"Sorry Beranake. The Fed is not omnipotent. QE4 didn't even have a half life."
Creditcane™: REPETERE AD INFINITUM: CAVEAT EMPTOR.
Shooting star day. Midpoint above EMA(10). Now above all SMA's. Holding above the 38.2% minor retrace (1416.67). New high on daily 3LB (reversal is 1418.07). QE2infinity. Still below 2 of 3 trend lines and RSI(14) above 50.
Bearish short day. Midpoint below EMA(10). Tested and failed the 38.2% retrace (79.97). Tested and failed SMA(55). No dally 3LB changes (reversal is 79.67).
Bullish short day. Midpoint below EMA(10). Tested and failed SMA(89). Still failing its 61.8% minor retrace (18.81). No daily 3LB changes (reversal is 15.06).
Bullish short day. Midpoint above EMA(10). Still failing its 38.2% retrace (1733.20). Tested and failed SMA(21,89). No daily 3LB changes (reversal is 1718.80). Must have the precious.
Bullish long day. Midpoint above EMA(10). Now above all SMA's. Still failing its 38.2% retrace (1.3127). No daily 3LB changes (reversal is 1.3101).
Spinning top day. Midpoint above EMA(10). Still above all SMA's. Tested and held its 100.0% retrace (40.86). New high on daily 3LB (reversal is 40.65).
Bullish long day. Tested and held SMA(55,89). Midpoint above EMA(10). Still failing its 38.2% minor retrace (17.47). Daily 3LB reversal up (reversal is 15.81).
Bullish short day. Tested and failed SMA(21). Midpoint below EMA(10). Still failing its 38.2% minor retrace (88.45). No dally 3LB changes (reversal is 84.87).
Bullish long day. Tested and held SMA(21,55). Midpoint above EMA(10). Holding above its 38.2% minor retrace (32.24). No daily 3LB changes (reversal is 34.42).
Bullish short day. Midpoint above EMA(10). Now above all SMA's. Tested and failed its 50.0% minor retrace (50.01). New high on daily 3LB (reversal is 49.17).
Bullish long day. Tested and held SMA(233). Midpoint above EMA(10). Tested and held its 50.0% minor retrace (0.7722). New high on daily 3LB (reversal is 0.7639).
Bullish short day. Midpoint above EMA(10). Still above all SMA's. Tested and held its 38.2% retrace (3.681). New high on daily 3LB (reversal is 3.658).
Bearish short day. Still failing all SMA's. Midpoint below EMA(10). Still failing its 38.2% retrace (555.47). Still failing BB(2,200). No daily 3LB changes (reversal is 589.53).
Spinning top day. Midpoint below EMA(10). Tested and held SMA(21). Still failing its 61.8% minor retrace (570.80). No daily 3LB changes (reversal is 575.22).
IT HAS BEGUN. YOU HAVE BEEN WARNED.
5 comments:
http://www.nakedcapitalism.com/2012/12/is-obama-getting-rid-of-the-fhfas-ed-demarco-to-bail-out-the-banks.html
Is Obama Getting Rid of the FHFA’s Ed DeMarco to Bail Out the Banks?
But then why replace DeMarco at all? He’s that rare beast of a dedicated public servant. Whether you like it or not, he actually believes that he can give borrowers enough relief without principals mods. And no one acceptable to the Republicans is going to be more forgiving on that issue.
Dave Dayen pieced it together. It’s the $200 billion in FHFA putback litigation against the banks. A few days ago, there was a peculiar article in the New York Times, “Mortgage Crisis Presents a New Reckoning to Banks,” peculiar in that it was old news, yet given prominent play. Here’s the relevant part:
Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages.
Estimates of potential costs from these cases vary widely, but some in the banking industry fear they could reach $300 billion if the institutions lose all of the litigation. Depending on the final price tag, the costs could lower profits and slow the economic recovery by weakening the banks’ ability to lend just as the housing market is showing signs of life…
Efforts by the banks to limit their losses could depend on the outcome of one of the highest-stakes lawsuits to date — the $200 billion case that the Federal Housing Finance Agency, which oversees the housing twins Fannie Mae and Freddie Mac, filed against 17 banks last year, claiming that they duped the mortgage finance giants into buying shaky securities.
“Duped”? This construction suggests that the banks enticed the GSEs into buying dreck, when the banks misrepresented their wares. And here’s the real reason for the bank freakout:
Last month, lawyers for some of the nation’s largest banks descended on a federal appeals court in Manhattan to make their case that the agency had waited too long to sue. A favorable ruling could overturn a decision by Judge Denise L. Cote, who is presiding over the litigation and has so far rejected virtually every defense raised by the banks, and would be cheered in bank boardrooms. It could also allow the banks to avoid federal housing regulators’ claims.
Again, you can see the pro-bank spin. “Rejected virtually every defense” implies the judge is biased, as opposed to the banks’ arguments were strained.
But the big issue is that if the banks lose the appeal, they have some big suits staring them in the eye, and the facts don’t appear to be on their side. So the best course of action is to settle. Hence having a much less tough-minded FHFA director would be very attractive.
QE4 LOL. That came a lot faster than I expected.
The shock and awe approach by the Fed is more like a shock and yawn approach. No one at work was really excited to hear the news today. Total indifference reigned. While Bernanke was talking, I was trying to read a story about the minimum wage and was mildly annoyed that someone had unmuted one of the TVs on the Desk. Most people around me felt the same.
My two cents:
1. They didn't expand the mortgage purchase program (again) because they can't. The Fed is already significantly surpassing net supply in conventionals. The mortgage purchase program doesn't appear to have been effective in significantly reducing the primary mortgage rate (the primary/secondary spread, on the other hand, is gaping historically wide, allowing banks to paint the bottom line).
Additionally, buying longer treasries can help them take more DV01 out of the market with less balance sheet expansion.
http://www.nytimes.com/2012/12/13/business/study-shows-a-pattern-of-risky-loans-by-fha.html?ref=business&_r=1&
Study Shows a Pattern of Risky Loans by F.H.A.
"A new and extensive analysis of 2.4 million loans insured by the Federal Housing Administration in recent years shows a pattern of risky lending that could generate $20 billion in losses and harm thousands of the nation’s most vulnerable borrowers. By ignoring risks in loans it insured in 2009 and 2010, the study concludes, the F.H.A. is imperiling both borrowers and taxpayers who stand behind the agency.
The analysis emerged less than a month after the F.H.A.’s auditor submitted a troubling report on the financial soundness of its insurance fund. In mid-November, the auditor estimated that the fund, which backs $1.1 trillion in mortgages, has a value of negative $13.5 billion. In other words, if it were to stop insuring loans today, the F.H.A. fund could not cover the losses anticipated on loans it has already insured.
The new study of the potential risks in recent F.H.A.-insured loans is illuminating because it provides a level of detail, including where government-backed loans are, that is usually missing from agency analyses. In addition, the report’s loss estimates are somewhat surprising given that the loans it examined were made after the mortgage crisis became evident."
..Almost not news. That was the plan, STan. It is like the ugly girl in your class. You know she's ugly, but you never mention it. But she's still ugly.
In case you were wondering about the crash in the NFIB poll:
http://hosted.ap.org/dynamic/stories/U/US_OBAMA_REGULATIONS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-12-13-03-21-05
Election over, administration unleashes new rules
WASHINGTON (AP) -- While the "fiscal cliff" of looming tax increases and spending cuts dominates political conversation in Washington, some Republicans and business groups see signs of a "regulatory cliff" that they say could be just as damaging to the economy.
For months, federal agencies and the White House have sidetracked dozens of major regulations that cover everything from power plant pollution to workplace safety to a crackdown on Wall Street.
Matthew
So what happens when the Fed owns the majority of US long bonds? Will anyone be willing to buy the little that is available?
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