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Traders Freaking Out Over WSJ Report On The Fed: Here's Why

Posted Aug 24, 2010 08:54am EDT by Joe Weisenthal in Recession

From The Business Insider

Last night, WSJ's John Hilsenrath reported that at the last FOMC meeting, several of the Fed governors expressed reservations about the plan to maintain the size of the balance sheet, and roll over MBS into Treasuries.

There are a lot of moving parts to the story because there are different reasons for the objections. Some of the Fed governors are hawkish (like Hoenig). Some are more dovish (like Bullard). And some think that the Fed can't really do anything because our problems are more structural (Kocherlakota).

But here's what folks are taking away from the article: The Fed is still way behind the curve in terms of how bad the economy is. It's paralyzed.

It's funny, because this is the exact opposite of what some people initially thought -- there was this fear that the Fed knew something about bad news coming down the pike that the public hadn't heard yet. In fact, as we now know, the Fed isn't seeing what everyone else is.

Anyway, this is the talk of the morning, and it's helping send stocks down again.

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130 comments

  • 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    Nathan JH Thu Aug 26, 2010 07:34 pm EDT Report Abuse
    RE: Where The MONEY WENT, f%$#@^& Dick Cheney ,and His CHUMPS!!!!!!!!!!!!!!!
  • A Yahoo! User
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    A Yahoo! User Wed Aug 25, 2010 03:25 am EDT Report Abuse
    It is the GOP that is going to kill the recovery, because they have no plan and nothing to offer except the same formula that caused the mess. If businesses knew the government would keep the recovery going, then the cash will come off the sidelines. We are repeating 1937 when the GOP killed that recovery as well.
  • 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    platap Tue Aug 24, 2010 11:17 pm EDT Report Abuse
    Forget about the U.S, its history, its so Roman empire, just buy gold and silver, and cash out after 2013.....Forget about the dollar too, the sheeple will learn the hard way...

    Everything is Rig, the market is going down hard, very hard..
  • 4 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    dan Tue Aug 24, 2010 10:56 pm EDT Report Abuse
    Traders and Wall Street should be freaking out because of themselves as well. They have lost the faith and trust of retail investors. They use to make money on pump and hipe and even a geat stock can get thrown down the tubes because the system has flaws that I don't undersatnd. The small investor has been thrown under the bus and they think that we will be like cattle and come right back to the pasture when they throw the hay out. This last decade, investors have been run over with 3 crashes and educated/connected investment bankers have made a fortune.

    Me, I make a good living on me and my business and have lost the trust of Wall Street They made money on me and I lost a small fortune on them. I have started putting all my investments in my business and trying to heal up the losses that other folks have made with my money. I think a lot of the issues on Wall Street is that they already have all from the investors they can get...The rest of us are trying to figure out where to go from here. This is why small investors are moving to greener pastures. The market stinks because they can't get us back. I wanted to be an investor and trust the market, that would be easy, but I just don't. I do have trouble figuring out where to put my extra money but have decided to put it into pay as I go, no dept when possible and if anything is left, I hesitantly put it in the crappy CD's that I have. As it grows and I can afford, I am buying land...at least I can walk on it.

    I agree that real estate is a root cause but greed, and we all have it , has been allowed to include deception, which is wrong and should be held accountable in any business. Somehow, it is acceptable now and it is what you can get away with that counts to many companies.

    All of the issues that we see are from poor accounting. Now our government has joined the tradition.."All is good, don't worry"
    We are smarter than they give us credit for. I can tell from these post, that we have some smart folks out there and the cool aide just isn't right.

    America has been built on being the best, not what you can get away with. I plan to work my fears out that way. I hope it continues to work. If you look at our US balance sheet, it ain't rocket science why those smart guys are "freakin out". I am right there with them, I just think they are the ones who created it.
  • A Yahoo! User
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    A Yahoo! User Tue Aug 24, 2010 10:28 pm EDT Report Abuse
    America needs a Rev. Jessy Jackson/Rev. Al Sharpton Ticket to Straighten us out. Oh Lordy Jesus- Help Us!!
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    biff Tue Aug 24, 2010 09:44 pm EDT Report Abuse
    nowadays bankers and politians are the scurge of the earth, fence in all such institutional facilities creating prisions for these licensed crooks.
  • 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 9 users disliked this comment
    ToMathew Tue Aug 24, 2010 09:27 pm EDT Report Abuse
    This is the most non-sensical article I have ever seen. The Fed is behind the curve? And who has better information than the Reserve? The Executive? The Congress? Goldman? Berkshire? The Conference Board? Are you serious? They are ahead of the curve! The US is in recovery. It is muted, not stunted. School starts in two weeks and parents WILL buy things.
    Comment hidden due to low rating. Show Comment
  • A Yahoo! User
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    A Yahoo! User Tue Aug 24, 2010 09:21 pm EDT Report Abuse
    Bernanke is still probably too BUSY researching and writing papers on the Great Depression to go to any store and look at prices of things. This SHAM of a CPI number is garbage – everyone knows that. Google to see how CPI is calculated – you will see what I mean. ========= Prices of all goods ( except completely discretionary items ) are going up – NOT because LABOR costs are high, but BECAUSE companies have great PRICING power. ========= Keep printing Ben.
  • A Yahoo! User
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    A Yahoo! User Tue Aug 24, 2010 09:11 pm EDT Report Abuse
    Bernanke and the Obama administration have SHAMELESSLY and ENDLESSLY kept on helping the IRRESPONSIBLE ( whether it is individual or banks ) in this entire saga. ===== Screw individual savers to make banks whole. No need to increase tax and face protests. Just QUIETLY keep screwing the depositors. No one will raise a voice …… Oh, and then also expect these people to help out the economy.
  • A Yahoo! User
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    A Yahoo! User Tue Aug 24, 2010 08:53 pm EDT Report Abuse
    1) Traders FLOAT these “freak out” rumors to get the Fed to open its vaults. Old tactic. Hopefully, everyone have caught on to this by now. ========= 2) Why would anyone lend to anyone for housing ? The foreigners have figured out that basically this country have become full of liars and cheats who would do anything to get a huge loan and wont pay that back ========= Ask Obama if he would lend to his relative if he knew this relative generally prefers not to pay back loans ========= People now fully UNDERSTAND and comprehend the meaning of the word “Non-RECOURSE” loan.

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