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Billionaire Ron Baron says that he's confident that the turbulence over the end of QE won't...

Billionaire Ron Baron says that he's confident that the turbulence over the end of QE won't last, and things will settle down. Why? Well, just recently, former Treasury Secretary Tim Geithner remarked at a dinner he attended that the Federal Reserve's exit strategy would take about five years, which he interpreted to mean the tapering of the Fed's $85B-per-month bond-buying program would last that long. Baron also noted that Geithner felt it wasn't likely short-term rates would rise anytime soon, possibly for years and years.
Comments (3)
  • Ted Bear
    , contributor
    Comments (573) | Send Message
     
    The 'exit' strategy is to let the bonds which they have purchased simply mature, or run off. The average maturity is just over five years, hence the expression 'it will take five years for the Fed to exit'.

     

    BB already said that the buying part of the program would likely end this autumn, consistent with economic conditions...or more subtly, when it is apparent that additional purchases will no longer have any economic impact.
    28 Jun 2013, 08:02 PM Reply Like
  • Ohrama
    , contributor
    Comments (506) | Send Message
     
    "Why? Well, just recently, former Treasury Secretary Tim Geithner remarked at a dinner he attended that the Federal Reserve's exit strategy would take about five years"
    And he (Tim) is cashing on his insider information and contacts! Well, we are in a state where we are doomed if there are no additional (higher than already planned) purchases. So, stopping the purchases altogether, where is to going to take us? Already China, the major purchaser of our T bills etc., seems to be unraveling. And we have added an alternate for them (or fuel to the fire) by pulling the gold down (so they have an alternate avenue to park their excess export earnings. Whatever negative feeling one may have about gold, they have to realize that the Chinese have up to their ears or higher in U.S. dollar deposits and I am sure they can and would easily pick the gold as the lesser of the two evils).
    28 Jun 2013, 09:31 PM Reply Like
  • 598
    , contributor
    Comments (11) | Send Message
     
    Ron mentioned that 'mutual fund managers' get much better returns than the individual investor (+500bps)... He said it was because of thier conviction. But I suppose a liitle inside dope from the treasury and fed doesn't hurt.

     

    But hey what is a little insider info b/w billionaires...
    29 Jun 2013, 02:02 PM Reply Like
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