Bennie and the Inkjets went all in yesterday at 12:30. This Princeton professor who has never held a real job in his entire life actually proclaimed that buying hundreds of billions of toxic mortgage backed securities from the insolvent Wall Street bankers that own the Federal Reserve, will benefit the average American. He proudly stated that he will hold interest rates at 0% until at least 2015. This means that senior citizens can plan ahead and stock up on cat food to eat, because they will be paid nothing on their savings for at least the next three years. Ben’s claim to help home buyers is a bold faced lie. Mortgage rates were already the lowest in history. Interest rates are not the problem. Debt is the problem. Insolvency is the problem. Spending money we don’t have is the problem. Debasement of the currency is the problem.
Ben Bernanke has one purpose on earth as Federal Reserve Chairman and that is to enrich the owners of the Federal Reserve and protect them from ever accepting the consequences of their criminal, traitorous actions. The impact of his disgusting actions can already be seen:
- The 10 Year Treasury rate has increased from 1.66% to 1.82% this week. That is a 9.6% increase in a few days. Mortgage rates key off this rate. This result does not match Bernanke’s rhetoric about helping the housing market.
- The USD has declined by 2.2% against the Euro and the entire basket of worldwide currencies. The debasement continues, as it is the main goal of Bernanke.
- Oil prices broke through $100 per barrel this morning and are up 3.6% this week alone. The pundits will blame it on Middle East tensions or speculators. The truth is that Oil is priced in USD and as Bernanke debases the currency, oil prices will rise. Luckily, Bernanke’s chauffer fills up his limo with the Fed credit card. He will just recalculate the CPI and pretend energy and food prices don’t really matter.
- The Dow is up 2.2% this week as Bennie’s QE3 to Infinity makes the Wall Street crowd giddy. The net worth of the .01% is getting a real boost.
- It seems a couple of asset classes reveal the real implications of Bennie’s money printing. Silver is up 5.8% and gold is up 2.5% this week. JP Morgan and the rest of the Wall Street scum are doing their utmost to keep a lid on gold and silver prices through their use of derivatives, but the lid is about to be blown off. Anyone who can’t see that Bernanke’s latest move is a last ditch desperate attempt to keep the economic system from collapsing, doesn’t have their eyes open.
Ben Bernanke has sealed his fate as the Federal Reserve Chairman that destroyed the world. There is no way for him to ever unwind his $4 trillion balance sheet of toxic debt. His balance sheet will be levered 80 to 1 by the end of 2013. The Wall Street banks were levered 30 to 1 when they blew up. Ben has a printing press and helicopters, but he is a stupid weak man who has never seen a crisis coming, even when it was on his doorstep. The stock market will party on, but faith in the U.S. Federal Reserve and our politicians is waning across the world. China, the Middle East oil exporters and the rest of the world can see that Bennie will debase the USD and screw them in the process. They will begin to shun the USD and our bonds.
The debate between the deflationists and the inflationists just swung in favor of inflation. Bennie has thrown down the gauntlet and told the world he will inflate to infinity and beyond. Our future awaits.
efarmer says:
All right in front of the public’s eyes. Amazing, simply amazing.
I hope history is written correctly and the MSM that is ignoring the perils of this are left hanging in the trees.
EF
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14th September 2012 at 9:21 am
Administrator says:
JUST AVERT YOUR EYES. INFLATION ISN’T REALLY SOARING. IT DIDN’T REALLY COST YOU $100 TO FILL UP YOUR MONSTER SUV.
RETAIL SALES SOARED – GAS STATIONS & CAR DEALERS PEDDLING CARS TO SUBPRIME BORROWERS ARE BOOMING
Consumer Prices Soar By Most Since June 2009, Retail Sales Ex-Autos And Gas Expose Lethargic Consumer
Submitted by Tyler Durden on 09/14/2012 08:47 -0400
Following yesterday’s producer price shock, when PPI soared by the most since June 2009, today’s CPI follows suit, with the largest jump in over 2 years, printing up 0.6%, in line with expectations, up from an unchanged print in July. In other words, the food inflation which is already spreading through the economy courtesy of the record drought, is about to be supported by some brand new Fed-generated inflation. Luckily, as yesterday, nobody uses gas or food. And in other news, retail sales posted yet another very disappointing print, when despite a better than expected headline print of 0.9% in August advance retail sales, a number which included gas and auto sales, retail sales excluding these very volatile components, rose by only 0.1%, on expectations of a 0.4% rise, and a downward revision from 0.9% to 0.8%. This was the 5th miss in 6 months, and ugly all around. In other words, the US consumer, revised consumer credit data notwithstanding, is levering up and not generating any real new sales. Expect yet another round of GDP revisions. However, in light of yesterday’s Bernanke announcement, it is pretty obvious that no macro economic data for public consumption does the disaster that is the economy in the Fed’s eyes, justice, and makes us wonder just how ugly the underlying reality must be. All that said: with inflation spiking, and consumers lethargic, it certainly appears that Bernanke picked the perfect time for more monetary paper dilution.
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14th September 2012 at 9:24 am
Administrator says:
Bernanke looks like death warmed over. Is that the face of a man who looks like he knows what he is doing? Wait until he commits suicide. That will be quite a day.
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14th September 2012 at 9:43 am
Administrator says:
Commentary on The Capital Markets Posted 2012-09-14 09:33
by Karl Denninger
QE Aftermath — Brace For Impact
Listening to CNBC this morning is nauseating, quite frankly, especially Cramer.
I know, I know, the market is up. It was up 200pts yesterday and this morning the futures are higher. But the reality is that despite people saying “keeping cash in the bank is a fool’s game” that logic discounts the risk in equities, and there is risk in equities.
Lots of it, in point of fact.
Bernanke’s statement was that he would keep QEing until unemployment falls to where he wants it.
What happens if it does not come down at all, but rather goes up?
Now here’s the ugly truth — QE has not only failed, it has massively failed.
QE began in November of 2008.
During that time the labor participation rate fell, flat-lined, and has refused to recover.
The evidence is clear: QE doesn’t work to stimulate employment, it instead destroys jobs.
The reason it doesn’t work is that it can’t; QE by definition debases purchasing power as it increases the denominator of credit and money. It is simply a sop to those who buy and speculate in the financial markets (in this case, in mortgages) but the positive effects on home prices are tiny. If we get a 50 basis point move in mortgages (unlikely; the more likely move is 25bps) then the price support is only 3%! If the more-reasonable expectation of 25bps is realized then the price support is 1.5%!
This is so tiny as to be beyond “marginal” and well-into the range of utterly insignificant and immaterial to the real economy.
As an investor, therefore, what should you expect?
•The speculative “burst” higher may be maintained for a while, however….
•When it wears off, and it will, equity prices will slide and accelerate, as if employment does not meaningfully improve then the market will come to realize that Bernanke’s plan has failed — as the evidence shows it already has.
The result? Something very similar to what happened in Japan, where over time the effect of “QE to the moon!” faded and the Nikkei never managed to actually recover it’s former levels.
20 years on the Nikkei stands at roughly 1/4 of where it was at their top.
Now that’s something sobering to think about.
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14th September 2012 at 9:52 am
Administrator says:
——————————————————————————–
Posted 2012-09-14 08:52
by Karl Denninger
CPI: Some Like It Smoking Hot
And here comes the consumer price increases!
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.
The seasonally adjusted increase in the all items index was the largest since June 2009. About 80 percent of the increase was accounted for by the gasoline index, which rose 9.0 percent and was the major factor in the energy index rising sharply in August after declining in each of the four previous months.
It didn’t rise, it skyrocketed.
Energy as a whole was up 4% on the month, with a 7.2% increase in motor fuels.
Oh yeah, and QE doesn’t tend to make oil prices go up, does it? Well let’s see — as I drove my kid to school this morning I noted that overnight fuel prices were up six cents, or about 1-1/2%.
But don’t worry, “core” inflation is contained.
Of course nobody we know buys gasoline or food, right?
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14th September 2012 at 9:54 am
Stan says:
Shit is fucked up and bullshit
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14th September 2012 at 9:54 am
card802 says:
All the fucking signs were there, TARP, QE 1, 2 3, Twist, bailouts, stimulus, low interest rates, gold up, oil up, dollar down, threat of more wars, massive purchases of ammo by domestic agencies, new fortified armored crowd control vehicles, camp fema, Patriot Act, NDAA, and Clinton was on the boob tube last night hinting that government internet control could stop another video upsetting the mooslums.
We knew this day was coming, we’ve beat this to death here and elsewhere, are you prepared?
Nothing much more to say, other than drop your cocks and grab your socks.
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14th September 2012 at 10:17 am
TC says:
Reminds me of the scene from Goodfellas where the restaurant owner goes to the mob boss for help. The mob boss stuffs the business to debt until there’s no creditors left, bringing goods in the front door and selling them out the back door for a loss. When there’s finally no credit left, burns the business to the ground for the insurance money. This looks like the Fed’s end game – they will keep stuffing their balance sheet, and the balance sheets of Fannie, Freddie and FHFA with the shittiest paper they can find from their complicit cohorts in the financial industries, and when there’s absolutely no credit left, burn it all to the ground with a massive PUT onto the taxpayers and dollar holding suckers. The only question I have is “what’s the limit?” How large can they grow their balance sheet before it all blows up?
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14th September 2012 at 10:22 am
IndenturedServant says:
As I understand it, QE2 (thin air money printing) never really ended on June 30, 2011 like it was supposed to and printing continues quietly today at something like $3.97 billion dollars per day prior to Bin Bernanke’s announcement yesterday. Rounding up, $4 billion X 30 is $120 billion per month. That comes to $1.46 Trillion per year. Add in the $40 billion per month announced yesterday and that comes to $1.94 Trillion in thin air money printing per year!
Is this correct?
I_S
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14th September 2012 at 10:41 am
Administrator says:
Dr Kevin And Mr Warsh: A Former Fed Governor Exposes The Fed
Submitted by Tyler Durden on 09/14/2012 09:41 -0400
Ex-Fed Governor Kevin Warsh provided much food for thought during his appearance on CNBC this morning. Over the course of the following clip, he addresses concerns from just how bad the reality of the global economy must have been for Bernanke and his merry men to have gone “all-in” aggressive – reflecting on this as a panic-like reaction during times now where we are not panicking, the ineffectiveness of QE3 “iPhone 5 will do more for the real economy than QE3″, fears over how bad this could get as “there is a reason ‘exit’ is a four-letter word.” Warsh notes the paradox of Bernanke “trying to pull a rabbit out of a hat’ each time the economy loses control while calling for Washington to do more – as the politicians know “there’s not much we need to do, Bernanke has our back.” We are not in a panic, we are in a lousy recovery and when asked what he would do, Warsh added that there is a ton Washington can do – and the key difference between him and Bernanke is the ranking of costs and benefits – indeed with WTI already over $100/bbl, the costs are rising.
On Bernanke’s exit strategy: “In the history of central banks, getting out is harder than getting in”
His comments are far-ranging but mostly ‘disappointed’ in our view that Bernanke has done this. “We are running these program like infomercials” is how he describes the short-term actions of the Fed, but the following conclusion is perhaps the most humbling for any and every bull long-only manager who has backed up the truck of unreality:
Look at the markets now; asset prices continue to melt up. When asset prices are driven less by fundamentals and more by speeches and policies coming out of Washington, you’re taking risks. Risks are highest in the economy when measures of risk are he lowest; and when I look at the VIX at this level and you compare that to the headlines you read every morning, they certainly don’t seem in sync, and that’s exactly when shocks happen.
and one more shot across the bow:
“If they believe the economy and prospects were moving even slowly to a higher path, I don’t think they would have decided to be nearly as aggressive.”
“I don’t like the bang for the buck. I’m not persuaded by the efficacy. I think there are people out there, perhaps even of prevailing opinion in Washington, who think the balance sheet can grow another $3 trillion to $5 trillion to bring us to optimal policy.
The reason I don’t believe much of that, who are we buying this debt from? Last year, the Federal Reserve bought 77% of all of the debt that Tim Geithner issued. It doesn’t mean that the Federal Government doesn’t have an important role to play; but our largest buyers of securities, domestically and overseas, they aren’t fooled.”
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14th September 2012 at 11:08 am
Cynical30 says:
I’m sorry and some of you official gov’t story lovers are going to shit when I type this, but this goddamn shitshow in the Middle East was/is a fucking wag-the-dog false flag. Seriously. Who the fuck translated that 2 dollar (and HILARIOUS) Muhammad movie into Arabic? Why did it go viral like that RIGHT BEFORE THIS ANNOUNCEMENT? Why in the fuck do we not get the same reaction from all of the pictures of dead ass Muslim kids that their media display constantly? Fuck this shit dude, it was just another Weapon of Mass Distraction as the last nail was driven into out economic coffin. Between this and the pounding of the QE is a GOOD THING by the MSM for the past 3 weeks or so. Too much goddamn convenience in the timeline.
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14th September 2012 at 11:09 am
TeresaE says:
What amazes me is how few are able to see reality.
Reality is that CONgress & the POTUS are spending what, nearly twice what they bring in? And truly, I think those numbers have been shaved and even that horror is a pale comparison of the truth.
How could the Fed NOT monetize with the reality of WDC running in the background? What options do we have?
Yesterday was just the solidity of what we all know. This puppy is going full-blown banana republic and soon our TP imported from China will have more worth than our dollar bills.
There is just no way that these evil men do not know what the end game will be. The middle class & small biz are being intentionally slaughtered to enrich Benny, Timmy, Barry and their cronies.
Eventually *boom*
Hub found my “vault” of seeds yesterday, when I told him what I paid he started to freak, saw the look on my face and wisely shut his mouth.
Now, I’m looking at a bunch of paid off credit cards and wondering if maybe I should take the banks up on their offers, charge the shit out of prepping supplies and rest assured that with inflation the guaranteed charged interest will be less than my loss in real purchasing powers.
Of course I’ve got the added bonus in that if it all goes tits up, I get to stick it to the big banks on my way down.
Decisions, decisions.
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14th September 2012 at 11:13 am
Buckhed says:
Correct me if I’m wrong but if the Fed purchses mortgages won’t this allow the TBTF banks to transfer the False Loans” that Mary Malone are investigating off of their books…Problem solved for them..
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14th September 2012 at 11:17 am
SAH says:
When Bernake was appointed, all I remember hearing about was that he was the world’s formost expert on The Great Depression. I thought to myself, “wonderful, get ready for a Greater Depression”. Like anything else, when you want an important job done, you bring in an expert.
I don’t believe that this is a case of bumbling incompetence, it is clearly a well thought out and orchestrated plan to crash the Dollar and put the whole World on a Global Currency. The Federal Reserve and international banks aren’t losing control, they are creating a crash that will allow them to gain even more control in the ensuing chaos.
This is a very ancient technique, which was known to Chinese Philosophers a couple of millennia ago as “tsung-heng hsueh” roughly translated as “the science of letting all hell break loose” – and was considered an important tool for being able to control and govern people. Occidental cultures think linearly – get from point A to point B. That is why the logical thinking economists here freak out in disbelief at the direction everything is moving toward, the obvious result being collapse and destruction of everything. If the supposed goal is point B, stabilization of the economy, then what the hell is Bernake thinking?
Eastern thought is circular, using any and every point on the circumference to get to the center — the center being “to control without being controlled”. Bernake is not some incompetent idiot, he’s a freaking genius of subversion and is pulling off the greatest feat of “tsung-heng hsueh” of all time. Unfortunately for the rest of us, his objective means we are left with only 2 choices: be completely controlled by our owners, or all human society is going to collapse and fade into the mists of myth – on par with Atlantis. The banker overlords are extremely confident that people will choose the former. If the rest of us “win”, is ending up with the latter really a victory?
We are fucked. We’ve been outmaneuvered by very intelligent people, and we and are in checkmate. The bakers are calling the bluff, the majority will choose “being controlled without controlling” because most humans do NOT want to be self-sufficient. There are very few who would choose liberty at the price of returning to hunter-gatherer or subsistence-farming. Most people would rather be surfs to an overlord. The sad part is though, once they’ve gained complete control of the world, the elites won’t want or need 6+ billion surfs, and will complete their vision of a world with a population of 500 million without resistance.
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14th September 2012 at 11:25 am
Jimi d says:
THIS FUCKER’S GONNA BLOW ! Bennie, Timmay, HUNK Palson and the banksters’ , et all should all be tried and then hung for TREASON !
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14th September 2012 at 11:27 am
AWD says:
“We’ve been outmaneuvered by very intelligent people, and we and are in checkmate”
Obama: never ran a lemonade stand
Bernake: never ran a lemonade stand
Paulson: Goldman Sachs stooge
Geitner: tax cheat
People are too stupid to do anything, if that’s checkmate, so be it. When they have to pay $10 for a Big Mac, then the riots will start.
“No matter how hard boobus Americanus is kicked in the teeth with his own inability to have an effect on government, he still feverishly casts his ballot with faith locked into the system”
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14th September 2012 at 11:57 am
Administrator says:
Marc Faber: “Fed Will Destroy The World”
Submitted by Tyler Durden on 09/14/2012 11:16 -0400
http://bloom.bg/PhXCyt
“Everything will collapse” is the consequence Gloom, Boom, & Doom’s Marc Faber sees from the Fed’s latest ‘stimulus’ (and the fallacy and misconception of how money-printing can help employment). In a wondrously clarifying interview on Bloomberg TV this morning, Faber explained why he was ‘happy’, since “the asset values of his holdings will go up” but as a responsible citizen he is worried because “the monetary policies of the US will destroy the world.” It truly is class warfare under a veil of ‘its good for you’ as he notes: “the fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won’t. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols.” Congratulations, Mr. Bernanke.
Faber on more Federal Reserve stimulus:
“It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don’t like bonds. I don’t particularly like equities, but I think equities are a better space to be in than bonds.”
On what he will do with his portfolio in reaction to yesterday’s move:
“I own corporate bonds and I recently, as I wrote, I pulled some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country. But it is in small doses. I wouldn’t put all of my money in corporate bonds. They have an equity character. I also own equities still in Asia and as I pointed out already four months ago for the first time in my life I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed. I think what people overlook today is they look at markets but they don’t look at what happens within the market. In the last 12 to 18 months the U.S. has massively outperformed European markets, Asian markets with a few exceptions and now some markets are relatively depressed. I could argue the Chinese stock market is now relatively depressed. So the asset allocators may move some money in Chinese stocks and then they can rally 10% to 20%.”
“The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won’t. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols…Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. I’m happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.”
On whether there’s any credibility in the Federal Reserve trying to bring down the unemployment rate and improve the housing market:
“I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don’t want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don’t add to employment. They destroy employment. Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.”
On where gold prices are headed:
“I think that the trend for gold prices will be steady, but the trend for the dollar and other currencies will be down. In other words, in dollar terms the price of gold will trend higher. How high it will go, you have to call Mr. Bernanke and at the Fed, there are other people actually that make Mr. Bernanke look like a hawk. So they are going to print money. And they have done it for ages already and where has it led? To record high unemployment essentially since the Great Depression and structural unemployment. Unemployment goes among low paying jobs, not high paying jobs. So, you ought to own some gold, but don’t store it in the U.S. because the Fed will take it away from you one day.”
On whether he would buy property in the United States:
“Yes. Property prices in the south of the U.S. are very inexpensive compared to property prices around the world. The tragedy is that the people that were evicted from these homes have no access to credit. They have no money. They can’t buy them. So, with easy money by the Fed well-to-do people can buy these properties and then rent them out to the people that were kicked out of these homes. What a great achievement of the Fed. First they create the property bubble and destroy the wealth of poor people, then the poor people have to rent and the rents have been up over the last 12 months. What a great achievement. Thank you, Mr. Bernanke.”
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14th September 2012 at 12:02 pm
Buckhed says:
SAH…couldn’t agree more. A planned explosion of the world’s economies will drive folks to their collective knees.
Many Americans have said they would never accept a world wide currency or perhaps even a ” Digital Currency” but if the USA implodes over-night they will gladly take it.
If you woke up and found that every dollar you had in savings,401K’s,housing equity etc had evaporated over-night the shock would be incredible. A person who once had some wealth now awakens to being a pauper…but wait…if you accept the “New Currency ” your wealth will be restored…what would you do ? The average person would as Steve Miller said ” Take the money and run ” !
This is how you get folks to accept a “World Wide Currency ” .
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14th September 2012 at 1:04 pm
SAH says:
@AWD – you are naming stooges who are implementing the plans of small elite groups like the Trilateral Commission, WTO, etc. The “evil geniuses” are in closed non-governmental organizations, and are smart enough to maintain their privacy and autonomy by using tools to accomplish their agenda. The goal is “control without being controlled” so being in highly visible elected or appointed positions is counter to this goal. I do believe many of the known players you name are aware of what they are doing. They don’t pull the puppet strings, but they are more than happy to be puppets if it gives them and their progeny a secure and profitable place in the 500 million who are allowed to live. They’ve found a way out of being part of the “useless eaters” and 99.99% of humans would do the same and sell themselves to the world elite if they were smart and useful enough to do so.
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14th September 2012 at 1:09 pm
AWD says:
SAH
Agreed. I’d like to remind you I still have a “manual sexual favor” coming, and no, I haven’t forgot.
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14th September 2012 at 1:17 pm
SAH says:
@AWD… Oh man, I’m so sorry for you. If “SAH” ever promised you a “manual sexual favor” you do realize it was Stucky or Llpoh making the promise, right? I never took you for the type who would do that sort of thing with a Boomer man, but I’m sure my doppelganger is stocking up on Viagra so you can return the favor. If they overdose and experience an erection lasts more than 4 hours, they’ll be in good hands since you’re a Dr.
I admit I am sort of rooting for Romney though, if he legalizes polygamy the feminists will surely add legality of polyandry, in which case I will be taking you up on that. Haha.
Oh, and I forgot to mention the vilest group of elites – the Bilderberg Group. They are the center of the circle, the heart of the heart of the cabal. A lot of smart people hang out here – can anyone name 5 members of the Bilderberg Group? “The Tao which can be named is not the Tao”. Those fuckers have mastered philosophy well… Those we can easily name are not the cabal.
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14th September 2012 at 1:41 pm
AWD says:
Damn, all the support I’ve given you in flame-fests, and I get rejected. Damn, Damn, Damn.
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14th September 2012 at 1:58 pm
Administrator says:
Inflation Expectations Suggest 5% Inflation Is In The Cards
Submitted by Tyler Durden on 09/14/2012 14:39 -0400
Color us stunned. While the world and their pet cat Roger are not worrying about inflation because Bernanke says CPI/PPI are still well-anchored and everything else is “transitory”; it turns out the market has a ‘different’ opinion. We have discussed inflation expectations before (whether 5Y5Y forward views or 10Y inflation swap breakevens) as a trigger for Fed action (or inaction) but this time, the market front-ran Bernanke’s Bazooka and in the last two days of QEternity has exploded higher with 5Y forward expectations now near 6 year highs. CPI remains below 2% but there is a clear lag between the rise in market-implied inflation and it showing up in the unicorn-laden CPI prints – what this means is that given the hubris of the Fed yesterday, market expectations of inflation are inferring CPI could rise to over 5% within the next 3 to 6 months. It will surely be difficult for Ben to keep-on-buying (‘Finding Nemo’-like) in the face of that kind of ‘transitory’ rise in real data – though for now, real money remains bid as risk comes off a little (even as the long-bond yield blows 26bps higher this week) – oh and CPI and PPI jump their most in 3 years.
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14th September 2012 at 3:06 pm
Administrator says:
Egan Jones Downgrades US From AA To AA-
Submitted by Tyler Durden on 09/14/2012 – 15:22
From Egan-Jones, which downgraded the US for the first time ever last July, two weeks ahead of S&P: “Up, up, and away – the FED’s QE3 will stoke the stock market and commodity prices, but in our opinion will hurt the US economy and, by extension, credit quality. Issuing additional currency and depressing interest rates via the purchasing of MBS does little to raise the real GDP of the US, but does reduce the value of the dollar (because of the increase in money supply), and in turn increase the cost of commodities (see the recent rise in the prices of energy, gold, and other commodities). The increased cost of commodities will pressure profitability of businesses, and increase the costs of consumers thereby reducing consumer purchasing power. Hence, in our opinion QE3 will be detrimental to credit quality for the US.”
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14th September 2012 at 3:38 pm
Administrator says:
10 year Treasury rates finished at 1.87% for the week. They were at 1.64% at one point on Monday. That is a 14% increase in rates for the week. This means 30 Year Mortgages will be .23% higher next week.
How exactly is that going to help the housing market? Someone call Ben.
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14th September 2012 at 4:03 pm
Administrator says:
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14th September 2012 at 4:47 pm
SAH says:
@AWD – hey, no woman can resist a man who makes her laugh. If I were single and Austrian, I’d be begging you for it daily – you know that. Alas, I’m not and I don’t, so I know better than to make promises I don’t intend to keep, or to extend you offers of misguided miscegenation. Flame wars though? I have your back bro.
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14th September 2012 at 6:56 pm
Administrator says:
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14th September 2012 at 7:11 pm
Buckhed says:
Looks like the Georgia Guide Stones idea’s are starting to take shape !
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14th September 2012 at 11:24 pm
Dazed and confused... says:
I first became interested in all this when I read James Howard Kunstler’s book, The Long Emergency”. First I conceptualized the issue as being something that would have an acute onset. Over time, I realized that that was unrealistic and unlikely and began to think of it as a slow gradual process of movement toward the disaster I’ve been reading about since 2005 when his book came out. Well, it’s 7 years soon to be 8, and no disaster. I’ll admit that things such as vastly increased prices for survival staples such as food, fuel and other similar necessities have been a problem for me because, for example, my income has not risen the 100% the cost of gasoline has to match that increase in cost. And, yes, I’m watching my daughter’s college tuition go up also and I’m having to cut corners elsewhere to cover that. However, where’s the development of the disastrous changes we’ve all been discussing for so long? Yes, it is frightening to see the turn the government has taken with the purchase of millions of rounds of ammo and the trotting out of various armored personnel vehicles which does not make me feel especially secure with where that might be leading. And, yes, there are a lot of other worriesome statistics such as the lingering awesome rate of unemployment which would suggest that a lot of people are really really suffering in a way which hasn’t been seen since The Great Depression. But, when is the shit really going to hit the fan? This fall, around the time of the Election? Will the dam finally break loose then? I’ve been basically in “worry mode” since I read Kunstler’s book, how long will we collectively keep it all in? Personally, I’m more worried about the “30 blocks of squalor” developing into a sort of tidal wave and wasking out from the city (I live in Baltimore County) over me… As the Free Shit Army is squeezed more and more, maybe that’s where it’ll start. I don’t know. What do you all think?
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14th September 2012 at 1:27 am