More trillions needed to prop up economy.

Discussion in 'Economics' started by S2007S, Oct 7, 2010.

  1. S2007S


    As told by Marc Sumerlin, this was obvious, they are far from over with the trillions being pumped into the system. Trillions more being spent, thank you bubble ben bernanke for this great recovery. This is the best recovery this economy is going to have.

    Fed Needs to Pump Trillions More Into Economy: Analyst
    Published: Thursday, 7 Oct 2010 | 2:44 PM ET
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    The Federal Reserve needs to pump at least $6 trillion to $7 trillion more into the U.S. economy to have any meaningful impact on sluggish growth, former Bush economic adviser Marc Sumerlin told CNBC.

    Sumerlin, co-founder of The Lindsey Group, a Washington DC-based economic advisory group, also said that the U.S. would fall back into a recession if the Bush tax cuts aren't extended beyond this year.

    The Fed has hinted for weeks that it is ready to buy up more debt in the credit markets to help spur the economy, which is still recovering from the financial crisis of 2008. The U.S. central bank has already spent over $1 trillion since early 2009 to keep credit markets liquid in what has become known as quantitative easing, or QE. (For a fuller explanation, click here.)

    Although the Fed hasn't indicated how much more money it might pump into the economy—which has been labeled QE-2—Sumerlin's recommendation goes well beyond what most other economists expect or even recommend.

    "U.S. households have $70 trillion in assets," Sumerlin explained during a live interview. "And the Fed essentially needs to buy enough Treasurys and mortgages that you can get a bid on all those other assets. And when you have leakage in the international system it takes a pretty big amount to be successful. To me, it starts to get interesting at six to seven trillion dollars."

    Sumerlin's comments, which came around midday, helped push stocks lower.

    “To get someone who was part of the former economic council saying the Fed will need to step up big and do $6 trillion in (asset purchases), was a bit of a shock and created a bit of nervousness,” Marc Pado, market strategist at Cantor Fitzgerald, told

    Few economists expect the Fed to commit that much new money to helping the economy, and many think any further quantitative easing wouldn't have that much impact anyway.

    Pimco co-CEO Mohamed El-Erian, for instance, told CNBC earlier Thursday that further monetary easing by the Fed and other central banks probably won't work.

    "The risk is that this may be ineffective again," he said. "In fact, the big story of the last year and a half is every time we have had a policy action, outcomes have fallen short of expectations."

    Raoul Pal, global macro analyst for the Global Macro Investor, who appeared with Sumerlin on CNBC, also questioned the wisdom of further easing.

    "There is no evidence that it's ever worked in the past, so there is no real evidence that it will work now," Pal said. "So I think it's a high risk thing for them to try and do. I also don't believe you can get the money in the system. Even if it's $6 trillion, I don't think it's going to get in the system because there is no velocity of money. So all you end up doing is buying the Treasurys off the banks who will keep the money at the Fed."

    As for extending the Bush tax cuts—which Congress has put off voting on until after the November elections—Sumerlin said "we will have a recession" if they are allowed to expire.

    "Because we're growing too slowly," he said. "If you look at the quarters when the tax cuts went in, there was very substantial growth. People forget that the third quarter of 2003, we grew at 7 percent when the tax cuts—the full marginal rates—took effect. Running that in reverse causes the opposite to happen."
  2. How bad is the Economy?

    The economy is so bad that...

    I got a pre-declined credit card in the mail.

    CEO's are now playing miniature golf.

    Exxon-Mobil laid off 25 Congressmen.

    I saw a Mormon with only one wife.

    I bought a toaster oven and my free gift was a bank.

    Angelina Jolie adopted a child from America .

    Motel Six won't leave the light on anymore.

    A picture is now only worth 200 words.

    They renamed Wall Street "Wal-Mart Street "

    When Bill and Hillary travel together, they now have to share a room.

    The Treasure Island casino in Las Vegas is now managed by Somali pirates.

  3. just send everyone a 20k check.
  4. The "Obama cash" would make Obama voters happy... until they realized it would take that much to buy a 6-pack of beer.
  5. -- Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September -- up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month -- the unemployment rate was 9.4% in mid-September -- and therefore is unlikely to be picked up in the government's unemployment report on Friday.

    And the OBAMA clowns come out in full force....

    NOV 2nd is a key point of no return.

    I have already created an LLC for my company (Me). All monies I recieve from raising capital will no longer flow to me directly, but through the LLC.

    I have a company car now. (New Rang Rover HSE), I have a home office in my loft, I have a Business Cell phone, and all "Expenses' as I travel will be write offs.

    I was W2 at my former Private Equity Group, with a base and 10% takedown. The new Group I joined...100% Comission as an Consultant as the CEO understood. No base as it would go to the Gov in taxes anyway. Comission start at 10% and as I reach certain goals increases.

    My plan, pay my self out under 60k per year, keep the rest in an LLC and when I get to my Goal, put the LLC in a Trust.

    I have talked to many individuals who no longer want W2 in different fields and most have turned to 100% comission and either LLP or LLC'd.

    Of course only certain Fields will allow you to do this.

    So, as the Gov. looks to tax & print to hide real Unemployment numbers, many will be far under the radar.

    Fuck Obama, the Freeloaders and the Socialist. They will get some of my money...but no nearly what they could if I were W2.
  6. pspr


    Obama and his progressive friends and advisors don't have a clue how to get the private sector to create jobs. Not a clue. The U.S. recession will continue at least until he is removed from office.
  7. "I" "I" "me" "me". It's really no wonder that you spend most of your idle time trying to impress everyone on an anonymous message board. In the real world, anybody who continued with this self centered narcissism would be a world class bore.
  8. Hey, that's Obama!
  9. jd7419


    I Agree. What I don't get is how anyone can still like Obama.