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More on FOMC minutes: Those expressing concern about the costs/risks from further asset...

More on FOMC minutes: Those expressing concern about the costs/risks from further asset purchases are upgraded to "many" from "several." A "number" said a close look at the data might well lead the FOMC to "taper or end" QE before a substantial improvement in the labor market occurred. "Several" argue the risks of ending too soon are also significant. Status quo for now, but the monetary law of the land can clearly no longer be called QE∞.
Comments (32)
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    How about QE 7.5 now that it seems like 6.5 is a number that no longer fits the new new-normals?
    20 Feb 2013, 02:27 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9022) | Send Message
     
    You would like that, won't you Tony? I am sure misery loves company.
    20 Feb 2013, 02:39 PM Reply Like
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    Macro. School out early?

     

    I dearly hope for change in the amount of media angst which, before our new-new normal would have kicked in about 1 year into the Age of Obama resulting in blistering criticism for chronic high unemployment. All we get now are promises to raise the minimum wage and Obamaphones--not much hope for the unemployed, especially for youngsters.

     

    I hate misery and it seems like QE 6.5 is misery without end.

     

    I hope I'm wrong and the Fed gooses a robust recovery with new jobs for all.
    20 Feb 2013, 02:47 PM Reply Like
  • mobyss
    , contributor
    Comments (1897) | Send Message
     
    I understand what you're saying - they are starting to see that UE of 6.5% in the Age of Obama is basically impossible, so now they can't tie QE to that number anymore.

     

    I think that the new "Age of O" normal is going to be an unemployment rate around 8% and $Trillion+ deficits forever. And now that gas is breaching $4 fast they need to pay attention to inflation or it will really get out of hand.
    20 Feb 2013, 05:18 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9022) | Send Message
     
    All I want for Christmas is QEternity for the next 5 years. Whatever goal helps us get there is fine.
    20 Feb 2013, 05:59 PM Reply Like
  • Zeus2012
    , contributor
    Comments (697) | Send Message
     
    Don't know how many articles and posts that I've read complaining about QE infinity. Irrespective of how you feel personally about this policy or your political views, this is the current environment.

     

    So instead of fighting or resisting the Fed, why not just go along for the ride That's usually a much more pleasant experience (at least based upon my experience). While there may be adverse consequences of such much liquidity down the line when the fed needs to unwind, you won't have to worry about it for now. So, enjoy it while it lasts.
    20 Feb 2013, 09:06 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9022) | Send Message
     
    If you have character you should fight the Fed. Do not listen to Zeus. It's only money, and I need people to take the other side of the bet.

     

    What is more important to you? Money or principle?
    20 Feb 2013, 09:45 PM Reply Like
  • Tommy the Cork
    , contributor
    Comments (53) | Send Message
     
    Bond market doesn't buy it.More hot air from the fed doesn't change a thing.I guess DC doesn't plan on issuing any more debt?
    20 Feb 2013, 02:56 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Actually, if one reads the text, they didn't back off. Even Fed's Bullard stated recently that the Fed's balance sheet relative to GDP isn't as large (yet) as some other CBs. Don't forget the Fed's mandate is to monetize debt and keep Treasuries "stable" and this history reverts to Hamilton. As nicely shown on other sites, the Fed just bought Treasuries auctioned last week by the Treasury, and this POMO has been, and will be, in effect for some time. Yes, the question still remains how long the Fed can keep this hedging game alive. Interest rate markets can turn very cruel, with nasty dislocations, as other sovereigns have experienced. Frankly, I don't see that happening imminently, but it is always a risk.
    20 Feb 2013, 03:12 PM Reply Like
  • Zanzibar123
    , contributor
    Comments (22) | Send Message
     
    This economy is fragile and it's about to get nailed.

     

    1. Even the supporters of President Obama admit that, without continued multi-trillion dollar borrowing, a recession will occur. That's a candid admission we are living on borrowed money.

     

    2. I'm horrified to say that the 1 March 2013 sequester will take place. It's not that I believe there should not be reductions in spending: quite the opposite. But this sort of budget cutting with an axe is not really "planning" that would create true "savings," only pile up and delay much-needed repairs, etc.

     

    3. It's not at all clear that Congress can figure out the 27 March 2013 budget battle to avoid a government shut down.

     

    Contemplate the fact that this is ALL happening during tax PAYING season!
    20 Feb 2013, 03:45 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    All the Fed knows is QE. A few of these "hawks" are just hedging themselves for the history books. "I voted for QE, but I was really worried about the consequences."

     

    Like Democrats that voted for the Iraq War....
    20 Feb 2013, 03:55 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    http://bit.ly/WbXYrP.
    20 Feb 2013, 06:14 PM Reply Like
  • whiff
    , contributor
    Comments (661) | Send Message
     
    "Several participants noted that a very large portfolio of long-duration assets would, under certain circumstances, expose the Federal Reserve to significant capital losses when these holdings were unwound, but others pointed to offsetting factors and one noted that losses would not impede the effective operation of monetary policy."

     

    I presume the "one" is the Chairman, but it sounds like the rest of the herd is rubbing against the fences.
    20 Feb 2013, 04:24 PM Reply Like
  • june1234
    , contributor
    Comments (2556) | Send Message
     
    Rates have been going up ever since Bernanke suggested last fall they would pull out. This is not the kind of signal markets want to hear. Its pure comedy or should be, they pull QE it crashes, rate rise it crashes and they know it
    20 Feb 2013, 04:33 PM Reply Like
  • june1234
    , contributor
    Comments (2556) | Send Message
     
    Fed keeps sending these types of signals bond markets wont wait around for Fed to make it official to sell it off, as happened at the end of Jan in both treasuries and corporate bonds. Why?
    20 Feb 2013, 04:50 PM Reply Like
  • Michael Parmar
    , contributor
    Comments (230) | Send Message
     
    Open ended QE is not never ending QE!!!

     

    http://seekingalpha.co...
    20 Feb 2013, 05:12 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2306) | Send Message
     
    I don't think they backed off:

     

    http://seekingalpha.co...
    20 Feb 2013, 05:39 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (779) | Send Message
     
    If the FY14 federal budget is even close to what happens in reality, $85 billion of monthly purchases would mean the Fed is shrinking the level of debt held by the public on an annual basis. I doubt the Fed wants to do this -- their upper comfort level is probably monetizing 100% of actual issuance. They will need to start laying the framework for a reduction to the area of $50 billion a month.
    20 Feb 2013, 05:41 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9022) | Send Message
     
    Guys, come now, let the markets drop some. We need to reload for the sequester and make money hand over fist. In the mean time just short gold.
    20 Feb 2013, 06:03 PM Reply Like
  • Loosing Rookie
    , contributor
    Comments (8) | Send Message
     
    The Fed can change the rules anytime they want, probably like they will with the Roth in a couple of years. Roll the Dice!
    20 Feb 2013, 06:40 PM Reply Like
  • kyleg17
    , contributor
    Comments (174) | Send Message
     
    The sequester will drop the markets macro investor.
    20 Feb 2013, 08:53 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9022) | Send Message
     
    Yes it will. I have raised cash and waiting to buy UPRO calls mid next week.
    20 Feb 2013, 09:45 PM Reply Like
  • Hendershott
    , contributor
    Comments (1520) | Send Message
     
    The Fed has been pretty clear about what conditions would cause a change in policy. The economy isn't close.
    20 Feb 2013, 09:46 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9022) | Send Message
     
    But what about the dissenting hawks who have no voting power?
    20 Feb 2013, 09:47 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4011) | Send Message
     
    If the Fed had operated the space program, man would never have landed on the moon. After all the course corrections, Neil Armstrong would have run out of rocket fuel.
    20 Feb 2013, 10:31 PM Reply Like
  • kyleg17
    , contributor
    Comments (174) | Send Message
     
    I like the URPO call.. But calling a bottom mid next is a where that gets a little hairy. I would like the market to correct 7-10 %. I don't see it bouncing anytime next week though so don't jump the gun and try and catch a falling knife. However, I could be wrong. I should of been buying those calls over the last 3 months. So touché to you. I've been raising cash and hoping for a pullback in Berkshire shares. Not feeling like it's going to happen though..
    21 Feb 2013, 12:18 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9022) | Send Message
     
    Look, a 7-10% correction after $170B has just been pumped in the market?

     

    Not going to happen.
    21 Feb 2013, 12:23 AM Reply Like
  • kyleg17
    , contributor
    Comments (174) | Send Message
     
    5 % is more realistic.
    21 Feb 2013, 12:33 AM Reply Like
  • Villi Grdovich
    , contributor
    Comments (598) | Send Message
     
    Boy, if you thought QE news affected the NYSE, look at what happened in ASX and Asia today.
    21 Feb 2013, 12:36 AM Reply Like
  • kyleg17
    , contributor
    Comments (174) | Send Message
     
    Yea China too.
    21 Feb 2013, 12:45 AM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    The whole thing is just a smokescreen to pretend that there is some real discussion at the FED. This is the good cop / bad cop strategy. I actually think that the most likely outcome is the FED increasing QE. This will be combined with some changes in CPI calculation to show low inflation. The whole thing is crazy. The FED, more or less unanimously, agreed on QE3 (September) and QE4 (December) and since December we've had unemployment tick up to 7.9% from 7.8% and GDP has ''grown'' at -0.1% and somebody actually thinks that they will end the cheap booze. Dream on.
    21 Feb 2013, 04:03 AM Reply Like
  • kyleg17
    , contributor
    Comments (174) | Send Message
     
    Yea that is actually well said. QE isn't ending anytime this year.
    21 Feb 2013, 11:00 AM Reply Like
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