Fed unexpectedly tapers

[Sallow]

Said while flecking off ashes from his tweed jacket in the teachers lounge.
The proof is in the pudding. I care not about above the line balance sheet details and the myriad of balance swaps etc. - rather what happens at the end. What is the result of said policies.
The result has been two record Wall Street years, record bonus options in the nations central banks and the top 7% have realized a 28% earnings increase. While the rest have seen a 5% earnings deficit. The policies of this administration have clearly-clearly been geared to benefit the top tier while ignoring the rest.
And Shallow applauds this.

I'm not a teacher.

The results of QE are negligible. It didn't work in any meaningful capacity, in terms of the desired outcome.

The situation you describe are a result of Congress approving the bailouts, control fraud, deregulation, securitization schemes of all flavors, inadequate and impotent social programs, and many, many, many other factors.

Of course. I have made at least 50-100 post saying this very thing.
My point now is how a shallow, low information partisan jerk off session it is for Sallow to applaud Bernanke in some supposed accomplishment.
The economic "recovery" we have seen has been overwhelmingly in favor of the wealthiest...and I mean top 2-3%.
But only because Obama is in office - Sallow makes the connection and proclaims "hoorah".
Dumb as a lamppost.
All of the things you listed above --- not one f*cking thing has been done to address these issues. Nada. That is the real problems...and THAT would be worth applauding.

You have no point.

You're all piss and vinegar.

Your "feasible" solution is what?

Cut taxes? Let the free market be free like butterflies in the field?

Then the sunshine will open up the land and we can all walk around like mini Howard Roarks and pontificate how we will build no Garage that do not meet our aesthetic sensibilities while Bilbo Baggins and Ronald Reagan spread Rainbows with the color of the US flags all around Libertarian fantasy land?

Maybe you should try Austria or something.

 

[iamwhatiseem]

I'm not a teacher.

The results of QE are negligible. It didn't work in any meaningful capacity, in terms of the desired outcome.

The situation you describe are a result of Congress approving the bailouts, control fraud, deregulation, securitization schemes of all flavors, inadequate and impotent social programs, and many, many, many other factors.

Of course. I have made at least 50-100 post saying this very thing.
My point now is how a shallow, low information partisan jerk off session it is for Sallow to applaud Bernanke in some supposed accomplishment.
The economic "recovery" we have seen has been overwhelmingly in favor of the wealthiest...and I mean top 2-3%.
But only because Obama is in office - Sallow makes the connection and proclaims "hoorah".
Dumb as a lamppost.
All of the things you listed above --- not one f*cking thing has been done to address these issues. Nada. That is the real problems...and THAT would be worth applauding.

You have no point.

You're all piss and vinegar.

Your "feasible" solution is what?

Cut taxes? Let the free market be free like butterflies in the field?

Then the sunshine will open up the land and we can all walk around like mini Howard Roarks and pontificate how we will build no Garage that do not meet our aesthetic sensibilities while Bilbo Baggins and Ronald Reagan spread Rainbows with the color of the US flags all around Libertarian fantasy land?

Maybe you should try Austria or something.

I would expect nothing else...a partisan response to my non partisan one.
If you would read - you would see I spoke of the solutions above.
We are unfortunately at a point where the only thing that will "fix" the problem is a government overhaul. The government - BOTH PARTIES - are utterly corrupt; to the point we are a democratic republic in name only.
And as usual, you do not address points people make unless you agree with them.
My point is very simple. You celebrate Bernanke only because you think it makes Obama look good. How else could anyone explain your applauding? EVERYTHING this administration has done has done little to improve the economy EXCEPT for the wealthiest...and the corporations they work for.
There has perhaps never been a better time to be a corporate leader, investment banker or market investor. And certainly no better time to be wealthy. It is a lousy time to be middle class and even worse to be poor. And holy cow is it a bad time to be a minority.

 

[Zander]

QE will never end.

 

[Sallow]

Of course. I have made at least 50-100 post saying this very thing.
My point now is how a shallow, low information partisan jerk off session it is for Sallow to applaud Bernanke in some supposed accomplishment.
The economic "recovery" we have seen has been overwhelmingly in favor of the wealthiest...and I mean top 2-3%.
But only because Obama is in office - Sallow makes the connection and proclaims "hoorah".
Dumb as a lamppost.
All of the things you listed above --- not one f*cking thing has been done to address these issues. Nada. That is the real problems...and THAT would be worth applauding.

You have no point.

You're all piss and vinegar.

Your "feasible" solution is what?

Cut taxes? Let the free market be free like butterflies in the field?

Then the sunshine will open up the land and we can all walk around like mini Howard Roarks and pontificate how we will build no Garage that do not meet our aesthetic sensibilities while Bilbo Baggins and Ronald Reagan spread Rainbows with the color of the US flags all around Libertarian fantasy land?

Maybe you should try Austria or something.

I would expect nothing else...a partisan response to my non partisan one.
If you would read - you would see I spoke of the solutions above.
We are unfortunately at a point where the only thing that will "fix" the problem is a government overhaul. The government - BOTH PARTIES - are utterly corrupt; to the point we are a democratic republic in name only.
And as usual, you do not address points people make unless you agree with them.
My point is very simple. You celebrate Bernanke only because you think it makes Obama look good. How else could anyone explain your applauding? EVERYTHING this administration has done has done little to improve the economy EXCEPT for the wealthiest...and the corporations they work for.
There has perhaps never been a better time to be a corporate leader, investment banker or market investor. And certainly no better time to be wealthy. It is a lousy time to be middle class and even worse to be poor. And holy cow is it a bad time to be a minority.

Oh and your vulgar crack was a non-partisan, eh?

Government overhaul..huh?

This government's been overhauled plenty..and usually for the better. It was overhauled during the civil war. It was overhauled by the new deal. It was overhauled by the civil right act. The last overhaul, the really major one, was Reagan. And he undid much of the new deal. So we are going back to the days of Coolidge ever since...whom..I suspect is a hero of yours.

Forgive me if I'm not impressed dude.

 

[Avorysuds]

LOLOLOLZOZLZOZLz~


They cut the stimulus from 85 a month to 75, and markets managed to make a comeback!!!

Hey swollow, come back in 6 months and tell us how markets are doing. at this rate the FED will still be stimulating the rich bankers at only 30 billion a month.

A hero in the eyes on any mindless obama-bot!

 

[Avorysuds]

LOL @ Economic law.

And no, genius, QE is an asset swap. The FED takes one type of asset - a US Treasury - and swaps it out with reserves in the banking system. The only end game is that the private sector has interest taken away that it could have earned on said Treasury, which would be more than the 0% it would have earned with a cash balance. It's a change in the overall asset composition and term structure of government liabilities. Get this through your thick skull: there is zero increase in non-government net financial assets. There is no new $$$$ added to the economy, but there's an increase in liquidity as longer-term government securities are brought onto the government's balance sheet. Bank reserves thus increase as bank assets.

This is the seventh time I've tried to explain this to you, two of the times were in painstaking detail.

Said while flecking off ashes from his tweed jacket in the teachers lounge.
The proof is in the pudding. I care not about above the line balance sheet details and the myriad of balance swaps etc. - rather what happens at the end. What is the result of said policies.
The result has been two record Wall Street years, record bonus options in the nations central banks and the top 7% have realized a 28% earnings increase. While the rest have seen a 5% earnings deficit. The policies of this administration have clearly-clearly been geared to benefit the top tier while ignoring the rest.
And Shallow applauds this.

I'm not a teacher.

The results of QE are negligible. It didn't work in any meaningful capacity, in terms of the desired outcome.

The situation you describe are a result of Congress approving the bailouts, control fraud, deregulation, securitization schemes of all flavors, inadequate and impotent social programs, and many, many, many other factors.

You better tell Swallow that, he seems to think the FED saved the nation, and they just did their first cut in total amount of stimulus per month, not even ending it.

Like the post you quoted said, it made rich bankers and CEO's massive;ly more wealthy while the middle class and poor are chit. You can claim the stimulus (that is not even kinda sorta over) had no real meaning, we're telling you it in fact made the rich more rich and the poor more poor.

 

[Toro]

Hooray for money printing!

It's good to be upper middle class!

Sux 2 B poor though.

 

[Toro]

QE will never end.

20% stock market returns forever!

Hooray!

 

[iamwhatiseem]

QE will never end.

20% stock market returns forever!

Hooray!

Sallow loves you too.

 

[Toro]

QE will never end.

20% stock market returns forever!

Hooray!

Sallow loves you too.

Clearly, you hate the stock market and America.

Talk to the hand!

 

[Kimura]

Of course. I have made at least 50-100 post saying this very thing.
My point now is how a shallow, low information partisan jerk off session it is for Sallow to applaud Bernanke in some supposed accomplishment.
The economic "recovery" we have seen has been overwhelmingly in favor of the wealthiest...and I mean top 2-3%.
But only because Obama is in office - Sallow makes the connection and proclaims "hoorah".
Dumb as a lamppost.
All of the things you listed above --- not one f*cking thing has been done to address these issues. Nada. That is the real problems...and THAT would be worth applauding.

You have no point.

You're all piss and vinegar.

Your "feasible" solution is what?

Cut taxes? Let the free market be free like butterflies in the field?

Then the sunshine will open up the land and we can all walk around like mini Howard Roarks and pontificate how we will build no Garage that do not meet our aesthetic sensibilities while Bilbo Baggins and Ronald Reagan spread Rainbows with the color of the US flags all around Libertarian fantasy land?

Maybe you should try Austria or something.

I would expect nothing else...a partisan response to my non partisan one.
If you would read - you would see I spoke of the solutions above.
We are unfortunately at a point where the only thing that will "fix" the problem is a government overhaul. The government - BOTH PARTIES - are utterly corrupt; to the point we are a democratic republic in name only.
And as usual, you do not address points people make unless you agree with them.
My point is very simple. You celebrate Bernanke only because you think it makes Obama look good. How else could anyone explain your applauding? EVERYTHING this administration has done has done little to improve the economy EXCEPT for the wealthiest...and the corporations they work for.
There has perhaps never been a better time to be a corporate leader, investment banker or market investor. And certainly no better time to be wealthy. It is a lousy time to be middle class and even worse to be poor. And holy cow is it a bad time to be a minority.

We need to reimplement Glass–Steagall. We also need to put a halt on foreclosures until we can dig ourselves out of this mess.

We need to start charging some of the large banks (CEOs and upper management) under RICO and dismantle most of them. The fact Jamie Dimon and Lloyd Blankfein aren't doing 25 to life for financial terrorism is beyond me.

Don't even get me started on free education, doubling SS payments, vocational training, Medicare for all, investments in infrastructure, transportation, nuclear power, green energy, etc. We can get out of this economic slump in around a year or two if we were to red line the economy with these programs.

 

[Toro]

Things will change but it will require a breakdown crisis like the Great Depression. Once people realize there really is a ruling class, and that they want it all, then it will come to a sudden halt.

We need to reimplement Glass–Steagall. We also need to put a halt on foreclosures until we can dig ourselves out of this mess.

Finally, we need to start charging some of the large banks (CEOs and upper management) under RICO and dismantle most of them. The fact Jamie Dimon and Lloyd Blankfein aren't doing 25 to life for financial terrorism is beyond me.

Halting foreclosures is a bad idea.

It delays the market clearing.

It's kind of like that gimmicky $8000 tax credit Obama offered for buying a home. Remember that? All it did was delay the inevitable.

Japan is a bad model to follow recapitalizing the banking system.

Besides, the market is clearing now. All you had to do was the math to realize that the biggest determinant of "fixing" the housing mess was time.

 

[iamwhatiseem]

Long live the oligarchy!!

 

[Kimura]

Things will change but it will require a breakdown crisis like the Great Depression. Once people realize there really is a ruling class, and that they want it all, then it will come to a sudden halt.

We need to reimplement Glass–Steagall. We also need to put a halt on foreclosures until we can dig ourselves out of this mess.

Finally, we need to start charging some of the large banks (CEOs and upper management) under RICO and dismantle most of them. The fact Jamie Dimon and Lloyd Blankfein aren't doing 25 to life for financial terrorism is beyond me.

Halting foreclosures is a bad idea.

It delays the market clearing.

It's kind of like that gimmicky $8000 tax credit Obama offered for buying a home. Remember that? All it did was delay the inevitable.

Japan is a bad model to follow recapitalizing the banking system.

Besides, the market is clearing now. All you had to do was the math to realize that the biggest determinant of "fixing" the housing mess was time.

I'm talking about the legality of some these mortgages and some of the fraud involved. The robo-signing debacle isn't even close to being sorted out. Chase just got sued again for this shit.

Here's an idea: you foreclose under current conditions and you'll share a cell with a member of the Gambino family at Leavenworth .

 

[Toro]

Things will change but it will require a breakdown crisis like the Great Depression. Once people realize there really is a ruling class, and that they want it all, then it will come to a sudden halt.

We need to reimplement Glass–Steagall. We also need to put a halt on foreclosures until we can dig ourselves out of this mess.

Finally, we need to start charging some of the large banks (CEOs and upper management) under RICO and dismantle most of them. The fact Jamie Dimon and Lloyd Blankfein aren't doing 25 to life for financial terrorism is beyond me.

Halting foreclosures is a bad idea.

It delays the market clearing.

It's kind of like that gimmicky $8000 tax credit Obama offered for buying a home. Remember that? All it did was delay the inevitable.

Japan is a bad model to follow recapitalizing the banking system.

Besides, the market is clearing now. All you had to do was the math to realize that the biggest determinant of "fixing" the housing mess was time.

I'm talking about the legality of some these mortgages and some of the fraud involved. The robo-signing debacle isn't even close to being sorted out. Chase just got sued again for this shit.

Here's an idea: you foreclose under current conditions and you'll share a cell with a member of the Gambino family at Leavenworth .

If there's fraud in foreclosure, then those people should be charged. But that's different than stopping all foreclosures.

 

[editec]

The December FOMC decision is out.

The Fed will taper asset purchases to a monthly rate of $75 billion from the current $85 billion pace. Half of the reduction is in Treasury purchases and half of the reduction is in purchases of mortgage-backed securities.

However, the FOMC did not modify its forward guidance, leaving the unemployment rate threshold for the first rate hike at 6.5%.

The Committee also released updated Staff Economic Projections. The central tendency for its 2014 unemployment rate forecast is now 6.3% to 6.6%, down from 6.4% to 6.8%.

Read more: FOMC Meeting December - Business Insider

The Market initially took a dip and then shot up. Bernanke held a news conference (probably his last) and was pretty straight up with what's happening. The Economy's been getting stronger.

He leaves on a high note after what was a heroic and successful effort to rescue the US economy.

Well done, Chairman.

What happened to the total collapse of the market and the huge spike in GOLD as a result of the government backing off on buying these "assets"?

 

[TakeAStepBack]

The December FOMC decision is out.

The Fed will taper asset purchases to a monthly rate of $75 billion from the current $85 billion pace. Half of the reduction is in Treasury purchases and half of the reduction is in purchases of mortgage-backed securities.

However, the FOMC did not modify its forward guidance, leaving the unemployment rate threshold for the first rate hike at 6.5%.

The Committee also released updated Staff Economic Projections. The central tendency for its 2014 unemployment rate forecast is now 6.3% to 6.6%, down from 6.4% to 6.8%.

Read more: FOMC Meeting December - Business Insider

The Market initially took a dip and then shot up. Bernanke held a news conference (probably his last) and was pretty straight up with what's happening. The Economy's been getting stronger.

He leaves on a high note after what was a heroic and successful effort to rescue the US economy.

Well done, Chairman.

What happened to the total collapse of the market and the huge spike in GOLD as a result of the government backing off on buying these "assets"?

The FED is still buying 75 billion a month in MBS and Treasury, genius.

 

[Sallow]

You have no point.

You're all piss and vinegar.

Your "feasible" solution is what?

Cut taxes? Let the free market be free like butterflies in the field?

Then the sunshine will open up the land and we can all walk around like mini Howard Roarks and pontificate how we will build no Garage that do not meet our aesthetic sensibilities while Bilbo Baggins and Ronald Reagan spread Rainbows with the color of the US flags all around Libertarian fantasy land?

Maybe you should try Austria or something.

I would expect nothing else...a partisan response to my non partisan one.
If you would read - you would see I spoke of the solutions above.
We are unfortunately at a point where the only thing that will "fix" the problem is a government overhaul. The government - BOTH PARTIES - are utterly corrupt; to the point we are a democratic republic in name only.
And as usual, you do not address points people make unless you agree with them.
My point is very simple. You celebrate Bernanke only because you think it makes Obama look good. How else could anyone explain your applauding? EVERYTHING this administration has done has done little to improve the economy EXCEPT for the wealthiest...and the corporations they work for.
There has perhaps never been a better time to be a corporate leader, investment banker or market investor. And certainly no better time to be wealthy. It is a lousy time to be middle class and even worse to be poor. And holy cow is it a bad time to be a minority.

We need to reimplement Glass–Steagall. We also need to put a halt on foreclosures until we can dig ourselves out of this mess.

We need to start charging some of the large banks (CEOs and upper management) under RICO and dismantle most of them. The fact Jamie Dimon and Lloyd Blankfein aren't doing 25 to life for financial terrorism is beyond me.

Don't even get me started on free education, doubling SS payments, vocational training, Medicare for all, investments in infrastructure, transportation, nuclear power, green energy, etc. We can get out of this economic slump in around a year or two if we were to red line the economy with these programs.

Preaching to the Choir here, buddy.

With the exception of nuclear power (Fukushima really lends alot of perspective on that) I'm all in with ya.

 

[TakeAStepBack]

 

[Kimura]

LET THE TAPER GAMES BEGIN

OK it had to happen. Over the past 5 years the Fed has lent and spent Quadrillions trying to prop up Wall Street’s crooked banks. At first it was eye-popping. But beyond some point, no one cares anymore.

“Oh yes, the Fed has bought all the financial assets on Earth, Mars, and Jupiter. Now it’s moving on to the distant planets and beyond. Its balance sheet now rivals some of the bigger black holes in terms of its ability to swallow assets.”

Yawn.

You knew the Fed had to do something or the talking heads on TV would have nothing to talk about. And a Talking Head with nothing to Talk About is a scary thing, indeed. You get Megyn Kelly arguing about whether Santa Claus is really a chubby white guy even though he came from Turkey.

But here was the fear. If the Fed starts tapering, Markets could take that as a Bad Signal. Of course, no one knew what the bad signal would be.

Would it be a signal that the Fed finally realized its multi-trillion dollar balance sheet would generate Zimbabwean hyperinflation, as all the goldbugs tell us?

Or would it be a signal that the Fed was going to hike interest rates and kill the incipient recovery?

You see, the Fed had reached what J.M. Keynes would call the “Nth Degree”, where “we devote our intellegences to anticipating what average opionion expects the average opinion to be. And there are some, I believe, who pratise the fourth, fifth and higher degrees”…. We reached the Nth Degree about 3 years ago.

The Fed actually promoted this nonsense, as it turned policy-making into managing the beliefs of Expectations Fairies. All monetary policy is now about trying to outguess what markets think the Fairies are thinking.

There really is no proactive monetary policy. It is all about trying to manage the Fairies and then doing what the Fairies want the Fed to do.

The Fairies wanted a taper. They whispered in the ear of Uncle Ben: Time for the Taper Games to Begin. Janet Yellen might have weak knees.

Now the die is cast. To downsize the Fed’s balance sheet, Aunt Janet will need to unload trillions of dollars of Treasuries and toxic MBSs.

But how would the Fairies react? Well, most of the money bet they’d all drop like lead—with little broken wings and splatting on the ground.

I thought there’d be a minor little hiccup in financial markets and then a recovery within 24 hours.

I was too pessimistic. The Fairies took the news and then headed skyward:

Stocks initially sold off but recovered, with the Dow logging a triple digit gain. The 10-year yield initially rose to 2.92 percent but fell back to its earlier level of 2.84 percent. It then moved higher, to the 2.88 percent area. Fed taper seen as positive for economy, bad omen for bonds

It seems the Fed had correctly calculated that a $10 billion reduction of QE per month was below what the “Nth degree” Fairies were expecting. Hence, relief all around. Time to blow those bubbles bigger.

A helluva lot bigger.

As Larry Summerian correctly said a couple of weeks ago, Bubbles-R-Us. It’s all we’ve got. The Fed has managed QE all the way up in a manner that would stoke our Bubbleonian Madness, and now it will manage the Taper all the way down with a view to stroking our Bubblicious economy.

Hang-on kids. Bumpy ride ahead.
- See more at: EconoMonitor : Great Leap Forward » LET THE TAPER GAMES BEGIN