Thursday, December 19, 2013

TAPER TALK, THE FED AND THE FINANCIAL MEDIA: WHAT WOULD JESUS SAY?

12/19/13

Unless you’ve been living in a cave, you know that the Fed announced yesterday that “the taper” will begin, i.e., the Fed will cut back its $85 billion per month program of buying longer dated treasuries and mortgage backed securities (“MBS”) by $10 billion per month, with the cutback being split evenly between treasuries and MBS.  Obsequious Ben made a point, however, of “reassuring” the markets that short term rates will remain low for about as long as the eye can see and then some; see today’s other post, THE CAR BUSINESS AND CHEAP MONEY:  “HOW MUCH YA GOTTA PUT DOWN?   HOW MUCH YA GOT IN YOUR POCKET?” for the impact of this “easy money forever” policy on one vital industry.

It’s bad enough that money will stay easy seemingly forever; it’s even worse that this senseless, pointless “taper talk” will continue as long as Ben Bernanke, his successor, and their henchpersons continue to shovel money into the system (now “only” $75 billion per month) at about the same rate Flash Gordon and Doctor Zarkov were forced by Prince Vultan to shovel coal into the ovens of the Flying City of the Hawkmen.   For at least the last few months, there has seemingly been nothing else going on in the world of finance, or the world, for that matter, but a “potential for tapering,” if one gets one’s news from the financial media.  Now, with only a minor retreat on the monetary front from the Bizarro World, this talk of tapering will apparently never cease.

So, tiring of having the financial talking heads speak of nothing but tapering, I fell asleep on the couch the other day watching CNBC and Bloomberg TV, while reading the Wall Street Journal, and lapsed into a dream….



FINANCIAL REPORTER I:   Here with us today is Elon Musk, Chairman, CEO, and founder of Tesla.   Welcome, Mr. Musk.  You company, and its stock, has been one of the year’s major stories.

MUSK:   That’s right.  Our sales are increasing, our nationwide network of superchargers will soon make it possible to traverse the nation without the remotest fear of being stranded, the fires amounted to nothing, and it’s onward and upward.

FINANCIAL REPORTER I:   That’s great, Mr. Musk.  But do you think the Fed will start tapering in December or March?

MUSK:  Huh?


FINANCIAL REPORTER II:   Thanks for asking all the right questions, my esteemed colleague.  I have here with me Alan Mulally, chairman and CEO of Ford Motor Company.   Mr. Mulally, your stock has been on a tear this year.

MULALLY:   That’s right.   While we’ve had to cut back on Focus and Fusion production to keep inventories in line, that is, in reality, good news because now we actually have the flexibility to adjust production.   Sales remain strong, affordability is about as good as it’s ever been.   And our products are continually being updated to remain competitive.   Here we have the brand new Mustang….

FINANCIAL REPORTER II:   But, Mr. Mulally….

MULALLY:   You’re not going to ask me about my going to Microsoft, are you?   Because I’m saying nothing on that topic; I’m here to talk about Ford, whose shareholders I am proud to serve as Chairman….

FINANCIAL REPORTER II:   No, Mr. Mulally.  I wasn’t going to bring up Microsoft at all.  I want to know if the Fed will taper next month.

MULALLY:   How the heck am I supposed to know?

FINANCIAL REPORTER II:   Since Mr. Mulally has nothing of interest to say, let’s go over to our sports reporter with a special guest.


SPORTS REPORTER:   I have with me the uncrowned Heisman Trophy winner, Jordan Lynch from Northern Illinois University, a man who runs, throws, and even catches passes, for big yards, a man who has broken every MAC record that seemingly can be broken, a man who clearly should have won the Heisman Trophy.

LYNCH:   Thanks for the kind words.  But Jameis Winston is a great quarterback and deserved to win the Trophy.  I’ve had a great career at NIU and I look forward to playing QB in the pros.   They said I couldn’t play QB in Division I and I proved them wrong.  They now say I can’t play QB in the pros, and I intend to prove them wrong….

SPORTS REPORTER:   That’s great, Jordan, but I have something that everyone wants your opinion on.   When will the Fed start tapering?

LYNCH:   Who do I look like?   Maria Bartiromo?

SPORTS REPORTER:   Wait, wait.  We have to break in for what, if it’s true, appears to be at least the story of the century.   Now to our world affairs reporter….


WORLD AFFAIRS REPORTER:        We have in the studio Jesus Christ, who apparently just dropped in for a visit.   Mr. Christ, do you have anything you’d like to tell us.

CHRIST:   As a matter of fact I do.   I’m getting pretty sick and tired of the way people are celebrating My birthday.  I’m the Prince of Peace, for My sake, and yet everyone sees fit to commemorate my birth by getting all stressed out in the silly acquisition of material things, the type of stuff I always preached against.  It’s like I’m going to My birthday party and having the guests take turn slapping Me in the face!   You think I like that?   Why can’t we get back to the original point?   Peace on earth, goodwill to men, render unto Caesar the things that are Caesar’s and unto God the things that are God’s, how many people I fed with seven loaves and two fishes, the leaven of the Pharisees and all those things I was trying to tell you.  Where did everything connected with MY birthday go so horribly wrong?

WORLD AFFAIRS REPORTER:   Yeah, yeah, Mr. Christ.  Wonderful sentiments, I’m sure.  But what our viewers want to know is whether the Fed will taper, by how much, and when.

CHRIST:   I’ll be back…be assured, I’ll be back.

…as Jesus vanishes from the studio.



Blessed, holy, and wonderful Christmas with your families.  Remember the Man on His birthday. 

Hopefully, we’ll talk before the new year breaks, but, if not, prosperous and joyous new year to you and those you love.


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