The show must go on

[Cristian]

from : http://www.zerohedge.com/news/2013-06-19/deer-returns-fears-bernankes-training-wheels-are-coming

and

http://www.bloomberg.com/news/2013-06-19/fed-keeps-85-billion-pace-of-bond-buying-sees-risks-waning.html

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.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/06/20130619_EOD2.jpg

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/06/20130619_EOD3.jpg



Commodities were a one way street...

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/06/20130619_EOD4.jpg


as for MSM :


Stocks extended losses after his remarks. The Standard & Poor’s 500 Index declined 1.3 percent at 3:57 p.m. in New York. The yield on the 10-year Treasury note rose to 2.34 percent from 2.19 percent late yesterday.
Downside Risks
“The Fed is out of the closet,” said Ward McCarthy, chief financial economist at Jefferies Group LLC in New York and a former Richmond Fed economist. “They expect to end these QE purchases. Bernanke wasn’t more specific than later this year, but connecting all the dots suggests he is thinking in the fourth quarter.’’
Bernanke stressed that the Fed has “no deterministic or fixed plan” to end asset purchases.
“If you draw the conclusion that I just said that our policies -- that our purchases will end in the middle of next year, you’ve drawn the wrong conclusion, because our purchases are tied to what happens in the economy,” he said. “If the economy does not improve along the lines that we expect, we will provide additional support.”
Unemployment Threshold
The Fed also left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.
Bernanke said policy makers might aim for a lower unemployment threshold before considering an increase in short-term interest rates.
“In terms of adjusting the threshold, I think that’s something that might happen,” he said in response to a question. “If it did happen, it would be to lower it, I’m sure, not to raise it.” He said an interest-rate increase is still “far in the future.”
Fed officials lowered their forecasts for the unemployment and inflation rates this year.
They now see a jobless rate of 7.2 percent to 7.3 percent, compared with 7.3 percent to 7.5 percent in their March forecasts. They predict the jobless rate will fall to 6.5 percent to 6.8 percent in 2014, compared with 6.7 percent to 7 percent in March.
Labor Market
“Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated,” the committee said. “Partly reflecting transitory influences, inflation has been running below the committee’s longer-run objective, but longer term inflation expectations have remained stable.”
Fifteen of 19 policy makers said the federal funds rate will be increased in 2015 or later, according to today’s forecasts. In March, 14 policy makers predicted an increase in 2015 or later.
The Fed repeated that it will keep buying assets “until the outlook for the labor market has improved substantially.” Bond purchases will remain divided between $40 billion a month of mortgage-backed securities and $45 billion a month of Treasury securities. The central bank also will continue reinvesting securities as they mature.

[mgray]

What is true is that the US markets cannot stand on their own two feet without Bernanke injecting $1.5B to $2B into the markets to provide liquidity. Credit markets across the globe will sink on the thought that the punch bowl (full of heroin) is being pulled away slowly.

[WhiteFeather]

Perhaps Americans can now find employment in China. Cause the jobs here are far and few. They sold us out. What next? I smell a beautiful fragrance of Revolution in the air. Take a whiff. Ahhh. You smell that?

Great song by Tracy Chapman "Revolution" Sing it Tracy!

http://www.youtube.com/watch?v=NTyAZTvLfAM

[Lifebringer]

They are treating OUR economy, like one of their cherished wants/cars. They want to break it, WE fix it/suffer through it, and then they want the keys to drive when they are clearly "drunk."

WE cannot allow Bernanke and people like him around the world to keep overextending on our cities, states or federal taxes, to cover their losses.

Bernanke must have bumped his head, or someone did, to even think he should be sticking his greedy little sweaty palms into the American Economy. If this is there economy, then let them have it, and simply start our own after they are fined for the takeover since 1913!

Oh, PLUS INTEREST. he should understand that.

Back in 1989 it was estimated that the AAmerican slave descendant was owed a total of 11 trillion dollars since Reconstruction, due to discriminatory hiring, and murders/lynchings and hatefilled speech all along the way, not to mention the dog bites and gun shots just because we marched across a bridge.

That was 1989. John Conyers and the congress of did the investigating on the losses and damages, because they were passing the Japanese Internment reparations.
It's 2013, we are still treated like crap, and nobody says a word, but Democrats when they want our vote. It's only right that we have some sort of base to build upon as other immigrants over the generations have accumulated. America needs to think about that cry to Christ also.
All I've heard from are those that have, hating those that don't, and so the train of hate, instead of the train/economy of solutions, pulls from the station with no passengers.
We are artistic, entrepenurial Americans, because of the way we are treated. If you are shopping for something you like at our stands, the conversation is little, and then they go on their way. The same spirit in Africa as far as the fresh food markets and clothing and shoes and purses and handcrafts, resides here in America. Others just want to take the business, buy you out or have you make the stuff and pay you what they want. But such is the bartering and haggling world.

Our creativity is being stifled and suffocated by NO opportunities and surrounded by other immigrant venues/supermarkets as they collect our cash, and go back to rural areas.

The little money in our communities sucked out like a vacuum from utilities to toilet paper. As long as this continues, the answers to the decades of neglect will never be solved, and perhaps that's my point on this. Perhaps that's just what they want. They want us to watch every one prosper in education, jobs and home ownership, but us and we've been here the longest.


All I can say Heavenly Father is, how long? Centuries of being on the bottom rung of economics, as our sports, stars, and singers calm the savage greedy American greed machine beast.

I thought the idea was NO CHILD LEFT BEHIND. I think I'll rely on the Creator and God for that, because the wait with hate, ain't a fun trip down memory lane.

[Cristian]

http://www.bloomberg.com/news/2013-06-19/japan-futures-drop-as-fed-sinks-u-s-stocks-crude-slides.html

“Many investors were hopeful that the party of cheap, easy money will go on for the next two years and here’s the Fed signaling the bar will close soon,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc., the largest bank by assets in the Philippines. “A contraction in China is going to worsen the hangover.”

"Investors are pulling money from emerging markets at the fastest pace in two years as slowing growth, prospects for lower stimulus and anti-government protests from Brazil to Turkey rattled investors. More than $19 billion left funds investing in developing-nation assets in the three weeks to June 12, the most since 2011, according to EPFR Global. The rupee, Philippine peso and Malaysian ringgit sank at least 1.6 percent per dollar."



A trader monitors financial data on his computer screens beneath a display of the DAX Index curve at the Frankfurt Stock Exchange
http://www.bloomberg.com/image/iIoIFItfbISY.jpg

¤=[Post Update]=¤

Submitted by Mark J. Grant, author of Out of the Box,

I have long held the opinion that the markets, all of them, have been buoyed by what the Fed and the other central banks have done which was to pump a massive amount of money into the system. There are various ways to count this but about $16 trillion is my estimation. The economy in America has been flat-lining while the economies in Europe have been red-lining and while China has claimed growth their numbers did not add up and could not be believed.

In other words, the economic fundamentals were not supporting the lofty levels of the markets which had rested upon one thing and one thing alone which was liquidity. I have also stated often enough that the long awaited reversal would take place either due to an "event" or due to a change in the Fed's position where the liquidity was going to be stopped. In one of the clearest and most open meetings ever conducted by the Fed, in my opinion, they said quite clearly that the end to its liquidity operations was coming and while the postulated this and that if the markets did this and that the message was quite clear; we are going to unwind what we have we have done.

Yesterday was the first day of the reversal. There will be more days to come.

What you are seeing, in the first instance, is leverage coming off the table. With short term interest rates right off of Kelvin's absolute Zero there was been massive leverage utilized in both the bond and equity markets. While it cannot be quantified I can tell you, dealing with so many institutional investors, that the amount of leverage on the books is giant and is now going to get covered. It will not be pretty and it will be a rush through the exit doors as the fire alarm has been pulled by the Fed and the alarms are ringing. There is also an additional problem here.

The Street is not what it was. There is not enough liquidity in the major Wall Street banks, any longer, to deal with the amount of securities that will be thrown at them and I expect the down cycle to get exacerbated by this very real issue. Bernanke is no longer at the gate and the Barbarians are going to be out in force.

Yesterday was not pretty but today is likely to be worse. Gold is getting smashed, equity futures are down significantly, bonds are taking it on the chin and the only thing that is up is the Dollar. Then besides the Fed's announcement; China is a rose dying on the vine. Their overnight repo rate hit 25% as the fear is palpable in Asia between the collapse of the Everbright Bank and the antics in Japan. The yield on China's three year government bonds rose 12.5% last night while their flash PMI plunged to 48.2 which is the worst number in nine months.

Now you may be wondering what to do next. You will hear a lot of people in the media today saying that this is just a normal part of the market's cycle.

This is not the case.

The Fed has signaled its intentions very clearly. You should be taking profits, taking money off the table and building up your cash positions. Your supplier of opiates has just informed you that your drugs are going to get cut off and preparations need to be made because there is no other supplier of this opiated cash. You can accurately think of the world's central banks as a "cash cartel" and the distribution is being ended.

How bad it is going to be is uncertain but BAD, with capital letters, in my estimation. For four years we have lived on drug money supplied by the Fed and their colleagues and what the emperors' can give; they can take away.