/2012 - 13:42 | 2772393 Christoph830
Christoph830's picture

I agree.  I'm not saying U.S. will have any direct involvement but rest assured higher oil prices will be blamed on Iran one way or the other.

Sat, 09/08/2012 - 05:15 | 2774136 Mary Wilbur
Mary Wilbur's picture

I read a story tonight about a Saudi oil running dry. The link is on http://nakedcapitalism.com.

Fri, 09/07/2012 - 14:07 | 2772508 resurger
resurger's picture

Unless Leon Panetta starts issuing (20 Years Private Bonds)  which yields 10% (They will come up with a bullshit long term investment plan that Iran has Natural Resources worth 100 Trillion USD, and when "Mission Accomplished" they promise they will pay it back.

The Federal Reserve Balance Sheet 2035

Assets (Trillions)

1- 20-30 years Years Bonds 30

2- MBS 2

3- JP Morgan Bank 2.5

4- Goldman Sachs 3.5

5- California State 2

6- AAPL 0.6

7- GM 0.2

8- US Military 20

9- Israel Central Bank 50

10- IDF 90

12 - Gold & Silver 0

13- Spearmint Rhino 0.5

14- Obama 10 Trillion

As my persian friend used to say, i dedicate his words to Ben Bernanke:

"Koso nanaet mader Jenday"

 

 

 

 

Fri, 09/07/2012 - 16:51 | 2773131 Jake88
Jake88's picture

what are you smoking

Fri, 09/07/2012 - 15:46 | 2772920 philosophers bone
philosophers bone's picture

The war will no only justify QE 3 but will also solve the debt ceiling crisis.  You can't put a price on National Security.  LOL. 

Fri, 09/07/2012 - 13:13 | 2772247 sdmjake
sdmjake's picture

In my neck-o-the-woods (capital of FEMA 6) we are already over $4 (got 18 gallons of 87octane yesterday for $72.50)....

Fri, 09/07/2012 - 14:13 | 2772526 Dr. Richard Head
Dr. Richard Head's picture

We have been waxing and wanning around the $4 mark here in Northeastern Ohio. $3.89 this morning, was over four yesterday.  I anticipate it back to $4 tomorrow morning. 

Too bad the gas price is blamed, by the republican failthful, on the lack of US drilling.  That is the "look over here" trap to disguise any relevant talk of increased supply of money having anything to do with anything. 

Fri, 09/07/2012 - 21:02 | 2773677 Overfed
Overfed's picture

Gas and ammo aren't expensive. Your money just ain't  worth nuthin'.

Fri, 09/07/2012 - 14:51 | 2772676 ThunderingTurd
ThunderingTurd's picture

Oklahoma City it is $3.82.  In case you weren't aware, the entire city thrives/starves on oil and natty gas.  If it is $3.82 here, where oil and gas seep from our red clay, it is much higher elsewhere. 

Fri, 09/07/2012 - 15:38 | 2772885 SoNH80
SoNH80's picture

We're at $3.78 in Eastern New England, where there is nothing below but granite and radon-laced water, but that because the Dutch refineries send over surplus gasoline, which helps out a little.  Diesel is touching $4 though.

Fri, 09/07/2012 - 14:56 | 2772699 Buzzworthy
Buzzworthy's picture

Your profile pic is just awesome.  We need a bigger version!

Fri, 09/07/2012 - 22:25 | 2773814 Clashfan
Clashfan's picture

Just what I was thinking. I think it every time I see it. Best avatar on here. I wish he would post a link to it so I can quit injuring my eyes squinting at it. I always up arrow him regardless of what he says.

Sat, 09/08/2012 - 04:50 | 2774125 Broomer
Broomer's picture

Google has a function to look for images.

You paste the link for the image you want to find and Google will look for it.

Here is a link to a bigger version. Notice how Google found a less cropped one too.

Fri, 09/07/2012 - 18:30 | 2773359 Meesohaawnee
Meesohaawnee's picture

in mine 4.35

Fri, 09/07/2012 - 13:30 | 2772337 SheepDog-One
SheepDog-One's picture

Already $4 here.

Fri, 09/07/2012 - 13:36 | 2772365 DCFusor
DCFusor's picture

Yet most here think I was stupid to buy a Volt.  18.5 gallons so far - this YEAR.

Fri, 09/07/2012 - 13:52 | 2772401 francis_sawyer
francis_sawyer's picture

The rest SAVED 18.5 useless car payments to Ally Capital for an overpriced POS... & if you DIDN'T finance it (& paid cash instead), you could have bought physical silver and been up 30% YTD...

I have a fucking EZ-Go golf cart that probably has more YTD miles on it than your Volt... didn't cost $40K... and has used ZERO gas... (Goes more than 26 miles on a full charge too)...

So ~ your $40K x 30% = $12,000 (which you could now have 4 golf carts & peel off the extra 3 to friends)...

But yeah... You're a fucking genius & everyone else on ZH is stupid...

 

 

Fri, 09/07/2012 - 13:53 | 2772450 CuriousPasserby
CuriousPasserby's picture

How much coal did you use?

1000 kwh requires 800+ pounds of coal.

Fri, 09/07/2012 - 15:42 | 2772897 SoNH80
SoNH80's picture

My Locomobile gets 48 rods per hogshead of coal, still better than the Volt.

Fri, 09/07/2012 - 13:57 | 2772457 smiler03
smiler03's picture

DCFusor. I'm curious, how many miles a year would you estimate you do? I do a very low mileage of 1400 miles per year @ 50mpg so I've used 21 gallons of diesel this year. No solar power equipment required.

 

I paid $8000 for my car in 2003 and it's now worth $1300. So depreciation has been $6700, or $744/year.

Fri, 09/07/2012 - 13:59 | 2772479 earleflorida
earleflorida's picture

i hope it was non-flammable...

Fri, 09/07/2012 - 14:19 | 2772549 Winston Churchill
Winston Churchill's picture

You like the new volt car  smell ?

Smoke.

Fri, 09/07/2012 - 15:12 | 2772766 Hippocratic Oaf
Hippocratic Oaf's picture

No DC, I just get physically ill when I read shit like this.......

 According to a Mackinac Center study of government subsidies throughout the manufacturing and distribution chain, the actual cost of the vehicle is almost $300,000 — with a quarter-million dollars of taxpayer subsidies going into every vehicle.

Which is why I stare endlessly at the driver and give him/her the finger. Then I laugh. Laugh. Laugh.

Fri, 09/07/2012 - 15:14 | 2772773 KidHorn
KidHorn's picture

Unlike most a****s who post, I'm glad you bought a volt. if we're going to get away from oil, we have to start somewhere.

Fri, 09/07/2012 - 16:33 | 2773067 Quantum Nucleonics
Quantum Nucleonics's picture

Since this article is about math, you may want to re-run your numbers taking into account the fact that you paid 100% more for an electric car.  When you amortize the higher upfront cost, you'd probably be better off paying $4/gallon.  Oh, and well you're at it, cut me a check for the $7,500 tax credit.

Obama drones about tax fairness, then gives tax credits to generally wealthy people to buy electric cars so they can feel good about their carbon footprint.

Fri, 09/07/2012 - 20:14 | 2773581 FutureShock
FutureShock's picture

The production cost and fossil fuels to make the batteries make that carbon footprint a lot bigger but no one talks about that.

Fri, 09/07/2012 - 18:06 | 2773291 knukles
knukles's picture

My Jaguar runs just fine on $4.33 per gallon premium refined form increasingly rare Middle Eastern oil, thank you very much.

 

 

(betcha he's got a big ass ObamaBiden2012 sticker on the fucker, too)

Fri, 09/07/2012 - 21:27 | 2773718 Marge N Call
Marge N Call's picture

HAHA!

So you are one of those dumbasses??

 

Fri, 09/07/2012 - 13:31 | 2772341 asteroids
asteroids's picture

The FED and the ECB and Western governments blew it! Their focus should have been jobs. Give a man a job and everything will get better. Instead their focus was on stock markets and "wealth" effects. What a waste of time. Now we will have whole generations, young and old, living in poverty.

Fri, 09/07/2012 - 17:06 | 2773141 TWSceptic
TWSceptic's picture

Don't fall for the 'politicians need to create jobs' idea, because they can't. All governments need to do is get out of the way so the free market can function, and jobs will automatically follow.

Fri, 09/07/2012 - 22:28 | 2773820 Clashfan
Clashfan's picture

Blew it? ??? Why do either of you think jobs are the goal? Slavery is the goal.

Sat, 09/08/2012 - 08:43 | 2774259 Ponzi_Scheme
Ponzi_Scheme's picture

Politicians enabled the "free trade" everyone wanted. They gave China MFN and WTO entry. In return, we got $30 DVd players and wage arbitrage... But no small pox.

Our debt buries us or China poisons itself with industrial toxins.. The race to the bottom is on...

Fri, 09/07/2012 - 14:40 | 2772630 MrMorden
MrMorden's picture

Gas is $3.95 here now...$4 ain't gonna take QE3 to get us there.

Fri, 09/07/2012 - 16:03 | 2772993 AGAU
AGAU's picture

The Horror! Gas here in Ireland is $8.23/US Gallon.

Fri, 09/07/2012 - 16:54 | 2773137 knightowl77
knightowl77's picture

Yea but how much of that is taxes?

Fri, 09/07/2012 - 15:15 | 2772780 LMAOLORI
LMAOLORI's picture

 

 

I don't know about that Gas Prices or Stock Market?  Obama's the Stock Market King! Most liberal's want the price of gas to rise anyway. The democratic voters are pretty bamboozled I heard them saying in the Schiff piece that Obama's just been blocked at every turn so they don't blame him for his failures. The elite's don't care about gas prices that's just the few working stiff's left that do.  Supply and demand less people working and then the shift to winter production are predicted to drop the prices soon anyway.  I'd say he would take the gamble and go with the stock market.  Draghi delivered despite the economy no reason to assume Ben won't do the same.

 

What's It Take to Be Middle Class? A Job

Eurozone fall akin to Great Depression: economist

 

Fri, 09/07/2012 - 15:34 | 2772870 sharky2003
sharky2003's picture

I can't help but wonder how many times Ben passes this gas station on the way in to work?

$5.29 unleaded

Fri, 09/07/2012 - 19:33 | 2773516 Papasmurf
Papasmurf's picture

They can afford $5.29 gas in Palisades.  Plus, in DC it doesn't pay to shop around because you'll drive through another speed camera.   So this station is a really thrifty choice.

Fri, 09/07/2012 - 16:59 | 2773149 BooMushroom
BooMushroom's picture

You obviously don't live in California or Chicago. $4 gas is, and has been, reality for a while.

Fri, 09/07/2012 - 13:05 | 2772212 yogibear
yogibear's picture

Fiscal cliff coming and it's huge!!

Bernanke knows if annouces QE now he has nothing to boost come December. Their discussing that in Fed meetings.

They use up whatever they have now and their goose is cooked come January 1.

 

Fri, 09/07/2012 - 13:19 | 2772275 El Oregonian
El Oregonian's picture

They (TPTB) only have to get past Nov. 6th, then Martial Law once it collapes... Presto! Dictator for Life!!! Crisis solved... [sarc off]

Fri, 09/07/2012 - 13:42 | 2772391 SilverIsKing
SilverIsKing's picture

I didn't detect any sarcasm to begin with.

Fri, 09/07/2012 - 13:52 | 2772444 LayPersonWatchin
LayPersonWatchin's picture

Why do they have to wait til Nov. 6th?   Do it now, and Presto!  Dictator for Life!!!!

Fri, 09/07/2012 - 20:16 | 2773584 knukles
knukles's picture

Sure it ain't already happened?

Fri, 09/07/2012 - 15:24 | 2772820 LMAOLORI
LMAOLORI's picture

 

 

Bernanke also knows that he's out of a job if Romney is elected so grease his buddie's palms & get Obama re-elected or worry about the fiscal cliff that will cause interest rates to rise on the debt which really still greases his buddies palms.  I think the choice is obvious.

Fri, 09/07/2012 - 13:07 | 2772218 surf0766
surf0766's picture

If there is $ 650 bill available in the 10-30 range,

 

what is the total in the 10-30 range available and unavailable?

Fri, 09/07/2012 - 13:07 | 2772220 THX 1178
THX 1178's picture

Doesn't something happen on sept. 12 in Germany? Putting it off 'til later again, I think it's called.

Fri, 09/07/2012 - 13:16 | 2772260 GolfHatesMe
GolfHatesMe's picture

KTFC

Fri, 09/07/2012 - 17:02 | 2773154 BooMushroom
BooMushroom's picture

Kite The Fucking Checks??

Fri, 09/07/2012 - 18:08 | 2773305 knukles
knukles's picture

Kentucky Twat Fried Chiken.

The Germans are big into strange shit like that.

Fri, 09/07/2012 - 13:08 | 2772222 Snakeeyes
Snakeeyes's picture

Bernanke made his own bed. Obama can't afford a non-QE3 since equities would get hammered.

https://confoundedinterest.wordpress.com/2012/08/29/a-tale-of-2-assets-h...

Fri, 09/07/2012 - 14:15 | 2772535 Dr. Richard Head
Dr. Richard Head's picture

Based on rare footage of Ben Bernanke as a child that was recently uncovered, I have to disagree with you http://bastiat.mises.org/2012/09/rare-footage-of-ben-bernanke-as-a-child/

Fri, 09/07/2012 - 14:49 | 2772662 slewie the pi-rat
slewie the pi-rat's picture

this is the first comment on the string that i think is about the actual article

however, it doesn't treat the MATH;  it about the "equities market" FED/straw man/last quarters' tyler who didn't know what the FED's job was

i have been saying here consistently for 13 months that the chairsatan KNOWS the math and i do too!

and so did zHedge last summer b/c we were all reading and blogging about the LSAP accelerating diminishing returns together, back then;  rosie wrote about;  others;  LOOK IT UP!

tyler called the "twist", taught us well about it, and then got into "politics" and wouldn't stop saying QE and this year's just like last year (equities) until THIS summer!

no one who understands this mess at all and what the FED is about under dodd/frank and WHY would consider anything more than :> trying to fund the pols' spending and the Treasury to keep the checks in the mail <: to be "reasonable" at this point imo

but the FED is the FED also...

if it will take five years to work thru this, they may certainly try again to prove beyond a reasonable doubt that it cannot be done in 5 months!

leave the fuking housing alone

if you're not gonna liquidate this shit LEAVE IT THE FUK ALONE!  we've had enuf "really smart ideas!

slewie does not speak outa both sides;  i have been saying this for over 13 months, right here, with you "people"

not only are the FED's hands "tied" monetarily, slewienomics indicate that he has also tied the POLITICIAN'S hands since he wants THEM to LEGISLATE the next step

L0L!!!  no shit! 

let me try for the 50th time :>  if the CONGRESS and the executive pass a jobs bill or a FHA-clearing bill, or an infrastructure bill,  or a spaceProgam, the FED will do its best to fund THAT also

thru the Treasury, JUST like now;  this is called "reality"

all this crap about analyses and what happened with so-&-so three months ago doesn't change it :>  the chairsatan KNOWS the freaking math for the last 13 months too and this is about it for the monetary side

try a balanced budget from the pols, and all of a sudden, the FED won't be such a fuking problem all day every day anymore.  perhaps...

s'pose we had a budget now which wasn't dependent on deficits and/or funding them with "different" QE's?

the chairsatan may advise on the budget;  i hope he does;  but he doesn't WRITE it, pass it, or approve it.  that is for the elected pork-farmers

so my point, mr RE brainiac guy is that the political deflection that this is about what prez0 can afford in equities is ...  dubious, at best;  b/c his hand ARE tied and HE WON"T DO IT WITHOUT LEGISLATION, if i understand the clear and simple meaning of his clear and simple words

legislation = "in the budget" that the TREASURY writes all the fuking CHECKS for!  it is his JOB to finance that AND try to keep the "economy" stable;  that is his ONLY job right now, as far as slewie can honestly tell

stocks can get "hammered" for many reasons here;  but not yet today;  pretty flat,  some red altho the R2K is "not confirming" that and is up a nice little 1/2% here... <clears throat>

but this is about the FED and the "math"

the FED chairsatan is pretty smart, i think;  and i think he has seen the "math" since last summer

remember the "ceiling" debate?  THAT is the kinda shit-headed political leadership that the FED and the nation is FOUNDERING under

neither candidate represents a change form THAT status quo, imo;  they are POLITICIANS!  mittens "seems" cleaner than the others b/c he hasn't been involved in national politics, ever, and was able to stay clear of everything till now;  but they are both still complete scum-bags as far as my interests or thePeople are concerned, imo

so benzelbub has kinda "washed his hands" here i think :> look!  i can keep the checks in the mail for a while longer, but will you people please GET REAL?

interestingly, rather that "get real", mittens wants to "killBen" and "fix the fedHead"  not devise a sound FISCAL plan;  the tPartee was s'posed to throw themselves bodily on the goobermint machinery to get the fiscal shit right, too

didya happen to "notice" what happened there?  no filibuster!  the spending bill coming from the SENATE (!) and the House being "good" and agreeing to a deal where they all continue to get money from the banksters too, btw 

so vote for _____?   L0L!!!  vote for whomever you please!  but VOTE!  L0L!!!

Fri, 09/07/2012 - 15:31 | 2772852 IndicaTive
IndicaTive's picture

Thank you slewie!

Fri, 09/07/2012 - 16:09 | 2773001 Piranhanoia
Piranhanoia's picture

QE is a bribe.  There will be printing.

Fri, 09/07/2012 - 18:39 | 2773381 itstippy
itstippy's picture

Three years ago Big Ben chided Congress to be more responsible with Fiscal Policy, like the Federal Reserve was with Monetary Policy, and develop an exit strategy:

Chairman Ben S. Bernanke Semiannual Monetary Policy Report to the Congress Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C., July 21, 2009

Fiscal Policy
Our economy and financial markets have faced extraordinary near-term challenges, and strong and timely actions to respond to those challenges have been necessary and appropriate. I have discussed some of the measures taken by the Federal Reserve to promote economic growth and financial stability. The Congress also has taken substantial actions, including the passage of a fiscal stimulus package. Nevertheless, even as important steps have been taken to address the recession and the intense threats to financial stability, maintaining the confidence of the public and financial markets requires that policymakers begin planning now for the restoration of fiscal balance. Prompt attention to questions of fiscal sustainability is particularly critical because of the coming budgetary and economic challenges associated with the retirement of the baby-boom generation and continued increases in the costs of Medicare and Medicaid. Addressing the country's fiscal problems will require difficult choices, but postponing those choices will only make them more difficult. Moreover, agreeing on a sustainable long-run fiscal path now could yield considerable near-term economic benefits in the form of lower long-term interest rates and increased consumer and business confidence. Unless we demonstrate a strong commitment to fiscal sustainability, we risk having neither financial stability nor durable economic growth.

Read entire text here:

http://federalreserve.gov/newsevents/testimony/bernanke20090721a.htm

 

 

For more Fed exit policy chuckles, read this from February, 2010:

 

http://www.federalreserve.gov/newsevents/testimony/bernanke20100210a.htm

 

Sat, 09/08/2012 - 07:35 | 2774197 slewie the pi-rat
slewie the pi-rat's picture

 

hey tip!

yes, i know

you call it "rhetoric" as if it were just a "cover" for "evil";  but yes, the benzelbub has consistently told the politicians that he can only do so much for so long

and, if you were to read the title of this article, someone else may think it has not been "rhetoric" beside slewie!

you chuckle away!  feb 2010 was months before dodd/frank was passed into law

i'm not saying the FED is completely divorced form the crash causes or the political "solution"

but i am saying that they have papered over the zombie-ism since '08 and worked for systemic stability since mid-2010;  that has been their lawful job;  i represent that simply as fact :> four years of "papering the problems" and almost a year of zirp after TARP & QE I & II

and i don't think the "distortions" are AWFUL;  they are simply factual also, to me;  what the fuk did people expect here?  the congress said to do this and now it is the law

and the FED is almost outa bullets, as this and other articles have pointed out;  slewie  agrees;  now the FED can't say this, but it kinda is, saying it too, isn't it?

i can see what happened in QE II with the DWINDLING to zilch returns on LSAP and federal spending :> a $1 dollar of QE II wasn't adding anything NEAR to a $1 to GDP;  GDP looked like it was maybe contracting relative to the QE

tyler saw this, the FED saw this, rosie saw it, other writers, other bloggers :> QE LSAP had to stop

twist was the next arrow in the quiver

to do what?  finance the Treasury;  this story will not change

so we went to zirp;  perfectly logical;  the FED's hands were damn near tied at that point;  and that was last YEAR! after the fuking congress had done it's "ceiling" thing and the rating of the USA got lowered by S&P

what did S&P say?  same as theBernank, wasn't it?  same "rhetoric" tippy

and what is being said is this:  the congress needs to reduce the deficit

not santa or the tooth fairy;  or the FED;   congress

and it is gonna hurt b/c we aren't "growing" which is, i believe, an "unintended consequence" to these keynesian genii;  so wtf else is new?

but again, it is simply another fact at this point

this is what the nation needs, but the fuking politicians don't want to face it

duh.  we can propably keep the checks in the mail for a few years if they don't;  dNoland said last week :> up to five.  up to.  5

could be 1 year;  2;  or 4.9.  but it ain't gonna be five if we keep this up

this is the faustian aspect too :> we've done every painless thing we could imagine and that pain is here;  we feel the zirp;  we need to cut the deficit;  it is the prudent course of papering the 'problem' at this point :>  lessen the need for papering

volker had the other "inflation-fighting" side; and he took the prime rate to 22%;  but the system stabilized;  it didn't goto runaway;  it came off it;  but it wasn't any fun for people who needed credit

now isn't any crazier than then;  so far

but then, the system responded;  it had not been demolished;  but if you think when the prime was going from 17% to 22% people thought it was "rhetorical" you are simply mistaken

it was what needed to be done; because volker said so

and now, the congress needs to cut the deficit;  because benzelbub says so

he's not wrong in my opinion

so if people want to pretend he's nuts and talk "slogans" for another year they're free

oh!  we don't hafta do that!  that's just evil!  that's just rhetoric!  that's just nonsense!

no, it isn't;  it is what needs to be done, and the FED can't do it!  the FED can say:  this is what YOU need to do so i can keep the systemics stable and the checks in the mail:>  cut the fuking deficit.  NOW!!!

prez0:  "huh?"
mittens: "off with his head!"
slewie:  L0L!!!  if the FED ISN'T being "rhetorical" who is?

yeah;  that one!

Sat, 09/08/2012 - 09:57 | 2774365 itstippy
itstippy's picture

Well put Mr. Pi-Rat.  I agree.

Bernanke rankled my ass early on with his "Great Moderation" thesis.  The sheer hubris of believing that he knows so much about how economies function, and how to tame their furies, pissed me off.  He honestly believed that a strong and informed Central Bank (led by him) could tame the beast and prevent any future wild bubbles or catastrophic crashes. So, I've always viewed him as a smart but conceited intellectual asshat.

As for Bernanke's "rhetoric", he still calls the drastic emergency funding measures he took to prevent everything from falling apart "stimulus".  He still claims to possess many additional "unorthodox fiscal measures" left in his bag of tricks that he could deploy at any time to prevent things from getting too out of hand.  This bullshit enables the Politicians and Citizens to continue down a path toward economic calamity.

Slewie and Tippy tell it the way it IS.  Bernanke doesn't.  He conjured up a trillion dollars to bail out the financial system and the government, and then went on TV in front of the whole Nation and claimed that he didn't print money.   That shit don't cut it.  I don't wish to share a beer with the guy.  He's still an asshat in my book.  

Sat, 09/08/2012 - 15:19 | 2774987 laozi
laozi's picture

Slewie is a sharp guy, that is 4 sure. Thanks!

Maybe slewie is Ben? You can not know this. The Chairman has to sell the country to the press, he has to "bend the truth". Slewie does not.

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