I keep telling people who tout unemployment getting better that this is the only real chart that matters.
I am in Ontario. Sorry to hear about the trading. We've been at this a long time. Could be volatility related? This flat environment is definitely much harder for discretionary traders. I think once the vix picks up again, most day-traders will find themselves more profitable. Canada is doing much better than the US, although it's very transitory. Our ship is tied to theirs. 26% of our GDP are comprised of exports to the US. And while the housing bubble is a wealth creator now, it'll be a liability shortly down the road. Imo, what Canada has going for it is a huge landmass, with relativily few people. I expect a depression/currency collapse in the US within the next 5-6 years, and Canada, with all it's trade and real estate market imbalances, should suffer a big shock. I'm looking into farm property in the Ontario north. Way out in the boonies. And if I get the money, perhaps farmland in South America somewhere. The whole idea is to have a place ready, in the event of some type of collapse, away from the masses of unprepared people. An insurance policy.
the days that the US sneezes and Canada gets pneumonia are on the way out. Canadian knows that their future lies with energy hungry China and with northern europe +germany. the US is good for buying property in Florida 75%+ off the peak when you figure in currency appreciation, property increases in value in Canada and decreases in property values in the US.
Timely article on the whole Fed Balance Sheet conversation: http://www.bloomberg.com/news/2012-12-07/fed-exit-plan-may-be-redrawn-as-assets-near-3-trillion.html Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion By Craig Torres & Josh Zumbrun - Dec 7, 2012 12:00 AM ET A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. Enlarge image Fedâs Exit Blueprint May Be Redrawn as Assets Near $3 Trillion âThere is certainly an issue about unwinding the balance sheetâ in a way that âis effective and continues to support the recovery without creating inflation,â St. Louis Fed Bank President James Bullard said in an interview in October. The central bank might have to ârevisitâ the 2011 strategy, he added. The Fed is already buying $40 billion a month in mortgage- backed securities to boost the economy, and policy makers meeting Dec. 11-12 will consider whether to purchase more assets. John Williams, president of the San Francisco Fed, has proposed adding $45 billion of Treasury securities a month. The bigger the balance sheet, âthe riskier the exit becomes,â Richmond Fed President Jeffrey Lacker said during a Nov. 20 speech in New York. âThat is something we need to think carefully about.â Krishna Memani, director of fixed income at OppenheimerFunds Inc., said a too-rapid sale of assets risks disrupting the $5.2 trillion market for agency mortgage debt. Finding Ways âThey have to find ways of unwinding the balance sheet without dumping all of it in the marketplace,â said Memani, who oversees a bond portfolio of about $70 billion, including about $6 billion of mortgage-backed securities. The central bank has been extending the maturities of its assets with Operation Twist, a program to replace $667 billion of short-term debt with the same amount of longer-term bonds that expires this month. A decision to expand purchases could push the total assets to $4 trillion by the end of 2013, said Michael Hanson, a senior U.S. economist at Bank of America Corp. Total assets stand at $2.86 trillion, up from $869 billion at the end of June 2007. âThe more they add to the balance sheet, the longer it will take to normalize,â said Hanson, who worked on designing tools that will be used in the Fedâs exit strategy as an economist in the monetary affairs division at the Board of Governors in 2009. Holdings Expand The central bankâs holdings expanded during the financial crisis as the Fed created several emergency loan programs. Chairman Ben S. Bernanke in November 2008 ordered the purchase of debt issued by housing agencies and mortgage-backed securities in a strategy that he called credit easing. After the benchmark lending rate was cut almost to zero in December 2008, the Fed continued buying bonds as its primary easing tool. The Fed announced its third round of purchases in September without specifying a total quantity or end date. Those central bank initiatives have helped push yields on Treasury and housing debt to record lows. The average fixed rate on a 30-year mortgage fell to 3.31 percent last month, according to a Freddie Mac index. The yield on the 10-year Treasury reached 1.39 percent on July 24 and was 1.59 percent late yesterday. Transparency Push The Fed announced the exit strategy in June 2011 as it sought to assure investors that it had the means to avoid igniting inflation once job growth, wages, and demand started moving up. The plan was part of Bernankeâs push for greater transparency and predictability. The goal is to return the balance sheet to a pre-crisis size in two to three years and eliminate holdings of housing debt âover a period of three to five years.â First, the Fed would allow assets to mature without being replaced, a process that will be slower now that the Fed has extended the average duration of its holdings. It would then modify its guidance on how long it plans to keep the federal funds rate near zero and begin temporary operations to drain excess bank reserves. The Fed would next raise the federal funds rate, and finally, it would start selling securities. The balance sheet averaged about 6.3 percent of nominal gross domestic product during the decade before the financial crisis. Today, a balance sheet of that size would be around $995 billion rather than $2.86 trillion. Long Exit âThe exit is going to take a long time,â said Stephen Oliner, a resident scholar at the American Enterprise Institute in Washington and former Fed Board senior adviser. He estimates the Fedâs holdings could rise to more than $4 trillion. If the Fed were to start bringing its holdings back to their pre-crisis level today, it would have to sell almost $2 trillion over a period of two to three years under its current exit plan. Assuming holdings grow to $4 trillion, asset sales could come to $3 trillion over the same period. Fed officials havenât publicly discussed an alternative plan for shrinking the balance sheet. One possibility, said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey, would be to enlist the help of the U.S. Treasury. The Fed could ask to swap longer-term Treasury debt for short-term bills and notes, thus reducing the maturity of its portfolio to accelerate the runoff. The Fed and Treasury could do this partly in a one-time swap, and partly by allowing the Fed to bid on new issues and pay with its holdings of long-term Treasuries, Crandall said. âMore Aggressiveâ Because the Fed would have less debt to sell to return its portfolio to a normal size, it could be âmore aggressive in the liquidationâ of housing-agency securities, he said, which was a priority for Fed officials when they announced the exit strategy. Asset purchases have made it harder to change the federal funds rate when the time comes to raise borrowing costs. In the five years before the crisis, excess bank reserves averaged $1.7 billion, so the Fed could alter interest rates by buying or selling comparatively small amounts of short-term debt in open-market operations. Those reserves are now more than 800 times larger at $1.4 trillion. To move the fed funds rate, the central bank will have to drain or lock up the supply of excess reserves. Under the current exit plan, the Fed would soak up reserves by using reverse repurchase agreements or offering term deposits. Draining Reserves âIâm not sure weâll really know, until they undertake a real program, what the effectiveness isâ of such measures, said Bank of Americaâs Hanson. âThe amount of reserves could be so large that the draining doesnât do a whole lot.â The central bank could lose credibility if its policy actions donât move the federal funds rate, said Marvin Goodfriend, a former adviser at the Richmond Fed. âThe Fed needs to delicately acquire inflation credibility in the exit,â said Goodfriend, a professor at Carnegie Mellon Universityâs Tepper School of Business in Pittsburgh. âWe are used to tightly managed short-term interest rates.â The Fedâs other tool is to extinguish reserves by selling bonds back to dealers. Even a fully-explained plan could push up home borrowing costs as traders account for hundreds of billions of dollars of new supply flowing back into the market. âWe are deep into experimentation at this point,â Oliner said. âItâs understandable that people are worried.â
obama has made statements that he does not believe in american exceptionalism and believes that international organizations should handle crises and not the US.