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Bill Gross Was Right: Fed Board Member Tarullo Calls For Restart Of MBS Monetization

Tyler Durden's picture





 

When we first reported on Bill Gross' massive surge in duration and accelerated purchase of Mortgage Backed Securities a week ago, we said, "That's either what is called betting one's farm on Operation Twist, or, betting one's farm that the next thing to be purchased by the Fed in QE3 or QE4 depending on how one keeps count, will be Mortgage Backed Securities." It was the letter. Confirmation that Bill once again frontran the Fed comes courtesy of Daniel Tarullo who in a speech at Columbia University, talking about the labor market of all things, just said the following: "I believe we should move back up toward the top of the list of options the large-scale purchase of additional mortgage-backed securities (MBS), something the FOMC first did in November 2008 and then in greater amounts beginning in March 2009 in order to provide more support to mortgage lending and housing markets." And there you go: watch as the market rips on the expectation that the US will bail out China all over again. Oh wait, at this point China couldn't care less what happens to the GSEs stack. So unfortunately as can be expected, this is nothing but yet another bailout of US banks, which lately have been buying up MBS like crazy (Gross is not the only one with the hotline), and expecting to flip right back to Brian Sack: after all something has to be done to save the poor things from a total pancaking of the Treasury curve.

The relevant section from Tarullo's just released speech (full thing can be found here).

Within the FOMC and in the broader policy community, there has been considerable discussion of possible additional accommodative measures, from communication strategies such as forward guidance on the likely path of the federal funds rate to additional balance sheet operations. I believe we should move back up toward the top of the list of options the large-scale purchase of additional mortgage-backed securities (MBS), something the FOMC first did in November 2008 and then in greater amounts beginning in March 2009 in order to provide more support to mortgage lending and housing markets.

In November 2010, when the FOMC initiated another large-scale asset purchase program, only U.S. Treasury securities were involved, in large part because of a desire to return, once the recovery was well established, as quickly as possible to a Federal Reserve balance sheet that did not contain other kinds of assets. A related concern of some was that the purchase of MBS was a form of credit allocation, rather than simply monetary policy that lowered long-term rates for all borrowers. For similar reasons, the proceeds of agency securities accumulated pursuant to the first large-scale asset purchase program were reinvested in Treasury securities rather than in other agency securities.

At the September FOMC meeting, we changed our reinvestment policy so that the proceeds of maturing agency securities will now be reinvested in new MBS. Yields on longer-duration Treasury securities had trended down appreciably in the late summer in response to market demand, safe-haven flows, and diminishing expectations for growth. Even though nominal MBS rates had also declined somewhat, spreads to Treasury yields had, over the course of the year, widened noticeably. Since this announced change in reinvestment policy, spreads on lower-coupon MBS have narrowed, but they remain higher than they were early this year.

A large-scale MBS purchase program has many of the benefits associated with purchases of longer-duration Treasury securities, such as inducing investors to shift to other assets, including bonds and equities. [translated: everyone go into high beta stocks right now] But it could also have more direct effects on the housing market. By increasing demand for MBS, such a program should reduce the effective yield on those MBS, which in turn should put downward pressure on mortgage rates. The aggregate demand effect should be felt not just in new home purchases, but also in the added purchasing power of existing homeowners who are able to refinance. Indeed, homeowners who refinance get the equivalent of a permanent tax cut. Concerns about central banks making sectoral credit allocation decisions are understandable in general. But here we are talking about a widely traded instrument in a sector that appears, now more than ever, to be central to the slow pace of recovery.

Now, I should note that the mortgage market is quite segmented. One relatively small group of borrowers has extremely good credit and funds for sizable down payments. That group can readily obtain a mortgage. The other, much larger group lacks one or both advantages, and it faces much greater hurdles in the mortgage market. So there is some chance that the principal effect of renewed MBS purchases would be to allow those in the first group who have already refinanced to do so once again or to buy a new home at a somewhat lower mortgage rate. These outcomes would be helpful, but the effectiveness of an MBS purchase program would be amplified, perhaps significantly, if certain nonmonetary policies were changed.

Proposals for promoting refinancing have been made by many academics, policymakers, and policy analysts. Any proposals that could sensibly and effectively be implemented would increase the effect of an MBS purchase program. For example, action could be taken to bring the benefits of refinancing to underwater borrowers. In principle, borrowers with mortgages that are guaranteed by government-sponsored enterprises (GSEs) such as Fannie Mae and that have loan-to-value ratios of up to 125 percent can refinance through the Home Affordable Refinance Program. In practice, though, numerous obstacles have kept the program from helping many potentially eligible borrowers. Underwater borrowers whose loans are not guaranteed by GSEs are essentially unable to refinance at all. Policy changes directed at this last, larger group of homeowners would have to be carefully designed so as not to transfer credit risk from private investors to the government, and could well require legislation.

Needless to say, though, an MBS repurchase program will not cure all that ails the housing market, much less fill the whole aggregate demand shortfall. There is a host of other problems, including continuing issues in mortgage servicing, uncertainty as to when house prices will have bottomed out in local markets, ambiguity about the scope of putback risk for securitized mortgages, and the substantial part of the underwater mortgage problem that cannot be solved by refinancing. But I believe that MBS purchases are worth considering as a monetary policy option precisely because they carry the promise of addressing the feature of the current aggregate demand shortfall that differs from typical recessions and recoveries.

***

Look for Bill to have bought much more MBS when the October TRF update is released. The good thing out of all this: Jan Hatzius can finally shut up about Nominal GDP targetting, a topic so stupid we have been ignoring it on purpose. Instead, the Goldman economist can now redouble his efforts on pitching MBS monetization as the one greatest thing to save Goldman bonuses for 2012 (2011 is a screatch), er... we mean, tax-break for the middle class.

 


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Thu, 10/20/2011 - 18:18 | Link to Comment AldoHux_IV
AldoHux_IV's picture

I wonder how many shares of XLF that weasel Tarullo owns.

Thu, 10/20/2011 - 18:30 | Link to Comment anynonmous
anynonmous's picture

MBS is just part  1, here's the second leg of Campaign 2012 under the heading free houses for all:

 from the above above "if certain non-monetary policies were changed...For example, action could be taken to bring the benefits of refinancing to underwater borrowers "

 

 

Thu, 10/20/2011 - 18:59 | Link to Comment Quixotic_Not
Quixotic_Not's picture

And all the OWS sheeple shouted hooray!!!

http://meyerisland.wikispaces.com/file/view/demotivatorion_poster_for_An...

Little pink RMBS slips for you and me...

Thu, 10/20/2011 - 20:12 | Link to Comment max2205
max2205's picture

Somebody please check the serial #'s on these MBS. Holy fuck, how many times can the fed buy the same thing. This is out of control

Thu, 10/20/2011 - 20:48 | Link to Comment macholatte
macholatte's picture

I want to buy some. How do I do it?

Thu, 10/20/2011 - 20:50 | Link to Comment macholatte
macholatte's picture

Is this bullish for Freddie & Fannie?

Thu, 10/20/2011 - 21:56 | Link to Comment Shock and Awe
Shock and Awe's picture

I do hope so.

"China couldn't care less what happens to the GSEs stack".

We have many fleets of fighter jets to build so time to pay up sucka's. hehe.

Fri, 10/21/2011 - 10:26 | Link to Comment eureka
eureka's picture

Yeah, right - and if only China had the balls - it would dump it holdings of US garbage paper, cash and bonds on the world market - and destroy US empire in a day

they're gonna get fucked anyway, so why don't they... - are you reading this, China?

which brings me to RE "expectation that the US will bail out China all over again"... WTF...?  The whole world has been bailing out the US Empire Elite Fuck-Scum for the past two generations... get the facts straight, Tylers - US doesn't bailout anyone, rather it takes from, and gets bailed out by, everyone else - all which, of course, only benefits the US EMpirial Elite, and not the 80% of US'ians, who make the US domestic slaves.

Thu, 10/20/2011 - 19:33 | Link to Comment knukles
knukles's picture

That very proposition was outlined on the front page of the WSJ several days ago.
Actually mentioned that it might not be any too fucking popular with folks still paying their mortgages....

Thu, 10/20/2011 - 20:51 | Link to Comment centerline
centerline's picture

Funny how the divide and conquer comes back to haunt them.  Now, whichever way they turn, there is moral hazard and a pissed off group of people with the power, if motivated, to fuck things up pretty bad.  Nothing would be more spectacular that a mass rejection of debt by the millions upon millions who are still paying and finally get confirmation that the golden ticket is "not" to pay.

 

Thu, 10/20/2011 - 23:16 | Link to Comment IndicaTive
IndicaTive's picture

Like me.

Fri, 10/21/2011 - 07:06 | Link to Comment WatchnSee
WatchnSee's picture

That is the plan Steven Lerner (former SEIU, now OWS rabblerouser and Obummer marxist) layed out a year ago. Only a matter of time now.

Fri, 10/21/2011 - 10:40 | Link to Comment eureka
eureka's picture

NO NEED FOR TPTB TO DIVIDE AND CONQUER - US'ians were never unified - rather, they hate each other - ref.: "the culture wars", the ideological divide between liberals and right wingers, between old-cons and neo-cons, isolationists and globalists, hegemons and producers... etc etc etc

the cult of individualism gone icon-worship... versus aimless collectivist consumption... and gone is classical values, classical education and classical morality - i.e. any real consciousness... because the US itself is too big to fail and thus needs to be bailed out by the rest of the world - and for that, one has Empire, that is to say, The Elite has Empire - and the 80% mass of US domestice slaves follow blindly and serve their masters, while squabling over the insignificant symbols of division....

it is - your own fault, US'ians - for being so fucking, pathetic nitpicking, knucleheads...

 

Thu, 10/20/2011 - 19:36 | Link to Comment SwingForce
SwingForce's picture

Is Kassie back to $13 yet? "BUY MY BOOK! Back to Under, I'm Jim Cramer Buy Bank of America at $14"

Buwahahahahahahahahahaha.............

Thu, 10/20/2011 - 19:50 | Link to Comment Widowmaker
Widowmaker's picture

None, because not one lying cheating sack of Chinese shit saw it coming.

Thu, 10/20/2011 - 20:03 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"And there you go: watch as the market rips on the expectation that the US will bail out China all over again. Oh wait, at this point China couldn't care less what happens to the GSEs stack."

Lest we forget: China decided to dump GSEs when the US Gov refused to put "Their Full Faith and Credit" behind them. I know, it seems like ancient history now... But this CRS Report was issued Sept 12, 2008... Page CR5 contains these less than crystal clear observations...

"Who Invests in the GSEs? There is little information available about who

holds GSE stock, bonds, and MBS. The Fed reports statistics for combined

ownership of government agency and GSE debt and GSE MBS. At the end of 2007,

non-United States investors held $1.479 trillion of $7.397 trillion. Other large

investors were U.S. commercial banks ($929 billion), life insurance companies ($388

billion), state and local government retirement funds ($317 billion), mutual funds

($566 billion), asset-backed securities issuers ($378 billion), and the GSEs

themselves ($710 billion).

?Full pdf link here... Lots of interesting misinformation tucked away in this link.

?http://fpc.state.gov/documents/organization/110096.pdf

Thu, 10/20/2011 - 21:09 | Link to Comment sgt_doom
sgt_doom's picture

Great timing re: the content of this posting:

http://dailybail.com/home/bombshell-massachusetts-supreme-court-rules-that-most-forecl.html

BOMBSHELL -- Massachusetts Supreme Court Rules That Most Foreclosure Sales From Previous 5 Years Are Void

No need to convince me......

Thu, 10/20/2011 - 23:42 | Link to Comment doomz78
doomz78's picture

QE to infinity and beyond..   They are putting make-up on Courtney Love.  But it's still her.  With the red lipstick all over her cheeks.  Maybe she just needs more. 

Thu, 10/20/2011 - 18:19 | Link to Comment Shirley Wilfahrt
Shirley Wilfahrt's picture

No Banker Left Behind

Bitchez!

Thu, 10/20/2011 - 20:39 | Link to Comment ragequit
ragequit's picture

Muad'Dibernak: LET THE SPAM FLOW

Thu, 10/20/2011 - 23:35 | Link to Comment Killer the Buzzard
Killer the Buzzard's picture

He who controls the Spam, controls the universe.

Thu, 10/20/2011 - 18:21 | Link to Comment Piranhanoia
Piranhanoia's picture

Betting on MBS, but going long!   HAHAHAHAHAHAHAHAHAH

Thu, 10/20/2011 - 19:31 | Link to Comment knukles
knukles's picture

If one wants to add duration, one does NOT fucking use Mortgage Backeds for 2 very important mathematical reasons.
1.) The average MBS's duration is so far short of the duration space of a long treasury that they don't even make apples and used condoms comparisons.  Black and white.  Not even a Kettle and Pot Black Relationship.  So if it was a decline in long rates Billyboy was looking for, he'd a bought 30 years.
EOC (as in end of conversation)
2.) The math of MBS is such that they have a mathematical characteristic known as Negative Convexity, which means that as rates move, the greater the move, the duration effect is actually defeated by other mathematical principles.  MBS's best world is one of rising rates, not falling.

So.... Billyboy didn't buy this shit in anticipation of Operation Twist.  (As in "do the twist" would have excluded the ownership of Mortgages and in fact demanded a barbell portfolio for any given duration target... barbell like cash and 30's....
My own opinion, guess, hunch is that Pimpco has an inside track with TPTB (as this just goes to further sort of enshrine) and they knew that was gonna be a topic discused and floated.
Talk about having Somebody Big Fucking Time Charlie Talk Your Book For You. 

Hah!

Thu, 10/20/2011 - 19:39 | Link to Comment SwingForce
SwingForce's picture

Or buy their own fund ZROZ.  They are shaking the Eurozone tree.

Thu, 10/20/2011 - 20:13 | Link to Comment riley martini
riley martini's picture

 Full  Front page of Barrons today in bold type "BUY THE BANKS " all of them. Looks like Bill isn't the only inside fascist.

Thu, 10/20/2011 - 20:57 | Link to Comment centerline
centerline's picture

Bill has his lips wrapped around what?  What a shock.  LOL.  IMO, the catestrophic blow will come when the pension funds are wiped out.  Keeping Bill in the game keeps the lid on things - for now.

Thu, 10/20/2011 - 18:21 | Link to Comment Henry Chinaski
Henry Chinaski's picture

communications strategies = more lies

Thu, 10/20/2011 - 18:23 | Link to Comment buzzsaw99
buzzsaw99's picture

By increasing demand for MBS, such a program should reduce the effective yield on those MBS, which in turn should put downward pressure on mortgage rates...

 

They love to say shit like that.

 

By increasing demand for MBS, such a program should increase the price on those MBS, which in turn would hand the front-running banks an easy profit thus ensuring bigger bonuses...

 

Fixed it.

Thu, 10/20/2011 - 19:08 | Link to Comment SwingForce
SwingForce's picture

And yet banksterz STILL not issuing new mortgages!

Buwahahahahahaha

Thu, 10/20/2011 - 19:50 | Link to Comment knukles
knukles's picture

"They" just do not fucking undersatnd that we are in a liquidity trap in the classic of the classic economic sense and that the only way out is regardless of how much money one jams into the system, people aiont' gonna borrow until they see an opportunuity accompanied by an increase in confidence.  Which is not a component of monetary policy...
That's a Job for Suoerman and the Daily Planet
(pretty good analogy to the PTB and media....  LOL... best of luck, don't lie in the sun too very fucking long..) 

Thu, 10/20/2011 - 18:30 | Link to Comment JustObserving
JustObserving's picture

Was Twist QE3 and this will be QE4? Luckily for the Fed, the number set is infinite.  The Debt monster is insatiable.

Fri, 10/21/2011 - 00:47 | Link to Comment nyse
nyse's picture

What is the point of even counting them anymore? 

Thu, 10/20/2011 - 18:26 | Link to Comment Belarus
Belarus's picture

They can't announce LSAP until Europe explodes, right?

Thu, 10/20/2011 - 18:32 | Link to Comment Manthong
Manthong's picture

If they let Europe detonate and the US market tank 30-40 per cent, they could do anything their evil, little hearts desire.

Thu, 10/20/2011 - 18:27 | Link to Comment Tic tock
Tic tock's picture

Or, the purchase of MBS is a cheap way of buying the other Bank assets, in the fairytale where they once implode...

Thu, 10/20/2011 - 18:31 | Link to Comment bogey4
bogey4's picture

Bill Gross is so good at front-running that his Total Return Fund has underperformed his benchmark by 460 bps this year to date and underperform 90% of comparable funds.

How's that for "front-running?" 

 

 

Thu, 10/20/2011 - 18:33 | Link to Comment Tyler Durden
Tyler Durden's picture

At $245 billion in AUM? Pretty damn good.

Thu, 10/20/2011 - 18:44 | Link to Comment kito
kito's picture

i thought one was only as good as his last trade? 

Thu, 10/20/2011 - 18:53 | Link to Comment Shirley Wilfahrt
Shirley Wilfahrt's picture

Dear Fellow 99%er,

Have you seen this?

http://www.youtube.com/watch?v=AtgfzzwoyK4

Thu, 10/20/2011 - 23:22 | Link to Comment DaveyJones
DaveyJones's picture

so goddamn true

Thu, 10/20/2011 - 20:29 | Link to Comment disabledvet
disabledvet's picture

i thought he had a trillion aum? I guess things really are shitty. During the biggest bond rally relative to equities since "the 19th century" no less. Perhaps if he hung of picture of Queen Victoria on his wall that would help "channel the correct vibes."

Thu, 10/20/2011 - 18:54 | Link to Comment buzzsaw99
buzzsaw99's picture

Ever since Bill Gross said this:

 

http://www.zerohedge.com/article/did-bill-gross-just-confirm-live-tv-he-...

 

he hasn't done so well. Like J. Paulson, once the criminal collusion stops they perform worse than average.

 

 

Thu, 10/20/2011 - 20:33 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Right you are BuzzSaw99...

And if one reads about the life of Keynes, one finds that the same happened to him when he lost contacts in high places... Like most, Keynes did not see the crash of 1929 coming and lost a fortune...

"Ten Great Economists from Marx to Keynes" Joseph A Schumpeter

I like this book because it was written in 1952 and filled with the prejudicies of that era... not the current prejudices

 

Fri, 10/21/2011 - 00:52 | Link to Comment ReactionToClose...
ReactionToClosedMinds's picture

will eventually go out and buy then read this on your highlight just now.   Schumpeter is one of the great unheralded minds of the 20th Century

Thu, 10/20/2011 - 18:33 | Link to Comment lizzy36
lizzy36's picture

Even better Fed mouthpiece Hillsenrath (WSJ) just announced this being considered:

Federal Reserve officials are considering a new program of buying mortgage-backed securities to boost the ailing economy, though they appear unlikely to move swiftly in this direction.

The idea would be to target any new efforts from the central bank at the parts of the economy that are most severely impeding a recovery--the housing and mortgage markets--by working to push down mortgage rates.

Lower mortgage rates, in turn, could encourage more home buying and mortgage refinancing, and help the economy more broadly by freeing up cash for consumers to spend on other goods and services. Moreover, Fed officials believe their past purchase programs helped to lift stock markets, by driving investors from low-risk investments toward riskier investments.

In the dictionary beside the defination of insanity is the FEDERAL RESERVE crica 1990-2012.

Thu, 10/20/2011 - 18:35 | Link to Comment Tyler Durden
Tyler Durden's picture

In other words, Hilsenrath just did what he always does: pitched verbatim what Tarullo said, with an article ready to go as soon as the embargo was lifted, with the data in hand weeks earlier, and in the meantime may or may not have told friends and neighbors of just what was happening.

Thu, 10/20/2011 - 18:38 | Link to Comment jdelano
jdelano's picture

If this happens I will join ows.

Thu, 10/20/2011 - 18:46 | Link to Comment NotApplicable
NotApplicable's picture

Where you will find them dancing in the streets at their "win" for the little people. So, you might as well smack yourself upside the head now, and get it over with.

In other news, our local occupation is down to a couple of people guarding all of the stuff that's beginning to pile up.

Thu, 10/20/2011 - 18:56 | Link to Comment jdelano
jdelano's picture

Id be a little less cavalier about mocking ows, unless it's because it scares you. It certainly worries me a bit. Right now ows is in it's adolescence--still ungainly and awkward, but when highly intelligent, established folks start joining their ranks the movement will evolve, producing a Trotsky or a Lenin, factions will grow and radicalize like some recursive virus, and when it starts to get really ugly out there you'll look back and curse yourself for a fool asking "how did I not see this coming?"

Thu, 10/20/2011 - 19:17 | Link to Comment Quixotic_Not
Quixotic_Not's picture

the movement will evolve, producing a Trotsky or a Lenin

No worries, it took 19 years from the Marxist Russian Social Democratic Labour Party formation to the October Revolution, so I'd say we've got at least 19 months (extrapolating for advances in technology, and the proliferation of sheeple in 'MeriKan culture) before the next Clinton, Dubya or Obummer show up...

With that in mind, the trend remains solidly in place:  TBTF/TPTB will continue exponention growth of ALL debt until economic collapse...

Trade/prepare accordingly - Do not believe rumours that ANYTHING will *STOP* CBs on the quest for the Holy Grail.

Everything else is just smoke, mirrors and braking wind!

Thu, 10/20/2011 - 20:08 | Link to Comment B9K9
B9K9's picture

Yep. Everything else, including the daily profusion of articles, debates, analyses, et al (ZH being one of the chief culprits), is all noise. All one has to understand is that the debt-money system will be defended down to the last clueless soldier in service of their true masters.

My advice has been fairly consistent: stay long the Empire, while preparing for its eventual demise. Attempting to short the PTB before it is time is suicidal. Discard obsolete sentiments like the 'rule of law', or that old chestnut "representative republic" and focus on what's really happening.

When its apparent the wheels are about to come off, then it's the time to finally get out of Dodge and bet long sustainable regions. Whether BC or TX, the name of the game is to avoid the rampaging FSA.

Thu, 10/20/2011 - 20:15 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Agreed, and thanks for the confirmatory reminder...

This OWS bullshit had me wondering if perhaps the Empire was threatened; Obviously nothing could be further from the truth.

Time to turn-down the amount of background noise in my life...

QN Out!

 

Thu, 10/20/2011 - 20:38 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Empires are not threatened until people get hungry... Of course, there are exceptions to the rule.

Thu, 10/20/2011 - 22:04 | Link to Comment i-dog
i-dog's picture

"This OWS bullshit had me wondering if perhaps the Empire was threatened"

If you mean the Globalist Empire, then 'yes' ... if you mean the American Empire, then 'no'. IMO.

I think TPTB wanted to speed things up in the US a little ... because the EU was suddenly coming apart at the seams! - threatening their home base, which they had hoped to expand to encompass the northern African states and the Eastern European states after the fall of the US.

PS. I'm enjoying your posts ... Some sanity amongst the screaming slogans of the well-trained Ds and Rs.

Thu, 10/20/2011 - 20:44 | Link to Comment Stax Edwards
Stax Edwards's picture

Agreed.  I see some new psychological indices coming soon.

Psychology over reality makes Stax a dull boy.

Thu, 10/20/2011 - 21:16 | Link to Comment centerline
centerline's picture

Spoken like a veteran Zh'er.

Probably one of the reason many older posters dont come around much anymore (but are probably in lurking mode).  They see how futile it is to continue to rant and have shifted gears into preparation and enjoying the time we have (oh, our lovely food supply).

ZH is like an early warning system in my opinion though.  Hard to find better seats to the show.

Keep the message coming B9K9.  People need to hear it.  The current system is mathematically flawed.  It it is a ponzi scheme built on greed, the industrial age and cheap oil.  It is in its final throws now.  There have been too many promises that cannot be kept.  Too many lives that are dependant on those promises.  When the system goes down, the chances that things get ugly and stay ugly for an extended period of time is... significant.  We are not immune from what has happened in the past (history).  In fact, we are the perfect damn example waiting to happen!  Maximum social complexity meets failing economics and government corruption.  A wonderful experiment gone wrong.  This of course is on top of global pressures and continuing cold war hostilities, etc.

My fear is the when the wheels come off - getting out of dodge will not be possible without undue risk.  Contingency plans needed.  IMO, "like" individiuals.  Start building a "team" now.   ZH tattoos anyone?  LOL.  At least then we can identify each other in the FEMA camps.

 

Thu, 10/20/2011 - 22:16 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Tatoos, hmm, I like it, now back to lurking...

Thu, 10/20/2011 - 23:29 | Link to Comment DaveyJones
DaveyJones's picture

nice, in a sick way, its comforting

Fri, 10/21/2011 - 07:10 | Link to Comment Xinu
Xinu's picture

"ZH is like an early warning system in my opinion though.  Hard to find better seats to the show."

Yeah, I don't have much to add to discussions, but I read ZH several time a day and that is why.

Thu, 10/20/2011 - 19:16 | Link to Comment Melin
Melin's picture

Who hasn't "seen this coming?"  It's inevitable but still highly, highly mock-worthy.

Thu, 10/20/2011 - 19:20 | Link to Comment Troll Magnet
Troll Magnet's picture

I agree.  I was stunned by the crowd's reaction at the last GOP debate in Vegas when $9.99 Pizza Boy derided the protesters and basically told them to get a job.  Unless all those idiots in audience were multimillionaires benefitting from our current system, I have no idea why they would take the banker's side.  Ron Paul, as usual, made a lot of sense when he stood up for the victims.  He should really be our President.  Unfortunately, our country is just too fucking stupid to see that.  

Thu, 10/20/2011 - 19:24 | Link to Comment Pegasus Muse
Pegasus Muse's picture

".... when highly intelligent, established folks start joining their ranks the movement will evolve..."

It's already happening ---

Chris Hedges: "This one could take them all down." Hedges on OWS w/ OccupyTVNY -- 10/15/11

http://www.youtube.com/watch?v=Tj8UlxhfJLw

 

Thu, 10/20/2011 - 19:34 | Link to Comment Quixotic_Not
Quixotic_Not's picture

*BURP*

Thu, 10/20/2011 - 19:39 | Link to Comment SwingForce
SwingForce's picture

Itching my ass...

Thu, 10/20/2011 - 19:42 | Link to Comment SwingForce
SwingForce's picture

Itching my ass...

Thu, 10/20/2011 - 19:54 | Link to Comment Quixotic_Not
Quixotic_Not's picture

*FART*

Thu, 10/20/2011 - 20:15 | Link to Comment i-dog
i-dog's picture

"the movement will evolve, producing a Trotsky or a Lenin"

Trotsky and Lenin were trained, financed and sent by TPTB to create what [allegedly "spontaneously"] happened in Russia in 1917. OWS is no different: The leaders are plants and the outcome is already known (aside from unintended consequences - like nobody turning up!). Google "Hegelian dialectic".

If you want to defeat TPTB, you need to do the opposite of what they are expecting you to do. If they use t union leaders to create a [pointless] demonstration, then do the opposite and withdraw all your funds from their banks. If they want your politicians to merge into an even larger "economic and political union", then do the opposite and secede from the one they've suckered you into already. It's simple game theory - best demonstrated in chess and best documented by Sun Tzu 2,500 years ago.

Thu, 10/20/2011 - 20:20 | Link to Comment jdelano
jdelano's picture

Not sure how you missed the implication of "when highly intelligent established folks...".

Or for that matter, the very deliberate choice of Trotsky/Lenin

Thu, 10/20/2011 - 20:37 | Link to Comment Peter_Griffin
Peter_Griffin's picture

If they use t union leaders to create a [pointless] demonstration, then do the opposite and withdraw all your funds from their banks

 

The demonstrators have already proposed this.  Living in a world where you believe everything to be a conspiracy theory must be tough.  Take your skitzo pills and you'll feel alright.

Thu, 10/20/2011 - 21:17 | Link to Comment Gene8696
Gene8696's picture

+1 jdelano

Thu, 10/20/2011 - 19:13 | Link to Comment Melin
Melin's picture

Our local Brookfield Properties' sponsored OWS folk can’t seem to wake up long enough to “protest.”  It’s just the same old camp-out of the local homeless variety except there’s a sign with “Wall Street” and “BS” written on it.

Thu, 10/20/2011 - 19:26 | Link to Comment jdelano
jdelano's picture

Alright. That's actually pretty funny. Guess we can laugh until it isn't anymore

Thu, 10/20/2011 - 19:39 | Link to Comment Melin
Melin's picture

One must always laugh at the laughable.  Anyway, my current government is a far greater threat to my life and livelihood than the under-developed automotons/occupiers. Heck, the occupiers would at least present a fair fight.  I've got zero recourse against Zero.

Thu, 10/20/2011 - 19:37 | Link to Comment Quixotic_Not
Quixotic_Not's picture

In OWS-NY somebody(s) is recuiting the homeless from shelters and busing them in...I shit you not.

Talk about useful idiots!

These come pre-medicated too...

Thu, 10/20/2011 - 18:47 | Link to Comment hambone
hambone's picture

Yeah, but how large is large scale purchases...another $500B...$1.25T...how large over how long are we guessing?

How far can Feds book extend?  Is there any limiting factor?  Seems these "assets" will never be sold off the Feds book and the toxic shit will rot its way to maturity, year after year on the taxpayer back...

Thu, 10/20/2011 - 18:56 | Link to Comment Troll Magnet
Troll Magnet's picture

Why do you want to know these things?  Are you a terrorist?

Thu, 10/20/2011 - 18:59 | Link to Comment Shirley Wilfahrt
Shirley Wilfahrt's picture

How much does it cost to buy the WH for 4 more years?

Thu, 10/20/2011 - 19:04 | Link to Comment Troll Magnet
Troll Magnet's picture

I'd say the livelihood of 20 million more families.  That should probably do it.

Thu, 10/20/2011 - 20:41 | Link to Comment Peter_Griffin
Peter_Griffin's picture

The limit will be found out afterwards, when China finally calls bullshit.

Thu, 10/20/2011 - 18:40 | Link to Comment JustObserving
JustObserving's picture

is Bill Gross his neighbor?

Thu, 10/20/2011 - 18:47 | Link to Comment NotApplicable
NotApplicable's picture

Opposite coast. They communicate via seance.

Thu, 10/20/2011 - 19:40 | Link to Comment knukles
knukles's picture

Fuck no.  Gross wouldn't talk with the O for this type of shit.  The man's a community organizer, not a fucking bond trader for Christ's sakes.  Community organizers have more brains than bond traders.  Billy (no Billi's folks, plausable deniability) talks with his likes/kin in Treasury and the Fed where They (as in PIMPCO) sit on a Treasury committee of outsiders who counsel what approprate policies mignht/should (as in tell the fuckers) be.  The major dealers likewise sit thereupon.  Have conversations over the phone about the important shit, like the weather and spread of Lyme disease from Plum Island, hydroponic cultivation of illicit crops and best places to get Cuban cigars. 

Thu, 10/20/2011 - 18:45 | Link to Comment lizzy36
lizzy36's picture

May or may not have?

My bet is always "may have". My guess is his criteria for whom he "may have told" is not anything as airy fairy as friends or neighbors, but IMHO, whomever offered him the biggest "quid pro quo" bang for his "hunch".

Thu, 10/20/2011 - 19:21 | Link to Comment SwingForce
SwingForce's picture

It wasn't that hard to figure out, and really, where can whale PIMCO go for a meaningful position? That yields more than stocks.....?

Tyler, why do these people think that lower interest rates will get the banks to lend money (at lower rates)?

Wait, sir, I just heard you answer my question (in my head) with another question. OK let me rephrase it:

Why do these morons at The Fed think that we will believe their feeble lies? Do they think we are idiots and can't see through their Nth backdoor bankster bailout? When will sheeple wake up and realize that the Fed only helps BANKS, period. Not People, BANKS. Not homeowners, BANKS. Not depositors, BANKSTERZ.

No need to answer, Tyler, thanks for being there though. I feel better now.....

Thu, 10/20/2011 - 19:37 | Link to Comment Stax Edwards
Stax Edwards's picture

TD, you continue to out do yourself with your uncannily timely and deductive analyses.  Great detective work snooping this out back on the 11th, you sometimes seem almost omnipotent. 

Another feather for the cap.  I'd say, at this point you are apparently sporting a full headdress. 

Thu, 10/20/2011 - 20:31 | Link to Comment disabledvet
disabledvet's picture

"I have you now young Skywalker! What? What?" zap...zap.

Thu, 10/20/2011 - 23:23 | Link to Comment dr.charlemagne
dr.charlemagne's picture

"This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any government that ever existed...The system is private, conducted for the sole purpose of obtaining the greatest possible profit from the use of other people's money"

Representative Charles Lindbergh, Sr

Thu, 10/20/2011 - 18:34 | Link to Comment Mark123
Mark123's picture

This would require a further increase in the Fed's balance sheet though? 

Thu, 10/20/2011 - 18:45 | Link to Comment maxmad
maxmad's picture

hmmmm... Just a little bit!

Thu, 10/20/2011 - 19:44 | Link to Comment knukles
knukles's picture

Just think of it as Zeno's Paradox in reverse.  The bigger the fucker gets, each additional gigatrillion gets to be a smaller and smaller increase in the size of the Leviathian until it subsumes everything and size becomes meaningless...just like cruising trrough midnight on the Zephyr Unlimited after way too much of whatever it was ........

Thu, 10/20/2011 - 18:49 | Link to Comment NotApplicable
NotApplicable's picture

From here on out, everything will require that. They just can't do it all at once though, as it would be too obvious. So instead, they drag it out, until everyone realizes "Well DUH, they had to do that!"

Thu, 10/20/2011 - 20:35 | Link to Comment riley martini
riley martini's picture

 It would increase the fed  balance sheet . It would stop some of the MBS fraud - corruption lawsuits creating cover for select fascist,.

Thu, 10/20/2011 - 18:36 | Link to Comment chump666
chump666's picture

Good luck Gross on your USD short, see if China goes (and they imploding in real time, check your copper charts) all the QE's in the world won't do anything.  The system will go short except for USD's and UST's.  Crazy huh?  Anyway, you create an insulated bet on the 2008/2009 re-run will be fatal.  The creditors of the world, not crappy debtors like the US, are slowing, maybe crashing all at once refer to Sth Korea huge swap line with Japan recently.  So the crditors get wiped out the debitors as far as stocks, commodities are going to crash making Lehman look like nothing.

 

Thu, 10/20/2011 - 20:51 | Link to Comment ffart
ffart's picture

If china goes who's going to buy all our fucking debt paper, space aliens?

Thu, 10/20/2011 - 20:55 | Link to Comment chump666
chump666's picture

aliens? Maybe.

No they will sell a sh*tload, burn Gross, push up yields and buy a TON of USD's at the same time sinking their currency.  Trade war will go hot

Thu, 10/20/2011 - 18:39 | Link to Comment kito
kito's picture

whatever ben buys, it wont be expanding the feds balance sheet. he will not risk the demise of the dollar.....why?

interest rates are at zero

stock market is holding its own (for whatever reason)

political pressure on fed too strong--even nitwitmitt romney is "anti fed"

inflation is manangeable, but still high

the entire world is throwing themselves at treasuries

ben is NOT GOING TO PRINT!!! not going to happen!! dream on!!

 

 

Thu, 10/20/2011 - 18:49 | Link to Comment TheSilverJournal
TheSilverJournal's picture

He's lying to you and printing right now. The very short end is being kept at 0% while he's selling short to buy long..so he must also be buying short.

Thu, 10/20/2011 - 19:00 | Link to Comment kito
kito's picture

i see. so the fact that parties-aside from the fed- are willing to purchase short term notes with negative to zero interest is indicative of nothing? face it, u.s. treasuries are being bought by the world as the last safe haven, along with the dollar. and its not ben doing all of the lifting. the market is always bigger than any one entity, even the fed.....

 

 

Thu, 10/20/2011 - 19:07 | Link to Comment TheSilverJournal
TheSilverJournal's picture

The fact that they're doing it is what makes it true. Face it, the Fed is doing more QE and not telling you.

Thu, 10/20/2011 - 19:16 | Link to Comment kito
kito's picture

doing what? so you say it is, therefore it is? so its being done in secret, and we dont know about, and therefore it holds true? ridiculous. im NO FAN OF THE FED. but hes not printing because there is no need for it now. and hes not going to risk his neck, and the dollar, his source of power, when he knows all of the liquidity in the world wont help growth at this point. youre not being reasonable when you fail to see this. maybe he has an itchy trigger finger, but the downside risks, especially before an election, are much greater than any upside.

Thu, 10/20/2011 - 19:37 | Link to Comment TheSilverJournal
TheSilverJournal's picture

So you say he isn't, therefore he isn't? And you can't use what Bernanke says to back you're point because he's a perpetual liar. Listen to what he does and not what he says. He's in there buying. 

Thu, 10/20/2011 - 19:58 | Link to Comment kito
kito's picture

i cant argue with ignorance and obstinence. youre right. bernanke is buying up short term treasuries, keeping them off the balance sheet, and nobody except you knows about it. and hes doing it because without it, demand for treasuries would sink. yeah, youre right.

Thu, 10/20/2011 - 20:48 | Link to Comment TheSilverJournal
TheSilverJournal's picture

I can't argue with ignorance and shinanigans either. Everyone that's looking knows about it. Go look into exactly how their keeping them off the balance sheet.

Fri, 10/21/2011 - 11:10 | Link to Comment TheSilverJournal
Thu, 10/20/2011 - 19:29 | Link to Comment kito
kito's picture

oh, and i guess pms are being left out of your little secret as well......

Thu, 10/20/2011 - 19:44 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Yeah, I guess so. The market is a big moron about a lot of stuff, PMs included. If they were right about silver, silver would jump $1,000 / oz. right now in real terms or more. And if they were right about the dollar, the dollar would be worthless. And if they were right about housing, housing would be down 70%-80%. 

Thu, 10/20/2011 - 19:53 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Shhhhh...

Don't wake-up the sheepsters...yet!

It will all happen in good time, probably before you'll even be ready...

Thu, 10/20/2011 - 22:32 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Much of banks assets are real estate and 60% of mortgage holders have less than 10% equity, so when housing drops another 10%, then 60% of mortgage holders will be underwater which is too much and the dollar will go bye bye. Gold will hit min. $10,000 in real terms and silver will min. silver to gold ratio of 10 to 1, meaning silver will be at least $1,000.

When hyperinflation hits, the US will get much poorer because hyperinflation is devastating to an economy, which will drive down the value of housing.

In addition, with the printing press being meaningless, the US will no longer be able to support housing through easy credit (0% rates + QE + government backing 95% of newly issued mortgages + MBS), which will further drive down housing, and all together, housing will be worth 70%-80% less in real terms from here.

BOTTOM LINE, SELL YOUR HOUSE AND BUY SILVER.

Thu, 10/20/2011 - 20:35 | Link to Comment disabledvet
disabledvet's picture

if the greenback doesn't just start rallying but soars you'll see the term "all hell breaking loose" given all sorts of new meanings. this much we do know: the Swiss Franc is rallying like a mofo again. Is it Italy's turn?

Thu, 10/20/2011 - 18:49 | Link to Comment maxmad
maxmad's picture

Translation:  Please, please, oh please Uncle Ben don't print anymore.  My life savings is in dollars and you're about to wipe it out!  Please don't wipe out everything I have worked my whole life for!

 

Uncle Ben:  But Kito, you know there is nothing else I know how to do.  Printing is the only thing I can do......

Thu, 10/20/2011 - 18:50 | Link to Comment Mark123
Mark123's picture

I agree....this is just more rumors to keep the hopium alive.  Once the Fed stopped expanding its balance sheet back in June it was game over for asset values.  I think the only thing keeping asset prices levitated now are the primary dealers selling to each other using HFT system (maybe some skulduggery going on behind the scenes with central banks too?).  The real consumer/buyer is being lied to so they don't run for the exits.

I think we get a real crash in the market (30% or more?) before the Fed makes a decision to go all in....that will be their last bullet.

Thu, 10/20/2011 - 19:29 | Link to Comment Belarus
Belarus's picture

It will take a crises for Ben to print, and how quaint that it will seem to the plebs that it's all Europe's fault. I don't see how Europe makes it work without printing (yes, i know it is can kicking but it certainly bid time for the U.S.). As said right here on ZH, there isn't enough money to bail out both: sovereigns and banks in the EZ with the damp squid at the ECB, EFSF, and IMF. And Germany won't just go all-in (which is why Sarkozy and everyone is flying over to Berlin in midnight panics) from the get-go (witness failure of TARP passing Congress first time). Once this happens, panic sets in, those hazily making their way through the day will go from unware to "I think it's time to panic" mode as the entire banking infrastructure begins to unravel. 

Thu, 10/20/2011 - 19:45 | Link to Comment SwingForce
SwingForce's picture

My initial reaction would be to reply, Screw the Banksterz! Especially Europeon ones but the when I read that 70% of Apple's cash hoard is held offshore, I hope its not in these same bankz. Where is there money? Where's Google's? Where is all this offshore money held? And where does the foreign companies keep there money? I know Sieman's went ECB-Direct.com but really, where is all this cash stashed?

Thu, 10/20/2011 - 20:39 | Link to Comment disabledvet
disabledvet's picture

they haven't even started lowering interst rates in Europe.///Hahahahahaha. French is indeed is still the Lingua Franca. I mean "pride cometh before the fall" is one thing...but this has all the makings of the proverbial "pie in the face."

Thu, 10/20/2011 - 22:12 | Link to Comment jdelano
jdelano's picture

Speaking of the fall, was just thinking--is it possible Obama is the Antichrist? I mean that whole bit about "initially the world will think he is the messiah..."

(I say in jest, with its concomitant grain of truth.)

Thu, 10/20/2011 - 18:59 | Link to Comment NotApplicable
NotApplicable's picture

Those truths only hold in "normal" times, where a market perspective rules. Now however, during these "exceptional" times, all options are on the table. Expanding the Fed's balance sheet won't kill the dollar, as long as it is seen as the only way to save the Euro (and vice versa).

As for the anti-Fed politicos, well, those are just words. Action (or more appropriately inaction) is the true tell. Outside of Dr. Paul, there are no true anti-Fed statesmen, but merely opportunists selling Hopium of a different flavor in an effort to win the keys to the federal liquor cabinet.

Oh, and then there's all of the upcoming wars. These will easily justify Benron owning everything, because "we need more money!"

Thu, 10/20/2011 - 18:41 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Drive those rates down in perfect timing with the refi program.

Thu, 10/20/2011 - 18:42 | Link to Comment Wannabee
Wannabee's picture

Election year coming up. Channeling HHoover: "A MBS in every pot!"

Thu, 10/20/2011 - 19:03 | Link to Comment NotApplicable
NotApplicable's picture

Close. In this case though, the MBS is the pot.

Which will enable the slogan, "A Fannie mortgage for every home. At long last the American people are realizing the American Dream. Our national nightmare is over."

Thu, 10/20/2011 - 19:23 | Link to Comment jdelano
jdelano's picture

Stopped myself for a few minutes to try and look at this from a genuinely objective vantage point. Failed miserably. I just can't see why they would proceed wi this when everyone knows that the lag in e housing markets has next to nothing--actually nothing at all--to do with rates. It has to do with credit quality, and the fact that number of eligible home buyers has been slashed to an extent that there are still far more houses (erm inventory) then there are legitimate potential buyers. The last bubble was given a massive lift by subprime and the people that took those loans haven't even gotten through foreclosure yet in many cases. The risk reward dynamic here is totally out of wack and even if Ben was insane enough to want to do this, given the scrutiny on the fed at the moment, I think he'd be forcibly deposed if he tried to push it through. I think Bill Gross screwed e pooch again, or the tylers are once again tired of sucking wind on their pms. They seem to join up with ft on the ramp rumor deployment every time gold takes a bath. No offense meant guys, everybody's got an angenda.

Thu, 10/20/2011 - 20:30 | Link to Comment Stax Edwards
Stax Edwards's picture

I think you are in for a surprise my friend. 

I agree about agendas (SFW?), but this is happening, and the FED is now (who am I kidding 'now') on the record actively engaging in insider trading on an unimaginable scale.  That part of this equation is inexcusable.  We are officially third world now in our level of corruption.  It is now full on, transparent, picking of winners.  I was OK with the fixing the housing thing, it needs to happen.  The cronyism becoming this transparent is really f'n troubling. 

You know the story, 250B here, 500B there, sooner or later we are talking about real money.  Sigh....

Thu, 10/20/2011 - 22:11 | Link to Comment jdelano
jdelano's picture

Everybody was saying the exact same thing about QE 3 last month. I said Ben will not use his last bullet until after Europe implodes--I'll stand by that. He's not an idiot.

Fri, 10/21/2011 - 01:14 | Link to Comment LongBallsShortBrains
LongBallsShortBrains's picture

Last bullet?

Fri, 10/21/2011 - 08:17 | Link to Comment Stax Edwards
Stax Edwards's picture

We have been discussing versions of this here for a month or two and it is going to happen, probably coinciding with the Obama re-election campaign as BK suggested awhile back.  My problem is not with the FED buying MBS, it is sharing that information with insiders.

It pisses me off in a major way that PIMPCO et al are being tipped off to front run this with the kind of money being thats being deployed. Hundreds of billions. That kind of dough is not deployed to buy crap MBS paper on a hunch.  Bill was tipped off and that is corruption at its finest by our friends down at 33 Liberty.

The leaker needs to be indighted.  The FED is absolutely hastening its own demise with this type of crap.  This just should not happen period!

Thu, 10/20/2011 - 20:18 | Link to Comment hambone
hambone's picture

 

Plus our new motto - All for a few and inflation for all.

Inflation has been so decreed by Ben, so why do we doubt Ben will not follow through?  Even if Fed has to eat all $9T in mortgage debt to make a market, do we doubt they'll do it?  The resolve is absolute.

One look at JJC (copper) or PrimeX or Shanghai SSE and you know Ben has to do something (and something big) to reflate globally or suffer the consequences of a global collapse and deflation- all these leading indicators are on the verge of collapse regardless of momo in US equities...and Bens masters will willingly suffer no such thing.

 

Thu, 10/20/2011 - 18:42 | Link to Comment PulauHantu29
PulauHantu29's picture

Print, Baby, Print!

Monetize and save the world.....

Thu, 10/20/2011 - 18:43 | Link to Comment DeadOnArrival
DeadOnArrival's picture

Policy changes directed at this last, larger group of homeowners would have to be carefully designed so as not to transfer credit risk from private investors to the government, and could well require legislation.

Yes...more policy...more legislation...thats right..."it rubs the lotion on its skin or else it gets the hose again."

http://www.youtube.com/watch?v=WCSZfmbFJyQ

 

Thu, 10/20/2011 - 18:45 | Link to Comment myne
myne's picture

Just hurry up and buy ALL the debt already.

http://en.wikipedia.org/wiki/Margaritaville_(South_Park)

Thu, 10/20/2011 - 18:47 | Link to Comment Duke of Con Dao
Duke of Con Dao's picture

after trudging up to my alma mater to hear Noam Chomsky speak on Monday 

where he really ravaged Obama, as seen here in this short clip: http://www.youtube.com/watch?v=rqIbqA3WKhY 

I didn't have it in me to once again slouch to Low Memorial to here Tarullo speak today. 

thanks ZH for the coverage...

Thu, 10/20/2011 - 18:47 | Link to Comment Hedgetard55
Hedgetard55's picture

Mortgage rates are already at historic lows, so QE in MBS will do nothing for the housing market. Besides, they are already buying MBS as part of QE lite. IF this goes down it is merely another way of shoveling money to the banks, like Twist, if they print to do it then I will call for Bernanke's treason trial.

Thu, 10/20/2011 - 18:55 | Link to Comment viahj
viahj's picture

+infinity

Thu, 10/20/2011 - 18:58 | Link to Comment jm
jm's picture

Not all banks.  Smaller banks don't get to play in this joint.  Crony capitalism.

Thu, 10/20/2011 - 18:48 | Link to Comment Yamaha
Yamaha's picture

Tyler - is this also an effort to support PrimeX?

Thu, 10/20/2011 - 18:57 | Link to Comment Mark123
Mark123's picture

Good point....that is connecting the dots!!

Thu, 10/20/2011 - 20:27 | Link to Comment Tyler Durden
Tyler Durden's picture

Not primex- that's just a market clearing symptom. All about the so called safe jumbo prImes whose value will only go up if the value of the houses in the neighborhood goes up, or of the NPV of the debt goes down. Which is what MBS QE is for

Thu, 10/20/2011 - 22:24 | Link to Comment Life of Illusion
Fri, 10/21/2011 - 00:34 | Link to Comment Yamaha
Yamaha's picture

Thank you - that really helps!

Thu, 10/20/2011 - 18:49 | Link to Comment NumberNone
NumberNone's picture

Drop the rates to .0000001% and the housing market won't change so please STFU about more MBS buying. 

Thu, 10/20/2011 - 18:49 | Link to Comment Tic tock
Tic tock's picture

MBS is a considered by the public at large to be a fraudulent abomination - the courts of law actually tend to share that opinion somewhat - using the rare firepower of the FED to push down rates on mortgages by making that market more liquid - well, it didn't work for Sovereign Bonds, their price went up.

And really, at this stage, economic recovery - two percent is marginally unaffordable - y'know, it really doesn't help that policy-makers live in Ivory Towers. ...there is no confidence in the Financial Industry, partly because people don't understand why anyone in a position of rsponsibility would keep suggesting such a range of pointless ... solutions?

If the Fed wants to keep Mortgage rates down, nationalize, or just buy, the banks that hold the mortgages - at this point, wouldn't that be cheaper?

 

Thu, 10/20/2011 - 18:50 | Link to Comment thedrickster
thedrickster's picture

WTF?? MBB dropped off of a cliff at 3:58pm, what gives?

Thu, 10/20/2011 - 23:42 | Link to Comment Hedge Fund of One
Hedge Fund of One's picture

MBB dropped off the cliff with volume. If it was important, I guess futures would have fallen, too.

 

Thu, 10/20/2011 - 18:50 | Link to Comment khakuda
khakuda's picture

It's incredible how 3 years after Lehman, they continue to shoot bullets into the head of the free market.  "Hi, we're from the government and we're here to help."

Thu, 10/20/2011 - 18:52 | Link to Comment pauhana
pauhana's picture

I am too angry to be snarky.  When will this rape of the taxpayer end?  How will it end?  Do TPTB think we are so stupid that we can't understand the grand plan?  This has so much less to do with "inducing investors to shift to other assets, including bonds and equities" than helping bankers to shield themselves from the rot that grows out of their own greed.  Rise up, America, and shake off your promise-induced lethargy.  Big government and its parasitic relationship to big banks has to end, and soon.  

Thu, 10/20/2011 - 18:56 | Link to Comment Everybodys All ...
Everybodys All American's picture

Rates are already at all-time lows. I can't see this having enough of a positive effect for homeowners. If you can't or have not refinanced already then chances are you just aren't in good financial position and that is unlikely to change no matter the rates. So how low can the rates be pushed I guess is the ultimate question?

Thu, 10/20/2011 - 19:18 | Link to Comment sasebo
sasebo's picture

It's not about rates - it's about TBTF balance sheets & BONUSES.

Thu, 10/20/2011 - 18:58 | Link to Comment PaperBear
PaperBear's picture

This round goes to Bill Gross.

Thu, 10/20/2011 - 19:01 | Link to Comment RobotTrader
RobotTrader's picture

Gold down again????

 

They better start monetizing quick, otherwise gold is going to fall off a cliff.

Regardless of what happens in Europe, or what PIMCO says, consumer stocks like Chipotle are likely to be unfazed from any and all financial market madness.

Thu, 10/20/2011 - 19:27 | Link to Comment SwingForce
SwingForce's picture

The UroPeons are selling anything not bolted down, and repatriating said proceeds. This QE will accomodate them further. I see your humor, I'll take "Things You Can Eat" for $300 RobotT... 

Thu, 10/20/2011 - 19:58 | Link to Comment buzzsaw99
buzzsaw99's picture

robo desperately clings to the last unfallen momo stock. pathetic.

Thu, 10/20/2011 - 19:04 | Link to Comment bob_dabolina
bob_dabolina's picture

Guess what? Bill Gross is wrong. 

MBS? Really Gross? That's what you're betting the farm on? 

...are you trying to make money? It doesn't look like it. 

Do NOT follow this link or you will be banned from the site!