Treasuries Price In Qe3 As Barclays Says

[Panda]

http://www.bloomberg.com/news/2011-08-21/treasuries-price-in-qe3-as-barclays-says-traders-anticipate-500-billion.html

Record-low yields on U.S. Treasuries show traders expect Federal Reserve Chairman Ben S. Bernanke to signal as soon as this week that the central bank will begin a third round of asset purchases to boost the economy, a scenario the world’s biggest bond dealers said is unlikely.

Barclays Plc said 10-year yields indicate traders have priced in $500 billion to $600 billion of Treasury purchases by the Fed. Citigroup Inc. said current rates can only be justified by more central bank bond buying or assuming the economy will shrink by 2 percent.

“The market is pricing in another round of large-scale asset purchases, looking for confirmation possibly as early as the Jackson Hole symposium” in Wyoming this week, Anshul Pradhan, a fixed-income research analyst at Barclays in New York, said in an interview last week. “The probability of that is low. If the Chairman does disappoint, then there should be a reversal in the outperformance of 10-year notes.”

Central bankers from around the world will meet in Jackson Hole at an annual conference sponsored by the Federal Reserve Bank of Kansas City, the same place where Bernanke triggered financial rallies a year ago when he said the Fed was prepared to “do all that it can” to ensure economic recovery and suggested it would purchase more securities if growth slowed.

[IDN]

they're claiming the threat of deflation is real, all i see is inflation - nothing seems to be going down- how is this going to help the man on the street?

[Panda]

Wages are falling so deflation

[Milkshock]

they're claiming the threat of deflation is real, all i see is inflation - nothing seems to be going down- how is this going to help the man on the street?

inflation? hardly. CPI is running at what - 4.4%?

[Panda]

Perhaps some economist somewhere will come up with a theory that deflation is nothing to do with the price level, but it is all to do with demand...which can be hit from either angle according to Central Bank policy in the face of a debt crisis.

With wages static so falling, incomes squeezed through rising costs because of money printing, we print more, costs rise further, incomes remain static, we get poorer, the rich cherry pick the poors assets? .i.e houses..................

[Fishbone Glover]

they're claiming the threat of deflation is real, all i see is inflation - nothing seems to be going down- how is this going to help the man on the street?

It isn't, but seeing as the man on the street isn't really a concern at the moment, it doesn't matter.

However, later on, when lots of men are on the streets, there may be a dramatic shift in policy

[interestrateripoff]

More free money which will do nothing apart from maybe push share prices back up.

No jobs for the proles.

[Fishbone Glover]

Yes, but eventually people are going to start to join the dots. Eventually, the majority of people will figure out what's been going on, how they've been shafted and who's to blame. At that point I would expect banks and MP's to be targetted, rather than a rampage for free stuff.

[hedgefunded]

Two words: X-Factor. Those in power only have to keep people in the dark between one series ending and another beginning.

Once the new series starts, people reset their memories and everything is fine until January

[papag]

QE3 is just more debt in reality so does this mean another down rating by the Credit guys?

[easy2012]

More free money which will do nothing apart from maybe push share prices back up.

No jobs for the proles.

By Mr Santorum, a potential Republican candidate for the next US president election said:

One big idea that I've proposed is to cut the corporate tax for all manufacturers from 35 percent to zero,” said Santorum. “You cut the tax rate to zero, you create a real launching pad for exports here in America.”

This might work. Asian/China countries have been giving out 0% rates in the special trade zones for a long time. Sounds like a winning formula for high tech manufacturing.

Not sure about his other policies, though.

[_w_]

By Mr Santorum, a potential Republican candidate for the next US president election said:

One big idea that I've proposed is to cut the corporate tax for all manufacturers from 35 percent to zero," said Santorum. "You cut the tax rate to zero, you create a real launching pad for exports here in America."

This might work. Asian/China countries have been giving out 0% rates in the special trade zones for a long time. Sounds like a winning formula for high tech manufacturing.

Not sure about his other policies, though.

I think that's not far from where they are now anyway and it only brings more problems. One problem is that if you don't make profits in the US, you're not worried about tax rates. Globalisation means most businesses would be mad to invest in the US, whatever the tax rate.