In perhaps the most shocking of mea culpas seen in modern financial history, former Dallas Fed head Richard Fisher unleashed some seriously uncomfortable truthiness during a 5-minute confessional interview on CNBC. While talking heads attempt to blame China for recent US market volatility, Fisher explains "It is not China," it is The Fed that is at fault: "What The Fed did, and I was part of it, was front-loaded an enormous rally market rally in order to create a wealth effect... and an uncomfortable digestive period is likely now." Simply put he concludes, there can't be much more accomodation, "The Fed is a giant weapon that has no ammunition left."

Must watch, when a shocked Simon Hobbs (at 5:10) is unforgettable: "Will The Fed come on and say 'we're sorry, we over-inflated the market' when it crashes?" We doubt it.

Here is CNBC's higher quality video, which for some reason seems to have edited out some of the more informative parts of the interview.

Fisher appears to be undertaking a major "cover-your-ass" episosde, proclaiming that he was against QE3 which is what has forced "valuations to be very richly priced."

In my tenure at The Fed, every market participant was demanding we do more... "It was The Fed, The Fed, The Fed... in my opinion they got lazy.. and it is time to go back to fundamental analysis... and not just expect the tide to lift all boats... and as [The Fed] tide recedes we are going to see who is wearing a bathing suit and who is not"