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spyguy

Qexit - Oct 2014

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I remember this time a year ago, when they were expected to announce the taper and, against all expectations, they decided to hold off for a while longer...

Just sayin'

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Oh go on then:

http://www.ft.com/cms/s/0/68b47b7a-5eda-11e4-a807-00144feabdc0.html#axzz3HKyOL0fC

'When the Federal Reserve releases the statement from its October meeting on Wednesday afternoon, the moment is almost certain to mark the end of the liquidity and stimulus programme known as quantitative easing.'

The comments are good.

10 things we already know about the effects of QE:

http://getwd50.blogspot.co.uk/2014/10/time-up-for-qe.html

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With the dollar losing reserve status the US has little choice but to stop printing and raise rates.

America - 0

China, Russia, Middle East - 1

That's as good an explanation as any, but we shouldn't lose sight of the fact that by reactivating the Term Deposit Facility two weeks ago the Fed is still handing out billions every month to the bankster welfare queens.

Edited by zugzwang

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When US QExit is announced (finally, properly) is it likely that the stock markets (worldwide) will tank (taper tantrum) and if so, would it be wise to switch holdings to cash. It seems that just the mention of a taper is enough to rattle the markets.

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My guess is if there is nothing in there to cause a shock, in the language (I'd like to see 'hard-stop you boomer VIs rich-on-paper complacents... we're crashing the market so banks can do volume lending and allow younger people an opportuinity'), end of expected taper announced gently, then probably DJIA will soar 200-300 pts.

I recall it did last month, when Yellen kept 'for a considerable time'. Gave it back next two days, then more during early Oct.

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Serial bubble inflater Alan 'The Maestro' Greenspan declares QE a bubblicious failure. :lol:

While the Fed’s bond-buying program has been a “terrific success” in boosting asset prices, it hasn’t galvanized effective demand in the real economy, Greenspan said.

The Fed’s bond purchases have had a “major effect” on price-to-earnings ratios, capitalization rates in real estate, and all income-earning assets broadly by “getting the real rate of return on long-term assets down,” Greenspan said.

The program “hasn’t been a success on the demand side for one fundamental reason,” Greenspan said. “What you’re basically seeing is an explosion of assets, an explosion of reserve balances, and that’s the only two statistics that are moving.”

http://www.bloomberg.com/news/2014-10-29/greenspan-sees-turmoil-as-qe-boost-to-markets-unwinds.html?hootPostID=c5ab11300685711bc15af1fc1fe4e5b9

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I'm not convinced that video stream link is going to work.... if anyone else has a better source.

Is there a good feed/blog update link? Can't even find anything at marketwatch...

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http://www.federalreserve.gov/newsevents/press/monetary/20141029a.htm

Release Date: October 29, 2014

For immediate release

Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace. Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing. Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee's longer-run objective. Market-based measures of inflation compensation have declined somewhat; survey-based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee judges that there has been a substantial improvement in the outlook for the labor market since the inception of its current asset purchase program. Moreover, the Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the Committee decided to conclude its asset purchase program this month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. However, if incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

EDIT: Emphasis mine

Edited by R K

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Sell, sell, sell!

Buy, buy, buy!

Can't be ar5ed. The machines get their orders in first anyway

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Macroman thinks sell, sell sell:

Does he own a machine? Doubt it.

Is he saying 'sell' or is he talking about a put butterfly option on the curve? I suspect it's rather more esoteric .......(I don't read his stuff so don't know what the prior post he referred to)

If the put fly mentioned in today's earlier piece is ever gonna work, this should do it
Edited by R K

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