World Needs Permanent QE - Says AEP -

[vinoveri]

Ha Ha Ha! That's a plan!

Well, at least the play is moving along according to script ....

http://www.telegraph.co.uk/finance/e...manent-QE.html

[lektrode]

Re: World Needs Permanent QE - Says AEP -

http://www.telegraph.co.uk/finance/economics/11165982/World-economy-so-damaged-it-may-need-permanent-QE.html

Markets are suddenly prey to the disturbing thought that the five-and-a-half year expansion since the Lehman crisis may already be over, before Europe has regained its prior level of output. That is the chief reason why the price of Brent crude has crashed by 25pc since June. It is why yields on 10-year US Treasuries have fallen to 1.96pc, and why German Bunds are pricing in perma-slump at historic lows of 0.81pc this week.



We will find out soon whether or not this a replay of 1937 when the authorities drained stimulus too early, and set off the second leg of the Great Depression.



If this growth scare presages the end of the cycle, the consequences will be hideous for France, Italy, Spain, Holland, Portugal, Greece, Bulgaria, and others already in deflation, or close to it. The higher their debt ratios, the worse the damage.


....
Traders are taking bets on capitulation by the Fed as it tries to find new excuses to delay rate rises, this time by talking down the dollar. "Talk of 'QE4' and renewed bond buying is doing the rounds," said Kit Juckes from Societe Generale.

Gentle declines in the price of oil are typically benign, a shot in the arm for companies and consumers alike. The rule of thumb is that each $10 drop in the price adds 0.3pc to GDP growth over the next year.
Crashes are another story. They signal global stress, doubly dangerous today because the whole industrial world is one shock away from a deflation trap, a psychological threshold where we batten down the hatches and wait for cheaper prices. That is the Ninth Circle of Hell in economics. Lasciate ogni speranza.
The world is also more stretched. Morgan Stanley calculates that gross global leverage has risen from $105 trillion to $150 trillion since 2007. Debt has risen to 275pc of GDP in the rich world, and to 175pc in emerging markets. Both are up 20 percentage points since 2007, and both are historic records. The Bank for Settlements warns that the world is on a hair-trigger. The slightest loss of liquidity can have "violent" effects.

sure is sounding more and more like it's 'time to party like its 1938' (/mode="prince-1999")
and/or that this confirms that "Print and pray has officially failed" as Mr J put it.

guess the only question now is: are we looking at the opening innings of the 'output gap recession' ?

could be the fans are just getting up to head for the next round of suds... or is it the exits?
but since the bases are now loaded, with PnP scoring 3 singles in 3 up - will ms yellen bring in a new hitter to knock one out of the park, here in the top of the 9th?

oh baybee! is the tension building or what?

[DRumsfeld2000]

Re: World Needs Permanent QE - Says AEP -

Lektrode: I wish I knew what the hell you are talking about!

[lektrode]

Re: World Needs Permanent QE - Says AEP -

ME TOO!!!
;)

but its one o them 'uniquely american colloquialisms' = referring to baseball

[aaron]

Re: World Needs Permanent QE - Says AEP -

Ha Ha Ha! That's a plan!

Well, at least the play is moving along according to script ....

Sure is

[BK]

Re: World Needs Permanent QE - Says AEP -

Good news! Ms Yellen was visiting Chelsea Massachusetts on Thursday and job prospects are looking up in Chelsea.
http://www.bostonherald.com/business...cts_looking_up

The man profiled in the attached video has received vocational training and has a new job as a Food Pantry coordinator!

I guess there is a skills gap for Food Pantry coordinators here in the good ole United States and the recovery is only limited by the unemployed to learn new skills to adapt to the modern technology focused economy.

[EJ]

Re: World Needs Permanent QE - Says AEP -

Good news! Ms Yellen was visiting Chelsea Massachusetts on Thursday and job prospects are looking up in Chelsea.
http://www.bostonherald.com/business...cts_looking_up

The man profiled in the attached video has received vocational training and has a new job as a Food Pantry coordinator!

I guess there is a skills gap for Food Pantry coordinators here in the good ole United States and the recovery is only limited by the unemployed to learn new skills to adapt to the modern technology focused economy.

Can you imagine Volcker or Greenspan or even Bernanke in such clearly politically motivated photo ops, as if the Fed chair was running for office?

For once I'm speechless.

[Thailandnotes]

Re: World Needs Permanent QE - Says AEP -

Can you imagine Volcker or Greenspan or even Bernanke in such clearly politically motivated photo ops, as if the Fed chair was running for office?

Oh my ******* god......You are kidding right?

[EJ]

Re: World Needs Permanent QE - Says AEP -

Oh my ******* god......You are kidding right?

Can you point to an instance of Volcker or Greenspan engaging in this shaking hands and kissing babies variety of campaigning that is clearly intended to convey that the Fed cares about working families? Hard to square that with the stated goal of QE, to inflate asset prices on the balance sheets of high net worth families.

Financial assets increased from 61% to 70% of total household assets starting at the housing bubble reflation
in 2005 and continuing through asset price inflation via interest rate and QE policy.

[lektrode]

Re: World Needs Permanent QE - Says AEP -

so... if this is indeed a marked change in 'fed speak' - guess the question becomes:

what is the implication ?

[jpetr48]

Re: World Needs Permanent QE - Says AEP -

so... if this is indeed a marked change in 'fed speak' - guess the question becomes:

what is the implication ?

Yellen is stressing income inequality in the most recent headlines. This is not new news as we expected a change in focus from Wall Street to Main street
the implication is suppose to be less reserves held with fed and more credit to main street (you and me). The investment implication is now that consumer sentiment is high, can they sustain growth thru increased availability of credit?

below is article and link
http://www.calculatedriskblog.com/20...deal-that.html

Mortgage giants Fannie Mae and Freddie Mac , their regulator and lenders are close to an agreement that could greatly expand mortgage credit while helping lenders protect themselves from charges of making bad loans, according to people familiar with the matter.
...
The new agreement would clarify what mistakes should constitute fraud, giving greater confidence to lenders that they won’t be penalized many years after a loan is made.
...
Separately, Fannie Mae, Freddie Mac and the FHFA are considering new programs that would allow them to guarantee some mortgages with down payments of as little as 3%.

CR Note: There are two parts: 1) less risk to lenders of being forced to buyback faulty loans, and 2) a lower downpayment in certain circumstances. According to the article the agreement could be announced next week.
Read more at http://www.calculatedriskblog.com/20...xjbm184l3lK.99

[BK]

Re: World Needs Permanent QE - Says AEP -

Volker and Greenspan didn't have to answer to a Political Machine that generates campaign donations and support of grassroots political action through 'New Market Tax Credits'. Tax Credits handed out by the US Treasuries CDFIFund.gov organization are powerful political favors for large Banks and Investment houses.

The economic crisis results in massive volatility in the financial markets and the big banks make lots of money trading these movements. Then the big concern for the big banks is how can we reduce our corporate income taxes and support the politicians who kept us out of jail during the financial crisis.

The organization Ms Yellen was visiting is called Connect and one of Connects partners/supports is a little ole non-profit called LISC (Local Initiative Support Company or Corp). see http://www.lisc.org/csi/crime_&_safe...in_chelsea.php

LISC is a Community Development Finance Institution and an organization with the special power to hand out Corporate Income Tax Credits that it receives directly from the US Treasury (you can be assured that Mr Lew and the President hand pick who gets these corporate income tax credits). Every Dollar that a big Bank invests in a housing project support by LISC and organizations like Connect the bank can secure 35%-50% of their investment in tax credits and secure a revenue stream that may pay back the entire investment.

In 2012 LISC, a non-profit, had non-taxable income of $118 Million dollars for handing out tax credits for the US Treasury.

Michael Rubinger is the CEO of LISC was paid $460,000 in 2012 for is 37 hour work week to hand out Tax Credits that LISC gets from the US Treasury.

Yellen was doing an appearance for very powerful interest groups who are closely aligned with Big Banks and the Obama Administration.

http://www.lisc.org/section/aboutus/mission/990_returns

[EJ]

Re: World Needs Permanent QE - Says AEP -

Volker and Greenspan didn't have to answer to a Political Machine that generates campaign donations and support of grassroots political action through 'New Market Tax Credits'. Tax Credits handed out by the US Treasuries CDFIFund.gov organization are powerful political favors for large Banks and Investment houses.

The economic crisis results in massive volatility in the financial markets and the big banks make lots of money trading these movements. Then the big concern for the big banks is how can we reduce our corporate income taxes and support the politicians who kept us out of jail during the financial crisis.

The organization Ms Yellen was visiting is called Connect and one of Connects partners/supports is a little ole non-profit called LISC (Local Initiative Support Company or Corp). see http://www.lisc.org/csi/crime_&_safe...in_chelsea.php

LISC is a Community Development Finance Institution and an organization with the special power to hand out Corporate Income Tax Credits that it receives directly from the US Treasury (you can be assured that Mr Lew and the President hand pick who gets these corporate income tax credits). Every Dollar that a big Bank invests in a housing project support by LISC and organizations like Connect the bank can secure 35%-50% of their investment in tax credits and secure a revenue stream that may pay back the entire investment.

In 2012 LISC, a non-profit, had non-taxable income of $118 Million dollars for handing out tax credits for the US Treasury.

Michael Rubinger is the CEO of LISC was paid $460,000 in 2012 for is 37 hour work week to hand out Tax Credits that LISC gets from the US Treasury.

Yellen was doing an appearance for very powerful interest groups who are closely aligned with Big Banks and the Obama Administration.

http://www.lisc.org/section/aboutus/mission/990_returns

Well researched. So it was a twofer: suck up to FIRE interests while appearing to be an advocate for the poor. She didn't get where she is by being politically naive.

[Thailandnotes]

Re: World Needs Permanent QE - Says AEP -

Can you imagine Volcker or Greenspan or even Bernanke in such clearly politically motivated photo ops?

Funny that a section of Greenspan’s wiki is on politicizing the office.

[BK]

Re: World Needs Permanent QE - Says AEP -

I suspect there is a ton of over investment in real estate development in the name of affordable housing and community redevelopment. The driving force in these construction projects is the harvesting of tax credit and crappy former industrial towns (like Chelsea) all qualify as 'New Market Tax Credit' eligible sites.

If you thought the over overbuilding in the 1980s or early 2000s then this round of over building will cause 'shock and awe' sometime in the future.

A quick Google search will bring up tons of real estate construction projects that are being undertaken because a large Bank has extra cash that they want to invest in order to harvest tax credits to reduce corporate income taxes (New market tax credits, historic tax credits, etc).
https://www.google.com/search?q=%22n...nel=sb&tbm=nws

Boston most famous Tax Credit person is Mike Barnacle's wife Anne M. Finucane. Here is a recent Press Release for the B of A investing in Women (read we want to harvest tax credit to reduce Bank taxes).
http://newsroom.bankofamerica.com/pr...r-invest-women

Morgan Stanley's Tax Credit harvesting machine is call 10,000 Small Businesses - http://www.goldmansachs.com/citizens...businesses/US/