RUSH: I just saw the following graphic, the following crawl on television: "Dow Surrenders Amid Fears of Weak Economy." Now, the Dow was way up yesterday, as you all recall. Are they trying to tell us that yesterday somebody thought we had a strong economy, and then today somebody figured out that the Dow is surrendering territory amid fears of a weak economy? When has it ever been strong? When's the economy ever shown signs of life here in the last two and a half years? You know, it's almost bordering on insanity, this following up and down the market seesaw here, and trying to attach minute by minute economic reality to it. It's, of course, thus left to me to explain it.
RUSH: Let me tell you about the stock market here to start. Let me tell you. This is fascinating. You know, yesterday, the market is way up for a while, and we had advanced a number of theories to explain this; and one of the theories was that the market was waiting on the Fed to either buy some securities, buy some stocks, or to signal QE3 in their meeting that was like coming up later yesterday afternoon. There was no question as what it was all about. The children of the market were waiting for Daddy Warbucks to show up with some lollipops, essentially. So the Fed about 12 o'clock yesterday afternoon announces what they announced. What did they announce?
They announced that they're gonna maintain interest rates at practically zero for two years. Two years, by the way, takes us through the reelection campaign. It takes us through
the election of 2012. So it was a gift from Bernanke all the way to Obama in his reelection bid: Keep interest rates at or near zero. But the big thing that the market wanted they didn't get. They didn't get any promise of QE3, and yet they acted as though they did. I'm sitting here, I gotta be honest with you... (Well, I'm always honest with you.) I was sitting here yesterday trying to figure it out. Wait a minute, why is the statement that interest rates are gonna stay where they are resulting in, what was it, a 400-some-odd point swing yesterday?
Because the interest rates had been where they are for a long time. It's not as though they announced we're taking interest rates from 2.25% down to zero, or taking interest rates from 4.25% down to zero. The announcement was we're leaving interest rates where they've been for years, for another two years. Okay, that warrants 400 points up? Well, guess what happened? Goldman Sachs sent a note to investors almost immediately after the Fed's announcement, and here is what they said: "A third round of quantitative easing is likely after the Fed promised to keep interest rates at extraordinarily low levels for at least two more years." The Fed didn't say it. I've looked. I can't find any conspiring going on out there.
I can't find any linkage between the Fed and Goldman. Goldman just took it upon themselves to say, "You know what? We think that this announcement from the Fed means that QE3 is right around the corner," and that is what caused the market to then yesterday afternoon, after two o'clock, to spike back up. Then when everybody learned that there was no conspiring between Goldman and the Fed, that Goldman was simply opining on their own about QE3, that's how we end up down 350 today. Blankfein is the head of Goldman Sachs. Jamie Dimon is the head of JPMorgan Chase. Gosh, I get 'em all confused. Lloyd Blankfein is, I think, a friend of Obama. They're all friends of Obama. They're all friends of Obama.
Anyway, Reuters has the gruesome details: "Goldman Sachs said on Wednesday a third round of quantitative easing from the Fed is likely." Now, Goldman... I mean really, who can blame them? They make money when people enter the market. They wanted people to enter the market, so they just said, "Guess what? QE3 is likely. It's just our opinion," but they didn't say it that way. They made it look like their experts saw it between the lines in the Fed report. "We now see a greater than ever chance that the FOMC [the Fed] will resume quantitative easing later this year or in early 2012. We have changed our call because today's statement suggests that the committee's reaction function to incoming economic news is more dovish than we had previously thought," said the chief economist at the firm.
"The explicit commitment to keep policy rates low through mid-2013 and a bias toward easing policy further were more aggressive than expected and resulted in Goldman
penciling in QE3 after the previous $600 billion bond purchase program, QE2, ended in June." So that's why. That's why it skyrocketed yesterday afternoon, and that's why it's down 350 at the start of the program, and that's why the lamebrains on television put up crawls and graphics, "Dow Surrenders Amid Fears of Week Economy." Dow surrenders because they know they've been had by Goldman Sachs! (chuckling) Ah, folks, you gotta love it. You just love it. It's just stunning to witness all of this stuff.
RUSH: Audio sound bite number five, last night on The Situation Room on CNN. That's Wolf Blitzer's show. Jeanne Moos had a report on the stock market. This is a report on the stock market on CNN.
MOOS: People like Rush Limbaugh like to coin names when the market tanks.
RUSH ARCHIVE: Obamageddon. That's what we have witnessed this Friday. Barackalypse Now.
RUSH: They did that at a report on the stock market on CNN. They left out "Debt Man Walking."