-- Posted Monday, 15 June 2009 | Digg This Article
| | Source: GoldSeek.com
Rick’s Picks
Monday, June 15, 2009
“Phenomenally accurate forecasts”
Bailing out the economy and the banking system has been such a brazenly corrupt, mendacious and, ultimately, doomed enterprise that one could almost forget for a moment how very clever the perpetrators are. If we needed proof that these guys are the slickest behind-the-scenes spin doctors around, consider the following two headlines that ran on successive days atop the Wall Street Journal’s front page. “Rate Rise Clouds Recovery” was the grim news that greeted us last Thursday, on day one. The article described how, despite the Federal Reserve’s explicit strategy of buying as much Treasury paper as it takes to hold market rates down, particularly in the mortgage sector, rates are rising anyway, and steeply. In fact, 30-year fixeds climbed to 5.79% from 5.00% just two weeks earlier, suggesting that market demand for mortgage paper is drying up despite the Fed’s strategy of direct monetization of Treasury debt (a.k.a. “quantitative easing”).
But get this: On day two, as if to reassure us that Treasury’s borrowing is well under control despite the fact that the opposite is true, the spinmeisters co-opted the Journal’s front page with this well timed policy leak: “Fed to Keep Lid on Bond Buys”. Are we actually being asked to believe that, absent the acceleration of direct purchases of Treasury paper by the central bank, demand from other sources will suffice to keep rates from rising further?
Just Like the Recovery of 1931
The key to having the public ignore the blatant contradictions in the two headlines is to have the news media conflate economic recovery with the spurious recovery that has been occurring in the stock market. The spinmeisters have been making as much hay with this deception as they can, even if the bear rally in stocks harkens directly back to an equally spurious picture of recovery in 1931. To assist in the public relations offensive, Fed spokesmen have garnered the fawning attention of a credulous news media. Judge for yourself whether Wall Street Journal reporter Jon Hilsenrath has taken the bait. Here’s his lead from the day-two story noted above: “Federal Reserve officials are unlikely to significantly boost purchases of U.S. Treasurys and mortgage-backed securities when they meet in late June, but could make other adjustments in the face of rising bond yields and fresh signs of an improving economy [emphasis ours].” Of course, nowhere in Hilsenrath’s story do we get a clear idea of what these “other adjustments” might be. Who needs such clarity when a vague picture of “economic recovery” will make all things possible?
This campaign of obfuscation is of a piece with recent news that ten of America’s largest banks would be returning $68 billion in supposedly unneeded TARP funds. To anyone who believes that the banks have indeed returned to health with the return of this token sum, we have a bridge to sell you.
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Rick's Picks publishes a daily trading newsletter for gold, stock, commodity, and mini-index traders 240 times per year. Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers' initials will be used unless express written permission has been granted to the contrary. All Contents © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Monday, 15 June 2009 | Digg This Article | Source: GoldSeek.com
