More (Dumb) Questions Than (Dumb) Answers
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I want to ask the Fed some questions. But some of these questions might be dumb. Then again, some of the answers I’m getting about this quantitative easing seem kinda dumb a lot of the time too. So here goes:
Dear Dr. Bernanke,
1) If you want to create jobs, is buying mortgages really the best way to do it?
2) Aren’t you just funnelling more money to the banks? If so, why are you so worried about the banks exactly? I thought they were fine now.
3) You say something somewhere about the economy being stimulated by bank-lending, and so you want to encourage banks to lend. But the last rounds of quantitative easing didn’t’ make banks lend. Why will this round of quantitative easing make banks lend?
4) Do you think there’s a magic threshold of free money that will finally make the banks lend? Any idea what that threshold is?
5) If you have an idea what the amount of money would finally make the banks lend, why don’t you just tell us, and then give the banks that much money? Is it because it’s “too much”? Or you have no idea?
6) Have the banks told you they won’t lend until they get more money from you?
7) If you really, really want banks to lend and they won’t (because they haven’t so far), then why don’t you take these trillions and start lending them yourself? I know it’s not in the mandate of the Fed…but have you asked to have your mandate extended in this regard? I mean, really, have you even asked? Like, just get the ball rolling a little? If not, why not?
8 ) What if more jobs are NOT created by this round of quantitative easing?
9) When will we know whether it’s working or not? You weren’t clear about what sort of job creation would be considered a success…but you must have some idea, don’t you?
10) Should I be suspicious that you introduced this massive plan for easing within the same four-week window as both China’s and Europe’s big quantitative easing? I mean, seriously–what bad thing do you know about that we don’t? Greece is about to exit isn’t it?
11) Why mortgages? Of all the things to buy, why those? Everyone thinks they’re garbage.
12) If your mandate limits you from doing the things that REALLY create jobs, and buying mortgages might not REALLY create jobs, then why are you saying this? Maybe isn’t it better not buy mortgages if you’re only doing it because your mandate doesn’t allow you to do anything else?
13) Why should we believe you when the Fed is a facility created by and for the biggest banks? Do the banks care about jobs as much as the people do? Or do they care more about their mortgages?
14) What if—after you give them billions and billions more–the banks still won’t lend, since clearly you can’t or won’t make them if they don’t want to?
15) Why the big guns now when the recent economic data is “less bad” in some respects than when you eased previously? Do you think that the “less bad” data is just a blip and will get worse?
16) I haven’t actually been able to bring myself to listen to your press conference announcement for this latest quantitative easing. Do I really even need to? Because I bet it probably didn’t asnwer any of my questions.
Fellow commentariat, please add your own dumb questions. Smart answers are welcome too.
skipbreakfast post=5228 wrote: 10) Should I be suspicious that you introduced this massive plan for easing within the same four-week window as both China’s and Europe’s big quantitative easing? I mean, seriously–what bad thing do you know about that we don’t? Greece is about to exit isn’t it?
Quoting myself and responding to myself…yikes, I swear I’m not all that narcissistic. But I did get a kick out of the fact my question beat Tyler Durden at Zero Hedge to the punch:
why did Bernanke go full retard yesterday? Data didn’t exactly scream ‘panic’ mode. Perhaps he knows something about this weekend in Europe and wanted to get out in front of it?
https://www.zerohedge.com/news/bernanke-koolaid-steals-draghi-punch-spanish-bonds-slide
I still swear he (they) read the comments on TAE…and everywhere else, I’m sure. Then again, that’s probably the narcissism talking.
I actually would imagine that the Fed’s panic button pushing yesterday is more likely anticipating something a couple months away rather than this weekend. Oh, like January 1st maybe? After the US election anyhow. Just guessin’.
Bernanke probably knows more about what is going on behind the scenes than we do. Timing is everything.
Also, there were several U.S. embassies attacked this week. Seems odd to me these attacks were due to a youtube video. More likely these were coordinated attacks timed to the 9/11 anniversary that unfortunately killed an ambassador and 3 other Americans, and then using the video as a cover-up. But what do I know.
I also get the feeling the Fed is in panic mode.
Something is very rotten in the state of Denmark that we know nothing about.
JP Morgan losses?
Derivative implosion?
Shock at tepid recovery?
Big European Banks under?
Could be anything, but I think I sense fright from the Fed, or maybe desperation is more accurate.
It does seem desperate, I agree.
It’s scaring the living pants off of people too. Which is exactly what Bernanke wants. He wants to smoke us out of our caves and into “the markets”. So we’re scared… I wonder if you’re right, and he’s actually scared too. I think he might very well be.
I think deflation is what he worries about most. Would I hate to be the person in charge of the economy in a deflationary bust. A sure path to the old Guillotine me thinks.
Maybe they are worried about the dirty laundry.
https://www.bbc.co.uk/news/business-19570840
UK-based banks accused of massive mis-selling in ItalyThe London-based banks who were accused of mis-selling Swaps to Italian local authorities now face numerous civil and criminal proceedings by multiple Italian cities.
I can’t help thinking that this film was somehow staged. I really can’t believe that a Copt can be that daft. However, there are loonies in all religious denominations.
The overlap with 9/11 cannot be fortuitous. I think stuff like the film below are beginning to go mainstream and something has to be done to prove once more that Moslems are all all fanatics and primitive:
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