The Fed Disappoints... The Great Collapse is Here

Zero Hedge ^ | 09/22/2011 | Graham Summers

[SeekAndFind]

I’ve been warning for weeks now that the Fed would disappoint with its September meeting. And boy did it.

 

As I forecast, the Fed didn’t announce QE 3. In fact, it didn’t announce any new policy of note. Instead it is simply reshuffling its holdings to focus more on the long end of the bond markets.

 

On top of this, the Fed announced it will only be moving roughly $400 billion of its portfolio around. This is the smallest major intervention the Fed has announced since it began implementing QE in 2009 (QE 1 was $1.25 trillion while QE 2 was $600 billion). Indeed, this move is on par with the Fed’s implementation of QE lite which to date has been about $300 billion give or take in scope.

 

Even more striking, while announcing this disappointing move, the Fed downgraded its view of the economy stating, “there are significant downside risks to the economic outlook.”

 

Previously, any admission of economic deterioration from the Fed resulted in the US Dollar selling off sharply as traders expected additional easing/ printing. This time around, the market senses that the Fed has disappointed and that the Fed’s move is largely symbolic more than anything else.

 

The end result of this: the market is Crashing just as I warned. The S&P 500 has gone from 1,200+ to 1,136, a 6% drop, in the overnight session.

 

 

We’re just getting started here. Today we got a confirmed SELL on my proprietary Crash indicator. This is the SAME indicator that registered before the 1987 Crash, the Tech Crash, and the 2008 collapse.

 

It's just triggered again... which means that today's sell off is JUST the beginning of what's coming. Indeed, I fully believe that the Great Collapse, the time when the Fed completely loses control of the markets, has arrived. We're going to be seeing Market Crashes, Bank holidays, riots, food shortages, and more in the coming months.

[Peter from Rutland]

Sell now! Panic! Panic! Go strictly on emotion and nothing else!

[jpsb]

I certainly hope he is wrong.

[rogue yam]

“We’re going to be seeing Market Crashes, Bank holidays, riots, food shortages, dogs and cats living together...real wrath of God stuff!”

[chris37]

Actually, no QE3 is a very good thing.

The market is going to get alot worse before it gets better though.

Barack Hussein Obama is damage in its purest form and in every aspect.

We are definitely going to pay for the mistake of electing this man, and we are going to pay hardcore.

[silverleaf]

“Those who fear deflation buy bonds; those who fear inflation buy gold; those who cannot decide buy both.”

Can’t remember who said that! Sounds good right now!

[The Sons of Liberty]

Wasn't Bernanke the one who was supposed to be a student and authority on The Great Depression? It seems like all he learned was how to fail, but maybe he is in league with his buddy Hussein 0bama. 0bama wants to be remembered, so he is busy creating The 0bama Depression.

FUBO GTFO! 486 Days until Noon Jan 20, 2013

[cuban leaf]

Well, I bought my tractor last weekend, but I still need to get my 40x60 sheet metal building up before it happens. Gotta get that floor poured pronto!

[cuban leaf]

—Sell now! Panic! Panic! Go strictly on emotion and nothing else!—

That is the first mention of panic in this thread. I believe the OP was talking about trustworthy indicators, as opposed to emotion.

Kinda like when Schiff was laughed at in 2006 when he said that the fundamentals said the bubble was bursting - and he was laughed at on live television by other “economists”. And he was dead right.

[Huskrrrr]

Actually, no QE3 is a very good thing.

Yes, maybe also insuring Obamas’ defeat in 2012.

[Durus]

"...I fully believe that the Great Collapse, the time when the Fed completely loses control of the markets."

Wait...what? Did he just say the Fed controls the markets? Pardon me while I fail to panic, but I think the time has come for us to nationalize the fed. It's insane that the government gave one of their few limited powers to a privately owned banking consortium.

[DuncanWaring]

Related:

Welcome To The Collapse Of 2011

[cuban leaf]

“Those who fear deflation buy bonds; those who fear inflation buy gold; those who cannot decide buy both.”

Though I did not intend it that way, that is how it has worked out for me. I did put my 401k into bonds too soon though - 2009. My wife’s 401k stayed in stocks and practically caught up with mine, which has much more of my money invested from my pay. I’d like to just cash them both out now, but want to wait “till next year when the tax hit would be much lower. But they may lose more value than that if I wait.

Decisions...

[cuban leaf]

—Actually, no QE3 is a very good thing.—

Concur. The less they do, the better.

[NavyCanDo]

Obama - putting the DOW in DOWN

[silverleaf]

I just wonder how much your wife’s 401K gave back since July and will continue to give back through the end of this year?

My bond fund is doing pretty good, was in the green yesterday and again today amid a sea of red

But we did spend about 10% of what I would call long term savings on precious metals...as an insurance policy

[cuban leaf]

I mentioned in another thread that it is ALL about precious metals for me. That said, the farm, tractor, building, guns, seed, canning supplies, fenced area for a few head of cattle are even more valuable than the metals. That stuff comes first, metals second, other “investments” last.

[BobP]

   Yikes

[sayuncledave]

You might find these interesting:
http://www.market-ticker.org/akcs-www?post=194631
http://www.zerohedge.com/news/morgan-stanleys-exposure-french-banks-60-greater-its-market-cap-and-more-half-its-book-value

Regardless of one’s opinion, I’d certainly say that we live in interesting times.

[Venturer]

The feds did nothing because they don’t know what to do either.

It’s gotten that bad.

We are in a stinking mess and we have no President.

We have an incompetent Narcissist .