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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (94678)	9/16/2012 11:37:59 AM
From: Metacomet	Respond to of 217739

Defensive reaction to similar moves on the Euro

To: carranza2 who wrote (94678)	9/16/2012 7:30:56 PM
From: TobagoJack	1 Recommendation Read Replies (1) \| Respond to of 217739

at least two possibilities: (i) there had been no deterioration. the situation was dire to begin with, and the bernanke knows printing money doesn't help, but was cornered by the fiscal ways of clueless congress, and essentially has to print and keep printing, and pray; or (ii) there had been no deterioration. the bernanke knows nothing, except that he actually and truly believes printing is the answer. fearing that he may soon be out of a job, and wants to place the empire more solidly on the path of printing, does so, leaving the next printer in good position to continue more of the same but w/ an excuse ("bernanke did it") or suffer the fall out of withdraw. it doesn't matter now, as we are tee-ed up, full-on, all-in, and the rest shall play put very predictably in tears for most, sorrow for many, and no joy for even a few. am now in indonesia, for probably the week, then off to another asean state for a bit. one note that is in line w/ my suspicions: no nation had stepped forward to complain about the QE-infinity, as all politicians everywhere exhale, thinking "hallelujah". and so we pray to better prey.

To: carranza2 who wrote (94678)	9/18/2012 2:24:21 AM
From: TobagoJack	Read Replies (1) \| Respond to of 217739

just in in-tray qe-infinity-ad infinitum ad nauseum works out

To: carranza2 who wrote (94678)	9/18/2012 7:43:00 PM
From: TobagoJack	1 Recommendation Respond to of 217739

bullish analysis ... for gold just in in-tray QEforever and the Real Estate Market Ramsey Su Sept 2012 One of, if not the main reason why I am negative on real estate, is government intervention. They are unpredictable. The most recent fiasco is obviously QEforever. Specifically, I am referring to Bernanke's plan to buy $40 billion MBS a month indefinitely. There were only $97 billion of PURCHASE loan originations and $275 billion REFINANCE loans during the 2nd Quarter this year. ycharts.com ycharts.com Say the purchase loan volume remains the same, Bernanke will be purchasing 100% of all originations and still have $23 billion a quarter left over. The actual excess funds are even higher because agency MBS is not 100% of all originations and Bernanke is not buying those. As for refinances, these are "pre-pays" and the funds that are prepaid would be looking for a new home. Bernanke is in essence squeezing out $23 billion a quarter from the private sector, forcing these investors into other instruments. While there are seemingly a huge volume of refinances right now, the $275 billion can vanish completely if rates go up, or simply do not go down further. Who is Bernanke going to buy the MBS from? If your answer is the agencies, you are probably correct. Freddie and Fannie were supposed to start reducing the size of their portfolio since they were placed under conservatorship four years ago. Bernanke's hidden agenda is to assist the Treasury in reducing the agencies' portfolio of MBS. Would Bernanke be successful in driving down mortgage rates? I think the odds are slim. Rates are already too low. One way of looking at mortgage rate may be: 10 yr treasury + hard cost of a mortgage + a reasonable spread = mortgage rate (hard cost is origination, insurance/reserve, servicing etc) QEforever is trying to drive down the 10 yr while reducing the spread to zero, which no private investor would likely want to match. If the spread is zero, why not just buy the treasury. How much lower can the 10 yr go below the current 1.8% range? As a reminder, the QEs have driven mortgage rates from the 6% to the current sub4% range with dismal results. Would an extra quarter percent really do anything to the market?