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Strategies & Market Trends : BAK - Investing
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To: batman10023 who wrote (2886)6/6/2012 2:31:08 PM
From: XoFruitCake  Read Replies (1) of 3249
 
Re: Treasuries (was Two Buck Chuck...)

i guess they don't realize banks have actual or implied libor floors in a lot of their deals.
I don't think bank is the concern anymore. Right now it is more transfer wealth form the saver to the debtor through low interest rate. The more money debtor get, the more they will spend and get the economy moving. The move money saver get, they will just put it in their bank account and economy will do nothing. The question is whether Fed has the tool to move long rate any more than they do? The best thing they can do now is leave everything alone and Europe will drive our rate as low as they can without Fed intervening.. When they do QE2, I think CR estimated that they lowered the long rate by 30-40 bps. Not sure they have enough fire power to do that again and Europe crisis can move long rate that much in a day.. I will bet my popcorn that there will be no QE3 for a while...
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