Google Search

Monday, October 3, 2011

Rosenberg Presents The Three Ways Bernanke Disappointed The Market, And Why It Is Dumping


1. By radically flattening the yield curve in this Operation Twist program (where the Fed sells short-dated securities and buys maturities between six and 30 years), net interest margins in the banking sector will likely be negatively affected.
2. The dramatic decline in the 30-year bond yield is going to aggravate already-massively actuarially underfunded positions in pension funds
3. The Fed says it is going to extend this Operation Twist program through to June 2012. This is a subtle hint to the markets that barring something really big occurring, there is no QE3 coming ? not over the near term, in any event, and certainly not at the next meeting on November 1-2. So a stock market that has continuously been fuelled on hopes doesn't have any in this regard for at least the next month and a half.

There is now likely to be very little talk about another round of Fed stimulus, and as such, one less crutch for the bulls to lean on. If the Fed, for instance, had said that the OT would have a December 2011 expiry date, the markets would be salivating over what would come next. But June 2012 is a good nine months away (it was deliberately drawn out). It would seem strange at this point, barring a cataclysmic event, to have the Fed embark on a new QE strategy at a time when OT is still in play, not that it can't happen. What is key is that the Fed did find a way to say to the market that this is it for a while, perhaps until we are well into 2012.

Read More


Latest Economy
- Twist Paves the Way for QE III
- Is Financial Instability The New Normal?
- Gov't paid $600 million in benefits to dead people
- Marc Faber to Reuters: You dont need the fed to tell you something is wrong
- Gold & Silver Crashing Hard: Gold Down to $1630/oz, Silver $29.90/oz
- Is Gold No Longer A Safe Haven? Not According To Capital Economics: "Gold Will Surge When Euro Crisis Escalates"
- Commodities Fall to Nine-Month Low
- Elizabeth Warren: "There Is Nobody In This Country Who Got Rich On His Own"

This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the Digital Millennium Copyright Act (found at the U.S. Copyright Office) and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.
About Us - Disclaimer - Privacy Policy
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill


View the original article here