NP but The Confidence Man: Bernanke

[David Morris]

You do go on & on.  Dazzling distraction won't work in these parts.

The only significant difference w Q3 is the Fed's stated commitment to keep
it up even after unemployment lowers, even if inflation tics up.  That's
what the doctor should have ordered long ago.


On Saturday, September 15, 2012, alice wellintown wrote:

> The move by Ben, now called QE3 is not the first, notice that there
> were other measures taken, including QE1 and QE2, and Twist, and these
> are only extraordinary steps taken by the Fed. Indeed, the Fed, prior
> to Ben, ignored employment, was fixated on inflation targets. So, the
> characterization of the Fed as one that has not moved agressively, and
> taken major risks, to shore up the economy is false. In fact, the Fed
> has been agressively buying Treasuries and MBS for years, it has
> purchased Trillions in T and MBS. The only change here is the
> language, the Fed saying it will keep these programs in place until
> the jobs and housing markets show marked improvement; this, of course,
> has been the program all along. That the Fed will target an employment
> rate, a rate its conservative projections sees in a range well above
> its target for another two years or so, and this will mean we will be
> looking at another face, for Ben will not stay on, is not really new;
> it's just, again, more explicitly stated, and this is a powerful force
> that will give a boost to investors and risnk asset investment. As mtg
> rates slide down a bit here, we should see further improvement in
> housing as prices stabilize and even move upward in some regions of
> the country. The trade-off that Ben acknowledged in his talk, the pain
> that risk averse savers will suffer, the fixed income folk, those in
> retirement, is a concern, a risk too. But what is needed is a move by
> the congress. The rating agencies are all moving to lower the debt
> rating of the US; that will not have a great impact, as the T remains
> the save harbor, but as the world shakes off this crisis, that debt
> premium will shrink to normal lspreads. We have a chance to address
> the fiscal issues now, as Obama will surely win the election after
> Ben's mighty push, but it is on congress and not the Fed.
>
> > Last year a small but elite group of monetarists began clamoring for
> > the Fed to take similar steps. Now what the Fed did yesterday isn’t
> > that robust. It didn’t commit to higher inflation, but it did commit
> > to keeping interest rates low even after unemployment starts falling.
> > So what you heard yesterday was relief, but also frustration that it
> > took so long.
>
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