Exposing Ideas to the Envelope of Serendipity

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Wednesday, March 18, 2009

Printing Press Galore!

The Fed said that it will concentrate its purchases in the 2 year and the 10 year sector. Gold surged while the bond market came to a crawl.

They will purchase $300 billion of Treasury securities making a v steep yield curve allowing our bankers to borrow yet lower yet lend higher. 
Good for banks, bad if you need to borrow. 

They also have set up for themselves an easy exit strategy if things don't go towards their liking they roll off the shorter paper as it matures and reassess things again.
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