Its late in the game. An undesirable outcome looms on the horizon. Your time in the spotlight may be coming to a close. What would you do ? If you're the Chairman of the Federal Reserve and your tenure coincides with the nastiest series of economic events ever heaved upon the planet, the answer is easy. You go all in like Walter White and break bad with monetary policy. You may have started with nobler intentions but shit's got real now and time is running out.
The Fed ramped up the meth production today and all that was missing was the first hit for free. Real rates are negative out past 2025, spreads are tight and the stock market"s on the high,,,,heads up cannonball coming ! The Fed is buying up MBS. Fed policy is now a gift to insolvent GSE manufactured product owners. The Fed is buying 85B but still selling over 45B in front so the "cooking" is getting complex. Importantly, beyond the long promise and the "significant" qualifier, Chairman White (er Bernanke) said they would buy whatever was around if TBA production fell short. Shut the front door! As we commented on Twitter, Precious Moments collections are "in play."
We have been supporters of much of what the Fed has done since 2008, often inviting ridicule for it. The facility structures built and torn down during the crisis were dynamic and under appreciated concepts. This is the seedy underbelly of monetary methamphetamine abuse. Ben made a point to shoot down Paul Ryan's understanding of QE. He forgot to mention his Man Crush with Bill Gross, however.
Hey, I'm a child of the 70's and we all know most of the 60's took place in the 70's. Recreational drug use and mind expanding experimentation has its place. This ain't that. Today, Ben broke bad. This season things get out of control.