August 9 FOMC Meeting Full Minutes: We Came Thiiiiiiis Close To QE3

We came this close to QE3:

• Some participants noted that additional asset purchases could be used to provide more accommodation by lowering longer-term interest rates.
• Others suggested that increasing the average maturity of the System’s portfolio—perhaps by selling securities with relatively short remaining maturities and purchasing securities with relatively long remaining maturities—could have a similar effect onlonger-term interest rates.
• A few participants noted that a reduction in the interest rate paid on excess reserve balances could also be helpful in easingfinancial conditions.
• A few members felt that recent economic developments justified a more substantial move at this meeting, but they were willing to accept the stronger forward guidance as a step in the direction of additional accommodation. Three members dissented because they preferred to retain the forward guidance language employed in the June statement.

Europe's Ponzi Takes A Twist For The Wacky: Greek Bank Equity To Be Used As Loan Collateral

That the European ponzi is leap and bounds ahead of the US is well known: we have frequently succumbed to vertigo trying to chart just how interconnected Europe's financial system is at a point where €1 in incremental capital is supposed to prop up a multi-trillion pyramid scheme. But the just released news from the Handeslblatt demonstrates that just when we thought we had seen it all, Europe once again manages to surprise us. As is by now well-known, Finland has proven to be quite a stick in the spokes of the joint-European can kicking exercise by, prudently, demanding collateral, or threatening to walk out of the second Greek bailout (that 1 year Greek bonds are trading at 60%+ yields is irrelevant). Well, here's the solution - give them collateral... in the form of insolvent Greek bank shares, which however will be "partially nationalized" as if that will suddenly push their value higher. Supposedly the Finns never clarified that the collateral has to have some liquidation "value." Oh well, better luck next time.

FOMC Minutes Word Cloud And Key Word Count

Below is the top-50 word cloud of the FOMC statement. Several key words and the number of appearances: Unemployment: 15; Volatility: 3; Italy: 1; Japan:3; 2011: 6; 2012: 3; 2013: 1; Transitory: 2 (4 in the June minutes); Debt: 19; Inflation: 29; Deflation: 1; Trillion: 1; Quadrillion: 0; Gold: 0; and... waxing: 1.

I Haven't Met A Rich Technician

Eric De Groot at Eric De Groot - 15 minutes ago

“I haven't met a rich technician” Jim Rogers All of the investment masters has their own version of the above lesson. The short term game of high frequency trading must not be challenged by speed and size but rather construction of thought that anticipates long-term secular direction. [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

 

 

 

 

After Pissing Off Germany, Lagarde Now Angers France, Which Blames The Collapse In Financial Markets On The Seasons

Earlier today, German financial regulator Bafin roundly smacked down Christine Lagarde's Jackson Hole proposal to use the EFSF as a bank recapitalization vehicle (as we noted over the weekend, it already has its hands full with merely keeping Italy afloat). Now it is France's turn to be indignant:

• BANK OF FRANCE'S NOYER SAYS DOES NOT UNDERSTAND IMF LAGARDE'S RECENT CALL FOR EU BANK RECAPITALISATIONS
• BANK OF FRANCE'S NOYER SAYS MAYBE LAGARDE WAS BADLY INFORMED BY IMF STAFF ON BANK RECAPITALISATIONS
• BANK OF FRANCE'S NOYER SAYS SEES NO REASON TO WORRY ABOUT FRENCH BANKS
• BANK OF FRANCE'S NOYER SAYS SPECULATION ABOUT POSSIBLE FRENCH DEBT DOWNGRADE IS AN "ABSURD RUMOUR"
• BANK OF FRANCE'S NOYER SAYS CONSTITUTIONAL DEFICIT LIMIT WOULD BE COMMON SENSE

 

 

 

 

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Fed Needs More Easing Until Economy Grows: Evans

Eric De Groot at Eric De Groot - 2 hours ago

I think the proper response from the urban dictionary would be no sh*t sherlock! The markets have been signaling this for months. Yet, many maintain that the Fed leads rather than follows them. Headline: Fed Needs More Easing Until Economy Grows: Evans The Federal Reserve may need to be even more aggressive in its easing policies than it has been so far unless the economy shows significant... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

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