asterisk2a + qe3   35

Lest We Forget | ZeroHedge
The view of the ECB raises some interesting questions. I believe most would agree on two issues; first that the ECB is an insolvent institution and so highly leveraged and under-capitalized that a normal bank would have been in bankruptcy long ago but then a normal bank can’t print money. However it must also be said that the ECB is not a stand-alone institution living on another world and that the national central banks of Europe own it. Second I think most thoughtful people would agree that at some point in time that the financial condition of a central bank matters either in terms of increasing inflation by increasing the money supply or as a matter of valuation if no one or not enough financial institutions will support their currency or if some national central bank opts out on the basis of the economic threat to its citizens. This could be exemplified by Germany.

... The game could end if a major European bank falters
... Loss of Trust = Out of Bonds/Equity - into Gold&Co;.
Jens  Weidmann  Mark  Grant  operationtwist  QE3  QE2  OMT  SMP  greatrecession  GFC  unintended  consequences  Fed  ZIRP  QE  Gold  toobigtofail  confidence  trust  bank  crisis  banking  crisis  debt  monetisation  monetization  PIIGS  sovereign  debt  crisis  Europe  Germany  Bundesbank  MarioDraghi  economic  history  monetary  theory  monetary  policy  balancesheet  accounting  ECB 
october 2012 by asterisk2a
Plosser: Price for QE will be paid later | ForexLive
Plosser: Price for QE will be paid later

Concerned Fed will fall behind the curve on inflation
Expects Fed to need to tighten before mid-2015
inflation  reflation  unintended  consequences  ZIRP  QE3  QE  Fed 
september 2012 by asterisk2a
Keene on Bernanke: Never Seen This Type of 'Hatred': Video - Bloomberg
Keene on Bernanke: Never Seen This Type of 'Hatred'

Sept. 21 (Bloomberg) -- Bloomberg's Tom Keene considers Fed Chairman Ben Bernanke, and the criticism he has received on both sides of the political aisle.
benbernake  QE3 
september 2012 by asterisk2a
Richard Koo Explains It's Not The Fed, Stupid; It's The Fiscal Cliff! | ZeroHedge
US is beginning to look more like Japan. The Japanese experience made it clear that when the private sector is minimizing debt (deleveraging) with very low interest rates, there is little that monetary policy can do. The government cannot tell the private sector 'don't repay your balance sheets'
because private sector must repair its balance sheets. In Koo's words: "the only thing the government can do is to spend the money that the private sector has saved and put that back into the income stream" - which (rightly or wrongly) places the US economy in the hands of the US Congress (and makes the Fed irrelevant).

Deleveraging even with ZIRP & QE123 & OpTwist & Language shows how sick balance sheet of private sector is. + Lack of Confidence + Structural Impairments of Domestic & Global Economy !

Koo advocating continued fiscal stimulus.

Fed engaged more aggressive w QE3/OpTwist & ZIRP ext. because nobody would bet on Congress to avoid Fiscal Cliff 2012/13.
globalisation  global-economy  faultlines  global  imbalances  structural  imbalance  OpertationTwist  trust  confidence  lostdecade  lost  barackobama  presidency  election2012  Japan  academics  academia  economics  supply-demand  stimulus  QE2  MBS  QE  deleveraging  fiscal  stimulus  fiscal  policy  2012  Cliff  monetary  theory  ZIRP  monetary  policy  property  bubble  benbernake  Fed  debt  bubble  balance  sheet  recession  debtoverhang  QE3  USA  Richardkoo 
september 2012 by asterisk2a
QE∞ - YouTube
Ben Bernanke has boldly gone where no Fed chairman has gone before him. In his third round of quantitative he's set the controls for the heart of infinity until unemployment is substantially reduced.

- QE3 = QE∞ = buying unlimited MBS to the tune of 40bn per month
- Operation Twist to continue
- ZIRP to stay till 2014 at least
- dropping inflation target, focusing on how to get unemployment down and increasing participation list (real unemployment is much higher bc so many dropped out)

how to get unemployment down? increase demand, but consumer and households are underwater (prioritizing debt servicing, and paying down mortgage). -> buy up MBS, reduce overall supply, thus increasing demand for secure debt (banks, basel3 anybody?), Ben hopes some will borrow again to consume and start finally the new credit cycle. = Reflation.
property  bubble  balance  sheet  recession  debt  bubble  debtoverhang  USA  financial  repression  reflation  ZIRP  operationtwist  freddiemac  FannieMea  MBS  structural  imbalance  greatrecession  GFC  2012  monetary  theory  monetary  policy  output-gap  employment  unemployment  benbernake  Fed  QE3 
september 2012 by asterisk2a
FOMC Minutes: Some Fed Officials Sought To Retain Option For QE3 | ZeroHedge
Minutes from meeting where OpTwist was enacted showed;

"A number of participants saw large-scale asset purchases as potentially a more potent tool that should be retained as an option in the event that further policy action to support a stronger economic recovery was warranted. Some judged that large-scale asset purchases and the resulting expansion of the Federal Reserve’s balance sheet would be more likely to raise inflation and inflation expectations than to stimulate economic activity and argued that such tools should be reserved for circumstances in which the risk of deflation was elevated."
Fed  QE3  2011  QE  operationtwist 
october 2011 by asterisk2a
RDQ's Ryding Says U.S. Treasury Yields Are `Unhealthy' - YouTube
Operation Twist will have very little macro economic impact
Fed reflates economy, but does not help to heal
Low yields are fundamentally a sign that nobody wants to take risk.
ECB provides Dollar lending facility till year end. Yesterday Central Bank Intervention - help for Europes banks.
operationtwist  2011  QE3  economics  macroeconomics  microeconomics  greatrecession  recession  recovery  reflation  yield  debt  unhealthy  treasury  treasuries  deflation  Japan  USA  monetary  policy  europe  creditcrunch  lenderoflastresort 
september 2011 by asterisk2a
Ben Bernanke realised printing yet more money would look desperate - Telegraph
The reality is QE has already done an awful lot of damage. America has expanded its base money supply three-fold in two and a half years – from 6pc to 18pc of national income. But even this jaw-dropping measure hasn't led to much of an expansion in monetary measures, such as M2 that include bank lending, precisely because the banks, for all the propaganda to the contrary, are still determined not to lend. They can make more money simply channelling QE money into stocks and other investments.Crucially, the banks also remain petrified of counter-party risk in the inter-bank market. Many of them, disgracefully, are still concealing vast sub-prime losses in off-balance-sheet vehicles. So they assume other banks are doing the same. Such mistrust between the banks – "we're lying, so they must be lying" – gums up the wheels of finance and starves even creditworthy firms of the funds needed to invest and create jobs.

zombi banks - same as japan +10 years ago.
transparency  Fed  benbernanke  2011  JacksonHole  QE  QE3  QE2  quantitative  easing  ZIRP  M2  moneysupply  monetary  policy  inflation  deflation  USA  UK  monetarybase  interbank  LIBOR  trust  confidence  toxicassets  subprime  zombi  banks  company  capitalism  fiatmoney  politics  barackobama  presidency  GeorgeOsborne  davidcameron  greatrecession  recovery  lostdecade  Japan  balancesheet  recession  richardkoo  deleveraging  debtoverhang  sovereign  debt  crisis  centralbanks  trichet 
august 2011 by asterisk2a
BofA Warns Upcoming "Desperate Measures" By Authorities Will Result In Another 2008 Market Collapse | ZeroHedge
 "rather than a repeat of 2010, when the Fed saved the day with QE2, we think we are moving closer to a repeat of 2008, when major policy errors devastated the economy." For once we actually agree with Bank of America: "In our view, the pressure to “do something” is now far more likely to result in more desperate or radical measures, even if it is bad policy." Does this mean that we are looking at a TARP "vote down" market reaction this Friday if indeed the chairman disappoints? We will know for sure in about 100 hours, which just may be the longest 100 hours for bulls since the start of the artificial and solely QE inspired bear market levitation in March of 2009. 
The environment has become too overwhelmed by uncertainty, particularly on the policy front. In our view, the pressure to “do something” is now far more likely to result in more desperate or radical measures, even if it is bad policy.
QE2  QE3  August  JacksonHole  Fed  benbernanke  2011  market  expectations  monetary  politics  error  mistake  uncertainty  ZIRP  easing  quantitative  quantitative-easing 
august 2011 by asterisk2a
Is QE3 already taking shape? |
Seems to us that this all may be about the Fed opening the back door for QE3, a.k.a. Operation Twist: securing that there is some reasonable yield at the short end of the curve by offering an endless supply of short-date treasuries, thus preventing the disorder and “haircuts” from borderline or outright negative yields for those looking to park money in a safe place. The other leg of O.T. – long rate interest rate targeting (most likely sans actual buying intention announcements), has yet to see the light of day – but then again, we have the Jackson Hole, Wyoming conference coming up in two weeks…
Definitely something to chew on over the weekend.

So the Fed’s decision to start reverse repo specifically to money market funds is specifically about giving them somewhere to invest their cash at a positive interest rate.
QE3  Fed  monetary  policy  quantitative  easing  quantitative-easing  QE  ZIRP 
august 2011 by asterisk2a
Will Latest Market, Credit Woes Add Up to a 'Global Recession'? - YouTube
- downgrade in confidence, stat gov is not able to prop up economy if needed- downgrade in confidence, after gov debt ceiling debate ended with austerity shaped bill (compromise)- downgrade in confidence, after Obama could not show leadership in debate and give boundaries
- government, and other institutions (Fed, SEC, Banks, Individual) failed
- growth panic
- no leadership on both sides of the Atlantic
- slow growth below long-term average guaranteed in developed markets whose bubbles burst 
- wrong medicine currently administered 
- currently, QE, monetization does not lead into healthier moneysupply in UK, USA, EU. bc of debt overhang and deleveraging process - which will still take years.
KennethRogoff  GFC  paulkrugman  2011  greatrecession  barackobama  presidency  monetary  fiscal  policy  politics  mistake  folly  sovereign  debt  ceiling  debtceiling  crisis  August  PIIGS  Fed  ECB  economy  recovery  GDP  growth  QE  QE3  debtoverhang  inflation  deflation  deleveraging  Japan  lostdecade  history  lesson  liquidity-trap  greatdepression  austerity  unemployment  output-gap  moneysupply  monetization  BOE  UK  europe  USA 
august 2011 by asterisk2a
Currency Intervention Revived as Fed May Ease - Bloomberg
Just eight months ago, Brazilian Finance Minister Guido Mantega declared a “truce” in competitive currency devaluations. Now, Japanese and Swiss moves to weaken the yen and the franc show reviving tension in foreign-exchange markets as the deteriorating U.S. economy weighs on the dollar.
Fed  QE3  unintended  consequences  global  stability  Dollar  reserve  currency  hot-money  ZIRP  growth  greatrecession  recovery  2011  monetary  policy  easing  QE  BOJ  SNB  RBA  RBNZ  BOE  ECB  benbernanke  quantitative  intervention 
august 2011 by asterisk2a
Hilsenrath: Fed's Kohn Says Will Give "Very Serious Consideration" To QE3 | ZeroHedge
If that's the case--and inflation is coming down--then he would give "very serious consideration" to a new round of bond purchases,

In an exclusive interview this week with The Wall Street Journal, Donald Kohn, Vincent Reinhart and Brian Madigan--the last three directors of the Fed's powerful monetary affairs committee--put the risk of a new economic contraction at between 20% and 40%. Madigan and Kohn said the Fed should consider a third round of bond purchases only if inflation slows from recent elevated levels and if the economy continues to underperform. But they cautioned a new purchase program, dubbed QE3, wouldn't represent a cure-all.
inflation  deflation  QE3  monetary  policy  Fed  benbernanke  2011  double-dip  greatrecession  recovery 
august 2011 by asterisk2a
YouTube - ‪Dalton Doubts Public Appetite for More Fed Stimulus‬‏
Fed targeting asset prices, ... higher asset prices does not mean people will spend.
Asset prices do support bank balance sheets, as in form of capital holdings, thus in form of lending capacity,
but if nobody want to borrow, nothing to lend to.
balance sheet recession richard koo
deleveraging process still ongoing in private space
and in parts of real world govs - uk austerity
Fed  monetary  policy  doubt  benbernanke  2011  QE3  ZIRP  economics  economy  401k  richardkoo  balancesheet  recession  recovery  greatrecession  deleveraging 
july 2011 by asterisk2a
John Taylor: "Next Year Is Going To Be Truly Miserable" And QE 3 Will Come | zero hedge
if there is no QE3, are about to get much worse: "Next year is going to be pretty miserable." The reason: the same one that caused us to predict, correctly, late in 2010 when we mocked Goldman's call for a US economic renaissance, namely that with the Fed blowing its wad on QE2 at a time when fiscal "consolidation" was about to become the norm in Washington, that the impact of monetary policy would have an increasingly less pronounced impact. We are surprised by how few people still get it: that cutting deficits at the same time as monetary easing is ending, will be an unmitigated disaster for the economy, and, yes, eventually the markets: "I'm afraid that the cutting the deficit means cutting final demand. It means the economy is going to slow. It might not be a bad thing to cut the deficit, but unfortunately, when you cut the deficit, you're going to get a slowdown. The more you cut the deficit, the worse it's going to be."
QE3  recovery  USA  fiscal  monetary  policy  Fed  stimulus  demand  2011  2012  QE-2.0  greatrecession  double-dip  bubble  speculation  wallstreet  deflation  inflation 
june 2011 by asterisk2a
El-Erian: Why Fed Is Unlikely to Have Third Round of Easing
Why Fed Is Unlikely to Have Third Round of EasingLegislators are increasingly uneasy about the Fed's ballooning balance sheet.Another round of easing could fuel inflation and credit bubbles abroad.

Hilsenrath noted in a WSJ piece (& ZeroHedge about it) that first the markets (which are frothy - quote Yellen in speech yesterday) would have to see the white of the eye. And that the pain might not be bearable, and that deflation is evident. As Ben Bernanke fears deflation. 2011/12 Outlook.
QE3  ZIRP  bubble  monetary  policy  2011  inflation  Fed 
june 2011 by asterisk2a
Jim Grant And James Turk Discuss The Endgame Of The Keynesian Experiment | zero hedge
"who benefit from zero interest rates and how savers are penalized by this easy money policy.
- speculative asset classes doe benefit from ZIRP
- Savers a loosing out. WallStreet winning
- negative saving yield rate
ZIRP  QE  QE-2.0  QE3  2011  monetary  policy  wallstreet  speculation  commodities  equities  history  JimGrant 
june 2011 by asterisk2a
JP Morgan On QE 3: "No Way, Jose" | zero hedge
Even if we are wrong on a second half rebound, we still believe the political hurdle for further asset purchases is tremendously high. The backlash from Capitol Hill after last Fall's decision probably took the Fed off-guard, and the political impact was not a prominent factor debated in the lead-up to the November decision.
QE3  Fed  2011 
june 2011 by asterisk2a
To QE3 or Not to QE3 and Does it Matter? | zero hedge
Point of No Return 
Beyond the social impact, if the Fed stops creating money to support the insolvency crisis (i.e., printing money to fill the funding gap), the sovereign bond market and western banking system will implode. The western (global) banking system is based on the continued functionality of its sovereign bonds markets, the underpinning of the monetary system. A major sovereign default will result in loss of international finance and loans. Borrowing costs in the form of higher interest rates will increase dramatically destroying derivative markets and the underlying currency.
QE  QE-2.0  QE3  2011  monetary  policy 
may 2011 by asterisk2a

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