When Something Doesn’t Work – Keep Doing It, Harder

12 Dec

Because once the Feds new $85 Billion in new Flows each month ends – its game over

It will take the market some time to figure it out, but there were two main parts to the Fed’s announcement: the actual breakdown of the $85 billion/month QE4EVA which were priced in as far back as the day QE3 was announced and were not a surprise at all; and the employment and inflation hard-targeting part, the so-called Evans Rule, which is, or at least should be, a shock to the market, only it hasn’t quite realized it yet.

…the 6.5% unemployment rate will be breached in July 2013! Now granted that is simply idiotic, and there is no way that the US economy could possibly recover that fast, but that is precisely what is implied based on the ongoing collapse in the Labor Force Participation, and the concurrent plunge in the Labor Force Participation rate, which has been the biggest marginal driver for the unemployment rate, far more than the number of people who have jobs, or are unemployed (readers can recreate our calculation on their own in 10 minutes with excel).

If insanity is doing the same thing over and over and expecting different results, this is clearly insane…

but it will only work with the “cooperation” of the BLS, the Fed and of course the media…

Zero Hedge

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