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Peter1469
07-31-2014, 06:45 AM
Fed is ending QE (http://www.ft.com/intl/cms/s/0/58848270-1729-11e4-8617-00144feabdc0.html#axzz390RimQRv)

As the Federal Reserve ends quantitative easing as much as $1T could leave the large banks. Investors are clearly worried about this (which is more evidence that the markets have been propped up by GE).

Also interest rates are to normalize. I don't they really mean return to historic averages (4-5%) as they will greatly harm the economy and would use most discretionary spending just to service the debt. Big government types wouldn't know what to do if that happened.


US banks are steeling themselves for the possibility of losing as much as $1tn in deposits as the Federal Reserve reverses its emergency economic policies and raises interest rates.



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“There are investors, traders and sellside analysts that are very concerned about it,” said one top-10 investor in several large US banks.
An outflow of deposits would be a reversal of a five-year trend that has seen significant amounts of extra cash poured into banks thanks to the Fed flooding the financial system with liquidity. These deposits, which act as a cheaper source of funding, have helped banks weather the aftermath of the financial crisis.



Maybe savers will get a break and start to make decent interest on their deposits.

Matty
07-31-2014, 06:52 AM
The stocks were way down this AM

Peter1469
07-31-2014, 06:56 AM
Probably because of articles like this, and confirmation that the Fed is stopping the free ride.

midcan5
07-31-2014, 06:59 AM
For us personally greater interest rates would work out fine, but life in the real world should take into consideration everyone. A slightly different point of view below. It is important we remember who broke the bank.

"To be sure, there is a role for unconventional policies like quantitative easing (QE); when markets are broken or grossly dysfunctional, central bankers need to think innovatively. Indeed, much of what was done immediately after the collapse of US investment bank Lehman Brothers in 2008 was exactly right, though central bankers had no guidebook."


Read more at http://www.project-syndicate.org/commentary/raghuram-rajan-calls-for-monetary-policy-coordination-among-major-central-banks#jB5TqU4LyGGdQHSl.99

Captain Obvious
07-31-2014, 07:00 AM
Islam forbids usury.

Peter1469
07-31-2014, 07:15 AM
Islam forbids usury.

They tend to do things which amount to the same thing as interest. Such as with mortgages. A bank might buy the property and then re-sell it at a slight profit.

Peter1469
07-31-2014, 07:19 AM
What does the linked article mean to you?

It seems to say QE was fine when it started be central banks kept it going too long. (Certainly a valid argument).

It also seems to say the spill over affects into other economies was bad. I am not sure about that- it gave them a lot more liquidity that all emerging economies had combined prior to QE (just the US QE too!). Ending QE is going to greatly harm the emerging economies.


For us personally greater interest rates would work out fine, but life in the real world should take into consideration everyone. A slightly different point of view below. It is important we remember who broke the bank.

"To be sure, there is a role for unconventional policies like quantitative easing (QE); when markets are broken or grossly dysfunctional, central bankers need to think innovatively. Indeed, much of what was done immediately after the collapse of US investment bank Lehman Brothers in 2008 was exactly right, though central bankers had no guidebook."


Read more at http://www.project-syndicate.org/commentary/raghuram-rajan-calls-for-monetary-policy-coordination-among-major-central-banks#jB5TqU4LyGGdQHSl.99

Mainecoons
07-31-2014, 10:30 AM
Fed is ending QE (http://www.ft.com/intl/cms/s/0/58848270-1729-11e4-8617-00144feabdc0.html#axzz390RimQRv)

As the Federal Reserve ends quantitative easing as much as $1T could leave the large banks. Investors are clearly worried about this (which is more evidence that the markets have been propped up by GE).

Also interest rates are to normalize. I don't they really mean return to historic averages (4-5%) as they will greatly harm the economy and would use most discretionary spending just to service the debt. Big government types wouldn't know what to do if that happened.





Maybe savers will get a break and start to make decent interest on their deposits.

And maybe they'll stop shitting on small depositors.

Peter1469
07-31-2014, 10:39 AM
And maybe they'll stop shitting on small depositors.

They will need small depositors as $1T is sucked from their balance sheets. Just wait; if the toxic assets are forced back onto their balance sheets that will = total collapse. Then the anarchists will get their way.