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A QE scaleback and an unraveling of the balance sheet liabilities created by the fed are two completely different things. Dealing with the risk tied to the liability side of QE is what will harm the stock market, not a QE scaleback. The OP doesn't seem to understand that the risk of QE is tied to the side of the balance sheet he never mentioned.
Wrong on both counts.
NEITHER will "crash the market" as long as both are done gradually rather than all at once - which is the way it will happen.
Wrong on both counts.
NEITHER will "crash the market" as long as both are done gradually rather than all at once - which is the way it will happen.
Ken
So you are completely in favor of the fed's levered position? They are levered more than Bear Stearns was before its collapse. Did you support their economic D/E ratios?
What does the fed do if it is faced with another crisis to deal with? It has no instruments left to use. Aren't you concerned about that?
So you are completely in favor of the fed's levered position? They are levered more than Bear Stearns was before its collapse. Did you support their economic D/E ratios?
What does the fed do if it is faced with another crisis to deal with? It has no instruments left to use. Aren't you concerned about that?
The Fed did what it felt it had to do. You act like QE is some unparallel thing. The fact is, QE has been done before and worked fine then - as it's working this time.
Comparing the Fed D/E ratio to that of Bear Stearns (or ANY private firm) is not really relevent since private firms do NOT create currency so it's an "apples and oranges" comparison that has little or no bearing.
Am I concerned that the Fed has "no instruments left to use" in the event of another crises?
Sure - but that doesn't change the fact that we have to deal with THE CURRENT SITUATION NOW.
If the FED had not done what it did, we'd probably be STILL in a major depression.
The FED will unwind over time, just as it will bring interest rates back up over time - just as it has typically done after a major economic crises.
Wingnuts are such drama queens.
The Fed did what it felt it had to do. You act like QE is some unparallel thing. The fact is, QE has been done before and worked fine then - as it's working this time.
When did that happen that things turned out fine? Until the next government created boom and bust?
Quote:
Originally Posted by LordBalfor
Comparing the Fed D/E ratio to that of Bear Stearns (or ANY private firm) is not really relevent since private firms do NOT create currency so it's an "apples and oranges" comparison that has little or no bearing.
Am I concerned that the Fed has "no instruments left to use" in the event of another crises?
Sure - but that doesn't change the fact that we have to deal with THE CURRENT SITUATION NOW.
Because the Fed can print up money day after day after day and nothing bad will happen right? Prices wont rise and the dollars purchasing power wont drop.
The wingnuts who continue to give economic advice yet never saw the biggest collapse since the Great Depression coming shouldn't discuss economics.
Quote:
Originally Posted by LordBalfor
If the FED had not done what it did, we'd probably be STILL in a major depression.
The FED will unwind over time, just as it will bring interest rates back up over time - just as it has typically done after a major economic crises.
Wingnuts are such drama queens.
Ken
Based on what? Because you said so? We know for a fact when government stayed out of the 1920 depression we recovered in 2 years. As diversified as we are now and with technology to assist those in getting from point a to point b quicker there is no reason to believe we wouldn't be out of it completely had the very same ones who ruined the economy stayed out of trying to fix it.
When did that happen that things turned out fine? Until the next government created boom and bust?
QE was used in the 1930's with no major inflationary impact.
You seem to think that there was no such thing as boom and bust cycle prior to the creation of the Fed, when in fact the cycles were far more frequent BEFORE the Fed than after.
Same thing with you folks' stoooopid "put us on the gold standard so that we have no inflation" nonsense, when in fact the highest inflation that country EVER experienced was when we WERE on the gold standard.
You might want to consider learning a little history.
Quote:
Originally Posted by Loveshiscountry
Because the Fed can print up money day after day after day and nothing bad will happen right? Prices wont rise and the dollars purchasing power wont drop.
QE is NOT "printing up money". It's just an asset swap.
Quote:
Originally Posted by Loveshiscountry
The wingnuts who continue to give economic advice yet never saw the biggest collapse since the Great Depression coming shouldn't discuss economics.
This coming from the guy who didn't know that QE had been used before and who thinks that QE is "printing money".
Quote:
Originally Posted by Loveshiscountry
Based on what? Because you said so? We know for a fact when government stayed out of the 1920 depression we recovered in 2 years. As diversified as we are now and with technology to assist those in getting from point a to point b quicker there is no reason to believe we wouldn't be out of it completely had the very same ones who ruined the economy stayed out of trying to fix it.
Contrary to much of the nonsense out there regarding the 1920 depression, the government did NOT "stay out of it". True enough they didn't provide economic stimulus (and in fact cut spending), but they DID provide economic aid in the form of monetary policy changes (ie lowering the interest rate - after mistakenly raising it (which played a significant part in creating the recession to begin with)). The 1920 depression was an odd recession in several ways so it's not necessarily true that one can simply claim that the reason it was so short was because the government cut spending - there are simply too many other factors involved. For one thing, unlike most recessions, wages never fell and inflation went from a wildly inflationary state in the 4 years prior to the depression to a wildly deflationary state during the depression - with the result that those people who still had jobs (most of the population) had far more buying power than they'd had before (their wages had risen wildly with the inflation but didn't drop during the the deflation) - a fact which likely played a part in shortening the depression. That sequence of very high inflation (the worst the country has ever seen) followed rapidly by severe deflation is something that has never happened before or since so you can't really compare the 1920 depression to the 2008 great recession because the circumstances were entirely different.
No two recessions/depressions are exactly the same.
Wrong on both counts.
NEITHER will "crash the market" as long as both are done gradually rather than all at once - which is the way it will happen.
Ken
I can't stop laughing. "We're gonna gradually decrease QE. It's $85 BILLION now so lets drop is down to $75 BILLION. Holly cow!! We dropped it a whole $10B and things didn't change!!"
Do you have any idea how ignorant this sounds trying to say the market would be fine without $85B...err...$75B/month QE?
So, please enlighten us to what you mean by "gradually" decreasing QE? Is it $10B now and than another $10B at the end of 2014?? Let me guess, QE is going to continue up until Nov. 2016 huh?
I can't stop laughing. "We're gonna gradually decrease QE. It's $85 BILLION now so lets drop is down to $75 BILLION. Holly cow!! We dropped it a whole $10B and things didn't change!!"
Do you have any idea how ignorant this sounds trying to say the market would be fine without $85B...err...$75B/month QE?
So, please enlighten us to what you mean by "gradually" decreasing QE? Is it $10B now and than another $10B at the end of 2014?? Let me guess, QE is going to continue up until Nov. 2016 huh?
Ignorant is thinking that QE is pumping $85B a month into the market.
That's NOT happening - and NEVER WAS.
And it won't drop "another $10B at the end of 2014". Depending on how the economy reacts, we may be DONE with QE by the end of 2014 (though more likely by the end of 2015).
The Fed did what it felt it had to do. You act like QE is some unparallel thing. The fact is, QE has been done before and worked fine then - as it's working this time.
Comparing the Fed D/E ratio to that of Bear Stearns (or ANY private firm) is not really relevent since private firms do NOT create currency so it's an "apples and oranges" comparison that has little or no bearing.
Am I concerned that the Fed has "no instruments left to use" in the event of another crises?
Sure - but that doesn't change the fact that we have to deal with THE CURRENT SITUATION NOW.
If the FED had not done what it did, we'd probably be STILL in a major depression.
The FED will unwind over time, just as it will bring interest rates back up over time - just as it has typically done after a major economic crises.
Wingnuts are such drama queens.
Ken
The fed did not have to undertake QE. QE is a bandaid on a broken leg. Go through the pain of a healthy economic recovery. The fed also doesn't create currency with no downside risk. You keep ignoring that risk. You seem completely oblivious to the fact that you need to drive recessionary periods to create a healthy economy. Look at what Volcker did with the Fed. Were you against that as well?
How the hell will the fed unwind? Has Japan unwound? We also were never anywhere near a 'major depression'. If the fed hadn't done what it did, we would have had a few more years of pain, but businesses would have reinvested earnings instead of hoarding profits, and we would have set ourselves up for a healthy economy in 5-10 years. Do you really want to sacrifice future stability for a few goods years right now?
And you are right, wingnuts are drama queens. Given you are one of the biggest wingnuts on this board, you prove that time and time again.
The fed did not have to undertake QE. QE is a bandaid on a broken leg. Go through the pain of a healthy economic recovery. The fed also doesn't create currency with no downside risk. You keep ignoring that risk. You seem completely oblivious to the fact that you need to drive recessionary periods to create a healthy economy. Look at what Volcker did with the Fed. Were you against that as well?
How the hell will the fed unwind? Has Japan unwound? We also were never anywhere near a 'major depression'. If the fed hadn't done what it did, we would have had a few more years of pain, but businesses would have reinvested earnings instead of hoarding profits, and we would have set ourselves up for a healthy economy in 5-10 years. Do you really want to sacrifice future stability for a few goods years right now?
And you are right, wingnuts are drama queens. Given you are one of the biggest wingnuts on this board, you prove that time and time again.
What "drama" do I post?
YOU folks are the ones constantly going on about "Oh my gawd, we're doomed!!! How are we going to unwind?????!!!!!! How are we going to stop QE without crashing the stock market???????!!!!!!!! How are we going to pay down the deficit?????!!!!!!!! How are we not going to end up with a worthless dollar and Zimbabwe type inflation?????????!!!!!! Obama is going to bankrupt us!!!!!!!!!!! Obama is going to overthrow the Constitution and declare himself dictator for life!!!!!!!!! Obama is going to turn us into an Islamic state!!!!!!!!!!!! Oh my gawd!!!!!! Oh my gawd!!!!! OH MY GAWD!!!!!!!"
Seriously, do you EVER really read what you folks post?
"Everything" is a crises to you folks - pretty much the very definition of a "drama queen". Geeze!!!!!!
How will we "unwind"?
Gradually over time. DUH!
And yes it WAS pretty nearly a "major depression". At the end of 2008 the economy was shedding THREE QUARTERS OF MILLION jobs a month, the credit markets were completely locked up, housing prices were in collapse, the stock market was tanking. 2008 gave us the biggest yearly job loss in half a century. THOSE are simply facts - not some frantic speculative drama queen nonsense about what MIGHT happen, simply what DID happen.
And there is no evidence that "If the fed hadn't done what it did, we would have had a few more years of pain, but businesses would have reinvested earnings instead of hoarding profits, and we would have set ourselves up for a healthy economy in 5-10 years".
Ken
Last edited by LordBalfor; 01-02-2014 at 08:22 AM..
What "drama" do I post?
YOU folks are the ones constantly going on about "Oh my gawd, we're doomed!!! How are we going to unwind?????!!!!!! How are we going to stop QE without crashing the stock market???????!!!!!!!! How are we going to pay down the deficit?????!!!!!!!! How are we not going to end up with a worthless dollar and Zimbabwe type inflation?????????!!!!!! Obama is going to bankrupt us!!!!!!!!!!! Obama is going to overthrow the Constitution and declare himself dictator for life!!!!!!!!! Obama is going to turn us into an Islamic state!!!!!!!!!!!! Oh my gawd!!!!!! Oh my gawd!!!!! OH MY GAWD!!!!!!!"
Seriously, do you EVER really read what you folks post?
"Everything" is a crises to you folks - pretty much the very definition of a "drama queen". Geeze!!!!!!
How will we "unwind"?
Gradually over time. DUH!
And yes it WAS pretty nearly a "major depression". At the end of 2008 the economy was shedding THREE QUARTERS OF MILLION jobs a month, the credit markets were completely locked up, housing prices were in collapse, the stock market was tanking. 2008 gave us the biggest yearly job loss in half a century. THOSE are simply facts - not some frantic speculative drama queen nonsense about what MIGHT happen, simply what DID happen.
And there is no evidence that "If the fed hadn't done what it did, we would have had a few more years of pain, but businesses would have reinvested earnings instead of hoarding profits, and we would have set ourselves up for a healthy economy in 5-10 years".
Ken
As I said before (which you continually ignore), I never once said we were heading towards a major crash. I am saying that the economy will either stagnate such as Japan has done for decades, or the fed will be poorly positioned to handle additional crises. We are already at a zero bound and are paying interest on reserves. Doesn't that scare you even a little?
Why do you think companies are sitting on cash right now? Have you given that any thought whatsoever? You don't seem to understand the economic difference between depressions and recessions.
And as a side note, the only person posting multiple exclamation points, hysterical type posts which sound like a 12 year old is yourself.
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