tag:blogger.com,1999:blog-6616959642391988608.post1487507444898509753..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Bond market to Fed: you've got things turned aroundScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-6616959642391988608.post-90611785516164831172011-02-08T10:26:18.236-08:002011-02-08T10:26:18.236-08:00Re who owns the Fed: For all practical purposes th...Re who owns the Fed: For all practical purposes the Fed is "owned" by the US government, since the Fed remits all its profits directly to the US Treasury. Those profits amounted to a record $78 billion in 2010. The Fed profits by exchanging reserves (on which it is currently paying 0.25% per year) for short- and intermediate-term Treasuries (on which it earns 2-3% per year). In short, Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32661421720860876062011-02-08T09:24:30.718-08:002011-02-08T09:24:30.718-08:00Scott, I have a Finance/Econ degree from the mid 8...Scott, I have a Finance/Econ degree from the mid 80's. I'm not in the Financial world today (except for my own investing). In my research, I cannot answer a simple question: Who owns the fed and who is benefiting financially from adding over a trillion dollars to their balance sheet?Jeffhttps://www.blogger.com/profile/04068805988034886750noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-4713833387826600962011-02-08T08:06:54.893-08:002011-02-08T08:06:54.893-08:00Maybe its not done much for interest rates, but it...Maybe its not done much for interest rates, but its been wonderful for stocks. In fact, Bernanke said on several occasions that his favorite mechanism for "wealth creation" was via the stock market.Frozen in the Northhttps://www.blogger.com/profile/04901959687094626879noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32918261511488893042011-02-07T16:28:45.695-08:002011-02-07T16:28:45.695-08:00I'm sure there was some "buy the rumor/se...I'm sure there was some "buy the rumor/sell the fact" action at the beginning which helped drive yields higher. But the fact that the rise has been sustained and it continues tells me that there is something afoot in the fundamentals. Namely, the economy is improving.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-54727393962605584982011-02-07T15:50:05.135-08:002011-02-07T15:50:05.135-08:00Thanks for the great blog Scott - much appreciated...Thanks for the great blog Scott - much appreciated. I was wondering if you thought maybe the expected move higher in bonds from QE2 actually happened before the announcement (a 'buy the rumour'-type move) given the telegraphing of QE2 intentions well before the official confirmation of the program?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-36188669227270214682011-02-07T12:07:03.673-08:002011-02-07T12:07:03.673-08:00Way way way too much focus on QE2...it is the econ...Way way way too much focus on QE2...it is the economy that matters<br />and as adjunct corporate bond borrowing....as long as corporate<br />bond spreads compress...QE2 is playing the lounge when the real story is in the ballroom....broderohttps://www.blogger.com/profile/12296214283216386700noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-38448503287657751832011-02-07T11:50:46.038-08:002011-02-07T11:50:46.038-08:00It reinforces the notion Central banks haven't...It reinforces the notion Central banks haven't a clue what they are doing. And further reinforces the notion they cause more harm than good.<br /><br />We will discuss this after the next Fed-induced episode of financial panic and mayhem.<br /><br />We are already on our way. The only food the young or the poor will buy in 5 years is fast food. However, even these prices will elevate Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.com