tag:blogger.com,1999:blog-6616959642391988608.post7390693647256238448..comments2024-03-18T13:22:06.536-07:00Comments on Calafia Beach Pundit: The real meaning of today's FOMC announcementScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger25125tag:blogger.com,1999:blog-6616959642391988608.post-70553578078595600332011-08-11T11:50:19.031-07:002011-08-11T11:50:19.031-07:00Ed R: 30-yr T-bonds did not exist prior to the lat...Ed R: 30-yr T-bonds did not exist prior to the late 1970s. 10 years was the longest maturity prior to that.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-58359094138895586372011-08-11T11:38:41.593-07:002011-08-11T11:38:41.593-07:00Who says: "[The Fed] can't control rates ...Who says: "[The Fed] can't control rates much beyond 10 years, and it certainly can't control 30-yr rates."<br /><br />That is pretty much what it did do from 1941 through 1952.Ed Rhttps://www.blogger.com/profile/17720176132423294274noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-35889914234589359212011-08-10T14:16:47.153-07:002011-08-10T14:16:47.153-07:00Interesting analysis, Rick.Interesting analysis, Rick.Williamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-50324261735440731942011-08-10T12:13:41.734-07:002011-08-10T12:13:41.734-07:00The ultimate bubble irony being created is within ...The ultimate bubble irony being created is within the US government's treasury market itself. The are working feverishly to set their very own trap and end game. When the bond market (final) bubble bursts you can turn out the lights the party is over. That is one that will never be blown back up!TradingStrategyLetter - Weekly Summaryhttps://www.blogger.com/profile/06430136667577107255noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-11209425813230688602011-08-10T11:05:25.612-07:002011-08-10T11:05:25.612-07:00Great analysis.
Are we going to go through a sto...Great analysis. <br /><br />Are we going to go through a stock market bubble? Then another real estate bubble?<br /><br />Seems the Fed has set the table for this.Steve Khttps://www.blogger.com/profile/13432588336315831351noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-60062794774274294992011-08-10T07:16:07.563-07:002011-08-10T07:16:07.563-07:00But Scott, 'we have to keep spending money to ...But Scott, 'we have to keep spending money to keep from going broke'! -- Vice President of the United States Joe Biden<br /><br />Where do you go now? Where do you flee? Austrailia? Canada? A 2nd grader selling lemonaide in her driveway in Georgia is shut down by the government because she doesn't have the necessary permits! <br /><br />What country is this??? What are these Jeffhttps://www.blogger.com/profile/04068805988034886750noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-42582567912585250722011-08-10T06:55:12.557-07:002011-08-10T06:55:12.557-07:00It's all about propping up the reckless lender...It's all about propping up the reckless lenders and penalizing the savers and earners. Nothing more. How the heck can the FED guanrantee that rates will stay at record infintessimal lows for 2 more years? We all know gold is wrong and there is no inflation - except in Zurich where ONE Big Mac will cost you $US17.19 today at lunch. But if this hyper inflationary move does 'stimulate' TradingStrategyLetter - Weekly Summaryhttps://www.blogger.com/profile/06430136667577107255noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-45710160676742780402011-08-10T06:28:19.975-07:002011-08-10T06:28:19.975-07:00There is no free lunch ... government should NOT b...There is no free lunch ... government should NOT be forcing investors and markets to do anything it doesn't want to do 'normally'! This is beyond wreckless! If I was S&P I would be downgrading treasury's another notch to 'AA' AND with a negative outlook immediately!TradingStrategyLetter - Weekly Summaryhttps://www.blogger.com/profile/06430136667577107255noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-63852343117749817542011-08-10T06:06:00.779-07:002011-08-10T06:06:00.779-07:00Actually, I think that the Fed has punted the ball...Actually, I think that the Fed has punted the ball back to Congress. The FOMC statement admits that the economy is worse than its prior forecasts. It admits that the Japan excuse was exaggerated and that the headwinds to real GDP growth are more structural here than the result of temporary external factors. Moreover, it is an admission that in a period of massive deleveraging, monetary policy Rickhttps://www.blogger.com/profile/07767085539237536998noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-10937775619899725692011-08-10T02:06:30.873-07:002011-08-10T02:06:30.873-07:00Good question, Al.Good question, Al.Williamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-70898183459296498392011-08-09T23:48:12.376-07:002011-08-09T23:48:12.376-07:00So, why will zero interest rates work for the US w...So, why will zero interest rates work for the US when it hasn't in Japan?Alhttps://www.blogger.com/profile/10252395341845905564noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-22216759482235857562011-08-09T23:21:07.930-07:002011-08-09T23:21:07.930-07:00If inflation started kicking in prior to 2013, the...If inflation started kicking in prior to 2013, the Fed could always stop reinvesting payments from its treasury holdings, which would be a small, relative tightening.<br /><br />Also - and I admit I might be reading too much into this - but their statement said, "exceptionally low levels for the federal funds rate." I don't know about anyone else, but I would still consider a targetAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-37478015543118899352011-08-09T22:07:47.369-07:002011-08-09T22:07:47.369-07:00Phil: your question is right on the mark. I have t...Phil: your question is right on the mark. I have to believe that the Fed's move today will add to the inflationary pressure out there. I don't know how much, though, and I don't know what will happen if and when inflation picks up in a big way. <br /><br />All I can say is that while this is good news for risky assets right now, it poses the very real threat of a big tightening of Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-54818527846842417602011-08-09T19:38:07.919-07:002011-08-09T19:38:07.919-07:00Thanks for the informed analysis. Much appreciated...Thanks for the informed analysis. Much appreciated.<br /><br />WilliamWilliamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-44712777518049998142011-08-09T19:13:18.099-07:002011-08-09T19:13:18.099-07:00great post scottgreat post scottChristian S. Herzeca, Esq.https://www.blogger.com/profile/09913237226503475709noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-79028715330785550652011-08-09T19:01:57.779-07:002011-08-09T19:01:57.779-07:00Scott, thank you for your thoughts. The question ...Scott, thank you for your thoughts. The question I have is what happens, say 9-12 months from now, if we see a spike in inflation? What tools would the Fed have to fight inflation now that they have pledged to keep rates near zero until mid-2013?Phil Boyerhttps://www.blogger.com/profile/05989111469856729589noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-44040064227609343702011-08-09T14:23:17.254-07:002011-08-09T14:23:17.254-07:00http://dmarron.com/2011/07/26/raise-the-debt-ceili...http://dmarron.com/2011/07/26/raise-the-debt-ceiling-rap/<br /><br />BTW ... this dude is next in line a Fed Chief!TradingStrategyLetter - Weekly Summaryhttps://www.blogger.com/profile/06430136667577107255noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-81120477621821575752011-08-09T14:19:45.207-07:002011-08-09T14:19:45.207-07:00Seems like a lot of financial engineering and jigg...Seems like a lot of financial engineering and jiggery-pokery to me. Individuals and funds which need 'safe' & 'secure' yield have been left in the lurch. The re-risk is back on whether you like it or not. America is the new 'carry trade' operator. This type of 'bubble' prosperity never lasts or works! Heliocopter Ben flying blind and nothing more!TradingStrategyLetter - Weekly Summaryhttps://www.blogger.com/profile/06430136667577107255noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-16144823223712653632011-08-09T14:09:14.166-07:002011-08-09T14:09:14.166-07:00Furthermore, I note Scott Sumner's point about...Furthermore, I note Scott Sumner's point about how this whole crisis has been aggravated by unusually weak growth in nominal GDP. To the extent that this announcement stimulates growth in M2 velocity, nominal GDP should pick up and that should go a long way to alleviating the problems of large debtors. (If nominal GDP comes in lower than a borrower expected, then he has a big cash flow Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-52205053989046643022011-08-09T14:00:21.188-07:002011-08-09T14:00:21.188-07:00I'm sensitive to the reflationary implications...I'm sensitive to the reflationary implications of this move by the Fed. But I do recognize that strong money demand (cash hoarding and deleveraging) has been holding back some of the recovery that I expected to see as M2 velocity picked up. (i.e., M2 velocity has remained quite low). Also, by weakening money demand the FOMC announcement could be seen as offsetting some of the extra money Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-56205455960698202992011-08-09T13:58:38.219-07:002011-08-09T13:58:38.219-07:00More of the same and getting worse. Financial repr...More of the same and getting worse. Financial repression is not how to build a thriving and robust society.Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-48230752326384336092011-08-09T13:53:03.456-07:002011-08-09T13:53:03.456-07:00It will be a first to devalue to prosperity. Did t...It will be a first to devalue to prosperity. Did this not get us into trouble in the first place?TradingStrategyLetter - Weekly Summaryhttps://www.blogger.com/profile/06430136667577107255noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-37147397293705455762011-08-09T13:41:14.154-07:002011-08-09T13:41:14.154-07:00The Fed's move may be enough, but I would pref...The Fed's move may be enough, but I would prefer targeting nominal GDP, and QE until we see some real traction.<br /><br />We may be entering a new era for monetary policy. In Japan they are stuck at zero bound, and have been since before I was bald. Staying at zero has not worked.<br /><br />Japan is still deflation-prone.<br /><br />We know from Japan that simply going to zero-bound is not Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-61981538005342547352011-08-09T13:32:33.080-07:002011-08-09T13:32:33.080-07:00Absolutly, absolutly correct. The lows for the equ...Absolutly, absolutly correct. The lows for the equity markets I believe occured right after the announcement, and they should prove to be the lows for the year.Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-84055517937314688422011-08-09T13:32:19.345-07:002011-08-09T13:32:19.345-07:00it's a game changer for sure. As always Scott,...it's a game changer for sure. As always Scott, great analysis.Jeffreyhttps://www.blogger.com/profile/06724263996761635355noreply@blogger.com