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WSJ: Fed could cut bond-buying even more

  • The Fed could reduce its monthly bond purchases to $65B from $75B at a FOMC meeting next week, the WSJ's well-connected Jon Hilsenrath reports.
  • The move would come after the Fed cut $10B from the program in December and despite a weak jobs report last month, with policy makers still bullish about the U.S.'s economic prospects.
  • Officials, though, are debating about how best to express their intentions vis a vis raising interest rates, especially as they've linked any increase to falling unemployment.
Comments (11)
  • june1234
    , contributor
    Comments (2491) | Send Message
     
    Communication means different things to different people.Last summer a voting member of the Fed communicated she was shocked to see how many restaurant and lifeguard positions were availlable at a Washington DC area job fair she stopped in at.
    21 Jan, 03:40 AM Reply Like
  • Joe2922
    , contributor
    Comments (406) | Send Message
     
    Fed should have ended QE 2 yrs ago. Benny said his QE is based on some guy from the 1800s who said should pour liquidity in time of panic. Where is the panic? Where is the crisis? Benny once said he needs QE because Europe is weak. Who knows the true reasons for incessant QE?
    Inflation, deflation, it depends on the person -- if the numbers are not likeable, they simply change the formulas to make the numbers say what they want to hear. Is the U. S. trying to be like the Chinese government now -- control the economy from the Ivory Tower?
    21 Jan, 04:57 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (530) | Send Message
     
    I often think one of the primary reasons for QE was to prop up the US banking industry to keep it from collapsing during the financial crisis. If the Fed’s hadn’t done that, we may all have taken a Cyprus style haircut and I think we’d have seen mass rioting in the US had that happened.

     

    US banks have made $$ billions off QE.
    21 Jan, 05:14 AM Reply Like
  • Joe2922
    , contributor
    Comments (406) | Send Message
     
    I agree, Rope, but that panic ended years ago. The Fed bails out banks when they do stupid things, ala Latin debt that defaulted in 1980
    21 Jan, 05:26 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (530) | Send Message
     
    I’m not sure about the panic ending several years ago because I don’t think anyone has an accurate idea of how much exposure US banks have to the derivative market. I’ve read some reports they may have exposure to $450 trillion, yes with a ‘T’, but no one really knows. Well, maybe the Fed knows but they won't tell the public how bad things really were a few years ago, or today.
    21 Jan, 05:48 AM Reply Like
  • june1234
    , contributor
    Comments (2491) | Send Message
     
    Yes they do . usdebtclock.org updates derivatives exposure 24/7. Last I checked over a year ago it was sitting at over $700 trillion and counting. Probably a ball park but they have a pretty good idea I think
    21 Jan, 05:55 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (530) | Send Message
     
    I couldn’t pull the debt clock up for some reason, but found this article after a quick google search. I’m not sure if I buy into the numbers, but this article has the world-wide derivatives market at $1.2 Quadrillion (notional) with $12 trillion in cash at risk.
    http://bit.ly/1iiVkjS
    21 Jan, 06:11 AM Reply Like
  • june1234
    , contributor
    Comments (2491) | Send Message
     
    Thx

     

    http://usdebtclock.org. Just pulled it up on my machine. They may not know the exact number it being unregulated but they know its a very large amount and getting larger. They also know its highly unlikely there is even 1% cash to cover any of it in the event something goes wrong like in 08
    21 Jan, 06:48 AM Reply Like
  • Regarded Solutions
    , contributor
    Comments (15426) | Send Message
     
    With the jobs growth report lousy, and the firings in retail AND banking, I believe that the FED will do absolutely nothing. The interest rate environment has finally stabilized after the fear of tapering, and for the FED to do more so quickly is simply the wrong way to handle this.
    21 Jan, 06:38 AM Reply Like
  • Joe2922
    , contributor
    Comments (406) | Send Message
     
    Those derivatives are supposed to be fully hedged, but counterparty risk is always there.
    AIG - when one's insurance co. goes broke, there is no longer insurance.
    Fed is lousy at forecasting, and many believe this is a grand experiment with consequences unintended and unknown -- except asset prices have gone ballistic.
    21 Jan, 07:42 AM Reply Like
  • naro
    , contributor
    Comments (15) | Send Message
     
    The Feds have destroyed millions of retirees and savers, and shifted all their efforts at saving bankers and Wall Street tycoons. (Because they are their friends and relatives). The number of real unemployed is dwarfed by the number of retirees and savers whose income dropped dramatically, and who had no money to support their local economy.
    21 Jan, 08:40 AM Reply Like
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