al audi
Banned
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for those of us who care about things like this on NT
lets discuss.
lets discuss.
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basically forget about putting your money in da bank...basically zero interest.
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The Federal Reserve fulfilled expectations of more stimulus for the faltering economy, taking aim now at driving down mortgage rates until an improvement in unemployment that the central bank says will be a problem for several years.http://
The Fed said it will buy $40 billion of mortgage-backed securities per month in an attempt to foster a nascent recovery in the real estate market.
The purchases will be open-ended, meaning that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve.
"There's strong hints that they'll do Treasurys next," Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London. "They're pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down."
The stock market, which had been slightly positive prior to the decision, shortly after 12:30 p.m., surged while bond yields, particularly farther out on the curve, jumped higher. Gold and other metals gained at least 1 percent across the board while the dollar slid against most global currencies.
Enacting the third leg of quantitative easing, or QE3, will take the Fed's money creation past the $3 trillion level since it began the process in 2008.
"The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Open Market Committee said in a statement.
As a follow-up to the statement, the Fed released its latest economic projections, which foresee slow growth including a jobless rate that stays above 7 percent into 2014. The economic projections expect growth to remain slow but to improve due to the stimulate measures announced Thursday.
In addition, the Fed said it will continue its program of selling shorter-dated government debt and buying longer-term securities, a mechanism known as Operation Twist. It also will continue its policy of reinvesting principal payments from agency debt and mortgage-backed securities back into mortgages.
The Fed left its funds rate unchanged at near-zero but offered one change in that regard, saying the rate would stay at "exceptionally low levels" until at least mid-2015.
"These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative," the Fed statement said.
The vote was 11-1, with Jeffrey Lacker voting against the notion of asset purchases as well as setting a time frame for rates.
At an afternoon news conference, Fed Chairman Ben Bernanke offered a defense of the Fed's QE activities, saying they are not adding to the government budget deficit nor causing runaway inflation.
In addition, he addressed concerns that savers are being penalized from low interest rates, saying that the policy has allowed for growth in other areas.
"While low interest rates impose some costs, Americans will ultimately benefit most from the healthy and growing economy that low interest rates promote," he said.
Bernanke also issued his latest challenge to Washington to get serious about fiscal policy.
"We can't solve this problem by ourselves," he said.
But Fed critics contended that QE3 will not succeed where its two predecessors failed.
"By doing QE3, he has admitted that QE1 and QE2 have not been beneficial. Otherwise, there would be no need for QE3," said Michael Pento, president of Pento Portfolio Strategies. "If the unemployment rates stays elevated and inflation exceeds his 2 percent target, what is his next move?"
With a summertime rally pinned on hopes for aggressive central bank intervention — both in the U.S. and Europe — the Fed essentially split the difference, offering a quantitative easing program the aggressiveness of which will depend on the strength of the recovery.
"The language of its policy stimulus leaves us in little doubt that the central bank is trying hard to allay fears over the prospects for inflation, which it continues to see as a low likelihood, as well as its exit strategy," said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York. "The Fed is going all out to say that easy money is here for a very long time. Will markets warm to its latest actions? We think so."
Doug Roberts, chief investment strategist at Channel Capital Research, said small-cap stocks, technology shares and precious metals probably will be the chief beneficiaries of QE3.
"What QE3 does is inject liquidity," he said. "Right now what you do is follow the Fed."
Though the Fed is ostensibly politically independent, the decision comes at a ticklish time with the presidential election less than two months away.
Washington conservatives have been critical of the central bank's money creation, which has caused its balance sheet to swell to $2.8 trillion. They worry that the growing money supply will lead to inflation, which has reared its head in food and energy prices but has remained tame through the broader economy.
Bill Gross, who runs bond giant Pimco, said the new round of easing would take the Fed's balance sheet up to nearly $3.5 trillion if the purchases continue for a year.
"That potentially is reflationary," he told CNBC. "We're just to have to see if it works."
Faced with an unemployment rate stubbornly above 8 percent and other indicators showing only halting signs of recovery, the Fed was pressed into action by a market worried that the nascent recovery was on wobbly ground and needed more stimulus.
Two previous rounds of QE had uneven effects on economic growth though they did manage to levitate stock prices by more than 100 percent from their March 2009 lows.
|
Travis J. Garner | Bloomberg | Getty Images |
The purchases will be open-ended, meaning that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve.
"There's strong hints that they'll do Treasurys next," Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London. "They're pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down."
The stock market, which had been slightly positive prior to the decision, shortly after 12:30 p.m., surged while bond yields, particularly farther out on the curve, jumped higher. Gold and other metals gained at least 1 percent across the board while the dollar slid against most global currencies.
Enacting the third leg of quantitative easing, or QE3, will take the Fed's money creation past the $3 trillion level since it began the process in 2008.
"The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Open Market Committee said in a statement.
As a follow-up to the statement, the Fed released its latest economic projections, which foresee slow growth including a jobless rate that stays above 7 percent into 2014. The economic projections expect growth to remain slow but to improve due to the stimulate measures announced Thursday.
In addition, the Fed said it will continue its program of selling shorter-dated government debt and buying longer-term securities, a mechanism known as Operation Twist. It also will continue its policy of reinvesting principal payments from agency debt and mortgage-backed securities back into mortgages.
The Fed left its funds rate unchanged at near-zero but offered one change in that regard, saying the rate would stay at "exceptionally low levels" until at least mid-2015.
"These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative," the Fed statement said.
The vote was 11-1, with Jeffrey Lacker voting against the notion of asset purchases as well as setting a time frame for rates.
At an afternoon news conference, Fed Chairman Ben Bernanke offered a defense of the Fed's QE activities, saying they are not adding to the government budget deficit nor causing runaway inflation.
In addition, he addressed concerns that savers are being penalized from low interest rates, saying that the policy has allowed for growth in other areas.
"While low interest rates impose some costs, Americans will ultimately benefit most from the healthy and growing economy that low interest rates promote," he said.
Bernanke also issued his latest challenge to Washington to get serious about fiscal policy.
"We can't solve this problem by ourselves," he said.
But Fed critics contended that QE3 will not succeed where its two predecessors failed.
"By doing QE3, he has admitted that QE1 and QE2 have not been beneficial. Otherwise, there would be no need for QE3," said Michael Pento, president of Pento Portfolio Strategies. "If the unemployment rates stays elevated and inflation exceeds his 2 percent target, what is his next move?"
With a summertime rally pinned on hopes for aggressive central bank intervention — both in the U.S. and Europe — the Fed essentially split the difference, offering a quantitative easing program the aggressiveness of which will depend on the strength of the recovery.
"The language of its policy stimulus leaves us in little doubt that the central bank is trying hard to allay fears over the prospects for inflation, which it continues to see as a low likelihood, as well as its exit strategy," said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York. "The Fed is going all out to say that easy money is here for a very long time. Will markets warm to its latest actions? We think so."
Doug Roberts, chief investment strategist at Channel Capital Research, said small-cap stocks, technology shares and precious metals probably will be the chief beneficiaries of QE3.
"What QE3 does is inject liquidity," he said. "Right now what you do is follow the Fed."
Though the Fed is ostensibly politically independent, the decision comes at a ticklish time with the presidential election less than two months away.
Washington conservatives have been critical of the central bank's money creation, which has caused its balance sheet to swell to $2.8 trillion. They worry that the growing money supply will lead to inflation, which has reared its head in food and energy prices but has remained tame through the broader economy.
Bill Gross, who runs bond giant Pimco, said the new round of easing would take the Fed's balance sheet up to nearly $3.5 trillion if the purchases continue for a year.
"That potentially is reflationary," he told CNBC. "We're just to have to see if it works."
Faced with an unemployment rate stubbornly above 8 percent and other indicators showing only halting signs of recovery, the Fed was pressed into action by a market worried that the nascent recovery was on wobbly ground and needed more stimulus.
Two previous rounds of QE had uneven effects on economic growth though they did manage to levitate stock prices by more than 100 percent from their March 2009 lows.
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Multiple emotions going on right now about this:
- Yes, it will help increase housing prices
- We need to stop injecting money for immediate problems at the expense of long term debt
- Do we really need to encourage people to take on more debt?
- Bernanke is making a play for his job knowing that if Romney wins he's out as Fed chief.
- Yes, it will help increase housing prices
- We need to stop injecting money for immediate problems at the expense of long term debt
- Do we really need to encourage people to take on more debt?
- Bernanke is making a play for his job knowing that if Romney wins he's out as Fed chief.
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@ what they are doing to savers/elderlyHow do they also not put a deadline on this at least for the sake of appearance? Why show your hand so soon?
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Here comes more inflation as if gas and food prices aren't high enough
as if gas and food prices aren't high enough
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gold st capital
Banned
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Yall need to start investing your money if you have any. A lot of opportunity will be in the market place. If you dont you need to figure out a business and get a loan. QE3 will open the gates for new small business loans if you have your affairs in order.
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I was thinking the same thing. They're really going to let congress dictate when they're going to stop? Isn't this supposed to be an independent company where the only say congress has is renewing their charter?@ what they are doing to savers/elderly
How do they also not put a deadline on this at least for the sake of appearance? Why show your hand so soon?
Your two statements are the primary reasons why I wouldn't mind eliminating the Fed and attempting to return to the gold standard.
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i've been hearing that interest rates are so low that they're pretty much negative at this point. Can anyone expound on this?
Also, how is no one indignant about this? The name QE3 is brilliant though instead of calling it what it really is - a tax, since your money and saving are worth less and less every time they increase the money supply.
Also, how is no one indignant about this? The name QE3 is brilliant though instead of calling it what it really is - a tax, since your money and saving are worth less and less every time they increase the money supply.
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please school me...i want to learn
i got about 8k in a 403b at work and they are doing about 7%
i just opened a roth ira with a balance of 1k but have about 6k in a high rate savings account less than 1%
thinking bout sticking 4 gs into the roth and invest...
i been researching and looking at a few healthcare stocks and pharms
got about 2-3 gs in the checking on the reg.
i got about 8k in a 403b at work and they are doing about 7%
i just opened a roth ira with a balance of 1k but have about 6k in a high rate savings account less than 1%
thinking bout sticking 4 gs into the roth and invest...
i been researching and looking at a few healthcare stocks and pharms
got about 2-3 gs in the checking on the reg.
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In related news household incomes reach the lowest level since 1995
http://online.wsj.com/article/SB10000872396390444426404577647470593975642.html#articleTabs=video
http://online.wsj.com/article/SB10000872396390444426404577647470593975642.html#articleTabs=video
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Interesting point of view.
It's a great opportunity to start a business or expand one, by getting "cheap money."
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Who didn't see QE3 coming...
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what are the potential long term (5-10 years) implications of these QE efforts?
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QE3 probably wasn't necessary, but people are trying to keep their jobs through November
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Unless you have a separate emergency fund, keep the $6K liquid. Although it's not doing much for you, having your money liquid is a smart move. Just look back 4 years ago when so many people had all their money invested in volatile assets like real estate and stocks. If your employer matches, see if you can open a Roth403B instead of contributing to a Roth IRA or the traditional 403B. It's almost the same thing, but you would be getting an additional 7% on that with tax free growth.
Hyperinflation is definitely still in the equation. Don't rule a Volker type Fed move sometime in the future if Benanke is thrown out.
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When people ( or the govt) stop taking on more debt is when the music stops. The entire system is built upon the principle exponential growth.
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The only difference is that our growth before was built on the exponential growth of intellectual capital. Over the last 40 years, since the advent of the credit card, we switched to exponential growth based on debt. Whether we address it or not, the house of cards is collapsing and our debt load (both personal end government) is perhaps the biggest threat to our security and sustainability.
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^Take a look at the propaganda. Initially the "American Dream" related to exploitation of labor, land of opportunity, anyone can pull themselves up by their bootstraps, people were instilled with the belief that with hard work they could become extremely successful in america. This was a migrant country, people came here to work and make something for themselves. This is how the elite built a labor force to exploit. Now days, the american dream consists of a house, couple cars, 2.5 kids and a dog all surrounded by a white picket fence. And of course a 30 year mortgage as well as car payments. About 60 or so years ago things switched. We used to just exploit labor, after the industrial revolution there was not enough labor to exploit that would maintain the growth rate and supply the standard of living americans had begun to come accustomed to. Now, not only are we exploiting labor, but we are pulling everyone's future earnings into the current economic system. Many peoples potential earnings over the next 30 years is in this years GDP. Credit is why the youngest superpower is bigger, stronger and richer than everyone else. There is no other option but a reset. This cannot be sustained.
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The end is near.
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Amidst all this, no one is really trying to even think about the Libor scandal. Especially the fact that it happened, but what are the effects?
I think this is pretty all we have to expect in the future. Things are changing so fast in the economies of the world that there really isn't time to find a solution to our woes and even put it in place. More or less this is going to be the norm.
I think this is pretty all we have to expect in the future. Things are changing so fast in the economies of the world that there really isn't time to find a solution to our woes and even put it in place. More or less this is going to be the norm.
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al audi
Banned
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thanks for the link
also check this out
Does Quantitative Easing Mainly Help the Rich?
http://www.cnbc.com/id/49031991
