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November 8, 2012
Operation Titty Twister
The following chart shows the Fed's treasury securities maturing in more than 10 years divided by the Fed's treasury securities maturing in 1 to 5 years.
Click to enlarge.
The twisting will continue until morale improves?
Here is the update. I have added retail sales growth to the chart so that you can see how effective all that titty twisting was.
Click to enlarge.
In black and blue (pun intended, left scale), you can see the ratio exponentially rise and then fail miserably. It's like the Fed just gave up. Out of curiosity, did anyone notice Bernanke waving a white flag at the time?
In the red (pun intended, right scale), you can see that total nominal annual retail sales growth has been declining for three years (and that the titty twisting pretty much had no effect).
As seen in the chart, I think it is safe to say that retail sales morale has not improved (or at the very least, shouldn't have). The titty twisting is over though. Go figure. Perhaps the next attempt will involve a swift kick to the gonads? Seriously, people need to know that the Fed is on top of the situation and is willing to do whatever it takes to improve morale. And if gonad kicking doesn't work, there's always eye-gouging and hair pulling, lol. Sigh.
As a lover of puns, how can I possibly be expected to resist referencing the Titty Twister bar from the movie From Dusk till Dawn? That's asking way too much of me!
In fact, this whole economy feels like a Quentin Tarantino movie. Titty twisting is at home in Sin City. There's plenty of Pulp Fiction, the Reservoir Dogs are running low, and Kill Bill is the Fed's ZIRP policy of choice. Treasury bill yields are pretty much dead now. That's not the worst of it though. Many seem to think that the economy is Death Proof thanks to ZIRP.
Hey, Pam, remember when I said this car was death proof? Well, that wasn't a lie. This car is 100% death proof. Only to get the benefit of it, honey, you REALLY need to be sitting in my seat. - Stuntman Mike, Death Proof (2007)
What fantastic timing! 2007? Genius!
We are the passengers! We are not the drivers! Literally. We are sitting in the wrong seats! Damn those Inglourious Basterds!
Let's sum this up. The economy expected a neverending stream of titty twisting but all it got was a wild orgy of excessive risk taking in its place. How sustainable will that be? Not very! Let's hope I'm wrong to be wary, but I see plenty of risks here and I have absolutely no desire to swing for the fences.
This is not investment advice.
Source Data:
St. Louis Fed: Custom Chart
4 comments:
In fact, this whole economy feels like a Quentin Tarantino movie.
During the bailouts, Warren Buffett claimed that Main St. and Wall St. were joined at the hip.
It's a True Romance!
mab,
I could believe they are joined From the Hip! ;)
Could you kindly tell the court how much yak manure is deposited annually on the plains of Rabshu?
Could you tell us then the amount of bat guano accumulated monthly by the flatwing Chilean fruit bat?
I'll tell you what it has to do with this case! It has as much to do with it as polymer chemistry! Exactly nothing! It is all a lot of crap!
(I really enjoyed that movie by the way.)
CONjoined from the hip!
mab,
Are you implying that Wall Street might be a parasitic twin?
Oh the humanity! ;)
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