Wednesday, September 18, 2013

No Taper, BIG Problem

FOMC  is an acronym for Federal Open Market Committee

The members are:

These fine folk set US monetary policy and in particular their 45 billion dollars monthly in treasuries and 40 million dollars monthly in mortgage backed securities purchases.

In banking terms this is known as Quantitative Easing or to give it a more common term

Printing Money

Here is today's bombshell

Traders could not quite believe their luck

Mo free money, we like the sound of that!


So to me it's like you are the parent of a tearaway, uncontrollable child.  In the last month or two he/she has declared that their habit of spending about 85 billion dollars [per month] on crack crap, really is about to change.

Then bold as brass they turn up today, as arranged and disappoint you.   They will keep handing out that money.

A reminder of how much it is.  It is 250 US Dollars per man/ woman/ child    per MONTH, every month.

Madness redefined.

Barry Ritholtz: The way a healthy economy grows is people earn money and go out and spend it, the way a UN-healthy economy grows is people borrow money and go out and spend it.