Qe 3??

[Polk]

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.

Which goes to show that policymakers are living in another world.

 

[Trajan]

so what do you think? will they vote to move ahead with the austerity measures?

In any event it going to get even uglier...



Greek Parliament Preparing Evacuation Tunnel Ahead Of Wednesday Vote On IMF Bailout, General Strike And Parliamentary Blockade

June 15, the day of a general strike in Greece, is also the day when the critical "mid-term agreement" between the insolvent country and the Troica will be voted on by the general assembly. "The agreement includes tax increases, slashing of wages and pensions and the lay-off of approximately more 100,000 civil servants in the next few years." Already the blog Occupied London has called for a blockade of the Athens parliament: "Last night (June 11th) the popular assembly of Syntagma square announced a call to blockade the Greek parliament ahead of the voting of the so-called Mid-term agreement between the Greek government and the troika (IMF/ECB/EU). The call-out for the blockade below is one of the most important acts we have seen by the Syntagma assembly so far. June 15th is gearing up to become a historical day in Greece, a crucial chance to block off the charge-ahead of neoliberalism here. Don’t be a spectator to this – translate and disseminate the text below; organise a gathering where you are, or come join us at Syntagma. This is the struggle for and of our lives."

more at-
Greek Parliament Preparing Evacuation Tunnel Ahead Of Wednesday Vote On IMF Bailout, General Strike And Parliamentary Blockade | zero hedge

 

[Trajan]

QE3- bank on it...

Friday night dump- Goldman cuts forecast to 2% GDP for 2011.....

http://www.usmessageboard.com/econo...forecast-to-2-gdp-for-2011-a.html#post3764568

 

[william the wie]

Trajan, you are preaching to the choir. Liberals who were of voting age in 1980 keep forgetting that Reagan was a sacrificial lamb, a bow to the wacko right by the GOP establishment.

 

[Trajan]

yea well, I am not so sure of that, but in any case, I'll keep plugging....what the hell.

and for some more weekend cheer-


After Dumping 30% Of Its Treasury Holdings In Half A Year, Russia Warns It Will Continue Selling US Debt

Just in time for the end of QE2, when the US needs every possible foreign buyer of US debt to step up to the plate, we get confirmation that yet another major foreign central bank has decided to not only not add to its US debt holdings, but to actively sell US Treasurys. The WSJ reports that "Russia will likely continue lowering its U.S. debt holdings as Washington struggles to contain a budget deficit and bolster a tepid economic recovery, a top aide to President Dmitry Medvedev said Saturday. "The share of our portfolio in U.S. instruments has gone down and probably will go down further," said Arkady Dvorkovich, chief economic aide to the president, told Dow Jones in an interview on the sidelines of the St. Petersburg International Economic Forum." Well, with Russia out, at least we have China and Japan continuing to buy US debt.... Oh wait, China is contemplating dumping two thirds of its debt you say? And the biggest buyer of Japanese bonds is now in the process of selling Japanese bonds in the open market for the first time (so not really in the market of US bonds). Well, surely US households will step up to the plate. After all they all have so much "cash on the sidelines" courtesy of the RecoveryTM ©® that they can't wait to dump it all into paper yielding less than 3% a year, and has negative real rates of return. Wait, what's that: according to the Fed, in Q1 US "households" sold $1.1 trillion annualized in Treasurys to the Fed? So, let's get this straight: China, Japan, and now very much openly Russia, the three countries with the largest financial reserves in the world, are threatening, if not already dumping US bonds, just in time for US households to sell their holdings of US paper to Brian Sack. And this is happening 2 weeks before QE2 ends... Um... Are we and Bill Gross (and certainly not Morgan Stanley) the only ones to see a problem with this?

more at

After Dumping 30% Of Its Treasury Holdings In Half A Year, Russia Warns It Will Continue Selling US Debt | zero hedge

 

[Trajan]

my question is, why are 2 yr bonds sitting at 2%? who's buying?

 

[Lucky#13]

my question is, why are 2 yr bonds sitting at 2%? who's buying?

Maybe this guy? How bout the guy to his right? I haven't a clue but it's probably one of these two.

 

[editec]

my question is, why are 2 yr bonds sitting at 2%? who's buying?

Didn't China recently convert much (about a trillion) of its short term debt (less than 1 year) into longer term bonds?

I imagine that they spread those bonds into 2 year, 5 year, 10 year, and 30 years bonds.

I say imagine since I have no data about what that mix of longer terms bonds was, of course.

 

[Toddsterpatriot]

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.

Banks cannot borrow from the Fed at 0%.
The current discount rate is 0.75%.

 

[KissMy]

Obama & Bernanke are pulling a stealth QE3 on US. First Bernanke said the Fed would roll over the money from the maturing bonds he purchased previously. This is what most are calling QE2.5

But now Obama has called up Saudi & had them increase oil production & then he opened up the Strategic Petroleum Reserve to flood the well supplied oil with a glut of oil. This will drive down gasoline & all commodities in order to stimulate the economy. Their oil price target is $75 a barrel or below $3.00 gasoline at the pump to get people spending again.

This will provide stimulus & inflation cover for the next 60 days until congress lifts the debt ceiling so the treasury can offer a bunch more bonds & Bernanke & the Fed can then safely launch QE3 to buy them all up.

 

[Toddsterpatriot]

Obama & Bernanke are pulling a stealth QE3 on US. First Bernanke said the Fed would roll over the money from the maturing bonds he purchased previously. This is what most are calling QE2.5

Keeping the Fed's balance sheet the same should not be called easing by anyone.

 

[Brutus]

Just in time for the end of QE2, when the US needs every possible foreign buyer of US debt to step up to the plate,

that is a mystery to me. It was widely reported that the Fed was buying 70% of recent Treasury auctions. When they stop a panic and Depression should begin. What am I missing?

 

[KissMy]

Just in time for the end of QE2, when the US needs every possible foreign buyer of US debt to step up to the plate,

that is a mystery to me. It was widely reported that the Fed was buying 70% of recent Treasury auctions. When they stop a panic and Depression should begin. What am I missing?

Haven't you noticed the 8 week slide of the stock market, Jobs & commodities?

The positive Jobs numbers have been getting wiped out by the subsequent revisions. We are heading back into another deflationary depression!

Bernanke & Obama are pushing hard to avert this coming depression.

Bernanke & the Fed announced that they would roll over money from maturing bonds to keep purchasing new bonds, this is being called QE2.5.

Also Obama has called up Saudi & had them increase oil production & then he opened up the Strategic Petroleum Reserve to flood the well supplied oil with a glut of oil. This will drive down gasoline & all commodities in order to stimulate the economy.

We will absolutely be seeing a QE3 stimulus within a few months.

 

[Brutus]

Just in time for the end of QE2, when the US needs every possible foreign buyer of US debt to step up to the plate,

that is a mystery to me. It was widely reported that the Fed was buying 70% of recent Treasury auctions. When they stop a panic and Depression should begin. What am I missing

Haven't you noticed the 8 week slide of the stock market, Jobs & commodities?

The positive Jobs numbers have been getting wiped out by the subsequent revisions.

8 weeks was long before QE2 ended??

We are heading back into another deflationary depression!

how can there be deflation and depression when the Fed is there to print money?????

Bernanke & Obama are pushing hard to avert this coming depression.

please don't pretend you can predict the future. It makes you look silly

Bernanke & the Fed announced that they would roll over money from maturing bonds to keep purchasing new bonds, this is being called QE2.5.

yes but it still represents a 70% drop in Fed purchases. You might call it then QE 2.3 at most but in any case its a sensible transition

Also Obama has called up Saudi & had them increase oil production & then he opened up the Strategic Petroleum Reserve to flood the well supplied oil with a glut of oil. This will drive down gasoline & all commodities in order to stimulate the economy.

so much for your deflation and depression?????????

We will absolutely be seeing a QE3 stimulus within a few months.

you just said BO would stimulate the economy??????

 

[iamwhatiseem]

Well - we get to bailout Greece.
Don't think so? Really?...one way or another you and I are going to give Greece another bailout.
Of course it isn't the Greek PEOPLE getting our money....or even Greece. But European banks.
Yes...again...you and I will bail out banks.
This is why the market regained nearly 200 points yesterday - if Wall Street was invested in the American taxpayer - it would have fallen 500 points yesterday!
SCORE
European Banks - 3
American Taxpayers - 0

 

[Brutus]

- if Wall Street was invested in the American taxpayer - it would have fallen 500 points yesterday!
SCORE
European Banks - 3
American Taxpayers - 0

no idea what you are talking about????

 

[Trajan]

he he ...I hate being right....well wait- in all fairness the good ship QE3 has not sailed yet, but look, its either that or..? see below.

we have boxed ourselves in. *shrugs*..and this is the easiest way out for Obama. The higher rates would panic anyone left there is to panic.


Horrible 5 Year Auction Sends Treasury Complex Into A Tailspin, 5 Year Yield Surges 22 Bps In Two Days

It has been a long time since we had seen a 5 Year auction as ugly as today's: printing at a 1.615% high yield, the 5 Year had a 3.5 bps tail off the bat to the 1.58% WI where it was trading before. The internals were just as ugly, with the Bid To Cover coming at 2.59 a plunge from May's 3.20, and the lowest since June 2010. Not surprisingly, Indirect interest evaporated once again, tumbling from 47.1% to just 37.6%, with Primary Dealers having to take up more than half, or 52.1%, and the remainder going to Direct Bidders. Too bad they will have no more opportunities to flip these back to the Fed. Which as expected starts to confirm Bill Gross' thesis that in the absence of the Fed monetizing, rates are about to go higher. One look at the second chart shows the relentless selling in bonds since Sunday. And as reported previously, with a barrage of issuance due in the months following the debt ceiling hike, which will probably be some time in July or August, look for the sell UST thesis to start getting its long overdue confirmation. In the meantime, the 5 Year yield has surged from 1.35% yesterday to 1.5727%, a mindnumbing move.

more at zero hedge | on a long enough timeline, the survival rate for everyone drops to zero

 

[iamwhatiseem]

It's like watching a tornado...hoping it doesn't hit you directly.

One way or another...we will be partially on the hook for Greece.
Course then there is the other 3-4 countries that will be as bad as they are soon...and then there is America.

 

[Trajan]

It's like watching a tornado...hoping it doesn't hit you directly.

One way or another...we will be partially on the hook for Greece.
Course then there is the other 3-4 countries that will be as bad as they are soon...and then there is America.

obama just does not have enough time to avid this shit. he can start qe 3 in October, ( if not sooner) but in the end, he cannot run fast enough to avoid the side effects of qe 1, 2 and now 3 ( hell forget the full effects, he won't be in office)....3 will not hide near as much of the first 2, or help ( which is debatable anyway) the fail that is this fiscal policy and econ. for him to slide in to another term.

 

[iamwhatiseem]

Ancient Rome couldn't have transferred wealth from the middle class to the elitist as fast as Bush/Obama has done.
History books will write that this period of time was the beginning of the end of America as it was.