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August 9 FOMC Meeting Full Minutes: We Came Thiiiiiiis Close To QE3

Tyler Durden's picture




 

Highlights from the FOMC minutes:

We came this close to QE3:

  • Some participants noted that additional asset purchases could be used to provide more accommodation by lowering longer-term interest rates.
  • Others suggested that increasing the average maturity of the System’s portfolio—perhaps by selling securities with relatively short remaining maturities and purchasing securities with relatively long remaining maturities—could have a similar effect onlonger-term interest rates.
  • A few participants noted that a reduction in the interest rate paid on excess reserve balances could also be helpful in easingfinancial conditions.
  • A few members felt that recent economic developments justified a more substantial move at this meeting, but they were willing to accept the stronger forward guidance as a step in the direction of additional accommodation. Three members dissented because they preferred to retain the forward guidance language employed in the June statement.

Yet this stopped them:

  • In contrast, some participants judged that none of the tools available to the Committee would likely do much to promote a faster economic recovery, either because the headwinds that the economy faced would unwind only gradually and that process could not be accelerated with monetary policy or because recent events had significantly lowered the path of potential output. Consequently, these participants thought that providing additional stimulus at this time would risk boosting inflation without providing a significant gain in output or employment.

On "transitory" commodity prices:

  • Transitory factors, including supply chain disruptions from the earthquake in Japan and a surge in energy and other commodity prices, had pushed up both headline and core measures of inflation for a time.
  • More recently, however, as prices of energy and some commodities have declined from their earlier peaks, headline inflation has moderated.
  • Participants generally noted that, with apparently significant slack in labor and product markets, slow wage growth, and little evidence of pricing power among firms, inflation was likely to decline somewhat over time.

On September 21:

  • Participants noted that devoting additional time to discussion of the possible costs and benefits of various potential tools would be useful, and they agreed that the September meeting should be extended to two days in order to provide more time.

And why the conclusion at this point is foregone:

  • Many participants pointed to the recent downward revision to estimates of economic activity over the past three years, and some to the financial market strains seen during the intermeeting period, as contributing to a downgrade of the outlook for the economy. Moreover, many participants saw increased downside risks to the outlook for economic growth.
  • Meeting participants generally noted that overall labor market conditions had deteriorated in recent months.

And on why the dissenters (now minus 1), are about to be trampled:

Messrs. Fisher, Kocherlakota, and Plosser dissented because they would have preferred to continue to describe economic conditions as likely to warrant exceptionally low levels for the federal funds rate for an “extended period,” rather than characterizing that period as “at least through mid-2013.” Mr. Fisher discussed the fragility of the U.S. economy but felt that it was chiefly nonmonetary factors, such as uncertainty about fiscal and regulatory initiatives, that were restraining domestic capital expenditures, job creation, and economic growth. He was concerned both that the Committee did not have enough information to be specific on the time interval over which it expected low rates to be maintained, and that, were it to do so, the Committee risked appearing overly responsive to the recent financial market volatility. Mr. Kocherlakota’s perspective on the policy decision was shaped by his view that in November 2010, the Committee had chosen a level of accommodation that was well calibrated for the condition of the economy. Since November, inflation had risen and unemployment had fallen, and he did not believe that providing more monetary accommodation was the appropriate response to those changes in the economy. Mr. Plosser felt that the reference to 2013 might well be misinterpreted as suggesting that monetary policy was no longer contingent on how the economic outlook evolved. Although financial markets had been volatile and incoming information on growth and employment had been weaker than anticipated, he believed the statement conveyed an excessively negative assessment of the economy and that it was premature to undertake, or be perceived to signal, further policy accommodation. He also judged that the policy step would do little to improve near-term growth prospects, given the ongoing structural adjustments and external challenges faced by the U.S. economy.

The latest Philly Fed update should have put Philly Plosser's doubt to rest.

Bottom line: the Fed knows the economy is contracting, but it needs that final deflationary confirmation to launch QE3. That confirmation will have to come in either the ISM, the NFP, or a 15-20% drop in the S&P.

 

Full report:

FOMC August 9

 

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Tue, 08/30/2011 - 14:09 | 1615798 trade the day
trade the day's picture

Strong dollar bitchez

 

Tue, 08/30/2011 - 14:12 | 1615811 The They
The They's picture

weak banks and treasury market bitchez

Tue, 08/30/2011 - 14:15 | 1615831 PaperBugsBurn
PaperBugsBurn's picture

 

 

Weiiiiiiimar, bitchez!

Tue, 08/30/2011 - 15:36 | 1616205 espirit
espirit's picture

Dollah, gold, oil - all up.  We don't need no stinking QE.

Tue, 08/30/2011 - 15:57 | 1616303 Michael
Michael's picture

It's nice to see the Fed will be starting its new currency debasement procedures pretty soon.

Tue, 08/30/2011 - 14:34 | 1615952 legal eagle
legal eagle's picture

Gold to the Moon Alice!

Tue, 08/30/2011 - 15:10 | 1616080 TruthInSunshine
TruthInSunshine's picture

While the focus on QE3 is idiotic in terms of a desire to improve the economy (it hasn't and won't; arguably, it's damaged the economy signifcantly by dampening consumption), I think the assumptions about today's Fed talking points as being dovish are very much off the mark:


  • Fed Considered Doing Nothing, Record Shows
  • Among the policy options Fed policymakers considered were changing the size or composition of the Fed’s balance sheet and reducing the interest rate paid on banks’ excess reserve balances.

    On the other hand, some unnamed members of the committee were in favor of doing nothing.

    “Some participants judged that none of the tools available to the Committee would likely do much to promote a faster economic recovery,” the minutes said.

    Ultimately, members of the Federal Open Market Committee, which sets interest rates, decided to give markets clearer guidance on how long interest rates would continue to hover around zero. Some committee members said they preferred to instead peg interest rates to a specific unemployment rate or inflation rate rather than a calendar date.

    Fed officials had expressed particular concern about “a deterioration in labor market conditions,” and debated what the longer-term consequences of such high and sustained levels of unemployment might be.

    Staffers slightly raised their forecasts for inflation for the rest of this year, indicating that the central bank may be especially unlikely to engage in another round of major asset purchases.

    Tue, 08/30/2011 - 14:15 | 1615830 flacon
    flacon's picture

    "economic recovery" LOL! 

    Tue, 08/30/2011 - 14:25 | 1615900 slaughterer
    slaughterer's picture

    "it needs that final deflationary confirmation to launch QE3. That confirmation will have to come in either the ISM, the NFP, or a 15-20% drop in the S&P."

    I am not even sure that the 15-20% drop in the S&P is necessary at this point, given that the Fed does not want people to think that they react immediately to market volatility.   Just a nicely disastrous ISM and/or NFP would do it at this point.  And if either are disastrous, I would not be surprised to see the market rally.   

    Tue, 08/30/2011 - 14:28 | 1615919 trade the day
    trade the day's picture

    sarcasm on regarding the strong dollar bitchez......bitchez

    Tue, 08/30/2011 - 14:11 | 1615806 carbonmutant
    carbonmutant's picture

    Would you believe "Chuck Norris with a BB gun?" M. Smart

    Tue, 08/30/2011 - 14:11 | 1615808 Ese Pinche
    Ese Pinche's picture

    BTFD bitchez!

    Tue, 08/30/2011 - 14:12 | 1615809 Subprime JD
    Subprime JD's picture

    They need to hurry the fuck up with the printathon so we get this current monetary regime over with. Bunch of pussies

    Tue, 08/30/2011 - 14:12 | 1615813 FunkyMonkeyBoy
    FunkyMonkeyBoy's picture

    QE DOES NOT WORK!!! PROVEN!! ARE THERE ANY SANE PEOPLE LEFT IN THE WORLD!?

    Tue, 08/30/2011 - 14:14 | 1615823 carbonmutant
    carbonmutant's picture

    Is that a trick question?

    Tue, 08/30/2011 - 14:17 | 1615844 PaperBugsBurn
    PaperBugsBurn's picture

     

     

    JUDEN FETZEN IS ALWAYS THE ANSWER TO ZIONISTA BANKSTERS

    Tue, 08/30/2011 - 14:15 | 1615835 The They
    The They's picture

    What do you mean it doesn't work!? my PM holdings have risen dramatically since the QE I!

    Tue, 08/30/2011 - 14:16 | 1615840 Racer
    Racer's picture

    Of course it works

    QE = Rich richer and poor poorer

    Tue, 08/30/2011 - 14:17 | 1615850 NotApplicable
    NotApplicable's picture

    Neither does fractional-reserve central banking. However, this does not seem to stop them from trying.

    Tue, 08/30/2011 - 14:25 | 1615893 TruthInSunshine
    TruthInSunshine's picture

    The goal for the next 20 odd days is to baffle with bullshit, apparently.

     

     

    FOMC: Some members thought more stimulus could boost inflation risk

    08-30 14:07: FOMC: Some members thought more stimulus could boost inflation risk

    FOMC says some participants judged none of the tools available were likely to do much to support the US economic recovery

    08-30 14:07: FOMC says some participants judged none of the tools available were...

     

    Tue, 08/30/2011 - 14:51 | 1616025 Spaceman Spiff
    Spaceman Spiff's picture

    They seem to want to keep a holding pattern until september thus the baffling with bullshit...  too bad for retail investors who are in a 'tilt-a-whirl' market.   No getting off this rollercoaster, just vomit in front of the monitors.

    Tue, 08/30/2011 - 14:19 | 1615856 Id fight Gandhi
    Id fight Gandhi's picture

    Of course inflation is transitory when you stop easing, the assets crash. But any qe3 would have ro be at least a trillion to get this market to new highs.

    Fuck the poor, they will see even more job losses due to poor economic conditions and higher commodity prices.

    Qe2 = Arab spring. Good job guys.

    Tue, 08/30/2011 - 14:27 | 1615912 NotApplicable
    NotApplicable's picture

    At some point they will give up on the idea of new highs, instead hoping to keep it flat as the gamblers all seek to cash in their chips.

    Tue, 08/30/2011 - 15:16 | 1616104 Mauibrad
    Mauibrad's picture

    It doesn't work, but they have to do it until their paradigm fails.  Fisher is the only one with balls in that group.

    Tue, 08/30/2011 - 16:02 | 1616319 Waffen
    Waffen's picture

    QE works.  It sends my Gold and Silver Up..  I am begging for QE3.

    Tue, 08/30/2011 - 14:13 | 1615822 Barry McBear
    Barry McBear's picture

    Good summary, thanks Tyler.

    Tue, 08/30/2011 - 14:15 | 1615828 shushup
    shushup's picture

    What a fucking waste of time!

    Tue, 08/30/2011 - 14:15 | 1615829 Dave Thomas
    Dave Thomas's picture

    No whammies, no whammies... STOP!

    Tue, 08/30/2011 - 14:28 | 1615918 NotApplicable
    NotApplicable's picture

    LOL

    And it's likely that well thought out.

    Tue, 08/30/2011 - 14:15 | 1615832 IMA5U
    IMA5U's picture

    ok.  i get it now.   data will be awful.  but beware QE3 if you want to short this market.  so don't even try doing it despite what the data says.

     

     

    Tue, 08/30/2011 - 14:28 | 1615921 --Freedom--
    --Freedom--'s picture

    But for the shorters out there, won't we need a serious drop in the s and p before qe 3? I don't buy Tylers take that a bad Nfp will be enough for qe3 unless it is accompanied by a big decline in the markets.
    So, I'm still banking on a decline this week or next.

    Tue, 08/30/2011 - 14:39 | 1615974 john39
    john39's picture

    the current plan of just dangling the prospect of more QE seems just as effective as actually announcing a plan.  so why bother so long as the market thinks its just around the corner?  they can play this game for some time before the market figures the game out.

    Tue, 08/30/2011 - 15:02 | 1616055 --Freedom--
    --Freedom--'s picture

    Maybe, but is the market really this stupid? Can't someone program the machines to know that they won't get a qe3 unless they start selling?
    Or is there something else at play here? Maybe they know they can't do qe3 anytime soon, so the idea is just to keep dangling it to keep the markets afloat for a while.

    Tue, 08/30/2011 - 15:52 | 1616244 caerus
    caerus's picture

    this is imo a normal reaction to the decline in the ES from 8/2 to 8/8...if one were to accept the technical interpretation of the ES from jan through july 2011 as a 7 month h&s that broke on 8/8, then he would expect a roughly (1360-1240=120) point decline before a reaction...ES bounced around (1240-120=1120)...one would then expect a possible retest of the neckline as resistance, most likely followed by the real decline...volume throughout seems to confirm...

    of course there are many who would disagree...just an opinion

    Tue, 08/30/2011 - 14:15 | 1615833 ??
    ??'s picture

    and here we go

    Tue, 08/30/2011 - 14:16 | 1615843 Id fight Gandhi
    Id fight Gandhi's picture

    So is this end of month melt up hedges just fluffing or a front run for sept meeting?

    Tue, 08/30/2011 - 14:17 | 1615847 TradingJoe
    TradingJoe's picture

    ...must close greeeeeennnn.....must make bonnuuussseeesssss....:))))

    Tue, 08/30/2011 - 14:18 | 1615852 SumSUN
    SumSUN's picture

    $2,000 gold.... preposterous. 

    $10,000 gold... not so much.

    Tue, 08/30/2011 - 14:19 | 1615854 espirit
    espirit's picture

    Markets are doing fine without QE, that is of course taking into account the dollah has to go to zero.

    Tue, 08/30/2011 - 14:19 | 1615855 trampstamp
    trampstamp's picture

    Bottom line: the Fed knows the economy is contracting, but it needs that final deflationary confirmation to launch QE3. That confirmation will have to come in either the ISM, the NFP, or a 15-20% drop in the S&P.

     

    Sounds more to me that commodity prices need to come down more no?

    Tue, 08/30/2011 - 14:19 | 1615858 Cognitive Dissonance
    Cognitive Dissonance's picture

    Missed my crack hit by >this< much. Damn you Fed dissenters, damn you to hell.

    Tue, 08/30/2011 - 14:22 | 1615883 The They
    The They's picture

    Don't worry.  They're just warming up the pipe for you first. give it time...

    Tue, 08/30/2011 - 14:24 | 1615894 Ese Pinche
    Ese Pinche's picture

    This market is way WAY short.. you still might catch a rock wiff or two, to the tune of a hard squeeze.

    Tue, 08/30/2011 - 14:30 | 1615931 Subprime JD
    Subprime JD's picture

    LOL

    Tue, 08/30/2011 - 14:19 | 1615859 sasebo
    sasebo's picture

    And what does all this meaningless gobbly gook (asset purches, accomodation, Systems portfolio, easing financial conditions, stronger forward guidance, etc) mean? Its all just a bunch of stupid elitist asshole bullshit.

    They think that the best way to get the real economy going is to print more paper money. That's it!!!!!! 

    Tue, 08/30/2011 - 14:23 | 1615887 HelluvaEngineer
    HelluvaEngineer's picture

    They don't care about the "real economy".  Hell, they don't even know what that means.

    Tue, 08/30/2011 - 14:34 | 1615947 Dave Thomas
    Dave Thomas's picture

    I don't think from reading the minutes they even know. I mean look at it. They are rattling off symptopms, symptoms of a disease they refuse to acknowledge. It's like knowing the patient has a huge tear in a blood vessle somewhere, but to keep blood pressure up, they keep pumping blood in.

     

    Paging Dr Keynes, Dr Keynes!

     

     

    Tue, 08/30/2011 - 17:05 | 1616602 bid the soldier...
    bid the soldiers shoot's picture

    as long as the express keeps stopping at 72nd street, I'm not complaining...

    Tue, 08/30/2011 - 14:21 | 1615874 rubearish10
    rubearish10's picture

    Run-up to September 21st, because everyone wants to get in front. IS it that simple? YES! Anything (bad) could happen between now and then, hence, even more QE, so no lose play. Heyyyyyyyyyyyy!

    Tue, 08/30/2011 - 14:23 | 1615885 mechawreck2
    mechawreck2's picture

    Two days is not sufficient...  the Members should convene daily when the market is open.  Stick a Bloomberg in front of each and just set the right prices every minute already.

    Tue, 08/30/2011 - 14:23 | 1615889 101 years and c...
    101 years and counting's picture

    i'm thinking we are going to have a glorious crash in the next 2 weeks.  stocks, pm's and oil will be slaughtered to get the printers turned back on.

    Tue, 08/30/2011 - 14:43 | 1615994 thedrickster
    thedrickster's picture

    They certainly do need a catalyst.

    Perhaps it's time to pull the plug on the B-Moyn's bad bank?

    Tue, 08/30/2011 - 17:01 | 1616588 bid the soldier...
    bid the soldiers shoot's picture

    wrong.  after QE3 takes it's first baby steps, we will be flirting with a new all-time high on the DJIA.

    Tue, 08/30/2011 - 14:24 | 1615890 NotApplicable
    NotApplicable's picture

    Many participants pointed to the recent downward revision to estimates of economic activity over the past three years, and some to the financial market strains seen during the intermeeting period, as contributing to a downgrade of the outlook for the economy.

    So... it looks bad for the future because it now looks bad in the past, back when they said it didn't?

    Wow, that bent my brain! (Don't try this at home folks, it's dangerous!)

    Tue, 08/30/2011 - 14:24 | 1615891 rambler6421
    rambler6421's picture

    Recession Bitchez!

    Tue, 08/30/2011 - 14:33 | 1615945 i love cholas
    i love cholas's picture

    I'm so over seeing "bitchez".

    Tue, 08/30/2011 - 14:25 | 1615896 buzzsaw99
    buzzsaw99's picture

    It sounds like Sack and Frost are about to get another workout.

    Tue, 08/30/2011 - 14:28 | 1615914 slaughterer
    slaughterer's picture

    Sack has been training at the gym for his F5 key entries for the last 3 months. 

    Tue, 08/30/2011 - 14:30 | 1615932 NotApplicable
    NotApplicable's picture

    I hear he has an index finger to die for.

    Tue, 08/30/2011 - 14:36 | 1615963 buzzsaw99
    buzzsaw99's picture

    point and click and

    buy buy buy

    point and click and

    F4, F4, and F4 some more

     

    Tue, 08/30/2011 - 14:48 | 1616012 thedrickster
    thedrickster's picture

    Correction,

    Log-in, open JD's Mark-To-Mars modeling.

    Get on phone, JPM Ask, noted....wait for it...on the board.

    point, click, select "Market", "GTC"

    Click.

    F5, F5, F5.

    Tue, 08/30/2011 - 15:06 | 1616067 buzzsaw99
    buzzsaw99's picture

    how about a nice little algo?:

     

    if: market down

    then: buy

    market up y/n?

    if: n

    then: repeat

    if: y

    then: end

    Tue, 08/30/2011 - 15:20 | 1616076 thedrickster
    thedrickster's picture

    Be at Newark in 45, flight #1679. Ensure the jump drive is safely stowed in a cavity.

    Tue, 08/30/2011 - 14:26 | 1615905 AllThatGlitters
    AllThatGlitters's picture

    Initial Gold Reaction is to shoot higher:

    http://www.oilbull.com/gold-chart/

     

     

    Tue, 08/30/2011 - 14:30 | 1615930 Ese Pinche
    Ese Pinche's picture

    wtf are you talking about?  Gold spkied at 645 CST in the AM.  Reaction to the fed in gold and silver has been almost as muted as equities.

    Tue, 08/30/2011 - 15:07 | 1616070 AllThatGlitters
    AllThatGlitters's picture

    Yeah, sorry.  I was looking at the minute chart (which was spiking) and thought I was looking at the hourly.

    Can I claim that this morning's spike was early front-running on a leak and that my statement was therefore still accurate? 

    :-)

     

    Tue, 08/30/2011 - 14:27 | 1615910 Id fight Gandhi
    Id fight Gandhi's picture

    So worst consumer confidence since the lows of the recession, we rally right back. I guess the Dow will shoot up nfp prints neg. Number,

    Tue, 08/30/2011 - 14:27 | 1615913 Flakmeister
    Flakmeister's picture

    Stimulus Interruptus!

    Wow, that was close....good thing the Bernake pulled out in time, a Ben and Timmy love child would get beaten like a red headed step child....

     

    Tue, 08/30/2011 - 16:55 | 1616564 bid the soldier...
    bid the soldiers shoot's picture

    au contraire,

    stimulus non abortus est

    Tue, 08/30/2011 - 14:29 | 1615923 rambler6421
    rambler6421's picture

    Who is Brian Sack?

    Tue, 08/30/2011 - 14:35 | 1615958 thedrickster
    thedrickster's picture

    Helicopter pilot.

    Tue, 08/30/2011 - 14:45 | 1616000 Flakmeister
    Flakmeister's picture

    Nice...

    Tue, 08/30/2011 - 14:30 | 1615929 espirit
    espirit's picture

    Buy the rumor, sell the news. Worked so far.

    Tue, 08/30/2011 - 14:31 | 1615937 Peter_Griffin
    Peter_Griffin's picture

    Although some of the slowdown in the first half of the year reflected transitory factors, most members now judged that only part of that weakness could be attributed to those factors.

     

    Oh shit, it isn't transitory?!?  They should start reading ZH, they could get the news early.

    I'm guessing transitory to the fed = oh shit that's bad, we have no idea what to do, so lets hope it gets better.

    Tue, 08/30/2011 - 14:32 | 1615941 DoChenRollingBearing
    DoChenRollingBearing's picture

    I'm going with Thomas Donlan (Editor of Barron's) who is guessing that QE3 ia already surrepticiously underway.  It makes sense to me.

    With all of .gov spending and HUGE Treasury bond sales yet low interest rates, what else could explain recent events (stocks going up, etc.)?

    So, whether QE3 is here or just about here, looks (again) like GOLD is the best place to preserve your wealth.

    Tue, 08/30/2011 - 14:35 | 1615953 eurusdog
    eurusdog's picture

    Gold moving up as the DJI and SP move up. I think there is no faith in those to moving higher.

    Tue, 08/30/2011 - 14:35 | 1615955 nobusiness
    nobusiness's picture

    I fought the Fed and the Fed won. Bernacke said talking was a tool the Fed could use.  He has now put a safety net below the market.  if data is bad he acts if good  keep rates low.  Only worry is inflation which either noone cares or if you buy real estate or commodities is great.  If you use or consume commodities your fucked.

    Tue, 08/30/2011 - 14:37 | 1615965 Dr. Engali
    Dr. Engali's picture

    Missed it by that much.                                       

    Tue, 08/30/2011 - 14:41 | 1615983 Aductor
    Aductor's picture

    The greatest nation in the world cannot remove the training wheels. More of the same - how proud the teleprompter must be.

    Tue, 08/30/2011 - 14:41 | 1615984 sabra1
    sabra1's picture

    if you're long or short the markets, the huge intraday moves guarantees your stops will be taken out! it's so you cannot even leave your monitor for a second! i'll just pee right here!

    Tue, 08/30/2011 - 15:03 | 1616057 JohnG
    JohnG's picture

    You don't already have a monitor in your bathroom?  That way, I can run to the head, barely miss a tick.  Scares the dog when I jump and run though......

    Tue, 08/30/2011 - 14:42 | 1615989 Stuart
    Stuart's picture

    QE3 is a lock. 

    Tue, 08/30/2011 - 14:44 | 1615996 adr
    adr's picture

    Without deflation even moderating inflation means we are stuck paying more forever. With wages going the opposite way it appears the only path to income growth is the stock market. hey tried housing as the only path to wealth generation and look how that played out.

    What kind of country do you have when there is no incentive to work but to just put your money in the stock market and watch it double every year.

    It is amazing that what the MSM says about the stock market is exactly what they said about housing. It can't go down, even if it does drop it is just a small correction before going higher, your investment will double every few years, it isn't high risk if everyone is playing the game.

    An average American says, man gas went back up to $3.85 and I don't know if I can afford to drive to work.

    A Wall Street vampire says, man gas went back up to $3.85 and I am going to make a killing on my freighter of oil I've been storing for the past two years.

    What is bad for main street is good for Wall Street as long as the government backstops the market and provides welfare for the new dependence class to purchase goods. The SNAP card has been the biggest boon for grocery stores in the history of this counry. If they were bad for business they wouldn't accept them. The truth is an unemployed family on SNAP will spend far more than a working family. An unemployed family will seek more healthcare than a family that has to pay for it. Katrina showed that a disaster benefits Best Buy more than Home Depot since more FEMA cards were used for flat screen TVs than screen doors.

    Tue, 08/30/2011 - 16:51 | 1616546 bid the soldier...
    bid the soldiers shoot's picture

    "Without deflation even moderating inflation means we are stuck paying more forever"

    If by 'forever' you mean till we die, yes.

    Tue, 08/30/2011 - 14:47 | 1616006 Tense INDIAN
    Tue, 08/30/2011 - 14:53 | 1616029 rubearish10
    rubearish10's picture

    Despite the extended upcoming meeting, does anyone suspect a pre-announcement???? I wouldn't put it passed them.

    Tue, 08/30/2011 - 16:48 | 1616531 bid the soldier...
    bid the soldiers shoot's picture

    You coulda bet the farm on QE3 when QE2 expired.

    Tue, 08/30/2011 - 15:04 | 1616059 no2foreclosures
    no2foreclosures's picture

    You know what's really interesting and telling is that these dozen or less people determine the fate of trillions of dollars of market reaction and they spend less than 24 hours to "make" such decisions.  Now, they are going to spend 2 days to do so in September?  WTF?  "Forward guidance language"  Are they priests or banksters?!?

    Tue, 08/30/2011 - 15:40 | 1616218 Aductor
    Aductor's picture

    Is there a difference? I guess "they" are not the only ones involved in forming the decision.

    Tue, 08/30/2011 - 16:04 | 1616338 MarcusLCrassus
    MarcusLCrassus's picture

    "Are they priests or banksters?!?"

     

    >implying there's a difference

    Tue, 08/30/2011 - 15:12 | 1616088 gwar5
    gwar5's picture

    $1.5 Trillion in chronic yearly deficits is gonna take a lot of money printing, no matter how much they 'fret' they don't want to. So shut up and start printing already. 

     

     

    Tue, 08/30/2011 - 15:49 | 1616262 Little John
    Little John's picture

      Too dang bad the fed cain't print factories.

    Tue, 08/30/2011 - 16:45 | 1616513 bid the soldier...
    bid the soldiers shoot's picture

    Or  piss crude oil

    Tue, 08/30/2011 - 16:00 | 1616297 sasebo
    sasebo's picture

    What makes these useless assholes think we need them? They could stay home for the rest of their terms & who would give a shit?

    Free markets my ass. Socialism.

    Tue, 08/30/2011 - 16:43 | 1616503 bid the soldier...
    bid the soldiers shoot's picture

    GOT QE?

    Tue, 08/30/2011 - 16:44 | 1616506 Random_Robert
    Random_Robert's picture

    Apparently Madoff is in prison only because he chose to run his Ponzi independently...

    Had he formed a commitee of regional ponzi-point-persons... he just MIGHT have gotten away with it.

    Tue, 08/30/2011 - 18:54 | 1616907 Anonymouse
    Anonymouse's picture

    A serious question if I may.

    I know the dollar (like all currencies) is a fiat currency.  But, I'm assuming that there is at least some relationship between the value of the assets on the Fed's balance sheet and the value of the dollar.  Otherwise, why hold any assets at all.

    If the Fed increases the duration of the assets, they are increasing the risk to the balance sheet. 

    It seems to me there is not much room for rates to go down (especially if you need to keep the banking model of borrow short - lend long profitable).

    If so, then the additional risk is to the downside of the balance sheet, not the upside.

    So if rates rise at some point for whatever reason, then the value of the balance sheet would fall.

    So the dollar would weaken as a result.

    Presumably, if rates rise, the dollar normally would strengthen, but that would be offset by the signifiant decline in Fed asset values.  And the longer the duration of those assets, the greater the negative impact.

    Is that off-base?  I have seen no discussion of this aspect of operation twist.

    Tue, 08/30/2011 - 20:20 | 1617104 DollarDive
    DollarDive's picture

    How low do these wipes want interest rates to go..... ?????  Do they actually think that moving the 30year from .00001 to .000005 will make a bit of difference in the economy ? Cut the shit.  These dinks should all be fired and made to go clean toilets.  The money they make toiling over these ridiculous decisions and posturing adds nothing to the real economy.

     

    Bens been predicting that we'll beging to see a modest recovery

    2008

    2009

    2010

    2011

    2012

     

    A broken clock is right a least twice a day.......

    Mon, 09/05/2011 - 09:32 | 1634022 shacai
    shacai's picture

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