Sept. 13 (Bloomberg) -- Bloomberg's Mike McKee reports that the Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment. The FOMC also said it would likely hold the federal funds rate near zero “at least through mid-2015.” “... [more]
Sept. 13 (Bloomberg) -- Bloomberg's Mike McKee reports that the Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment. The FOMC also said it would likely hold the federal funds rate near zero “at least through mid-2015.”
“If the outlook for the labor market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases and employ its other policy tools as appropriate,” the Federal Open Market Committee said today in a statement at the end of a two-day meeting in Washington.
The FOMC said it would likely hold the federal funds rate near zero “at least through mid-2015.” Since January, the Fed had said the rate was likely to stay low at least through late 2014. The Fed said “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.”
Chairman Ben S. Bernanke is enlarging his supply of unconventional tools to attack unemployment stuck above 8 percent since February 2009, a situation he has called a “grave concern.” The decision risks provoking a renewed backlash from Republicans, including presidential nominee Mitt Romney, who say Bernanke’s policies threaten to ignite inflation while doing little to spur the economy.
http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40-billion-in-mortgage-securities-each-month.html[less]
Response by Riversider
over 13 years ago
Posts: 13573
Member since: Apr 2009
When you add liquidity to the market--even with the same set of experienced players--you can reignite bubbles. Liquidity creates bubbles.
Humans are a bubbly species: Good government policy should take that into account before creating an agency whose mission is "to provide liquidity...to the mortgage market."
Vacupenispump! Look it up! So Kool how old flaccid penises can look hard!
-only meant for temporary relief of flaccid mkt conditions!-
Buy more re nycre Swedish pump.
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Response by w67thstreet
over 13 years ago
Posts: 9003
Member since: Dec 2008
Pump it real good! Dun du du dun du
-sung to 'push it'-
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Response by Riversider
over 13 years ago
Posts: 13573
Member since: Apr 2009
This might move rates a little for the very best credits, but not by the full amount of the change in TBA's. Basically this results in increased profits to the big four banks who buy mortgages and deliver then to Fannie /Freddie.
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Response by AvUWS
over 13 years ago
Posts: 839
Member since: Mar 2008
Just because QE inflates asset bubbles doesn't mean you can guess which bubbles it will inflate. Will it be RE? How about commodities? How about easily stored "value" like gold? Or the "means of production"?
Like inflation, you don't know where it is going to land.
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Response by Triple_Zero
over 13 years ago
Posts: 516
Member since: Apr 2012
As someone who has a whole lot of plain old ordinary cash in the bank, let me say: drop dead, Fed.
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Response by jason10006
over 13 years ago
Posts: 5257
Member since: Jan 2009
"As someone who has a whole lot of plain old ordinary cash in the bank, let me say: drop dead, Fed."
You are retarded. This has been telegraphed for like a year. You should have had your money in stocks. Or real estate ETFs (the S&P RE index is up 30% YOY.) In other words, YOU SHOULD HAVE FOLLOWED YOUR OWN ADVICE.
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Response by jason10006
over 13 years ago
Posts: 5257
Member since: Jan 2009
...also, as a gold bug, you should be happy since ultra low rates makes gold more attractive. Thus
Would you still put cash into stocks now? With the fed pump on is there any short term risk that I am missing or should we be all in until the feds bias starts to turn?
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Response by yikes
over 13 years ago
Posts: 1016
Member since: Mar 2012
jason--retarded is an inappropriate word--you know better--call him the village idiot or something less offensive, please.
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Response by jason10006
over 13 years ago
Posts: 5257
Member since: Jan 2009
Sorry, no offense meant to actual retarded people. Mentally handicapped. Special..differently abled...what is the right term now? Yes, I have gotten in trouble for using that word. So perhaps "dummy" for now. Or does that insult the mute?
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Response by huntersburg
over 13 years ago
Posts: 11329
Member since: Nov 2010
How about Californian.
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Response by caonima
over 13 years ago
Posts: 815
Member since: Apr 2010
jason himself is a freaking retard, so we trust he won't insult his own fellas
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Response by Triple_Zero
over 13 years ago
Posts: 516
Member since: Apr 2012
Actually, Jason, I have a valid excuse. I work for a foreign financial firm, and being an American I'm not allowed to buy or sell stock at all because of onerous IRS reporting requirements. But we employees aren't allowed to open accounts an any other brokers. So, no stock trading. Thus my strong interest in buying RE as a hedge against the future inflation that is sure to come.
And it's been telegraphed ever since Bernanke took up his position and started babbling about dropping cash from helicopters to make sure that his nation's currency continues to have its value diluted. In a more enlightened age he'd be in prison for treason.
When you add liquidity to the market--even with the same set of experienced players--you can reignite bubbles. Liquidity creates bubbles.
Humans are a bubbly species: Good government policy should take that into account before creating an agency whose mission is "to provide liquidity...to the mortgage market."
http://econlog.econlib.org/archives/2012/09/bubbles_who_to.html
http://blogs.wsj.com/economics/2012/09/13/live-blog-fed-decision-and-bernanke-press-conference-2/
Prediction time: Will this move mortgage rates?
QE3 esplained.
http://i.imgur.com/XaiUx.gif
Vacupenispump! Look it up! So Kool how old flaccid penises can look hard!
-only meant for temporary relief of flaccid mkt conditions!-
Buy more re nycre Swedish pump.
Pump it real good! Dun du du dun du
-sung to 'push it'-
This might move rates a little for the very best credits, but not by the full amount of the change in TBA's. Basically this results in increased profits to the big four banks who buy mortgages and deliver then to Fannie /Freddie.
Just because QE inflates asset bubbles doesn't mean you can guess which bubbles it will inflate. Will it be RE? How about commodities? How about easily stored "value" like gold? Or the "means of production"?
Like inflation, you don't know where it is going to land.
As someone who has a whole lot of plain old ordinary cash in the bank, let me say: drop dead, Fed.
"As someone who has a whole lot of plain old ordinary cash in the bank, let me say: drop dead, Fed."
You are retarded. This has been telegraphed for like a year. You should have had your money in stocks. Or real estate ETFs (the S&P RE index is up 30% YOY.) In other words, YOU SHOULD HAVE FOLLOWED YOUR OWN ADVICE.
...also, as a gold bug, you should be happy since ultra low rates makes gold more attractive. Thus
http://www.bloomberg.com/news/2012-09-13/gold-may-gain-before-fed-policy-decision-amid-record-etp-assets.html
Would you still put cash into stocks now? With the fed pump on is there any short term risk that I am missing or should we be all in until the feds bias starts to turn?
jason--retarded is an inappropriate word--you know better--call him the village idiot or something less offensive, please.
Sorry, no offense meant to actual retarded people. Mentally handicapped. Special..differently abled...what is the right term now? Yes, I have gotten in trouble for using that word. So perhaps "dummy" for now. Or does that insult the mute?
How about Californian.
jason himself is a freaking retard, so we trust he won't insult his own fellas
Actually, Jason, I have a valid excuse. I work for a foreign financial firm, and being an American I'm not allowed to buy or sell stock at all because of onerous IRS reporting requirements. But we employees aren't allowed to open accounts an any other brokers. So, no stock trading. Thus my strong interest in buying RE as a hedge against the future inflation that is sure to come.
And it's been telegraphed ever since Bernanke took up his position and started babbling about dropping cash from helicopters to make sure that his nation's currency continues to have its value diluted. In a more enlightened age he'd be in prison for treason.