Weekend Topic Suggestions
Please post topic ideas here!
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
August 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Is it time to hunker down for another taper temper tantrum on Wall Street, or should traders instead expect to enjoy a tempered taper rally?
Fed Message Muddled as Misunderstood Taper Meets Slowing Growth
By Craig Torres & Ilan Kolet - Sep 12, 2013 9:00 PM PT
Federal Reserve Chairman Ben S. Bernanke and his colleagues meeting next week are poised to take two steps that appear inconsistent.
They will probably lower their estimates for growth for this year and next for the third consecutive time. Simultaneously, they are forecast to start scaling back the $85 billion in monthly bond purchases they have been relying on to stoke the recovery.
What’s more, annual inflation has been running at least a half percentage point below the Fed’s goal since December. And while the unemployment rate, at 7.3 percent in August, is falling, that’s mainly because some Americans are leaving the labor force.
“As a central bank, you are lowering your growth forecast, inflation is running low, and hiring is slowing and you are going to taper your asset purchases?” said Julia Coronado, chief economist for North America at BNP Paribas in New York and a former member of the Federal Reserve Board’s forecasting staff. “That is a communications challenge.”
…
“That is a communications challenge.”
Hah hah…that is quite a euphemism.
Nice.
Ever think about replacing some of the lame Bloomburg columnists?
Think the FED is selling gold to buy T-notes?
I’d never make it as a journalist if I weren’t just doing it for fun.
(Didn’t mean to guess my wild-arsed conjectures rise to any standard of professional journalism.
)
Adhering to the spirit of “No dollar shall be allowed to escape”, whatever it is that will punish the most people is what you should expect to happen.
Money: Joe6Pack makes it, Wall Street takes it.
“…whatever it is that will punish the most people is what you should expect to happen.”
Which is why UncleFedLoveMe should exit her short positions if she wants to precipitate a market correction…
Will the end of easy money bring hard times for these times?
Investing
9/10/2013 @ 10:15AM
Does Tapering Really Signal Doom For The Markets?
Sean Hanlon Sean Hanlon, Contributor
If you’ve been paying attention to the financial headlines as of late, you’ve likely noticed some increased market volatility. One cause of this volatility has been information coming out of the Federal Reserve. Recently, the Federal Open Market Committee (FOMC) meeting minutes and announcements have revealed the possibility that they will begin to reduce, or “taper,” the $85 billion bond-buying program toward the end of 2013. We should know more about the “tapering” plan when the Fed meets on September 17and 18.
The standard reaction of the markets has been to sell off, causing interest rates to spike and equities to decline. One reason for this action is that the Fed is propping up the bond market with their bond-buying. If they start to taper the bond-buying program, bond prices will sag, interest rates will rise, and equities will become less attractive. We should ask ourselves, is all of this worrying warranted? Does tapering really signal doom for the markets?
…
If Summers gets the nod as Fed Chief, is his confirmation a done deal?
ECONOMY
Updated September 13, 2013, 12:12 a.m. ET
GOP Senator to Oppose Summers as Fed Chief
By KRISTINA PETERSON
CONNECT
The second-ranking Republican in the Senate said he would oppose former Treasury Secretary Lawrence Summers if President Barack Obama nominates him to lead the Federal Reserve.
“Temperamentally, he’s really unsuitable for that job,” Senate Minority Whip John Cornyn (R., Texas) said in an interview Thursday.
Potential Replacements for Federal Reserve Chief
Although Mr. Cornyn isn’t on the Senate Banking Committee, where Mr. Summers would face his first vote if nominated, his opposition suggests the former Treasury secretary could face resistance among conservative Republicans. Many GOP lawmakers have criticized Mr. Summers’s role, when he was director of Mr. Obama’s National Economic Council, in helping create stimulus legislation aimed at boosting the economy after the recession.
“Given his role in the first two years of the president’s first term of office, and the failed stimulus, and his whole approach to getting the economy growing…I would not support” his nomination, Mr. Cornyn said.
…
It better be. If the senate does not immediately confirm the appointment, Obomba may try start a war with Canada- only to safeguard ‘The Children’ and future generations, of course.
September 12, 2013, 2:28 PM
Lew Has Met With Summers, Yellen in Recent Months
By Damian Paletta
CONNECT
Treasury Secretary Jacob Lew, a key adviser in the White House’s search for the next Federal Reserve chairman, has met with two of the leading candidates in recent months as the Obama administration formulates its pick.
Mr. Lew met or spoke with former Treasury Secretary Lawrence Summers on at least three occasions between February and the end of July, according to his official calendar. These include a morning phone call on March 19, a 20-minute meeting at Treasury on April 5, and a 95-minute meeting on the evening of June 4 at Treasury.
Mr. Lew’s has also met with Fed vice chairman Janet Yellen – another contender for the job – at least twice during that span. Once was during a trip both took to the G-7 meeting in Buckinghamshire, England, another was at the G-20 meeting in Moscow.
It’s possible Mr. Lew met with the candidates on other occasions at the White House or elsewhere and the appointments weren’t put on his official calendar.
Mr. Lew’s discussions with Mr. Summers could draw scrutiny, but his schedule shows he is in regular contact with former Treasury secretaries, particularly Robert Rubin and Henry Paulson.
…
The choice between Yellen and Summers is like having a choice between bad and worse, and trying to figure out which is which.
“The choice between Yellen and Summers is like having a choice between bad and worse, and trying to figure out which is which.”
+1 The infestation is rather complete, IMHO.
Aside from investment banksters at Wall Street’s too-big-to-fail Megabank, Inc, who would love to have Summers as the next Fed Chair?
ft.com > World > US >
September 13, 2013 8:34 pm
Republicans hold strong hand if Obama wants Summers at Fed
By Richard McGregor, Robin Harding and Gina Chon
When a Democratic congressman told Barack Obama at a meeting on Capitol Hill in July that he should not appoint Lawrence Summers to head the Federal Reserve, the president jumped to the defence of his former adviser.
But there is one legacy of Mr Summers’ record Mr Obama may not appreciate if he picks him as the next Fed chairman. So strong is Democratic antipathy to Mr Summers that Mr Obama will have to sweat on a bloc of Republican votes in the Senate to get him across the line.
A White House spokeswoman said on Friday that Mr Obama had made no decision on who would take Ben Bernanke’s place when the Fed incumbent steps down in January.
The White House’s failure to damp speculation over the past month that Mr Obama and his advisers want Mr Summers over his chief rival, Janet Yellen, the Fed vice-chair, however, has hardened a perception that the former Treasury secretary will get the nod.
The assumption that Mr Summers will be nominated lies behind the frantic vote-counting on the Senate banking committee, which must clear any candidate before he or she goes before the full Senate to be confirmed.
The Democrats have a 12-10 advantage on the committee, but already at least three members of the majority – Sherrod Brown of Ohio, Jeff Merkley of Oregon and Jon Tester of Montana – have indicated they will vote against Mr Summers. A fourth Democrat, Elizabeth Warren, elected last year from Massachusetts, is leaning to “no”, with people familiar with the issue indicating on Friday that she had relayed “serious concerns” to the White House about Mr Summers at the Fed.
If all four go against Mr Summers, he will need a bloc of Republican support on the committee, potentially sparking an uncomfortable partisan fight over a position that has tried to stay above politics.
But it is a fight that many Democrats and Republicans, for different reasons, want to have.
All four Democratic senators share a distaste for the financial deregulation and embrace of trade liberalisation that Mr Summers has been identified with – even if he insists his views have been caricatured.
In August, Ms Warren, with Bernie Sanders, the Senate’s most avowedly leftwing senator, authored an opinion piece entitled “Four questions for Fed chair candidates”, including whether the nominee would “work to break up ‘too-big-to-fail’ financial institutions so they could no longer pose a catastrophic risk to the economy”.
A former White House official said Mr Summers had shown “incredible disrespect” to Ms Warren when he was advising Mr Obama on the economy and she was under consideration to head a new consumer financial watchdog.
On the Republican side, Mr Summers has been demonised as the architect of Mr Obama’s first-term stimulus and the bailing out of the banks, both now heresy on large sections of the right.
A number of the key conservative activist groups, such as the Club for Growth and the Heritage Action Fund, have so far stayed on the sidelines of the debate over the next Fed chair.
But the American Principles Project, another rightwing group, which opposes all of Mr Obama’s potential nominees because of their support for Mr Bernanke’s looser monetary policy, has more specific complaints about Mr Summers.
“When grassroots groups on the right start to focus on this, they will oppose Summers because of his role in the stimulus,” said Rich Danker, the group’s director, adding that they intended to run campaign advertisements against him. “Bernanke already got 30 ‘no’ votes in his 2010 [confirmation], so I think that’s the baseline.”
…
“If Summers gets the nod as Fed Chief, is his confirmation a done deal?”
I’d expect an extra heavy dose of bullying and cajolery.
If you trade gold, would now be a better time to buy or to sell?
Gold under $1,000 an ounce? Don’t rule it out says Goldman Sachs
September 13, 2013, 10:20 AM
It’s open season on gold and Goldman Sachs looks to be lining up to get ahead of the pack, again. In a Bloomberg TV interview on Friday, the bank’s head of commodities research, Jeffrey Currie, said there’s a danger that gold could drop to under $1,000 an ounce in the near term as the Fed pulls back on stimulus and economic data continues to perk up.
…
Question: What should we call the economic malaise of the past five years?
Talking heads call it “The Great Recession.” That seems to minimize it. The US hasn’t been in recession for several quarters now and yet there is still dropping absolutely numbers of employed, wage stagnation, increasing prices for essentials.
I’m wondering what a good name for this period and/or phenomenon would be.
The Great Stagnation?
The Great Hangover?
The Great Reckoning?
Some other formulation entirely?
still dropping absolutely numbers of employed : I need to amend that. The absolute number of employed may be increasing, but the ratio of employed to the population is holding at a persistently lower level: http://data.bls.gov/timeseries/LNS12300000
It is however higher than it was in the early 70s. So there’s that. But regardless… names for the current economic phenomenon. Also what are the characteristics of this phenomenon?
It is the Great Rumbling, which telegraphs something about to come.
“Great Rumbling”
Soon followed by the “The Great Flatulence”
Pull my finger.
Talking heads call it “The Great Recession.” That seems to minimize it.
Hah hah…apparently his cynicism meter is broken then.
The Great FUBAR?
I always liked “The Awesome Depression”, because this time it’s not just great, it’s AWESOME!
How come everybody’s underwear is suddenly tied in a knot over taper fears? Isn’t it plainly obvious the Fed will announce a tapered and delayed taper next week?
Consumer confidence tumbles as interest rates rise
By Jim Puzzanghera
September 13, 2013, 8:30 a.m.
WASHINGTON — Consumer confidence tumbled this month to its lowest level since April amid rising interest rates and sluggish job creation.
The preliminary September consumer sentiment reading Friday from the University of Michigan and Thomson Reuters fell to 76.8 from August’s final figure of 82.1. Analysts had expected the figure to be flat.
The closely watched index hit a six-year high of 85.1 in July but has fallen as lenders have hiked mortgage and other interest rates sharply this summer in anticipation of a pullback by the Federal Reserve of one of its major stimulus programs.
Richard Curtin, the survey’s chief economist, said the decline reflected growing concern about the effect of rising rates on the economy, according to Reuters. Higher mortgage rates also have slowed the housing market rebound, which had an influence on how homeowners view their financial well-being, he said.
Consumers views of present economic conditions and their expectations for the coming year fell in September.
“It is very obvious that Americans are still cautious and their mood has soured recently,” said Chris Christopher, an economist with IHS Global Insight. He projects modest growth in consumer spending and retail sales ahead.
Those expectations would be consistent with government data released Friday showing retail sales growth slowed unexpectedly in August.
Federal Reserve policymakers are monitoring economic data as they consider reducing a key stimulus program when they meet next week.
…
So long as the Fed keeps dumping boatloads of money into mortgages, the economy will be saved!
Among other things, this paper is flat out WRONG. Anyone who passed an undergraduate banking class can tell you that federally-guaranteed mortgage bonds and Treasurys are very close substitutes. I once or twice have calculated the correlation in mortgage and long-term Treasury rates; it’s somewhere in the neighborhood of 99%.
But don’t let the facts stand in the way of the findings of papers presented at the Fed’s annual Jackson Hole central banker conclave.
P.S. If the Fed is snapping up MBS at above-market prices, then I rescind my point.
ft dot com
August 23, 2013 4:55 pm
Jackson Hole: Fed urged to keep buying mortgage-backed securities
By Robin Harding in Jackson Hole
Academics are trying to indicate the way ahead for the US Federal Reserve
The US Federal Reserve should keep buying mortgage-backed securities even as it sells Treasury bonds, two leading academics told the central bank in a paper at its conference in Jackson Hole, Wyoming.
Arvind Krishnamurthy and Annette Vissing-Jorgensen told the world’s assembled central bankers that their buying of government bonds does little to stimulate the economy but buying stressed assets such as MBS does work.
The paper may encourage the Fed to “taper” its $85bn-a-month, third round of quantitative easing by cutting back on its $45bn of Treasury purchases rather than its $40bn-a-month of MBS buying.
The annual Jackson Hole symposium, organised by the Kansas City Fed, is attracting a lower profile this year because chairman Ben Bernanke is not attending. In previous years, he started the conference with a policy speech.
Several Fed officials made comments on the sidelines, however. “I would be supportive [of tapering] in September as long as the data comes in between now and then basically confirm the path we’re on,” said Dennis Lockhart, president of the Atlanta Fed, on CNBC, the broadcaster.
But St Louis Fed president James Bullard, who has often expressed concern about low inflation, said there was no need to hurry. “We can afford to be very deliberate in our decision-making here.”
The two academics proposed a radically different approach to the Fed’s plan of gradually tapering its $85bn of purchases down to zero by the middle of 2014. Instead, they said it should taper its Treasury purchases down to zero and then sell Treasuries, while continuing to buy MBS.
“The Fed’s cessation of MBS purchases or sale of MBS are likely to be more economically important for the private sector than a sale of Treasury bonds, which by itself will affect mainly government borrowing costs,” they argued.
…
“Fed urged to keep buying mortgage-backed securities”
How do you urge a guy with a money printing press?
QUIZ: How much do you know about mortgages?
Here it comes: Are you ready for the Fed to taper?
Published: Friday, 13 Sep 2013 | 9:36 PM ET
By: Patti Domm | CNBC Executive News Editor
The Federal Reserve is expected to announce its first move to taper its $85 billion in monthly bond buying when its two-day meeting ends Wednesday. While the Fed is seen curbing bond purchases by an initial $10 to $15 billion — a relative baby step compared to the massive amount of stimulus applied — it sends an important message that the Fed is moving toward a normalization of rates and expecting a more normal economy.
“We have come a long way, and we often forget how far we’ve come. At the heart of the crisis, people didn’t think there was a tomorrow. Now we know, there’s a tomorrow. We just don’t know how strong it is,” said Diane Swonk, chief economist at Mesirow Financial. “Sometimes the cure has its own dangers and you have to look at those tradeoffs. That’s where the Fed is. Is the cure good enough for the risks?”
The Fed’s bond buying, which has ballooned its balance sheet to $3.6 trillion, has been criticized for adding too much easy money to the economy and over-inflating the stock market. Just talk of a pullback in the Fed’s quantitative easing program prompted a swift move up in Treasury yields, and also mortgage rates. Stocks reacted negatively at first to the higher rates, but the pain across emerging markets was much more intense as capital took flight. U.S. stocks have largely recovered, with the S&P 500 now just about 1.2 percent from its all-time high.
…
QUIZ: How well do you understand the Fed stimulus?
From Ben’s lead article:
“… the government (of Malaysia) encouraged house ownership to secure the loyalty of immigrants….”
With a threatened failed state on America’s southern border, and an increasingly strident “hispanic” rights movement gathering domestically, offering no-down, low-monthly ARM’s to illegal aliens makes increasingly more sense.
Discuss.