fatlone’s view: QE3 來了

fatlone: 中美歐三大體系都相繼出招, 市場頓時充滿利好消息。未知這勢頭能帶領我們行到多遠? 但眼前仍危機四伏, 習近平下落未明; 釣魚台局勢緊張; 美國駐利比亞被殺, 歐債危機遠未解決。前路有無數地雷等著引爆, 大家應把握機會, 有得炒就盡量炒吧! 假如牛市已經重臨, 路途應不會平坦。看來, 美國是最有條件率先重返牛市。道指挑戰5年高位, 是很合理的。頁岩氣及跌幅甚深的房地產價格, 使美國處於低通脹的環境, 加上弱美元, 而大陸的工資不斷快速上升, 使美國的競爭力增加不少。環顧全球,  美國雖然失業率仍高企, 不過其體質已經改善中, 而中歐均面對自家的經濟問題, 此消彼長之下, 美國股市領先全球確實合理非常。

如果我有相當數量的資產, 我會把一部份港樓套現而換馬至美國的房地產市場。未知美國的REITS ETF是不是個好的選擇?

source: http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40-billion-in-mortgage-securities-each-month.html

Fed Undertakes QE3 With $40 Billion in MBS Purchases a Month

By Joshua Zumbrun – Sep 14, 2012 1:08 AM GMT+0800

The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment.

“If the outlook for the labor market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases and employ its other policy tools as appropriate,” theFederal Open Market Committee said today in a statement at the end of a two-day meeting in Washington.

The FOMC said it would likely hold the federal funds rate near zero “at least through mid-2015.” Since January, the Fed had said the rate was likely to stay low at least through late 2014. The Fed said “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.”

Chairman Ben S. Bernanke is enlarging his supply of unconventional tools to attack unemployment stuck above 8 percent since February 2009, a situation he has called a “grave concern.” The decision risks provoking a renewed backlash from Republicans, including presidential nominee Mitt Romney, who say Bernanke’s policies threaten to ignite inflation while doing little to spur the economy.

The Fed said it will continue its program to swap $667 billion of short-term debt with longer-term securities to lengthen the average maturity of its holdings, an action dubbed Operation Twist. The central bank will also continue reinvesting its portfolio of maturing housing debt into agency mortgage- backed securities.

Stocks, Treasuries

Stocks soared after the statement. The Standard & Poor’s 500 Index rose 0.7 percent to 1,446.57 at 12:48 p.m. in New York. The yield on the 10-year Treasury note rose to 1.81 percent from as low as 1.71 percent.

“The committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,” the statement said.

Richmond Fed President Jeffrey Lacker dissented for the sixth consecutive meeting, saying he opposed additional asset purchases. Lacker opposed the FOMC’s June decision to extend Operation Twist through the end of the year and has said he expects interest rates will need to be raised in 2013.

Economic Forecasts

The Fed will issue forecasts for unemployment, growth, inflation and interest rates at 2 p.m. today, and Bernanke is scheduled to speak at a press conference starting at 2:15 p.m. in Washington.

Today’s Fed meeting comes less than two weeks after Bernanke’s Aug. 31 speech in Jackson Hole, Wyoming, when he lamented the state of the labor market and defended his “nontraditional policies,” saying “the costs, when considered carefully, appear manageable.”

Growing expectations of additional stimulus have helped propel a rally in stocks and commodities. The Standard & Poor’s 500 Index rose 4.5 percent through yesterday since the Fed’s last statement on Aug. 1 to near the highest level in more than four years. The S&P GSCI Spot Index of 24 commodity prices has risen 7.1 percent.

Weak employment data has increased pressure on the central bank to act. The Labor Department said Sept. 7 that the economy added 96,000 jobs in August, less than forecast by economists and down from a 141,000 increase in July. Average hourly earnings were little changed, and 368,000 Americans left the labor force.

Manufacturing Cools

Other reports have shown that manufacturing, one of the mainstays of the three-year expansion, has been weakening. The Institute for Supply Management’s factory index showed a third straight month of contraction in August as it fell to the lowest level since July 2009.

“We have seen no net improvement in the unemployment rate since January,” Bernanke said in his Jackson Hole speech. “Unless the economy begins to grow more quickly than it has recently, the unemployment rate is likely to remain far above levels consistent with maximum employment for some time.”

Economic growth slowed to a 1.7 percent annual pace in the second quarter from 4.1 percent in the final three months of last year. Growth will average 2.1 percent next year, according to the median forecast in a Bloomberg News survey of economists, and the jobless rate will average 7.9 percent.

Forecast Reduced

Intel Corp., the world’s largest semiconductor maker, on Sept. 7 slashed its third-quarter sales forecast citing declining demand for personal computers from corporate customers in a weakening economy.

FedEx Corp., operator of the world’s largest cargo airline, said Sept. 4 that earnings for the quarter ended Aug. 31 will be short of its forecast after a weak global economy damped revenue.

Some companies are planning to reduce staff. Printer maker Lexmark International Inc. on Aug. 28 announced plans to eliminate 1,700 jobs globally. Hewlett-Packard Co., the world’s largest personal-computer maker, said Sept. 10 that it would cut 29,000 jobs, an expansion of a reorganization plan first announced in May.

Bernanke, a scholar of the Great Depression, has deployed the most aggressive monetary policies since the Fed’s founding nearly a century ago as he battled the 2007-2009 financial crisis, helped pull the nation out of the worst recession since the 1930s and then sought to keep the expansion going.

The Fed lowered its target interest rate to zero in December 2008 and undertook two rounds of large-scale asset purchases that swelled its balance sheet to almost $3 trillion from less than $900 billion in December 2007, when the recession began.

Congressional Republicans

After the second round of asset purchases started in November 2010, Republican congressional leaders, including Congressman John Boehner of Ohio and Senator Mitch McConnell of Kentucky, the head of the party in their respective chambers, wrote a letter to Bernanke saying the action could ignite inflation, weaken the dollar and generate speculative bubbles.

Republican presidential candidate Mitt Romney has said he wouldn’t reappoint Bernanke when his term ends in January 2014. Glenn Hubbard, the Columbia University Business School dean and Romney adviser, has said additional bond purchases by the Fed would do little to shore up the economy.

“I don’t think that another round of quantitative easing is going to have a material effect on the recovery,” Hubbard said in an Aug. 31 interview on Bloomberg Television. “Lowering the 10-year yield by another handful of basis points isn’t going to move the needle.”

‘Failed’ Policy

Representative Paul Ryan of Wisconsin, Romney’s vice presidential running mate, yesterday said the Fed is “trying to make up for failed fiscal policy.”

The central bank is “trying to bail out the fact that the president hasn’t led, that the Senate hasn’t passed a budget, that we have a horrible economic policy coming from our regulations and from our tax policy,” Ryan said at a campaign event in Wisconsin.

Fed district bank presidents, including Richmond’s Jeffrey Lacker, Philadelphia’s Charles Plosser and Dennis Lockhart of Atlanta, have also raised concerns about inflation or whether more Fed action would help fuel growth.

Bernanke, in his Jackson Hole speech, cited a Fed study showing that large-scale asset purchases may have raised the level of economic output by almost 3 percent and boosted private payroll employment by more than 2 million jobs.

What’s more, Bernanke said, Fed the purchases have created “few if any” disruptions to market functioning, and there are no signs the expanding balance sheet has “materially affected inflation expectations.”

Still, Bernanke said monetary policy is “not a panacea” and his remarks have highlighted “two main sources of risk” facing the U.S. economy: Europe’s sovereign debt crisis and the prospect of abrupt fiscal tightening in the U.S.

Europe cleared a hurdle in its debt crisis yesterday when Germany’s top constitutional court rejected efforts to block the European Stability Mechanism, a 500 billion-euro ($645 billion) bailout fund.

The U.S. is also vulnerable to the so-called fiscal cliff, the $600 billion of tax increases and spending cuts that will kick in automatically at the end of the year unless Congress acts. TheCongressional Budget Office said in an Aug. 22 economic report that fiscal tightening of that magnitude could cause a recession.

“We’ve got a U.S. economy where we have looming tax increases that are quite significant, we have looming spending cuts in the government which are quite significant,” Michael DeWalt, the director of investor relations for Peoria, Illinois- based Caterpillar Inc., said in a Sept. 6 presentation. A lot of customers are “unsure about what to do, highly uncertain about where it’s going to go at the end of the year.”

To contact the reporter on this story: Joshua Zumbrun in Washington atjzumbrun@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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