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2 Year Treasury Hits Fresh All Time Low Of 0.5461%
And this is happening even despite the very appropriately named Bullard telling CNBC that he calls "for a plan to have significant easing if the situation arises" in essence guaranteeing QE2.0. Today's GDP report has just confirmed that another round of dollar debasement, long expected by everyone at Zero Hedge, is now inevitable. And with the ECB actively "easing", better known as printing, as well, the race to the currency bottom, now well in the second to last lap, is starting to get interesting once again.
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long treasuries baby...
yep, sell those Krugerrands and buy treasuries.
what time are ECRI numbers released?
the ECRI data has been bad since a long time now.....cant expect it to impact the markets much ....it had already signalled a double-dip recession.....
The WSJ says, "GDP fails to shake markets."
http://blogs.wsj.com/marketbeat/2010/07/30/gdp-fails-to-shake-markets/
So, I feel better. Don't you? Just ignore the part about, "...growth estimates all the way back to the start of 2007 were revised lower."
Incredible... one half of one percent on 2 year money... and the pension funds are supposed to make up their shortfalls after 2007 and 2008? We are so screwed.
The one good benefit from these low rates are enjoyed by those who are now (or soon) retiring with a defined benefit pension plan (a traditional pension that pays you a benefit based upon a formula that considers numbers of years employed etc) and are considering taking a lump sum benefit (if your plan allows for it) rather than the monthly payout.
The lower the interest rate (it depends upon the plan what interest rate is used in the lump sum calculation) the higher the lump sum payout. If you don't think things will end well with the economy or your plan and the plan doesn't allow for a cost of living increase in your monthly payments, you might want to consider taking your money and running. But of course, there are many variables to consider so consult an expert. Or three experts and average the advice. :>)
"is starting to get interesting again"
WHAT , I am suffering from post traumatic stress disorder - I am not sure I can take another dose of shock / debt therapy.
QE doesn't work. It's useless when you already have a ZIRP economy. via alphaville
Mr Fisher declared that central bankers could do no more to boost the economy. He believed that no amount of monetary easing could offset the retarding effects on growth of heightened uncertainty… At the same time, Mr Bullard acknowledged that downside economic risks were increasing. Central bankers seem close to recognising that the actions they take do not determine the economy’s performance. They can no longer demonstrate, or credibly claim, the omnipotence attributed to them by credulous markets in the era of the Greenspan cult. Market participants, however, give every appearance of lagging behind central bankers in their understanding of what macroeconomic policy can achieve. They still look to the Fed and to other central banks to engineer an improvement in the situation. When they grasp how circumscribing are the limits on the efficacy of central bank action, there is likely to be a major reassessment of market valuations.
http://ftalphaville.ft.com/blog/2010/07/30/302501/us-gdp-comes-below-con...
Qe does not work when there is no transmission mechanism to the real economy. Interbank rates may be ultra low, but this is not translating to the rates for consumers. If they can create a way to enable borrowers to transfer legacy debts to a new facility, this may actually help to fix the problem. Obviously the Fed doesn't want to do this as it hurts the banks, and that's who they work for.
Basically, savers get screwed through zero rates, but borrowers aren't benefiting.
Engine one is flamed out, engine two has no fuel -- quick add two more engines or we're gonna crash (oops, I meant land gently in the treetops)!
Nothing like the smell of low yields cooking in the morning...
Of course they can - if they were responsible central bankers they could bid up the price of Gold to at least equal the M1.
Of course that would be recognizing failure and we can't have that can we.
The blind leading the deaf and dumb...
Hyperinflation ready to go on Queue,the only way to flatten these unpayable deficits and debts.Haircuts alround and time to get your cash stash invested in Gold at you local Coin Dealer.When it gets really bad make sure you have a wheelbarrow handy to take your small change shopping and make sure your employer understands monthly pay will be futile and daily pay and then hourly pay will be the order of the day.Wallpaper and toilet roll won,t be on your shopping list anymore as there will no shortage of worthless paper.Coins will soon go out of circulation as they will be worth more as scrap so start the hoarding as of now.Make sure you have skills and products to start bartering for food and goods you require.Richest country in the world has come to this in the year 2010.If your an economist don,t tell anyone as the chances are someone will just throw a rope over the nearest lampost after they have had your shoes and clothes away.Ah the joys of a modern economic system,what a fuckin breeze.
So what should the dow be priced in terms of this? 6000?
Possibly time to go long...this easing may manifest in a rising index because many companies are sitting on high levels of cash and the debased currency will be freely available to make large technological advancements.
Remember, the fastest way for the govt. to pay off debt is to create more of it! (i.e. Debase outstanding debt with newly created dollars)
The real question is HOW the excess liquidity is used. If it's only used to pay off existing debts then the merry-go-round won't work too well.
If it's used to actually produce something (the U.S. govt. might be a bit confused on what this means) then perhaps maybe we can increase GDP.
If all participants have the same constant of change...is this not akin to all size boats rising and falling with the tide ?
It is sort of a "so what"....with the traders just seeking the imbalances...."as always"....
Also ...."buy and hold" is totally invalid for all asset classes....
Everyone will have to learn how to trade....
"Trade well" or "whither away"....
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The cash fix by governments across the board is a "bank first" strategy....in hopes of levering infusions....
However...this also means "cart before the horse"....
It should be "cash infusions" to the public first....then levered by the banks via the public...
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The fastest way to accomplish this is to maximize "public first" cash....via proper government tax strategies....ie 15% consumption tax...replaces individual and corporate income taxes....
The "bank first" strategy has FAILED....
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The US and Europe are on a far worse track than Japan....and will stay on the same track until the tax strategy is corrected....If not corrected....the shift of wealth to those that have the best tax structure will gain wealth versus their peers....
Liquidity a slosh-slosh everywhere, but a FRN is just a 0% interest debt instrument. Whatcha gonna do?
Barnacle Ben: Helipad!
Prepare to Launch!
And don't forget the money bazookas this time!
"the very appropriately named Bullard telling CNBC that he calls "for a plan to have significant easing if the situation arises"
The same Bulltard who was just saying that the Fed should purchase more Treasury bonds if yields continue to fall? Which is to say bid up the price if the price rises?
That doesn't make any sense at all.
Government spending grew 9.2% in Q2. Defense spending up 7.4%, non-defense up 13% in Q2. Quick, loan us all your money for free!
GBPUSD upside continues, since daily and weekly charts remain bullish.
http://stockmarket618.wordpress.com/about