Quantitative Easing 3

[Buckwheet]

Is it just me, or does this just seem stupid since the previous two times they have done this it has had little impact in the economy? Can we come up with no other solutions to solve this and the think tank is just THAT empty?

What am I missing?

[Fallen]

Wondering if Bob has anything to add on the subject.

[Bobmuhthol]

It didn't have little impact in the economy. QE1 was super helpful, QE2 was kind of helpful, Twist did what it set out to do. I'm making this up based on what I've been projecting the Fed to do for the last year or so, but this round is heavily concentrated on MBS, while Treasurys do not need any additional moves, and therefore interest rates will not fall in general (because they're already 0) but mortgage rates will decrease/stay low.

This is a graph I prepared in late October/early November of last year when we recommended MBS purchases as the next policy:
https://sphotos-b.xx.fbcdn.net/hphotos-ash3/530109_10151404077528356_206351729_n.jpg

Bear in mind that monetary policy can't fix fiscal issues, and it can't fix infrastructure issues.

[Androidpk]

Yo Bob, how does Bernanke's dick taste?

[crb]

It'll help asset and commodity prices increase, homes, stocks, oil, food. But artificial demand and an increase in the money supply is not actual demand. PPI was up this morning too... Uncertainty is why businesses are not hiring, every round of QE raises the specter of inflation, which would have just be underlined this morning, people worry that all this money creation is building up and will spring open like a can of spring loaded worms one day. I guess Uncle Ben indicated he'd work to keep rates low until mid 2015 instead of 2014, so that adds a little bit of certainty, but really that is just a token. The real problems need fiscal solution, monetary policy can only do so much.

And really, anyone who wanted to buy a house was already doing it, it isn't as if rates were too high.

So stocks will go up, gold will go up, housing prices might go up (still so much inventory), oil will go up, households and businesses may feel richer and spend more, or they might be fearful and not do so. The people who get screwed are the poor without any assets to appreciate.

[Parkbandit]

Is it just me, or does this just seem stupid since the previous two times they have done this it has had little impact in the economy? Can we come up with no other solutions to solve this and the think tank is just THAT empty?

What am I missing?

Definition of insanity: Doing the same thing over and over again and expecting different results - Albert Einstein.

[Latrinsorm]

...households and businesses may feel richer and spend more, or they might be fearful and not do so.I assumed you put this in for comic effect and laughed.

[Bobmuhthol]

Yo Bob, how does Bernanke's dick taste?
I will suck any MIT Econ PhD's dick long before someone who knows no economics and has not completed a Bachelor's degree in anything​.

[Keller]

I will suck any MIT Econ PhD's dick.

Have a great night and remember to tip your waitress, folks.

[Tgo01]

I assumed you put this in for comic effect and laughed.

He's basically saying the light bulb is either off or on, why is that funny sir?

[Parkbandit]

I will suck any MIT Econ PhD's dick long before someone who knows no economics and has not completed a Bachelor's degree in anything​.

http://rlv.zcache.com/i_have_a_ph_d_pretty_huge_dick_card-p137294129877917571envwi_400.jpg

[Parkbandit]

Ratings firm Egan-Jones cut its credit rating on the U.S. government to "AA-" from "AA," citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country's credit quality.

The Fed (http://www.cnbc.com/id/43752521/) on Thursday said it would pump $40 billion (http://www.cnbc.com/id/49018964/) into the U.S. economy each month until it saw a sustained upturn in the weak jobs market. (Read more: Fed's 'QE Infinity' — Four Things That Could Go Wrong (http://www.cnbc.com/id/49034067/))
In its downgrade, the firm said that issuing more currency and depressing interest rates through purchasing mortgage-backed securities (http://www.cnbc.com/id/44178108/) does little to raise the U.S.'s realgross domestic product (http://www.cnbc.com/id/44505017/), but reduces the value of the dollar.
In turn, this increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers thereby reducing consumer purchasing power, the firm said.
In April, Egan-Jones cuts the U.S. credit rating to "AA" from "AA+" with a negative watch, citing a lack of progress in cutting the mounting federal debt (http://www.cnbc.com/id/43381362/).
Moody's Investors Service (http://data.cnbc.com/quotes/MCO) [MCO 43.82 http://media.cnbc.com/i/CNBC/CNBC_Images/componentbacks/watchlist_up.gif 0.07 (+0.16%) http://media.cnbc.com/i/CNBC/CNBC_Images/backgrounds/realtime_icon.gif] (http://data.cnbc.com/quotes/mco) currently rates the United States Aaa, Fitch rates the country AAA, and Standard & Poor's rates the country AA-plus. All three of those ratings have a negative outlook.

http://www.cnbc.com/id/49037337

[Bobmuhthol]

Oh no, the value of the dollar is being reduced? This is horrible news. Remember when Operation Twist increased the value of the dollar and everyone hated that too?


"By doing QE3, he has admitted that QE1 and QE2 have not been beneficial. Otherwise, there would be no need for QE3," said Michael Pento, president of Pento Portfolio Strategies.
Here's Michael Pento writing for the Huffington Post in March:

Back in early 2011, I was one of the few economists to warn that global GDP growth would slow dramatically in the near future and that the emerging market economies would not be immune from that upcoming contraction.

Right. Totally. Nobody but Michael Pento was saying that GDP growth was slowing.

(We all were.)

[Kembal]

The Fed's doing what limited things it can do. The country needs a fiscal stimulus, but the Republican Party, under the guise of austerity theory, refuses to pass one.

Hell, I'll settle for the fiscal cliff being mostly dismantled at this point. At least we won't have a second recession then.

[Kembal]

Oh no, the value of the dollar is being reduced? This is horrible news. Remember when Operation Twist increased the value of the dollar and everyone hated that too?

This. I have to assume Egan-Jones is a bunch of monkeys typing on typewriters, because no real economist could say reducing the value of the dollar would be a bad thing. Best way to increase exports. (also, except for oil, most commodity prices are fairly down, from the reports I see.)

[Androidpk]

U.S. credit rating cut again, tied to QEP3. (http://www.cnbc.com/id/49037337)

Shocker.

[~Rocktar~]

It's Bush's fault.

In before Bob, theE and others.

Heh.

[Jarvan]

It's Bush's fault.

In before Bob, theE and others.

Heh.

Just Remember, in 2016 when Hilary runs, it will still be Bush's economy, instead of 8 years of crappy economy under Obama.

[Back]

Just Remember, in 2016 when Hilary runs, it will still be Bush's economy, instead of 8 years of crappy economy under Obama.

Is Jarvan predicting two terms for Obama??? Right on brother!

[Wrathbringer]

Why didn't they just reduce interest rates again? Oh right, they already did that... a bunch... Oh well, when in doubt, print more money! Woohoo, hyper-inflation! Dollar down 33% since 2000? Let's see if we can go lower! How low can you go! Abolish the Fed.

[Androidpk]

Just Remember, in 2016 when Hilary runs, it will still be Bush's economy, instead of 8 years of crappy economy under Obama.

http://i45.tinypic.com/11rxht4.jpg

[diethx]

http://rlv.zcache.com/i_have_a_ph_d_pretty_huge_dick_card-p137294129877917571envwi_400.jpg

Did PB just insinuate that he'd like Bob to slob his knob?

[Warriorbird]

I will suck any MIT Econ PhD's dick long before someone who knows no economics and has not completed a Bachelor's degree in anything​.

But what about Anthony Hopkins?

[Parkbandit]

Did PB just insinuate that he'd like Bob to slob his knob?

No.. and I don't want a hideous, plus sized ginger doing it either.

Sorry.

[Bobmuhthol]

But what about Anthony Hopkins?
Over my head?

It's Bush's fault.

In before Bob, theE and others.

Heh.
I don't take ratings agencies seriously at all, so I would say it's Egan-Jones's fault that they think the government is somehow less able to pay back its debt. I'm also the least president-blaming person in the universe regarding economic outcomes (almost all of my arguments are counterexamples for why Bush was worse than Obama under the assumption that the president matters so I can tell anti-Obama people to shut up, and I don't even like Obama), so I don't know why I'm being targeted.

[Latrinsorm]

No.. and I don't want a hideous, plus sized ginger doing it either.

Sorry.That was pretty embarrassing to read.

[Bobmuhthol]

Why didn't they just reduce interest rates again? Oh right, they already did that... a bunch... Oh well, when in doubt, print more money! Woohoo, hyper-inflation! Dollar down 33% since 2000? Let's see if we can go lower! How low can you go! Abolish the Fed.
What is this "dollar down 33%" number? Are you saying there has been an average inflation rate between 2% and 3% over the last 12 years (I'm assuming you're retarded and you think 33% inflation is a 33% decrease in the value of the dollar, which it is not at all)? You know that's among the lowest in any economy, right? The exceptions are Sweden (better at maintaining almost exactly 2% all the time, fucking love the Riksbank), Japan (the Central Bank of Japan has done pretty much nothing right in the last 15 years, nobody knows what they're doing, but it's very clear that they aren't trying to stop deflation), China (crawling peg policy -- they don't have a flexible monetary policy), and maybe some others. A lot of countries in South America had annual inflation rates above 20%, and if you know much about numbers, you'd realize that's somewhere in the neighborhood of 500% inflation.

Good luck running the United States economy without a central bank, though. That sounds brilliant.

Fuck.

[Parkbandit]

That was pretty embarrassing to read.

Don't read it then?

[Warriorbird]

Over my head?

There was a "straight" guy on Lnet who scammed Rhett out of some bet money on the PC who declared that if he blew Anthony Hopkins it wasn't gay.

[diethx]

No.. and I don't want a hideous, plus sized ginger doing it either.

Sorry.

Poor Delias.

[Warriorbird]

What is this "dollar down 33%" number? Are you saying there has been an average inflation rate between 2% and 3% over the last 12 years (I'm assuming you're retarded and you think 33% inflation is a 33% decrease in the value of the dollar, which it is not at all)? You know that's among the lowest in any economy, right? The exceptions are Sweden (better at maintaining almost exactly 2% all the time, fucking love the Riksbank), Japan (the Central Bank of Japan has done pretty much nothing right in the last 15 years, nobody knows what they're doing, but it's very clear that they aren't trying to stop deflation), China (crawling peg policy -- they don't have a flexible monetary policy), and maybe some others. A lot of countries in South America had annual inflation rates above 20%, and if you know much about numbers, you'd realize that's somewhere in the neighborhood of 500% inflation.

Good luck running the United States economy without a central bank, though. That sounds brilliant.

Fuck.

People think I'm crazy when I say they're trying to bring the 1890's back (or in the case of some of them, the Articles of Confederation).