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Fed: No taper
CNBC ^ | September 18, 2013 | Jeff Cox

Posted on 09/18/2013 11:13:08 AM PDT by Hojczyk

Edited on 09/18/2013 11:17:36 AM PDT by Admin Moderator. [history]

An economy still stumbling toward recovery was not enough to sway the Federal Reserve, which defied market expectations Wednesday and said it will not begin pulling back on its monthly asset-purchasing program. Stocks surged on the news but bond yields were flat.


(Excerpt) Read more at cnbc.com ...


TOPICS: Breaking News; Business/Economy; Government
KEYWORDS: badeconomy; bensaysbadeconomy; bernanke; fed; fedsaysbadeconomy; qe; stimulus; thefed
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1 posted on 09/18/2013 11:13:08 AM PDT by Hojczyk
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To: Hojczyk

More air into the balloon.

Makes a bigger noise when it pops.


2 posted on 09/18/2013 11:19:32 AM PDT by exit82 ("The Taliban is on the inside of the building" E. Nordstrom 10-10-12)
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To: Hojczyk

amazed at this, really.

I had absolutely expected them to announce a tapering, and not even such a small one.


3 posted on 09/18/2013 11:20:11 AM PDT by babble-on
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To: Hojczyk

“This is incredibly wimpy,” David Kelly, chief market strategist at Morgan Stanley, told CNBC.

The Fed said it was unsatisfied with the pace of economic growth and felt the timing was not right to make a change in quantitative easing.


4 posted on 09/18/2013 11:21:08 AM PDT by John W (Viva Cristo Rey!)
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To: exit82

This is not going to end well.

I recall watching FMOC during the dot com bubble, and being thrilled with the decision (cant remember if it was increased rates or lower rates) and watching the dot coms shoot up 5% in a couple of minutes.

That ended well, didn’t it.


5 posted on 09/18/2013 11:22:36 AM PDT by Vermont Lt (Quis custodiet ipsos custodes? Who will watch the watchers?)
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To: exit82

$85 BILLION created every month, out of thin air, and used to purchase stocks in order to maintain the illusion that the market is doing well -

with the intent of keeping real money, yours, in the market.

THEY know when the music is going to stop - you don’t.


6 posted on 09/18/2013 11:23:05 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: Hojczyk

DJIA to 20,000 by the 2014 election.


7 posted on 09/18/2013 11:23:42 AM PDT by Roccus
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To: Hojczyk

http://confoundedinterest.wordpress.com/2013/09/18/to-infinity-and-beyond-fed-doesnt-change-qe-or-fed-funds-target-keeps-buying-85b-per-month/

Gold and stocks shoot up, treasury yields tank.


8 posted on 09/18/2013 11:25:03 AM PDT by whitedog57
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To: Hojczyk

Wonder how many ordinary people know what “asset purchasing” means. For that matter, how many people know what “bond buying” means?

They mean borrowing of course and these activities should always be called ‘borrowing’ when the audience is ordinary people.


9 posted on 09/18/2013 11:28:55 AM PDT by cymbeline
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To: Hojczyk

More QE4Ever....

It’s tough to get a crack addict to stop taking the drug, when the crash it would cause is so bad.

And, if you don’t like giving the Big, Obama-supporting New York Bankers $87 Billion a month in free cash for eternity, YOU MUSS BE A RASSISS! (or one of those crazy conservative Christian-types)


10 posted on 09/18/2013 11:29:28 AM PDT by tcrlaf (Well, it is what the Sheeple voted for....)
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To: Roccus

Hey, once the real rate of inflation has to be recognized the Dow should go straight to 100,000. Now 100,000 units of the Dow will still buy the same amount of gasoline or potatoes as 15,000 units do today, but at least St. Barack will get to feel good about himself. :)


11 posted on 09/18/2013 11:31:46 AM PDT by Mr. Jeeves (CTRL-GALT-DELETE)
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To: babble-on

It certainly turned the equities market around. Must be like meth.

TC


12 posted on 09/18/2013 11:32:37 AM PDT by Pentagon Leatherneck
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To: Vermont Lt

A whole lot of people are going to have their asses handed to them...again. The markets have gone full retard...again.


13 posted on 09/18/2013 11:33:17 AM PDT by Orangedog (An optimist is someone who tells you to 'cheer up' when things are going his way)
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To: Hojczyk

Things are not getting better, no matter how much they manipulate the markets, and the sycophantic media praises Obama.

More and more people are dropping into poverty, every day, yet if you note that, you must be CRAZY!!, or a racist.

It’s OUR fault, folks. We sat on our asses for decades and let the Radical Socialist Dems take control of the language, and this is our just desert.


14 posted on 09/18/2013 11:40:39 AM PDT by tcrlaf (Well, it is what the Sheeple voted for....)
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To: Orangedog

One 401 is on full retard. The other is in cash. Who the hell knows what to do.

I just buy a little more silver each week.


15 posted on 09/18/2013 11:40:41 AM PDT by Vermont Lt (Quis custodiet ipsos custodes? Who will watch the watchers?)
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To: Hojczyk

Not sustainable. We are Argentina.


16 posted on 09/18/2013 11:43:20 AM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: Roccus

DJIA to 20,000 by the 2014 election.

Kinda meaningless, cause the dollar’s in collapse mode now.

Congress has abdicated its responsibility to “coin money and regulate the value thereof...”


17 posted on 09/18/2013 11:47:21 AM PDT by djf (Global warming is turning out to be a bunch of hot air!!)
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To: Hojczyk
The Fed wants no tapirs?


18 posted on 09/18/2013 12:02:10 PM PDT by Old Sarge (Opinions are like orgasms: only mine count, and I couldn't care less if you have one...)
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To: Vermont Lt

How anyone can keep money in that casino is beyond me. I was here years ago telling people that you can’t have a solid economy with a country of wedding planners and mortgage brokers. Me and those like me were lucky if we were only called gloom and doomers back then. Do people with 401k and IRA money in this market think these asset prices are reflectiong anything near reality now that we’ve gone from wedding planners and mortgage brokers to 29 hour a week fast food workers?


19 posted on 09/18/2013 12:02:28 PM PDT by Orangedog (An optimist is someone who tells you to 'cheer up' when things are going his way)
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To: Mr. Jeeves

My companies 401k rep was just here yesterday. Boy he was pumping 401ks and the stock market.

No word of the govt taking over 401ks from him of course.


20 posted on 09/18/2013 12:06:34 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Orangedog

Free trade will fix it.


21 posted on 09/18/2013 12:07:23 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Hojczyk

And there goes the prices of precious metals....zooooom!


22 posted on 09/18/2013 12:07:44 PM PDT by RKBA Democrat (Power disintegrates when people withdraw their obedience and support)
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To: All

lets see, 5 years ago, oil was around 30, today its 108. but Bernanke says there’s no inflation.

would be hilarious if it wasn’t so sad.


23 posted on 09/18/2013 12:08:20 PM PDT by willywill
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To: cymbeline

“Wonder how many ordinary people know what “asset purchasing” means.”

a couple of years ago on wrko in boston, there was an overnight radio show called the steve Lavelle broadcast.
the subject was price of gas. I called in and I said well its very much tied to qe and the dollars being pumped into the economy. the host didn’t even know there was such a thing as qe.
then when I told him it was the fed he went ballistic, so i’m assuming talk of the fed is verboten.


24 posted on 09/18/2013 12:13:26 PM PDT by willywill
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To: Hojczyk

The Fake White Indian kneecapped Larry Summers.

Message Received and Understood.


25 posted on 09/18/2013 12:23:49 PM PDT by Buckeye McFrog
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To: driftdiver
There ya' go . . . what we need is more government intervention.
26 posted on 09/18/2013 12:24:35 PM PDT by 1rudeboy
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To: 1rudeboy

It doesn’t work so they will keep doing it. lol


27 posted on 09/18/2013 12:25:00 PM PDT by GeronL
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To: willywill

You bring up a subject that I’m not real sure of. Can the Fed (or any other agency) create money out of thin air? I think they always have to borrow the money they put into the system.

That in turn means they gotta pay it back sometimes.

So if they gotta pay it back then such ‘created’ money isn’t permanently in circulation since it the government (or Fed) would have to take back the money to pay off the creditors, plus interest.

Am I missing something here?

In the current qe process, is the Fed buying bonds that already exist in the private sector, or they borrowing from the treasury, or what?

My final question: does money get created that stays in circulation forever?


28 posted on 09/18/2013 12:26:10 PM PDT by cymbeline
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To: willywill
lets see, 5 years ago, oil was around 30....

On what planet? In what solar system?

29 posted on 09/18/2013 12:26:46 PM PDT by 1rudeboy
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To: driftdiver

And an ownership society! Who wants a pony?


30 posted on 09/18/2013 12:27:03 PM PDT by Orangedog (An optimist is someone who tells you to 'cheer up' when things are going his way)
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To: Hojczyk

Pure monetary insanity. The inmates are running the asylum now.


31 posted on 09/18/2013 12:32:34 PM PDT by Deo volente (God willing, America shall survive this Obamanation.)
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To: Orangedog

My primary fiscal plan, quite honestly, is to pay off debt and buy assets. Hard assets. So far, it hasn’t yielded much in terms of $$. But I sleep well at night and I don’t worry about unemployment.


32 posted on 09/18/2013 12:34:41 PM PDT by Vermont Lt (Quis custodiet ipsos custodes? Who will watch the watchers?)
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To: RKBA Democrat

Gold up $44/oz, silver up almost 5%, oil up 2.5%.

Gasoline to follow. In California it’s back over $4/gallon.


33 posted on 09/18/2013 12:35:13 PM PDT by Deo volente (God willing, America shall survive this Obamanation.)
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Because banks are holding onto the cash?


34 posted on 09/18/2013 12:37:03 PM PDT by Gene Eric (Don't be a statist!)
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To: MrB

They will keep this up until a Republican is elected president. It will then be allowed to pop, putting the blame on republicans and conservative fiscal policy. Just watch.


35 posted on 09/18/2013 12:39:37 PM PDT by Personal Responsibility (Government: Slimy used car salesmen writing laws forcing you to buy their cars)
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To: willywill
lets see, 5 years ago, oil was around 30, today its 108. but Bernanke says there’s no inflation.

Energy and food are deliberately withheld from inflation calculations: too volatile! lol

36 posted on 09/18/2013 12:42:11 PM PDT by Night Hides Not (The Tea Party was the earthquake, and Chick Fil A the tsunami...100's of aftershocks to come.)
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To: Orangedog

I want a pony!.


37 posted on 09/18/2013 12:43:57 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Night Hides Not
Just once, I'd like somebody to count how many times the govt mentions food and energy in a typical CPI press release.

http://www.bls.gov/news.release/cpi.nr0.htm.

38 posted on 09/18/2013 12:52:19 PM PDT by 1rudeboy
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To: Hojczyk

Burning the candle at both ends = no taper.


39 posted on 09/18/2013 12:53:47 PM PDT by P.O.E. (Pray for America)
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To: Orangedog

Vote for Vermin Supreme!


40 posted on 09/18/2013 12:57:17 PM PDT by ConfusedSwede
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To: Personal Responsibility
They will keep this up until a Republican is elected president. It will then be allowed to pop, putting the blame on republicans and conservative fiscal policy.

If you recall the first two years of the Reagan Presidency, the economy was pretty brutal. His reforms did not start to kick in until Year 3. And then they made an historically strong run to the end of the century.

I was in Pittsburgh at the time, which caught the worst of the worst. Most people around here were ready to chuck Ronny six months in.


41 posted on 09/18/2013 12:57:34 PM PDT by Buckeye McFrog
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To: willywill
lets see, 5 years ago, oil was around 30, today its 108. but Bernanke says there’s no inflation.

5 years ago, oil was about $112, two months before that, it hit $147. Today it popped almost $3 to $108.


42 posted on 09/18/2013 1:07:27 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: Buckeye McFrog
I was in Pittsburgh at the time, which caught the worst of the worst. Most people around here were ready to chuck Ronny six months in.

I was also in Pittsburgh at the time. What a difference a little more time made; after 3 1/2 years most were "Reagan Democrats"!

43 posted on 09/18/2013 1:08:08 PM PDT by jdsteel (Give me freedom, not more government.)
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To: Personal Responsibility
They will keep this up until a Republican is elected president

Or, at least until after the 2014 election.

44 posted on 09/18/2013 1:09:58 PM PDT by VRW Conspirator (Producing Talk Show Prep since 1998.)
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To: Hojczyk
Fed: No Taper

Fed: No Taper Bernanke Caves

There. Fixed it.

45 posted on 09/18/2013 1:19:11 PM PDT by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: Hojczyk

46 posted on 09/18/2013 1:29:43 PM PDT by Errant
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To: John W

They need to go back and read Chapter One of their economics textbooks.

Economic growth does not come from fiat money being pumped into the economy. It comes from the chance to make a profit.

Right now, with the coming of draconian environmental regulations and Obamcare, there’s absolutely no chance to make a profit.


47 posted on 09/18/2013 1:43:43 PM PDT by wolfpat (Not to know what has been transacted in former times is to be always a child. -- Cicero)
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To: Old Sarge

That was my first thought too.


48 posted on 09/18/2013 1:45:11 PM PDT by wolfpat (Not to know what has been transacted in former times is to be always a child. -- Cicero)
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To: Hojczyk
No way the Fed is going to allow interest rates to rise!

Barnake worships at the feet of Keynes.

49 posted on 09/18/2013 1:58:50 PM PDT by fortheDeclaration (Pr 14:34 Righteousness exalteth a nation:but sin is a reproach to any people)
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To: cymbeline
You bring up a subject that I’m not real sure of. Can the Fed (or any other agency) create money out of thin air? I think they always have to borrow the money they put into the system.

No, I don't believe the Fed ever has to pay the money back. My understanding is that the Fed has been given the power by Congress to print money out of thin air at their own discretion with a dual mandate to "control inflation" and "maximize employment." This is how the system works.

Let's say that the US government wants a billion dollars of cash to spend and no private investors want to buy Treasury bonds. How does the US government get the cash they want if their are no private investors who want to buy? Well, the government won't want to raise taxes because that is politically unpopular. So where does the money come from?

Well, of course! The Government goes to the Federal Reserve Bank and asks for a LOAN of a billion dollars. The Fed does not actually have a billion dollars to give the government, but that's not a problem. The Fed will create the money out of thin air, by creating a bank account and electronically saying that it has a billion dollars in it. And just like that *poof*, the government has a billion dollars to spend. Because the computer says that the government now has a billion dollars in their account.

In exchange for this newly created billion dollars of cash, the US Treasury Department will usually give the Fed a billion dollars of US Treasury bonds. Since these treasury bonds are on interest. The US government will owe the Fed a billion dollars plus the interest on the treasury bonds. This is a problem though, because the US government will owe more money to the Fed than the Fed actually printed, so it will be essentially impossible to ever pay off the National Debt in full.

In short, the Fed is basically a legalized counterfeiting operation. They can create as much money as they like for free, but they loan that money out to the US government and other banks on interest.

The Fed doesn't have to pay anyone back. It's not the Fed borrowing from the Treasury. It's the Treasury borrowing from the Fed. Thus it's the government who has to pay the Fed back. Unfortunately, this means that ultimately, the taxpayers who will get the short end of the stick because they have to pay the Fed all of the money they created plus interest. Quite a racket, isn't it?

Now the US government could cut out the middleman and issue money to itself directly interest free like it used to do, but I don't think that the big banks would be very found of that idea.

50 posted on 09/18/2013 1:59:12 PM PDT by old republic
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