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Aurora, Il USA
Experience: Advanced
Platform: TradeStation
Trading: futures
Posts: 5,854 since Nov 2010
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No, I didn't even bother to listen to the Bernanke speech! It was a waste of perfectly good hot air. The MSM is all abuzz with the bullshit. A quick Google search for Fed QE3 reveals the cackle...
Fed to launch QE3 by buying mortgage securities MarketWatch - WASHINGTON (MarketWatch) — The Federal Reserve, worried that improvement in the unemployment rate has stalled, announced a third ...
Fed Undertakes QE3 With $40 Billion Monthly MBS Purchases Bloomberg - Business, Financial & Economic News, Stock Quotes – The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month ...
Federal Reserve launches QE3 - (CNNMoney) -- The Federal Reserve announced plans to unleash more stimulus Thursday, in its third attempt at a controversial ...
QE3 Decision: Fed Vows To Buy Bonds Until Economy Recovers ... https://www.forbes.com/.../feds-monetary-policy-decision-bernanke-...
Fed To Markets: Take Some QE3, There's A Lot More Where That ... Information for the World's Business Leaders - Forbes.com – The Federal Reserve finally did what everyone was expecting: it unleashed a third round of quantitative easing (QE3), extended the Twist and ...
Federal Reserve announces QE3 — RT – The Federal Reserve announced Thursday that they will spent $40 billion a month on bond purchases in an effort to kick-start the US economy...
So, this is the scam story, in a nutshell - Bernanke says he will target the mortgage market to reduce unemployment by pledging to buy $40 billion USD of mortgage securities per month until a demonstrable improvement in the labor force materializes.
What the F^ck!!!! So, is it just me or does everyone assume that the most common job in the US is MBS trader? Exactly how direct is the mechanism between MBS purchases and employment? Does anyone truly believe (obviously, from the links above, many actually do) that Bernanke can lift employment by buying mortgage securities?
Okay, all bullshit aside, this is the skinny. The banks are in trouble again. Actually, they've been in trouble since 2007, but the stress seems to be approaching the acute phase again. The housing scam is once again catching up to this nation's lenders and credit gamblers.
The pending downturn in the CS index will prove my point, as will the stress emanating from the inevitable break in Europe. Bernanke has come to save this market and its participants by a) buying the stuff that there is still really no market for, and b) announcing that he will do so indefinitely.
Do I sound conspiratorial? Well, mortgage rates are already at record lows, so what the hell is the purpose of trying to push them even lower, and by force at that? Oh yeah, I forgot... To increase employment. Let's not leave all of those MBS traders to fend for themselves in the unemployment line.
This is what I would do if I was Fed Chairman and I was serious about lowering unemployment - Which Bernanke is not!
I would take the Fed's resources and purchase SBA bonds aimed at pumping cash into the small business sector, not the housing sector which is still trying overcome the ramifications of the last bubble popping.
You see, the SBA guarantees loans to small businesses, a group which represents the single largest contributor to employment this nation has. $40 billion per month in SBA bond purchases which would be used to guarantee loans to business creating a significant multiplier effect of no less than 5x - 7x ~ around a quarter trillion US dollars per MONTH in direct small business and direct employment stimulus is like sparking a live wire in a vat of gasoline with a semtex lid - at least in terms of the potential explosiveness this would have in terms of invigorating the small business sector, hiring and within a very short order, the spiking of employment.
Now, I admite that this would be blowing a new bubble, but Bernanke is trying to do this now with housing finance, no? Now I admit, the process would not be that simple, but its a whole of a lot simpler than what Bernanke is trying now - that is unless he's really not trying to boost employment... Hmmmm!!!!
The argument can't be made that the SBA loans are not that liquid either. I query, how liquid is the MBS market now?
Of course, the old Bernanke put - which has morphed and metastasized, and is now the Bernanke CDO cubed with inverse kickers - has lit a fire under the ass of stocks. As usual, fundamentals and common sense take second seat to momentum gambling and non-sense. When does the math return?
When things get real ugly. This is why my team and I have been focusing on the sector that has mistakenly been seen as much stronger than it actually is - the retailers and vendors of consumer discretionary products and services!
Bernanke's Lying Through His Teeth and Not A Single Pundit/Analyst/Banker Has Called Him On It!!!
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