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Economy
In reply to the discussion: Weekend Economists' Harvest Ball September 21-23, 2012 [View all]Demeter
(85,373 posts)13. It’s Time to Air Out Ben Bernanke’s Dirty Laundry
http://gainspainscapital.com/2012/09/19/its-time-to-air-out-ben-bernankes-dirty-laundy/
Now that the Fed has engaged in QE 3 (which is essentially QE infinite since its meant to run until things get where the Fed wants them), I decided to go back and count the recap the Fed/Feds interventions since the Great Crisis began in 2007.
Heres a recap of some of the larger moves made during the Crisis:
Cutting interest rates from 5.25-0.25% (Sept 07-today).
The Bear Stearns deal/ taking on $30 billion in junk mortgages (Mar 08).
Opening various lending windows to investment banks (Mar 08).
Hank Paulson spends $400 billion on Fannie/ Freddie (Sept 08).
The Fed takes over insurance company AIG for $85 billion (Sept 08).
The Fed doles out $25 billion for the automakers (Sept 08)
The Feds kick off the $700 billion TARP program (Oct 08)
The Fed buys commercial paper from non-financial firms (Oct 08)
The Fed offers $540 billion to backstop money market funds (Oct 08)
The Fed agrees to back up to $280 billion of Citigroups liabilities (Oct 08).
$40 billion more to AIG (Nov 08)
The Fed backstops $140 billion of Bank of Americas liabilities (Jan 09)
Obamas $787 Billion Stimulus (Jan 09)
QE 1 buys $1.25 trillion in Treasuries and mortgage debt (March 09)
QE lite buys $200-300 billion of Treasuries and mortgage debt (Aug 10)
QE 2 buys $600 billion in Treasuries (Nov 10)
Operation Twist 2 (Nov 11)
QE 3 buys $40 billion in Mortgage Backed Securities every month from now on (Sept. 12)
Thats one heck of a list. And the worst part is I know Ive left something out somewhere. And yet, despite all of this
1) Median income today is lower than it was during at the end of 2009 (when the recession supposedly ended)
2) The percentage of Americans on food stamps has increased from 11% to nearly 15%
3) The average unemployment duration has increased from 30 weeks to nearly 40 weeks
4) The civilian employment to population ratio hasnt budged
My question to everyone, especially the political class: at what point do we start calling BS on the Feds claims that it has a clue how to improve the economy? Seriously, how many trillions of Dollars are we going to let the Fed spend? The Fed balance sheet is already at $2.8 trillion making it larger than the GDP of France, the UK, or Brazil. Indeed, if the Feds balance sheet were a country, itd be the FIFTH LARGEST COUNTRY IN THE WORLD. While the Fed has failed miserably to improve the economy in the US, its done a bang up job of letting the inflation genie out of the bottle...
Now that the Fed has engaged in QE 3 (which is essentially QE infinite since its meant to run until things get where the Fed wants them), I decided to go back and count the recap the Fed/Feds interventions since the Great Crisis began in 2007.
Heres a recap of some of the larger moves made during the Crisis:
Thats one heck of a list. And the worst part is I know Ive left something out somewhere. And yet, despite all of this
1) Median income today is lower than it was during at the end of 2009 (when the recession supposedly ended)
2) The percentage of Americans on food stamps has increased from 11% to nearly 15%
3) The average unemployment duration has increased from 30 weeks to nearly 40 weeks
4) The civilian employment to population ratio hasnt budged
My question to everyone, especially the political class: at what point do we start calling BS on the Feds claims that it has a clue how to improve the economy? Seriously, how many trillions of Dollars are we going to let the Fed spend? The Fed balance sheet is already at $2.8 trillion making it larger than the GDP of France, the UK, or Brazil. Indeed, if the Feds balance sheet were a country, itd be the FIFTH LARGEST COUNTRY IN THE WORLD. While the Fed has failed miserably to improve the economy in the US, its done a bang up job of letting the inflation genie out of the bottle...
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