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According to "The Donald," the Fed's pledge to buy $40 billion in mortgage securities each month...
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Thursday, September 13, 2012, 8:21 PM ETAccording to "The Donald," the Fed's pledge to buy $40 billion in mortgage securities each month is just creating "phony numbers" and will not ultimately benefit the economy. Nor will it will do anything to spur additional activity in the housing market. “Mortgage rates are already very low,” Trump says, “but the banks aren’t lending. So it doesn’t make any difference.”
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The World Bank has warned and the cost to feed over 2 billion people is rocketing up and countries are in debt !
The great currency war continues and soon when the BRICs finish setting up exchanges to use all the other currencies the Reserve will be dropped !
ALL in US will see what they have cut in half ! When.. not if there will be 7 billion folks jumping for joy as Americans leap out of there windows.........
Love Ben.. Yeah, give him free room and board with Bernie.
When the dollar devalues he is not pushing up the value of financial assets. Today's S&P and DOW need to be MUCH higher to equal just the 2007 values.
Seeing those likes tells me that there is something seriously wrong with the values of the WS types.
And how much more can we print?
And isn't the whole thing just one house of cards?
With $16 trillion in debt just being the icing on the cake?
Ya know, we could have taken our medicine back in 2008, marked everything to market, closed down the institutions which were (and still are) bust, and moved on.
But no, we had a better way. If financial engineering got us in, surely more financial engineering could get us out.
Today we took another one half trillion dollar swipe at it.
And have we accomplished anything at all other than kicking the can down the road?
If so, could someone please list the examples.
I'm tired of this shit. How many generations have to put up with this crap before the people have had enough? (And please, spare me the political rhetoric--they are ALL criminals).
TB
Christ, we read this over and over. Yes, I get it: we all hate banks and bankers. Count me in on that for sure. But stuff like this just makes all of us taking that position look bad. It takes two to tango. People with solid earning power and healthy balance sheets have no desire to buy houses, and unsecured loans are still too expensive (and too small) to be worthwhile for all but the fabulously wealthy. The reality is that houses are still ridiculously overpriced relative to rents, priced in gold, or by any other useful metric, and our wages aren't sufficient to cover the enormous *principal* payments that would be required. And, again, that's those of us with reliable income, in-demand skills, and rock-solid balance sheets. If we're not going to borrow on these terms, who would?
I would gladly issue senior unsecured 20-year dollar notes at 4%. I am absolutely confident that I could earn far more than that in equities over that time period. My returns would consist primarily of being short the dollar and secondarily from dividends. Piece of cake. Unfortunately, the only way to access long-term credit is if it's secured by an asset that's not going to generate income, or in the case of investment real estate, not going to generate enough income. It wouldn't matter if mortgage rates were zero; I still wouldn't take out a mortgage. Why not borrow on margin instead? Because that's secured debt, and the market's insanity can force me out of my positions. Unacceptable.
If the Fed is serious about encouraging borrowing, it needs to get over the fallacy that banks won't lend. Banks are happy to lend against residential property at absurdly low rates. But it will take very different channels to entice anyone to borrow. As long as the only way to borrow at negative real rates is to buy a house at silly inflated prices or become the HFTs' chew toy, forget it. Give me the same terms companies like Microsoft are getting and I'll back up the truck. Until then, the reason no one's lending is that no one's stupid enough to borrow.
We went on a massive binge spend for several decades and now we are tapped out. It will take a decade or more to unwind. These solutions just makes it worse.
356% total credit market debts to gdp is hitting a ceiling.
It feels great now....car speeding along at a tremendous rate, face pressed to the windshield....damn we're having fun.
Except nobody paid heed to the sign which says "cliff ahead", apply brakes at this point, or you will be unable to stop in time.
That we are going over....whether it be this year, or this decade, and whether it looks like we think it will look or not, is no longer a question. You simply cannot spend 'good will' into perpetuity.
We're all in now. Sit back and watch. The party is awesome. The hangover will be something to behold.
Dollar crashes, gold explodes.