FED FIGHTING: Where Do They Stand On QE2 - Check Out This QE Quote Box For The 12 Fed Heads
STOP! Notice the face of the man in the middle. Deflating Bernanke photo essay.
Scoll down for the text of the story.
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Yo, Paulson!
Sweet commentary on FED transparency.
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Notice the crossed fingers. Nice.
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Deflating Bernanke photo collection.
Nano-crapmagic money printing for dummies.
Thoughts from Bullard, Lockhart, Fisher and the rest of B-52's henchmen. Solid Reuters fact box with QE positions and quotes from all 12 Fed Governors. Plus, why the super-bullshitastic efforts by the Helipcopter will fail.
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Fed's Bullard could back easing in $100 billion steps - Reuters
(Reuters) - St. Louis Federal Reserve President James Bullard said on Thursday he would favor Fed purchases of Treasury securities in $100 billion increments one Fed meeting at a time (every 45 days), if the U.S. central bank decides monetary easing is necessary.
- "If we do decide to go ahead with quantitative easing ... we could think in units of about $100 billion," he said.
- "And then I think we could give forward guidance for the next meeting that would suggest how likely the committee thinks it is to continue these purchases," he added.
Analysts anticipate around $500 billion in fresh Treasury buying to be announced at the Fed's November 2-3 meeting, and some see a shopping spree of $1 trillion or more. Bullard, a voter on the Fed's policy-setting panel this year, said the decision on further easing is "a tough call." Bullard further said he does not think the Fed should set a ceiling on how much further easing it is willing to provide.
- "You just leave it open-ended," he said. "People would impute what they think the Fed's going to do based on their own forecasts... We would do the best we can to communicate how we think the program is evolving."
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Richard Fisher is not so sure:
Oct 19 (Reuters) - Dallas Federal Reserve President Richard Fisher said on Tuesday that while the economy is barely growing fast enough to create new jobs, the case for further monetary easing has not been made conclusively.
Fed's Richard Fisher - not clear more easing is warranted
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But Lockhart is gung ho, ready to test the hellhounds of inflation:
On Tuesday, Atlanta Fed President Dennis Lockhart said any additional Fed securities purchases would have to be large enough to have an impact and that increments of about $100 billion per month would be roughly on target.
Fed's Lockhart: Quantitative easing must be big
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Finally, this article sums up the positions of all Fed Governors:
(Reuters) - Federal Reserve Chairman Ben Bernanke said on October 15 that a case could be made for a further easing in U.S. monetary policy. A consensus appears to be in place at the Fed in favor of a second round of purchases of U.S. government debt to stimulate the economy, with a number of officials firming their support or showing more openness toward easing in recent weeks.
Following is a rating of where policy makers stand on a scale of 1 to 5, with 1 signifying "doves" most likely to support further easing and 5 representing "hawks" most likely to oppose it.
Hawks, Doves fight it out as Fed moves toward easing
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Now, why it won't work:
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DB here.
It's pretty simple. QE1 was $1.75 trillion and yet failed like the miserable, slobbering, hyperventilating, sleestack of Satan's 2nd spawn, spit out of Volcker's colon during a difficult moment on the DC belltway.
The same will happen with QE2, only worse.
The numbers Bullard and Lockhart discuss come to about $800 billion per year of Treasury purchases. There is no way in Bernanke's Tokyo nightmare scenario that $800 billion of printing will slow a $50 trillion deleveraging push. Rates are already astronomically low, and there is no refinancing boom. Too many homeowners are underwater and can't pass the appraisal-equity game in order to get one of those new lower rates. And the ones who could qualify, have already refinanced. Make no mistake, this is a Brian Sack gift to the equity markets and the banks, pensions funds, and others who already own treasuries. It will hurt the Dollar, and won't even make a dent in the deleveraging. Better to give up on extend, pretend, and just take it in the aft end, at least for awhile. It's gonna be a long slog. In the end, and we're nowhere near the end, quantitative easing is little more than dollar-destroying, nano-crapmagic money printing for dubious, devious, desperate, dumb-ass Fed Chairmen.
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Oct 22, 2010 at 6:55 AM
Reader Comments (10)
http://www.businessweek.com/magazine/content/10_43/b4200009860564.htm
the latest from krugman...
http://www.nytimes.com/2010/10/22/opinion/22krugman.html?_r=2
http://online.wsj.com/article/SB10001424052702303339504575566194097878552.html?mod=WSJ_hps_LEADNewsCollection
http://www.rasmussenreports.com/public_content/politics/general_politics/october_2010/questions/questions_benchmarks_and_obama_on_society_october_18_19_2010
http://market-ticker.org/post=168845
Read this one...
http://www.marketoracle.co.uk/Article23644.html
http://4closurefraud.org/2010/10/21/video-sheriff-tom-dart-explaining-exactly-why-he-won%e2%80%99t-enforce-foreclosure-evictions/
One of the banks whose Chicago foreclosure efforts are now impotent is Bank of America. That reminded me of another Chicago muff job on BofA, the Republic Windows and Doors affair. Remember that one?
On December 2, 2008, BofA--citing a sharp downturn in Republic's business--cut its line of credit, which was going to shut down the company's Goose Island manufacturing plant and screw its workers out of severance pay and benefits. So the workers staged a sit-in that drew national attention. It also drew the ire of then-Governor Rod Blagojevich, who announced that Illinois would no longer be doing business with BofA. Magically, BofA came up with $1.75 million dollar line of credit.
http://www.dollarsandsense.org/archives/2008/1208lydersentracy.html
http://www.bloomberg.com/apps/news?sid=aw5QzWC86Vl8&pid=newsarchive
That whole affair, which occurred just two months after TARP passed, gives lie yet again to the banks' claims that a bailout was needed so they could keep lending to businesses. It is also a reminder that banks can be brought to heel by actions on a local level.
(DB, you may have covered this back then; didn't start reading you until early '09.)
Mr. Cox dismantled a risk management office created by Mr. Donaldson that was assigned to watch for future problems. While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency. -end
Apparently Paulson wasn't content to completely defang the SEC, but decided to continue GS and God's work as a public servant. The brilliance he brought was captured in an aptly titled Businessweek article from June of 2006 called, "Mr. Risk Goes to Washington". A few paragraphs:
Think of Paulson as Mr. Risk. He's one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in their pursuit of profits. By some key measures, the securities industry is more leveraged now than it was at the height of the 1990s boom. It has also extended its global supremacy since then.
Goldman, under Paulson's leadership, became one of the greatest and most profitable risk-taking machines ever built. Since 1999, when he took over as sole CEO, Goldman has competed with bigger rivals such as Citigroup (C ) and JPMorgan Chase & Co. by being aggressive, making smart gambles, and putting the company's own money into deals. Paulson stresses Goldman's willingness to take risks along with clients in the latest annual report: "Investment banks are expected to commit more of their own capital when executing transactions."
The subject has become an obsession at Goldman: how to find profitable risks, how to control and monitor them, and how to avoid the catastrophic missteps that can bring down whole companies. That means taking on more debt: $100 billion in long-term debt in 2005, compared with about $20 billion in 1999. It means placing big bets on all sorts of exotic derivatives and other securities. And it means holding almost $50 billion in the piggy bank, enough cash and liquid securities to keep the firm going in the event of a financial crisis.
For the full chewy goodness read at http://www.businessweek.com/magazine/content/06_24/b3988001.htm