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Fed: No More Stimulus For Now

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http://www.bloomberg.com/news/2010-08-03/fed-may-forgo-new-stimulus-while-awaiting-more-evidence-of-weaker-economy.html

Fed Likely to Pass On More Stimulus Amid Signs Economy Weak
By Craig "KReg" Torres and Scott Lanman - Aug 3, 2010 5:00 AM GMT
Chairman Ben S. Bernanke told lawmakers in South Carolina yesterday that consumer spending is “likely to pick up” amid a “moderate” expansion. St. Louis Fed President James Bullard said on July 29 that he expects the “recovery will continue through the fall.” Three days earlier, Philadelphia Fed President Charles Plosser said in a Bloomberg News interview that calls for more Fed stimulus “are premature.”
Officials indicated they may ease more should the economy falter after reports of a flagging housing industry and persistently high jobless rate. Options include strengthening the pledge to keep interest rates around zero, cutting the rate the Fed pays on excess bank reserves, or buying more Treasuries or mortgage bonds. No consensus has emerged among policy makers for any of those actions, remarks by officials show, and Bernanke didn’t mention them in a speech yesterday.

I just do not see any real signs of recovery in the US. Its as bad as it is here, just a year or so ahead of where we will be.

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I just do not see any real signs of recovery in the US. Its as bad as it is here, just a year or so ahead of where we will be.

Nonsense ;) The ConDems have saved us all with their dither and delay austerity package. All we have to do now is wait 2-3 years for a public servant to actually be shown the door. This weeks £3bn deficit can be swept under the carpet like the last one, and the one before that.

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http://www.bloomberg.com/news/2010-08-03/fed-may-forgo-new-stimulus-while-awaiting-more-evidence-of-weaker-economy.html

Fed Likely to Pass On More Stimulus Amid Signs Economy Weak
By Craig "KReg" Torres and Scott Lanman - Aug 3, 2010 5:00 AM GMT
Chairman Ben S. Bernanke told lawmakers in South Carolina yesterday that consumer spending is “likely to pick up” amid a “moderate” expansion. St. Louis Fed President James Bullard said on July 29 that he expects the “recovery will continue through the fall.” Three days earlier, Philadelphia Fed President Charles Plosser said in a Bloomberg News interview that calls for more Fed stimulus “are premature.”
Officials indicated they may ease more should the economy falter after reports of a flagging housing industry and persistently high jobless rate. Options include strengthening the pledge to keep interest rates around zero, cutting the rate the Fed pays on excess bank reserves, or buying more Treasuries or mortgage bonds. No consensus has emerged among policy makers for any of those actions, remarks by officials show, and Bernanke didn’t mention them in a speech yesterday.

I just do not see any real signs of recovery in the US. Its as bad as it is here, just a year or so ahead of where we will be.

Deflation is the likely outcome.

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Try this one RB. Bloom and Faber - our favourites:

http://www.cnbc.com/id/38534143

Good article for Bears. The only thing with Prechter and Faber, is that they will not say when the collapse they predict will take place. May be no one can. They theorise that the borrowing already in the system is so great that there is no answer but a depression and that printing does not fix it, but merely delays the inevitable. Looking at Faber produced graphs you would believe it!

TO AVOID IT, THERE WOULD NEED TO BE MASSIVE GROWTH IN THE PRIVATE SECTOR. Unfotunately we cannot pay for any more stimulus, as the current borrowing and structural deficit are already out of control.This is at time when I reckon we will most likely start to see falling growth again and falling house prices and an increase in unemployment as the winter approaches. Brrrrrrrr!

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Good article for Bears. The only thing with Prechter and Faber, is that they will not say when the collapse they predict will take place. May be no one can. They theorise that the borrowing already in the system is so great that there is no answer but a depression and that printing does not fix it, but merely delays the inevitable. Looking at Faber produced graphs you would believe it!

TO AVOID IT, THERE WOULD NEED TO BE MASSIVE GROWTH IN THE PRIVATE SECTOR. Unfotunately we cannot pay for any more stimulus, as the current borrowing and structural deficit are already out of control.This is at time when I reckon we will most likely start to see falling growth again and falling house prices and an increase in unemployment as the winter approaches. Brrrrrrrr!

Inflation/Deflation is a choice, you can choose either option. Most govs choose inflation...

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I just do not see any real signs of recovery in the US. Its as bad as it is here, just a year or so ahead of where we will be.

At times like these I like ritholtz's commentary. Its always quite sensible. Hes a good could go up or down man, and doesn't pretend to know everything.

Sometimes I get the feeling that after a 300 year upward trajectory, we have now reached that momentary point of weightlessness prior to the long descent. I keep imagining a faint, weary collective :sigh: escaping from the world just prior to gravity returning.

I'm not hearing that sigh yet. Perhaps it will arrive when the likes of faber and hendry and AEP, and prognosticators like me have all gotten bored and STFU.

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At times like these I like ritholtz's commentary. Its always quite sensible. Hes a good could go up or down man, and doesn't pretend to know everything.

Sometimes I get the feeling that after a 300 year upward trajectory, we have now reached that momentary point of weightlessness prior to the long descent. I keep imagining a faint, weary collective :sigh: escaping from the world just prior to gravity returning.

I'm not hearing that sigh yet. Perhaps it will arrive when the likes of faber and hendry and AEP, and prognosticators like me have all gotten bored and STFU.

its the K-Winter. the first snows.

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Well if the objective was to talk down the dollar on the back of QE to boost exports it worked.

That trick isn't going to work forever though.

I believe the Americans are at it again with the "strong dollar policy" to reduce the value of their currency in order to undermine competition in the global market. Recovery through exports is the US Mantra and a low dollar is the means by which they will succeed.

The only problem is that when it starts to succeed, as it did a year or so ago, the dollar rebounds. As it surely will.

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http://uk.finance.yahoo.com/news/us-treasury-yields-fall-to-record-low-on-fed-s-qe-lite-plan-tele-24cf7548e6f5.html?x=0

Yields on short-term US Treasury debt have fallen to the lowest in history on mounting expectations of extra stimulus from the Federal Reserve.
Two-year rates fell to 0.52pc after a further batch of grim data hinted at a sharp slowdown in the second half of the year. Factory orders fell 1.2pc in June, while consumer spending fell flat.
The savings rate has risen to a one-year high of 6.4pc as Americans adapt to the new era of austerity and build a safety buffer against unemployment. "Households are repaying debt at a rapid clip," said Gabriel Stein from Lombard Street Research. "With an output gap at around 3pc, the US economy could move into outright deflation in 2011 for the first time since records began."
The latest figures follow a sharp drop in
GDP growth to 2.4pc
in the second quarter, prompting fears that the economy may stall altogether as the boost from fiscal stimulus and inventory cycle both fade.

I suspect we may have heard the last of the "recovery locked in" articles after this. The second dip must surely be locked in with a vice-like grip. Their awful GDP makes ours, at 1.1% sound diabolical. Happy days ahead as the wave of recession/depression spreads just like subprime which did, as Brown pointed out, BEGIN in America.

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http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7925216/US-Treasury-yields-fall-to-record-low-on-Feds-QE-lite-plan.html

Two-year rates fell to 0.52pc after a further batch of grim data hinted at a sharp slowdown in the second half of the year. Factory orders fell 1.2pc in June, while consumer spending fell flat.

The savings rate has risen to a one-year high of 6.4pc as Americans adapt to the new era of austerity and build a safety buffer against unemployment. "Households are repaying debt at a rapid clip," said Gabriel Stein from Lombard Street Research. "With an output gap at around 3pc, the US economy could move into outright deflation in 2011 for the first time since records began."

The latest figures follow a sharp drop in GDP growth to 2.4pc in the second quarter, prompting fears that the economy may stall altogether as the boost from fiscal stimulus and inventory cycle both fade.

The data has strengthened the hand of the Fed board led by Ben Bernanke as it pushes for a return to quantitative easing (QE), against fierce resistance from the Fed's regional hawks.

A closely-scrutinised article by the Wall Street Journal – described by some analysts as kite-flying by the Fed board – said the bank may announce some form of compromise at its crucial meeting next week, agreeing to roll over bonds purchased during the credit crisis rather than letting them expire gradually as previously planned. This would entail a slow shift from mortgage debt to Treasury bonds.

The Fed would keep its balance sheet steady at $2.3 trillion (£1.44 trillion). The effect would be neutral rather than adding any fresh stimulus. It has already dubbed 'QE lite' by Barclays Capital, as opposed to full 'QE2'. However, Fed watchers say it would be a crucial first step in a broader shift in policy.

And in today's Telegraph we have this.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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