orca

'Helicopter Ben' Was Prophetic in 2002

Just so we are on the same page, the FED is n.o.t. the Central Bank of the USA, it is a group of commercial/investment banks. Therefore the entire alphabet-soup of emergency programs coming out of the institution (and the Treasury), leading to a transer of assets and liabilities from one balance sheet to another, is nothing more or less than an optical illusion.

Bernanke's Backfire: Now What?

As we speak uncle Hank is at it again. Unless it is followed up by action the recoil will be ferocious. Also concerted intervention will not work for more than 2-3 days, there is only so much dough you can spend on buying something the issuer doesn't want to defend with structural reforms.

Bernanke's Backfire: Now What?

True, bearfund. The same happening over here (Europe) by the way, although here it can be sort of explained with higher rate expecation. In the USA it is probably something else, more inflation- and save parking-related. Can't put my finger on it yet. We have had a brutal move on our EUR-dominated state-treasuries, falling 550 bbp from the March-top on 4-year maturity. 10-year even more savage at -600 bbp. Interesting times, that's for sure.

Bernanke's Backfire: Now What?

The whole world is royally pissed off, excuse my french. Couple of weeks ago you saw it with Bush in Saudi-Arabia, regarding production quota (Bush looking even more stupid than usual, which is an accomplishment of sorts), and with OPEC explaining that every USD fall of 1% will be accompanied by a crude spike of 4%.
Last week you saw it with Trichet calling Bernanke's / Paulsons bluff within 2 days. This morning your prez, oblivious of everything around him, also reiterated that moronic "strong $ policy" phrase.
G8 tried and failed too last month to verbally support the USD.
You are spot on regarding credibilty. After the subprime fiasco, the rating agencies, the monolines, LIBOR, the FED facilities, "strong $ policy" BS etc nobody listens any more, they want to s.e.e. something. That something is the patient taking the medicine, in the form of multiple rate hikes. The question is will it happen in a week, a month or a year. It will happen, no doubt about it, but seeing your "leadership" probably later than sooner. BS time is over.