Tapering bond purchases gets real. New York Fed President William Dudley has spoken. He represents Goldman, where he was a managing director. Goldman owns part of the NY Fed and is one of its 21 “primary dealers.” But it doesn’t want the financial system to blow up. On the theory that you can milk a cow many times, but you can bleed it only once.
Wall Street shenanigans
The Power Of The Financial Lobby: “For 25 Years, It’s Never Been The Right Moment” To Tighten
by Wolf Richter • • Comments Off on The Power Of The Financial Lobby: “For 25 Years, It’s Never Been The Right Moment” To Tighten
Things move quickly at the G-20 when markets go south. The turmoil following Chairman Bernanke’s mere suggestion of a vague and slow taper of the Fed’s multi-year money-printing and bond-buying binge has already incited our illustrious finance gurus and central bankers at the G-20 to buckle – under the weight of the financial lobby.
David Stockman: How The Fed Got Cramer’d
by David Stockman • • Comments Off on David Stockman: How The Fed Got Cramer’d
Retail Investor Nightmare: The Bond Fund Rout
by Wolf Richter • • Comments Off on Retail Investor Nightmare: The Bond Fund Rout
The bond selloff didn’t surprise anyone. Gurus of all stripes had predicted for years that it would happen, that the ridiculously low yields the Fed was imposing weren’t sustainable – only to watch as the Fed opened the spigot even wider. Then the smart money offered a tidbit of immortal wisdom to the euphoric bondholders: “run – do not walk!” And they did.
The Smart Money Sells “Everything That’s Not Nailed Down”
by Wolf Richter • • Comments Off on The Smart Money Sells “Everything That’s Not Nailed Down”
It was the day when Private Equity firms – the smart money, the great beneficiaries of the Fed’s bond-buying binge – announced their intentions to the rest of the world. The heavy hitters were there, and they let fly some pungent words. In short, they were “selling everything that’s not nailed down.” Turns out, they weren’t kidding.
The Big Four Central Banks Muddy The Same Sea Of Liquidity, And Then There’s China
by Lee Adler • • Comments Off on The Big Four Central Banks Muddy The Same Sea Of Liquidity, And Then There’s China
Contributed by Lee Adler, of The Wall Street Examiner. The Fed, ECB, BoJ, and BoE all deal with the same banks. Of the Fed’s 21 Primary Dealers, its sole counterparties, only seven are US domiciled. Three are Canadian, eight are European, including three British banks, and three are Japanese. All of them are major players in Europe and Japan.
David Stockman: When The Fed Capitulated To Financial Hoodlums
by David Stockman • • Comments Off on David Stockman: When The Fed Capitulated To Financial Hoodlums
“The market had been taken over by white-collar financial hoodlums who needed a trading fix every day,” writes David Stockman, Director of the OMB under President Reagan. “These punters and speculators were asserting an entitlement to any and all government policy actions which might be needed to keep the casino running at full tilt.”
Controlling The Implosion Of The Biggest Bond Bubble In History
by Wolf Richter • • Comments Off on Controlling The Implosion Of The Biggest Bond Bubble In History
In theory, the Fed could continue to print money and buy Treasuries and mortgage-backed securities, even pure junk, until the bitter end. But the bitter end would be unpleasant for those that the Fed represents – and now they’re speaking up publicly. They’re worried that their system might break down. It would threaten their empires. It would be the bitter end.
Biggest Bond Bubble In History Is Turning Into Carnage
by Wolf Richter • • Comments Off on Biggest Bond Bubble In History Is Turning Into Carnage
“We’ve intentionally blown the biggest government bond bubble in history,” confessed Andy Haldane, Director of Financial Stability at the Bank of England. The bursting of that bubble was a risk he felt “acutely.” He saw “a disorderly reversion” as the “biggest risk to global financial stability.” Seatbelts are being fastened; the clicks can be heard around the world.