Qe 3??

[Norman]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

Wanna bet?

I don't believe there is ANY chance that QE won't continue. But it may not be called QE or anything for that matter. Bernanke is an expert at lying and making statements that answer nothing...

"Will there be QE 3" "No".

"Will you print more money" "No"

"Will you expand the balance sheet of the fed" "Yes"

 

[Wiseacre]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

Wanna bet?

I don't believe there is ANY chance that QE won't continue. But it may not be called QE or anything for that matter. Bernanke is an expert at lying and making statements that answer nothing...

"Will there be QE 3" "No".

"Will you print more money" "No"

"Will you expand the balance sheet of the fed" "Yes"

The question is whether or not prices and inflation continue to go up. Don't know that Bernanke will add more to the Fed balance sheet if prices look like they're increasing too much.
He doesn't want to go down in history as the guy who lead us into high inflation or a depression.

 

[Avorysuds]

What no Rtard/TM or RW to tell us all that the economy has turned around and everything everywhere is getting better? We need more facts!

The more I see stuff like this the more I believe someone like Ron Paul has a chance at making it to President. It just gets harder and harder to make him look like a crazy old man when he gets it all right.

 

[Toro]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

well the eu has and are considering doing it again.....how worse do you think things would need to be or get, or that is, how much more of stumbling thru a mangled recovery would it take in your opinion?

The ECB raised rates last month.

And they're more fracked than we are.

 

[Norman]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

Wanna bet?

I don't believe there is ANY chance that QE won't continue. But it may not be called QE or anything for that matter. Bernanke is an expert at lying and making statements that answer nothing...

"Will there be QE 3" "No".

"Will you print more money" "No"

"Will you expand the balance sheet of the fed" "Yes"

The question is whether or not prices and inflation continue to go up. Don't know that Bernanke will add more to the Fed balance sheet if prices look like they're increasing too much.
He doesn't want to go down in history as the guy who lead us into high inflation or a depression.

The inflation rate is directly related to the amount of unicorns the Fed finds. So they really have to get the alcohol rolling before any can be spotted.

 

[Big Fitz]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

Wanna bet?

I don't believe there is ANY chance that QE won't continue. But it may not be called QE or anything for that matter. Bernanke is an expert at lying and making statements that answer nothing...

"Will there be QE 3" "No".

"Will you print more money" "No"

"Will you expand the balance sheet of the fed" "Yes"

The question is whether or not prices and inflation continue to go up. Don't know that Bernanke will add more to the Fed balance sheet if prices look like they're increasing too much.
He doesn't want to go down in history as the guy who lead us into high inflation or a depression.

I don't think he's going to get a choice in the matter.

He just doesn't want it to happen on HIS watch.

 

[Toro]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

Wanna bet?

I don't believe there is ANY chance that QE won't continue. But it may not be called QE or anything for that matter. Bernanke is an expert at lying and making statements that answer nothing...

"Will there be QE 3" "No".

"Will you print more money" "No"

"Will you expand the balance sheet of the fed" "Yes"

It depends on growth. They won't expand the B/S if growth continues as is, though I expect the Fed will replace expiring MBS and Tbonds with new purchases so that the B/S does not shrink. They might expand it, however, if the economy falters.

Some components are suggesting that it might. ISM numbers have been fairly weak, for example. However, I receive an index of 22 coincident and leading economic indicators and the index is still showing moderate expansion. Also, the ECRI weekly leading index is still fairly positive. And thus far, Bernanke has said nothing to indicate that he supports another round.

 

[Norman]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

Wanna bet?

I don't believe there is ANY chance that QE won't continue. But it may not be called QE or anything for that matter. Bernanke is an expert at lying and making statements that answer nothing...

"Will there be QE 3" "No".

"Will you print more money" "No"

"Will you expand the balance sheet of the fed" "Yes"

It depends on growth. They won't expand the B/S if growth continues as is, though I expect the Fed will replace expiring MBS and Tbonds with new purchases so that the B/S does not shrink. They might expand it, however, if the economy falters.

Some components are suggesting that it might. ISM numbers have been fairly weak, for example. However, I receive an index of 22 coincident and leading economic indicators and the index is still showing moderate expansion. Also, the ECRI weekly leading index is still fairly positive. And thus far, Bernanke has said nothing to indicate that he supports another round.

How many banks are relying on the Fed's discount rate currently?

Because they are buying govt bonds with the money I hear. And when those rates raise, the banks and government are all in big trouble again. So are the businesses. The economy will go down the crapper.

So that is one more reason why I doubt simple growth is not enough. Sure the losses should be liquidated but the illusion is much nicer. Inflation will collapse the whole thing eventually though.

 

[Toro]

How many banks are relying on the Fed's discount rate currently?

Because they are buying govt bonds with the money I hear. And when those rates raise, the banks and government are all in big trouble again.

So that is one more reason why I doubt simple growth is not enough. Sure the losses should be liquidated but the illusion is much nicer. Inflation will collapse the whole thing eventually though.

They are buying government bonds. They are borrowing at 0% and lending at 4%. That's a pretty steep curve, not one associated with a recession.

Also, bank loan officers are being told to start making loans again. Loans are beginning to rise, albeit tepidly. Loans have a higher spread than Tbonds, so an increase in lending means banks are going out on the risk curve and net interest margin will begin to rise.

I don't think the Fed is going to raise rates this year, though I could be wrong. If they are raising, that means the economy is beginning to grow significantly.

Nonfarm payrolls are up by over a million in the past year. Household survey says teh same thing. Not great for certain but not indicative of a recession either.

I think for there to be a QE3, employment will have to slip significantly. It's possible but there is no reason thus far to think that will happen, unless you believe housing is going to take a serious turn for the worse.

 

[Trajan]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

Wanna bet?

I don't believe there is ANY chance that QE won't continue. But it may not be called QE or anything for that matter. Bernanke is an expert at lying and making statements that answer nothing...

"Will there be QE 3" "No".

"Will you print more money" "No"

"Will you expand the balance sheet of the fed" "Yes"

It depends on growth. They won't expand the B/S if growth continues as is, though I expect the Fed will replace expiring MBS and Tbonds with new purchases so that the B/S does not shrink. They might expand it, however, if the economy falters.

Some components are suggesting that it might. ISM numbers have been fairly weak, for example. However, I receive an index of 22 coincident and leading economic indicators and the index is still showing moderate expansion. Also, the ECRI weekly leading index is still fairly positive. And thus far, Bernanke has said nothing to indicate that he supports another round.

and, toro, my good man this is all predicated upon what Obama does as he thinks ahead in q-3-4 this year, as to what he can survive with, come late 2012.

IF wee Timmy, and the Bernbank say hey, its even up or even slim odds, it will result in another 30-40K jobs a month (becasue 200k and a 2.2% gdp ) aint getting it, he'll do it, no matter that other factors exist, we both know this.

 

[Trajan]

I think the Fed is more likely to start raising rates than institute another round of QE3. I believe that things would have to get materially worse before there is another round of quantitative easing.

Wanna bet?

I don't believe there is ANY chance that QE won't continue. But it may not be called QE or anything for that matter. Bernanke is an expert at lying and making statements that answer nothing...

"Will there be QE 3" "No".

"Will you print more money" "No"

"Will you expand the balance sheet of the fed" "Yes"

It depends on growth. They won't expand the B/S if growth continues as is, though I expect the Fed will replace expiring MBS and Tbonds with new purchases so that the B/S does not shrink. They might expand it, however, if the economy falters.

Some components are suggesting that it might. ISM numbers have been fairly weak, for example. However, I receive an index of 22 coincident and leading economic indicators and the index is still showing moderate expansion. Also, the ECRI weekly leading index is still fairly positive. And thus far, Bernanke has said nothing to indicate that he supports another round.

and, toro, my good man this is all predicated upon what Obama does as he thinks ahead in q-3-4 this year, as to what he can survive with, come late 2012.

IF wee Timmy, and the Bernbank say hey, its even up or even slim odds, it will result in another 30-40K jobs a month (becasue 200-230k and a 2.2-2.5% gdp ) aint getting it, he'll do it, no matter that other factors exist, we both know this.

another sub par 3.0 gdp or below and a piddling 230K plus a rise in rate, its a done deal, as norman infers bernbank will play it cool, plan ahead and come late sep. whammo...

( its also amazing to me, that a gdp of say 3.5 or 4% and 300kwould be now be received like the second coming....what a joke, kudos to the media as well).

 

[Toro]

In a good economy, nonfarm payrolls are +200-250k, and the economy grows at ~3% per year. That's about what the economy is doing today. The problem is that this recovery is weak relative to the depth if the decline. IOW growth should be stronger if this was a typical recession.

The problem, of course, is that this is not a typical recession. It is not one induced by the Fed in response to the inventory cycle, which was what all recessions were from WWII to the end of the century It is due to the collapse in asset prices. In B/S recessions, recovery is relatively weak. The last recession was also a B/S recession, and it was the weakest recovery since the Depression. This recovery has been the strongest since the recovery in the early 80s.

Of course, things still suck. But in the context of QE3, things are going to have to get appreciably worse IMHO before we get another jolt of monetary stimulus.

 

[Trajan]

yes well its all relative to an extent. but, at the pop. we have today, just ten years from the last downturn, the gain in the labor force was what? 250k today is not very good, in 1992, it was pretty good, in 1982 it was damn good.....and let it be said at 6% 200-250 is pretty good, 10 years later, at 9.0% it blows, the net job picture per month blows ( and thats not me talking that the ballyhooed 'jobless recovery Bush was saddled with by the media).

And at the un-allayed spending AND tinkering AND here to fore unseen low interest rates thats got to be factored in somehow too, so, that 250K well.....if this is a different kind of recession well, we have also employed a different set of tool and stimulus, but it appears we have not employed the correct methodology.

I suppose we are talking past each other at this point. Back in jan we discussed this and I said 3 months of employment numbers and good to very good gdp would convince me we had turned a corner, the employment numbers have bumped up but not near enough, we cannot wait 4 years to ratchet ourselves down and fed revenue to grow to keep up with the debt. we are carrying....*shrugs*, we'll see. ( fed revenue actually bumped up last quarter but I read it was an anomaly).

 

[Toro]

I don't think we have turned the corner. I have said all along that this is a very different type of recession, and that the recovery would be very different from what we are used to. It appears to me that we continue to track along that path. There will not be a strong recovery.

 

[Trajan]

I don't think we have turned the corner. I have said all along that this is a very different type of recession, and that the recovery would be very different from what we are used to. It appears to me that we continue to track along that path. There will not be a strong recovery.

I'll tell you what I am afraid of toro, and it has nothing to do with obama.....I hope you understand though I disagree with obama's handling of this all, there is no doubt in my mind there is plenty of blame for everyone of all stripes.

That being said my fear is this will become, as it has become for several states in Europe, the new normal, 6-7% running unemployment for over a decade, some more than that and that will push taxes and transfer payments ( aside from the other entitlement mechanisms) to the point where we really never will have 'the recovery' as we know it for a very very long time, IF ever.

 

[Toro]

We will recover eventually. This is a problem of excess supply. Eventually excess supply gets absorbed.

America is a fantastic country. It is extraordinarily dynamic and regenerative. People are worrying too much. We definitely have issues, entitlements - particularly healthcare - have to be reformed. But what has been fascinating is that despite all we have been through, productivity growth just keeps chugging along. And productivity is by far the best metric for wealth creation. We have, I believe, some bumps in the road ahead of us. But if one bets against America long term, one does so at their peril. We have been through far worse before.

 

[william the wie]

A potential game changer is the condition of the flood control spillways in Louisiana. It is not just that after the New Orleans levees gave way that these spill ways should have become front page news but didn't but the perceived lack of money spent on them in the stimulus package that will become big news in the coming three weeks even if they hold. So I am with Toro on this. Most likely the news in the next three weeks, even if the spillways hold, will force the Fed to dance the Tea Party tune or be impeached.

 

[Trajan]

we'll see......


back to the topic......they are moving the deck chairs as we speak from QE 2 to QE 3....


Second Biggest Weekly Drop Ever In Treasurys Held In The Fed's Custodial Account As Foreigners Dump

may 26 2011

here was one truly interesting observation in this week's Fed balance sheet update: not that the actual balance sheet hit a new all time record (which it did at $2.779 trillion), or that the Fed added another $24 billion in Treasurys to its balance sheet, or that total reserves hit a new all time record, increasing by $53 billion to $1.59 trillion. No. The biggest surprise was that in the just ended week, Treasury securities held in custodial accounts at the Fed, considered by some the best real-time representation of foreign holdings of US Treasurys considering that the TIC update is not only wildly inaccurate in its monthly update, but is also 3 months delayed, dropped by the largest amount in 4 years. From a total of $2.704 trillion, USTs held in custodial accounts declined by $18.7 billion to $2.685 billion. This is the second largest decline in history, only topped by the $22.1 billion in the week of August 15, 2007 which is the week that followed the great quant crash of 2007 that wiped out, among others, Goldman Alpha. This observation is in stark contrast to the recent record strength of bond issuance, after both the 5 and 7 Years auctions posted record Bid to Cover investor interest.

Second Biggest Weekly Drop Ever In Treasurys Held In The Fed's Custodial Account As Foreigners Dump | zero hedge

Chinese USD Diversification Continues: First Euro Bonds, Now JGBs

may 29 2011

ven as the peanut gallery debates whether or not the dollar is the reserve currency of choice for the world, China continues to diversify away from the USD. After last week's news that Beijing had not had enough of Portuguese bonds, in a repeat of the same scenario from January 2011, and was preparing to bid up Eurozone bonds across the curve (aka double down) we now learn that China, or rather third-party London-domiciled banks doing its bidding, is now the actor behind "massive Japanese bond buying" seen over the past month. Per Reuters: "Foreign investors have flocked to Japanese government bonds in the past five weeks, finance ministry data shows and market sources say China was among the main buyers, although a large part of buying was made through banks in London." That said, even Reuters appears unable to get its story straight: "Foreigners bought a net 4.696 trillion yen ($57.7 billion) of Japanese bonds in the five weeks to May 20, a record amount of purchases for any five consecutive weeks since data began to be compiled in its current form in 2005. One source said China appears to be buying the four to five-year sector after having sold a large amount of short-term bills earlier in the month. But other sources said foreign investors, including China, were buying long-dated bonds with less than one year left to maturity, effectively the same as buying short-term bills." Wherever in the curve China is focusing, the fact that it continues to actively buy JGBs after 5 consecutive months of declines in its UST purchases (coupled with the news broken by Zero Hedge that Fed custodial accounts of foreign UST holdings suffered the largest one week drop in almost 4 years) is sending a very clear political message to the US.

Chinese USD Diversification Continues: First Euro Bonds, Now JGBs | zero hedge

 

[Toro]

Crappy ADP jobs report. ISM numbers around the world poor. Housing prices declining again. Maybe QE3 is back on the table.

 

[Oddball]

Maybe, instead of The Fed printing up more money, Boiking and his merry band of Marxist moonbats could quit threatening to print up new laws, rules and regulations, that are primarily to blame for all the cash sitting on the sidelines.

It's really not that hard, gang.