Posted on 12/12/2012 10:53:37 AM PST by whitedog57
The Fed announced further monetary stimulus with $45 billion Treasury purchases per month to on top of $40 billion in agency mortgage-backed securities purchases starting in January.
But back to the Fed’s announcement. Richmond Fed President Jeffrey Lacker. dissented for the eighth consecutive meeting, saying he opposed the asset purchase program. Lacker opposed the FOMC’s June decision to extend Operation Twist through the end of the year along with additional asset purchases, saying more bond buying probably won’t quicken economic growth.
The Fed’s balance sheet is expected to grow, of course, beyond its current level of almost $3 trillion.
According to the New York Fed, the duration of the new purchases is expected to be 9 years.
Hmm. The duration of agency MBS is currently around 3. The purchase of the 7-10 year Treasuries are clearly more risky than the agency MBS purchases, at least in terms of interest rate risk.
The reaction in the stock market? The Dow Jones Industrial Average rose on the announcement, as expected.
Oil and gasoline prices rose as well.
The dollar?
Protests erupted as Lindsay Lohan had her probation revoked.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
When this all comes crashing down a person will have to carry his money in a backpack to go grocery shopping.
Proving the truth of the statement that the definition of insanity is doing the same thing over and over hoping for a different result the next time.
1.02 Trillion per year of merry-go-round money.
Yeah, that will fix things...
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If there wasn’t a record level of cash already on corporate balance sheets, I’d say this might have a positive effect, but with the current levels of cash, there is no way easier access to funds is going to help at all.
This is nuts!
Not a problem. The government has a huge supply of tungsten and more than enough gold to cover it with...the tungsten, not the money borrowed.
Not sure how this works. Am I correct in reading this as the government is buying the morgages on the properties that they caused to go into default by crashing the market with money they are printing up deflating the remaining savings of poor working stiffs?
What a SCAM. If the Feds are buying all this stuff, where is the money going and who ends up with the goods?
Q: If the Fed dropped trillions of dollars from planes, would it create any new economic activity?
A: No. It would actually decrease economic activity, as people scrambled around the countryside looking for the bills. What they're doing with "Operation Twist" is no different at all.
Love your post!
In Sept 13 meeting they decided on 40 billion a month till unemployment went down, now in Dec, its 80 billion a month till unemployment goes down.
The Titanic has spotted the Iceberg and has decided to turn towards it and ram it?
I am going to print up a couple of hundred pieces of paper titled “Mortgage Based Security” and send em to the Fed for just 1 million each.
No problem! I got my EBT card! I’m covered.../s
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