SP 500 and NDX Futures Daily Charts - The Downward Spiral of Dumbness

"The Committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.

However, if incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated.

Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated."

FOMC Statement, Oct 29, 2014

I think Bob Pisani literally squeaked when he read 'sooner' in the underlined portion of that FOMC statement, asserting that this was a 'hawkish' statement indeed.  He did not bother to reference the next sentences that begins, 'conversely.'

And I think the wiseguys knew that the Fed was basically saying nothing new, but throwing a farewell bone to the hawk Plosser on the committee, who won't be around after the first of the year, and the complexion of the FOMC turns decidedly more dovish in nature.

The US dollar spiked, but forex has a notorious carney game intraday, but that moved key commodities like gold and oil in the 'right direction' which is down. 

And the hosts and guests on bubblevision continued to burble on about 'rate increases' and 'amazing corporate profits' for the rest of the afternoon.

I am sure we will have loads of fun speculating about what the Fed will do next for quite some time.

Let's see how the rest of the world takes the news that the Fed has its hand on the tiller of the world's economy, to take it where they will.

I think the Fed will move when something forces their hand, and not one minute before.  And I will be glad but surprised if it is a booming economy fueled by organic growth and domestic consumption  next year.

Have a pleasant evening.

FOMC On QE III: Mission Accomplished

It is mission accomplished for the Fed's third stimulus program, if one keeps in mind that Quantitative Easing is a subsidy program for the one percent and Wall Street, not the general public and Main Street.

It is the fallacy of trickle down economics at its most blind and pernicious.

At the end of the day, the Fed's objective has been to bail out and preserve their owners in the Banking System, largely intact, down to their thoroughly rotten core.   The Fed is not the government.  The Fed works with its friends in the government.  The Fed is a creature of the Banks.

And the public is being forced to pick up the tab through financial repression and a stealth austerity through market manipulation, money printing, and price rigging.

Board of Governors of the Federal Reserve System

Release Date: October 29, 2014

For immediate release

Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace. Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing. Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee's longer-run objective. Market-based measures of inflation compensation have declined somewhat; survey-based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee judges that there has been a substantial improvement in the outlook for the labor market since the inception of its current asset purchase program. Moreover, the Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the Committee decided to conclude its asset purchase program this month....

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

Related: US Child Poverty Highest In Twenty Years

Nomi Prins: Why the Financial and Political Systems Failed

Nomi Prins calls out the policy error deluxe that has been the topic of so much commentary at Le Café over the past few years.

What is perhaps most striking is that this failure is so bipartisan in a time of contentiousness.   It crosses not only parties but professions, from academics to politicians.

As you know I have featured several articles and videos of hers as she introduces her latest book, All the President's Bankers which is insightful, well-founded and researched, and essential to any understand of what is happening today.

 

As you know I have ascribed this to the credibility trap.   Insiders never speak ill of insiders, if they which to remain a part of the power elite. This is reinforced in the Ivy League and the halls of power.   And so leaders and potential leaders are hopelessly compromised and entangled in a self-serving system of abuse of power and corruption.

It is part of a general failure of moral conscience and leadership in the country.   It has been or is being repeated in England and other countries in Europe.  It is the reason for the long stagnation of the Japanese economy.

 

This is a very brief excerpt.  You may read this insightful commentary in its entirety here.

 

"The recent spike in global political-financial volatility that was temporarily soothed by ECB covered bond buying reveals another crack in the six-year-old throw-money-at-the-banks strategies of politicians and central bankers.

The premise of using banks as credit portals to transport public funds from the government to citizens is as inefficient as it is not happening. The power elite may exude belabored moans about slow growth and rising inequality in speeches and press releases, but they continue to find ways to provide liquidity, sustenance and comfort to financial institutions, not to populations.

The very fact - that without excessive artificial stimulation or the promise of it - more hell breaks loose - is one that government heads neither admit, nor appear to discuss. But the truth is that the global financial system has already failed. Big banks have been propped up, and their capital bases rejuvenated, by various means of external intervention, not their own business models..."

Nomi Prins, Why the Financial and Political Systems Failed, and Why Stability Matters

Related: All The President's Bankers