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Message
re: The Federal Reserve ends QE.
Posted on 10/29/14 at 10:20 pm to GumboPot
Posted on 10/29/14 at 10:20 pm to GumboPot
quote:
quote:
I'm not sure why they kept it up as long as they did.
Their credibility, as in the fact that markets believe they will do what they say, is important. Small changes to plans once they are put out, if any.
1
Posted on 10/29/14 at 11:05 pm to Tiger n Miami AU83
5 years? Why wait 5 years?
Posted on 10/29/14 at 11:20 pm to GumboPot
quote:
The Federal Reserve ends QE.
Not really. All the bonds they bought are still on the books.
Posted on 10/29/14 at 11:28 pm to GumboPot
quote:
It will be interesting to see (in the coming months) if the US Treasury begins to have a little difficulty selling bonds.
Posted on 10/29/14 at 11:47 pm to S.E.C. Crazy
quote:
Secondly is my religious research, Europe must become the leader of the world, so the U.S. has to become irrelevant. Also for there to be a one world dictator, you have to have an economic collapse, ( people only give up their rights when they are scared or fearful )to have a worldwide economic collapse, that means that the leader of the world economy ( U.S. ) has to lead the world into an economic collapse.
Obama knows what he is doing, he is destroying our country with DEBT, ILLEGAL ALIENS, and by pitting blacks against whites, latinos against Americans, women against men etc etc.
Obama wants our country to become third world like.
Posted on 10/30/14 at 12:59 am to Jagd Tiger
quote:
govt will still print cash to pay for it's bullsh*t spending...
Yeah, anyone believes the Fed is finished manipulating the markets is nuts, 1st sign of the market tanking and in comes the plunge protection team, at some point it'll finally correct/collapse but no one knows when, just make sure when the music stops you find a chair.
Posted on 10/30/14 at 1:14 am to crawdaddy52
quote:
The Federal Reserve ends QE.You guys have been predicting this crap for 6 years. I know you want the economy to tank so the plutocrats can completely run the show but what I can not figure out is why. Plutocrats do not post on message boards with names like Tigerdroppings - so you're not one of them and you're not gonna win the lottery
You'll figure it out someday, when the Fed/government is deciding/picking winners and losers (Lehman Bros, GM, GE, etc.) you know this whole economy is complete cronyism and a Ponzi scheme, 0% interest rates so retirees have to put their money in equities to get any income for retirement with the risk of the market tanking and losing their savings, it's not good and will not end well for most folks. If we're being honest think about the unfunded liabilities (estimated over $100 trillion) on the horizon that will never be met and what happens when they're not met is chaos.
Posted on 10/30/14 at 7:01 am to SpidermanTUba
quote:
Not really. All the bonds they bought are still on the books.
When the title of the thread says "The Federal Reserve Ends QE" that means the bond purchasing program has ended. Of course the bonds are on the Fed balance sheet.
Posted on 10/30/14 at 8:28 am to SpidermanTUba
quote:quote:
It will be interesting to see (in the coming months) if the US Treasury begins to have a little difficulty selling bonds.
Why is that funny? It's simple supply and demand. When a huge buyer of said bonds exits the market, aka the Federal Reserve in this case, demand for said bonds decreases ("the US Treasury will have a little difficulty selling bonds"). In order to sell all the bonds at the auction the price of said bonds will decrease due to lower demand. When bond prices decrease yield increases because of the the price to yield inverse relationship. When the yields of these bonds increase in puts pressure on all interest rate products, like mortgages. That's what I meant by my comment, "the US Treasury will have a little difficulty selling bonds".
Posted on 10/30/14 at 8:31 am to 90proofprofessional
So.. home mortgage interest rates are about to go up by a significant amount, right?
Posted on 10/30/14 at 8:36 am to Tiger n Miami AU83
quote:.
Or if you will still think you were right and it is still coming or some crazy "something" happened and had it not you would have been right
Much like the anthropogenic climate change crowd, correct?
Posted on 10/30/14 at 8:45 am to Asgard Device
quote:
So.. home mortgage interest rates are about to go up by a significant amount, right?
Not necessarily. Mortgage rates are supply and demand driven and can vary a lot by region. But one thing is for sure, the ten year T note creates the floor for all interest rate products including house loans. When upward pressure is put on US treasury yields (when the floor is raised) pressure on all interest rate products will follow.
Posted on 10/30/14 at 8:52 am to Asgard Device
quote:
So.. home mortgage interest rates are about to go up by a significant amount, right?
Not sure what you mean by "significant amount". I think they will keep coming off of recent lows, not strictly because of QE ending though. Why did you direct this question at me?
Posted on 10/30/14 at 8:52 am to 90proofprofessional
quote:
Why did you direct this question at me?
Good Lord.
Posted on 10/30/14 at 8:58 am to Asgard Device
Posted on 10/30/14 at 9:02 am to mmcgrath
quote:
Back to the OP, I think that the ending of QE could be an especially strong time for the economy.
Fascinating. Tell me more.
Posted on 10/30/14 at 9:08 am to 90proofprofessional
quote:
I think they will keep coming off of recent lows, not strictly because of QE ending though.
There is lots of wiggle room here for me to disagree. One of the main purposes of QE was to boost asset prices, specifically housing.
The Federal Reserve did that by purchasing a shite ton of treasuries (and MBSs). The demand from the Federal Reserve for these treasuries raised their price to record levels. When bond prices increase their yields decrease. This lowers the floor on all interest rate products including mortgages. The lower mortgage rates incentivised people to purchase homes which in turn puts upward pressure on housing prices. Goal accomplished.
Since one of the main objectives of QE was to boost housing the corollary to ending QE would be deflating housing market though rising mortgage rates. However it's really not a direct cause and effect because their are tons of other economic factors that influence housing prices.
Posted on 10/30/14 at 9:16 am to GumboPot
quote:
There is lots of wiggle room here for me to disagree.
Yep, that's why I said not strictly because of QE ending. I think all else equal, yeah, QE in the form we did it will push mortgage rates down and home prices up. I don't think this is the only reason rates will continue to go up though, and I don't think they're going back to the 10% neighborhood- at least not immediately. And I think that would need to happen if one wanted to show that QE was the reason they're as low as they have been.
Posted on 10/30/14 at 9:49 am to Bestbank Tiger
Well, you don't have the freedom to screw the rest of us over. The only insurance that is not being offered is the health equivalent of the The General's car insurance.
Posted on 10/30/14 at 9:58 am to GumboPot
quote:
There is lots of wiggle room here for me to disagree. One of the main purposes of QE was to boost asset prices, specifically housing. The Federal Reserve did that by purchasing a shite ton of treasuries (and MBSs). The demand from the Federal Reserve for these treasuries raised their price to record levels. When bond prices increase their yields decrease. This lowers the floor on all interest rate products including mortgages. The lower mortgage rates incentivised people to purchase homes which in turn puts upward pressure on housing prices. Goal accomplished. Since one of the main objectives of QE was to boost housing the corollary to ending QE would be deflating housing market though rising mortgage rates. However it's really not a direct cause and effect because their are tons of other economic factors that influence housing prices.
I really appreciate your explanations of this stuff, GP.
It's good to know. I think that a rise in mortgage rates - and it's deleterious effect on the economy - might be mitigated by an increase in the real (Private) economy. It'll likely take off like a rocket when Obama's policies are in the rear view mirror.
Rich and poor will get a rest when we get over the hump...but that rest will be on the back of liberating technological breakthroughs. And the fastest way to those high tech solutions is a vibrant economy that can support innovative research.
Of course we'll have to deal with the economic transition and effects on society, as high tech kicks in...and many old jobs are lost. Good and visionary leadership will be required; and I suspect we'll get it.
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