Fed to buy up to $300B long-term Treasury bonds

[GeezerMan]

Link

Fed to buy up to $300B long-term Treasury bonds


Kinda like printing money aint it?

 

[Jeffg010]

I was about to post that. Here is the scary part

from the article:
"In addition, the Fed said a $1 trillion program to jump-start consumer and small business lending could be expanded to include other financial assets."

The spending never seems to stop good lord.

Jeff

 

[dullard]

Originally posted by: Jeffg010
The spending never seems to stop good lord.

Why do you care if private banks (ie the fed) spend money?

 

[StageLeft]

Originally posted by: dullard

Originally posted by: Jeffg010
The spending never seems to stop good lord.

Why do you care if private banks (ie the fed) spend money?

Isn't calling the fed private kind of like me walking around in my front room with the curtains open naked and painting myself in chocolate sauce and when the cops come saying it was in my private house, even though I waited until it was night time and turned the lights up bright?

 

[OCGuy]

Originally posted by: Skoorb

Originally posted by: dullard

Originally posted by: Jeffg010
The spending never seems to stop good lord.

Why do you care if private banks (ie the fed) spend money?

Isn't calling the fed private kind of like me walking around in my front room with the curtains open naked and painting myself in chocolate sauce and when the cops come saying it was in my private house, even though I waited until it was night time and turned the lights up bright?

:camera: ?

 

[BoberFett]

Originally posted by: dullard

Originally posted by: Jeffg010
The spending never seems to stop good lord.

Why do you care if private banks (ie the fed) spend money?

I don't know, why does the government care if I get a printing press and start making fake $100s?

 

[miketheidiot]

this is news?

 

[bamacre]

Originally posted by: BoberFett

Originally posted by: dullard

Originally posted by: Jeffg010
The spending never seems to stop good lord.

Why do you care if private banks (ie the fed) spend money?

I don't know, why does the government care if I get a printing press and start making fake $100s?

Because the Federal Reserve doesn't like competition?

 

[Fern]

Originally posted by: Jeffg010
I was about to post that. Here is the scary part

from the article:
"In addition, the Fed said a $1 trillion program to jump-start consumer and small business lending could be expanded to include other financial assets."

The spending never seems to stop good lord.

Jeff

Add this part:

The Fed also said it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac to help that battered market. The central bank will buy an additional $750 billion

Is this new/additional $1.75 Trillion in bailout/stimulous accomplished through 'back door' means?

Fern

 

[Budmantom]

They should bring back $1000 bills.

 

[JS80]

it's like buying internet stocks as they were crashing to artificially inflate them.

 

[BoberFett]

Originally posted by: JS80
it's like buying internet stocks as they were crashing to artificially inflate them.

So they could be sold to some sucker who thought they wouldn't crash the moment they bought them.

 

[cubeless]

go go gold... nothing like the sound of the presses to run up the glittery stuff...

big o is going to do whatever it takes to make things look better in 3 years...

maybe the aig blathering is really a conspiracy to give people something stupid to rant about whilst barry and the boys do these kinds of things on the qt...

 

[Dari]

So long as inflation isn't an issue, I see nothing wrong with this. It's better than selling it to the Chinese.

 

[Fern]

Originally posted by: Dari
So long as inflation isn't an issue, I see nothing wrong with this. It's better than selling it to the Chinese.

Depending on who the holders of those LT bonds are - they just might be paying China back for previous loans.

The only way I can see this pumping moneyt into our economy is if they can be assured that those they purchase bonds or mortgage-backed securities from are US persons.

To my knowlege, they have no d@mn way of doing so.

But I can feel reasonably sure that they just increased the global supply of US doillars by a whopping amount. Inflation to follow?

Fern

 

[cubeless]

Originally posted by: Fern

Originally posted by: Dari
So long as inflation isn't an issue, I see nothing wrong with this. It's better than selling it to the Chinese.

Depending on who the holders of those LT bonds are - they just might be paying China back for previous loans.

The only way I can see this pumping moneyt into our economy is if they can be assured that those they purchase bonds or mortgage-backed securities from are US persons.

To my knowlege, they have no d@mn way of doing so.

But I can feel reasonably sure that they just increased the global supply of US doillars by a whopping amount. Inflation to follow?

Fern

yippeee!!! i get to agree with fern!!! if there's not global inflation down the road a piece i'll donate a chromosome to jediyoda so he can have two!!! the wild ride is just beginning!!!

the only question left is "where is the war going to start so we can work our way out of all this?"... that's the last link in the historical circle...

 

[rchiu]

Originally posted by: Fern

Originally posted by: Dari
So long as inflation isn't an issue, I see nothing wrong with this. It's better than selling it to the Chinese.

Depending on who the holders of those LT bonds are - they just might be paying China back for previous loans.

The only way I can see this pumping moneyt into our economy is if they can be assured that those they purchase bonds or mortgage-backed securities from are US persons.

To my knowlege, they have no d@mn way of doing so.

But I can feel reasonably sure that they just increased the global supply of US doillars by a whopping amount. Inflation to follow?

Fern

First of all, buying LT bond is clearly different from paying bond from previous loans and why would Fed wanna do that when those loans are not mature yet.

Second, FED deal with primary dealers for these type of activities, those dealers are either US bank or major EU/Japanese bank based in US. Of course Fed have to ensure the money get pumped into US market, that's their job to control US money supply. And they have mechanism inplace to do this already.

For all you people disagreeing, would you rather Fed tighten up the money right now? Hope you know what you wish for.

Finally, for you people afraid of inflation/dollar depreciation. May it's helpful for u people to know that Fed has the tool and is always actively monitoring all those. They also have the mechanism to reduce money supply as easily as they increase it. Why don't you wait until inflation or dollar depreciation happens before making comment. By the way, neither of those happened lately, actually inflation has been very mild and dollar actually went up quite a bit lately.

 

[StageLeft]

Government is floundering. Having spent its last bullet with lowering interest rates and selling bonds now it's just like oh fvck it, send off a print job I don't give a sh*t anymore, let's just screw it.

It's unsettling, to say the least, knowing that the monetary wealth of the entire country is at the behest of a very small group of people who can torpedo it on a whim. And easily, too. It's not like the king would have to send his troops door to door to steal people's gold, he can just do it by pressing some buttons. In theory we trust that it won't happen because a) they have everybody's best interests at heart and b) they are extremely competent and know what they're doing.

My great consolation comes from the fact that I have a nice big mortgage, so if inflation gets fully out of hand I'll be in a physical asset while its debt evaporates before my eyes.

 

[JS80]

Originally posted by: Dari
So long as inflation isn't an issue, I see nothing wrong with this. It's better than selling it to the Chinese.

Wrong, at least if we sell it to the Chinese and treasuries fail they are left holding the bag.

 

[brencat]

Originally posted by: Fern
But I can feel reasonably sure that they just increased the global supply of US doillars by a whopping amount. Inflation to follow?

Fern

You're damn right inflation will follow. Not today or in 6 mos, but eventually. This is disastrous policy the Fed is pursuing right now IMO. Litterally flooding the market with dollars by buying back USTs in an effort to drive down yields -- the yields many credit instruments like mortgage rates are linked to, in an effort to get people borrowing again and credit following.

But wait, is that really a good thing? Do we really want people overextending themselves again? I thought that's what got us into this mess in the first place. No we shouldn't go back to the go go days of living beyond our means. But that's exactly what the Fed is indirectly telling us to do. I have no qualms about helping small businesses get loans, nor providing a better environment for corporations to borrow money.

All you have to do to see how the market read this is look the charts of GLD (gold ETF), TBT (ultrashort long end of UST curve), and FXE (Euro/Dollar) right after the announcement.

Bernanke and this disaster of an administration are going to turn our country into a 3rd rate Banana Republic like Mexico if we don't get our sh*t together. We can't borrow our way to prosperity and the only thing that is going to get us out of this is time -- a long time. We had a huge party for 10+ years. And the hangover is going to be a bear (as it should be!)

 

[Dari]

Originally posted by: brencat

Originally posted by: Fern
But I can feel reasonably sure that they just increased the global supply of US doillars by a whopping amount. Inflation to follow?

Fern

You're damn right inflation will follow. Not today or in 6 mos, but eventually. This is disastrous policy the Fed is pursuing right now IMO. Litterally flooding the market with dollars by buying back USTs in an effort to drive down yields -- the yields many credit instruments like mortgage rates are linked to, in an effort to get people borrowing again and credit following.

But wait, is that really a good thing? Do we really want people overextending themselves again? I thought that's what got us into this mess in the first place. No we shouldn't go back to the go go days of living beyond our means. But that's exactly what the Fed is indirectly telling us to do. I have no qualms about helping small businesses get loans, nor providing a better environment for corporations to borrow money.

All you have to do to see how the market read this is look the charts of GLD (gold ETF), TBT (ultrashort long end of UST curve), and FXE (Euro/Dollar) right after the announcement.

Bernanke and this disaster of an administration are going to turn our country into a 3rd rate Banana Republic like Mexico if we don't get our sh*t together. We can't borrow our way to prosperity and the only thing that is going to get us out of this is time -- a long time. We had a huge party for 10+ years. And the hangover is going to be a bear (as it should be!)

Hmmm, who should I believe? Bernanke or Brencat? Decision decisions...

 

[StageLeft]

Hmmm, who should I believe? Bernanke or Brencat? Decision decisions...

FWIW I bet Brencat wasn't still a year ago saying the US could avoid a recession. He probably wasn't also at the helm while the ship charged head on into the iceberg and didn't realize that it had sunk until he was almost dead from exposure, bobbing around the ocean.

Vanguard's long term treasury index went up almost 5% today. Has that ever happened? It's hard for investors to know wtf to do with the government constantly changing sh*t.

 

[alchemize]

I saw an in interview on PBS the other night, wish I had noted who they were talking to. Some ivy league economist, basically he said that the printing presses were the next stop. And that the politically expedient way to resolve Obama's debt would be 70's like inflation.

 

[Eug]

Well, people looking for a fixed-rate mortgage are gonna love this. Get ready for yet another drop in mortgage rates in the next several days.

I just locked up a deal last week. Doh! I got a killer rate, but I'm guessing the rates might just be that much more killer at some banks by Monday.

P.S. As for those people saying it was mortgages that got everyone in trouble in the first place... Dunno about the US, but around here (Kanuckistan), the low end of the borrowing crowd isn't getting the loans now anyway. The people getting the loans are those with good credit ratings, but they're getting those loans at better rates than before.

 

[rchiu]

Originally posted by: Skoorb

Hmmm, who should I believe? Bernanke or Brencat? Decision decisions...

FWIW I bet Brencat wasn't still a year ago saying the US could avoid a recession. He probably wasn't also at the helm while the ship charged head on into the iceberg and didn't realize that it had sunk until he was almost dead from exposure, bobbing around the ocean.

Vanguard's long term treasury index went up almost 5% today. Has that ever happened? It's hard for investors to know wtf to do with the government constantly changing sh*t.

Yeah go on and point finger at Fed and Bernanke while keep loading up your credit card and borrow what you cannot afford. (maybe not you specifically but American in general). The mess is brought upon by Banks ran by American and loans taken out by American. I don't see how Fed, who have no oversight authority nor capcity have much to do with anything.

Funny how people love to blame everyone except themselves.