Mr. Gross concludes the Fed’s pancaking of the yield curve through Operation Twist will destroy the banking system’s incentive to create credit by reducing the opportunity for banks to leverage a positively sloped yield curve We add our two cents to the Bond King’s skepticism of current policy using the basic supply and demand curves of microeconomics, or what graduate students call “price theory.... [more]
Mr. Gross concludes the Fed’s pancaking of the yield curve through Operation Twist will destroy the banking system’s incentive to create credit by reducing the opportunity for banks to leverage a positively sloped yield curve
We add our two cents to the Bond King’s skepticism of current policy using the basic supply and demand curves of microeconomics, or what graduate students call “price theory.’ Recall how we were taught as freshman that rent control creates a shortage of rental apartments and housing when government policy distorts or represses market prices.
http://macromon.files.wordpress.com/2011/09/fed-credit-crunch_sep233.jpghttp://www.ritholtz.com/blog/2011/09/is-the-fed-contributing-to-the-creditmortgage-crunch/[less]
Response by jason10006
over 14 years ago
Posts: 5257
Member since: Jan 2009
And yet Bill Gross's CONCLUSION is that both the Fed and Congress need to do MORE monetary and fiscal stimulus in the short term, not less. Nice cherry-picking.
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Response by Truth
over 14 years ago
Posts: 5641
Member since: Dec 2009
I feel a verse from "Twist and Shout" coming on.
May I serenade you, Riversider? ;)
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Response by columbiacounty
over 14 years ago
Posts: 12708
Member since: Jan 2009
no
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Response by Truth
over 14 years ago
Posts: 5641
Member since: Dec 2009
Riversider: cc. missed me. I was gone for amost 2 months. He waited for me to get back on here and posted 2 comments ( one on another thread) right after I did.
I'm going out on a tour next week and I'll be gone for another few months.
cc. will be waiting and watching until I get back again.
Waiting to make an even bigger fool of himself.
If that's possible.
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Response by Riversider
over 14 years ago
Posts: 13573
Member since: Apr 2009
I'm sure you are right...
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Response by Riversider
over 14 years ago
Posts: 13573
Member since: Apr 2009
My view is that the Fed can certainly carry out the policies its contemplating like the twist, or qe3, but will they bring unintended consequences( I certainly believe the risk is there) and will they achieve their goals(I highly doubt it). Think of Bernanke, Geither Obama on a boat hunting a shark and one of them looks up and says, "I think we're going to need a bigger boat"). What ails the world is bigger than the Fed and it's tools.
And yet Bill Gross's CONCLUSION is that both the Fed and Congress need to do MORE monetary and fiscal stimulus in the short term, not less. Nice cherry-picking.
I feel a verse from "Twist and Shout" coming on.
May I serenade you, Riversider? ;)
no
Riversider: cc. missed me. I was gone for amost 2 months. He waited for me to get back on here and posted 2 comments ( one on another thread) right after I did.
I'm going out on a tour next week and I'll be gone for another few months.
cc. will be waiting and watching until I get back again.
Waiting to make an even bigger fool of himself.
If that's possible.
I'm sure you are right...
My view is that the Fed can certainly carry out the policies its contemplating like the twist, or qe3, but will they bring unintended consequences( I certainly believe the risk is there) and will they achieve their goals(I highly doubt it). Think of Bernanke, Geither Obama on a boat hunting a shark and one of them looks up and says, "I think we're going to need a bigger boat"). What ails the world is bigger than the Fed and it's tools.
http://www.youtube.com/watch?v=8gciFoEbOA8
"SHAKE IT UP BABY,
SHAKE IT UP BABY
TWIST AND SHOUT
TWIST AND SHOUT..."
Always a pleasure, Riversider.
http://www.youtube.com/watch?v=3_I8RCUpe-c
Ah, I missed you Riversider!
L'Shana Tova Truth.
Actually I view the Federal Reserve as being more of a Chubby Checker group
http://www.youtube.com/watch?v=xbK0C9AYMd8
Thanks Riversider!
Well after today, the gov't will need an EVEN BIGGER BOAT YET!