Quantitative Displeasing

Not everyone was thrilled with Wednesday’s Quantitative Easing announcement from the Fed.

Paul Vigna discusses how the lone dissenting hawk on the Federal Reserve Board, Thomas Hoenig, views the policy:

Thomas Hoenig, the head of the Kansas City Fed and the only dissenter on the FOMC to Wednesday’s decision to flood the marketplace with $600 billion worth of new liquidity (quite possibly because he’s the only one who didn’t hit the liquidity hash pipe on his way in the building,) has some serious misgivings about the wisdom of pumping asset bubbles.

What Hoenig’s getting at there is a misallocation of resources that sends “hot” money into risky assets, building up a bubble that eventually bursts and unleashes a torrent of pain on the populace. By this point, after the housing bubble, credit crisis and dot-com bubble, that’s become a familiar exercise, yet Hoenig may be the only guy currentl with a vote on the FOMC who sees the downside clearly (albeit some other dissenters within the Fed will get the vote next year, although they’ll still be in the minority.) That’s a pity for the rest of us.

Paul and Mr. Hoenig are absolutely correct.  I have been calling for a 1% rate hike  as I’m getting tired of seeing money printed just so that Russian oligarchs and Brazilian mining execs can buy 3rd and 4th homes.  Food costs are beginning to rise and emerging countries are begging us in the New York Times to staunch the flow of hot cash.

Unemployment after all this printing and pumping?  Still 9.6%.


Hoenig, the Dissenter’s Take on QE2 (Market Talk)

Emerging-Market Countries Criticize Fed Decision (NYT)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. replica rolex commented on Sep 18

    … [Trackback]

    […] Find More Info here on that Topic: thereformedbroker.com/2010/11/05/quantitative-displeasing/ […]

  2. 118cm sex dolls commented on Sep 25

    … [Trackback]

    […] Here you will find 92936 additional Information to that Topic: thereformedbroker.com/2010/11/05/quantitative-displeasing/ […]

  3. short wigs for black women commented on Nov 28

    … [Trackback]

    […] There you will find 99529 more Information to that Topic: thereformedbroker.com/2010/11/05/quantitative-displeasing/ […]

  4. bob wigs for black women commented on Dec 29

    … [Trackback]

    […] There you will find 27914 additional Information on that Topic: thereformedbroker.com/2010/11/05/quantitative-displeasing/ […]

  5. bmo online banking login commented on Jan 10

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2010/11/05/quantitative-displeasing/ […]

  6. wig commented on Jan 22

    … [Trackback]

    […] Read More Info here to that Topic: thereformedbroker.com/2010/11/05/quantitative-displeasing/ […]

  7. royal bank commented on Jan 26

    … [Trackback]

    […] There you will find 56853 additional Information to that Topic: thereformedbroker.com/2010/11/05/quantitative-displeasing/ […]