Call the FOMC action - Aug 9th
MsMorrisine
Posts: 33,019 ✭✭✭✭✭
I'm going to say Ben is going to be a cheerleader, blind and ignorant to the long-term problems the debt will cause, and point out that bond yields have fallen since the AA+ downgrade and will indicate no move and no move towards QE3, although he will leave that option on the table as a possibility.
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He won't go so far as to say that S&P doesn't know what the heck they are talking about and should be investigated, along with those tea party people. They'll leave that to Joe Biden or John Kerry.
Since the market is still up a couple hundred points today, it appears that the recovery is well underway. <cough>
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
1) Key interest rates low for two years.
2) No QE3
Therefore the correction.
<< <i>Just heard:
1) Key interest rates low for two years.
2) No QE3
Therefore the correction. >>
DOW down 176 points glad there's not going to be a correction
<< <i>
<< <i>Just heard:
1) Key interest rates low for two years.
2) No QE3
Therefore the correction. >>
DOW down 176 points glad there's not going to be a correction
The up and down is dizzying.
Fred, Las Vegas, NV
Santelli says that the Swiss Franc had one of the biggest moves in futures that he's ever seen in his 31 years on the floor.
Savers are not going to be rewarded. Who needs such low rates? The Treasury sure does.
Commentary revolves around gold as a viable option in lieu of such low-yielding paper.
I don't know that much about the commercial lending market, but what banks are going to lend at historically-low rates?
cohodk may be right about deflation at this point in time.
I knew it would happen.
<< <i>Just heard:
1) Key interest rates low for two years.
2) No QE3
>>
In order to keep the interest rates low, does it imply the Fed has to buy bonds by printing money?
Isn't it exactly what QE3 does?
So now they just change the name for money printing or am I missing something?
yep.
I knew it would happen.
I knew it would happen.
<< <i>Is there a word to describe hyperinflation of the currency on one hand, while a viscious deflation in asset prices is happening at exactly the same time? >>
There aint gonna be no inflation. Thats why silver has weakened.
Bernanke has conceded to follow the Japanese model.
Knowledge is the enemy of fear
What he said. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I'm wondering why they didn't choose stimulation for the economy, so we can grow our way out of debt.
I think I know the answer, they're running out of stimulants (ideas.)
Normally, when the Fed used to lower interest rates by 1/4 pt at a time, it was considered stimulative. A 1/2 pt lowering of Fed Funds was considered really bullish for the economy. That was when Fed Funds rates ran between 3% to 7% and other rates were based on that. They are now down to 0.25% and can't go lower.
So, the economy is bad enough that the Fed has stated that interest rates will remain at these low levels for 2 years, which is an unprecedented statement coming from the Fed. There is nothing more that they can do with interest rates that can be stimulative.
That leaves inflation as the remaining option. They have to keep rolling over the national debt, which is increasing more rapidly even without the massive deficit spending that has already been baked into the cake over the past 2 1/2 years. The momentum is already working against the economy even if they did everything right from here on.
The S&P ratings downgrade has also been extended to Muni Bonds across the spectrum, and although the Feds can buy their own debt (and pretend to get away with it, for awhile) - the Municipalities and States can't do that. Their only recourse is to sell their bonds at higher interest rates, which flies in the face of lower rates on Treasuries and creates budget gaps in state & muni budgets - bigtime.
This is really gonna mess with the bond markets, and let me reiterate - the Fed is out of bullets. The cities & states are going to have serious revenue shortfalls and the Feds won't be able to help them. When the municipal and state layoffs hit, you can bet that Federal Unemployment Costs will rise and tax revenues from falling employment numbers will put a bigger pinch on the Federal Tax Revenues.
Hence, to cover these exascerbated deficit problems, they will inflate or default. Same thing, either way. And the pressure keeps building. I see an emergency coming and I think that we could be facing some horrible moves on the part of our current bunch in DC. They've already shown us what they can do, and I'm sure that they have more planned.
I knew it would happen.
<< <i>I'm wondering why they didn't choose stimulation for the economy, so we can grow our way out of debt.
Normally, when the Fed used to lower interest rates by 1/4 pt at a time, it was considered stimulative. A 1/2 pt lowering of Fed Funds was considered really bullish for the economy. That was when Fed Funds rates ran between 3% to 7% and other rates were based on that. They are now down to 0.25% and can't go lower.
So, the economy is bad enough that the Fed has stated that interest rates will remain at these low levels for 2 years, which is an unprecedented statement coming from the Fed. There is nothing more that they can do with interest rates that can be stimulative.
That leaves inflation as the remaining option. They have to keep rolling over the national debt, which is increasing more rapidly even without the massive deficit spending that has already been baked into the cake over the past 2 1/2 years. The momentum is already working against the economy even if they did everything right from here on.
The S&P ratings downgrade has also been extended to Muni Bonds across the spectrum, and although the Feds can buy their own debt (and pretend to get away with it, for awhile) - the Municipalities and States can't do that. Their only recourse is to sell their bonds at higher interest rates, which flies in the face of lower rates on Treasuries and creates budget gaps in state & muni budgets - bigtime.
This is really gonna mess with the bond markets, and let me reiterate - the Fed is out of bullets. The cities & states are going to have serious revenue shortfalls and the Feds won't be able to help them. When the municipal and state layoffs hit, you can bet that Federal Unemployment Costs will rise and tax revenues from falling employment numbers will put a bigger pinch on the Federal Tax Revenues.
Hence, to cover these exascerbated deficit problems, they will inflate or default. Same thing, either way. And the pressure keeps building. I see an emergency coming and I think that we could be facing some horrible moves on the part of our current bunch in DC. They've already shown us what they can do, and I'm sure that they have more planned. >>
Does this mean you think this could happen before the current bunch is out in 2012 or 2016?
<< <i>
Bernanke has conceded to follow the Japanese model. >>
so how's he gonna get us to save enough to "have enough" to pay off the debt like in Japan?
i've heard the Japanese have enough personal savings to pay off the debt. i doubt we all have $40k in savings to do that here. (not that we would)
or is this just way, way out in left field to what you are referring to?
<< <i>I'm wondering why they didn't choose stimulation for the economy, so we can grow our way out of debt.
Normally, when the Fed used to lower interest rates by 1/4 pt at a time, it was considered stimulative. A 1/2 pt lowering of Fed Funds was considered really bullish for the economy. That was when Fed Funds rates ran between 3% to 7% and other rates were based on that. They are now down to 0.25% and can't go lower.
So, the economy is bad enough that the Fed has stated that interest rates will remain at these low levels for 2 years, which is an unprecedented statement coming from the Fed. There is nothing more that they can do with interest rates that can be stimulative.
That leaves inflation as the remaining option. They have to keep rolling over the national debt, which is increasing more rapidly even without the massive deficit spending that has already been baked into the cake over the past 2 1/2 years. The momentum is already working against the economy even if they did everything right from here on.
The S&P ratings downgrade has also been extended to Muni Bonds across the spectrum, and although the Feds can buy their own debt (and pretend to get away with it, for awhile) - the Municipalities and States can't do that. Their only recourse is to sell their bonds at higher interest rates, which flies in the face of lower rates on Treasuries and creates budget gaps in state & muni budgets - bigtime.
This is really gonna mess with the bond markets, and let me reiterate - the Fed is out of bullets. The cities & states are going to have serious revenue shortfalls and the Feds won't be able to help them. When the municipal and state layoffs hit, you can bet that Federal Unemployment Costs will rise and tax revenues from falling employment numbers will put a bigger pinch on the Federal Tax Revenues.
Hence, to cover these exascerbated deficit problems, they will inflate or default. Same thing, either way. And the pressure keeps building. I see an emergency coming and I think that we could be facing some horrible moves on the part of our current bunch in DC. They've already shown us what they can do, and I'm sure that they have more planned. >>
I think they are in "everything is transitory" denial.
They at least have QE3, although I doubt it's effects.
I'm surprised there is not talk abuot finding other ways to stimulate.
This mess we are in is not transitory and we are under the magnifying glass right now for our debt and how we will handle it.
We need to show action in paying it off.
We need growth.
It's time the Fed acts. there is ""no inflation"" right? So, they have some room, right?
<< <i>
We need to show action in paying it off.
We need growth.
>>
our economy/government/Fed is now transparently and mutually exclusive of doing both. (IMHO)