Bernanke’s Speech: How Does Quantitative Easing Work? Will It Work? I agree with Brad DeLong's reaction to Ben Bernanke's speech: Ben Bernanke's Speech Was... Disappointing, by Brad DeLong: I am still surprised at the Fed Chair we have. Where is the Fed Chair who was willing to try to get ahead of the problems in late 2008? Or the "Helicopter Ben" of 2003? Or the student of big downturns in Japan in the 1990s and the U.S. in the 1930s. It's a very different animal we have today. And this speech didn't do much to convince me that he is going to do what ought to be done. Bernanke forecasts that growth next year "seems unlikely to be much above its longer-term trend"--that is, that unemployment is likely to rise in the near term and then stay essentially stable through the end of 2011 before it even starts to think about heading down. In this environment, now is not the time for Bernanke to talk about the costs and risks of expanding the Federal Reserve balance sheet. 1. 2. 3. 4. 5.
The PermaBear to English Translation Guide. These days, the spectrum of market commentary is broad, ranging from permabulls to recessionistas to gold bugs to dollar bears. More recently, a special group of folks have been out in full force — the PermaBears — and their jargon can be a bit . . . confusing . . . to the uninitiated. For those you who have been having difficulty understanding their idiosyncratic language, The Big Picture, in conjunction with Google Translate, offers you this handy service. Enjoy: Well, there you have it — unless the trading Gods have terrific senses of humor, the top is now in.
Previously: The Modern Kudlow To Standard English Translation Guide Coming Soon: The Gold Bug to English Translation Guide David Rosenberg: A minor deity amongst the Perma-bear faithful. Category: Humor, Psychology, Trading. When Pigs Can Fly, the Devil Shivers in Hell, and 30% Gains in Western Stock Markets Will Mean Practically Nothing | zero hedge. Employment Revisions May Put U.S. Payrolls in Bigger ‘Hole’ Greece default 2012. Peston's Picks: How sinister is the LIBOR rise? Global Banks May Need $1.5 Trillion in Capital, Study Says - Bus. Us-debt-and-the-greece-analogy: Personal Finance News from Yahoo. Don't be fooled by today's low interest rates. The government could very quickly discover the limits of its borrowing capacity.
An urgency to rein in budget deficits seems to be gaining some traction among American lawmakers. If so, it is none too soon. Perceptions of a large U.S. borrowing capacity are misleading. Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. The roots of the apparent debt market calm are clear enough. Beneath the calm, there are market signals that do not bode well for the future. The U.S. government can create dollars at will to meet any obligation, and it will doubtless continue to do so. The 10-year swap spread quickly regained positive territory and by June 14 stood at a plus 12 basis points. I grant that low long-term interest rates could continue for months, or even well into next year.