While the implications for stocks in general are extensive and were previously discussed, it is worth noting that the Israel Monetary Authority now has a big MTM loss on its Apple investment (although as Greece and the ECB have taught us, a central bank can book a “profit” even when a given security is trading at an all time low, and completely irrelevant of what one’s cost basis is). And where Israel is, it is quite certain that other central banks have boldly ventured as well. So how long until the Fed has to open an FX swap line with Tel Aviv to bailout Stanley Fischer in this latest of hare brained schemes to keep the Ponzi system going? And how long until it has to be extended to the nearly 250 hedge funds who are now also long the stock, with the universe of incremental buyers disappearing by the day? What is most stunning is that Apple dipped a modest 3% intraday… Which just happened to be the biggest decline since November 2010.
Guys, you do realize that a foreign central bank of a nation who is essentially a global power just took a hit because the new iPad3 announcement (or whatever) didn’t make the street happy, right?
As mentioned before, this is just another bucket in a long line of buckets in which they are trying to dump fiat currency in order to inflate some kind of bubble where there wasn’t one before.
Of course, as with previously disastrous information related to the economy, this will go unnoticed and unreported by any media outlet that is not Zerohedge or a blog. This is akin to the Fed monetizing the debt back in 2008/2009. Only this time, you will see noticeable results in the very short term.
I understand that things have been very economically weighted the past couple of weeks. However, I want to try and attempt to convey to you that paying attention to these macro, large scale, sometimes long timeline events and triggers is beneficial to your understanding of the battle space with which you will be forced to operate in.
Housing, for the past almost 100 years in this country, has been the single vehicle by which dotgov has flatly stated is the single best and biggest investment for every American. The dream of owning your own home has been on the forefront for the majority of post WWII people in this country.
The chairman of the Federal Reserve has just publicly contradicted that trend.
Think about it. The answer is simple. This test will be pass/fail.
Zerohedge points out that the Fed will actually be buying and selling US bonds at the same bloody time.
This literally could not be funnier. You couldn’t make this stuff up if you tried. The Federal Reserve is acting out a long lost Monty Python movie in realtime here.
Following today’s unprecedented POMO failure due to “system difficulties” (one would hope the Fed’s POMO machine does not start and stop every time someone pulls the plug from the socket), Brian Sack’s team (not to be confused with the PWG team of Eric Mindich) had to reschedule the literally failed auction. As it turns out, the first opportunity to sell $8-$8.75 billion in 2013 bonds is on December 2. And unlike the December 21 “reverse” POMO which is due to take place at 1:15pm, the rescheduled bond sale will instead occur at its usual time of 10:15-11:00am. Ironically, this is also the time when the Fed will be buying $2.25-$2.75 billion in 2036-2041 bonds. In other words, for the first time ever on Friday the Fed will be literally selling and buying bonds (although selling 4 times more than buying) at the same time. If this is not the pinnacle of deranged monetary policy which does not even attempt to offset monetization by a few hours, then nothing ever can be.