Bernanke: QE2 has helped improve the stock market

Market Watch ^ | 1/13/2011 | Ronald D. Orol

[FromLori]

Federal Reserve Board Chairman Ben Bernanke said Thursday that a controversial $600 billion bond buying plan has contributed to a stronger stock market. "Our policies have contributed to a stronger stock market just as they did in March 2009 when we did the first iteration of this program," Bernanke said at a Federal Deposit Insurance Corp. forum on small businesses. "A stronger economy helps small businesses more than larger businesses. Interest rates are higher but that's mostly because the news is better. It has responded to a stronger economy and better expectations." The $600 billion bond buying plan follows a completed effort to buy $1.75 trillion in government bonds and Fannie Mae and Freddie Mac-backed mortgage securities.

[FromLori]

Too bad he doesn't tell how his printing is devaluing the dollar, driving up food, gas prices and ruining your savings.

[GeronL]

lol

Zimbabwe’s hyper-inflation made their stock market soar too.

See what that got them?

[Brilliant]

What happen to the days when the Fed didn’t give a rat’s @ss what the stock market did?

[Jerrybob]

Isn't that just wonderful!!! The Ben Bernak helps out all his friends.

Check this out:

http://www.youtube.com/watch?v=PTUY16CkS-k

[FromLori]

Excellent point :)

[org.whodat]

What a damn tool, lending money at zero percent interest, how about the price of dog food for the old people on fixed in come. That,s all they will be able to eat in a couple of years.

[the invisib1e hand]

If you pump enough water into the sea, even a sinking ship will appear to float.

[alloysteel]

All those excess dollars being dumped in the economy got to go SOMEWHERE, and one is led to suspect that the Fedral Reserve itself, just might be putting these dollars into the stack market through front organizations, to perserve the illusion the averages are “doing well”.

Why aren’t the toxic mortgages that make up so much of the portfolios of Fannie Mae and Freddie Mac being paid off and taken out of the system instead? If you are going to play around with Monopoly money, put it where there will be some POSITIVE effect on the economy.

[BilLies]

Most banks around Albany NY are paying .25%, a quarter of a percent, on savings accounts of less than $100,000. If a person needs liquidity, it forces people to put their money in riskier investments, but higher return investments that maybe available in the stock market. Of course, since there are few new securities being issued, we are talking about “churning” existing securities which do not expand the employment portion of the economy. At least that is my take.

[Wuli]

“Bernanke: QE2 has helped improve the stock market”

Well yes, sure it is:

Just as Greenspan’s easy fiat money policies sent fixed interest rates to the bottom, killing the bond market, increased the money supply

and sent the excess dollars chasing stocks, creating part of the high-tech bubble and most all of the dot.com bubble,

which, when they burst, destroyed the inflated stock-based nest eggs of many; no one should call that a great thing.

Then Greenspan and Bernanke jointly (one after the other) followed with their excess, easy money, cheap dollar, huge leverage “expansion” that went chasing after real estate, fueling the housing bubble and the risky-leverage bubble;

then the risky-leverage bubble doubled-up the consequences of the bursting of the Greenspan-Bernanke housing bubble; taking the economy lower than any downturn since the depression - again nothing to brag about.

Now, Bernanke thinks there should be nothing but applause that it is again his money manipulation and not economic and market fundamentals that are sending his excess dollars to stocks.

The 2012 election campaign should include campaign pledges for legislation permitting the POTUS to make a one-time wholesale replacement of every Federal Reserve officer/board member, with US Senate concurrence.

This is not an issue of “politicizing” the Fed.

The Fed’s actions are an act of “politicizing” the Fed’s policies, following a political agenda bent on “fixing” what the Obama administration is hurting, at the expense of a sound dollar and at the expense of a sound economy in the future. It won’t work. It should be considered criminal.

[Attention Surplus Disorder]

There’s no possible argument that QE2 has helped the stock market. That statement is NOT meant as a defense of the policy. I am not in favor of ANYTHING the Fed has done over the past few years.

Personally, I believe that the performance of the stock market is probably the number one or number two item targeted by the Fed. This is the thing that every person who has any access to the news, from any source, ultimately sees on essentially a daily level. It is the psychological factor that gooses people to spend when it is rising. It is the number that the greatest number of people see and are force-fed an interpretation, to some extent. I genuinely believe this is true.

*IF* the actions of the Fed, whether it be quantitative easing or quantitative tightening or Ben Bernanke dressing up as a pirate or a spaceman or performing backflips with the Flying Wallendas, cause the market to rise, it basiclly destroys at least 85% of the counterargument against the Feds’ actions, and that is that. It is not possible for fund managers to argue with their compadres and competitors if their compadres and competitors are making money and they are not. The world MUST jump on this train if it can be nudged into vectored action. It is its own solution. Like it or not.

[steve86]

What happens to the stock market when the punchbowl is taken away?

[LomanBill]

[All those excess dollars being dumped in the economy got to go SOMEWHERE, and one is led to suspect that the Fedral Reserve itself, just might be putting these dollars into the stack market through front organizations]

http://www.zerohedge.com/article/todays-pomo-confirms-fed-continues-shower-primary-dealers-billions-commission-based-profits

[YankeeReb]

Food is up, gas is up and all commodities are up, but there’s no inflation. George Orewell’s Ministry of Plenty has nothing on 0bama and his clowns running the treasury.

[Walmartian]

controversial $600 billion bond buying plan has contributed to a stronger RIGGED stock market. TFI

[Brilliant]

I don’t have any problem with their initial reaction right after the crash. Could have been more adept, but in general, I don’t think they had any choice but to flood the market with money. I think that excuses what he did til about the end of 2008. After that, it was pure nonsense.

[microgood]

Doesn’t anyone in Washington DC understand what their job is?

[FromLori]

Thanks for the link!

[AlexW]

“Personally, I believe that the performance of the stock market is probably the number one or number two item targeted by the Fed.”
_________________________________________
Just my opinion:
It is no longer our father’s stock market.
It is just a computer driven pump and dump scam run by a handful of fat cats like Soros and Buffet.
None of it is based on reality.

[BilLies]

Thanks, I've seen that one, just want to be accurate when espousing/arguing an important issue.