Looks like QE3 is coming...

[CosmicCowboy]

All the economic fundamentals are turning to crap and with an election coming you know Obama is gonna pull out all the stops to keep kicking that debt can down the road...

[CosmicCowboy]

Which of course means that oil and other commodities are going right back up...

[RandomGuy]

The president directly controls the Fed

No, actually, it doesn't.

[CosmicCowboy]

No, actually, it doesn't.

If you think the Fed is not politicized then you are remarkably naive.

[RandomGuy]

If you think the Fed is not politicized then you are remarkably naive.

Politicized? Yes, to some degree.

Directed by fiats originating in the Executive branch as you imply? No.

If you want to prove the Fed is directed by the executive branch as you strongly imply in the OP, you have a pretty tough bar to clear in terms of evidence.

I assume you have some emails or similar to present to support this assertion?

(he asked, knowing the answer no)

I would be willing to bet that your reply will include some rancor and/or defensive derision. Disappoint me. :)

[boutons_deux]

Fed politicized? yes.

Controlled by Barry, fuck no.

The Fed is owned and operated by Wall St, the financial arm of the 100% political VRWC.

QE1, 2, with corps sitting on $2T cash and Wall St swimming in $10Bs of bonuses, did fuck all for the economy and jobs, QE3 won't have any effect at getting the economy moving.

[CosmicCowboy]

Politicized? Yes, to some degree.

Directed by fiats originating in the Executive branch as you imply? No.

If you want to prove the Fed is directed by the executive branch as you strongly imply in the OP, you have a pretty tough bar to clear in terms of evidence.

I assume you have some emails or similar to present to support this assertion?

(he asked, knowing the answer no)

I would be willing to bet that your reply will include some rancor and/or defensive derision. Disappoint me. :)

Uhhh...you know who appoints the Fed, right? When the President can hire and fire the Chairman of the Federal Reserve thats a very low bar to clear as far as evidence.

[coyotes_geek]

Politicized? Yes, to some degree.

Directed by fiats originating in the Executive branch as you imply? No.

If you want to prove the Fed is directed by the executive branch as you strongly imply in the OP, you have a pretty tough bar to clear in terms of evidence.

I assume you have some emails or similar to present to support this assertion?

(he asked, knowing the answer no)

I would be willing to bet that your reply will include some rancor and/or defensive derision. Disappoint me. :)

When was the last time the Fed went against the Executive's wishes on something?

Honest question.

[RandomGuy]

Uhhh...you know who appoints the Fed, right? When the President can hire and fire the Chairman of the Federal Reserve thats a very low bar to clear as far as evidence.

Yes, I understand that.

I don't however, buy that Fed chairmen have ever felt particularly beholden to the executive even so.

[RandomGuy]

When was the last time the Fed went against the Executive's wishes on something?

Honest question.

Honest answer:

I don't know. I do seem to remember some pressure to "goose" the economy more than would merited during the Bush administration that was ignored by Greenspan.

Can you imagine the firestorm that would be created by any such presidential directive to the Chairman if it got out that was what was happening?

In this case, CC made the claim, it is his burden to prove, not mine. I have merely stated what I am willing to accept without evidence and called bullshit on what I am not.

[CosmicCowboy]

So you think I'm wrong about QE3?

[RandomGuy]

So you think I'm wrong about QE3?

A much better question. I do not entirely think you are wrong about the possibility, no.

Still a bit early though. One moderately bad month or two's worth of data are not really a basis for any major policy initiatives.

[coyotes_geek]

Honest answer:

I don't know. I do seem to remember some pressure to "goose" the economy more than would merited during the Bush administration that was ignored by Greenspan.

Can you imagine the firestorm that would be created by any such presidential directive to the Chairman if it got out that was what was happening?

In this case, CC made the claim, it is his burden to prove, not mine. I have merely stated what I am willing to accept without evidence and called bullshit on what I am not.

I won't go so far as to call it direct control, but I do think it's a fair observation to say that the Fed & the executive branch have consistently remained like-minded.

[angrydude]

A much better question. I do not entirely think you are wrong about the possibility, no.

Still a bit early though. One moderately bad month or two's worth of data are not really a basis for any major policy initiatives.

anyone who is at least half paying attention to this has known what is going to go down since around January.

They are going to let the markets fall enough to scare everyone shitless, then implement QE3 before the double-dip occurs.

Then we're fucked.

[scott]

I won't go so far as to call it direct control, but I do think it's a fair observation to say that the Fed & the executive branch have consistently remained like-minded.

Which do you think is the tail, and which do you think is the dog?

[Viva Las Espuelas]

Already? Wasn't one just done a few months ago or is this the actual "easing" of what I thought done months ago?

[Viva Las Espuelas]

I wonder when people will hit their "oh shit!" moment.

[Wild Cobra]

Maybe I should take the time to find my post election predictions of what this administration would do to the economy.

[coyotes_geek]

Which do you think is the tail, and which do you think is the dog?

Greenspan was definitely the dog. I think Bernake is the tail.

[Viva Las Espuelas]

Maybe I should take the time to find my post election predictions of what this administration would do to the economy.

I'll save you the time. Bush did it.

[boutons_deux]

"What are the goals of U.S. monetary policy?

Monetary policy has two basic goals: to promote "maximum" sustainable output and employment and to promote "stable" prices. These goals are prescribed in a 1977 amendment to the Federal Reserve Act."

http://www.frbsf.org/publications/federalreserve/monetary/goals.html

output, esp productivity, is up, prices (official definition) are pretty stable, but clearly the Fed has failed horribly on employment.

[George Gervin's Afro]

Maybe I should take the time to find my post election predictions of what this administration would do to the economy.

Please do


I have a feeling it is going to lack anything specific other than "he's gonna make things worse.." but maybe you'll surprise us..

[boutons_deux]

of course, WC's predictions about Barry will be in the vacuum of ignoring the history of 8 years of Repug misrule.

[Viva Las Espuelas]

I'll save you the time. Bush did it.

[Wild Cobra]

I'll save you the time. Bush did it.
The shit didn't start hitting the fan until summer 2007, after the democrats took congress.

[ElNono]

The shit didn't start hitting the fan until summer 2007, after the democrats took congress.

No law passes unless it's signed by the prez...

And I'm pretty sure the rules that created the housing bubble predate even Bush Jr...

[boutons_deux]

What specific legislation did the Dems pass with dubya's signature that caused the criminal housing bubble to pop?

Whose regulator blocked 19 states' efforts to shutdown predatory, sub-prime lending?

[Wild Cobra]

No law passes unless it's signed by the prez...

And I'm pretty sure the rules that created the housing bubble predate even Bush Jr...
I agree, and I never said president Bush was without fault. I wish he vetoed more items from all four congresses than he did while he was in office.

Still, he was the lesser of two other evils, even though he proved not to be as conservative as I like.

The worse damage in history past, and present, is when both houses and the presidency are controlled by democrats.

[boutons_deux]

can't get much more evil than lying the country into Iraq, wasting 100s of 1000s of lives, to grab the oil.

[Wild Cobra]

What specific legislation did the Dems pass with dubya's signature that caused the criminal housing bubble to pop?

Whose regulator blocked 19 states' efforts to shutdown predatory, sub-prime lending?
My memory of time may be flaky, but I think it was about 2003 that several republicans in congress tried to change the regulations governing housing loans, saying a disaster was coming if the regulations were not changed. They didn't have enough republican support, and were blocked by prominent democrats with little or no democrat support. The regulations/laws they were trying to change were passed in the early Clinton years if i recall correctly.

[Wild Cobra]

can't get much more evil than lying the country into Iraq, wasting 100s of 1000s of lives, to grab the oil.
When you say something you believe to be true at the time, and find out later you were wrong, do you call yourself a liar?

[boutons_deux]

"believe to be true at the time"

they didn't believe it then. They knew they were fixing up the intelligence all along.

CPAC and such neo-cunt ilk wanted Clinton to invade Iraq.

Iraq was on dubya's/Repug agenda when he swore in, and dubya mentioned Iraq in his first cabinet meeting.

in 2002 and 2003, we heard "justificaiton-of-the-week" of why Saddam had to go. That odiferous bullshit was proven to be bullshit.

"belief" ain't good enough when you're starting a war.

[clambake]

you mean they believed their own bullshit?

[Drachen]

I won't go so far as to call it direct control, but I do think it's a fair observation to say that the Fed & the executive branch have consistently remained like-minded.

I wonder if this is true because the main bankers that the president speaks with are the federal reserve govenors. (i.e. the president doesn't "tell the fed what to do" rather, the fed "tells the president what his position should be."

Edit: Oops, this was covered upstream.

[ElNono]

Which do you think is the tail, and which do you think is the dog?

This. The perception I get is that most of the time the Fed simply tells the executive how it's gonna be.

[ElNono]

The worse damage in history past, and present, is when both houses and the presidency are controlled by democrats.

I disagree, I think it was just as bad when the GOP controlled both the executive and the legislative. Frankly, when it was mixed, it used to be better (at least it was on part of the Clinton administration), but lately it's hard to distinguish the parties apart.

[boutons_deux]

“We Are on the Verge of a Great, Great Depression"

http://www.nakedcapitalism.com/2011/06/guest-post-yastrow-%E2%80%9Cwe-are-on-the-verge-of-a-great-great-depression%E2%80%9D.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

=========

Some, I "believe" the Repugs have the solution ... to keeping economic shithole going until Nov 2012. After which, if they win, they won't do fuck all about the economy, because they believe that that hated govt has no role to play.

[coyotes_geek]

This. The perception I get is that most of the time the Fed simply tells the executive how it's gonna be.

With Greenspan, definitely. Greenspan spoke, presidents listened. But Bernake sure looked to me like he was taking orders from Paulson/Bush (read: Paulson). I think that still holds and he pretty much takes his lead from whatever Geitner/Obama (read: Geitner) are thinking.

[RandomGuy]

But with the current round of QE about to end, Mr Bernanke gave no hint that a third programme was on its way in a keenly awaited speech this week, acknowledging merely that “economic conditions are likely to warrant exceptionally low levels for the federal-funds rate for an extended period.”

The alternative, less palatable thesis is that the stimulus delivered by central banks and governments since late 2008 and early 2009 is now starting to fade. The authorities are running low on ammunition, as Mr Bernanke has in effect admitted. There appears to be little political appetite for a further round of fiscal stimulus or easier monetary policy. In Europe the emphasis has shifted to fiscal austerity and the European Central Bank has started to push up interest rates.



http://www.economist.com/node/18805359

FWIW

The much hated stimulus is fading, and those who hated it the most will be among those who lose the most in the coming double dip. I am among those who never really considered us out of the first recession though.