Category: Quantitative Easing
The analysis published under this category are as follows.
Wednesday, October 02, 2013
QE Taper Capers / Interest-Rates / Quantitative Easing
By: John_Mauldin
Michael Lewitt has long been one of my favorite thinkers and writers on matters economic. He's incisive, thorough, and, well, pithy. No holds barred. Today's Outside the Box features an extended excerpt from the October issue of Michael's The Credit Strategist, which he has kindly allowed me to pass on to you.
Michael leads off this month with some useful thoughts on "the art of learning to live with intellectual and emotional discomfort," which he says is a key requirement for successful investing. Then he extends these thoughts in order to give us a critique of recent Federal Reserve behavior that is different from any I've seen. The FOMC (Federal Reserve Open Market Committee), he says, has been seized by intellectual rigidity:
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Monday, September 30, 2013
Ready for QE Five? - It's Already Here / Interest-Rates / Quantitative Easing
By: Michael_Pento
The sad truth is that the primary function of the Fed and Treasury has now become the sustention and expansion of disastrous asset bubbles. In fact, while Mr. Bernanke officially acknowledges QEs one through three, the truth is he has embarked on QE V. What's QE five all about? Putting a lid on U.S. Treasury yields.
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Friday, September 27, 2013
Fed, Central Banks Trapped Into Continuing Money Printing / Stock-Markets / Quantitative Easing
By: DeepCaster_LLC
“Both stock and blond valuations today are actually explicitly a matter of government policy.” Brett Arends, Wall Street Journal, 09/23/2013
“This looks to me like 2007 all over again, but even worse. All the previous imbalances are still there. Total public and private debt levels are 30% higher as a share of GDP in the advanced economies than they were then, and we have added a whole new problem with bubbles in emerging markets.”William White, former BIS chief economist, 09/20/2013
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Thursday, September 26, 2013
An Explanation of Quantitative Easing: Intention behind US current Monetary Policy / Interest-Rates / Quantitative Easing
By: Submissions
Sahil Hafeez writes: Quantitative easing (QE)
This is the Federal Reserve's (USA central bank) program of buying bonds from its member banks. The purpose of this expansionary monetary policy (A policy uses to stimulate economy) is to lower interest rates and spur (stimulate) economic growth.
Thursday, September 26, 2013
Why did the FOMC continue QE? / Interest-Rates / Quantitative Easing
By: Submissions
Sahil Hafeez writes: The FOMC (Federal Open Market Committee) affirmed the results of its September 17-18 gathering. It won't close Quantitative Easing until the economic indicators are closer to the Fed's targets.
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Wednesday, September 25, 2013
Bernanke Signaled QE is Now a Permanent Government Program / Interest-Rates / Quantitative Easing
By: John_Mauldin
Last Thursday, prior to the FOMC announcement, I was having an early lunch with Kyle Bass so he could get back to the office in time for the announcement. As we were finishing up, I was invited to come sit with another group of friends and traders who also happened to be in the same restaurant. Everyone was sure there would be some type of tapering. That message had been clearly communicated to the markets. When the announcement came, the telephones went off and everyone erupted with various forms of surprise. I fully admit to being speechless. I kept waiting for some kind of explanation, and none came. The more we talked about it and the more I thought about it later, the more convinced I became that this was one of the more ham-handed policy announcements from the Fed in a very long time. Why would you go to the trouble of getting the market all ready for the onset of tapering, build expectations, and then jerk out the rug? What in the wide, wide world of sports is going on?
Sunday, September 22, 2013
Can Quantitative Easing Create Economic Growth? / Economics / Quantitative Easing
By: Frank_Shostak
Some commentators such as Mohamed El-Erian, the chief executive officer of Pacific Investment Management (PIMCO), are of the view that the Federal Reserve’s policy of massive asset purchases has added very little to economic growth. A study published by the Federal Reserve Bank of Kansas City explores various channels through which monetary pumping can grow the US economy. On this, the study indicates that the Fed’s purchases of mortgage backed securities (MBS) can have a strong beneficial effect. The study however suggests that with respect to the purchases of Treasury Bonds the effect on the economy is minimal.
Saturday, September 21, 2013
No Taper E-Alchemy with the US Fed / Interest-Rates / Quantitative Easing
By: Adrian_Ash
Imagine the US Fed had a technology called the 'printing press'...
SO LIKE ME, the world and its stockbroker thought the US Fed would start trimming QE money-printing this Wednesday.
US Treasury bonds were down, stocks were soft, and gold and silver were long set for a cut to the money-creation scheme, too.
The Fed seemed determined. Ben Bernanke said as much in June. But no.
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Saturday, September 21, 2013
Fed Small QE Tapering in Ocotber is Possible / Interest-Rates / Quantitative Easing
By: Bloomberg
Bloomberg Television's Sara Eisen and Tom Keene sat down with Federal Reserve Bank of St. Louis President/CEO, James Bullard to discuss the Fed's decision not to taper and said that a 'small taper' in October is possible, that he doesn't want to see brinkmanship on debt, and insisted that the Fed still absolutely targets dual mandate.
Thursday, September 19, 2013
The QE Taper That Wasn't / Interest-Rates / Quantitative Easing
By: Peter_Schiff
The Fed's failure today to announce some sort of tapering of its QE program, despite the consensus of an overwhelming percentage of economists who expected action, once again reveals the degree to which mainstream analysts have overestimated the strength of our current economy. The Fed understands, as the market seems not to, that the current "recovery" could not survive without continuation of massive monetary stimulus. Mainstream economists have mistaken the symptoms of the Fed's monetary expansion, most notably rising stock and real estate prices, as signs of real and sustainable growth. But the current asset price bubbles have nothing to do with the real economy. To the contrary, they are setting up for a painful correction that will likely be worse than the one we experienced five years ago.
Thursday, September 19, 2013
Dow New High, Another Stocks Bear Market Goes Up in Smoke, Forget QE Tapering Expect Expansion! / Stock-Markets / Quantitative Easing
By: Nadeem_Walayat
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.
Friday, September 13, 2013
Fed QE3-Tapering Impact on Stocks and Gold / Stock-Markets / Quantitative Easing
By: Zeal_LLC
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.
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Saturday, September 07, 2013
PIMCO's Gross: Fed Will Still Taper After Jobs Report / Interest-Rates / Quantitative Easing
By: Bloomberg
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."
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Wednesday, August 28, 2013
The Global QE Exit Crisis, Guidance Schmidance / Interest-Rates / Quantitative Easing
By: John_Mauldin
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."
Thursday, August 22, 2013
Fed Hits the Markets WE Kill Switch / Stock-Markets / Quantitative Easing
By: Clif_Droke
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.
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Wednesday, August 21, 2013
What Has QE Actually Accomplished? / Interest-Rates / Quantitative Easing
By: John_Mauldin
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:
Tuesday, August 20, 2013
Fed QE Taper Talk, Act 2 / Interest-Rates / Quantitative Easing
By: Axel_Merk
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.
Monday, August 19, 2013
The Fed Can’t Afford to Taper QE / Interest-Rates / Quantitative Easing
By: John_Handbury
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.
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Thursday, August 08, 2013
What a QE Taper Means for Markets and the Next Fed Chair / Stock-Markets / Quantitative Easing
By: Money_Morning
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.
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Wednesday, August 07, 2013
The Federal Reserve Relies on a Flawed Economic Model / Interest-Rates / Quantitative Easing
By: Casey_Research
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.