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Fed Sets October End for Bond Buying
WSJ ^ | Updated July 9, 2014 7:07 p.m. ET | Jon Hilsenrath and Pedro Nicolaci da Costa

Posted on 07/10/2014 6:21:44 AM PDT by Java4Jay

Federal Reserve officials agreed at June's policy meeting to end their bond-buying program in October, putting an explicit end date on the experiment for the first time and closing a controversial chapter in central-banking annals with results still the subject of immense debate.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Front Page News; Government; News/Current Events; Politics/Elections
KEYWORDS:
Odd this happens at midterm elections
1 posted on 07/10/2014 6:21:44 AM PDT by Java4Jay
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To: Java4Jay

I can quit anytime. Just let me have one more shot for now...


2 posted on 07/10/2014 6:25:43 AM PDT by Junk Silver
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To: Java4Jay

So we have a certain date on which the market will tank?
Sounds like it to me. Be out of the market by October, or loose big time!


3 posted on 07/10/2014 6:26:58 AM PDT by 9422WMR ("Ignorance can be cured by education, but stupidity is forever.")
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To: Java4Jay

So they won’t be spending 30+ billion a month anymore trying to paper over the national debt with phony e-money anymore. Go figure. I’ll be they add that amount to the 4050 billion they’ve been spending per month buying MBSs on the stock market.

Anyone wondering why the stock market is impervious to the recession - this is the reason. Greed and they’ll get theirs and don’t care about the future.


4 posted on 07/10/2014 6:27:34 AM PDT by Gaffer
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To: Java4Jay

This way the inevitable crash can be blamed on the Republicans who will have kept the House and just retaken (I hope) the Senate.


5 posted on 07/10/2014 6:27:38 AM PDT by PTBAA
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To: 9422WMR

Lose not loose for you spelling rats.


6 posted on 07/10/2014 6:29:30 AM PDT by 9422WMR ("Ignorance can be cured by education, but stupidity is forever.")
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To: Java4Jay

putting an explicit end date on the experiment

**************
Strange “coincidence” indeed. Whatever, with the Fed and all agencies of the government its not always what they say, its what they do that matters. Words are cheap, and the gullible sheeple usually buy them.

The Fed could easily backtrack by claiming “softness” in the economy or some other excuse. We’ve seent his movie before.


7 posted on 07/10/2014 6:32:05 AM PDT by Starboard
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To: Java4Jay

It’s all been planned, bozo’s job has always been to destroy America. He just held off until after his reelection to ensure he had carte blanc to bring us all down. He wants a brown country-that is what he is all about-revenge and destruction of the most glorious republic to ever exist!


8 posted on 07/10/2014 6:34:23 AM PDT by seeker41 (take your country back by whatever means necessary & remove the son of a kenyan mooslimb)
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To: Gaffer

Anyone wondering why the stock market is impervious to the recession - this is the reason.

*************
Yes, the Fed is behind this levitation. No doubt about it.

If the business environment is so healthy and the economy is so strong then why has the Fed found it necessary to print trillions?


9 posted on 07/10/2014 6:36:18 AM PDT by Starboard
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To: PTBAA

You’re not suggesting that the Fed is political, are you? ;)


10 posted on 07/10/2014 6:37:21 AM PDT by Starboard
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To: Java4Jay

DISMANTLE the FED

TREA$ON


11 posted on 07/10/2014 6:39:12 AM PDT by PGalt
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To: Starboard

In a nutshell, the FED is paying the NYSE to look the other way.


12 posted on 07/10/2014 6:41:00 AM PDT by Gaffer
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5% Carry 100% of Free Republic Expense

Are You Part Of The 5%?


Click The Pic To Donate

Donate

13 posted on 07/10/2014 6:53:51 AM PDT by DJ MacWoW (The Fed Gov is not one ring to rule them all)
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To: 9422WMR

Wonder if this has anything to do with the price increase in gold and silver since very early June?


14 posted on 07/10/2014 6:54:49 AM PDT by Foundahardheadedwoman (God don't have a statute of limitations)
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To: Java4Jay

All hell breaks loose AFTER the election.


15 posted on 07/10/2014 6:55:13 AM PDT by RatRipper (No need to rob others; democRATS will steal and share a tiny bit with you.)
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To: Gaffer

At least the Bank of Japan is straightforward about it’s manipulation of markets:

http://www.zerohedge.com/news/2014-07-09/bank-japan-prepares-buy-nikkei-400-etf-boost-stocks


16 posted on 07/10/2014 6:58:12 AM PDT by Starboard
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To: seeker41

IMHO we will see an invasion and it won’t be coming from the South. You got to remember that this country still has the largest natural resource base in the world, we are just not allowed to tip it. This land is the prize, worldwide.


17 posted on 07/10/2014 6:58:52 AM PDT by Foundahardheadedwoman (God don't have a statute of limitations)
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To: PTBAA
The stock market is so high now, that even if it "crashes" 20% it'll still be ahead of where it was when the recession started.

Higher interest rates just might help local economies long term. Responsible people will be able to accumulate savings for the future. Seniors whose savings haven't been decimated by gov "help" through the recession will mostly spend any interest they get, a lot of it locally. Banks will be more willing to loan if they'll earn a profit from it.

People who are STILL in debt? Not my problem. QE going on any longer?....the longer it goes on, the less reversible its effects on the economy will be.

18 posted on 07/10/2014 6:59:55 AM PDT by grania
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To: 9422WMR

Muzzies are big on symbolism. Remember the date of the market crash that led to the Great Depression?


19 posted on 07/10/2014 7:00:19 AM PDT by Foundahardheadedwoman (God don't have a statute of limitations)
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To: Java4Jay

OK all you Freeper Finance guys. What should we do with our money?

Do we keep it in Stocks?

Do we move it to Bonds?

Do we put it in fixed income money markets?

Do we put it in Real Estate Equity?

Do we move it to foreign investments?

Help us out here.


20 posted on 07/10/2014 7:07:58 AM PDT by P-Marlowe (There can be no Victory without a fight and no battle without wounds)
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To: Java4Jay

When will the Fed start selling the Trillions $$ that they already have sitting on their balance sheets ?

2- The ECB and Japan are expanding their money printing.


21 posted on 07/10/2014 7:28:07 AM PDT by george76 (Ward Churchill : Fake Indian, Fake Scholarship, and Fake Art)
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To: P-Marlowe

I imagine that the biggest result will be in the bond market; but I will not hazard to guess in which way.

They have been propping up government bonds, but has this taken investment funds away from other bonds; or has it artificially inflated the bond market that will now correct?

Bonds are an oddity, because as their price drops, *typically* their yield rises. However, if their price drops and their yield does not rise, it may cause a stampede out of bonds.

Commercial, taxable yields are more volatile, and market driven; and tax free municipal bonds are more stable, and based on the ability of cities to build new infrastructure. And because muny bonds are often medium and long term, even cities with financial problems continue to pay yields on them, so as not to destroy their credit.


22 posted on 07/10/2014 7:28:40 AM PDT by yefragetuwrabrumuy ("Don't compare me to the almighty, compare me to the alternative." -Obama, 09-24-11)
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To: Java4Jay

After that it’s Orange Juice and Chocolate bars.


23 posted on 07/10/2014 7:30:53 AM PDT by headstamp 2
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To: Starboard

BS. The FED can’t stop creating money. There is no one to buy $1 trillion a year in US debt.

This will be a smoke and mirrors psych opp. Proxy buyers of Treasurys. Maybe Belgium will move up to be the biggest buyer. It already somehow holds over $400 billion. Not bad for a country with a 2013 GDP of $482 billion. /sarc


24 posted on 07/10/2014 8:12:23 AM PDT by ChildOfThe60s ((If you can remember the 60s.....you weren't really there)
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To: Foundahardheadedwoman

Every blade of grass.


25 posted on 07/10/2014 8:14:42 AM PDT by demshateGod (The fool hath said in his heart, There is no God.)
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To: yefragetuwrabrumuy
I imagine that the biggest result will be in the bond market; but I will not hazard to guess in which way.

That's the dilemma, isn't it? Should I move my investments out of bonds (which have been doing quite well lately) and move them to something like a money market fund?

Should I let my large and small cap investments ride? Should I move in or out of equities? Or is it just something no one can predict?

26 posted on 07/10/2014 8:18:51 AM PDT by P-Marlowe (There can be no Victory without a fight and no battle without wounds)
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To: Java4Jay

The Fed policies have led to Hot Money going to the Stock Market because of no returns anywhere else.
For certain now that interest rates will go up.
The Hat trick will be the Fed trying to unwind their Bond Portfolio now at about $5 Trillion bucks.


27 posted on 07/10/2014 8:22:14 AM PDT by Captain Peter Blood
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To: P-Marlowe

Truthfully, I sincerely suggest what I have been suggesting for some years now: to keep a significant amount of cash, perhaps $5,000, in a secure place at home.

It’s most important element is that you have complete control over it at all times. Unlike a bank deposit, withdrawals cannot be “halted” by the government, or the bank itself. (Just a year or two ago, the rules were changed so that even “demand” accounts are no longer safe.)

It cannot be savaged by any kind of “currency run” on banks. (N.B.: there is only enough physical currency to support 4% of US daily retail trade.)

And paper money and coin cannot be hyperinflated, as such, because there are only two US printing offices, that already work around the clock producing mostly $1 bills, and proportionately fewer higher denominations. So they cannot produce *more* money, and there are not enough $20, $50 and $100 bills to support even a $500 denomination, much less a $1000 denomination.

So the weird situation might exist of hyperinflation in virtual money, and hyper-deflation of physical money, at the same time. That is, *starting* with a nickel being worth a dollar, rapidly becoming a penny worth a dollar, then a penny worth ten dollars. While at the same time, virtual money becomes worthless, because no one will accept it.

The biggest twist here is that physical money is legal tender, and virtual money is not. So creditors *must* take physical money, but they can refuse any form of virtual money. So pay in cash, or nothing.

The final blessing of having cash at home is that if there is an economic disaster and massive inflation affecting all currency, you can spend it immediately.


28 posted on 07/10/2014 8:38:51 AM PDT by yefragetuwrabrumuy ("Don't compare me to the almighty, compare me to the alternative." -Obama, 09-24-11)
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To: P-Marlowe
If I was a little ahead of the game I'd be looking to invest in a wrecker service. There are going to be a lot more broken down cars that need towing in the future.

I'd probably work out an arrangement to share the profits with the driver, and I'd have GPS tracking installed to keep the driver honest.

If I had big bucks to invest I'd be looking at the nation of Panama (in fact, one of my own aspirations is to open an office there).

29 posted on 07/10/2014 8:52:50 AM PDT by The Duke ("Forgiveness is between them and God, it's my job to arrange the meeting.")
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To: yefragetuwrabrumuy

hmmmm, sounds like I should get out of everything.

And get a 1% CD. yippee!


30 posted on 07/10/2014 9:27:10 AM PDT by yorkiemom ( "...if fascism ever comes to America, it will come in the name of liberalism." - Ronald Reagan)
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To: Java4Jay
Yeah right.

Does anyone really think the Fed will take away the punch bowl?

Does the Fed really want to crash the market back to 13.5 by Christmas?

The Fed has hooked Wall Street on free meth/money and if the junkie goes cold turkey, he's gonna be real real sick.

Plus, does anyone think that Barry's boys will let this happen on Barry's watch and send a weak economy into big recession?

Nope, nope and nope.

The Fed as pusher is here to stay for a long long time, until something outside blows the whole rotten scheme up.

31 posted on 07/10/2014 10:05:57 AM PDT by mojito (Zero, our Nero.)
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To: PTBAA

Correct.

This is a play at the 2016 elections. Crash the economy (well, it is really dead, this just removes the life support)right before mid terms and blame it on the TEA party conservatives.

In two years, proclaim an emergency of some sort and the game is over.


32 posted on 07/10/2014 12:25:17 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: Java4Jay
So we may see the bond collapse soon then. Next year might be interesting indeed with much more shocking "unexpected" consequences than heretofore seen.

What kind of politicians would millions of currently politically active and influential voters choose, if they knew that they were about to unemployed and homeless for the rest of their unnatural lives?

Heavy Hitters: Top All-Time Donors, 1989-2014
http://www.opensecrets.org/orgs/list.php
American Fedn of State, County & Municipal Employees $60,949,129 [Democrat] 81% [Republican] 1%”
National Cmte to Preserve Social Security & Medicare $10,414,606 [Democrat] 82% [Republican] 17%

Oh. They've already been chatting it up with us and fooling most of us.

Leviathan (Uncle Sam employs more people than you think)
National Review ^ | 02/03/2011 | Iain Murray
"...nearly 40 million Americans employed in some way by government."

Spendthrift ways are ways of government-linked socialists.

About "70 million" people are receiving good incomes but are also steeped in debt and can't borrow more for big ticket items. Meanwhile,...

Wait a minute! Where did the real private sector go? Oh...regulations and HOAs outlawed them from building homes, producing in small shops, doing odd jobs, etc.

More Than 101 Million Working Age Americans Do Not Have A Job
http://www.freerepublic.com/focus/f-bloggers/3005481/posts


And how might foreign enemies try to take advantage of the situation? Granted, many not-so-loyal Americans among us have already shown that they don't care (psychotic influential constituents).


33 posted on 07/10/2014 12:39:09 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: PTBAA

Well if the crash is inevitable we can all get fabulously rich like John Paulson and laugh at everybody.

Just tell me when to load up on shorts and puts!


34 posted on 07/10/2014 12:41:08 PM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
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To: Java4Jay
Timing of this is interesting. Let's wait and find out what the 2nd Q GDP is.
35 posted on 07/10/2014 12:41:30 PM PDT by Chgogal (Obama "hung the SEALs out to dry, basically exposed them like a set of dog balls..." CMH)
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To: Java4Jay
BRIC nations have been making deals for years to trade in their own currencies. It's obvious as to where many investors are going, after much news has been sponsored to scare their peers away from the same.

China second-quarter GDP seen steady at 7.4 percent, recovery in sight
Reuters
By Xiaoyi Shao and Koh Gui Qing
BEIJING Mon Jul 7, 2014 3:30am EDT
http://www.reuters.com/article/2014/07/07/us-china-economy-gdp-idUSKBN0FC08920140707


36 posted on 07/10/2014 12:58:53 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: PTBAA

“This way the inevitable crash can be blamed on the Republicans who will have kept the House and just retaken (I hope) the Senate.”

i’ll take it


37 posted on 07/10/2014 12:58:59 PM PDT by willywill
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To: yefragetuwrabrumuy

“And paper money and coin cannot be hyperinflated”

I thought that was the basis of hyperinflation, and the stories of paper money in wheel barrels during the weimer republic?


38 posted on 07/10/2014 1:05:30 PM PDT by willywill
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To: demshateGod

I hope you are right.


39 posted on 07/10/2014 2:18:09 PM PDT by Foundahardheadedwoman (God don't have a statute of limitations)
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To: P-Marlowe
As someone said above - the market indices will go down. They've been propped up by the FED "Twist".

Inflation cuts across numerous commodities and assets. So if you move to cash now - then commodities / assets should drop in price - you can reinvest opportunistically.

I'd say ammo is always a safe bet - keeps you safe, fills the freezer, and needs to be replaced due to consumption...

40 posted on 07/10/2014 2:29:05 PM PDT by uncommonsense (Liberals see what they believe; Conservatives believe what they see.)
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To: Captain Peter Blood

Fed already plans to regulate banks to have more liquidity, i.e., buy government bonds...

So as the Fed has bought up all the more valuable private sector bonds, banks will be forced into buying freshly printed government bonds.

Private sector will be bilked again.


41 posted on 07/10/2014 2:51:11 PM PDT by Son House (Violate Constitution + Spend Beyond Means + Tax More to Diminish Private Sector = Democrat.)
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To: yorkiemom

This may not be a short term problem from the fed. Obviously we were doomed to collapse from all the decades off deficit spending. The Question is just how soon will hyper-inflation occur? yes, it is best to get out of everything in the market right now and wait for at least a ten percent correction. In private I will tell you a stock to buy.
need to communicate. ASAP. PLS.


42 posted on 07/10/2014 3:01:10 PM PDT by cooper10
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To: P-Marlowe

It’s easy to guess which way an interest rate increase might effect the market. The market will NEVER jump up at the sight of such an event and it’s long overdue for interest rates to be a bit higher, more like 5-6% for home loans and 12% for car loans. US bonds need to be 3-4% at a minimum and more like 5-7% to be sustainable.

For at least 3 decades my largest holdings have been tax exempt muni bond funds where the funds hold general obligation bonds exclusively. I prefer knowing that the local folks have voted on it and are backing it. These funds took a hit in 2008 along with everything else but only around 20%, not the 40+% that most other stuff took. We took another hit in 2011 when Meridith Whitney shot her mouth off about muni bonds in general without being specific about GO types.

There are plenty of those funds that pay over 6% tax exempt. If your concern is the interest rate increase that is bound to happen about Oct. when the Fed turns loose then you need to be light on any other funds that are interest rate sensitive. But the tax exempt munis will do just fine. Even if they drop with the market they will still pay just fine and if the general market corrects you will get a chance to buy some more paying a higher rate——using the cash you should be sitting on at the time.

Keeping some cash in the freezer is always good advice but keeping your portfolio simple is even better. And if you’re not making at least 6% tax exempt you’re just not paying attention, especially if you have other income that is exposed to a tax rate. Works for me and I will indeed be paying close attention as we close in on October.


43 posted on 07/10/2014 5:25:50 PM PDT by cherokee1 (skip the names---just kick the buttz)
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To: Son House

There is right now more liquidity than can be handled. The banks have about $1 Trillion plus parked at the Fed.
If the Fed tries to unwind their portfolio the buyers may very well be the banks.
The reason the Fed has bought all that paper is to try and control Interest rates for Treasury Debt.
Any spike in rates, say 80 to 100 basis points, will add another $100 TO $200 Billion to the Interest cost in the Budget and before long all Tax revenues will be going to pay that cost.
The Fed has boxed themselves in along with the rest of us.


44 posted on 07/11/2014 6:21:22 AM PDT by Captain Peter Blood
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To: 9422WMR

I don’t think they will do it. Not right before the election.


45 posted on 07/11/2014 6:36:20 PM PDT by Pining_4_TX (All those who were appointed to eternal life believed. Acts 13:48)
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To: 9422WMR
It s interesting, given that October is the traditional month for crashes.
46 posted on 07/13/2014 8:41:31 PM PDT by hinckley buzzard
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To: 9422WMR
So we have a certain date on which the market will tank?

The stock market's already priced in the October end. (At least that's what I've read from all the "experts." Who really knows what's gonna happen .....)

47 posted on 07/13/2014 8:43:16 PM PDT by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: usconservative

how long does it coast on whats already been printed?


48 posted on 07/13/2014 8:44:20 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: All

#24 Child of the 60s,

You have it! The _Reserve_ pretends to stop floating the system as other places like Belgium pick up the slack. This is just covert _Reserve_ activity and it will contunue floating the sinking boat thru any means possible. This included bailing you into. Coming soon to a USA near you.


49 posted on 07/16/2014 7:46:05 AM PDT by veracious
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