When QE3 will start

[c1ue]

When do you think QE3 will start?

Bernanke: "In the interests of promoting the growth in the US economy, the Federal Reserve has unanimously agreed to begin a new program of quantitative easing"

Obama: "I have a great deal of confidence in Chairman Bernanke"

[jk]

Re: When QE3 will start

you talking about the big hint, the official announcement, or the actual implementation? last year the big hint was at jackson hole, the official announcement sometime later, the implementation oct if i'm not mistaken.

[Chris Coles]

Re: When QE3 will start

Ah! But the question is; how do they use it this time?

[c1ue]

Re: When QE3 will start

you talking about the big hint, the official announcement, or the actual implementation? last year the big hint was at jackson hole, the official announcement sometime later, the implementation oct if i'm not mistaken.

I'd say given that the double dip has begun, the actual implementation is what matters.

[jk]

Re: When QE3 will start

Ah! But the question is; how do they use it this time?

ben's playbook says to buy further out on the yield curve, out to 2yrs. after that, they extend it to 3-6 yrs. there's already noise in the media referring to operation twist back in the '60s [iirc].

[jk]

Re: When QE3 will start

I'd say given that the double dip has begun, the actual implementation is what matters.

then i'd have to say oct 1.

[globaleconomicollaps]

Re: When QE3 will start

operation twist was intended to suppress the price of gold by simultaneously selling the short end and buying the long end. It was intended to be balance sheet neutral. If they follow the play book, this will increase the duration of the treasuries under management while not polluting the fed balance sheet with additional securities. This might elevate the dollar and have the effect of pulling money out of gold. In any event they will take no action until after the first of the year. They are alienating the Chinese with the Large Scale asset purchases making it politically infeasible to act before then. I think gold has a powerful upward momentum right now and this kind of program will only have a limited effect. Jim Sinclair said yesterday that he thinks that $1764/oz will be a cut off price beyond which the public will begin to lose faith in the currency. If so, the central bank will not be able to influence prices with asset purchases.

[jk]

Re: When QE3 will start

operation twist was intended to suppress the price of gold by simultaneously selling the short end and buying the long end. It was intended to be balance sheet neutral. If they follow the play book, this will increase the duration of the treasuries under management while not polluting the fed balance sheet with additional securities. This might elevate the dollar and have the effect of pulling money out of gold. In any event they will take no action until after the first of the year. They are alienating the Chinese with the Large Scale asset purchases making it politically infeasible to act before then. I think gold has a powerful upward momentum right now and this kind of program will only have a limited effect. Jim Sinclair said yesterday that he thinks that $1764/oz will be a cut off price beyond which the public will begin to lose faith in the currency. If so, the central bank will not be able to influence prices with asset purchases.

if they buy far enough out on the curve they can bring down 10yr rates, which in turn will lower mortgage rates. if they can get those low enough, they might be able to spur some refi's, which would help.

[GRG55]

Re: When QE3 will start

if they buy far enough out on the curve they can bring down 10yr rates, which in turn will lower mortgage rates. if they can get those low enough, they might be able to spur some refi's, which would help.

I doubt it helps nearly as much this time. Refi's now will help those that don't really need the help [anyone who has a mortgage and can qualify for a refi, still has their house and presumably have been able to afford the current mortgage payments]. People who refi likely won't consume much more in these uncertain times...

[jk]

Re: When QE3 will start

I doubt it helps nearly as much this time. Refi's now will help those that don't really need the help [anyone who has a mortgage and can qualify for a refi, still has their house and presumably have been able to afford the current mortgage payments]. People who refi likely won't consume much more in these uncertain times...

i'm grasping at straws here, grg. i'm trying to think of something which actually might happen in the policy sphere which might actually do at least marginal good. things haven't become awful enough, apparently, for anything more substantive.

[GRG55]

Re: When QE3 will start

i'm grasping at straws here, grg. i'm trying to think of something which actually might happen in the policy sphere which might actually do at least marginal good. things haven't become awful enough, apparently, for anything more substantive.

Things are more awful that the authorities seem to understand. Tonight on the BBC World News, in an item about the US economy [squeezed in between reports on riots and arson all over the UK], the reporter interviewed a restaurant owner who is just finishing fitting out his second restaurant in Manhattan. He was a recipient of government funds for the project under the last Federal fiscal stimulus program. The BBC mentioned the jobs that will be created.



My reaction was, in order:

1. This is "infrastructure"?
2. Is yet another high end NY restaurant a necessary part of restructuring the US economy to compete with _______________ [<-- fill in your favourite developing nation here]?
3. Are the jobs going to be classified as "gourmet burger flippers"?

I realize this is not monetary policy, which is what we were talking about, but I am starting to think the authorities - fiscal and monetary authorities, both - might do best to just stand aside instead of doing more damage with their corrupt policies...

[metalman]

Re: When QE3 will start

Things are more awful that the authorities seem to understand. Tonight on the BBC World News, in an item about the US economy [squeezed in between reports on riots and arson all over the UK], the reporter interviewed a restaurant owner who is just finishing fitting out his second restaurant in Manhattan. He was a recipient of government funds for the project under the last Federal fiscal stimulus program. The BBC mentioned the jobs that will be created.



My reaction was, in order:

1. This is "infrastructure"?
2. Is yet another high end NY restaurant a necessary part of restructuring the US economy to compete with _______________ [<-- fill in your favourite developing nation here]?
3. Are the jobs going to be classified as "gourmet burger flippers"?

I realize this is not monetary policy, which is what we were talking about, but I am starting to think the authorities - fiscal and monetary authorities, both - might do best to just stand aside instead of doing more damage with their corrupt policies...

clicking on 100+ cable stations here... nothing re uk riots. nada. not a peep... uk riots? what riots?

[GRG55]

Re: When QE3 will start

clicking on 100+ cable stations here... nothing re uk riots. nada. not a peep... uk riots? what riots?

LOL...

The "BREAKING NEWS" that just came across CNN is Diana Nyad abandoning her effort to swim from Cuba to Key West. Could have something to do with the fact she is 61 years old...

Meantime across the pond, there's no possibility of hypothermia as it was a hot time in Blighty for the third night in a row...

[metalman]

Re: When QE3 will start

LOL...

The "BREAKING NEWS" that just came across CNN is Diana Nyad abandoning her effort to swim from Cuba to Key West. Could have something to do with the fact she is 61 years old...

Meantime across the pond, there's no possibility of hypothermia as it was a hot time in Blighty for the third night in a row...

here in the usa we're watching...



not...



cuz...

[aaron]

Re: When QE3 will start

In the news on Yahoo finance:
Fed may react to market plunge and stalled economy with new rescue efforts
http://finance.yahoo.com/news/Fed-ma...111449018.html

So, the rumors are running wild.

EJ guessed the fed would start tomorrow. If Bernanke is true to his word, then yes, he should announce a bond buying program tomorrow. We are getting 'deflation' in all the assets that he cares about.