June 19 US Marketwatch: Fed Day Edition

The Deer Returns On Fears Bernanke's Training Wheels Are Coming Off

One word can describe performance across all asset classes today: clobbered. Stocks tumble, Commodities slide and Bonds crash, with the 5 year suffering the biggest intraday percentage jump in yields... ever! And why? Because Bernanke confirmed what everyone thought they knew, namely that the Fed will start tapering (how else can the Fed match the reduction in gross Treasury issuance at auction without taking over the private market entirely) eventually. Or at least that's what the market read between the Chairman's lines. In reality, Bernanke himself is more dazed and confused than anyone out there and just like Europe, is making it up one day at a time.

www.zerohedge.com...




Now for me this is THE GAME CHANGER, once the bond bubble breaks, you can kiss the "recovery" goodbye.....you can kill a lot of things goodbye. There have been hints for the past few months that the FED will stop / taper its QE (that is 85 billion a month) and we have just witnessed that the FED has no power what so ever in this situation.

The wonderful stock market is simply running on the fact that the FED is pumping out billions each and every month - it is pure illusion. Take away that money and it all goes down the toilet. So essentially it has now been shown that we are really into QE Infinity - wonder how long good ole Ben can hide the increasing inflation (do you really think inflation is low atm, I just went grocery shopping - prices are rising every damn week)

If im reading this information correctly we could be in for another plummet.

Can the economy survive another major hit?

How about this for a positive spin on the Fed's announcement....


Cheer up - Fed's move signals recovery

So now we know, and after the markets throw a minor tantrum, most investors will decide very little has changed. The sky is not falling in: it's an economic recovery story in the US - get used to it.

Well, we'll see about that.

As for the markets having a fall on the news, its probably a very good thing. I don't really see too much a crash and burn as a result less other problems surface, like surging interest rates.

I also wait and watch at the actual wind down of said asset purchases. Let's see how the economy can really stand on its own legs.

Wouldn't it be a major shocking revelation if it became apparent they couldn't withdraw or even lessen the monetary policy?

China not doing too well now with its credit created growth narrative.