I went to Yahoo to check the financial headlines. The place where all logic & brainpower goes to die. Found out some astounding information!
Who knew that “the U.S. recovery is among the soundest in the developed world since the Great Recession?!?” I bet you didn’t. I also found out that Ben Bernacke is the saviour, & we have under 2% inflation. I guess all those little charts on TBP are just BS. I even enjoy the fact that they found an “author” & I use the term loosely, who’s name is alllllllmost Rick Santelli. There is just so much good bullshit in here. Have another kool-aid & enjoy!
P.S. I also truly don’t understand something??? “Fed Chairman Ben Bernanke and his fellow policy makers met investors’ expectations by announcing a total of $85 billion in bond purchases per month.” I thought they were in the business of SELLING bonds sorta kindof??? Someone help a feller out.
Why the Fed Deserves Credit for the Economic Recovery
By The Daily Ticker By Michael Santoli
On 12-12-12, a day that already had numerologists buzzing, the Federal Reserve gave the markets a couple of new numbers to obsess over.
Fed Chairman Ben Bernanke and his fellow policy makers met investors’ expectations by announcing a total of $85 billion in bond purchases per month. But they also added an unforeseen wrinkle by pledging to maintain the Fed’s easy-money, zero-rate stance at least until the unemployment rate falls to 6.5% and expected inflation stays at or below 2.5%.
The setting of explicit targets has been discussed for some time and advocated by some within the Fed as a way to firmly anchor financial-market expectations and clearly convey central bank intentions.
Yet, these targets are mere guidelines, just the minimal prerequisites for the start of an eventual removal of the aggressive monetary stimulus the Fed has maintained. They are really just another way to convince investors and business decision makers that short-term rates will stay near zero and the Fed will stand ready to keep sluicing cash into the financial system until the labor market is unequivocally in better shape.
Indeed, the Fed’s statement explicitly said it “views these thresholds as consistent with its earlier date-based guidance,” which means the draining of liquidity from the system will not likely happen until mid-2015. In other words, until the reported unemployment rate falls by more than 1.2 percentage points from here, and the Fed’s one- to two-year inflation forecast gets over 2.5%, don’t even start to worry about rates rising from zero or the Fed shrinking its balance sheet.
The Fed’s latest policy moves are not without its critics. The plan to buy $40 billion in mortgage securities and $45 billion in longer-term Treasuries per month adds another $1 trillion a year to the Fed’s balance sheet, which already totals $3 trillion. For years, some analysts have been raising alarms that such voluminous money creation would surely uncork damaging inflation, which so far has not occurred. Others gripe that the Fed is essentially enabling the U.S. government’s heavy deficits by absorbing so much Treasury debt.
A related complaint, offered here on Yahoo! by John Tamny of RealClear Markets, is that the production of all these reserves is hampering the economy by sapping the strength and reliability of the U.S. dollar.
Yet in the absence of immediate or even early indications of an upwelling of inflation, the Fed is clearly determined to focus maximum effort on the other leg of its “dual mandate,” i.e. fostering full employment. So far, at least, the dollar has not collapsed and prices of everyday goods haven’t soared. Even gold, which has doubled in price since the financial crisis, has not managed to hang near its 2011 highs even with such fears of dollar debasement being aired loudly.
Economists at Barclays call the latest moves a continuation of the Fed’s “bold shift” which “further strengthen the Fed’s commitment to generate a stronger recovery and substantially improve conditions in the labor market.” Another objective is to join other central banks in working to “successfully contain large negative tail risks,” or major market panic attacks.
It’s pretty easy to snipe that the Fed’s zero-rate policy and trillions in bond-buying pledges have done little to speed up the pace of this recovery and lower the stubbornly high unemployment rate.
Yet the U.S. recovery is among the soundest in the developed world since the Great Recession. Michael Darda, chief strategist at MKM Partners, points out that the Fed’s policies “have been exactly enough to keep nominal GDP growing at a steady 4% rate” even with governments acting as a drag on growth in the past year or so.
That 4% nominal rate, which shakes out to a bit more than 2% real growth and just under 2% inflation, might not seem impressive by historical standards. But if it is sustained well into 2013, it would qualify as a victory for Fed policy makers and something of a surprise to financial markets still quick to spy a slowdown or worse around every corner.
ThePessimisticChemist says:
I just helped my wife with her economics paper she had to write. Well, technically it was just a “short essay” but it turned into a 12 page document. She was supposed to be bipartisan in her research, so we only used sources from the BLS and Census.
I think my favorite stat is that median household income continues to drop at the same rate now as it did during the official recession.
Unemployment also took two years to nudge down .8%.
Not really that earth shaking by themselves, but when you factor in .25% Fed interest and mind-blowing Government spending and you have a real problem on your hands.
I think I’m going to finish fleshing out my wife’s paper and put it on the internet. Its a good “Cliff’s Notes” of the current economic situation….and I freely admit that I would be ignorant of 99% of this if it wasn’t for you guys here.
Thank you all.
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13th December 2012 at 1:16 pm
Wyoming Mike says:
Damn, misspelled Bernanke. From now on, I’ll use the name he’s more commonly referred to as – Giant Douche!
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13th December 2012 at 1:18 pm
Thinker says:
Mike, did you happen to review the comments on some of those Yahoo stories? I always find that the most entertaining aspect of them.
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13th December 2012 at 3:29 pm
TeresaE says:
I love Yahoo, WM.
Anytime I start thinking Americans have a clue, I hop over there to see reality.
The number of idiots “blaming” Republicans while painting Dems as saviors is the same as it has been.
Those that are connected just don’t get it. Yet.
Soon, even they won’t be able to deny the truth.
We never left the recession, the fiscal cliff is nothing but theater and come January mass layoffs and reductions in hours is going to hit the only parts of the economy that are managing growth.
We can thank Obamacare for much of what is coming in January.
We can thank every politician (with one, maybe two notable exceptions) that has worked in Washington over the past thirty or forty years.
Reality is going to be a bitch for the majority whom chose to believe what they are told versus opening their eyes and seeing the truth.
And guys like Michael (the writer) are PAID to ignore truth, how could we hope for anything different from those that only get paid to write bullspit like this?
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13th December 2012 at 4:03 pm
Wyoming Mike says:
Thinker, yes, sometimes I’m dumb enough to engage them. Check out this comment from one of the morons I was playing with – comical…MikeinAZ; and read the Bill of Rights. Libertarians like to gloss over that. Also, the Constitution has been been the subject of perverted translation by people like you Ayn Rand and Ron Paul, and people like Father Coughlin for decades.
One; it is a living and malleable document and was designed to be so. It is amendable, and has been may times.
Your view is cockeyed, like your heroes. I suggest you read the subsequent writings by the founders, particularly the correspondences between Jefferson and Adams. You and your boy Paul are totally wrong. A small gov’t only empowers our global enemies and the moneyed elite. So who do you want to serve? Your own best interest, or bow down to people like Donald Trump? You are not going to get the kind of feudalism and anarchy that is Libertarianism. I suggest you just go elsewhere. You want a Paul or Rand type of country, move to Russia, as despotism is open and unabashed. Plutocracy is what you are favoring, but you’re too stupid to know it..
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13th December 2012 at 4:24 pm
Thinker says:
Wow, Mike… scary. Libertarianism is “despotism”? In what world?
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13th December 2012 at 4:28 pm
Wyoming Mike says:
His. I have met the enemy…
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13th December 2012 at 4:45 pm
Colma Rising says:
PissyC:
Up the level and the labor demand curve gets friendlier with lower real wages….
That’s the last price to adjust to inflation: Wages.
It’s one fucked up way to look at it, but keep up the work.
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13th December 2012 at 4:50 pm
flash says:
WM, there’s no fix for stupid….. for sanity’s sake accept and learn to work around….
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13th December 2012 at 5:25 pm
ragman says:
WM: I thought that I was the Giant Douche according to ll. Now I’m really confused!
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13th December 2012 at 5:26 pm
flash says:
BTW, just saw this over at the SBC…what to make? Is any media outlet not suspect?I don’t regularly read the Daily Bell, so I can’t speak to their credibility…
Elite Neo-Nazis … Is Russia Today (RT) Part of the Controlled Media Matrix and the Imposition of Global Government?
Anthony Wile
http://www.silverbearcafe.com/private/12.12/neonazis.html
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13th December 2012 at 5:28 pm
Terry says:
flash -
Actually, the Daily Bell is part of the “Controlled Media Matrix.” They are simply the Hegelian Dialectic of a Hegelian Dialectic, of a Hegelian Dialectic. It’s simple really: Don’t believe anything.
Remember, Pavlov’s Theory isn’t really about the dog being beaten or rewarded …or even salivating. It was that, in the end, the dog did nothing. Seems only the Russians “get” it.
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13th December 2012 at 7:40 pm
Bob says:
WM: I thought that I was the Giant Douche according to ll. Now I’m really confused! — Ragman
Isn’t a douche a liquid? Is ‘Giant’ an appropriate adjective for a liquid? Seems to me somebody is all wet! LOL
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13th December 2012 at 7:43 pm
Novista says:
What is a tsunami, Bob?
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13th December 2012 at 10:22 pm
Makati1 says:
Real unemployment: 15% to 20% depending on who you count.
Real inflation: 10%+
Real situation: Depression with a constantly falling GDP.
Yahoo News: The internet version of the National Enquirer, you know, the newspaper that used to print gossip and stories about invasions from Mars, ghosts, and such as if they were real facts.
People don’t want to hear the truth unless it is to supports their own preconceived beliefs.
Lalalalalalala…I can’t hear you!
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13th December 2012 at 11:42 pm
Wyoming Mike says:
Who is 11
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13th December 2012 at 10:16 am