What the hell does Bernanke & Co. mean by "all available tools"?

Quote from saliva:

Second, just what the hell does the Fed mean by using "all available tools" to fight the current recession. I want to know the specifics other than all the speculative bullshit that I hear on CNBC. They're fast running out of ammunition, not to mention that both TARP and TALF ain't working, so what more can they do to stimulate this bleeding economy.
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I guess you never took a class in Federal Reserve Open Market Operations when you were in college, eh? - - - They're fast running out of ammunition?

Get real.

I guess you haven't been paying attention to the FACT that the balance sheet of the FED has been steadily increasing over the past several months. Last I checked, they were now up to $2.245 trillion as of Wednesday, December 10th. - - - Compare this to much earlier in the year when the balance sheet was around $810 - $880 billion.

The Fed has already stated that they will be purchasing mortgage and asset-backed securities. Did you not see the Fed's announcement on Nov. 25th in which they stated that they will be purchasing $600 BILLION worth of MBS backed by Fannie, Freddie, and Ginnie Mae? They also said that they would be allocating another $200 BILLION to create liquidity in the auto, student, and small business loan markets.

In fact, if you had read Bernanke's speech about DEFLATION back in 2002, he pretty much spells out what "tools" the Fed has at its disposal to combat such an economic environment.

http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm

NOTE: Fed Funds averaged 0.39% for the month of November.
 
Quote from Landis82:

I guess you never took a class in Federal Reserve Open Market Operations when you were in college, eh? - - - They're fast running out of ammunition?

Get real.

I guess you haven't been paying attention to the FACT that the balance sheet of the FED has been steadily increasing over the past several months. Last I checked, they were now up to $2.245 trillion as of Wednesday, December 10th. - - - Compare this to much earlier in the year when the balance sheet was around $810 - $880 billion.

The Fed has already stated that they will be purchasing mortgage and asset-backed securities. Did you not see the Fed's announcement on Nov. 25th in which they stated that they will be purchasing $600 BILLION worth of MBS backed by Fannie, Freddie, and Ginnie Mae? They also said that they would be allocating another $200 BILLION to create liquidity in the auto, student, and small business loan markets.

In fact, if you had read Bernanke's speech about DEFLATION back in 2002, he pretty much spells out what "tools" the Fed has at its disposal to combat such an economic environment.

http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm

NOTE: Fed Funds averaged 0.39% for the month of November.
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Sorry, but I don't buy Bernie's rationale. With the threat of the greenback collapsing AND the unemployment on the rise, I don't believe his otherwise astute, albeit jackass, policy will work.
 
Quote from saliva:

Sorry, but I don't buy Bernie's rationale. With the threat of the greenback collapsing AND the unemployment on the rise, I don't believe his otherwise astute, albeit jackass, policy will work.
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Care to explain specifically why?
 
Mine isn't as complex as you might think. The foreclosure rate shot up because people defaulted on their loans and they defaulted because they lost their jobs and not because of lack of liquidity.The same rationale can be applied to auto, student, and small business loans. And we all know what consequence devaluation can have on real wages in a time of global recession.
 
Quote from saliva:

...just what the hell does the Fed mean by using "all available tools" to fight the current recession.
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They are basically saying "stay short at your peril, because we will do anything, (currently) legal or not, to save the current system". It's the nuclear option - no longer is the concern to stay solvent in a sustainable manner - now it's all about staying solvent just long enough for most other economies to go broke.

In short, Bernanke is saying he will either succeed, or he will pull the temple down around his ears in the attempt.
 
Quote from Random.Capital:

They are basically saying "stay short at your peril, because we will do anything, (currently) legal or not, to save the current system". It's the nuclear option - no longer is the concern to stay solvent in a sustainable manner - now it's all about staying solvent just long enough for most other economies to go broke.

In short, Bernanke is saying he will either succeed, or he will pull the temple down around his ears in the attempt.
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Sounds like he's been watching too many re-runs of them Texas Hold 'em. Hey y'all, ALL IN!!!

S'pose he blows up, then what? Do we as taxpayers have a recourse?
 
Chrysler shutting down *ALL* plants till January 19th

The Fed needs to do WHATEVER it can to restore confidence in the economy. Its a shame that people and companies have become dependent on credit instead of producing and saving.
 
I don't even know what the definition of "confidence" is any more. Every friggin' economist seems to have one's own worthless 2-cents when it comes to that exact term. Just what the hell is it?
 
I misquoted it. They are shutting down all plants till AT LEAST Jan 19th.

My guess is other automakers will follow in the next couple days. That means all supplier plants, too. And the suppliers to the suppliers will follow.

Look for some amazingly ugly numbers...
 
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