The QE2 month LEC?
11-03-2010
, 09:06 AM
Its big:
FOMC QE2 announcement at 2:15 here
http://www.federalreserve.gov/monetarypolicy/fomc.htm
FOMC QE2 announcement at 2:15 here
Quote:
About the FOMC | Meeting calendars, statements, and minutes | Transcripts and other historical materials
About the FOMC
The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.
The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.
Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services.
Structure of the FOMC
The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.
The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.
About the FOMC
The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.
The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.
Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services.
Structure of the FOMC
The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.
The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.
11-03-2010
, 10:09 AM
11-03-2010
, 11:31 AM
11-03-2010
, 11:34 AM
11-03-2010
, 02:23 PM
Quote:
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
11-03-2010
, 05:27 PM
11-03-2010
, 05:44 PM
11-03-2010
, 06:38 PM
The price of paper gold is not rising faster for the same reason as this and this, but fear not, it will soon collapse towards zero.
Good thing we can simply casually inquire about the "money supply" and divorce ourselves from the responsibility for accepting the superficial platitudes dangled to us.
11-03-2010
, 07:20 PM
Quote:
The price of paper gold is not rising faster for the same reason as this and this, but fear not, it will soon collapse towards zero.
Good thing we can simply casually inquire about the "money supply" and divorce ourselves from the responsibility for accepting the superficial platitudes dangled to us.
The price of paper gold is not rising faster for the same reason as this and this, but fear not, it will soon collapse towards zero.
Good thing we can simply casually inquire about the "money supply" and divorce ourselves from the responsibility for accepting the superficial platitudes dangled to us.
If I'm being too casual I'd appreciate if you enlightened me as to how one inquires about the size of the money supply formally. In part I'm asking how much damage this $600/$900bil will inflict, and with the assumption that the greater its size relative to the amount of money in circulation the greater the magnitude of its effects will be. I however do not know the size of the money supply, hence my question. And please explain what superficial platitudes you think I'm accepting.
11-04-2010
, 12:56 AM
11-04-2010
, 08:59 AM
11-04-2010
, 11:20 AM
Quote:
the Chairman sez its to promote the "virtuous circle"
Apparently supporting bond prices and thereby providing liquidity to ramp stocks = win for everyone
Quote:
The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed. With short-term interest rates already about as low as they can go, the FOMC agreed to deliver that support by purchasing additional longer-term securities, as it did in 2008 and 2009. The FOMC intends to buy an additional $600 billion of longer-term Treasury securities by mid-2011 and will continue to reinvest repayments of principal on its holdings of securities, as it has been doing since August.
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
Bernanke Confirms That The Key Goal Of The Fed, And QE2, Is To Boost Stock Prices
Quote:
So much for the Fed's two mythical mandates of promoting "maximum employment" and maintaining "price stability." First, we had Bernanke's predecessor Greenspan confirming in late July on Meet the Press what everyone knows: namely that the primary goal of the Fed is merely to encourage higher stock prices: "if the stock market continues higher it will do more to stimulate the economy than any other measure we have discussed here." And now, courtesy of an Op-Ed by the current chairman, we get confirmation, again, just three months later, from the current chairman, that the Fed cares mostly about stimulating high stock prices, solely to create the completely artificial illusion of "wealth" for the few, the proud, the shareholders, and the banking oligarchy.
See, the thing is Bernanke is absolutely right... when it comes to a few hundred thousand "consumers" (out of over 330 million). One group of Americans whose wealth is tied into the equity value of any given company, typically insiders, are more than happy to take advantage of this massive surge in artificial stock valuations. This last week for example they took over 660 million advantages worth. We repeatedly demonstrate that the ratio of insider selling to buying is now beyond grotesque. In the past week alone it hit over 400 (and was over 2,300 a few weeks ago) - see chart at bottom of post. So yes, those for whom Bernanke's "easing" is working, are taking advantage of it. As for the other group of beneficiaries, the ones who are going to receive over $100 billion in bonuses this year, well: they already literally own Bernanke, so we are not too worried about them either.
As for everyone else, tough luck. Since for 99% of America, surging prices will not be offset by any appreciation in their meager stock holding, nor will deteriorating employment prospects, declining home values, and a recessionary relapse in the economy provoke Americans to actually part with their increasingly meager capital as confirmed by the 26th sequential outflow from US retail mutual funds. In other words, the bulk of America has nothing to look forward to except encroaching poverty, and retirement fund balances substantiated by nothing than fraudulent, FASB-endorsed, stock valuations.
Quote:
Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
As for everyone else, tough luck. Since for 99% of America, surging prices will not be offset by any appreciation in their meager stock holding, nor will deteriorating employment prospects, declining home values, and a recessionary relapse in the economy provoke Americans to actually part with their increasingly meager capital as confirmed by the 26th sequential outflow from US retail mutual funds. In other words, the bulk of America has nothing to look forward to except encroaching poverty, and retirement fund balances substantiated by nothing than fraudulent, FASB-endorsed, stock valuations.
Quote:
But lying and scheming is nothing new to the Chairman. As we showed earlier, Bernanke lied under oath to Congress. Why should he start telling the truth now? Additionally, when all those who are chasing stock momentum higher are piggybacking on the "frontrun the Fed" trade, are benefiting, why should they voice disapproval with a strategy that is helping them, if only until such time as the market experiences another massive, and this time terminal, crash... No matter how destructive it is for everyone else.
At the end of the day, it is a question of time: when the people of America realize that all those who are selling on the chart below are doing so at the expense of 99% of American population, and are also sentencing the country to a fate of debt-based insolvency, the time will come. The time will be one of a violent overthrow of the Fed.
Until then, America, for some odd reason believing it has achieved some atual change in the political arena, can just continue to bend over, and take the Fed's daily dose of lies, wealth transfer, and involuntary indebtedness, like a flock of very docile sheep, which has its iPad and iPhone. After all, who needs anything more.
At the end of the day, it is a question of time: when the people of America realize that all those who are selling on the chart below are doing so at the expense of 99% of American population, and are also sentencing the country to a fate of debt-based insolvency, the time will come. The time will be one of a violent overthrow of the Fed.
Until then, America, for some odd reason believing it has achieved some atual change in the political arena, can just continue to bend over, and take the Fed's daily dose of lies, wealth transfer, and involuntary indebtedness, like a flock of very docile sheep, which has its iPad and iPhone. After all, who needs anything more.
11-04-2010
, 11:22 AM
Headlines From 2008: "Zimbabwe Stock Exchange Soars As Others Crash"
Quote:
From Businessweekly, October 22, 2008
While markets across the world have been crashing, the Zimbabwe Stock Exchange has being seeing record gains as citizens turn to equities to protect their money from the country's hyperinflation.
The benchmark Industrial Index soared 257 percent on Tuesday up from a previous one day record of 241 percent on Monday with some companies seeing share prices increase by up to 3,500 percent.
But before Wall Street traders start packing their bags and heading south, they should bear in mind that these figures are just another representation of Zimbabwe's collapsing economy and are almost meaningless in real terms.
Zimbabwe, once a regional breadbasket, is staggering amid the world's worst inflation, a looming humanitarian emergency and worsening shortages of food, gasoline and most basic goods. Inflation is at 231 million percent, but some experts put it more at about 20 trillion percent.
"Why leave money in the bank?" asked Emmanuel Munyukwi, chief executive of the Zimbabwe Stock Exchange at a seminar on the doing business in Zimbabwe on Tuesday.
"People are forced to come on the stock market. They believe that after hard currency, the stock market is the only viable option where you can get a bit of a return," he said.
While markets across the world have been crashing, the Zimbabwe Stock Exchange has being seeing record gains as citizens turn to equities to protect their money from the country's hyperinflation.
The benchmark Industrial Index soared 257 percent on Tuesday up from a previous one day record of 241 percent on Monday with some companies seeing share prices increase by up to 3,500 percent.
But before Wall Street traders start packing their bags and heading south, they should bear in mind that these figures are just another representation of Zimbabwe's collapsing economy and are almost meaningless in real terms.
Zimbabwe, once a regional breadbasket, is staggering amid the world's worst inflation, a looming humanitarian emergency and worsening shortages of food, gasoline and most basic goods. Inflation is at 231 million percent, but some experts put it more at about 20 trillion percent.
"Why leave money in the bank?" asked Emmanuel Munyukwi, chief executive of the Zimbabwe Stock Exchange at a seminar on the doing business in Zimbabwe on Tuesday.
"People are forced to come on the stock market. They believe that after hard currency, the stock market is the only viable option where you can get a bit of a return," he said.