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bubbleturbo

The Federal Reserve - Putting The Toothpaste Back In The Tube

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Interesting article and opinions on the Fed having to unwind their QE meddling:

http://viableopposition.blogspot.ca/2013/09/the-federal-reserve-putting-toothpaste.html

More interesting articles relating to the mess we are now in:

http://brucewilds.blogspot.com/2013/07/it-will-all-end-badly.html

http://brucewilds.blogspot.com/2013/01/ugly-math-made-simple.html

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I don't think the Fed can unwind from this without causing major financial distress. I'd argue they think the US economy will still come out on top from the carnage.

Central bankers don't have any idea how it will end, if they avoid major collapse it will be through luck rather than judgement.

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Interesting article and opinions on the Fed having to unwind their QE meddling:

http://viableopposition.blogspot.ca/2013/09/the-federal-reserve-putting-toothpaste.html

'With the size of the Fed's portfolio, it faces paper losses of approximately $3 billion for every one-hundredth of a percentage point rise in interest rates.'

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I don't think the Fed can unwind from this without causing major financial distress. I'd argue they think the US economy will still come out on top from the carnage.

Central bankers don't have any idea how it will end, if they avoid major collapse it will be through luck rather than judgement.

I'm pretty sure that they know that it will end in general financial carnage but before that happens they are making sure that they (and their chums in the financial system) can loot as much wealth from the real World as they possibly can.

You can bet that should we see an Argentina style collapse, they'll be holding physical assets and be located somewhere safe and comfortable, probably offshore.

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FT says 19:00 BST.

Yep , sold most of my SIPP holdings ( for a nice profit ), to see what happens after the FED announcement over the next week or so.

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I heard this on the radio and it pricked my ears up.

I wonder how long it will be before we start to see inexorable, merciless interest rate rises then. God the over leveraged have NO IDEA what's in store once that starts.

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I heard this on the radio and it pricked my ears up.

I wonder how long it will be before we start to see inexorable, merciless interest rate rises then. God the over leveraged have NO IDEA what's in store once that starts.

Breaking news on the beeb: no tapering this time.

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Yep , sold most of my SIPP holdings ( for a nice profit ), to see what happens after the FED announcement over the next week or so.

Gold just went up $40

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'With the size of the Fed's portfolio, it faces paper losses of approximately $3 billion for every one-hundredth of a percentage point rise in interest rates.'

http://uk.reuters.com/article/2013/09/18/uk-usa-fed-idUKBRE98G1D420130918

The U.S. Federal Reserve said on Wednesday that it would continue buying bonds at an $85 billion monthly pace for now, expressing concerns that a sharp rise in borrowing costs in recent months could weigh on the economy.

If the above is true the Fed may be worried about it's own solvency, printing money to cover it's own losses may not be considered cricket.

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Market's are taking Ben's remarks at the presser as dovish.

Sterling above 1.61, 10-year now down nearly 14bps, DJIA up 150.

Defo was a dove-ish speech....however he said that if economic conditions remain similar and the recovery does not reverse, they would look to taper shortly with a view to completely halting all of the current $85B / month asset purchases by mid next year.

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Defo was a dove-ish speech....however he said that if economic conditions remain similar and the recovery does not reverse, they would look to taper shortly with a view to completely halting all of the current $85B / month asset purchases by mid next year.

do we need to say it again...when in comes to politicians and central bankers.. watch what they do...not what they say. i dont thehunk se people are not going to stop until something seriously goes wrong.

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7 Reasons To Delay The Taper (And 4 Reasons Why They Can't)

1. Both growth and inflation data continue to come in below the Fed’s forecasts and they will likely revise their GDP and inflation forecasts lower at the September meeting.

2. The unemployment rate has moved closer to the 7% “indication” for ending QE; however, as we have argued and the minutes confirm, the Fed is only using 7% as a rough summary statistic for a broad-based recovery.

3. At the July meeting, just one meeting before the alleged certain tapering, the Fed showed no urgency. They had inconclusive debates about inflation, growth and financial conditions, and they had no discussion of the specifics of tapering.

4. Public statements by Fed officials have been similarly ambiguous. Time is running out.

5. The Fed has never said September is the month, they have consistently said “later this year” — that means at any of the next three meetings.

6. The Fed meets on September 18, right in the middle of what could be another nasty fight over the budget and the debt ceiling. A key reason for tapering is that fiscal risks are fading with the cliff behind us. But are they really fading or is this just a temporary lull in the fiscal fracas?

7. Last, but not least, the core of a bullish forecast — a solid housing recovery — is now in serious doubt.

..

1. Deficits are shrinking and the Fed has less and less room for its buying

2. Under the surface, various non-mainstream technicalities are breaking in the markets due to the size of the Fed's position (repo markets, bond specialness, and fail-to-delivers among them).

3. Sentiment is critical; if the public starts to believe (as Kyle Bass warned) that the central bank is monetizing the government's debt (which it clearly is), then the game accelerates away from them very quickly - and we suspect they fear we are close to that tipping point

4. The rest of the world is not happy. As Canada just noted, the US monetary policy will be discussed at the G-20

From ZH as to why they can't taper.

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Tops off an already fairly crap day

We won't be giving a stuff about housing when prices do finally revert - the ones left will be eating dog food and driving Ford Interceptors

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The Fed has become the Pied Piper

More like a poisonous viper

We follow along To Ben's tragic song

Till markets resemble a diaper!

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America is a very interesting county. the citizens have the right to bare arms and a lot of them do...although i distinctly get the feeling they are looking for an excuse to stop that. throw into the mix a powder keg of religions and nationality and you have a recipe for disaster.maybe being in the UK aunt so was after all.

Edited by TheCountOfNowhere

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