Fed holds off on further actions to help economy
Fed holds off on further help to economy as stronger growth provides breathing room
Martin Crutsinger, AP Economics Writer, On Wednesday November 2, 2011, 12:32 pm
WASHINGTON (AP) -- The Federal Reserve is holding off on any new actions to help the economy because stronger growth is giving it time to gauge the impact of steps it's already taken.
Fed policymakers made the announcement after a two-day meeting.
In a statement, the officials said the economy has strengthened and consumers have stepped up spending. But they said the economy continues to face significant downside risks, including strain in global financial markets -- a reference to the crisis in Europe.
The Fed left open the possibility of taking further steps later to try to boost the sluggish economy.
The vote was 9-1. Charles Evans, the president of the Chicago Federal Reserve Bank, dissented because he wanted to take stronger action.
Move Congress and the current president to New Orleans and open the floodgates until they come up with a solution. Ray Nagin to cater the event. Live TV so voters can watch the action.
Meanwhile back in Washington, strap a microphone on Joe Biden and let him run the country.
My money says Biden fixes the problem before election day.
>>.."let Congress and the Whitehouse fix the economy. .."<<
Yes, they have done a 'bang up' job so far with an added $3 to 4 trillion in debt and $ 100 trillion in future unfunded liabilities and debt service.
White house and congress as one party have had free reign for 3 years and what have they done with it? Decimated the country's current and future prospects for growth with hyperbolic debt escalation which has resulted in ZERO by way of substantive return on investment and a 9% unemployment rate, 20% underemployment rate, and a mass exodus of jobs to 'emerging markets' with their U.S. business hating, Marxist regulations and attitude. Not to mention creating the "Occupy" movement and mentality, all while (ironically) being the very WH and COngress who bailed out banks, hedge funds, and Billionaires with Hundreds of Billions at the expense of working taxpayers.
I agree, this nonsense solves nothing (in terms of the 'real' economy).
And to elaborate a little, I think this type of CB nonsense is more supportive for commodity type investments than anything that might be domestic or consumer oriented.
Of course, keeping up with inflation is only part of the battle and real returns a little tougher to achieve when everyone's money is being watered down in order to bailout the banking and moneyed elites.
Not surprising really. I've noted that you seem to be reading it the same way I have.
Sadly I got very busy with personal affairs over the past couple of weeks and bought nowhere as much as I wanted. But that's life, what I did buy a few weeks back has fared well. I had a buy order in on PAL at 2.77 and just missed having it filled a couple weeks back. Same with a few other near misses. My predictions have been pretty spot on, my execution not so much.
But you can't fight the tape so its back to defensive.
Absolutely correct. They are definitely not out of bullets. As I mentioned I expect QE3 at some point in 2012.
The Fed is going down firing. I would contend that the Feds bullets are all rubber. They look good to the market but end up solving nothing. Does anyone really think the problem is not enough easy money?
But whether or not the Feds moves actually accomplish anything is largely irrelevant from a trading perspective. The only thing that is important is how does the market react and so far it almost always reacts upwards to easing (the notable exception was Operation Twist because the market thought it was weak).
Having said all that, the fed usually waits a few months after firing to see if the last bullet was silver and not rubber. Inevitably the market realizes that nothing was cured and begins begging for its next fix by dropping precipitously. That is until rumors start abounding of the next great bailout/easing, the rally begins, Big Ben delivers and all is good until the dust settles and we repeat the cycle. Wash, rinse, repeat.
So in my estimation we have 2 months or so before the next rally begins.. but that is a guess, it could be 3 weeks it could be 6 months. The length of the cycle varies, but we've been locked into the cycle for quite a while and its going to take a serious event to break it. I know not what or when that will be.
Good Luck all
Out of bullets?
I don't think so.
Never underestimate a central bankers ability to print up more ammo ...errr bullets and undermine the purchasing power of fiat.
IOW all about undermining creditors claims and reducing the value of govt debt through inflation.
And still lots of ink left.
fed doesnt need to stimulate to start the year end rally .. china reserve ratio cut of 50 basis points reinforces the notion of global easing and the announcement by the european central bank today IS A GREAT START HAHAHAHAH
Geez, we are same page again. I am lightening up across the board, including liquidating a percentage of gold positions in 401K. I sold this morning the SWC shares bought in the 8.xx range over the past 2 weeks.
Even considering a new position in shorting Nasdaq and S&P using SQQQ and SDS. Maybe before day's end, and also shorting the Euro via DRR.