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QE expanded...now up to 85 billion / month
Posted on 12/12/12 at 11:46 am
Posted on 12/12/12 at 11:46 am
Print, Benny, Print.
I see a good year for precious metals next year.
Though I think we see some sell the news the next few trading days.
"To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and, in January, will resume rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."
LINK
I see a good year for precious metals next year.
Though I think we see some sell the news the next few trading days.
"To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and, in January, will resume rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."
LINK
This post was edited on 12/12/12 at 11:50 am
1
Posted on 12/12/12 at 12:13 pm to LSU0358
Everyone is making a big deal out of the the unemployment and inflation conditional targets that trigger rates to go back up, but the Fed has always had these type of targets before. The only difference is they're communicating what they are.
I don't, the market will price in any speculation very quickly. Commodities don't pay interest or dividends, so their worth is completely determined by aggregate demand. Unless we have a grand bargain type deal with the fiscal cliff and certainity in the corporate tax code you'll see aggregate demand take a hit.
quote:
I see a good year for precious metals next year.
I don't, the market will price in any speculation very quickly. Commodities don't pay interest or dividends, so their worth is completely determined by aggregate demand. Unless we have a grand bargain type deal with the fiscal cliff and certainity in the corporate tax code you'll see aggregate demand take a hit.
Posted on 12/12/12 at 3:07 pm to BennyAndTheInkJets
I agree with the PM's not doing much until the fiscal cliff issue is "solved."
I also think that money has been in hiding hoping Romney would win. Now that Obama is in, I look for everyone to realize that the "rules" (taxes, healthcare, etc.) are now set for the next four years, and the money will start to flow.
Americans are very creative, and can make money with a constant set of rules. The big fear over the last few years has been that money would be invested for projects and businesses, then Romney comes in and the rules of the game change (which would make companies/businesses that were viable under one set of rules nonprofitable under the new set).
So I don't think this:
Is that big of a deal.
My guess is that a big deal will be made over a few percentage point of a tax increase, which really doesn't amount to all that much, and the media and politicians claim a big success.
I also think that money has been in hiding hoping Romney would win. Now that Obama is in, I look for everyone to realize that the "rules" (taxes, healthcare, etc.) are now set for the next four years, and the money will start to flow.
Americans are very creative, and can make money with a constant set of rules. The big fear over the last few years has been that money would be invested for projects and businesses, then Romney comes in and the rules of the game change (which would make companies/businesses that were viable under one set of rules nonprofitable under the new set).
So I don't think this:
quote:
in the corporate tax code you'll see aggregate demand take a hit.
Is that big of a deal.
My guess is that a big deal will be made over a few percentage point of a tax increase, which really doesn't amount to all that much, and the media and politicians claim a big success.
Posted on 12/12/12 at 3:49 pm to LSU0358
I wasn't referring to what the corporate tax code is or will be, as you said Americans are creative and can deal with any levels. I was referring to the uncertainty surrounding the corporate tax code. Corporations can deal and plan with anything if they know what to expect, that is not true when they don't know what to expect.
The reason you saw many corporations uneasy to raise CapEx or hire in 3Q-4Q was just uncertainty surrounding the fiscal situation. It's not the levels, it's not knowing what the levels are that creates a problem.
With that being said, I've talked to a few people that know tax code and fiscal situation better than most people alive. And they will even say that they, personally, can not sit down and write a corporate tax code that makes sense. It's really that hard to do. If they can't, I won't even try to think that Washington will be able to. So my guess is that Congress will probably do nothing in regards to that when it is all said and done.
The reason you saw many corporations uneasy to raise CapEx or hire in 3Q-4Q was just uncertainty surrounding the fiscal situation. It's not the levels, it's not knowing what the levels are that creates a problem.
With that being said, I've talked to a few people that know tax code and fiscal situation better than most people alive. And they will even say that they, personally, can not sit down and write a corporate tax code that makes sense. It's really that hard to do. If they can't, I won't even try to think that Washington will be able to. So my guess is that Congress will probably do nothing in regards to that when it is all said and done.
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