Comments on: What The Fed Is Trying To Accomplish http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html Freshly squeezed market commentary & analysis Sat, 21 Nov 2009 19:32:08 +0000 http://wordpress.org/?v=2.0.2 by: gamma http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36077 Fri, 19 Dec 2008 03:14:08 +0000 http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36077 well if you don't think more debt is the answer then you can't agree with slashing rates, period. Arguing that it should have been done sooner is just saying you think more debt should have been injected faster. More debt is not the answer and this country (and the UK) will spend some very painful years figuring that out. well if you don’t think more debt is the answer then you can’t agree with slashing rates, period. Arguing that it should have been done sooner is just saying you think more debt should have been injected faster.

More debt is not the answer and this country (and the UK) will spend some very painful years figuring that out.

]]> by: Babak http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36076 Fri, 19 Dec 2008 03:04:07 +0000 http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36076 gamma, what I meant is that this is what they should have done more than a year ago. They are finally doing it now but it is too little too late. Of course, there are some massive structural issues related to regulation as well. Am I talking in circles? usually if I talk long enough that happens :) gamma, what I meant is that this is what they should have done more than a year ago. They are finally doing it now but it is too little too late. Of course, there are some massive structural issues related to regulation as well. Am I talking in circles? usually if I talk long enough that happens :)

]]> by: gamma http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36072 Fri, 19 Dec 2008 01:06:13 +0000 http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36072 well you seem to be contradicting yourself. you said that "they are finally getting in front because not only are they in effect lowering to zero, they are also putting to use all their other tools to ram liquidity down the financial market’s throat". 'finally getting in front' sounds like you think they are on the right track lowering rates effecting quantitative easing. But then you say you don't think the solution is more debt. If you don't think the solution is more debt than you can't possible think they are getting on top of the problem... well you seem to be contradicting yourself. you said that “they are finally getting in front because not only are they in effect lowering to zero, they are also putting to use all their other tools to ram liquidity down the financial market’s throat”.

‘finally getting in front’ sounds like you think they are on the right track lowering rates effecting quantitative easing. But then you say you don’t think the solution is more debt. If you don’t think the solution is more debt than you can’t possible think they are getting on top of the problem…

]]> by: Babak http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36070 Thu, 18 Dec 2008 20:55:03 +0000 http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36070 gamma, no not really, but that's what the Fed seems to be bent on accomplishing. gamma, no not really, but that’s what the Fed seems to be bent on accomplishing.

]]> by: gamma http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36069 Thu, 18 Dec 2008 20:28:50 +0000 http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36069 So you think force feeding the market with more debt is the solution??? I guess when the only thing you know is a Keynesian hammer, then everything looks like a nail. So you think force feeding the market with more debt is the solution??? I guess when the only thing you know is a Keynesian hammer, then everything looks like a nail.

]]> by: Babak http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36038 Wed, 17 Dec 2008 21:38:47 +0000 http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36038 gamma, I think they are finally getting in front because not only are they in effect lowering to zero, they are also putting to use all their other tools to ram liquidity down the financial market's throat. gamma, I think they are finally getting in front because not only are they in effect lowering to zero, they are also putting to use all their other tools to ram liquidity down the financial market’s throat.

]]> by: gamma http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36037 Wed, 17 Dec 2008 19:44:04 +0000 http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36037 The Fed did not "get in front" of the Treasury markets. The FFR controls short-term rates which have been prices between 0 and .25% for quite some time now. All they did was acknowledge that the market is more powerful than they are in short-term rates. However they appear to think they can out muscle the market in pricing assets and pricing longer term interest rates. I think they will find that they are very wrong. The Fed did not “get in front” of the Treasury markets. The FFR controls short-term rates which have been prices between 0 and .25% for quite some time now. All they did was acknowledge that the market is more powerful than they are in short-term rates.

However they appear to think they can out muscle the market in pricing assets and pricing longer term interest rates. I think they will find that they are very wrong.

]]> by: TheTraderBlog.com » More Good News … (Not Yet) http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36033 Wed, 17 Dec 2008 10:51:40 +0000 http://www.tradersnarrative.com/what-the-fed-is-trying-to-accomplish-2152.html#comment-36033 [...] ZERO - “To put it bluntly, the Fed is punishing saving and rewarding spending and debt. With inflation running at ~1% anyone who saves money is a chump. Many money market funds now have a negative return (due to MERs).” [...] […] ZERO - “To put it bluntly, the Fed is punishing saving and rewarding spending and debt. With inflation running at ~1% anyone who saves money is a chump. Many money market funds now have a negative return (due to MERs).” […]

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