The Fed announced QE 3 this afternoon (AKA "Operation Twist") @ 2:15.
The markets proceeded to shit the bed afterwards. They should of called it "Operation Timberrrrrrrrrrr".
Basically the Federal reserve is going to sell some of it's short term bonds and buy long term bonds to push yields lower, which in their fucked up minds, should boost the housing industry (lower mortgage rates) and small business lending (lower loan rates). If you believe this will work, I have an awesome bridge for sale in my native land of NY. Great price for board members..... [URL=http://www.smileyvault.co
This is their solution to our utterly fucked economy and way of life. Why do they not understand that people aren't buying houses or taking out loans, not because of high rates (they are near all time lows already), but because NO ONE HAS A JOB! (Near 23% REAL unemployment).
It has nothing to do with helping out the people, and everything to do with helping capitol hill dig the hole deeper. You see, another effect of lowered long term interest rates is the ability of our gov't. to borrow more money at these low rates. The debt will pile up even further. When interest rates do go up (and they will have to eventually), the interest payments will eat us alive.
Our government is over 100 Trillion in debt. 15 trillion to other people and 85 trillion in unfunded Social Security, Medicare, and Medicaid liabilities. (85 trillion owed to WE THE PEOPLE).
Pay attention fellas, this is IDIOCY at it's finest......
-Rant over.
