Has the Fed realized QE isn't working?

Quote from jem:

I disagree.

The fed has been desperately trying to inflate residential and commercial real estate assets in order to try and save most of their member owners. The fed was wiling to debase the dollar to any extent.

I think right about now... they realize they are going to have let a few go... because they are debasing the dollar but not getting much in return. They have been pushing on a string.

Absent serious wage inflation you can't make residential real estate rise in an when borrowers have to qualify for their loans.

The problem with commerical real estate is that prices were driven up by the silly money easy capital era. Few sane people or institutions will lend money even at currently well reduced prices. The cap rates still suck in most places.
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Exactly. I said a few years ago that the end result of all this bullshit would be alot more debt and little to nothing to show for it. Housing prices (in many locales) are still trending lower, unemployment is still the same problem it was 2+ years ago...So we got a bump in inflation with 20+ year highs in unemployment and a downgrade of our credit rating...

All it did was buy a bit more time, allow "insiders" to cash out of company stock and possibly convert those assets into a "hard currency" and sent the bill to the rest of the country that isn't able to participate in the asset inflation game.
 
It sure feels like the market wants the long bond to go down for the market to go up. It just doesn't feel the same. I don't think they can have both anymore. But that's just from the gut. Maybe they can
 
Quote from jem:
I disagree.

The fed has been desperately trying to inflate residential and commercial real estate assets in order to try and save most of their member owners. The fed was wiling to debase the dollar to any extent.

I think right about now... they realize they are going to have let a few go... because they are debasing the dollar but not getting much in return. They have been pushing on a string.

Absent serious wage inflation you can't make residential real estate rise in an when borrowers have to qualify for their loans.

The problem with commerical real estate is that prices were driven up by the silly money easy capital era. Few sane people or institutions will lend money even at currently well reduced prices. The cap rates still suck in most places.
More...
You disagree with what? I am saying that the FT blog has completely misinterpreted the reason the Fed's engaging in the reverse repos. They're also completely wrong with their description of what's been happening in the US money mkts recently (i.e. collateral issues, cash balances at the custodian banks, etc). Their conclusions about the Fed, therefore, are also incorrcet. As to real estate, apart from the fact I don't see anything about any of those subjects in either the original article or my response, I don't really have anything to say. You're certainly entitled to have your view on the subject and the Fed's actions, just like I am entitled to believe that Britney Spears is an extreterrestrial alien.
 
Quote from Illum:

It sure feels like the market wants the long bond to go down for the market to go up. It just doesn't feel the same. I don't think they can have both anymore. But that's just from the gut. Maybe they can
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agreed. The banks are the sovereign so they both get trashed. I thought we would be there by now
 
Quote from ajcrshr:

The Fed’s secret QE equivalent

"Why on earth would the Fed be choosing to soak up excess reserves at a time when the panic in the markets has reached highs not seen since 2008, and at a time when most of the market is calling for more liquidity and quantitative easing?

Well, we would argue it’s because the Fed believs the financial system may have crashed through a critically important juncture. Actually perhaps a rabbit hole or a looking glass are more accurate.

QE is no longer the cure. It has now become a poison."


http://ftalphaville.ft.com/blog/2011/08/12/652166/the-feds-secret-qe-equivalent/
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Nope, Admission of failure is aknowledgement of inabilty. Plausible denibility and side skirting is the course untill the objective is met. Another round of QE would determine who is right or wrong. It does not matter if the whole nation falls apart somebody will get their way.

http://en.wikipedia.org/wiki/Argument_from_repetition

Akuma
 
Quote from ajcrshr:

The Fed’s secret QE equivalent

"Why on earth would the Fed be choosing to soak up excess reserves at a time when the panic in the markets has reached highs not seen since 2008, and at a time when most of the market is calling for more liquidity and quantitative easing?

Well, we would argue it’s because the Fed believs the financial system may have crashed through a critically important juncture. Actually perhaps a rabbit hole or a looking glass are more accurate.

QE is no longer the cure. It has now become a poison."


http://ftalphaville.ft.com/blog/2011/08/12/652166/the-feds-secret-qe-equivalent/
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I said this well before the announcement of QE1 years back, why is this even being questioned, its a given fact that QE was never the answer, as I have said many times QE is destroying this economy, while creating a worthless dollar and inflation. The only thing its doing is creating a wealth effect and widening the gap between the rich and the poor. QE did nothing but prop up equities and BUBBLE ben bernanke is certainly guilty of even saying this. They can pump all the QE they want into the system and it will still not do a thing but create a more worthless economy.
 
Quote from S2007S:

I said this well before the announcement of QE1 years back, why is this even being questioned, its a given fact that QE was never the answer, as I have said many times QE is destroying this economy, while creating a worthless dollar and inflation. The only thing its doing is creating a wealth effect and widening the gap between the rich and the poor. QE did nothing but prop up equities and BUBBLE ben bernanke is certainly guilty of even saying this. They can pump all the QE they want into the system and it will still not do a thing but create a more worthless economy.
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What are you talking about? You have no idea of what the heck you are talking about. Nil, none, zero, nada.

QE was not helicopter money. QE was a way to re-capitalize banks, avoid a bank run and a collapse of the economic system. Those that fight QE basically hoped for a collapse of the economy, chaos and unrest.

Still, after QE 1 + 2, banks hesitate to lend money, there is a liquidity trap. QE3 is needed but this time it should be partly helicopter money. About 3 trillion of US dollars have been transferred overseas through unfair trade that costed jobs and lives to US and Europe as well. These monies must be supplied to the economy, at least part of it.

Bernanke has not done enough. More QE is required. The constant attacks by fanatics, extreme conservatives who have enough money to live 10 lives when everyone around then starves to death have rendered him unable to complete the good job he started. He must complete it now and let Chinese and Germans scream to their inflation death.
 
Quote from Martinghoul:

You disagree with what? I am saying that the FT blog has completely misinterpreted the reason the Fed's engaging in the reverse repos. They're also completely wrong with their description of what's been happening in the US money mkts recently (i.e. collateral issues, cash balances at the custodian banks, etc). Their conclusions about the Fed, therefore, are also incorrcet. As to real estate, apart from the fact I don't see anything about any of those subjects in either the original article or my response, I don't really have anything to say. You're certainly entitled to have your view on the subject and the Fed's actions, just like I am entitled to believe that Britney Spears is an extreterrestrial alien.
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They were barking up the correct tree.
The fed has been debasing the dollar and now they realize it is not working. You disagreed. I disagreed with you.

But ok tell us why is the Fed doing what they are doing.


Then after you are done telling us how they saved the world by saving the banking system....

Please comment....

Would not more banks be insolvent if they had to mark their commercial assets and other assets to today's prices, instead of the fantasy marks they are using.

Was not the effect of the last year of debasement and cheap money, to save their member banks?
 
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