Top 10 Things You May Not Have Known About the FOMC
With the Fed decision out, you already know the most salient information about what the FOMC did today. What follows are the top 10 things about the FOMC you probably don't know about:
>
Top 10 Things You May Not Have Known About the FOMC
10. The Fed exists to insure maximum employment, price stability and moderate long term rates. Their purpose is not to backstop speculators
9. 4.25% Funds rate very accommodative and historically low.
8. Between votes, Fed Governors make fun of BLS economists.
7. Overheard at FOMC meetings: “What would Greenspan do? Let’s do the opposite!”
6. Jealous that Jean Claude Trichet gets to hang out with Gisele Bundchen
5. Doesn’t give a rat’s ass what Cramer thinks.
4. "Then it's resolved, we print more money and we make more speeches . . ."
3. There is no Santa Clause -- just some guy with a beard named Ben.
2. Has been long Gold and short the Dollar since 2003.
and the #1 thing you may not have known about the FOMC:
1. “Hey, Wall Street: We’re not your Bitch anymore.”
>
Feel free to come up with your own additions in comments . . .
Tuesday, December 11, 2007 | 05:03 PM | Permalink
| Comments (43)
| TrackBack (0)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef00e54fa05d0f8833
Listed below are links to weblogs that reference Top 10 Things You May Not Have Known About the FOMC:
Comments
* That notepad Greenspan used to pen his memoirs on? They switched it to water soluble paper three times during the writing of the book.
* They play monopoly with real $, just because they can.
* Have a side bet going on if they can cause the aneurism in Cramer's head to pop.
* Get a HUGE kick out of tipping with $2 bills and watching the reaction of the "idiots who don't know basic currency".
* Apparently don't listen to Larry Kudlow (Sorry dude!)
* End each meeting by running into the special Fed Chucky Cheese and rolling around in the cash cage.
Posted by: Mike G. | Dec 11, 2007 5:22:50 PM
* The salt & pepper shakers at the Fed are bundles of rolled up $20s.
Posted by: Mike G. | Dec 11, 2007 5:27:59 PM
Ben's helicopter runs on a nasty, nasty concoction made from Maria Bartiromo's tears and Jim Cramer's armpit sweat.
Posted by: CKT | Dec 11, 2007 5:42:00 PM
I think your wrong on #10-- The fed was created to keep financial markets from freezing up--that was the purpose for creating the fed--otherwise emplyment and prices don't matter.
Also, if #9 was true, then the economy would not be stalling.
Posted by: Johnny Vee | Dec 11, 2007 5:45:32 PM
Also, if #9 was true, then the economy would not be stalling.
Tell that to Japan.
Posted by: Walker | Dec 11, 2007 5:49:30 PM
Fact: Although he's well over 50, Ben Bernanke's first testicle just descended today.
Johnny Vee: That's a terrible argument. The economy is stalling, ergo 4.25% is not a pretty low rate in historical context? What?
Posted by: jag | Dec 11, 2007 5:55:24 PM
Hit that nail right on the HEAD!
Since summer I've been prattling on that everyone should throw out their Greenspan playbook, this is not Al's Fed.
This is a very difficult situation that Bernanke has inherited and the solution will be a combo of pain, pain and trying to mitigate pain a little...
I do think they are falling a bit on the maintenance of price stability. Talk to bond traders and it is apparent that stability isn't present. I also notice their prime directive says nothing about inflation, specifically.
Posted by: JasRas | Dec 11, 2007 5:55:37 PM
"I could see it was a rough-cut Tuesday, slow-motion weekdays stare me down." - J Giels Band, "Freeze Frame"
Eh, maybe "rate-cut Tuesday" today.
One day wonder or something more? Everyone sure seems bearish. And 57% of people believe we're already in a recession.
Of course, that's using the new definition of recession. People believe that they're in a recession when their neighbors with DirecTV get over 100 HD channels, while they're stuck with only 10 or so on cable.
OH THE HORRORS!
Posted by: muckdog | Dec 11, 2007 6:33:33 PM
Johnny Vee: "The fed was created to keep financial markets from freezing up--that was the purpose for creating the fed--otherwise emplyment and prices don't matter."
I agree and also contend with you.
After ~100 years of inflation & growth -- despite 1929 & 1987, the crisis that enabled the creation of the FRB (deflation of latter 19th century and crashes of 1890's and 1907 -- the Fed's been creating credit for IB's and elite banks to trickle down.
Therefore, add these to the "What You Don't Know" list:
- The Fed was charted to make oil to lubricate the financial machinery, not gasoline to fuel it.
- They got it exponentially bass ackwards for the past twenty-five years.
- They've won a game of chicken with all other CB's, exporting inflation while making foreigners create credit at nearly the same rate or risk unemployment spikes caused by exchange rate disadvantages... until now.
Posted by: puravidavid | Dec 11, 2007 6:45:06 PM
Just had to watch Cramer tonight. I guess he wont be happy until we have a 1% fed rate again. 500 pts from all time Dow high, and he is complaining cause Fed is too tight? Dude, we need a correction!!! I think Dave said it best in the prior post. didn't 1% help get us into this mess to begin with? He really thinks the Fed listens to him, amazing...
Posted by: Brian B. | Dec 11, 2007 7:00:14 PM
We don't "need" a correction. The PE of the S&P 500 is not high. The index is more than justified by the earnings. Truthfully, stocks can actually be called "cheap" here. We are, however, "overdue" for a correction if you look at history (less so since we did have that quick 10%-er).
The Fed doesn't and shouldn't act according to how how the indexes are, but how strong they think the economy (and employment) are. Apparently that's what they are doing, at least in their minds.
Posted by: Mike G. | Dec 11, 2007 7:24:13 PM
Todays "pre-organized" market tantrum felt so fake and so just for show that it was really pathetic. The market will force the FED into a surprise rate cut before the January FOMC meeting, as expected. I expect a little better pretending from the FED and the stock market, this is getting too obvious!
Posted by: JJL | Dec 11, 2007 7:34:56 PM
Perhaps the Fed was considering the fact that the ECB is poised to raise rates.
A cut when ECB is raising would devalue the dollar further, to new lows. A global perception/confidence issue?
Further devaluation might be worse for the economy.
Posted by: Diogenes | Dec 11, 2007 7:47:12 PM
Mike G.
Re: S&P not being high relative to earnings--Earnings are at an all time high. If the historical average is applied the S&P is high. If earnings typical of a recession are applied, then the S&P is really really high.
Posted by: Johnny Vee | Dec 11, 2007 7:49:35 PM
All of the Feddies agree that Andrea Mitchell is nuts and Greenspan is not "a great kisser". Well, all of them except Eric S. Rosengren.
Posted by: 12th percentile | Dec 11, 2007 7:53:01 PM
Love it Barry!
Can you believe all the whining from investors and the press?
These people probably think it'd be best to keep interest rates at 1% permanently!
I haven't heard one person try to explain why the Fed might be reluctant to cut 50.
The currency? Maybe inflation?
The economics textbooks explain why monetary exchange, exchange through money rather than goods, is so important. But that all depends on a steady monetary unit. Without that, trust me, Cramer, you have NO IDEA how bad it would be. NO IDEA!
Posted by: Greg Feirman | Dec 11, 2007 7:53:41 PM
Barry,
The market was overbought, time for profit taking.
To win cut losses short, those who don't lose on falling stocks.
The fed knows that pheo-inflation is getting worse.
Posted by: David | Dec 11, 2007 8:01:11 PM
Japan has been suffering for almost 20 years since its credit ballon collapse even though it continues to run massive trade surpluses. Japanese companies have all the capital they and then some. America, on the other hand, has few competitive industries and is unlikely to grow them anytime soon -- unless the average worker is paid the current equivalent of 2 dollars a day. Due to the piss poor rate of investment in US industrial production over the last 30 years there is nothing going forward.
Posted by: hidebound | Dec 11, 2007 8:19:53 PM
The DOW drops 300pts so the FED has "sources" leak information to CNBC that they are going to do more stuff...you really can't make this shit up.
Posted by: Sammy20 | Dec 11, 2007 8:51:11 PM
#5 is my favorite here. Why does it seem like Cramer goes from loving to hating Bernanke and back about 3 times a week? Its gotten past silly.
Posted by: Aaron | Dec 11, 2007 8:58:56 PM
Have to disagree with 'jag' above on Lil' Ben's newly discovered Testicle.
The only pair of Ball(s) Bernanke has are those of Hank Paulson's as they Bounce off his chin...
Posted by: John | Dec 11, 2007 9:01:53 PM
I'm a sap for ignoring the blatant telegraphing tantrum from Pisani et al that "we don't get .50, we shoot the market." My bad, shoulda shorted. But then I watch that idiot Cramer go wigshit again, telling his sheep that recession is 100% certain, sell everything I told you to buy yesterday, blah blah blah. I don't believe Cramer is venal. But he is a public hazard. I know, a fool and his money etc., but instead of giving someone rational like BR an hour to speak intelligently we get this carnival clown feeding "investors" total bullshit. He is a menace. And I'm with Sammy20 re: the Liesman leak. How lame.
Posted by: DC | Dec 11, 2007 9:12:28 PM
#11: Moral hazards not limited to the late night activities on West 42nd Street.
#12: I can has liquidity trap (Bernanke's cat).
Posted by: Bynoceros | Dec 11, 2007 9:39:40 PM
The leak and the GE missing 'at least'?they will do anything for a few points. The book " How i made 2 Million" the author says whenver he was away from wall street he made money and when he was with the wall streeters he lost money. Now I know how he felt. So much nonsense . I wonder who is so afraid of falling from all time highs. Why the panic . Its as if we already lost 20% not 2%
Posted by: Sandeep | Dec 11, 2007 9:44:24 PM
#4 makes me laugh every time I hear it.
I also don't think anyone said "Balls" it was first Ball, and maybe only partially descended.
How about:
"GoldyLocks, you're my little Bitch now!!!"
And it's Long "Of" Gold, and Short "Of" Dollars.
Hats off to Ben!! That was the right move. but I would have preferred the 50 to the discount, so that they could stop saying that the .50 to the discount was the reason for the sell off.
What a lode of Talking Head Dribble.
and this crap about "The fed may cut between meetings" or "they have other "stuff"..."
What kind of fed official would be quoted saying, "We may have "Other Stuff" to do." It sounds like Dubja "We Gots some Special Cards to play, Don't you count the fed out... There is some super secret fed Mojo strings to push, we will be back here, Like Oz... Pushing them... You just wait"
I mean, why wouldn't they have done it now.. Just too busy? Couldn't fit it in between 8-2.. had to make it to the opera and just ran out of time?
Maybe they will just print some $100,000 bills and mail them out? to some lucky winner.
The fed will be sending out a mailer to all ARM holders in the country, for 30 special winners(Must stay current on their reset for 5 years) in the end they may win a brand new $100,000 bill(AKA The Smirking Chimp Bill). for the rest of us, we just get a special subscription to "Inflation" magazine.
Posted by: Eric Davis | Dec 11, 2007 10:08:24 PM
