I know with Bennie and the Ink Jets meeting again this week in their ongoing efforts to enrich their masters at your expense, you might want an update on how that QE to Infinity is working out for you. Bennie announced his “new plan” of buying $85 billion of toxic debt per month from the Wall Street banks and U.S. Treasury for infinity on September 13, 2012. His statement was as follows:
“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 agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. These actions should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”
His stated purpose was to decrease long-term interest rates and help the economy recover. As you may have heard this morning, GDP for the 4th quarter, after Bennie intiated his brilliant new plan, went negative for the first time since 2009. In addition, I point you to the little chart below. In July of 2012, the 10 Year Treasury rate hit 1.40%. On the day of Bennie’s QE to Infinity announcement it clocked in at 1.6%. This morning the 10 Year Treasury hit 2.02%. Bennie has truly worked his magic again. Interest rates have been driven higher and the economy has plunged back into recession. I think this should put him in the running for Time’s Man of the Year again.
John Hussman gave his assessment of Bernanke’s QE to Infinity shortly after the announcement:
“Quantitative easing promises to have little effect except to provoke commodity hoarding and an expansion in stock valuations to levels that have rarely been sustained for long. The Fed is not helping the economy – it is encouraging a bubble in risky assets, and an increasingly unstable one at that.”
On September 5 before the Wall Street insiders were told about Bernanke’s plans, the S&P 500 was at 1403. It has skyrocketed to 1507 since Bernanke’s promise to enrich his masters at any cost. That is a 7.4% ramp up, when the economy was going into the dumper and interest rates were soaring by 50 basis points. I guess it must be tied to the improving jobs situation.
Well spin me around and call me Sally. It seems there were 25,000 less people employed in December than there were employed in October. But, at least 432,000 more Americans left the workforce between October and December. That is surely a good sign. They must have all gotten rich on the 7.4% stock market gains. That Bennie sure knows what he’s doing. Remember his advice about housing in 2005? After he retires from the Fed, he has a huge opportunity as a Tarot card reader.
You may have heard of Egan Jones. They weren’t one of the rating agencies that wilfully helped the criminal Wall Street banks commit that biggest financial fraud in history – that was S&P and Moodys. After Bennie’s QE to Infinity announcement, they had the gall to cut their credit rating on the United States of America. You don’t do that to the biggest empire on earth. Last week the Federal government turned the screws on this truth telling credit rating firm by threatening them into accepting a penalty of not being able to rate the United States because they filled out one of their 5,000 Federally required forms improperly. You don’t mess with the oligarchs. Here was Egan Jones evaluation of Bernanke’s QE to Infinity in mid September:
“The FED’s QE3 will stoke the stock market and commodity prices, but in our opinion will hurt the US economy and, by extension, credit quality. Issuing additional currency and depressing interest rates via the purchasing of mortgage-backed securities does little to raise the real GDP of the US, but does reduce the value of the dollar (because of the increase in money supply), and in turn increase the cost of commodities (see the recent rise in the prices of energy, gold, and other commodities). The increased cost of commodities will pressure profitability of businesses, and increase the costs of consumers thereby reducing consumer purchasing power. Hence, in our opinion QE3 will be detrimental to credit quality for the US.”
The price of oil has risen from $90 to $98 since Bernanke implemented his grand scheme on September 13. In the last month, corn and soybeans are up 5% and cotton is up 9%. Since September, meat prices are up 10%. But don’t concern yourself. Bernanke says inflation is well contained because your wages aren’t going up.
If you are even partially awake, you must realize that Bernanke has no interest in helping the average person with his ZIRP policy and his QE to Infinity policy. He is destroying the savers and the prudent in order to enrich the bankers and the debtors. He knows the averge person will believe what they are told by the corporate mouthpieces in the MSM and are too ignorant to figure out how they are getting screwed by inflation and the non-stop transfer of their wealth to the bankers.
How’s QE to Infinity working out for you?
Administrator says:
Is life for the average American back to the level of 2007? According to the stock market index, things are even better. Who does Ben Bernanke really work for?
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30th January 2013 at 12:46 pm
Eddie says:
I know you read Of Two Minds, but Charles Hugh Smith today +++. Both of you bastards depress the hell out of me.
http://www.oftwominds.com/blog.html
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30th January 2013 at 12:51 pm
AWD says:
Why Ben Bernanke Is Like A Monkey
Though economists might wish otherwise, economics is, at its core, behavioral. Modern economies are too complex to be reliably modeled; but put an economist in a powerful government job and provide levers that can be pulled to start the printing presses, set reserve requirements, fiddle with the Fed funds rate, expand the Fed’s balance sheet, and deliver indecipherable communiqués, and that economist will feel compelled to pull those levers. He or she, like a monkey with a typewriter, might even give us Shakespeare (or Adam Smith) on occasion. But mostly that economist will spout gibberish, a mélange of untested and potentially counterproductive measures that unleash all manner of unintended consequences.
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30th January 2013 at 1:08 pm
JIMSKI says:
@ AWD
I disagree that we can not model behavior using math. You can model EVERYTHING using math. You just need to get comfortable with the term Imaginary numbers. Now these are not the classic imaginary numbers but more like made up numbers that are spewed out a BLS drones ass. WE can start a list and others can add and then we can work it into a formula.
A= Amount of current % OF LIES of actual to reported
b= Basic government skim from receipts
c= Confidence/exuberence ratio = subformula (c1-ex1) / days as a top news story
d= Dog+pony Index Another sub formula ( S2 ( senators behind it ) – C-2 ( Congress behind it ) )X Federal commities formed to study it.
e= Expective outcome ( EMC-EMC) Notice this is actually ZERO
F= Fraud quotient . See link http://static3.depositphotos.com/1000321/123/v/950/depositphotos_1239266-Math-Formulas.jpg
With a little help we could develop the math to model the economy.
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30th January 2013 at 1:37 pm
AWD says:
I don’t care what math can model, Bernanke is still a monkey
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30th January 2013 at 1:46 pm
AWD says:
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30th January 2013 at 1:47 pm
Mary Malone says:
Yesterday, Bloomberg unexpectedly shut down access to residential loan level data. Whatever you think about the usefulness of securitization audits or Bloomberg info itself, this is a pretty clear message that the banks don’t want us having access to this level of detail. Bloomberg removing the data could be a result of the concerns over the accuracy of Bloomberg’s information, but we suspect that something more is going on.
Homeowners have been getting access to the loan level data on Bloomberg – it’s expensive but worth it if you can grab the screen shots that show your loan and the entire tranche are – FPO – Fully paid off.
We are going into the Bank of NY Mellon, signed up as members and pulling reports that show lots of zeros next to loan numbers in RMBS and MBS deals. Also getting info on which loans were modified and why. Seems that getting a mod has nothing to do with being credit-worthy or in need.
Rather, its just a matter of whether or not there is a major issue with the loan itself – missing title reports, notes, unrecorded liens. Oh, the process is totally corrupt. What a surprise.
The window of opportunity is closing. Anybody who want to obtain info on their alleged mortgages better act now.
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30th January 2013 at 1:52 pm
Erasmus says:
If you check out the 5 year dollar index chart:: http://www.marketwatch.com/investing/index/dxy/charts?symb=DXY&time=12&startdate=1%2F4%2F1999&enddate=1%2F27%2F2013&freq=1&compidx=none&compind=none&comptemptext=Enter+Symbol%28s%29&comp=none&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=2&style=1013
the right side shows a well formed Head and Shoulder formation. If the neckline is breached, the dollar will drop to the 74 area from its current 79 range. That will be the catalist for gold moving much higher. It should also be the catalist for free thinking folks to ask what exactly is Ben and the fucking Fed up to. But maybe that’s expecting too much.
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30th January 2013 at 1:55 pm
Administrator says:
WHEN A POLICY FAILS COMPLETELY – JUST KEEP IT GOING UNTIL IT FAILS SOME MORE
Fed keeps $85 billion-a-month bond purchase plan
WASHINGTON (MarketWatch) – The Federal Reserve on Wednesday maintained its aggressive easing policy stance in light of downside risks to the outlook. In a statement after a two-day meeting, the Fed said it will keep buying $85 billion a month in mortgage bonds and Treasurys. The Fed said that economic activity has “paused in recent months” due to weather and other transitory factors. The Fed did not say how long the bond purchases would last. The vote was 11 to 1. Kansas City Fed president Esther George dissented, saying the Fed’s loose policy stance could lead to financial imbalances and higher inflation.
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30th January 2013 at 2:17 pm
underfire says:
I wish we could say we as a nation weren’t complicit in this, if we weren’t we’d have a chance at righting the boat, but we’ve been right in there for decades. The culture, for many, of getting something for nothing.
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30th January 2013 at 2:29 pm
AWD says:
Santelli Blasts Bernanke: “Whatever You’re Doing, It Isn’t Working”
While some would look at the surge in government spending in Q3 last year (ahead of the election) and subsequent plunge in Q4 as conspiratorial, CNBC’s Rick Santelli takes a step slightly further back as he draws the analogy between the mystical monetary experimentation of Ben Bernanke and his horde of central bank cronies and the “bloodletting of leeching” of medieval medicine providers. The point being that if you were sick in the middle ages, leeches were applied; and if you returned weeks later (still sick), more leeches and blood-letting took place – with no lesson learned. The fact that we borrowed $300bn in Q4 and managed a dismally dire drop in GDP growth offers little hope as the world glares agog at the Dow Jones Industrial Average index while Bernanke, six years on from the start of the recession continues to apply the same medicine that has done nothing to resurrect our economy. In Rick’s words, “Whatever you’re doing; It isn’t working!” and in fact the monetary support could potentially hurt the economy in the medium-term as debt piles up exponentially. An epic rant…
great video
http://www.zerohedge.com/news/2013-01-30/santelli-blasts-bernanke-whatever-youre-doing-it-isnt-working
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30th January 2013 at 3:47 pm
Administrator says:
FOMC January 2013 Statement
“The foundations of the Maginot Line were the war cemeteries of France.”
Vivian Rowe, The Great Wall Of France, 1959
Nothing really new in the FOMC statement, but we have to view this in the light of the shocking revelation from the recently released Fed Notes that they failed to see the crisis coming even in the days before the financial system teetered on collapse.
These are old and tired generals, fighting new wars with the old tools and tactics.
Until the banking system is reformed, the Fed will continue to attempt to prop it up, and stand by doing little else while the real economy stagnates. Except perhaps to foment yet another imbalanced, unstable bubble in financial instruments.
JESSE
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30th January 2013 at 5:43 pm
llpoh says:
Admin/AWD/et al – not anything I can add. Right you are.
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30th January 2013 at 6:05 pm