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Fed Up With The Fed- Follow Up

Tyler Durden's picture


Follow up from Peter Tchir of TF Market Advisors

Well, the statement was more dovish than I thought - leaving in the extended period language, offset only a little by a slightly more direct reference to inflation.  This was the first sign that the conference would be positive for stocks.  As soon as it became clear that no questioner would really be allowed any follow up questions, the Q&A took on the 'Does this dress make me look fat?' tone.  A few reporters tried to ask some tough questions, but the format made it far too easy for the Chairman to avoid answering in any great detail.

There are a few useful takeaways from the conference: 

The Fed over-estimated growth and under-estimated inflation in January, but now they have it right.  Hmmm.  Its seems like their estimates are as much what they hope for as what is likely to happen.

I learned that the man who sets interest rates and prints dollars has nothing to do with creating a 'strong' or 'weak' dollar.  I'm still scratching my head, as I would have thought interest rates and supply of dollars had more impact on exchange rates than the Treasury Secretary saying he supports a strong dollar, but clearly I'm wrong on this.

Transitory is a great word and applies only to bad things the Fed wants to go away.  Inflation - transitory.  First quarter weakness - transitory.   Hmmmm. 

The vote was unanimous.  I keep hearing this is a strong indication that everyone backs the policy.  To me, it just means there is no point listening to any other Fed governors speak as in the end they will all do what the Chairman wants.  If there ever was a time that the vote was meant to be a real vote that is long gone and the Fed is clearly a dictatorship at this point.

I was disappointed that they did not push out their target maturity.  I'm also disappointed they rarely mentioned rates as a sign of the success of QE2.  In fact, it became clear they viewed stock market rally and to a lesser extent, credit spread tightening as measures of success of failure.  So in spite of their stated goals of economic growth and employment, their hidden goal of dollar weakness, their stated metrics are now asset prices.  It seems clear that the stock market can rest assured that the Fed is vigilant and will do what it can to support the stock market.  With stocks now at multi year highs, but the deficit and unemployment remaining high, I would have hoped he would have less focus on stocks.  He doesn't, so clearly have to be very careful betting against stocks while Ben has free rein.   

In the meantime, European sovereign debt remains relatively weak, though we continue to see the outperformance of CDS relative to bonds.  I'm still not sure exactly why, but the divergence bears watching. 


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Thu, 04/28/2011 - 08:19 | 1215238 Thorlyx
Thorlyx's picture

It's all transitory. Banks get transitory richer and we get transitory poorer.

Thu, 04/28/2011 - 08:25 | 1215254 Twindrives
Twindrives's picture

The FED uses the same approach as Obama in addressing the U.S. public, it goes like this.........I'll pick the venue, subject, and attendees.......and the rest of you fucking tax paying peasants just need to STFU and listen. 

The U.S. publics response:  Fuck Washington D.C. and everyone in it. 

Thu, 04/28/2011 - 10:43 | 1215833 DeadFred
DeadFred's picture

Hopefully transitory also applies to his presidency.  Let some other clown entertain us for a bit.  Regime change 2012.

Thu, 04/28/2011 - 09:16 | 1215452 Aristophanes
Aristophanes's picture Western Civilization.

Thu, 04/28/2011 - 10:16 | 1215720 InconvenientCou...
InconvenientCounterParty's picture

Everything is transitory except entropy.

enjoy the ride

Thu, 04/28/2011 - 08:22 | 1215243 slow_roast
slow_roast's picture

By the end Ben was smiling as each question was asked.  All of those reporters are getting access to the funding window.


All I heard was "Sure, go ahead and short the USD"

Thu, 04/28/2011 - 08:36 | 1215294 oh_bama
oh_bama's picture

FED up with WHAT? You guys are way too negative!!




Thu, 04/28/2011 - 08:20 | 1215247 shushup
shushup's picture

Very good assessment Tyler. And funny as usual.

Thu, 04/28/2011 - 08:22 | 1215249 UnRealized Reality
UnRealized Reality's picture

How the hell does he know the other feds are going along with Ben. It's all a con game, period. He is just as clueless as the fed.

Thu, 04/28/2011 - 08:22 | 1215251 BrobamaReds
BrobamaReds's picture

I tried to open an account at the Federal Reserve Bank in NYC the other day and the Security Guard laughed at me.  Just what kind of a bank is this?  I wanted to open a custodial account for my kid and see about a home equity line of credit.  Hummmm, very strange.  I am going to complain about this bank.

Thu, 04/28/2011 - 08:47 | 1215330 slewie the pi-rat
slewie the pi-rat's picture

they have a retail front.  j.p. something-or-other/somebody.

Thu, 04/28/2011 - 08:50 | 1215351 Whatta
Whatta's picture

did you at least get the free toaster? or the lunch box with Chairsatan's pic on it?

Thu, 04/28/2011 - 11:40 | 1216151 Mpizzie
Mpizzie's picture

I did the same thing at the one in Atlanta on 10th st.

I walked in and started asking where the teller line was, I needed to make a withdrawl.  

When they laughed, I walked outside, asked some of the obviously well-educated employees smoking, 'Do you know where I can make a withdrawl at, I saw no teller line.'

They laughed and one lady said, 'Don't you mean deposit...honey, we withdrawl off you everyday.'



Thu, 04/28/2011 - 08:25 | 1215252 Robslob
Robslob's picture

When the Fed is confident...worry.

When people are confident in the Fed...worry.

The U.S. Dollar is the only thing that is "transitory" now.

Thu, 04/28/2011 - 09:52 | 1215629 rufusbird
rufusbird's picture

Exactly, "What me worry?" ...Alfred E. Neuman.

When I read these 'news' analyasis... I wonder when did rationalization become more importaint than behavior?

Thu, 04/28/2011 - 08:26 | 1215255 augie
augie's picture

i wish my herpes was transitory :(

Thu, 04/28/2011 - 08:24 | 1215256 gordengeko
gordengeko's picture

In other news...

Ancient Porn Bitchez!

Thu, 04/28/2011 - 08:26 | 1215258 Racer
Racer's picture

Stocks up... goal of Fed...Banker Leeches very happy

Stocks up....80% of the population poor and in difficulties... Fed can't be bothered to listen... it is only transitory, inflation is contained, just look at those iPad prices what are you complaining about?

Thu, 04/28/2011 - 08:28 | 1215259 Titus
Titus's picture

The clap is transitory. Aids isn't. 

Thu, 04/28/2011 - 08:28 | 1215262 somethingelse
somethingelse's picture

why don't they just merge NYSE and NASDAQ into the FED and they can move their trading floors right into the Mariner Eccles building and really streamline the whole process.

Thu, 04/28/2011 - 08:30 | 1215272 Racer
Racer's picture

Why don't they just open the dow at 1million and keep it there....

everyone super rich, well maybe just a tiny amount of the propulation, but they can trickle it down to the rest of us peasants

Thu, 04/28/2011 - 08:31 | 1215275 Robslob
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The did in April 2009

Thu, 04/28/2011 - 08:35 | 1215289 dcb
dcb's picture

This is very similiar to the type of analysis I do with these things:

try to do what they call a block box analysis. you look at the people, the inputs, the effects. Ignore the public statements, then come to a conclusion as to what the real purpose of the thing is. It almost always leads to a very different conclusion that the "official" paradigm.

Thu, 04/28/2011 - 10:08 | 1215699 rufusbird
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Thu, 04/28/2011 - 08:38 | 1215291 Re-Discovery
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Woke up this morning to a great big MSM Yawn on the PM move.  If silver/gold is a mania, it is a mania that few want to openly talk about.  Seems if it is directly addressed by MSM or Bernank or any of the powers that be, it iwould be an admission of failure.  And as we all know, the Fed doesn't 'do' failure.

Looks like all us PM holders will be left in our own little cozy part of the market to freely profit on the monetary meltown for a while yet . . . .  at least til next delivery date.

Shh, don't wake the sheeple.

Thu, 04/28/2011 - 08:36 | 1215296 JFK.4PREZ
JFK.4PREZ's picture

change = end the fed

<obama change bumper sticker> <human rights campaign bumper sticker> <End the Fed bumper sticker>


I wonder if that'll penetrate through the sheeples noggins 

Thu, 04/28/2011 - 08:59 | 1215305 Soap
Soap's picture

My hemorrhoids are transitory.

Thu, 04/28/2011 - 08:55 | 1215364 Strategery
Strategery's picture

Transitory means they think they can control it, and I think they, in their arrogance. Truly believe that. The ultimate true believers. the unholy, Unfederal reserve.

Thu, 04/28/2011 - 09:29 | 1215513 SWCroaker
SWCroaker's picture

Most of the MSM seem to interpret "transitory" as meaning "temporary", as in we'll be back to our regular programming in just a bit.  Technically, "transitory" means something more along the lines of "moving", and shouldn't connotate any comfort about the end state other than it isn't likely to be here.

Fedspeak always seems to enjoy telling the truth in a fashion that can be misconstrued by idiots.  Ben says "Inflation is moving (transitory)" and people hear "inflation is temporary". 

Thu, 04/28/2011 - 11:45 | 1216197 alexanderstollznow
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"transitory" does NOT mean anything to do with moving. it means "temporary", as you will find if you consult a dictionary.  "temporary" is exactly what BB and the Fed team mean, and everyone knows that.

Thu, 04/28/2011 - 08:58 | 1215380 MrMorden
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Here's to hoping the Bernank is transitory.

Thu, 04/28/2011 - 09:01 | 1215391 slewie the pi-rat
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slewie's "Do The Math" 4 the day:

ZIRP + 8% inflation = PMs

Thu, 04/28/2011 - 09:28 | 1215498 JFK.4PREZ
JFK.4PREZ's picture

Students studying economics at Princeton would bomb your exam.  But the dean would intervene with grade inflation.  hmmmm weird.  

Thu, 04/28/2011 - 09:01 | 1215394 monopoly
monopoly's picture

Tough to short this market. As long as The Bernank is not indicted, Obama does not resign, or Geithner is not fired, I will hold my gold, silver, miners and will not short this market.

Nothing changed. Lets move on. Enjoy.

Thu, 04/28/2011 - 09:13 | 1215443 HEHEHE
HEHEHE's picture

Impossible to short.  Impossible.  It will all collapse monstrously at some point but this Bernanke nut will keep printing until that day happens.

Thu, 04/28/2011 - 09:04 | 1215404 Note to self
Note to self's picture

Did the big guy state anything definitively w/ respect to no possibility of a QE3?  Egad - look at the dollar index today.

Thu, 04/28/2011 - 11:42 | 1216170 alexanderstollznow
alexanderstollznow's picture

yes, he said that the incremental gains from QE were diminshed, and that it would be hard to make a case for a further round of QE.  funds from maturing MBS will continue to be rolled over.


Thu, 04/28/2011 - 09:12 | 1215438 HEHEHE
HEHEHE's picture

As long as they left in the dovish you know QE3 is coming.  This guy Bernanke is a chump.  Nobody believes him.  All he has left is QE and everyone knows it.  What was really hilarious was the pdf of the FEDS projections going forward from which they based their decision.  You'll all be happy to know that in 2013 there'll be 6% unemployment again and little inflation.

Do they teach a special class at Harvard Business School on how to calculate government statistics.

Thu, 04/28/2011 - 09:17 | 1215454 HedgeFundLIVE
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Fed days tend to be up on average 67bps, on following day down 11bps:

Thu, 04/28/2011 - 09:21 | 1215478 bbbilly1326
bbbilly1326's picture

"Transitory is a great word and applies only to bad things the Fed wants to go away. "

yep, zerohedgers know that "on a long enough timeline" everything is transitory.

The thing that impressed me most was a small  detail -- he actually told the truth in one instance -- he admitted that "long term unemployment is not within the scope of FED monetary policy."

IOW, not my job !

Thu, 04/28/2011 - 10:04 | 1215603 sbenard
sbenard's picture

I've been feeling for quite awhile now that our freedom is also "transitory"! I guess that they , the oligarchy, view freedom as "a bad thing" that "they want to go away", too!

Both the press corps and the questions were pre-screened! That wasn't a press conference yesterday; it was a photo op!

Thu, 04/28/2011 - 10:08 | 1215685 sbenard
sbenard's picture

And if inflation's NOT transitory, Bubbles? Back to barter and grunts, sir?

Thu, 04/28/2011 - 10:21 | 1215746 Flakmeister
Flakmeister's picture

Anyone catch on CNBC in their "post-game show", the guy who said

"...the traders are gaming The Bernank"

Almost fell out of my chair....

Thu, 04/28/2011 - 10:34 | 1215790 MrBoompi
MrBoompi's picture

I don't remember any questions being asked about the metals markets. In the meantime silver goes over $49! I wonder how Bennies' coworkers over at JPM feel about this?

Thu, 04/28/2011 - 11:09 | 1215958 SRV - ES339
SRV - ES339's picture

The only news from the Dog (Ben) and Pony (Lies-man) show was Ben's quiet capitulation in the continuing purchase of treasuries through QE1&2 maturities...

Welcome to QE

Thu, 04/28/2011 - 11:35 | 1216128 alexanderstollznow
alexanderstollznow's picture


that does not accurately reflect what Benanke said. 

 firstly, he said the Geithner is the US government's spokesman on the subject of the $, rather than BB. 

secondly, he did not say that fed policy has nothing to do with creating a strong or weak $;  rather, he said the best thing the Fed can do to achieve a strong $, is to promote a strong economy.  which is completely true, and in any case, using MP to effect a policy on the level of the $ would not be within the Fed mandate, right? 

Thu, 04/28/2011 - 12:06 | 1216322 AldousHuxley
AldousHuxley's picture

You will get as much truth from this "conference" as you would from white house press secretary. They are there to lie to the public but formality would make it sound official.


For real substance, see what they do not what they say. ie. promotion of dovish janet yellen to vice-chair.


Thu, 04/28/2011 - 14:53 | 1217131 AldoHux_IV
AldoHux_IV's picture

Very much the least ugly pageant when looking at the US vs the Euro situation-- for now the euro is benefitting from their pisspoor mismanagement of economic policy while the spotlight is on the US.
