Wow. Bernanke opens his mouth and the dollar sinks to 84.5.
Can’t he read a RED STOP sign?
And this weird thing here: I saw a piece on bond yields and when I looked it up on yahoo, it’d been removed.
/cnnm/090318/031809_credit_market.html http://news.yahoo.com/s/ynews/ynews_bs262‘
Here’s the URL for the original site:
CMWire – The Capital Markets Newswire
But when I looked through Capital Markets wire just now I couldn’t find it.
Here’s a copy of the google search result for the piece:
Mar 18, 2009 … Yields plummeted by the widest margin since 1987. … 14:41 AIG chief asks execs to return bonuses» CNN.com. AIG chief Edward Liddy told lawmakers ….. (
cmwire.com/ – 39 minutes ago – Similar pages –
(http://www.google.com/search?hl=en&q=yields+plunge+1987+cnn&btnG=Google+Search&aq=f&oq=)
Update:
OK – I found the piece. It’s by Deborah Levine and I found it at Market Watch.
I think the original wire report on CMWire and Yahoo might have been taken off to make the headline look less alarming, so that the reference to 1987 didn’t spook stock investors – the media’s target patsies.
You can see that the article now reads – “Treasury prices soared Wednesday, sending yields plummeting….”
The powers that be want to keep the poor Dow’s chin up at least for today before the big bad short sellers come out in droves…
“Treasury prices soared Wednesday, sending yields plummeting by the largest amount since 1987 after the Federal Reserve surprised bond investors by saying it would buy $300 billion in longer-term Treasury securities over the next six months.”
http://www.marketwatch.com/news/story/treasurys-soar-after-fed-says/story.aspx?guid={7DB91E8A-FD87-4BD4-9296-3C6EA402C920}&tool=1&dist=bigcharts&
Meanwhile here are the details at Bloomberg on the FOMC decision:
” This Wednesday, the Federal Open Market Committee of the United States’ Federal Reserve made a unanimous decision to keep the Fed Funds rate unchanged at the 0.25% to 0% range. The rate decision was not a surprise for a good number of investors since the Federal Reserve stated clearly on its last FOMC statement that “economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time”. Even so, today’s FOMC statement sounded a bit more dovish than expected, not reflecting the positive performance of the U.S. stock, bond and credit markets over the last two weeks. The Federal Reserve said “it sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term”. In addition, “to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.” So once gain, the Fed said it will employ all available tools to promote the resumption of sustainable economic growth and this makes us believe that the Fed will continue to purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets. In other words, the Fed will use quantitative easing. Currency traders reacted very negatively to the FOMC statement driving the U.S. dollar lower against the world’s most heavily traded currencies.”
Comment:
What are they doing? Blowing smoke in everyone’s eyes pretending they see deflation in store in order to throw everyone off the inflationary scent? Hoping meanwhile that gold doesn’t pop up too much and give the game away before they finish the next mighty round of mortgage hot potato? (Most plausible scenario).
Or, are they really terrified of having so destroyed the capital base of the economy that they think something, anything (maybe another financial instrument’s been discovered we haven’t heard about) has to be done. And since all they have is a printing press., well why not use it? Off with the heads of the middle class, the thrifty, the savers, those who have no debt, the creditors! (Also plausible, though probably only if combined with the theory above).
There’s a third option, but I’ll explore that in another post.
And why is Bill Gross pumping this whole business to the public?
“You want to continue to buy what the government will buy,” Pimco’s Bill Gross told CNBC.
From now on, it will be Pimpco to me. Sorry.