Federal Reserve Program Is Socialism For The Rich

By: Friday September 20, 2013 9:39 am

If you have followed any economic news at all you will have heard the term quantitative easing, or QE, which is technocratic shorthand for the Federal Reserve shoveling funds into Wall Street banks to produce a phenomenon known as the “wealth effect.” The wealth effect relies principally on trickery. The hope being that people will see higher [...]

Janet Yellen’s Game-Changing Speech for Monetary Policy

By: Wednesday November 14, 2012 12:00 pm

The President opened his press conference by designating the top two priorities as jobs and growth, and then spent the next 60 minutes answering questions about David Petraeus and Susan Rice and tax rates and Benghazi and deficit reduction. And Obama didn’t seek to break out of that constraint and suggest actual near-term job creation [...]

The Junk Bond Time Bomb

By: Tuesday October 30, 2012 10:00 am

At some point, Wall Street will dry out, the New York Stock Exchange will return to life, and the traders will roll back into Lower Manhattan. And by most accounts, they will continue their trend of purchasing garbage. Junk bonds are living up to their name again. Companies with junk credit ratings have been increasingly [...]

Short-Term Economic Performance Does Not Equal Fixing Long-Term Structural Economic Problems

By: Wednesday October 24, 2012 1:26 pm

The Federal Reserve stood pat today, determining that they would continue with QE3 despite the relative improvement in economic performance. This clears one hurdle lingering in the minds of some observers: would the Fed have the resolve to stay the course, even if the economy strengthened, which would probably lead to an uptick in inflation? [...]

US GDP Data Revised Down in Second Quarter

By: Thursday September 27, 2012 9:00 am

Economic growth for the second quarter of 2012 was revised down sharply to 1.3%, a reminder that economic activity really stalled out in the spring. Thursday’s report underscored that the recovery has proved insufficient to pull down the unemployment rate, which has been stuck between 8.1 percent and 8.3 percent all year. The renewed weakness [...]

The Investor-Purchase Housing Bubble Inflates Some More

By: Monday September 17, 2012 10:27 am

Analysts have tried to parcel out whether QE3 will really help the economy. I’ve done the same thing myself. The way almost everyone looks at this is about the impact on housing, specifically mortgage prices. But mortgage rates haven’t changed at all since the announcement of QE3, and if the Fed was trying to influence [...]

Assessing the Impact of QE3

By: Friday September 14, 2012 11:00 am

Stocks have leveled off after yesterday’s boost from the Federal Reserve’s resumption of quantitative easing, this time in a more modest but open-ended capacity. Most analysts take for granted that this new QE3 will work, in fact, better than the first two rounds despite its smaller footprint. That stems from the use of the expectations [...]

Fed Announces Open-Ended QE3

By: Thursday September 13, 2012 10:15 am

The Federal Reserve made a major and dramatic change to their monetary policy today, moving forward with a third round of quantitative easing that is actually more modest than the first two. However, the much more crucial component to the policy action was the open-ended nature of the commitment, including a promise to keep interest [...]

Paper Criticizes Federal Reserve Approach, Suggests Radical Overhaul of Monetary Policy in the Crisis

By: Sunday September 2, 2012 11:16 am

The upshot of Ben Bernanke’s speech at the economic symposium at Jackson Hole, Wyoming, at least to most interested observers, is that the Federal Reserve will enact a new round of quantitative easing at their next policy meeting the week of September 10. This may be dependent on the jobs numbers that come out this [...]

Doing Just Enough: Why Ben Bernanke and Company Irk Me

By: Friday August 31, 2012 12:21 pm

For half a second I felt like I was being too hard on Ben Bernanke and his Jackson Hole speech. Mr. Market certainly thinks it presages another round of quantitative easing, with stocks up big today. And it’s considerate Fed-speak to merely hint and nod at a policy change before embarking on it, probably at [...]

Fed’s Preferred Monetary Policy Tool, Quantitative Easing, Mostly Benefits the Rich

By: Friday August 24, 2012 10:53 am

I can think of several ways that the Federal Reserve could be aiding the US economy. Another round of quantitative easing isn’t necessarily one of them. The Bank of England produced a study on the distributional effects of QE, and found that, predictably, the benefits go to the rich. By pushing up a range of [...]

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