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BEN BERNANKE'S FOLLY
The Market-ticker ^ | Sept. 9, 2013 | Karl Denninger

Posted on 09/19/2013 8:17:02 AM PDT by SatinDoll

This much has been determined yesterday -- The Fed could not handle a 2.8% 10 year Treasury rate.

Nor could it handle any further increases.

But consideration of the impact of this policy on the common man, along with the destruction of purchasing power and outright theft from the people who produce the services (and few goods remaining) in this nation was damned -- exactly as has been the case for the last three decades.

What Bernanke did yesterday was guarantee a crash. He guaranteed it because he took what was a clear opportunity to take what had been priced into the market and execute on that and squandered it, effectively turning the crack ***** into the person in charge of the crack supply.

The econometric model predicated on simple credit growth allowed this move in stock prices to where we are now. However, since the 1990s we left the world were this expansion can take place in a stable format as credit -- that is, the amount of money in the system -- rose precipitously.

Instead we now have a positive feedback system established, and Bernanke is extending that into the part of the market where it has never been before -- US Treasuries.

Simply having it occur in MBS blew up the world in 2008. This is worse as now it's in MBS and Treasuries and zero-earning companies.

What's worse is that all Bernanke got out of this is a 10 year Treasury that moved back to where it was a month ago. He did not get back any of the slide in the bond price from May to August -- nor is he likely to.

The impact of yesterday's decision on middle class America is likely to be catastrophic, but not immediate. If you're a trader and were long yesterday you were probably high-fiving your pals in the bar last night, but beware that the bartender likely has none of those stocks and when he figures out what you did to him, along with your maid and nanny, don't be surprised if your morning coffee, evening drink, or kid's lunch is discovered to be spiked with something far worse than a bit of rum.


TOPICS: Business/Economy; Government; Politics
KEYWORDS: bonds; denninger; economicgrowth; federalreserve; stockmarketcrash; ticker
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To: SatinDoll
And I need a robot made out of bacon.

Otherwise I'm screwed.

21 posted on 09/19/2013 10:31:30 AM PDT by Lazamataz (Early 2009 to 7/21/2013 - RIP my little Sgirl Cathy. You were the best cat ever. You will be missed.)
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To: Lazamataz

All right, I’ll buy — why do you need a robot made out of bacon?


22 posted on 09/19/2013 10:33:37 AM PDT by SatinDoll (NATURAL BORN CITIZEN: BORN IN THE USA OFCITIZEN PARENTS)
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To: SatinDoll
Because it would be DELICIOUS, silly goose!

And automated, too!

23 posted on 09/19/2013 10:40:14 AM PDT by Lazamataz (Early 2009 to 7/21/2013 - RIP my little Sgirl Cathy. You were the best cat ever. You will be missed.)
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To: SatinDoll

Bump and save


24 posted on 09/19/2013 10:51:06 AM PDT by krunkygirl (force multiplier in effect...)
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To: Lazamataz
I agree, no matter how you post it, you may be SCREWED and part of the getting screwed club.

Welcome to the Obama legacy.

25 posted on 09/19/2013 10:52:05 AM PDT by A CA Guy ( God Bless America, God Bless and keep safe our fighting men and women.)
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To: Lazamataz

Hmm — roaming sizzle, I suppose.


26 posted on 09/19/2013 10:56:38 AM PDT by SatinDoll (NATURAL BORN CITIZEN: BORN IN THE USA OFCITIZEN PARENTS)
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To: SatinDoll

350.00 per month you are definitely off the radar. It’s people like you who cause Obama these headaches! LOL


27 posted on 09/19/2013 2:15:18 PM PDT by Orange1998
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