該來的總會來 March 19, 2017Posted by hslu in Debt and deficit, Economics, Trump.
Tags: Fed Balance sheet, MBS, QE, Yellen
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不過，這是 Goldman Sachs 的推測，不一定會實現。我倒覺得 Yellen 大媽不會貿然行事，最多她也不過是做個樣子，賣個幾十億，開個頭，讓後來的人收拾這個爛攤子。反正 The Fed 欠這麽多錢，也不是她的錯，她勇敢的開始減少QE的行動，也可以沾點光。
再說， Trump 是絕對不會把她留下來的。她明年年初是一定會收到 “You are fired” 的粉紅小單。反正她也風光夠了，下台收政府的退休金，日子好過的很。她在位的這幾年，兢兢業業，守著她從教科書上學到的理論，一步一步慢慢的走，蕭規曹隨，錯不到那裏。黑暗隧道的那一邊已經有光亮出來了。只要熬過這幾個月，成功身退，歷史留名，有什麽不好。搞個大動作，不是 Yellen 大媽的作風。
套一句 Yellen 大媽和 Bernanke 大叔最喜歡說的話來結尾吧：”預知後事如何，請聽下回分解。”
BOJ: Joker of the Central Banks September 11, 2016Posted by hslu in Economics, Global Affair.
Tags: BOJ, Negative interest rate, QE, QEE
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QBank of Japan looks to clarify policy confusion but markets still bewildered – http://www.cnbc.com/2016/09/11/financial-times-bank-of-japan-looks-to-clarify-policy-confusion.html
Tags: Debt, GDP, Negative interest rate, QE
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Grant Williams, the author of the widely-read financial publication “Things That Make You Go Hmmm” and co-founder of Real Vision Television, says we’re experiencing something “truly historic” in the global economy. In a new 40-minute video presentation called “Crazy,” Williams highlights the extraordinary levels of global debt and unprecedented monetary policy we’ve seen since the 2008 financial crisis. Following the 2008 financial crisis, central bankers unleashed ultra easy monetary policy.
New Normal in the U.S. September 28, 2014Posted by hslu in Economics, Taxes.
Tags: BOJ, Federal Funds rate, Federal government, national debt, QE, taxes
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Normal federal funds rate before 2008/2009 financial crisis was 4 to
PIMCO has argued that the ‘new normal’ fed funds rate in 2017 will be 2 to 2.5%.
I don’t know what it will be but I instinctively believed that it will be a lower number because the U.S. government can’t let it go up too much.
The reason is very simple: America is broke.
Higher interest rate will increase America’s interest payment and the government can’t afford it.
For every 1 percentage point increase in interest rate, Uncle Sam has to add $160 billion to federal government’s budget just to pay the interests on the loans.
Let’s call they what they really are: IOUs.
Don’t call it Treasury Bonds or Treasury Notes as if the government can keep issuing new ones to pay off the interests and the principles on the old Bonds. They are IOUs and they have to be paid off one day.
Just look at Japan: interest rate has stayed at or near 0% for the past 25 years becsuse of Japan’s massive national debt; now at 250% of Japan’s GDP after recent BoJ QE program. Interest payments on Japanese national debt and redemptions of JGBs by Japanese seniors account for 40+% of annual government budget. 40%.
Yet, BOJ is considering more money printing to jack up inflation which will ultimately push up interest rates and debt payments.
America is heading to that direction now that the Fed has gone through four runs of massive money printing and 8 years of near 0% interest rate policy.
We’ll have to wait and come back in 2 years to see where nrw interest rate is.
What I really like to know in 2017 is what percentage of our taxes goes to pay for the interests on the IOUs.
BLIND leading the Blind March 21, 2014Posted by hslu in Economics, Global Affair, Politics, stocks.
Tags: Federal Reserve, QE, tapering, Yellen
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Look at this picture and tell me what you see.
A beacon of light above the entrance of a building with menecing clouds gathering in the sky in the background.
The building is the Federal Reserve building in Washington DC. The beacon of light gives out hope of chiarman Benanke or Yellen leading the US economy out of the recession into a bright future.
Benanke created QEs but they barely kept the US economy creeping along at ~2.2%. He knew his QEs made inequality in the US worse and he wanted to get taper started while he was still in the office.
Lo and behold, the moment he started taper in December 2013, the job market in November 2013 tanked: 74,000 new jobs vs. 200,000 expected. December’s number isn’t much better: 113,000 vs. 185,000. January 2014 saw 175,000 new job but still much lower than what is needed to absorb new entrants into the economy.
So what’s going on here? Do we have a recovery or do we not?
No wonder the beacon of light is’t very bright. The US economy is in the dark just like the cloud behind the building. The one who’s supposed to lead the economy out of the dark couldn’t see very far out either.
Read this from Yellon when she was pressed in the Q&E session to put a date on when the short rate will rise after QE ends:
“I — I, you know, this is the kind of term it’s hard to define, but, you know, it probably means something on the order of around six months or that type of thing. But, you know, it depends — what the FOMC statement is saying is it depends what conditions are like at the time.”
In plain English:
“Yes, it depends and I don’t know. What else do you want? Give me a break.”
It’s kind of blind leading the blind. And we are left in the dark to guess what’s going to happen next. For the emerging markets, I am sorry, you are on your own. The US federal Reserve only cares about what happens in the US. You countries can take care of your own problems: raise interest rate to 10+%, devalue your currencies, cut your federal budgets, reduce pension benefits, what ever. That’s your problem. Not mine.
That’s was Bernanke’s position. It will be Yellen’s too.
That’s simply not fair. The US government through its crony Wall Street too-big-to-fail investment banking firms and too-big-to-prosecute bank CEOs created the financial crisis in the first place. The Great Recession was instigated by the United States and QEs followed. Now QEs’ unintended consequences begin to surface and the US washes its hands and leave other nations to face the consequence on their own.
This is the classic behavior of a bully.
Blame Bernanke on inequality in US January 28, 2014Posted by hslu in Economics, Health Insurance, jobs, Obama, Obamacare, Politics, stocks, Taiwan.
Tags: Bernanke, Income Inequality, minimum wage, Obama, QE, wealth gap
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Bernanke’s QEs did little to stimulate the US economy. He added $3.2 trillion to Fed’s balance sheet which grew the US economy ~2.2% per annum since 2009; a little better than inflation. U6 dropped from ~17% to ~14%. Millions of people got out of the labor market. They moved from the unemployment line to the food stamp line.
So what happen to that $3.2 trillion? Some returned to the Fed and earned 0.25% risk free for the dealer banks. The rest of that hot money pumped up stock markets all over the world and housing markets in many cities in the US.
US stock market went up 175% since the 2009 low. It was up about 30% in 2013 alone.
Housing prices in Las Vegas, Phoenix, SF, San Jose, Miami, etc., have gone up by double digits for a few years in a row.
Let me ask you this:
Who benefited from the $3.2 trillion?
The rich guys. They owns most of the stocks.
Gates made $6 billion in 2013 alone and he was worth $67 billion in 2013. Buffett made $7.5 billion in 2013 and was worth $53.5 billion in 2013. Others such as hedge fund managers and Wall Street investment bankers also made millions of dollars since 2009.
Who got rich from the Booming housing markets?
The rich guys. Again.
Millions of former home owners are renters in 2013 and will remain so in 2014. The homes they used to own went back to banks. Banks sold these foreclosed homes to individual investors and hedge funds who borrowed from banks at ultra low interest rates thanks to Bernanke’s QEs.
This outcome doesn’t come from the left field. It was by design.
Bernanke engineered the largest wealth transfer in America’s history: he robbed from the poor and the middle class and handed them over to the rich; people who own most of the stocks and big houses.
In other words, the gap between the rich and everyone elso got bigger thanks to Bernanke. And he is washing his hands and leave the mess, or 爛攤子, to the next chairman.
This is inequality that everyone from the US to Europe to Taiwan is talking about.
Bernanke wanted A trickle down economy. It didn’t happen. The poor got poorer and the rich got richer.
Everybody knows that the mostbdirect and efficient way to narrow the inequality gap is to engineer a crush of DJIA and bring down the runaway housing market.
That’s govrrnment’s job and Obama is good at it.
He started Obamacare. Health insurance companies will lose money because they canceled millions of policies because they didn’t meet Obamacare’s requirements. In return, they got the old and the sick instead. Unsurance companies are in trouble.
He raised salaries of millions of contract workers to the federal government. Companies which hired these people will make less. Companies who don’t work for the federal government will feel the wage pressure and wages will perk up in time. Companies will make kess.
He’ll probably use his pen to sign an executive order or some kind of regulation (his words, not mine) to raise the minimum wage. Democrat controlled governments will follow Obama and some (DC) have done it already. Businesses all over the US will see their margin squeezed. Some will hire less. Few will close. Economy will suffer and stock market will come down because earnings will suffer.
What follows next will be the housing market because one who doesn’t have a job will not buy any house.
That’s wealth transfer in reverse direction.
Well, there we go again.
What government gives you, government will take it away. The rich can move their money to foreign countries, look for loopholes or change their investment to avoid IRS’s knife. They have wealth managers who do nothing but that.
The middle class is stuck. They will always be the loyal servants to the 47% until they become one of the 47%.