Bernanke’s QE2 Averts Deflation, Spurs Rally, Credit

Quote from ElCubano:
but then again, How do you know we would have not survived? We perhaps would have flushed the excess toxicity out with one flush. I am not an econimist and you have way more knowldge in this matter than me...Im just asking a question.
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It's a valid question and I find that I am, willy-nilly, asking this question of myself a lot, esp recently. However, I am not the one making a categorical statement that it all would have been fine. Maybe, maybe not. My point is all about risk management. It's like a hypothetical situation where you've got a ginormous position on that might, with a small(ish), but non-zero probability, wipe you and your entire shop out. Suppose you're the risk manager and also have significant personal capital at stake in the firm. What would you do in such a situation?
Quote from MKTrader:
Asking 101 questions does nothing to prove your point. Why do you sound like such a shill?

Anyone who has worked with gov't data (including military), knows how numbers are massaged for the desired results.

http://harpers.org/archive/2008/05/0082023

As for the necessity of the stimulus/bailouts, it was a classic appeal to fear.

http://www.minyanville.com/business...e-fed-central-banking-wall/3/23/2011/id/33504
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Sorry, more questions. Why is it that anyone who disagrees with you always has to be a "shill"? As to your links, how is it that you think you can somehow reinforce your statements with opinions of a couple of journalists/commentators? Are these two dudes, Kevin Phillips and David Stockman, supposed to be authorities on the issues they're talking about?
 
Quote from SCI new york:

Sounds like another dribble post filled with your worthless opinion. Act like an adult citizen and state some facts or dont bother posting. It's unbecoming.

And what is it that you do for a "real job", failed trader?

I love how everyone always wants to throw the finger and blame someone else or some bs or a cosmic event for their own slacking. It's truly pathetic. President Bush did this, Obama is bla bla, Bernanke is the worst guy ever. And you're doing a stand up job, right? Blame the idiot sons like you that should be cleaning the grills at mcdonalds.

On another note;

The Fed’s policy of pumping cash into the financial markets risks longer term damage, according to Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $85 billion. He compared the Fed’s current policy to the one it adopted following recession of 2001-2002, when policy makers slashed its target rate to 1 percent in 2003 to spark the housing market and the economy.

“It was a failure,” Bittles said. “I don’t think it’s very healthy to artificially boost stock prices. What are the long-term consequences of that? We don’t know. The Fed did this with housing back in the last decade, and the unintended consequences were a disaster.”


Bittles is a moron. And an obvious bear. The Fed didn't cause the housing bubble and the consequences of their actions was directly propotional with the public. They're to blame for the mess.


There are too many people on this forum who run their mouths and have ABSOLUTELY no idea what anything they say means, probably just some drivel they read from a yahoo message board they wanted to copy or maybe listening to the morons on cnbc too much. And then want to compain about it all every step of the way.
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How is the average citizen benefitting from what the central bank has done?
 
Quote from sprstpd:

How do you know we wouldn't be better off right now if there were no stimulus and bailouts?
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We don't know, that's the whole point...

But many on here who blame the Fed for all of their problems claim that they do in fact KNOW we would have been better off if nothing was done. Hence their unfounded criticism.
 
Quote from Rickshaw Man:

How is the average citizen benefitting from what the central bank has done?
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How would you like to have your home price plummet even more than it already has?
 
Quote from Tsing Tao:

olias, you are a fed shill/apologist. only a complete and utter fool would believe what the federal reserve is doing is in the best interest of the country, or the world for that matter.

by destroying the dollar (yes, it's your buddies at the fed doing that) they are driving up commodity and input cost for all business that rely on raw materials to make their goods - squeezing margins to the breaking point and forcing companies to pass these costs on to the consumer. but wait, it gets better! we dont consider it inflation because we remove pesky things like food and energy from inflation statistics - they're too volatile (and inconvenient). yet MIT's Billion Price Project or Shadowstats show inflation more around 9-10% than the CPI-U joke of 2%. in fact, if you follow the same inflation methodology of calculation we did in the 1980's, that is precisely where inflation would be today (9-10%). convenient, isn't it, that the government changed that to mask the growth in the money supply's effect.

what about savers? you know, ol' ma and pa who live on fixed incomes and try to make it by all this hilariously transient inflation by use of their retirement savings? ah, screw 'em. that .025% they earn is plenty. greedy bastards, what do they expect?

meanwhile, the fed monetizes the debt by purchasing treasuries from ol' turbotax timmah after he issues them - oh wait, first the middle men, the primary dealers, get to play "Flip That Bond!" by borrowing at next-to-nothing, buying from timmah, selling back to the Fed and taking a commission on top of it. wait, wait...sorry. did i say monetize the debt?

ben, are we monetizing and printing money? it's so hard to tell because in one 60 minutes clip you say we're not, but back in 2009, you said what you are doing now IS printing money on the same god damned television program (also in the same link).

ah hell with it, what's the difference? who cares if the latest week shows that insiders are selling 565 times the amount that insiders are buying? we've got a 100% S+P gain in just two years! can't we lay that credit on QE and the Fed? apparently uncle benny thinks so!

in this meteoric rise in just about every asset class (minus the dollar, of course), risk has become mispriced. wait, no. it's not mispriced, it's malpriced. just like during the housing bubble when we were lending to every tom, dick and harry that made $.25 a week and selling them mc-mansions. hell, i remember greenspan coming on and telling everyone an ARM was the best thing since sliced bread. or how about when bernanke said there's no housing bubble? that one is always good for a laugh. was the fed largely responsible? you bet it was! and we trust these jackasses to get us out of the mess by running ultra-cheap money until "the foreseeable future"? Hahaha...! (note: i blame idiot americans taking out more than they could afford as well, but the central bank encouraged it). nevermind that the federal government (fannie/freddie) own all the junk now, or that Fannie needs another fucking 8 and a half billion??

oh, and this lovely quote from the bloomberg article you posted essentially makes my point on risk:



i wonder why this is?

this is nothing more than an agenda to take from the taxpayers and give to wall street - on a monumental scale.
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You speak the truth, thanks!
 
Quote from sprstpd:
How do you know hedonic adjustments aren't just manipulations to make inflation figures smaller than they actually are?
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I know that because I have actually looked at the academic literature on the subject. Do you want references to papers that discuss these issues?
How do you know the MIT BPP numbers aren't real? Why do you trust the government on inflation numbers when it is their best interest to keep them as low as possible? Why do you distrust Shadow Stats? How do you know deflation was a threat? How do you know we wouldn't be better off right now if there were no stimulus and bailouts?
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I am not saying the BPP numbers aren't real. I am asking why I should weigh them more than the official CPI measures produced by the BLS. I don't trust the govt, but in my personal experience I have no reason to conclude that they're distorting reality somehow. I have already said why I don't like Shadow Stats. I'll reiterate: if John Williams were serious and not just out there for publicity/monetary gain, he would respond to his critics and engage in a dialogue with economists that have approached him. As to your last question, I believe I responded in a post above.
 
Quote from Kassz007:

How would you like to have your home price plummet even more than it already has?
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Ah, the ole just think how bad it would have been if we did nothing line. Your have been reading your response manuel from the central bank i see.
 
Quote from ElCubano:

The public is not where the blame should go. I know, I know in theory yes you have a point, but in reality you dont have a leg to stand on. Because given the chance the public would do it over and over and over again. You are assuming the public in general give a rats ass. If a person making $2000/ month is able to afford somehow through fantasy lending a $1million home 9.9 out of 10 people will sign the dotted line. How do I know this, well because it actually happened...I may be a little off on the 9.9 out of 10. So now, if a dumb mo-F88k banker knowing very well that there is a likelyhood of close to zilch of getting paid back; who is at fault? I know you are going to spin this with ..."oh it was legal" " oh it was legal" ...yes it was legal, but if the homeonwer cant pay then the bank should lose out,,,,not me, not my logical thinking neighbor...I don't care if the world was about to end. Thats survival of the fittest that you like to talk about. The world is going to end..then bring it on.

If you lend money to your crack head cousin and didnt ask for collateral and then dont get paid...do we really need to argue who's the idiot?

There's a reason you dont loan money to people with low FICA scores and no skin in the game...cmon meng. Unless of coarse you are making a boatload on commission and know you wont be held accountable.
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I'm still going to disagree here. Business is business, wether the moral compass is thrown out the window or not, you CAN blame them for pulling a fast one on the public and to that degree I feel the same way, no one cared especially the guys that were making money off the disgusting mortgages knowing full well people had no business buying them. That said, It wasn't illegal, they were taking advantage of a silly system and the general ignorance and stupidity of the country. I don't like it either but that doesn't mean I'm going to blame them because its a two way street. The people should have known it wasn't possible for them to pay that off. Everyone's greed played a role. I don't think sub-prime should have been created in the first place, but it was and that story is done.

As far as the banks issuing the mortgages, the reason why they didn't care after a while was because one, some people truly did believe housing prices would not fall. Let's not get into that right now. And two, these firms would take those mortgages, basket them up and sell them off to other institutions and make their money back immediately and put someone else holding the bag. So in essence, you're lending $1,000 to your crackhead cousin, and then you're going out to 50 people you know and asking them each for $20 knowing they'll give it to you and in the end you get your money back, maybe even some extra, and you forget you ever lent your cousin the money and move on with your life.
 
The standard line from pro central bank leeches. "just think how bad it would have been if they did nothing"


To every action there is always an equal and opposite reaction, it's just a matter of time.
 
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