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rom Bruce Krasting: Bernanke has to do something this week. Most pundits are suggesting it will be more LSAPs (QE). I have trouble with this scenario. To be of any benefit, a new QE would have to be for $600 billion. If QE3 were to be only a paltry $200 billion, it would be received very poorly. I don’t see Ben shooting off a popgun this week. He would be better off [...] From Bruce Krasting: I was down at the barn working on a busted mower when a neighbor jogs by wearing white Nikes and a maroon tracksuit. I wave, he stops, says hello and asks: “So when are you going to get those fences fixed?” The guy has a point. The fences are shot. But this is an old barn, and the horses are long gone, so I don’t really give a s#$% about [...] by ZH Because the downward sloping line below, which shows the average maturity of Fed holdings, is about to go up, up, up. And yes, that means that every 0.01% change in interest rates will mean a $2 billion capital loss for the Fed. But, oh yes, the Fed can always print money so no risk there… Source: Stone Mountain Henry Blodget One of the most outrageous “open secrets” of U.S. government policy these days is that the Federal Reserve is still paying big banks not to lend money. And it’s doing that while screwing average Americans who have been responsible and lived within their means. Huh? Seriously: The Federal Reserve is quietly continuing with one of the many outrageous bank-bailout programs it initiated during the financial crisis–the one in which [...] by Philip Taylor $100,000 Loan for 30 Years for Various Interest Rates Int. Rate Total Interest Paid Total all payments 0% $0 $100,000 (Lincoln Greenback 0% Credit Currency) NO INTEREST by bearfund Jill loves shoes. She loves them so much that she spends about $200 a month on shoes, and expects to spend $250 a month next year and $300 a month the year after that. Unfortunately, Jill has been struggling to make ends meet lately; she’s been paying a lot more for groceries and gasoline, her landlord just raised her rent, and she’s [...] by Peter Tchir of TF Market Advisors Debt Service Is Growing Rapidly and Will Dwarf other Budget Line Items Asides from the fact that I don’t see how people can believe the deficit doesn’t matter, let’s take a quick look at the facts that show it does matter. Massively! Put most simply, in 2010, for every $1 of discretionary spending we spend $0.15 on interest. By 2020, for every [...] http://www.marketwatch.com/story/fed-could-trim-interest-rates-further-duke-2010-07-12 “WASHINGTON (MarketWatch) — Trimming short-term interest rates further would be one tool the Federal Reserve could use to support the economy if threatened by a renewed downturn, said Federal Reserve Board Governor Elizabeth Duke on Monday. “We still have tools. Obviously we have more room on the tightening side than we do on the easing side,” Duke said in an interview on Fox Business Channel. “But we still have balance [...] So far, banks can borrow at near 0% interest but consumers are still borrowing at higher rates. I’m thinking the Fed is going to keep push rates down further for consumers. Right now, 30-year fixed mortgage rates down to an average of 4.57%, apparently the lowest point in 50 years. Mortgage rates drop to new low of 4.57 pct. If the Fed and Federal government keeps this up, [...] The whole thing is worth watching, as Koo outlines in detail how the U.S. economy is starting to look quite a bit like the Japanese did in the 1990s, particularly in terms of a decline in demand for credit. * 3:00 The U.S. should be seeing 3 or more bubbles with all the interest rate stimulus. Any economy that requires zero % interest rates and infinitum and trillion $ stimulus injections just to tread water is by definition an economy on life support with serious/lethal structural problems. The structural problems are insurmountable debt and loss of wealth creation through the exportation of manufacturing/technology infrastructure overseas. It’s like running up your credit card to the max then getting your wages slashed in half. The outcome is certain without change. - Mel |
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