BUBBLE ben bernanke "risking sequel to 2008 crisis"

Discussion in 'Economics' started by S2007S, May 2, 2013.

  1. S2007S


    I dont know why only a few people can comprehend whats really going on with BUBBLE ben bernanke, why isnt anyone taking a step back to analyze what is really taking place in these markets, that the trillions of dollars being pumped into the market is doing nothing but creating asset bubbles not just in the US, but around the globe, that when this does fall apart again (which it will) will be even more of crisis than the one just a few short years ago. This time however there will be nothing to prop it up because every tool and every worthless dollar they are using today to prop up the economy and create an artificial economy will do absolutely nothing in the next financial crisis.

    So Roubini is right, the fed is risking a huge sequel to the 2008 crisis. Everyone is talking about the monetary tightening happening in the next year or 2, they talked about monetary tightening happening in 2011, 2012, 2013 and it hasn't happened yet which leaves me to believe that the 2014 and 2015 idea of monetary tightening is not going to happen either which means many, many, more years of worthless trillions propping up an artificial economy!

    Roubini: Fed Risking Sequel to 2008 Crisis
    By Shai Ahmed | CNBC – 6 hours ago

    The Federal Reserve's commitment to loose monetary policy is likely to lead to asset and equity bubbles in the next two years which could be worse than the previous crisis, renowned economist Nouriel Roubini said in an opinion piece for Project Syndicate.

    Roubini, co-founder and chairman of Roubini Global Economics famously dubbed Dr Doom for his accurate prediction of the 2008 financial crisis, wrote earlier this week that "the problem is that the Fed's liquidity injections are not creating credit for the real economy, but rather boosting leverage and risk-taking in financial markets."

    "The issuance of risky junk bonds under loose covenants and with excessively low interest rates is increasing; the stock market is reaching new highs, despite the growth slowdown; and money is flowing to high-yielding emerging markets," he added.

    According to Roubini, a slow exit from the Fed's quantitative easing (QE) policy would be similar to 2004, when the central bank began to slowly raise rates. Between June 2004 and December 2007, the Fed raised rates in 25 basis point increments. The gradual rate hikes were blamed for keeping monetary policy accommodative for too long and worsening the housing bubble.

    On Wednesday, the Fed held fast to its ultra-accommodative monetary policy after its policy meeting because of what board members described as an economy weakened by fiscal policy. The Fed will continue to buy $85 billion a month in bonds under its QE3 program.

    According to Roubini, the Fed's program and that of similar programs from other central banks have far-reaching consequences with the troubled euro zone periphery even gaining from the increased liquidity.

    Roubini said that even when interest rates begin to rise, which he predicts will be in 2015, it will be slow and steady.
    But Roubini doesn't prescribe an alternative. Instead, he said, that moving too quickly "would crash asset markets and risk leading to a hard economic landing."

    According to him, markets should be braced for turmoil once monetary tightening starts and further turbulence once tightening is finished.

    "The exit from the Fed's QE and zero-interest-rate policies will be treacherous: Exiting too fast will crash the real economy, while exiting too slowly will first create a huge bubble and then crash the financial system. If the exit cannot be navigated successfully, a dovish Fed is more likely to blow bubbles."
  2. one of the reasons I can't compehend is because I didn't do my Phd thesis on the "Great Depression" like he did

    but I think about it from time to time

    and like to bitch on ET
  3. Rumours are that Ben will "retire" by year end and dump the mess into the next Fed bagholder Yellen. Raise interest rates?.........lol. QE forever...... at least until the bond market implodes.
  4. Not before we first idolize the man like a God as we did Greenspan. Of course, once everything crashes we'll demonize him just as we did Greenspan.
  5. Over $3T in purchases to date? Someone in Congress will eventually be ballsy enough to introduce legislation aimed as neutering the Fed. F*cking criminals.
  6. S2007S


    yep over 3 Trillion!


    Trillions and trillions and trillions of dollars to create a false artificial economy, just take everything you learned about economics 101 and throw it out the fucking window because in this world there is no such thing as economic 101!
  7. We're not bailing out banks any more... but we're buying over a trillion a year in their shitty MBS paper?
  8. It makes no difference to us as active traders. Booms and Busts with high volatility are how we make money. It might be interesting from a theoretical and academic perspective but where money is concerned, there is no value there in this kind of discussion and consequently nothing to get worked up about.

  9. I am ready and waiting for some easy money to be made on the downside.
  10. Agreed!

    I hope no one thinks policies are written for the greater good. It is all about opportunity, money and rescuing the people that you hurt. The bigger the bubble, the bigger the profits and in the end the bigger the mess to come in and make more money on cleaning up.
    #10     May 2, 2013