Category: Quantitative EasingThe analysis published under this category are as follows.
Thursday, September 19, 2013
Dow New High, Another Stocks Bear Market Goes Up in Smoke, Forget QE Tapering Expect Expansion! / Stock-Markets / Quantitative Easing
The Dow Jones stocks index closed at another all time high of 15,676, catching many if not most so called market analysts off guard as for the duration of the stock markets latest correction could be found to be singing the new secular or cyclical bear market has begun mantra, despite the fact that many of whom have been singing the same tune for the duration of the 5 year plus of the stocks bull market.Read full article... Read full article...
Friday, September 13, 2013
The Federal Reserve’s upcoming decision on whether to slow its third quantitative-easing campaign’s debt monetizations has to be this year’s most-highly-anticipated market event. Traders have been trying to game the odds of QE3 tapering literally all year long, driving some sharp market moves. So the Federal Open Market Committee’s decision due out next Wednesday is likely to be a major market-moving event.
The focus on this imminent FOMC meeting is so hyper-intense that its impact should be considerable no matter what the Fed decides. The QE3 taper (or lack thereof), its size, and what the FOMC implies for future tapering will almost certainly spark sharp price reactions in the bond markets, currency markets, stock markets, and precious metals. All have moved violently this year on mere QE3-taper anticipation.Read full article... Read full article...
Saturday, September 07, 2013
PIMCO's Bill Gross appeared on "Bloomberg Surveillance" today, telling host Tom Keene: "I think Bernanke and company are committed to a taper...It will be taper lite as opposed to a strong tapering." Transcript below.
Gross on today's jobs report being the new normal:
"Yes, it sure was. And I guess the revision of last month was the biggest shocker. And the fall, of course, as you mentioned in terms of the participation rate from 63.4 to 63.2. You know, the unemployment rate is down, for those that focus on the unemployment rate, it is 7.3 percent. They would simply suggest we are closer to tapering and closer to a fed funds increase at some point. But I would suggest otherwise, that it is really a weaker economy as evidenced by today's report."Read full article... Read full article...
Wednesday, August 28, 2013
In last week's Outside the Box, which included a paper from the San Francisco Federal Reserve on the effectiveness of quantitative easing, I wrote, "What [authors] Cúrdia and Ferrero are really saying is that the latest round of QE, massive as it has been, has not had all that much effect on the economy, and that other factors should be taken into account. I'm sure this thesis is somewhat controversial, and I look forward to seeing what QE proponents like David Zervos over at Jefferies have to say about it."Read full article... Read full article...
Thursday, August 22, 2013
On Wednesday the Fed released the minutes from its July 30-31 policy meeting. Minutes from the meeting showed that most members of the FOMC agreed that a reduction of the stimulus was not yet appropriate. Only a few thought it was time to “slow somewhat” the pace of the stimulus policy.
Investors continue to fear that the Fed will start to slow its $85 billion monthly asset purchases, with most predicting September as the beginning of the end of the aggressive quantitative easing (QE) program. This fear was manifested beginning in June as foreign investors sold U.S. Treasuries to the tune of $489 billion in that month alone. The annualized rate of Treasury notes and bonds sold over the last three months was $271 billion. In more recent days, Asian currencies have declined as investors fear tighter Fed policy will starve emerging markets of investment funds.Read full article... Read full article...
Wednesday, August 21, 2013
The market is obsessed with “tapering.” The assumption is that all the “juice” in the economy is somehow the product of the Federal Reserve's actions. The headline on the front page of the Wall Street Journal today reads “Fear of Fed Retreat Roils India.” I suppose one has to come up with some kind of reason to explain the convergence of emerging equity markets and those of the US. My friend Dan Greenhaus over at BTIG sent out this ugly graph (if you are an emerging-market investor) this morning:Read full article... Read full article...
Tuesday, August 20, 2013
While the Fed’s taper talk has been tapered and then un-tapered, the market may now be tapering the Fed rather than vice versa. Let’s assess Act 2 of the taper talk and the implications for the markets, including the dollar and gold.Read full article... Read full article...
Monday, August 19, 2013
The Federal Reserve Bank’s balance sheet looked pretty healthy in May this year. On the asset side of the balance sheet is the large amount of paper that the Fed has bought to supposedly stimulate the economy. This consists mostly of treasury bonds and notes and mortgage-back securities of a value approaching $3 trillion.Read full article... Read full article...
Thursday, August 08, 2013
Garrett Baldwin writes: On Tuesday, Federal Reserve Bank of Chicago President Charles Evans announced that he wouldn't be surprised if the central bank begins to taper its $85 billion monthly bond-buying program in September.
Evans is the third official this week to signal a QE taper. Richard Fisher, president of the Dallas Fed, and Dennis Lockhart, president of the Atlanta Fed, parroted Evans' sentiment.Read full article... Read full article...
Wednesday, August 07, 2013
By Lacy H. Hunt, Ph.D., Economist
In May 22 testimony to the Joint Economic Committee of Congress, Fed Chairman Ben Bernanke issued another of many similar positive interpretations of central bank policy. Yet again, he continued to argue that quantitative easing has decreased long-term interest rates and produced other benefits. He called economic growth "moderate," a term that he has often used without acknowledging that the Fed's forecasts have repeatedly been far above the mark. Within less than two months—or by the time of the July FOMC meeting—the Fed had downgraded the economic growth to "modest," tacitly acknowledging that program of open-ended $85 billion purchases of government and federal agency security purchases had failed to boost economic activity.
Friday, August 02, 2013
George Leong writes: At the Federal Reserve meeting this past Wednesday, Chairman Ben Bernanke confirmed the bond buying would continue as economic growth was only modest and jobs remain an issue.
In other words, the Federal Reserve is planning to keep the money-printing press in full operation.Read full article... Read full article...
Friday, August 02, 2013
After the Fed's latest 2-day policy meeting it announced on Wednesday that it would continue its $85 billion per month asset purchase program. The major indices fluctuated from positive to negative throughout the day, as is typical of a Fed meeting day, before closing basically unchanged.Read full article... Read full article...
Thursday, August 01, 2013
Gary Gately writes: The Federal Open Market Committee (FOMC) meeting ended today (Wednesday) with word that the Fed plans to the stay the course on QE for now, backtracking from earlier hints it might begin tapering this fall.
"For all those looking for clear guidance on when quantitative easing will end, well, you will have to wait a little longer," Joel Naroff, president and chief economist at Naroff Economic Advisors Inc., wrote in a research note. "Indeed, there may have been some walking backwards today."Read full article... Read full article...
Thursday, August 01, 2013
WASHINGTON (MarketWatch) — The Federal Reserve on Wednesday slightly downgraded its economic outlook but gave no hint about its plans for its $85 billion-a-month asset purchase program. The statement released after a meeting of the Fed’s policy making committee said that the economy was expanding at a “modest” pace, a change from the “moderate” pace seen in June. The Fed also noted that the rise in mortgage rates was a concern. It also said that persistently low inflation was a risk. There was only one dissent, by Kansas City Fed President Esther George.Read full article... Read full article...
Wednesday, July 31, 2013
By Grant Williams
Who can take tomorrow
Dip it in a dream
Separate the sorrow
And collect up all the cream?
The candyman, the candyman can
The candyman can 'cause he mixes it with love
And makes the world taste good.
And the world tastes good 'cause the candyman thinks it should.
– "The Candyman", Willy Wonka and the Chocolate FactoryRead full article... Read full article...