What happened to all of the doom and gloom economic threads?

[mercury14]

Says who?

Says JEN! And that should be good enough for all of us.

 

[Frisco_Slug_Esq]

WOW!



Did you see the new numbers on bailing out Freddie and Fannie?

What would Barney Frank say?

Raise taxes...?

 

[unregistered]

 

[Frisco_Slug_Esq]

*chuckle*

 

[jeninflorida]

Says JEN! And that should be good enough for all of us.

please....look at why the recovery is so slow? if the market is going up, then shouldn't there be jobs? oh wait.....

and I thought you were off fighting a war, in Japan? is your base still under attack or is that all in your head also?

keep on living that failed big ass obama government dream

 

[jeninflorida]

WOW!



Did you see the new numbers on bailing out Freddie and Fannie?

What would Barney Frank say?

Raise taxes...?

taxes are good, that helps GDP....just like having out more welfare checks

why work, when poeple like Merk96, overTheRainbow can sit back drinking beer

 

[Frisco_Slug_Esq]

No dummy!




FOOD STAMPS are the greatest stimulator of an economy. The multiplier is ∞...

 

[jeninflorida]

ah yes, foodstamps and welfare, the staples of the democrats party...ways to keep the people down.

No dummy!




FOOD STAMPS are the greatest stimulator of an economy. The multiplier is ∞...

 

[trysail]

For the first time in history, the Federal Reserve today sold a Treasury Inflation Protected Security at a price that resulted in a NEGATIVE ( that's right, I'm not kidding ) YIELD.

...With nominal rates so low, in order have high TIPS breakevens you’ve got to have negative real yields on the five-year.

The fixed payment on five-year TIPS, known as the real yield, has been pushed below zero because the rise in the CPI is greater than the yield on regular five-year U.S. notes, which has fallen with other Treasury yields as investors sought the safety of U.S. government debt

The negative yield is “a reflection of where the overall rate environment is, combined with the expectation for the Fed to stoke inflation and get prices rising again...

Savers are so fearful of not getting their money back and so certain that inflation is just around the bend that they're willing to accept a negative yield. It's incredible.

M2 Money Supply ( St. Louis Federal Reserve )

 

[mercury14]

please....look at why the recovery is so slow? if the market is going up, then shouldn't there be jobs? oh wait.....

and I thought you were off fighting a war, in Japan? is your base still under attack or is that all in your head also?

keep on living that failed big ass obama government dream

The recovery is so slow "because CEO's distrust Obama"? And you don't have any source for this, just conjecture? What?

 

[mercury14]

For the first time in history, the Federal Reserve today sold a Treasury Inflation Protected Security at a price that resulted in a NEGATIVE ( that's right, I'm not kidding ) YIELD.




Savers are so fearful of not getting their money back and so certain that inflation is just around the bend that they're willing to accept a negative yield. It's incredible.

M2 Money Supply ( St. Louis Federal Reserve )

We have righties here who have been predicting inflation AND deflation for over a year. And here we are with neither one. What makes you any different?

 

[mercury14]

The Dow is pushing 11,200. When do we see Vettebigot's drop to 5000 that he sagely predicted?

 

[trysail]

We have righties here who have been predicting inflation AND deflation for over a year. And here we are with neither one. What makes you any different?

I don't predict; I always let Mr. Market do that— and the market for TIPS is unprecedented.

 

[Luk]

Interesting... Toys R Use is hiring 30,000 more seasonal workers this year than last year. Kohl's is also up a ton.

 

[Frisco_Slug_Esq]

Here's the part I notice in that article...

Sustained Price Declines

While central banks are typically more concerned about faster inflation, the worst financial crisis since the Great Depression has made sustained price declines a bigger concern. Fed policy makers, who already cut interest rates almost to zero and bought $1.7 trillion of securities, are discussing more purchases of Treasuries to flood markets with cheap money to prevent stagnating prices from undermining the recovery.

“With more quantitative easing the likelihood of a deflation scare over the short term has decreased significantly, as the Fed is committed to upping inflation expectations,” said Keith Blackwell, an interest-rate strategist at Royal Bank of Canada in New York, a primary dealer. “TIPS look much more attractive.”

At today’s auction, the bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.84, versus 3.15 at the April offering and an average of 2.38 at the past 10. Indirect bidders, a class of investors that includes foreign central banks, purchased 39.4 percent of the notes today. At the April sale, they bought 23.1 percent, the lowest in the history of the securities.

And note that even after creating a record deficit with "stimulus," the same people keep calling for more stimulus, but yet we see Britain move to austerity and look at what's happening to their economy...

So we're still struggling with near deflation which seems to indicate the inflation is certainly as close as the recovery.

So my option is to believe that the Fed really has everything under control or that we still have a significant probability of doom and gloom. Seeing as how its the same Fed that got us here, I'm still leaning towards the latter...

 

[Frisco_Slug_Esq]

Interesting... Toys R Use is hiring 30,000 more seasonal workers this year than last year. Kohl's is also up a ton.

Wow, you get a hundred more stores doing that and unemployment will only go up another percentage or so...






There is still the mortgage crises and the end of extended unemployment benefits on the horizon unless, of course, you believe we can continue to deficit spend indefinitely...

 

[Frisco_Slug_Esq]

We have righties here who have been predicting inflation AND deflation for over a year. And here we are with neither one. What makes you any different?

But, if you go back to post one, we have lefties here predicting for even longer that we were well on the way to recovery...



I mean, if you're a DOW watcher, we crossed 11K before.

 

[JAMESBJOHNSON]

The recovery is so slow "because CEO's distrust Obama"? And you don't have any source for this, just conjecture? What?

Learn to Google.

Obama is poised to dump 500 BILLION of funny money into the economy. Bernanke's gonna use the money to pay down the national debt. Thats right, he's gonna print funny money and give it to your pension fund. He sex we need some Carter Era inflation to force people to spend.

 

[RightField]

Interesting... Toys R Use is hiring 30,000 more seasonal workers this year than last year. Kohl's is also up a ton.

Weren't you guys complaining during the Bush years saying that these type of jobs weren't the kind that we needed and that Bush was bad even though we had full employment? It seems a liberal is only happy when he's a tyrant.

 

[Frisco_Slug_Esq]

I don't think merc actually listens to what Obama says, he just likes the style...

I especially like the part in his book where he describes his corporate job as being in enemy territory.
__________________
When I was asked earlier about, uh, the issue of coal. Uhhh, y'know, under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket....
We would put a cap-and-trade system in place, eh, that is as aggressive, if not more aggressive, than anybody else's out there. So if somebody wants to build a coal-powered plant, they can. It's just that it will bankrupt them because they're gonna be charged a huge sum for all that, uh, greenhouse gas that's being emitted.
Barack Hussein Obama
Editorial board meeting, San Francisco Chronicle
January 2008

A massive campaign must be launched to restore a high-quality environment in North America and to de-develop the United States...,
John P. Holdren
White House Office of Science and Technology Director

The US economy for a long period of time was the engine of world economic growth. We were sucking in imports from all across the world financed by huge amounts of consumer debt. Because of the financial crisis, but also because that debt was fundamentally unsustainable, the United States is not going to be able to serve in that same capacity to that same extent.
Barack Hussein Obama

“I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism.”
Barack Hussein Obama
Strasbourg, France

We left corporate America, which is a lot of what we're asking young people to do. Don't go into corporate America. You know, become teachers. Work for the community. Be social workers. Be a nurse. Those are the careers that we need, and we're encouraging our young people to do that.
Michelle Obama

 

[Frisco_Slug_Esq]

Weren't you guys complaining during the Bush years saying that these type of jobs weren't the kind that we needed and that Bush was bad even though we had full employment? It seems a liberal is only happy when he's a tyrant.

Only the rich got richer, which is what the rising stock market is telling us, Wall Street, unlike Main street is back to high salaries and big bonuses, and why wouldn't they, they have friends in very high places, just like BP had...
__________________
“There are a number of things [Barack Obama said] he was for on the campaign trail.”
Nancy Pelosi (on why no transparency or time to read the bill)
"My experience is when you talk to a guy like a BP CEO, he's going to say all the right things to me."
Barack Obama

"It turns out, by the way, that oil rigs today generally don't cause spills. They are technologically very advanced. Even during Katrina, the spills didn't come from the oil rigs, they came from the refineries onshore."
Barack Hussein Obama

"Then why the hell did this president, what was it, two weeks after the spill started, signed another waiver for exactly this kind of deep sea drilling, another waiver for the exact same company!"
Don Imus

 

[trysail]

http://noir.bloomberg.com/apps/news?pid=20601103&sid=a.c.wMdiaY50


Bernanke Asset Purchases Risk Unleashing 1970s Inflation Genie
By Craig Torres

Oct. 26 (Bloomberg) -- For the second time since he became chairman in 2006, Ben S. Bernanke is leading the Federal Reserve into uncharted monetary territory.

Bernanke next week is likely to preside over a decision to launch another round of large-scale asset purchases after deploying $1.7 trillion to pull the economy out of the financial crisis, comments from policy makers over the past week indicate. This time, with interest rates already near zero, the Fed will be aiming to increase the rate of inflation and reduce the cost of borrowing in real terms. The goal is to unlock consumer spending and jump-start an economy that’s growing too slowly to push unemployment lower.

Estimates for the ultimate size of the asset-purchase program range from $1 trillion at Bank of America-Merrill Lynch Global Research to $2 trillion at Goldman Sachs Group Inc., with economists at both firms agreeing the Fed will likely start by announcing $500 billion after the Nov. 2-3 meeting. The danger is that once the Fed kindles price increases, inflation will be difficult to control.

“By reducing real interest rates and trying to break the psychology of ‘Why spend today when I can buy goods cheaper tomorrow,’ they are hoping to drive growth that would be more commensurate with a pickup in employment,” said Dan Greenhaus, chief economic strategist at Miller Tabak & Co. in New York. “The risk is a late 1970s type of scenario where the inflation genie gets out of the bottle.”

The U.S. Treasury Department yesterday sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Fed will be successful in sparking inflation. The securities drew a yield of negative 0.55 percent.

‘Unacceptable’ Inflation
William Dudley, president of the New York Fed and vice chairman of the Federal Open Market Committee, yesterday repeated that current levels of inflation and a 9.6 percent unemployment rate are “unacceptable” and said the Fed needs to take action, even though expanding the balance sheet isn’t a “perfect tool.”

“To the extent that we can do things to improve the economic environment, we certainly owe it to the millions of people who are unemployed to do so,” Dudley said in response to audience questions after a speech in Ithaca, New York. Policy makers haven’t yet decided whether to buy additional assets, he said.

A second jolt of monetary stimulus would expand the Fed’s $2.3 trillion balance sheet to a record and likely work through the exchange rate as well as interest rates, said former Fed governor Lyle Gramley. A weaker dollar would boost U.S. exports and push prices higher as the cost of imported goods rises.

Competitive Exports
“It is a channel that works not only from the standpoint of encouraging more growth and making exports more competitive, but if you’re worried about inflation getting too low, this tends to put a little upward pressure” on it, said Gramley, a senior adviser at Potomac Research Group in Washington.

An index of the dollar versus six major currencies is down 5.2 percent since Sept. 20, the day before Fed officials concluded their last meeting by saying inflation measures were “somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.” The Standard and Poor’s 500 Index is up 3.8 percent since then.

A 10 percent decline in the dollar in the first six months of next year would push the economy above estimates of trend growth, moving indicators on inflation and employment more rapidly toward the Fed’s policy goals, according to a simulation run by Macroeconomic Advisers LLC on their model of the U.S. economy.

Effect on GDP
Gross domestic product would rise 1.1 percentage points more than the St. Louis-based firm’s baseline forecast for next year, to 4.8 percent. In 2012, growth of 5.7 percent would exceed the baseline forecast by 1.3 percentage points.

Unemployment would fall to 7 percent by the end of 2012, 1.4 points lower than the firm’s baseline forecast. The consumer price index, minus food and energy, would rise 0.4 percent and 0.7 percent more each year.

A continuing rally in stocks could also provide an added lift to growth, the firm’s simulation showed.

The firm, co-founded by former Fed governor Laurence Meyer, predicts the Wilshire 5000 stock index will jump 14 percent next year and 16 percent in 2012. The index tracks the impact of rising asset prices on household net worth. An additional 10 percent gain in the stock index in the first half of 2011 boosts growth by 0.1 percentage point and 0.3 percentage point more than the firm’s baseline forecast.

‘Transmission Mechanism’
“The transmission mechanisms are risk assets and a lower dollar,” said Steven Einhorn, who helps manage $5 billion at hedge fund Omega Advisors Inc. in New York. “Exports will respond over the next six to 12 months, and a further lift in risk assets will have benefits in more consumer spending as it lifts households’ net worth.”

A weaker dollar won’t be welcomed by U.S. trading partners concerned about the danger of competitive devaluations as nations seek to boost exports and growth.

Bernanke received “criticism” at a meeting of Group of 20 central bankers and finance ministers in South Korea last weekend, said German Economy Minister Rainer Bruederle.

“It’s the wrong way to try to prevent or solve problems by adding more liquidity,” Bruederle told reporters. “Excessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate.”

$500 Billion
Economists Jan Hatzius at Goldman Sachs and Ethan Harris at Bank of America predict the Fed will spread an initial $500 billion in asset purchases over six months. That is the figure mentioned in the Oct. 1 speech by Dudley, who said $500 billion in purchases could have the same effect as cutting the benchmark federal funds rate by as much as a 0.75 percentage point.

The FOMC’s meeting next week could be contentious, with regional bank presidents such as Charles Plosser of Philadelphia and Richard Fisher of Dallas expressing concern in public remarks about a second round of asset purchases. Neither is a voting member of the FOMC this year.

Plosser told reporters Oct. 20 that high unemployment may not be “amenable to monetary-policy solutions” and added that he was “less inclined to want to follow a policy that is highly concentrated on raising inflation and raising inflation expectations.”

Fisher said central bank officials must be mindful of the effect their actions are having on the dollar.

Dollar Impact
“We need to be aware of the impact whatever we do has on other variables, and one of the variables is the dollar, the value of the dollar against other currencies,” Fisher said in an Oct. 22 interview in New York.

The prospect of an easier policy for a long period could prompt foreign investors to use Fed purchases as an opportunity to unload longer-term Treasuries, said Vincent Reinhart, former director of the Fed Board’s Division of Monetary Affairs.

“This might put more pressure on the exchange value of the dollar than the Fed is willing to tolerate,” said Reinhart, a resident scholar at the American Enterprise Institute in Washington.

Some commodity prices have already started to move up in anticipation of further Fed stimulus. Gold futures traded on the Comex in New York have risen 22 percent this year to $1,338.90 an ounce, while silver is up 40 percent.

“The Fed would like to talk up as many asset classes as it can,” said Scott Minerd, the Santa Monica-based chief investment officer at Guggenheim Partners LLC, who helps oversee $76 billion.

Asset Bubbles
“The history of the Fed, over the last 20 years, is one of bubble to bubble: one bubble deflates to create another bubble,” Minerd said. “We are certainly heading into the mother of all bubbles with commodities and gold.”

Another danger for the Fed is that its policy fails to have the intended effect, damaging the central bank’s credibility, Reinhart said.

“What happens if they bulk up the portfolio by another $500 billion in the next six months and there is no material change in markets or the outlook,” he said. “Presumably, the Fed will double-down and buy some more, but at some point, people will ask, ‘Is that all there is?’”

U.S. central bankers cut the benchmark lending rate to zero in December 2008. Seeking more stimulus, they launched a $1.7 trillion program to buy mortgage-backed securities, housing agency debt and U.S. Treasuries. The purchases ended in March.

Jackson Hole
Bernanke told central bankers in Jackson Hole, Wyoming, in August that those purchases “pushed investors into holding other assets with similar characteristics,” lowering interest rates on a broad range of debt.

While a second round of Treasury purchases would also lower nominal rates, the FOMC has been explicit about the need to lower real interest rates through higher inflation, minutes of its Sept. 21 meeting show.

The year-over-year increase in consumer prices jumped as high as 14.8 percent in 1980 during the administration of Jimmy Carter...

______________________________

For the first time in history, the Federal Reserve today sold a Treasury Inflation Protected Security at a price that resulted in a NEGATIVE ( that's right, I'm not kidding ) YIELD.




Savers are so fearful of not getting their money back and so certain that inflation is just around the bend that they're willing to accept a negative yield. It's incredible.

M2 Money Supply ( St. Louis Federal Reserve )

 

[Luk]

Wow, you get a hundred more stores doing that and unemployment will only go up another percentage or so...






There is still the mortgage crises and the end of extended unemployment benefits on the horizon unless, of course, you believe we can continue to deficit spend indefinitely...

So it's a bad thing people are being employed?

Weren't you guys complaining during the Bush years saying that these type of jobs weren't the kind that we needed and that Bush was bad even though we had full employment? It seems a liberal is only happy when he's a tyrant.

"You guys?" Who are you talking about? And right now, all jobs are needed, don't be an idiot.

 

[unregistered]

 

[Luk]

Wow, you get a hundred more stores doing that and unemployment will only go up another percentage or so...
There is still the mortgage crises and the end of extended unemployment benefits on the horizon unless, of course, you believe we can continue to deficit spend indefinitely...

So people being employed is a bad thing? Got it.

Weren't you guys complaining during the Bush years saying that these type of jobs weren't the kind that we needed and that Bush was bad even though we had full employment? It seems a liberal is only happy when he's a tyrant.

"You guys?" Who are you talking about? Aren't all jobs good jobs right now? Seems "you guys" only agree that seasonal jobs are a good thing when a Republican is in office