We The Sheeplez- The Coming Economic Collapse.."A Nation Of Sheep Ruled By Wolves" Thomas Jefferson

Goldman's Take: "Fed Returns To Monetary Easing"

BOTTOM LINE: Despite three dissents--the largest number since 1992--the committee adopted an even easier policy stance than expected: first, the committee now anticipates that rates will stay on hold "at least through mid-2013." Second, the committee effectively signaled an easing bias saying that it is prepared to employ additional easing steps as appropriate.

Fed to Keep Rates at Record Lows at Least Through Mid-2013

ITG's Quick Take On The FOMC: The Fed's Tea Party Dissent

For the equity markets they are on their own, the economy is where it is, and until the three dissenters can be convinced deflation risk is back on the table, Fed policy is going to stay right where it is – regardless of slow growth or high unemployment. The re-pricing of risk markets to the economy we have should continue. If the dissenters can be convinced deflation risk is back we will have a necessary but not sufficient condition for the next round of ease. In that case look, as we have been saying, for some effort to shore up bank capital instead of quantitative ease – something the dissenting three might find more to their liking.

Update: 2.04%..... 10 Year Drops To 2.17%, Lowest Since January 2009

Submitted by Tyler Durden on 08/09/2011 - 15:02

But shhhh, don't anybody tell stocks they are trading about 30% higher than where they should be based on this yield.

And Plunge Resumes: ES Under 1100

The several hour reprieve on expectations that the Fed's infinite moral hazard would continue unabated, runs out. Plunge resumes. Which means Bernanke needs to shock the living feces out of everyone before his repeat performance at Jackson Hole in 3 weeks. In the meantime, many more traders go bankrupt. Too bad none of them have discount window access.

Read the Fed's Statement

And... Scramble For Safety

While stocks right now are trading based on mean reversion algos and other trivial and highly irrelevant drivers of noise, the scramble for safety spikes, with both the 10 Year yield plunging post the announcement (no forced steepening yet), and the USDCHF hitting fresh all time lows of 0.7185, and the EURCHF about to test parity even ahead of our aggressive timeline. That person crouched in a corner, crying violently in a helpless daze is none other than SNB president Philipp Hildebrand who has just thrown in the towel on fighting the Fed while playing by its rules.

Immediate FOMC Reaction - "The Face Your Rip Off" Unrally

Market reponse in one chart. We expect about 10 more kneejerk reactions imminently before the market realizes this is not good

NO QE3 - FOMC: "Exceptionally Low Rates Through Mid 2013" - Complete Statement Comparison, Dissenters Increase To 3

Full June-August redline.
Nothing substantial except that the "exceptionally extended" language was pushed to mid-2013.
Dump time.

David Rosenberg Breaks Down "The End Game"

As always, just as the market is about to set off on yet another dead cat bounce courtesy of vapor volume and the lack of concerted selling (after all the Fed is front and center today which means nothing can possibly go wrong... at least until someone actually does some Mark to Market accounting on the left side of Bank of America's balance sheet), here comes David Rosenberg with a cup of very cold water, thrown right in the face of the misguided optimists who carry the deluded idea that this story could possibly have a Hollywood ending...

'Everything the gold bulls predicted is coming true'

Gold Is Becoming The Only Game In Town

Eric De Groot at Eric De Groot - 35 minutes ago

The overhead anvil halted the CRBSPOT to gold ratio counter trend rally. The down trend will accelerate with the force of a runaway freight train once the 2009 lows are breached. What does this mean? It means is that gold to the chagrin of many talking media heads is slowly becoming the only game in town. Spot Commodity Price Index (CRBSPOT) to Gold Ratio [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Guest Post: The Best Looking Horse In The Glue Factory

The politicians and bankers who control the developed world have made the choice to print money and create more debt as their solution to an un-payable debt problem. Europe, Japan, the U.S., and virtually every country in the world want to dev.alue their way out of a debt problem created over the last forty years. It has become a race to the bottom, with no winners. Every country can’t devalue their currency simultaneously without blowing up the entire worldwide monetary system. But, it appears they are going to try. The United States will never actually default on its debts. Ben Bernanke will attempt to default slowly by paying back the interest and principal to foreigners in ever more worthless fiat dovllvvars. This will work until the foreigners decide to pull the plug. For now interest rates are low and the U.S. is the best looking horse in the glue factory. But we all know what happens to all the horses in the glue factory – even Mr. Ed.

Redrawing The Exter Pyramid: Paul Mylchreest's Latest Observations On The Flow Of Funds And More

I’ve redrawn Exter’s pyramid to show how I see the flow of funds out of all kinds of “paper” assets, like cash and deposits, all varieties of debt obligations, and derivatives into real money, i.e. physical gold and silver (and the related equities – although that is a source of great pain for me at the moment). Even gold and silver ETFs which are either un-backed or where the backing is questionable (and we all know which ones) could come to grief. Look at Eric Sprott’s gold and silver ETFs which are trading at premiums of 2.1% and 19.4%, respectively. Investors believe that Eric Sprott is an honest man and his funds really do own the gold and silver bullion they claim. Other funds trade at a discount. While Bernanke may not be quite as stupid as he sounds, it’s important to realize that many powerful bankers and politicians, and the more powerful people behind them, are far from stupid. You would be naïve if you didn’t believe that the end game is as obvious to them as it is to us. The most powerful of these people are long-term planners and skilled at turning crises to their own advantage. Indeed, the modus operandi, used time and time again, is best summarized as: PROBLEM, REACTION, SOLUTION.

Indirect Interest Surges In $32 Billion 3 Year Auction Which Prices At Record Low 0.50% Yield

Any concerns that the first bond auction following the US downgrade may not price well can be put to rest. Not surprisingly, following the historic rout in the stock market over the past week which has seen nearly $8 trillion in global capital market losses recently, the Indirect take down in the just completed $32 billion 3 year auction surged from 34.5% in July to a whopping 47.9%, the highest since May 2010, when the market was imploding for the first time following the first Greek collapse and when it was unknown just what the response by the central planners would look like. The Indirect hit rate was a solid 75.8%, as virtually all submitted bids got allocated in the final take down. As expected the note was a smashing success, with the When Issued trading 0.515%, and the final price closing well inside, at 0.50%, a record low yield. The Bid To Cover was close to a record high coming at 3.289, up from 3.219 last month, and well above the 3.162 average over the past year. Completing the data set was the take down of Dealers which was 41% on 51.3 LTM average, and the Directs which came in line at 11.1% compared to 12.93% LTM. Overall a very strong auction driven primarily by equity capital market concerns.