As was expected, there was no change in the formal interest rate policy. However, watching the press conference was interesting in that Mr. Bernanke hinted several times at additional monetary stimulus that was ready to be provided – if necessary.

The FED downgraded their economic outlook. The most recent FOMC statement release changed from last month’s, when there were modest signs of growth. Blame for this was placed on the natural disaster in Japan, and the debt problems in Europe.

Mr. Bernanke also was forward in his thoughts that monetary policy alone cannot solve the unemployment issue. He has previously suggested that its “up to Congress” to apply Fiscal stimulus to the Fed’s Monetary stimulus. Bernanke seems disappointed that the massive stimulus which the FED has already provided has done little to help bring down the unemployment rate.

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Side by Side 11022011

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Category: Economy, Federal Reserve

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5 Responses to “FOMC Statement – Changes Versus Last Month”

  1. dead hobo says:

    Do you remember the good old days when changes in Fed statements from meeting to meeting seemed important? At one time, these words could swing markets for months and longer. Times were simple then. Today we have Europe and Greece and whatever game Greece has been playing, which appears to be nearing some form of conclusion … or maybe not … as nobody on Earth really could have seen this coming. It couldn’t even exist in bad fiction because it is such a 10th tail event … yet here it is in the news every day. Is it settled or will someone shit on the floor again in a place and manner nobody could have ever expected?

    Only a moron would put money out with this uncertainty. Risk has taken on a new dimension. You literally can’t believe anybody without taking a chance. Sovereign debt is for suckers now as promises from minor countries are just made for the purpose of getting more money that may or may not be paid back. And skilled extortionists know how to exploit the downside of default risk. I’m 30% in and want to buy more, but that would be stupid until it looks like Greece is settled once and for all. And considering their credibility, how can they do that? Will the other PIGS copy Greece?

  2. theexpertisin says:

    Three points and an observation:

    History has shown that the countries comprising the EU have failed to unite on anything. They are, alas, tribes with cultures that are, at best, suspicious of each other and worst, warlike. They are best operating in separate spheres. There is no European “Union” except in the eyes of bureaucrats and wayward socialists.

    The FED stimulus programs may have had a successful impact if the Obama admisintration and the Democractic-controlled Congress of the day had allocated funds to other than propping up unions, plugging state deficits (almost all in blue states), and selecting by mega-billion dollar bets which industries were on the agenda to be juiced. In the final analysis, it was more a gigantic slush fund, not a stimulus regimen. I do not hold the FED responsible for this gross misallocation of taxpayer money.

    I chuckle over the complaints OWS groups are spouting over cities that are limiting the scope and duration of camps employing bureaucratic rules and regulations to frustrate their cause. I wonder if they are feeling at union with American business and it’s frustrations with an over-regulated and heavy-handed bureaucracy. Dream on, I suppose.

  3. eliz says:

    Bernanke seems disappointed that the massive stimulus which the FED has already provided has done little to help bring down the unemployment rate.

    It should be easy for Bernanke to compare his analysis of how he thought his actions would improve U.S. employment to reality. Apparently, he isn’t interested.

    It should be easy for Bernanke to explore why “the small people” are being burdened with higher prices for essentials. Apparently, he isn’t interested.

    Bernanke has shown himself to be narrowly focused, concerned only with propping up insolvent financial institutions and the RE bubble he and Greenspan blew. Of course, this is no surprise — but that his mindset has become the de facto economic mindset of D.C. is appalling and outrageous. Seriously, Greece is only a few steps ahead of us, it serves as an illustration of the things to come.

    This is the entire plan of TPTB: Bankers (including The Fed itself) will be bailed out – overtly or covertly – on the backs of the 99%.

  4. 4whatitsworth says:

    @dead hobo,

    I follow your posts and you are generally right. This time however could be different the problem is where are you going to put your cash? It does seem like every day nearly everything gets more expensive, lower quality or both. Also we are in an election cycle. You could be a gold bug but the US dollar is getting stronger considering the alternatives. Agree there is not much to choose from but not sure that time is on your sideline.

  5. dead hobo says:

    4whatitsworth,

    This time I chose to put my cash in a variety of actively managed mutual funds, each of which concentrates on a sector. Each has a minimum 30 day holding period, but no transaction costs and perfect liquidity. Each has a 10% to 15% upside potential from the 1st buy date, with 15% associated with a blow out end of year rally. I plan to sell when the S&P hits certain values, this is not a buy and hold unless circumstances force that upon me. I expect the S&P to be rather volatile next year and plan to repeat this process for each dip I can catch, unless the dip is associated with another world ending event caused intentionally by financial pariah. To me, any cash is free money so I don’t fret about missing the absolute tops or bottoms. I think improving financial conditions and end of year window dressing will drive a significant climb. I try to follow Jim Cramer’s excellent advice of never buying in all at once.