Seeking Alpha

What to expect from Bernanke at Jackson Hole? Something different from another QE, Gavyn Davies...

What to expect from Bernanke at Jackson Hole? Something different from another QE, Gavyn Davies says: It's not just the Fed's hawks that think there are limits to monetary policy. Rather than add to the balance sheet, the bank might just stretch the duration of its portfolio, to depress longer-dated Treasury yields. (earlier)
Comments (5)
  • Really what can he do? Debase the dollar more? We, meaning the public and private sector, are leveraged to the hilt. Don't punish the ones who were fiscally responsible anymore.
    22 Aug 2011, 07:06 PM Reply Like
  • The only thing he can do is OT2. The test run was about 2 weeks ago, and look what happened. Not going to work this time around.
    Top that off with imploding banks everywhere you look. Trying to scare / run money out of t's and into equities is an impossible feat, as he is discovering. Pretty soon, every time he goes to the john, gold is going to add another hunsky to the spot.

     

    Cue the deer in headlights pic.
    22 Aug 2011, 07:33 PM Reply Like
  • Whatever the Fed does will have no effect on the U.S unemployment. The problem is not cost of capital. The problem is returns on investment. Capitalists right now think their investments provide better returns away from U.S preferably in an emerging economy. In my view we Americans are beyond help. That is our Karma!. Let us live with it!
    22 Aug 2011, 07:59 PM Reply Like
  • What would really move the market positively would be for Bennie to raise rates significantly. It would immediately force the banks to lend to make money. Banks lending, gee, what a novel idea.
    22 Aug 2011, 08:02 PM Reply Like
  • It seems like the issue right now is Job Growth and Investments in new product development. Those are issues that are more driven by long term tax strategies. As long as the Obama administration continues to hold the threat of higher taxes, tax loop hole closures, and increased benefit costs over the heads of corporations, they have very little incentives to take on the burden of increased development costs. By not knowing what your tax liabilities will be in the future 3 to 5 years it is very difficult to commit to spending money.

     

    Right now we are in Limbo, we seem to have a lack of corporations that want to borrow money even at these very low interest rates.

     

    I do not see how any QE3 intervention could solve this investment problem. About the only thing left is to convert the short term bonds over to long term bonds. And then wait and see.
    25 Aug 2011, 04:13 AM Reply Like
DJIA (DIA) S&P 500 (SPY)