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Thread: Bernanke blasted after surprise no-taper decision

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    Bernanke blasted after surprise no-taper decision

    Bernanke blasted after surprise no-taper decision

    The decision cost investorswho bet on a stimulus cutback hugely, though benefiting many with longpositions in global stocks.

    Many blamed Bernanke andfellow members of the Federal Open Market Committee (FOMC) for having since Mayrepeatedly suggested a September taper of the quantitative easing (QE) program.

    Yahoo!
    Do you know why Bernanke broke his repeated suggestion?

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    Re: Bernanke blasted after surprise no-taper decision

    To keep things looking as rosy as possible until after the debt ceiling increase and another year of borrow and spend by Obama/congress would be my guess. I would assume that this easy money deal will be kept going until at least the 2014 mid-term elections, after that Obama could probably care less.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: Bernanke blasted after surprise no-taper decision

    Because the 2014 elections are around the corner and a sell off in a already depressed economy would look bad for ALL Democrat candidates ?

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    Re: Bernanke blasted after surprise no-taper decision

    Quote Originally Posted by Fenton View Post
    Because the 2014 elections are around the corner and a sell off in a already depressed economy would look bad for ALL Democrat candidates ?
    And Republicans as well! Oh I forgot they are the responcible party! LMAO

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    Re: Bernanke blasted after surprise no-taper decision

    I know that it seems like a compulsory reaction to blame Obama for Bernanke but really:
    "Bernanke then served as chairman of President George W. Bush's Council of Economic Advisers before President Bush appointed him on February 1, 2006, to be chairman of the United States Federal Reserve. Bernanke was confirmed for a second term as chairman on January 28, 2010, after being re-nominated by President Barack Obama."

    So, if we can take a few minutes away from the endless, tedious Obama bashing, we can discuss what is really going on here. I'll try to keep it simple:
    1) Bernanke "prints" billions and "gives" them to banks.
    2) Banks lend the money back to Bernanke
    3) Banks get interest on the money they lend Bernanke.
    4) Banks buy stocks with the basically free interest they get on the money that was created in the first place. The rich get richer.

    It's actually pretty obvious (IMHO) what is going on here. They count on the animosity toward Obama (or Bush) to obfuscate the reality that they are giving free money to bankers. After cursing Bush for his terrible policies, Obama hired the exact same guy. Doesn't that seem a bit revealing?

    Instead of bitching about this blatant theft, I have to listen to the dreadful sorrow that these poor bankers have to pay FIT when they are obviously the "wealth creators" and should not have to be burdened with these taxes.


    good grief©

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    Re: Bernanke blasted after surprise no-taper decision

    Quote Originally Posted by katsung47 View Post

    Do you know why Bernanke broke his repeated suggestion?
    Bernanke wants to keep pretending that liquidity is the root problem, so the solution to that is to print money. He knew that a surprise extension of QE3 would be like giving the junkie one last snort of coke on the way to rehab, and it was. Unfortunately, this won't fix the problem.

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    Re: Bernanke blasted after surprise no-taper decision

    Quote Originally Posted by katsung47 View Post

    Do you know why Bernanke broke his repeated suggestion?
    Bernanke broke no promises whatsoever. He never promised to begin reducing QE in September. From the July FOMC statement, the meeting that preceded the just concluded one:

    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 decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

    The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.


    The underlined text is not a promise to begin tapering at the next meeting. There's a world of difference between a commitment to monitoring conditions and a commitment to begin reducing QE. If some market participants misread the statement and made bad decisions based on their misreading it, they alone are responsible for the financial consequences of their choice. Chairman Bernanke is not.

    The overall macroeconomic context has not yet changed, even as there have been some indications of a pickup in growth. However, there were also some downside signals mixed in. The mixed bag suggested that it was premature to conclude that the economy had moved onto a sustained stronger growth trajectory just yet. Once the pickup in growth is sustained, then one can expect the Fed to begin paring back QE. For now, the Fed remains in a holding pattern, though the proverbial end game is nearing.

    FWIW, my overall thinking remains that no taper is likely to begin until at least sometime during Q4 or next year (the December or January FOMC meetings might represent the most likely timing barring no meaningful economic shocks; unfortunately, the potential for a self-inflicted, politically-induced shock exists, both with respect to the government's expiring spending authority and the debt ceiling).

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    Re: Bernanke blasted after surprise no-taper decision

    Quote Originally Posted by katsung47 View Post

    Do you know why Bernanke broke his repeated suggestion?
    Because the number of new jobs have dropped close to 25% per month since spring and this has caused them concern that things are sliding back would be my guess. That people lost money on their own gamble doesn't matter one way or the other. I wish they had lost more I am so sick of Wall Street gaming the market.

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    Re: Bernanke blasted after surprise no-taper decision

    The right answer is:

    790. Bernanke’s Sept. Q.E. tapering off and Mueller’s stepping down (9/22/2013)


    I quote some of my articles here because later development used to prove they were correct.

    September should be the last month for Robert Mueller in his FBI office. (Sep. 2001 – Sep. 2011) His term has been extended for two more years. He has to finish Kat Sung before he leaves the office. (#694)
    So this year we saw the last crazy before Robert Mueller’s leaving. The big plot – North Korea nuclear war crisis, the bird flu in China, Boston bombing. It ended with Snowden’s case in June.

    There were still two months left before Mueller’s stepping down. So they hurried off a last hour effort – organized a Mid-East crisis which signaled by great prison escapes, US embassies close and Chemical weapon attack in Syria.

    Embassies to close in Muslim world this Sunday

    The Associated Press Aug 2, 2013

    "Current information suggests that al-Qaeda and affiliated organizations continue to plan terrorist attacks both in the region and beyond, and that they may focus efforts to conduct attacks in the period between now and the end of August," the statement said.

    U.S. issues global travel alert over al-Qaeda threat - World - CBC News
    Why Al Qaida “focus to conduct attacks in the period between now (Aug 2) and the end of August, “? More likely, it fits the time of

    Mueller stepped down on September 4, 2013, and was replaced by James Comey.[10]
    Robert Mueller - Wikipedia, the free encyclopedia
    The Feds used to buy in many houses in their case. It is for the convenience of surveillance. It also brings with them a lot of profit because they can manipulate the policy. In my case, Feds bought the houses of nearly whole area according to my observation. It now becomes a burden for them. The interest rate became a very important factor for them to maintain those real estate properties. They force the Federal Reserve to start a third Q.E. to keep the interest rate low . I describe the story from #733 to “739. The third housing bubble (10/1/2012)”).

    The Q.E. certainly will create a big inflation bubble and a housing bubble as well. Bernanke likely has been assured he could taper off Q.E. after September. The Feds was sure they could eliminate Kat Sung before Robert Mueller’s leaving. However, it fails.

    To maintain the interest of the Feds, Bernanke has to break up his promise and take the blame.

    Bernanke blasted after surprise no-taper decision

    Many blamed Bernanke and fellow members of the Federal Open Market Committee (FOMC) for having since May repeatedly suggested a September taper of the quantitative easing (QE) program.

    Bernanke blasted after surprise no-taper decision
    Last edited by katsung47; 09-23-13 at 03:05 PM.

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    Re: Bernanke blasted after surprise no-taper decision

    The funny thing is that Bernanke has been completely and 100% crystal clear on when they would start looking at tapering. Everyone that wasn't paying attention misinterpreted what he was saying. How they did that is completely beyond me because he couldn't have been clearer.
    "I do not claim that every incident in the history of empire can be explained in directly economic terms. Economic interests are filtered through a political process, policies are implemented by a complex state apparatus, and the whole system generates its own momentum."

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