Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Fed ramps up aid to economy with $400 billion stimulus
Yahoo ^ | 9/21/11 | Mark Felsenthal and Pedro da Costa - Reuters

Posted on 09/21/2011 11:57:26 AM PDT by NormsRevenge

WASHINGTON (Reuters) - The Federal Reserve on Wednesday dialed up its aid to the beleaguered U.S. economy, launching an effort to put more downward pressure on long-term interest rates over time and help the battered housing sector.

The Fed said it would launch a new $400 billion program that will tilt its $2.85 trillion balance sheet more heavily to longer-term securities by selling shorter-term notes and using those funds to purchase longer-dated Treasuries.

It will now also reinvest proceeds from maturing mortgage and agency bonds back into the mortgage market, an acknowledgement of just how weak conditions in the sector have remained.

"Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated," Fed said in its statement.

Faced with a lofty 9.1 percent jobless rate, consumer and business confidence sapped by a troubling U.S. credit downgrade, and an escalating sovereign debt crisis in Europe, Fed officials have signaled they would seek to prevent already sluggish U.S. growth from weakening further.

But even as Fed Chairman Ben Bernanke has indicated the central bank's reluctance to stay on the sidelines, Fed activism has become a punching bag for politicians as an election year nears. Top Republican congressional leaders wrote to Fed Chairman Ben Bernanke this week urging the central bank to desist from further economic interventions, echoing criticism voiced by Republican presidential candidates in recent weeks.

Fed officials, however, believe that by shifting their bond holdings they could encourage mortgage refinancing and push investors into riskier assets, such as corporate bonds and stocks, without stoking a run-up in consumer prices.

(Excerpt) Read more at news.yahoo.com ...


TOPICS: Business/Economy; Culture/Society; Front Page News; Government; Politics/Elections
KEYWORDS: bernanke; debt; economy; federalreserve; kingofthedeficit; noaccountability; notaxes4dnc; notaxes4ge; porkulus; spending; stimulus

1 posted on 09/21/2011 11:57:27 AM PDT by NormsRevenge
[ Post Reply | Private Reply | View Replies]

To: NormsRevenge

Does this really hlp? & where is the 4 billion coming from? Will they print it and call the paper—money.


2 posted on 09/21/2011 11:59:44 AM PDT by Venturer
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

Sounds like a classic ponzi scheme.


3 posted on 09/21/2011 12:00:17 PM PDT by Captain Kirk
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge
It will now also reinvest proceeds from maturing mortgage and agency bonds back into the mortgage market...

Tax payer paid mortgages to buyers that can't pay the loan installments. Is this what they call a stimulus?

4 posted on 09/21/2011 12:02:23 PM PDT by Rudder (The Main Stream Media is Our Enemy---get used to it.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

How much is going into the non-existant “shovel-ready” jobs this time?


5 posted on 09/21/2011 12:05:07 PM PDT by Hodar ( Who needs laws; when this FEELS so right?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Venturer

Sounds to me like they’re just moving one pile of existing money into another pile.

So long as they don’t flood the economy with new dollars, I’m fine with this. I don’t think it will do much other than prop up the markets, though.


6 posted on 09/21/2011 12:07:24 PM PDT by Carling (As of 9/12/11, FreeRepublic Is Now an Anti-Vaccine Community.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Captain Kirk

JMHO, somebody on Wall Street is sure not impressed.

About the time that announcement got made, the Dow took a hundred point dump, and it’s just kinda wobbling around now.

Guess it does take some time for the guys from the Fed to load up the wheelbarrows and get to the exchange after all.

Wonder how much THIS “rally” is going to cost my grandkids.


7 posted on 09/21/2011 12:07:36 PM PDT by Unrepentant VN Vet ((486 and a wakeup) Truth, I know, always resides wherever brave men still have ammunition.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Hodar

L

8 posted on 09/21/2011 12:08:23 PM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: NormsRevenge; ding_dong_daddy_from_dumas; stephenjohnbanker; DoughtyOne; calcowgirl; Gilbo_3; ...
RE :”The Fed said it would launch a new $400 billion program that will tilt its $2.85 trillion balance sheet more heavily to longer-term securities by selling shorter-term notes and using those funds to purchase longer-dated Treasuries. It will now also reinvest proceeds from maturing mortgage and agency bonds back into the mortgage market, an acknowledgement of just how weak conditions in the sector have remained.

QE3 ping!

Greenspan taught Bernanke that printing money can cure any problem.

9 posted on 09/21/2011 12:09:24 PM PDT by sickoflibs (Over-taxed means 'paying too much in taxes', not zero taxes)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

...because another quarter point off mortgage rates will make all those 99’ers jump into the housing market and buy buy BUY!

The Fed is only shifting the maturity dates of their balance sheet. They’ve run out of ammo.


10 posted on 09/21/2011 12:10:27 PM PDT by Jack of all Trades (Hold your face to the light, even though for the moment you do not see.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge
Who writes the Yahoo headlines?

This is not a $400 billion stimulus at all. It will simply transfer $400 from short-term US Treasury bills to long-term US Treasury bonds.

This move will do nothing to fix the economy, and the stock market will reflect this moving forward.

11 posted on 09/21/2011 12:14:02 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Venturer
Does this really hlp? & where is the 4 billion coming from? Will they print it and call the paper—money.

They don't have to print it. All they need to do is to say it exists and it exists. It just appears in the balance sheets. It is nothing more than photons on a monitor.

12 posted on 09/21/2011 12:23:35 PM PDT by P-Marlowe (LPFOKETT GAHCOEEP-w/o*)
[ Post Reply | Private Reply | To 2 | View Replies]

To: sickoflibs
”The Fed said it would launch a new $400 billion program that will tilt its $2.85 trillion balance sheet more heavily to longer-term securities by selling shorter-term notes and using those funds to purchase longer-dated Treasuries.

The market doesn't seem impressed...

13 posted on 09/21/2011 12:31:43 PM PDT by GOPJ (126 people were indicted for being terrorists in the last two years. Every one of them was Muslim.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: NormsRevenge

does anyone remember voting on this?


14 posted on 09/21/2011 12:36:28 PM PDT by the invisib1e hand (...then they came for the guitars, and we kicked their sorry faggot asses into the dust)
[ Post Reply | Private Reply | To 1 | View Replies]

To: GOPJ
RE :"The market doesn't seem impressed... "

Imagine if he didnt do this..

How about Obama running on :
" Elect me because the economy is so bad, I have 4 years direct experience working with bad economies ....Hope and Change redux with edited scenes put back in...This time I will raise taxes to jumpstart the economy..."

?

15 posted on 09/21/2011 12:39:21 PM PDT by sickoflibs (Over-taxed means 'paying too much in taxes', not zero taxes)
[ Post Reply | Private Reply | To 13 | View Replies]

To: NormsRevenge

16 posted on 09/21/2011 12:48:34 PM PDT by Uncle Miltie (Gore Lauds Romney on Climate Position; 0bamaCare was based on RomneyCare.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: GOPJ

Dow down 199 points now.


17 posted on 09/21/2011 12:52:44 PM PDT by Deo volente (God willing, America will survive this Obamination.)
[ Post Reply | Private Reply | To 13 | View Replies]

To: the invisib1e hand

18 posted on 09/21/2011 12:53:27 PM PDT by Uncle Miltie (Gore Lauds Romney on Climate Position; 0bamaCare was based on RomneyCare.)
[ Post Reply | Private Reply | To 14 | View Replies]

To: NormsRevenge

Markets took a dive at the end of today’s trading session. Down 231.


19 posted on 09/21/2011 12:55:19 PM PDT by jersey117
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge
MONETARY POLICY DOES NOT INFLUENCE JOB CREATION!!!!!

See: QE I, QE II, QE III, ad nauseum.

20 posted on 09/21/2011 12:56:02 PM PDT by Uncle Miltie (Gore Lauds Romney on Climate Position; 0bamaCare was based on RomneyCare.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

Markets are throwing a tantrum saying give us more money. Not enough.


21 posted on 09/21/2011 12:57:17 PM PDT by Ravi
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

Didn’t the Feds recently sell (exchange) long term bonds for short term bonds? I know China did. Now that interest rates are near 1% on long term bonds, the Feds pile (exchange) back into long bonds. The only real new money being created is the payments for the interest rate maturities. Other than that it is just bond printing.

The principle or debt outstanding is another matter but best pushed past the next election(s) or for unborn generations to worry about...Unless generational warfare (young vs old) begins early as elders having pissed youth’s future away becomes abundantly clear even to the stoners.


22 posted on 09/21/2011 1:04:52 PM PDT by Razzz42
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

Look at the Dow after this announcement... it went down and closed down 284 points.

LLS


23 posted on 09/21/2011 1:10:10 PM PDT by LibLieSlayer (Is the person that you support a Crony Capitalist... A.K.A. CRAPITALIST?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge
Fed Chairman Ben Bernanke ( Archimedes: “Give me a place to stand and with a lever I will move the whole world.” ) trying to move the world to save any chance Obama has for reelection in a desperate attempt to recover the economy inspite of failed Obama fiscal policies.

This to, will fail.
24 posted on 09/21/2011 1:18:24 PM PDT by American Constitutionalist (The fool has said in his heart, " there is no GOD " ..)
[ Post Reply | Private Reply | To 1 | View Replies]

To: jersey117
Markets took a dive at the end of today’s trading session. Down 231.

Which, being translated, means: "Don't give us this 'stimulus' bullshit. Get this animal out of the White House. He shuts down Park Avenue with his paramilitary entourage like he's Caesar himself, and says he's gonna raise taxes on millionaires? Fuggedaboudit."

25 posted on 09/21/2011 1:19:51 PM PDT by the invisib1e hand (...then they came for the guitars, and we kicked their sorry faggot asses into the dust)
[ Post Reply | Private Reply | To 19 | View Replies]

To: NormsRevenge
( * The Fed said it would launch a new $400 billion program that will tilt its $2.85 trillion balance sheet more heavily to longer-term securities by selling shorter-term notes and using those funds to purchase longer-dated Treasuries. * ) : translated : Obama to Ben : get this economy moving for right now so I can get elected or else.

This is nothing more than another failed attempt to help Obama get relected.
Any fiscal polices that are implemented from now on are in a futile effort to get Obama reelected in the face of failed polices and mismanagement by Obama and Democrats, no, wait, it's not mismanagement, it was all done by design.
26 posted on 09/21/2011 1:23:02 PM PDT by American Constitutionalist (The fool has said in his heart, " there is no GOD " ..)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sickoflibs
RE: "Greenspan taught Bernanke that printing money can cure any problem."
Well said. But in this particular case, they are not printing new money.
27 posted on 09/21/2011 1:39:41 PM PDT by Marine_Uncle (Honor must be earned....Duncan Hunter Sr. for POTUS.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Deo volente

Down 283 at close...


28 posted on 09/21/2011 2:25:21 PM PDT by GOPJ (126 people were indicted for being terrorists in the last two years. Every one of them was Muslim.)
[ Post Reply | Private Reply | To 17 | View Replies]

To: GOPJ; blam

Stocks plunge after Fed announces stimulus steps

http://www.freerepublic.com/focus/f-news/2781800/posts

DOHHH!!!


29 posted on 09/21/2011 2:58:18 PM PDT by NormsRevenge (Semper Fi ... Godspeed .. Monthly Donor Onboard .. Obama: Epic Fail or Bust!!!)
[ Post Reply | Private Reply | To 28 | View Replies]

To: NormsRevenge

Stupid headline, its not a $400 b ‘stimulus’, it has nothing to do with spending $400b like Obama wants.

It’s a Fed operation to keep long-term rates low.
(They are plenty low already, but ....)


30 posted on 09/21/2011 3:27:53 PM PDT by WOSG
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

It was said at least 2 years ago that the Fed had run out of ammunition to fight the recession. So instead of doing nothing and letting the economy recover, Ben (the incompetent) just doubles down on stupid. But then he is not alone, he’s got the Food Stamp President and Harry the Loser as companions.


31 posted on 09/21/2011 7:20:37 PM PDT by RetiredTexasVet (There's a pill for just about everything ... except stupid!)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson