Wall Street was all aghast that their quantitative easing was about to disappear. The FOMC decided to taper in January and now stocks soar. Why? Because the taper is minimal and the FOMC announced the federal funds rate will remain an effective zero for much longer than previously estimated.
When did it become OK to play political Calvin ball with the faith and good credit of the United States of America? Such are the hidden whispers that the debt ceiling will be used as yet another gun to the head of America, a hostage taking bargaining chip, in spite of the claims to the contrary.
The Federal Open Market Committee is not going to stop quantitative easing just yet. This is no surprise considering the weak economic conditions and as we pointed out, an inflation rate below expectations. The risk of deflation is real.
The Bank for International Settlements has demanded Central Banks stop their quantitative easing in hopes of a global economic recovery. All that has happened is a stock market love affair while the real economy languishes. BIS has issued their annual report demanding nations deleverage, which is codespeak for austerity.
Anyone find these economic stimulus packages put out by the government and the Federal Reserve ridiculous at this point? The reality is a direct jobs program would be much cheaper and much more effective to get the economy moving. Yet, magically that idea has been dismissed and worse since 2008.
Fire in the Jackson Hole - Bombastic Stimulus Claims
Federal Reserve Chair Ben Bernanke will do more quantitative easing. That's the consensus from his Jackson Hole speech. As usual, the utterances on labor are ignored by Wall Street or in this case, used to justify Wall Street's crack addict quantitative easing fix.
The stagnation of the labor market in particular is a grave concern not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for many years.
Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.
Bernanke is justifying this action through various studies claiming quantitative easing generated jobs.
Spain today was suddenly imploding. We should say suddenly with a bit of sarcasm, after all, we've been watching Europe put their fingers in the never ending European financial dike for years now.
The German Bundestag voted Thursday to approve the $122 billion banking bailout, but only if the Spanish government accepted full liability for the loans. “There will be no direct bank financing,” said Volker Kauder, head of the Christian Democratic delegation in the Bundestag.
Truth be told this is just another day in the adventures of Eurozone financial crises. U.S. Treasury bonds are hitting record lows as a mass exodus from Europe seeks safe assets.
U.S. Treasuries yields fell to new record lows on Monday as concern that the euro zone's debt crisis is spiraling out of control led investors to seek out the relative safety of U.S. debt.
Germany and U.K. bonds yields are also hitting record lows as the flight to safe haven continues.
China is now mainlined directly into U.S. debt. Reuters uncovered an astounding thing. The U.S. Treasury has literally set up a direct line for China to buy U.S. treasuries, bypassing brokers and any third party. China is the only country with this privledge. Those thinking this administration would confront China on currency manipulation, think again. Instead our government gave China real time direct access to dynamically control the value of the Yuan.
China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.
China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary.
The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.
China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.
The change was not announced publicly or in any message to primary dealers.
Yes the title is crass, vulgar. Yet the never ending trading of mortgage backed securities, previously titled toxic assets in some game of musical chairs justifies the analogy. Take just this latest revolving door as an example. Did you know a former New York Federal Reserve Official, in charge of overseeing AIG now works for AIG?
Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities — that would be stamped with a government guarantee.
The banks have presented their ideas publicly through trade groups. Housing industry consultants and people familiar with recent meetings at the Treasury Department say these banks view the government’s overhaul of the mortgage market as a potential profit opportunity. Treasury officials have met with executives from several institutions, including Wells Fargo, Morgan Stanley, Goldman Sachs and Credit Suisse, according to a public listing of the meetings.
Incredible, instead of regulating derivatives which caused the Financial Crisis, banks now want to make them and get the government to guarantee them.
In November, the United States trade deficit was $38.3 billion and only shrunk during the global recession, where all trade slowed. Now Joseph E. Gagnon has new research, showing the trade deficit will come roaring back, wrecking havoc once again on the U.S. economy. Why? Currency manipulation in a nutshell.
Anyone find these economic stimulus packages put out by the government and the Federal Reserve ridiculous at this point? The reality is a direct jobs program would be much cheaper and much more effective to get the economy moving. Yet, magically that idea has been dismissed and worse since 2008. 
Spain today was suddenly imploding. We should say suddenly with a bit of sarcasm, after all, we've been watching Europe put their fingers in the never ending European financial dike for years now.
China is now mainlined directly into U.S. debt. Reuters 
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