Thursday, August 13, 2009

Retail Sales "Unexpectedly" Decline

"Retail Sales in U.S. unexpectedly fell as job losses Mounted"

Unexpected?  By WHO(M)?

Look, I will grant you that a powerful rally has taken place since March.  

I am willing to bet C notes to donuts that when the smoke clears, history will show that the Federal Reserve - in addition to supporting the bond market, the auto market, the banking system, and the mortgage market - bought S & P futures to support the U.S.l equity market, in an "extra" legal (illegal) effort and in direct contravention of their Charter. No wonder we had a rally with that kind of power behind the short squeeze (this is why you can't stand on ceremony.  If you are wrong, you gotta be gone.  It is insisting that you are right and the market is wrong that brings the BIG loss). No wonder the Fed has refused, so far, all efforts to audit their balance sheet.

(Not that I would not have done the EXACT same thing if I were in their shoes...)

This report is enormously supportive of the U.S. Treasury market and the US$.  The U.S. equity market?  Not so much.

Libertariananimal (at) gmail (d0t) com

5 comments:

bureaucrat said...

The Fed would have sent their money thru the banks and had them do the dirty work of buying shares/futures in the S&P, no? This way, they (the banks) get to pretend they have money to match up against their massive bad loans, and insolvent banks look a lot like solvent banks.

Greg T. Jeffers said...

I don't think so, but we won't know for sure for a couple years...

More to follow

Publius said...

It's not funny anymore, how every bit of news on the downside is unexpected. I have no doubt that the stats are not even accurate, and are actively modified or massaged. The downside news is probably way worse than these stats show...
Hold on.

bureaucrat said...

And/or, the banks could be buying Treasuries as well ... (from Bill Bonner) ...

"The banks can borrow at practically zero interest…and use the money to buy Treasury bonds. The 10-year yields about 3.7%. In effect, they’re lending the money back to the people they got it from…and earning 3.7% for their trouble."

Saoirse said...
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