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The weak NFP print increases the likelihood the Fed will launch fresh stimulus at its policy...

The weak NFP print increases the likelihood the Fed will launch fresh stimulus at its policy meeting next week, writes Jon Hilsenrath. Bernanke made clear (again) his concerns over the labor market in his Jackson Hole speech, leaving the suggestion he's itching to take action. Today's report, combined with ISM in contraction territory, may give him the opening.
Comments (28)
  • The more QE, the sooner we reach the end of the road and can begin rebuilding the economy on a firm foundation. In the meantime, prepare for social unrest.
    7 Sep 2012, 09:30 AM Reply Like
  • That would normally work but since BO purposefully has not passed a budget in 3 years and 9 months, so that he may bankrupt America to be on par with his Middle East brothers, no one can see the end or the downfall. It's like running a train off the Grand Canyon and magical tracks appear to get to the other side. The tracks are only there because he says they are there. It's the Socialist Hopium Train!
    7 Sep 2012, 09:40 AM Reply Like
  • How much more QE can the Fed possibly give while remaining effective? Interest rates are already at record lows.
    7 Sep 2012, 09:48 AM Reply Like
  • since when does the President PASS the budget, really educate yourself from sources other than Limbaugh
    7 Sep 2012, 09:48 AM Reply Like
  • As long as there's an overall contraction of the money supply due to deleveraging, QE should be effective. We're still in a contractionary mode. CPI shows deflation since April. The overall money supply is still contracting as debts are written off and/or paid down. I expect the FOMC will hold off, however, until they see what effect the ECB's bond-buying has on the EZ.
    7 Sep 2012, 10:45 AM Reply Like
  • Stagflation will result in unrest. Monetary easing throttles that.
    7 Sep 2012, 11:06 AM Reply Like
  • The President submits a budget to Congress, but under the Constitution, all spending Bills must originate in the House. The House has passed several budgets which have been sent up to the Senate. Harry Reid has refused to bring the budget bills to the floor for a vote. Draw your own conclusions about where to place the blame, but those are the facts.
    7 Sep 2012, 11:52 AM Reply Like
  • The manipulation of the money supply, in this case, injecting liquidity in an attempt to stave off the deflationary effects of bad debts, is artificial, theoretical and prone to unintended consequences which are deemed preferable to allowing the markets to clear. Neither the bankers nor the politicians are prepared to lose their livelihoods in the ensuing reset and will do anything to keep their positions. I'm betting they won't be able to hang on for long unless they are able to start a war and convince the American people that the war is necessary and just.
    7 Sep 2012, 12:01 PM Reply Like
  • TG:


    "...allowing markets to clear..."


    When debt contractions of the size required in this instance are allowed to "clear," unfettered by Fed monetary actions, you get massive money-supply contraction and resulting depression, exactly as occurred in the '30's. And, it's not the bankers, politicians or the rich that suffer disproportionately in depressions; it's the little people, who lose their jobs, houses and savings, just trying to keep their noses above water.
    7 Sep 2012, 12:18 PM Reply Like
  • Tack


    That's easy to deal with. Just suspend all IRS collections until GDP is north of 5% and unemployment is back at 4%.


    Income taxes under a monopolized money medium system are like treasury stock purchases. They just cancel the money mediums. Thus if you are worried about money mediums disappearing, then stop cancelling them.
    7 Sep 2012, 12:20 PM Reply Like
  • Just do it Ben. You know you've been wanting to for a year now.
    7 Sep 2012, 09:31 AM Reply Like
  • Anything to keep his job. Damn the consequences.
    7 Sep 2012, 09:34 AM Reply Like
  • There's nothing else that weasel can do. He has no more bullets left except to squeeze every last ounce of monetary value out of the middle class. Timmy and Bernanke need to be held accountable for their roles in BO's master plan.
    7 Sep 2012, 09:34 AM Reply Like
  • Hold up, i need a couple more slabs of bullion since sub 2K gold is about to be relegated to the dust bin of history never to return.
    7 Sep 2012, 09:43 AM Reply Like
  • Next stop, S&P 1440 it seems.
    7 Sep 2012, 09:43 AM Reply Like
  • More disappointment for the QE crowd. Not happening.
    7 Sep 2012, 10:39 AM Reply Like
  • Agreed, no more QE. I see NFP at 96k a bad sign. I see FED-EX warning a bad sign. I see INTC this morning a bad sign. I see nothing more of substance out of Draghi yesterday as a bad sign. And yet, the market is up again today, on hope of QE.


    Question is; if no QE, will the market stay flat until election and fiscal cliff, or improve because "things must really be good" if FED doesn't think we need QE, or fall sharply because reality finally sets in that more QE won't help the economy and we need to face the pain in order to move forward. My bet is we see a 15-20% correction starting next week. We shall see...
    7 Sep 2012, 11:19 AM Reply Like
  • J457:


    The market, at some point, will conjure up new fears of the "fiscal cliff." Even so, I don't foresee any 15-20% correction, if only for the reason, which I have so often mentioned recently, that too much capital is already allocated away from equities. This will provide lots of downside support for equities and will attract buyers on dips.
    7 Sep 2012, 11:56 AM Reply Like
  • Not this week anyway.
    11 Sep 2012, 03:30 PM Reply Like
  • Can I ask a question? If Ben does not buy our bonds, then who will?
    7 Sep 2012, 10:45 AM Reply Like
  • Interest rates need to (be allowed to) rise. The risk-reward curves are skewed here. The Fed can buy bonds 24/7 to keep gov't and mortgage (agency) borrowing costs low, but the systemic risks from this hedging will keep increasing.
    7 Sep 2012, 11:13 AM Reply Like
  • It might not be QE (growing the balance sheet), but just an extension of low rate guidance, say till late 2015.
    7 Sep 2012, 12:09 PM Reply Like
  • Bernake already indicated of March of this year that he will keep us in the Zirp until 2014.
    7 Sep 2012, 03:40 PM Reply Like
  • I think most observers agree that Nixons price controls are/were viewed negatively.
    Wonder what the rearview mirror opinions of the current Fed 'price of money controls' will reveal.
    7 Sep 2012, 12:34 PM Reply Like
  • The same.
    7 Sep 2012, 12:36 PM Reply Like
  • Politicians & central banks have figured out that if all countries print unlimited amounts of money at the same time, then the "free world" will never go bankrupt.


    It's the new "bull market".
    7 Sep 2012, 03:23 PM Reply Like
  • Meanwhile, the average Joe sees their quality of life decline every year. The "American Dream" will become just that - a dream.
    7 Sep 2012, 03:41 PM Reply Like
  • That is the plan---sink the middle class. As Ben has said, that is collateral damage to his zero rates.
    7 Sep 2012, 04:11 PM Reply Like
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