http://market-ticker.org/akcs-www?post=215617
and......
http://www.zerohedge.com/news/2013-01-03/fomc-minutes-released-dissension-qe4eva-growing
Submitted by Tyler Durden on 01/03/2013 14:03 -0500
http://www.zerohedge.com/news/2013-01-03/geithner-out-march
Submitted by Tyler Durden on 01/03/2013 12:43 -0500
http://uk.reuters.com/article/2012/12/04/blackrock-fink-idUKL1E8N4COC20121204
( unfortunately Larry says he's not leaving BR... )
http://ex-skf.blogspot.com/2013/01/post-fiscal-cliff-us-blackrock-chairman.html
Larry Fink, Chairman and CEO of Blackrock that manages $3.67 trillion assets, appears almost embarrassed at his colleagues on Bloomberg TV talking about "who won and who lost" in the "fiscal cliff" non-deal.
While his colleagues (Bloomberg columnists) yak-yak about Republicans as losers and Obama as winner getting "B" grade, Biden gaining more power etc., Mr. Fink says "Excuse me, but the biggest losers are American people."
1:40 into the clip, after a lively discussion of winners and losers on Capitol Hill and White House, Mr. Fink says:
This is really thrilling.
Fed Minutes: "We Lied"
Oh hoh hoh, what do we have in here?
Remember this from the Statement?
But but but..... everyone took the statement as meaning that 2015 was the minimum target before policy accomodation would end -- that is, Bernanke would monetize at least $2 trillion more, and probably more like $3 trillion.
Not so fast Kemosabe!
It appears that The FOMC sees what I and a few others have been talking about for a couple of years now -- that these "asset purchases" are not particularly effective (other than in boosting stock prices) and the larger the imbalance that The Fed builds into the economy and the markets the more difficult it will be to withdraw that policy, because exponents are a bitch.
Remember this from the Statement?
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and, in January, will resume rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.Yeah, $1 trillion, roughly, annualized. Except that....
While almost all members thought that the asset purchase program begun in September had been effective and supportive of growth, they also generally saw that the benefits of ongoing purchases were uncertain and that the potential costs could rise as the size of the balance sheet increased. Various members stressed the importance of a continuing assessment of labor market developments and reviews of the program's efficacy and costs at upcoming FOMC meetings. In considering the outlook for the labor market and the broader economy, a few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy accommodation but did not state a specific time frame or total for purchases. Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted.
But but but..... everyone took the statement as meaning that 2015 was the minimum target before policy accomodation would end -- that is, Bernanke would monetize at least $2 trillion more, and probably more like $3 trillion.
Not so fast Kemosabe!
It appears that The FOMC sees what I and a few others have been talking about for a couple of years now -- that these "asset purchases" are not particularly effective (other than in boosting stock prices) and the larger the imbalance that The Fed builds into the economy and the markets the more difficult it will be to withdraw that policy, because exponents are a bitch.
By the way, these aren't actually "minutes." We don't know who said what, precisely. Indeed, we don't even know if the alleged "minutes" reflect what was really said at all, and we have seen when the actual minutes are released (many years later) that in point of fact some members of the FOMC have said things that aren't exactly coherent with the so-called "minutes" released a month after the meeting.
But in this case memory lane is short enough for people to pay attention, since the FOMC decision came just a few weeks ago, as did the presser, and both the statement and Bernanke led the market to believe that they would simply stand on the gas -- and the FOMC was not only behind him on this with the exception of his one dissenter, they saw this as appropriate through 2015 or maybe even later.
Nope.
Now add to this the debt ceiling and suddenly things get very interesting, and the bond market appears to have figured that out rather..... "rapidly."
This could, in turn, make the interest expense for the Federal Government rather..... "interesting" if they don't cut the crap.
Heh Boehner, Pelosi, Reid, McConnell and Obama:
But in this case memory lane is short enough for people to pay attention, since the FOMC decision came just a few weeks ago, as did the presser, and both the statement and Bernanke led the market to believe that they would simply stand on the gas -- and the FOMC was not only behind him on this with the exception of his one dissenter, they saw this as appropriate through 2015 or maybe even later.
Nope.
Now add to this the debt ceiling and suddenly things get very interesting, and the bond market appears to have figured that out rather..... "rapidly."
This could, in turn, make the interest expense for the Federal Government rather..... "interesting" if they don't cut the crap.
Heh Boehner, Pelosi, Reid, McConnell and Obama:
That's the Chrysler Building you feel up your butt. I hope you enjoy it.
and......
http://www.zerohedge.com/news/2013-01-03/fomc-minutes-released-dissension-qe4eva-growing
FOMC Minutes Released: Dissension To QE4EVA Growing
While some were concerned at the Fed's new quantitative targets as suggesting early tightening, it appears (from the FOMC Minutes) that those fears were somewhat warranted (with most seeing QE ending in 2013):
- *FED SAYS A FEW ON FOMC WANTED QE UNTIL ABOUT THE END OF 2013
- *FED: SEVERAL ON FOMC BACKED QE HALT OR CUT WELL BEFORE 2013 END
- *ALMOST ALL FOMC MEMBERS SAW POTENTIAL QE COSTS AS INCREASING
The punchline: "several" means more than just QE4 hater Jeff Lacker are turning hawkish. Though, even with the risks, they want moar. Pre-FOMC Minutes: ES 1460, 10Y 1.86%, EUR 1.3108, Gold $1674. Post: ES -6pts, 10Y +5bps, EUR -40 pips, Gold -$10.
Here is the punchline from the report:
In their discussion of monetary policy for the period ahead, all members but one judged that continued provision of monetary accommodation was warranted in order to support further progress toward the Committee’s goals of maximum employment and price stability. The Committee judged that such accommodation should be provided in part by continuing to purchase MBS at a pace of $40 billion per month and by purchasing longer-term Treasury securities, initially at a pace of $45 billion per month, following the completion of the maturity extension program at the end of the year. The Committee also maintained its existing policy of reinvesting principal payments from its holdings of agency debt and agency MBS into agency MBS and decided that, starting in January, it will resume rolling over maturing Treasury securities at auction. While almost all members thought that the asset purchase program begun in September had been effective and supportive of growth, they also generally saw that the benefits of ongoing purchases were uncertain and that the potential costs could rise as the size of the balance sheet increased. Various members stressed the importance of a continuing assessment of labor market developments and reviews of the program’s efficacy and costs at upcoming FOMC meetings. In considering the outlook for the labor market and the broader economy, a few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy accommodation but did not state a specific time frame or total for purchases. Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted.
http://www.zerohedge.com/news/2013-01-03/geithner-out-march
Geithner Out Before End Of January
We are sad to bring you the tragic news that Tim "TuboTax" Geithner, who has long made clear his plans to leave some time in early 2012, will be out before March, and in fact before the end of January as it turns out.From Bloomberg:
- GEITHNER SAID TO PLAN DEPARTURE BEFORE DEBT CEILING RECKONING
We are also confident readers will somehow be able to overcome the unprecedented sadness at this particular rat's departure from the Titanic, metaphorically speaking of course.
And while Timmy's replacement (assuming it is of the Homo Sapiens genus and species) is still unknown, we know what some of the prospects think about serving the public:
American Express Kenneth Chenault had been approached for job, has indicated he isn’t interestedAdministration officials had approached American Express Co. Chief Executive Officer Kenneth Chenault about joining Obama’s second-term cabinet, possibly as Treasury secretary.Chenault isn’t interested in leaving his private sector job, according to a spokesman.
More from Bloomberg
and on the subject of Treasury - note the comments from " rumored " candidate Larry Fink....
( unfortunately Larry says he's not leaving BR... )
FRIDAY, JANUARY 4, 2013
Post-"Fiscal Cliff" US: Blackrock Chairman "The Biggest Losers Are American People"
Larry Fink, Chairman and CEO of Blackrock that manages $3.67 trillion assets, appears almost embarrassed at his colleagues on Bloomberg TV talking about "who won and who lost" in the "fiscal cliff" non-deal.
While his colleagues (Bloomberg columnists) yak-yak about Republicans as losers and Obama as winner getting "B" grade, Biden gaining more power etc., Mr. Fink says "Excuse me, but the biggest losers are American people."
1:40 into the clip, after a lively discussion of winners and losers on Capitol Hill and White House, Mr. Fink says:
I, I guess I wish we spent less time worrying about who's the winner and losers, because I think American population is the big loser in this... We have two more months of work in front of us to get something really sensible.... I am really afraid we're going to have the repeat of August 2011...
He doesn't manage the world-largest investment firm for nothing.
and how do you know the Fed is really running out of bullets..... how do you know the US is really busted ........
http://www.businessinsider.com/suddenly-lots-of-influential-people-are-talking-about-the-trillion-dollar-coin-idea-to-save-the-economy-2013-1
Suddenly, Lots Of Influential People Are Talking About The Trillion Dollar Coin Idea To Save The Economy
An arcane idea that started on finance blogs in the summer of 2011-- that Tim Geithner should mint a trillion dollar platinum coin to avert the debt ceiling -- is now seriously taking off.
The premise of the idea is this: Although the Treasury can't just create money out of thin air to pay its bills, there is a technicality in the law that says the Treasury has special discretion to create platinum coins, and the thinking is that Tim Geithner could make the coin and walk it over to the Federal Reserve and deposit it in the Fed's account.
The first blog to really promote the idea was Cullen Roche's Pragmatic Capitalist. We jumped on it soon thereafter, as did others. Of course, once the debt ceiling was solved, people forgot about it.
But there's a new debt ceiling looming, and this time, LOTS more people are talking about it.
We noted our surprise back in early December that an actual 3rd party research firm brought up the idea.
Now it's going even more viral.
In an interview with Capitol New York, Representative Jerry Nadler came out in favor of the solution (Nadler has an above-average understanding of economics in our experience).
Josh Barro at Bloomberg is now endorsing it, and that's spread a huge conversation about it among DC journalists and policy folks on twitter.
Barro explains why it's the perfect "solution" to the debt ceiling fiasco:
Hitting the debt ceiling isn't an option. It's no way to run the country, and Republicans know that. So, a debt-ceiling increase shouldn't count as a "concession," and it's nutty for Obama to have to give substantive policy ground to get one.
Monetizing deficits through direct presidential control of the currency, in lieu of borrowing, is also no way to run a country. It's silly, and it's perfectly legal. Agreeing not to do so is therefore the ideal "concession" for Obama to offer in return for Republicans agreeing to end the threat of a debt-default crisis.
This is basically the right way to think about it. Yes it's silly to think of funding yourself with a coin, but it's even sillier to think that defaulting might be a good idea, so you might as well do it.
One economics point must be addressed: Lots of people, when they hear the idea, say one of two things:
- This would cause massive inflation!
- Well if we did this, why not a $100 trillion dollar coin?
Neither of these are legitimate rejoinders.
This would not result in massive inflation, because we wouldn't have a gigantic injection of new money into "the system." That is only achievable through massive spending beyond which the economy can handle. But this loophole would in no way let the government spend beyond which Congress has allocated through the budget.
And the point about the $100 trillion coin misses the point as well. The current economic constraint is not what we can raise or spend, but rather a dumb law (the debt ceiling) that we would like to get around legally. A $1 trillion coin accomplishes this goal just as easily as a $100 trillion coin does. Remember, the constraint isn't money, the constraint is law.
So yes, this is very thrilling, and we hope Obama puts an end to this nonsense tomorrow by unveiling the coin.
Now the question everyone is asking is
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