The Daily Links Post: 2010-12-08

These first posts are on QE. My view is that QE won’t work. The fundamentals are negative for a lot more credit growth and the Fed has concentrated on QE quantity instead of QE price i.e. rate. The result, predictably, is that rates are not lower. In fact, they are higher. Bernanke has made a hash of explaining QE to the American people. Instead of defensively saying the Fed is not printing money, he should have said, "yes we are adding to the monetary base. But we can only do so much." Isn’t that what he’s been saying? I don’t get it. Why did he start obfuscating at this critical juncture?

As far as the tax cuts go, they will boost the economy somewhat and the payroll tax cut was nice to see. Last January I wrote this up as "What President Obama can do to improve the economy." saying a payroll tax cut would be good. Note that giving it to employees instead of employers is less likely to boost jobs and more likely to boost demand.

QE Posts

Credit Writedowns

The Usual Fare

Read more: https://www.creditwritedowns.com/news-feed/#ixzz17XpK04F6

financial newsmonetary policyquantitative easing