Bernanke: Interest rates to remain low. No QE3 announcement. DOW goes from 180 to red in minutes

[CleanGreenFuture]

Could be right back to tanking on this non-news. Investors not happy with results of FOMC meeting.

Down -40

[villager]

1. How much more breathtakingly clueless can this administration get?

:shrug:

[banned from Kos]

4. Fed is not part of the administration - but if Q3 had been announced

all the people who falsely claim inflation is caused by that "money printing" would be howling in protest.

[villager]

8. appointments to Fed would be, yes?

And agreed, there's the other side of the argument -- the "money printing," but it's hard to think of anything other than a tin ear when they resolutely keep interest rates this low (there's some thought they should rise a little), and send the markets downward again.

On the other hand, oil's going down too... ;-)

[banned from Kos]

10. yeah, the President has 3-4 Fed BoG appointments (of the 10 who vote)

Low interest rates should spur more loans and business activity.

Its a great time to buy a house if you have the credit - mortgage rates at 60 year lows.

[villager]

15. it sure would be a good time for that --*if I had the credit*

Formerly okay-esque credit has gone through a ruinous stretch occasioned by under-employment, lingering divorce fallout, et al.

my only hope might be to try and pick one up outright for cash, in another year or two! ;-)

[Swede]

22. Low interest rates are good for everyone.

Even you.

[krispos42]

2. But I just checked the Dow... it's in my sigline

It was plus a hundred and something...


*check again*


:wow:

[krispos42]

3. And it just shot back up with no record of the drop!

:wtf:

[elleng]

5. Guess we have to wait 'til 4 today, and then tomorrow.

There's a 'move' I've got to make; will wait.

[dkf]

6. Up 50. Up down up down. Dizzy.

[mysticalchick]

7. It hasn't dropped into the red yet today

I work for a financial services firm and monitor it. Took a bit of a hit from earlier levels but at 2:32pm, it's all green from here.

Geez oh pete. Everyone take a breath.

[Ruby the Liberal]

19. Posted at 2:32 and down she goes!

-123 right now.

http://www.google.com/finance?q=INDEXDJX:.DJI

[rdking647]

9. ignore what the market does in the first 15 minutes after a fed anouncement

trading is usually wild right after the announcement. sometime for teh rest of the day and into the next day.

what they said is basically what they should have said. they said they will keep rates low for a long time (until 2013 at least). for the most part thats all the really can do. if they had said they were starting QE3 I think markets would have panicked badly,thinking things where really bad.
the fact is the economy is growing. way to slow but it is growing. until that changes there isnt really much for the fed to do.

[CleanGreenFuture]

33. Looks like you nailed it! Damn that was a helluva rally.

[OHdem10]

11. Every Economists knows we need stimulus right now but the

Republicans will not hear of it and the Democrats
are not the old Democrats who would get out there
and make the case to the people. Last time Bernanke
went to QE2 because Congress would not pass stimulus.
In the long run, Wall St knows QE2 is not as effective
as stimulus which moves through the entire economy.

Bernake is not going to do QE2 until things really
get bad. Republkicans will not agree to stimulus.

So we will plug along until we collapse.

[woolldog]

12. Down 160 now

Has been as far down as 200+

[originalpckelly]

16. Now up to +19

It has no clue what its doing. People are buying the cheap stocks, then others are freaking out and selling, because no QE3.

[originalpckelly]

17. Fuck now its -70!

:wow:

[rdking647]

21. now its -15

[woolldog]

23. now it's up 170!!!!!

wow!

[rdking647]

24. im not really surprised

I spend 20 years on the floor. theres not to much that can actually surprise me.
But what the fed statement does it turns a 2 year tnote into a tbill. the 2 year yield is now .17%. the 5 years is under 1%

it makes certain income investments that got killed in the last week reallly good investments

[woolldog]

26. 20 years on the floor?

interesting, so you're the guy to PM if I have some financial questions eh? What moves do you recommend right now?

[rdking647]

28. 20 years in the option pits

both in chicago and new york..
as to what moves to make now I have a few suggestions
1... DONT PANIC!!!!!!!!!!!
2. if you dont have 6 months-1 years living expenses in cash you have no business trading stocks (retirement assets excluded)
3. as to the rest it depends on your time horizon.

And I dont mind PM's with financial question.
Ill do my best to answer them.

[woolldog]

30. very cool.

You must have been one of the few liberals in that environment.

Thanks for the advice too. I'm not panicking. I had protection on my portfolio before the downturn, thank GOD. But I'm underwater on a few speculative options positions. But they're september options so I've got some time. But I need the market to rally more.

:hi:

[RainDog]

34. you should create a thread for this

because any time there is volatility in the market, there are all kinds of crazy threads.

it would be great if you would be interested in posting some threads about the reality of the financial markets, too, from your perspective in the trenches.

would make for great reading on DU. you could create a journal...just saying.

not asking for/giving financial advice - just talking about experience.

[rdking647]

35. i will

[leveymg]

13. They'll drive the Dow down to zero demanding that the Fed turn the Treasury over to Wall St.

Nothing less than a complete obliteration of both will make them happy.

[originalpckelly]

14. WTF?

QE has nothing to do with the treasury directly, they just go out and buy securities from people on the open market, based on the theory that they will then use the new freed up money to go out and lend.

[leveymg]

25. QE2 has been all about $16T in "quantitative easing" (injections of electronic funds)

(short-term loans at negative real interest to Primary Dealers) without actually selling Treasuries or printing currency. QE2 has been primarily done through Fed funds that go through huge secondary markets for public debt, such as Repos, of which few in this country even seem to be aware.

[banned from Kos]

29. that $16 trillion is completely bogus lie - quit spewing it

Its been pointed out here many times.

A $1 billion loan rolled over 10 times is not a $10 billion loan.

[leveymg]

36. It's a flow of funds intended to inject liquidity into the banking system - not a lie.

It's only interpreted that way by those whose who don't know a reverse repurchase with a haircut from an overdraft free on their checking account.

Please don't call something a "bogus lie" unless you clearly understand the mechanisms and markets being discussed. That's clear from your disparaging comments. I never claimed all of the $16T QE2 is new lending - it certainly is not supported by T-bill issues. It's negative-rate short-term funds, a lot of it through the NY Fed's Overnight Window, and a lot of it stepped-up reverse repos at higher rates than would have otherwise been paid. Either way, it's a subsidy and stimulus for the biggest global banks. Essentially, a kickback for those who hold US-issue public debt.

[banned from Kos]

38. You're still lying by saying the Fed is in bailout mode at taxpayer expense.

The CP market failed in 2008 so the Fed made payroll for MacDonalds - at a PROFIT for taxpayers.

Your attempts to disparage the Fed will get catcalls from a truth teller like me... Go try Ron Paul out.

[leveymg]

39. I'm not disparaging the Fed - it's the last thing between us and national default.

I'm also not against some elements of TARP - but it was wholly inadequate. Are you really a "truthteller" - you sure don't seem to be able to read the facts (or my thinking on this subject) very adequately.

[Yavin4]

18. The Fed Will Do QE3

They may not formally announce it, but it will happen.

Buy gold and silver. Hold the physical metal.

[Swede]

20. A boost in interest rates would have been bad.

Anyone with a line of credit,credit card or mortgage would feel the pinch.

[Yavin4]

31. The Downside is that Savers Are Getting Killed

In essence, if you save, you're giving your after tax money for free to the banks, and they are loaning it out at 5%, 6%, and 21% interest rates. Yet, they're paying you virtually nothing for it.

The purchasing power of your savings/CD is getting eaten alive every day by inflation.

Buy gold and silver. Hold the hard.

[mysticalchick]

27. and it finishes up nicely!

up 327 right near the end. :)

[originalpckelly]

32. Make that 429!

:P

They sure do know how to bounce, don't they?

[spanone]

37. i guess you saw the end of the day....