CNBC is Making My Stomach Hurt

Unfortunately I had/have to listen to CNBC today to see what the F_O_M_C statement would be and now what the Bernie press conference will bring about at 2 p.m., again I need to pay attention to that, especially with CNBC sewing the seeds of amazement and wonder (literal wonder, as in they aren't clear on the economic data yardstick that is replacing calendar guidance) so CNBC viewers will be locked in to hear Bernie's answer to CNBC's question which is what I already told you Bernie answered on September 13th and the market didn't like it, even though we rallied on the QE3 announcement on the 13th, the press conference and that specific question marked the top of the market for the day at that exact minute in which Bernie answered the question in an Alan Green-speak kind of way.

CNBC is amazed that the F_E_D tied monetary policy, specifically the F_E_D funds rate to economic developments, they already knew this, everyone knew this, in fact a majority of economist were asked yesterday, "If the F_E_D ties the Funds rate to a specific unemployment target rate, what would it be?" Something like 48 of 49 all answered 6.5%! This is exactly what the policy statement said, but CNBC is unclear as to how that may tie in to or effect the rate of asset purchases. This was the question asked on September 13th that the market didn't like...Bernie said if inflation starts getting too hot (which it will with $85 bn  in new money being created every month) they will "Adjust" the purchase program to maintain inflation stability within the context of their mandate"!

If anything, the question is, "What is the inflation rate that triggers a change in the asset purchases and what would the literal change in asset purchases be", but that question can't be answered!

THE F_E_D'S INFLATION TARGET EXCLUDES GAS AND FOOD and that's where the inflation is and where it hits the consumer the most. How can the F_E_D say ,

"At 2.9% inflation over a 3 month period so we are sure it's not transient we will scale back MBS asset purchases to $25 bn a month instead of $40 bn and we will scale back Treasury purchases of $45 bn a month to $35 bn (because someone has to buy our debt) and we will do this until inflation hits 2.3%"?

How can the F_E_D say that, THEY CAN"T, Why does CNBC NOT GET THIS?????

So we have what was widely expected and if you payed any attention to what Bernie already said, there really aren't any surprises.

-Operation Twist will end, so the sterilized program (no new money enters the market) will be replaced with $45bn a month in Treasury purchases that will not be sterilized (more money enters the economy, dilutes the dollar)

-They will keep buying MBS at the same pace

-The total will be $85 billion as expected

-They moved forward with an economic yardstick for policy adjustments rather than a calendar date as they have made clear the last 3 meetings they would do.

-No changes to rates.

NO SURPRISES, except CNBC's willingness to appear absolutely ignorant to keep viewers on their channel for another couple of hours.