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FED Announces....

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Postby Dade on 26 Jan 2012 10:21

FED Announces....

That interest rates will remain at historic lows until at least 2014. Yay for free money to the banks!! Yay for the endless printing press!!

What the fuck is wrong with these people? Doesn't this announcement really mean that they know we're still fucked? If things were looking up, wouldn't interest rates rise slightly? Not good......IMHO.
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Postby JMT on 02 Feb 2012 15:12

Re: FED Announces....

Fed Members Laughed As Housing Bubble Grew

CNBC wrote:In what may be the strangest market indicator ever, a blogger found that the amount of laughter recorded in the official transcripts of Federal Reserve Open Market Committee meetings from 2000 to 2006 correlates almost perfectly with the rise in housing prices taking place at the time.

A particular series of side-splitting meetings by the central bank in 2006 marked the very top of the housing bubble.

CNBC wrote:...one of the more TV sitcom-like moments came during the Fed’s January 2006 meeting when then-Vice Chairman Tim Geithner said to the departing Greenspan during his last gathering:
Tim Geithner wrote:“I’d like the record to show that I think you’re pretty terrific, too. [Laughter] And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative.[Laughter] With that, the economy looks pretty good to us, perhaps a bit better than it did at the last meeting. With the near-term monetary policy path that’s now priced into the markets, we think the economy is likely to grow slightly above trend in ’06 and close to trend in ’07.”

But soon after that exchange, the laughter died.

CNBC wrote:That means the laughter count is probably pretty low in Fed meetings these days.

But we don’t know for sure because while the FOMC meeting minutes are released three weeks later, full transcripts of the meetings that record these moments of brevity are not released until five years later.

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Postby slamminshaun on 02 Feb 2012 15:44

Re: FED Announces....

Spot on.....

Peter Schiff wrote:With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow. The signposts are easily understood: the Fed will stop at nothing in pursuing its goals of creating phantom GDP growth, holding down unemployment, propping up stock and housing prices, and monetizing government debt. To do so, it will continue to pursue a policy of negative interest rates, while ignoring the collateral damage of unsustainable debt, virulent inflation, misallocated resources and credit, suffering yield-dependent retirees, and a devalued U.S. currency.


Read the rest....

http://www.europac.net/commentaries/wai ... _big_muddy
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Postby SWANK on 02 Feb 2012 18:53

Re: FED Announces....

Is this not where we are supposed to assimilate and make lemonade...? Shouldn't we be taking advantage of our weak dollar to now start exporting our sh*t.......oh wait...we have nothing to export....or do we?

You've all heard about the Alberta Oil Sands right...?

Fasten your seat belts and prepare for the ride.... :|
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Postby JMT on 01 Mar 2012 15:29

Re: FED Announces....

Bernanke warns lawmakers country headed for 'massive fiscal cliff'

In remarks that hit Wall Street stock prices, the central bank boss suggested the economy could hit a serious roadblock if Congress allows the Bush tax rates and a payroll tax cut to expire and $1.2 trillion in spending cuts to be implemented simultaneously in January.

Cutting $1.2 trillion in government spending is BAD for the economy?

Bernanke warned that draining funds from the economy by allowing tax cuts to expire and trimming spending could slow growth.

That means it is not real growth.
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Postby JMT on 21 Sep 2012 15:10

Re: FED Announces....

Peter Schiff wrote:I think the Fed has just driven the final nail in the coffin of the US dollar.



Ron Paul explains why Bernanke keeps insisting on more QE.
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Postby JMT on 27 Feb 2013 11:21

Re: FED Announces....

The Fed fails at it's own "stress test". Nice.

Fed Faces Explaining Billion-Dollar Losses in QE Exit Stress
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Postby Lola on 27 Feb 2013 12:35

Re: FED Announces....

OK guys I'm the first to admit that I"m not the sharpest tool in the shed.

Who gets the interest ? Like if we increase the interest rates on say mortgage loans - who keeps that interest? The government?

(sorry if this is a no-brainer answer).
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Postby Color_Swatch on 27 Feb 2013 13:17

Re: FED Announces....

Lola wrote:OK guys I'm the first to admit that I"m not the sharpest tool in the shed.

Who gets the interest ? Like if we increase the interest rates on say mortgage loans - who keeps that interest? The government?

(sorry if this is a no-brainer answer).


I'm just as confused as you are. :?:
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Postby JMT on 27 Feb 2013 15:21

Re: FED Announces....

Lola wrote:Who gets the interest ? Like if we increase the interest rates on say mortgage loans - who keeps that interest? The government?


You mean when interests rates go up? It goes to whomever loaned out the money in whatever transaction took place. Same way a credit card works. They loan you money and you pay it back with interest.

Now, applying this analogy to the government... the US has currently owes over $16 trillion. Because interest rates are low enough, we can keep paying the "minimum balance" on our massive credit card by borrowing even more to make the payment. A scam that has worked so far. But once rates go up (which some people predict will have to happen soon because the inflation rate is outpacing interest rates, which makes everyone poorer with each passing day), we will have a much harder time paying our minimum balance, or very likely will not be able to make the minimum payment at all and will default on obligations. This would be very, very bad. Most of the money that the US borrows is from selling short term bonds (typically 30 day terms) over and over. Once they mature, we sell more, and repeat the process. So any significant increase in interest rates would have an effect very quickly. As a result, the people who decide policy, like Bernanke, want to suppress the rate as long as possible, at the expense of you and me.

Economics is like physics. For every action there is an equal and opposite reaction. While one side earns money on the interest rate, the other side pays more for it. Most politicians, and The Fed, seem to think money can just be whipped up out of thin air. It is my belief is that we will all pay a big price for that failed logic.
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