Comment by: Anonymous. Posted 10 years ago [2014-02-25 21:00:55]

Credit spread performance is about as comical as has become the FOMC. Today, Federal Reserve Governor Tarullo stated, the FOMC needs to be able to manipulate asset prices so we can avoid bubbles created when the FOMC manipulates asset prices. The thought of Yellen, Dudley, Tarullo and others forcing and pricing risk assets as opposed to supply & demand is beyond frightening but they certainly aren't the first. Monetary policy under Greenspan directly lead to the 2008 financial crisis via forced risk taking. Bernanke took it one step further, deploying manchurian-esqe techniques like having the NYT or his foot soliders relase market timed rhetoric to stave off equity market declines on top of forcing savers to subsidize lower US borrowing costs. Today, its rockstars Yellen, who stated "current monetary policy has zero cost" and who, now that we're on the cusp of the 6.5% unemployment bogey that's been in place for the past two years, is trying to figure out a way to wiggle out of that decree and continue to price risk herself. I'm mean my lord - can you imagine your parents determining monetary policy in the USA?!?!?! Does anyone, other that corporate issuers, syndicates bringing new issues or the US government believe QE is doing anything constructive for economic prospects in this country? I'm in the camp where QE has already embedded a ticking time bomb into markets and will perpetuate massive deflationary pressures for years to come. And we'll hear on the 27th Yellen defend with a passion & ferver, QE and monetary policy as the rubber stamp that is the Senate Banking Committee doesn't question or challenge a single word that rolls out of her stuttering trap.