Today was quite a day – the market was pushed and pulled by a lot of news. The bad situation in Libya, as mentioned yesterday, continued to worsen and led to a heck of an oil price prognostication by Nomura Securities. Moreover, violence in Greece (yes, Greece) is once again heating up.
Like yesterday’s oddity of NO “flight to quality” into the US dollar, today’s continued global upheaval did not cause scared equity to “fly” into the US currency…or US Treasuries.
Yesterday I quoted the CIO of Pimco who was surprised at this turn of events and said on Bloomberg, “It is a warning shot to America that we cannot simply assume flight to quality, flight to safety. That people are starting to worry about the fiscal situation in the U.S., worrying about the level of debt and what they're hearing about states and municipalities. I would take this as a warning shot that we cannot assume that we will maintain the standing of the reserve currency as we have in the past.”
Tuesday’s 2-YR Note auction didn’t go very well and Wednesday’s 5-YR Note auction was also quite weak. Said another way, the “flight to quality” is flying away from the USA. It’s far too early to tell but one wonders: Is this the new normal? Are the Treasury and Federal Reserve losing credibility?
But why would anyone lose credibility with the Fed or Treasury when members make statements that prove they’re all about bailing out the banksters and flat-out manipulating markets?
While speaking at a Bloomberg breakfast in Washington Wednesday, Tax-Cheatin-Timmy of the Treasury admitted to central banking manipulation when he said, “The economy is in a much stronger position to handle” higher oil prices. “Central banks have a lot of experience in managing these things.” If anyone outside the Federal Reserve would have deep knowledge of how the ANTI-free market central banksters operate, it would be the head of the US Treasury. Moreover, Benron Bernanke has already admitted numerous times that his QE policy was designed to manipulate the stock market higher. Add oil to the list now, and soon the destruction of the gold and silver markets.
But the goofball tax-cheating-liar at the Treasury wasn’t the only one with interesting things to say. Thomas Hoenig, President of the Federal Reserve Bank of Kansas City gave a speech today that yielded the following headlines from the financial press:
Finally, the oil prognostication made by Nomura Securities helped fuel the day’s volatility. “…we believe the closest comparison is the 1990-91 Gulf War as this is the only event outside of that period. During the seven months of Gulf War, prices jumped 130% as OPEC spare capacity was reduced to 1.8mmbbl/d while demand came off briefly by 1.7%. Similarly, today, if Libya and Algeria were to halt operations, OPEC spare capacity will also likely be drawn down to 2.1mmbbl/d, in our view, which could fuel higher oil prices...(where) prices could peak above US$220/bbl .”
When this statement was made, Libya admitted to a 50% cut in its light sweet crude oil production, which is the highest grade on the market and therefore most difficult to replace.
I guess the central banking cartel better get crackin’ on that whole “manipulating” oil prices lower thing.
Since the central banking Ivory Tower elitists actually believe that their Keynesian/Monetarist interventionist nonsense is NEVER the cause of any mal-investments, I fully believe that they (specifically Benron Bernanke) will use the current QE-driven “crisis” to actually implement QE3! If so, every single person in this country should demand the removal of the Chairman of the Fed (if not sooner).
Like yesterday’s oddity of NO “flight to quality” into the US dollar, today’s continued global upheaval did not cause scared equity to “fly” into the US currency…or US Treasuries.
Yesterday I quoted the CIO of Pimco who was surprised at this turn of events and said on Bloomberg, “It is a warning shot to America that we cannot simply assume flight to quality, flight to safety. That people are starting to worry about the fiscal situation in the U.S., worrying about the level of debt and what they're hearing about states and municipalities. I would take this as a warning shot that we cannot assume that we will maintain the standing of the reserve currency as we have in the past.”
Tuesday’s 2-YR Note auction didn’t go very well and Wednesday’s 5-YR Note auction was also quite weak. Said another way, the “flight to quality” is flying away from the USA. It’s far too early to tell but one wonders: Is this the new normal? Are the Treasury and Federal Reserve losing credibility?
But why would anyone lose credibility with the Fed or Treasury when members make statements that prove they’re all about bailing out the banksters and flat-out manipulating markets?
While speaking at a Bloomberg breakfast in Washington Wednesday, Tax-Cheatin-Timmy of the Treasury admitted to central banking manipulation when he said, “The economy is in a much stronger position to handle” higher oil prices. “Central banks have a lot of experience in managing these things.” If anyone outside the Federal Reserve would have deep knowledge of how the ANTI-free market central banksters operate, it would be the head of the US Treasury. Moreover, Benron Bernanke has already admitted numerous times that his QE policy was designed to manipulate the stock market higher. Add oil to the list now, and soon the destruction of the gold and silver markets.
But the goofball tax-cheating-liar at the Treasury wasn’t the only one with interesting things to say. Thomas Hoenig, President of the Federal Reserve Bank of Kansas City gave a speech today that yielded the following headlines from the financial press:
- HOENIG SAYS U.S. HAS `DEEPLY' UNDERMINED FREE-MARKET CAPITALISM (By “U.S.” Mr. Hoenig means the Treasury working in concert with the Fed, and by “undermined” he means completely *^%$! Up)
- HOENIG WARNS OF ESCALATING SERIES OF CRISES WITH RISING COSTS (Said another way: the Fed and Congress have fixed NOTHING!)
- HOENIG: LARGE FINANCIAL FIRMS CAN EXPECT BAILOUTS IN FUTURE (Said another way: It’s business as usual on Fraud Street and the Fed likes it that way…as well as Congress)
- HOENIG SAYS BIG FINANCIAL FIRMS MUST NOT HOLD ECONOMY `HOSTAGE' (Well, he hopes they don’t do that, but if they do because of another Federal Reserve created crisis, the banksters can hold us hostage AND get another bailout – reread point #3 above)
- HOENIG: LARGE FIRMS WERE `GAMING' CAPITAL STANDARDS PRE-CRISIS (Said another way: We knew it, as primary bank regulator, and didn’t care.)
- HOENIG: BIG FIRMS `HAVE SIGNIFICANT INCENTIVES' TO INCREASE RISK (Again, NOTHING has changed, which is how we the Fed and Congress want it)
- HOENIG: TOO-BIG-TO-FAIL FIRMS POSE `GREATEST RISK' TO ECONOMY (And we the Fed obviously do not care)
- HOENIG SAYS BIG FINANCIAL FIRMS ENJOY `HUGE' FUNDING ADVANTAGE (No doubt; that’s how we banksters roll, suckers.)
Finally, the oil prognostication made by Nomura Securities helped fuel the day’s volatility. “…we believe the closest comparison is the 1990-91 Gulf War as this is the only event outside of that period. During the seven months of Gulf War, prices jumped 130% as OPEC spare capacity was reduced to 1.8mmbbl/d while demand came off briefly by 1.7%. Similarly, today, if Libya and Algeria were to halt operations, OPEC spare capacity will also likely be drawn down to 2.1mmbbl/d, in our view, which could fuel higher oil prices...(where) prices could peak above US$220/bbl .”
When this statement was made, Libya admitted to a 50% cut in its light sweet crude oil production, which is the highest grade on the market and therefore most difficult to replace.
I guess the central banking cartel better get crackin’ on that whole “manipulating” oil prices lower thing.
Since the central banking Ivory Tower elitists actually believe that their Keynesian/Monetarist interventionist nonsense is NEVER the cause of any mal-investments, I fully believe that they (specifically Benron Bernanke) will use the current QE-driven “crisis” to actually implement QE3! If so, every single person in this country should demand the removal of the Chairman of the Fed (if not sooner).
Trade Date: 2/23/11
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