The DJIA closed down 206 points.
Posted on 06/19/2013 1:40:46 PM PDT by blam
STOCKS CRUMBLE AND RATES SURGE AFTER BERNANKE SPEAKS: Here's What You Need To Know
Sam Ro
June 19, 2013
It's the day everyone's been waiting for: Fed day.
First, the scoreboard:
• Dow: 15,112.1 -206.0 -1.3%
• S&P 500: 1,628.9 -22.8 -1.3%
• NASDAQ: 3,443.2 -38.9 -1.1%
And now, the top stories:
• The Federal Reserve wrapped up its two-day Federal Open Market Committee (FOMC) meeting and published its market-moving statement and updated economic forecasts at 2:00 p.m. ET.
• The big takeaways were that the Committee saw "further improvement" in the labor market and said downside risks to the economy have diminished since autumn. They also significantly lowered their inflation expectations.
• It's worth noting that the Fed revised its 2014 unemployment rate forecast to a range of 6.5% to 6.8%, down from a previous range of 6.7% to 7.0%. In case you forgot, the Fed said at its December meeting that it would use unemployment rate and inflation rate thresholds to guide monetary policy. And its unemployment rate threshold is 6.5%. This suggests that the Fed may be warming up to the idea of tightening monetary policy sooner than later.
• Bernanke also addressed the taper, or gradual reduction, of its quantitative easing, or bond-buying, plan. Specifically, he said that if the Fed's economic forecasts hold, then it would be "appropriate to moderate the pace of purchases later this year," ending mid-2014.
• Increasing optimism toward the economy and the prospect of a taper in the near-term appeared to be the catalyst for an interest rate rally. It also appeared to spook the stock market, which immediately crumbled.
(Excerpt) Read more at businessinsider.com ...
The DJIA closed down 206 points.
So whats this mean?
It means that the people on Wall Street are lemmings.............
Unfortunately those drunk on Fed money will crash into a lot of people while driving towards a ditch.
This is the dump phase of the pump & dump
It means that though Wall Street is not the economy, the slide of Wall Street will just pile more rubble on top of the real economy of day-to-day commerce which is already in the crapper.
And yeah, they’re a bunch of lemmings on Wall Street.
It means that the slightest indication interest rates are headed higher your 401 K goes in the shitter!
I would guess cynical— that the market does not have much faith in Bernanke expressing his faith that the economy will eventually recover, and when it does, that the Fed can then ease off the QE (aka printing money). Some folks believe that most of the employment numbers are artificially rigged by powers that be, and tying QE to a statistic commonly believed to be rigged is not something that is going to engender a sense of stability and returning normalcy to the market— rather, it could be a code for a long term prognosis of no actual change in fed policy regarding qe, iow continued qe to the indefinite future.
i am a cynic, jmo...
Higher interest rates would increase consumer spending, JMHO. Retirees and near-retirees have the bulk of that accumulated savings, and all of the interest we get will be spent, a lot of it locally.
Obama has borrowed and spent trillions of dollars and Bernacke has printed trillions more. Almost none has gone into capital investments. Obama and Bernacke have not created wealth but hollowed out the economy. The standard of living for most Americans has declined and prospects are not good. These two men have done more harm to America than anyone who has ever lived.
ha I dont have a 401k anymore, I got nothing to worry about /s
more discussion here
Bernanke just now: “Between 5%-6% unemployment is what we consider to be “Full Employment”
http://www.freerepublic.com/focus/f-chat/3033267/posts
I think this means that the “economic recovery”, as weak as it is, will only last as long as the Fed keeps pumping money into the economy. It also means, on a personal note, that I will have to hustle if I want to sell my house before interest rates start rising.
Yeah I saw gold taking a pretty big hit.
It means there will be a BIG rise in mortgage rates and a mad dash to buy homes.
IMHO 6.5% unemployment is a bit optimistic in the face of the rollout of obamacare. Unless the new employment paradigm for the BLS will consider 20hrs/week as a full time employment.
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