The Fed - QE II

[tsptalk]

Wow, that was fun. While they were reading the policy statement, which was a lot longer than usually, the market bounced around wildly. The Dow was down 20, then down 50, up 10, down 30, up 40, down 10, and going... all in about a 2 minute period with each new sentence.

Looks like QE 2 is $600 billion over the next 8-months ($75B / month).

 

[Nate]

Re: The Fed

The rollercoaster was interesting. Would like to hear someones break-down as how this will affect their IFT's.
Im getting a virgin feeling I should be getting outta G & back into I for a while...

 

[tsptalk]

Re: The Fed

The market isn't giving very many buying opportunities. Patience is usually rewarded, but sometimes these unreasonable trends just keep going. Tough call.

 

[tsptalk]

Re: The Fed

Backlash against Fed’s $600bn easing

“Everybody wants the US economy to recover, but it does no good at all to just throw dollars from a helicopter.”

http://www.ft.com/cms/s/0/981ca8f4-e83e-11df-8995-00144feab49a.html#ixzz14NoMPAr1​

 

[KevinD]

Please forgive my ignorance in advance but in postman terms (layman's terms) can somebody explain what happens exactly when this money is spent by the Fed?

What does it mean exactly when they say that the Fed is going to expand it's balance sheet?

So the fed creates dollars whether literally or electronically and buys what from whom?

And then what happens to that money? Those people who hold crappy assets that they want to unload on the tax payer all go to the Bahamas for Christmas?

 

[KevinD]

Also I hear "monetizing the debt" a lot. In the last round of QE the Fed bought a lot of MBS from "institutions." So these institutions had all this worthless paper and unloaded it on the Fed? Is that what they mean by monetizing the debt? They got money in exchange for their bad debt? And then they took that money and spent it on Wall St. and thats why the market went up?

 

[Show-me]

Please forgive my ignorance in advance but in postman terms (layman's terms) can somebody explain what happens exactly when this money is spent by the Fed?

What does it mean exactly when they say that the Fed is going to expand it's balance sheet?

So the fed creates dollars whether literally or electronically and buys what from whom?

And then what happens to that money? Those people who hold crappy assets that they want to unload on the tax payer all go to the Bahamas for Christmas?

Simple, they create more money that in turn weakens the dollar in order to stop deflation, stop people from investing in SAFE investments like CD's and bond, make mortgage rates artificially low as they run parallel to treasuries.

When QE stops the rubber band retracts and the market crashes and interest rates go through the roof.

Expanding the balance sheet is the Fed telling the Treasury to give me some more money out of thin air so that the Fed can in turn give it back to the Fed in exchange for Treasuries to keep the yields down artificially. Can you say Ponzi scheme?

 

[tsptalk]

Isn't it fun to get manipulated? Their intent, from what I understand, is to actually help push stock prices higher, which in turn will lift confidence and get people to spend more. It's stimulous to change the way americans think about the economy, and it's mostly fake.

 

[nnuut]

And push the price of COMMODITIES much higher. That includes ALL Commodities, Food, Gas/Oil, Corn, energy, you name it, but it won't be recognized as inflationary because they are NOT COUNTED!!! This is a hidden TAX that is what it REALLY is. This is no way a smart thing to do.

 

[Bullitt]

I see Ben isn't adhering to his one week black out since he's celebrating his victorious triumph over the bad bears that occurred just a bit over 24 hours ago. He spoke to college students today and is on to Jekyll Island tomorrow for the party.

Rudy, Rudy, Rudy....

http://dailybail.com/home/bernanke-...sland-to-celebrat.html?utm_source=patrick.net

 

[CountryBoy]

And push the price of COMMODITIES much higher. That includes ALL Commodities, Food, Gas/Oil, Corn, energy, you name it, but it won't be recognized as inflationary because they are NOT COUNTED!!! This is a hidden TAX that is what it REALLY is. This is no way a smart thing to do.

As a follow-up,

Food price fears as US warns on crop yields

http://www.ft.com/cms/s/0/249211fc-ec1d-11df-9e11-00144feab49a.html#axzz14skqwOJr

Thank goodness food and fuel don't count or we'd really be in for some tough times.

 

[tsptalk]

http://www.youtube.com/watch?v=PTUY16CkS-k​

 

[Silverbird]

Braaakkk! Any Port in a Storm! Braaakkk! [Parrot in Pirates of the Carribean]

The dollar looks good with all these other currencies looking bad. That's not the way to look good.

http://www.optionmonster.com/news/a...shing_indexes_into_the_red_50995.html&src=msu