The Fed’s Meaningless Taper – Podcast 12.20.13

JM Bullion

December 2013 Fed Meeting Review

Podcast Summary

0:00-2:26 intro

Has the Fed Met its Objectives?

2:26:6:30 discussion of Fed’s tapering of quantitative easing (QE) decision, ceremonious exit for Bernanke, Bernanke’s claim that the Fed has met its objectives, Fed tapers to keep options open to further taper; discussion of economic data and its impact on further tapering moves; market reaction to the taper

Bernanke’s Legacy

6:30- 14:15 review of the mechanics of QE; why the Fed tapers; cigarettes and alcohol; the damage already done by QE irrespective of tapering a small amount; Fed’s contention that asset purchases are a “secondary option”; Fed comments on availability of capital; Bernanke’s legacy and why the taper took place; the Fed and the labor market; inflation; unemployment rate

Tapering Impact on the Stock and Real Estate Markets

14:15-16:50 impact of regulation, availability of credit and unemployment on real estate; tapering impact on the real estate vs stock market; Fed’s loss of control of the bond market

16:50-19:30 The impact of low inventory, underwater homeowners and lack of new home buyers on the real estate market; the Fed’s “accomodative stance” and who benefits

19:30-20:40 alternative financing

What’s Next for the Fed

20:40-23:30 -discussion of why the Fed has determined that further tapers of QE are data dependent but keeping interest rates at record low levels are not;tapering is tightening; taper talk; how the Fed keeps control of interest rate; impact of the taper on real estate and other speculative assets

23:30-26:30 the direction of interest rates and what might impact them,

26:30-29:45 unwinding the Fed’s portfolio; advantages of the 30 year mortgage and it unavailability

29:45-32:00 the impact of the Fed and macro economics on the real estate market

Wall Street vs Main Street

32:00 – 37:30 wall street vs main street; household formation; NAR -good time to buy! good time to sell!

37:30-40:40 researching a town’s finances before buying a home in that town

40:40-43:10 home ownership association fees

43:10- 47:10 low interest rates and home buying

Why Tapering Won’t Help the Real Estate Market

47:10 – 50:40 stock market vs housing market; the flaws of the Federal Reserve system; Bernanke and gold price

50:40- discussion of the GDP number and its impact on the Fed’s taper decision

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Further Reading:

December 2013 Fed Meeting Review

October 2013 Fed Meeting Review

September 2013 Fed Meeting Review

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