Santelli's Latest Rant
For those who didn't catch it, Rick Santelli let loose another one of his wild rants in response to Bernake's last speech. Agree with him or not you have to love this guy's passion. I tend to agree with his sentiment. I really don't understand why the Fed is so apprehensive to slow (not stop) the unprecedented asset purchases. Obviously the short-term effects will be negative but the longer they wait the greater the eventual correction will have to be. How long can the gov't pump money into the system without consequence?
What do you guys think? Is Santelli just another nutty CNBC character or does he have a point? I'm sure some of you out there agree with what the Feds doing.
I don't really disagree with him...but I'm not sure why he is so mad? Investors are just trying to make $ in the game that is in front of them...right now that game is trying to guess when the Fed will signal slowing down QE...looks like today was the first of maybe a nice drop down in equities...
Luckily I own a decnt chunk of DLBS as a hedge
He also took Hilsenrath to task after that..
I'm with Bernanke on this one. He's got a difficult hand and he is getting zero help from Washington. If anything, Washington is trying to make it harder for the Fed's dual mandate.
Which I think is something everyone forgets. The Fed does have a dual mandate and sure Bernanke could stop and just say eff the rates lets run it up. But then he'd be doing the exact opposite of what the Fed is supposed to be doing.
get the fuck out of here with that bullshit. the fed enables congress to never have to face accountability for any of their bullshit. congress would have actually had to do their job and not just hand out shit if the fed wasn't monetizing debt.
^^Amen.
Regards
So you're saying he should say eff what congress set as our mandate and say eff the economy yes? That'll get the Fed dissolved pretty quick. I'm not against raising rates but I do think it's foolish to basically blame everything on the Fed when technically they're trying to do what they're designed to do. But to each their own.
Santelli did this before Bernanke spoke if I'm not mistaken
I can tell that you're a college kid because you're just thinking "oh hey they're just doing their job" vs. "oh hey maybe their job shouldn't fucking exist because it enables politician bullshit and causes bubbles"
Well let's not turn this into a flame war and no not a college kid, kid. Like I said, if you listened, I just don't think it's a fair assessment to blame it all on him. That's all, nothing more. He, as the chairman, is doing what he thinks is best based on his mandates. If there's collateral damage, there is collateral damage.
go start a OMG Y IZ EVERY1 PICKING ON BEN/LEAVE BEN BERNANK ALONE thread then
Will do buddy. Take it easy.
I think it's time for quantitative easing to be pulled back, but I don't understand how you could say you don't understand the apprehension with regard to slowing asset purchases. Since May 3 we've lost something like 700 bps in mortgage backed securities. It's had a devastating impact on the real estate market/mortgage market--and that's just from TALK of pulling back QE3 if--and only if--the economy continues to improve. Imagine what's going to happen when the Fed finally announces the end of quantitative easing. In the matter of 6-8 months you'll have mortgage rates rise from 3.5% to 6% and you'll have the stock market collapse, all while seeing virtually no inflation.
So while I think it's time to start re-adjusting Fed policy, you have to be crazy to think that it's just no big deal. I don't think you understand how fundamental interest rates are to the every day market.
I don't fully understand - I am far less informed than many in this community on this issue which is why I was interested to hear what the rest of the you all had to say.
I understand things will probably get ugly in the near short term with a rise in rates/scale back of purchases, but isn't that pullback going to have to happen eventually? I guess what I'm asking is do you think we will reach a point where we can pull back all the QE without drawing a huge swing downward? It seems like whatever the Fed does (or whatever the market thinks the Fed will do) is dictating where things go. The huge moves in the MBS market you mention are a great example. Doesn't that suggest the markets are becoming dependent on the Fed's accommodation? At what point do you think we will be able to stop buying without creating a crisis?
Also, something I have been wondering, once they stop buying do they start selling their treasuries back to the markets or do they just let them mature?
Again, I'm far from an expert on monetary policy. I'm not trying to argue with you, I'm just trying to better understand whats going on.
oh, i'm taking it easy; don't worry about me bro. just trying to help you out pal. don't get so offended muchacho
This rant just reminds me how glad I am that institutions like the federal reserve are run by academics and not by old-time rates traders who have moved into a second career in "journalism."
http://en.wikipedia.org/wiki/Long-Term_Capital_Management
I want academics running the Fed, not the hedge funds. The old-time rates traders can run all the hedge funds they want. Academics may not make very good traders but that doesn't mean that traders make good academics.
Being an uber douche doesn't help anyone either. Congress is made up of grown ups and they should be able to do their own job without having to be cajoled into doing it. Dial it back and make your point without resorting to ridiculously childlike rants a la Santelli.
As in Charlie "Go home and get your f'n shinebox" Gasparino?
That was better than sex
If the fundamental question is, "can we pull back quantitative easing without seeing a huge downward slide?" then the answer is no, especially not with this mediocre economy. Obama's economic policies have been nothing short of putrid, which is why we've had the worst recovery out of a recession since the 1930s. The Federal Reserve's policy of quantitative easing is the ONLY REASON at all that the economy is even mediocre rather than bad. The stock market has hit all time highs for one reason and one reason alone--interest rates. There is almost a perfect linear relationship between QE policies and stock market prices.
Point is, ridiculously low interest rates are the economy's sugar rush. We have still virtually no core inflation. So pulling back QE is a gutsy move in the face of little or no core inflation and 7.6% unemployment and a stock market and housing market entirely dependent upon sugar rush interest rates. The fundamental problem is that the economy has become far too reliant on low interest rates.
For the people who think the market needs to go down, consider that there are HUGE reserves at every point that people kept out of the market these last few years. Yes, the rocket fuel of liquidity is gone, but there's no shortage at all of investable capital that will re enter the market over the coming years as confidence continues to be restored. Not all of this will go into fixed income either, so I think we'll see some volitility but end up more or less where we are.
This article (http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/19/finance-peop…) includes a link to another pretty good santelli tantrum. Decent article I thought.
I both love and hate this guy.
But yeah the other thing I think is important to remember is that at the end of the day, this announcement meant absolutely nothing to 95% of the economy. It just so happens that all of us having these discussions tend to dwell in that other 5%.
In the video in that article Santelli's railing about how all the hedgies and bond traders think QE is crazy, not realizing that Bernanke probably has absolutely not a care in the world about what the hedgies think. The markets are a means to an end for him, he's trying to transmit things into the wider economy. A 300 point drop in the DOW just does not matter from the perspective Bernanke is sitting at.
The equation for GDP is C+I+G+X, not S&P500 + Barcap Aggregate + 10-year + (nikkei + FTSE + hang seng) ^(1/2). The markets just don't play as big a role in the overall economic health of the country as some would like to think.
there is so much fail in this thread...
Jeff Macke
Steve Ballmer....need proof...watch the video where Ballmer is trying to get the crowd all psyched up. He goes from 0 to batshit-crazy in under 15 seconds.
he's on point
100% agree with Santelli.
This rant is great
Five points to Hufflepuff!
Eos saepe sit autem labore eum sapiente. Facere vel qui ut architecto non tenetur sunt qui. Consequatur est odio natus consequatur eum tenetur voluptatem atque. Ut aperiam laborum libero consequatur eum error quisquam voluptates.
Consequatur nam sequi voluptas quibusdam voluptate voluptas quos. Minima ex dolore fugiat alias aperiam. Sit at neque dolore debitis in. Rerum aut cumque pariatur aut. Recusandae ducimus aut quisquam est. Aut voluptas voluptas illo. Fugit at provident eius beatae. Vero sint omnis rerum harum.
Tenetur omnis est accusantium. Rerum voluptas totam illum doloremque nostrum ratione eaque consequatur. Ipsum beatae delectus corporis est beatae voluptatem ex aut.
Omnis similique ipsum velit. Id vitae aliquid iure itaque. Temporibus magni aut repudiandae quo blanditiis eum est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Nihil ratione facere facilis voluptate voluptatum quae. Nisi error dignissimos qui fuga. Illo voluptatem perspiciatis et ducimus quasi totam nisi.
Officia veritatis velit cupiditate temporibus. Deleniti eum nobis sit voluptatem et omnis. Sunt labore itaque voluptatum illo modi odit occaecati. Modi ipsum rem saepe repudiandae officiis quam. Voluptatem dolores assumenda sint eum vitae.
Quo explicabo ut consectetur omnis vero magni. Consequuntur dolores sunt iure odit. Hic totam ipsam error ut quae. Consectetur possimus sapiente itaque at omnis nesciunt quo.