This page has been archived and commenting is disabled.
Bill Gross Summarizes Main Street's "Benefits" From QEternity
The old 'new normal' bond guru succinctly sums up Bernanke's failed logic with QEternity in 80 characters...
Gross: Fed buys Mtges but banks fail to pass through lower yields to future home buyers.
— PIMCO (@PIMCO) September 21, 2012
»
- 9245 reads
- Printer-friendly version
- Send to friend
- advertisements -
30 year treasury is 3%, and the credit card rate is 24.99%. talking about the benefit to the main street.
Don't play their game until you get their terms...[when you can borrow at 0% and value all your assets at whatever myth you like]
Bill Gross is lying as usual. Mortgage rates are at all time lows:
http://mortgage-x.com/general/historical_rates.asp
Furthermore, this is specifically due to the wise and well-though-out actions of both our congress and our Federal Reserve.
Banks now view lending as the riskiest thing they do. Better to charge fees for deposits and buy TSY's with their 0.00% cost of borrowing. As a 25+ year loan officer, I can honestly say they'll only make a loan when they can't find any way out of it.
It's never about "trickle down" in credit.. that only happens when real wealth proliferates.
Main Street benefits from QE the day .gov allows the citizenry to take money from 401ks tax (or at least penalty) free to buy these cheap foreclosed houses. With the inflated equity markets right now and the depressed homes, it makes sense and would boost the 'failing cylinder' of the economy. Done and done.
"Furthermore, this is specifically due to the wise and well-though-out actions of both our congress and our Federal Reserve."
That comment alone should get you strung up and beaten with tire irons until you ooze puss and have every bone in your body broken multiple times.
Try harder MDB, had to junk you this time
It wasn't his best work. Still a junk seems overly harsh for a joke that lacked its usual wit.
That's rich. MillionDollarBonus_ is calling someone else a liar. I mean really... it's like the pot screaming at the kettle in the Grand Canyon.
Damn shame, turning to racism like that - http://img140.imageshack.us/img140/8338/potkettleblogrl6.jpg
Thats so damn true!!!!!!!!!!!!
Of course it is. It's how bank bailouts work.
I have a couple of friends who are trying to get mortgages right now. They have the down payment. They have the income, but the banks keep giving them the run around and one guy was mysteriously just denied a mortgage.
Why do we need banks if they are not going to lend to qualified buyers?
Do we need them so desperately to use their resources to prop up the stock market, prop up commodity prices and prop up foreign countries. Pretty much everyone I know is a better credit risk than any of the current governments. They all have assets. They all have income and they are not already massively in debt.
Your friends may have done this already but I strongly recommend small, local Credit Unions. I know a couple of families that were turned down for mortgages by banks and were picked up by credit unions. I've stopped using banks entirely after it took us months, literally months, to get our mortgage in our hands after we paid off the house. Chase could not locate the damned piece of paper, they had no fucking clue who owned our mortgage. It took a fucking threatening letter and multiple trips to the bank before they found it and handed it over. Pieces of shit, every one of them.
What the bank gave you is not real. Your mortgage was already sold 4x to the FED.
After our struggles with Chase, I wanted that piece of paper in our hands. Our victory was a small one, perhaps. No mortgage ever again and nothing whatsoever to do with banks. I realize we are still getting fucked by them, but I don't have to bend over to take it. Our ownership paper is framed and in the front hall. Our credit cards have long since been destroyed and trashed. Sadly, its the closest I will ever come to feeling free.
PS. I tried to give you a plus one because you're right. Clicky is not working, though.
No banks? Are you advocating tanks in the streets?
It's easier to get some of those tanks than to knock out any of the criminal banks when they own everything using forged documents, printed money and bribes.
Banks did them a favor. It's too early to buy houses.
High prices OR high interest. Didn't see that coming.
Here's what's amused me about this process in a sick way. Banks borrow at 0%, lend out with credit card rates up to 19.99% they're still fucking broke! Not just broke but trillions of dollars in the hole, hundreds of trillions. How could it happen? This is the funniest and most expensive soap opera in the history of humanity.
It's because they funnel any "profits" into their personal bank accounts while the corporation itself atrophies into a ward of the state.
I don't think they're broke at all. Millions of lines of credit were destroyed during the recession. They will not be resurrected nor re-invented. The banks are not doing business. They are punishing savers and not providing consumers with the credit they need, yet money continues to flow like a swollen river to banks. They are not investing it, they are not extending it. They are hoarding it. The Fed has convinced a lot of stupid, gullible people that the reason the banks are not lending is due to liquidity problems which is laughable. Bernanke has one response to banks - or you're not lending, must be because you either don't have the capital or the bad citizens are saving and not applying for credit. None of this, not one single piece of policy or machination by the Fed, has increased the velocity at which money is exchanged. Maybe after the US applies to Zimbabwe for a loan it will dawn on them that there is link failure between increasing liquidity and velocity.
Banks are lending, albeit with some stricter underwriting...the consumer demand side is just not there. That's what happens with high unemployment and wealth destruction via the housing and stock collapse. Stocks have roared back and now the fed is trying to goose the housing market to induce a wealth effect. Will it work? maybe, but there will be some collateral damage(the very poor) for years to come and the gap between the haves and have nots will continue to grow.
Business credit is also booming-Have you seen HY lately? People are tripping over themselves for yield. But I wonder what exactly businesses are using the $ for. Is it growth or just Refi's for massive debt taken on in the last 10 years?
"Not just broke but trillions of dollars in the hole, hundreds of trillions"
would love to see the numbers to back this hyperbole up.
Derivatives, full stop.
derivatives do not = broke, despite what your ZH stuffed mind tells you.
http://www.zerohedge.com/news/707568901000000-how-and-why-banks-increase...
Derivatives outweight the total currency amount in the WORLD. Someone somewhere fudged the numbers in. No one can owe more money than has ever actually existed unless it's fraud.
Nobody gives a shit about future home buyers. Maybe they can buy into the meteoric rise in multi-family rental properties. Its all about the banks. Every single fucking thing Bernanke does is for the banks; its Wall Street not Main Street.
Wasn't it Bill Gross buying up mortgages the last 18 months or so?
Anyway, re: Fed, we all know the difference between stated aims and true aims.
this because the fed is not charging the banks a higher rate on the money the banks have on had. fed charges more interest on those funds forces the banks to lend the monies out. at least that is how it worked for decades.
How about QE-MBS sucking the yield and risk out of agency MBS so that it prices like Treasuries? This forces risk averse investors into more risk taking,
Thanks Ben, you fool.
http://confoundedinterest.wordpress.com/2012/09/20/mortgage-rates-and-risk-fall-fall-after-the-feds-mbs-announcement/
The Fed has bailed out his stupid trading on bonds as well. He is no different than any bank entity that bought these mortgage backed securities. Pimco is selling all this toxic crap back to the Fed so now he can make his money on the trade. Bernanke has broken this market with his crony nonsense and there is no other outcome possible but an eventual collapse. We know it and you all know it as well. We just don't know when.
Look at the Dow transportation index. In any other quasi free market this would be forecasting an immediate Dow drop. The only way this does not happen is with central planning doing the trading. Bernanke should be jailed along with all the rest for his ruinations on the capital markets.
I'm not applying this to you Everybodys, but people sometimes forget the Fed is a private bank. On a functional level there are differences between how it operates versus other banks primarily because our entire economy has been handed over to the Fed to play Mad Scientist with. As a private bank, its primary business relationships are with other banks and entities like hedge funds, it is NOT with people. Its interests are expressed in policies designed to float and enrich private banks of which it is one. This is tantamount to enacting a policy that states only politicians can vote. We can't even agree on an audit without stimulating vapors in the audit opponents. Its as safe and secure as any private bank could be in the full history of mankind.
If the banks fail to pass through lower yields then the Fed should double the buys up to 84b/month. And if they fail again it should double again, 170b/m, etc., until the banks lower the yields by at least 1-2%.
Main Street's Benefits from QEternity for Dummies
If banks would lower rates, my MBS port would rock.
Signed,
Bill Gross, Jr.
I dont think any body, present company excluded, undertsands the 40 billion per month is going to turn into 400 billion per month in derivatives at a minimum.
and then derivatives go boom!
say goodbye to your downpayment and all the payments you've made when you can no longer pay the mortgage due to currency deval
unbeknownst to you, your mortgage was sliced and diced into various tranches and sold off to a hedge fund
Mortgage meltdown 2.0
say hello to your new landlord Uncle Fed when you get foreclosed upon and Uncle rents your house back to you for the rest of your slave life here on Prison Planet Earth
Humanity, please wake the fu$k up!!!!!
Bill Gross and Mohammad El-Arian probably read Zero Hedge everyday.. And see if any of their twitter updates make it on ZH or Morning Surveillance/the rest of Bloomberg.
Spanky Bernanke's Hanky Panky
I for one am shocked to learn that the Fed's QE4EVUH program would line the pockets of its member bank-owners!
When they call it 'housing' instead of 'living', you should know there's something wrong.