Fed cuts stimulus as expected; Bernanke prepares to depart

[princess_morbucks]

http://www.businesstimes.com.sg/brea...epart-20140130

[WASHINGTON] The US Federal Reserve on Wednesday announced a further US$10 billion reduction in its monthly bond purchases as it stuck to a plan to wind down its extraordinary stimulus despite recent turmoil in emerging markets.
Fed Chairman Ben Bernanke, who hands the central bank's reins to vice chair Janet Yellen on Friday, also adjourned his last policy-setting meeting without making any changes to the US central bank's other main policy plank: its longer-term plan to keep interest rates low for some time to come.
In a statement after the two-day meeting, the Fed said "economic activity picked up in recent quarters," and largely shook off a surprisingly soft reading on December jobs growth.
"Labour market indicators were mixed but on balance showed further improvement," the central bank said.

[DC33_2008]

Nikkei drops 2.55% as at 8.35am. STI will drop %?

http://www.businesstimes.com.sg/brea...epart-20140130

[WASHINGTON] The US Federal Reserve on Wednesday announced a further US$10 billion reduction in its monthly bond purchases as it stuck to a plan to wind down its extraordinary stimulus despite recent turmoil in emerging markets.
Fed Chairman Ben Bernanke, who hands the central bank's reins to vice chair Janet Yellen on Friday, also adjourned his last policy-setting meeting without making any changes to the US central bank's other main policy plank: its longer-term plan to keep interest rates low for some time to come.
In a statement after the two-day meeting, the Fed said "economic activity picked up in recent quarters," and largely shook off a surprisingly soft reading on December jobs growth.
"Labour market indicators were mixed but on balance showed further improvement," the central bank said.

[wt_know]

today asia market sure ANG ANG ... hongbao color

Nikkei drops 2.55% as at 8.35am. STI will drop %?

[phantom_opera]

Nikkei drops 2.55% as at 8.35am. STI will drop %?

Nikkei has gained 60% in 2013 ... even saints also will take profit

http://chart.finance.yahoo.com/z?s=%...n-SG&region=SG

[DC33_2008]

Ready to buy some bluechip. Lucky did not get any yesterday. Nikkei is down 2.67% at 8.43am.

today asia market sure ANG ANG ... hongbao color

[wt_know]

i think still too early to get in. today probably knee jerk reaction
the effect will come after weeks or months where cheap money is reduced and EM currencies plunged further due to QE taper

Ready to buy some bluechip. Lucky did not get any yesterday.

[DC33_2008]

It is with knee jerk where people make $. Remember after lethman bros all asset class went down.

i think still too early to get in. today probably knee jerk reaction
the effect will come after weeks or months where cheap money is reduced and EM currencies plunged further due to QE taper

[Wunderkind]

Tapering was expected to begin in September/October 2013 but was delayed by the Federal Reserve ("Fed") due to economic uncertainty and instability. Towards the end of 2013, the Fed announced, however, that they would begin tapering their bond buying by $10 billion to $75 billion a month starting in January and will continue to do so upon signs of an improving economy. We expect tapering will continue throughout 2014 and will likely be completed by the end of the year, recognizing that the Fed is scheduled to meet 8 times in 2014 as of this point in time. After tapering, we anticipate bond sales (i.e. federal balance sheet reductions) beginning in early 2015 and the initial stages of a protracted and measured period of Federal Funds Target Rate increases during the second half of 2015. In this regard, we believe that the Fed will follow a similar blueprint to the one they employed in 2004 - 2006 when they raised this key interest rate by 25 Basis Points (0.25%) on seventeen different occasions over this three-year time period.

In summary, interest rate is set to rise in 2014.

[phantom_opera]

Obama now want to implement something like CPF nicknamed MyRA to keep all the retirement money to fund the garmen bonds

Don't worry, they will try all kinds of tricks to ensure garmen debt interest rate is reasonably low

I already see signs of accumulation for REITs .. especially those at or below book value ... recently Blackrock just bought 5% CMT @ 1.85

Marc Faber also likes Singapore REITs

[DC33_2008]

Big question is still the rate of rise?

Asia Indices as at 9.43am:
Nikkei Down 3.13%
Hang Seng-314.28-1.42%21,827.33
<li data-ticker="AS51:IND">ASX 200-48.71-0.93%5,180.30<li data-ticker="SHCOMP:IND">Shanghai-3.98-0.19%2,045.93<li data-ticker="FSSTI:IND">Straits Times-29.10-0.95%3,018.83<li data-ticker="SENSEX:IND">Sensex 30-36.21

Tapering was expected to begin in September/October 2013 but was delayed by the Federal Reserve ("Fed") due to economic uncertainty and instability. Towards the end of 2013, the Fed announced, however, that they would begin tapering their bond buying by $10 billion to $75 billion a month starting in January and will continue to do so upon signs of an improving economy. We expect tapering will continue throughout 2014 and will likely be completed by the end of the year, recognizing that the Fed is scheduled to meet 8 times in 2014 as of this point in time. After tapering, we anticipate bond sales (i.e. federal balance sheet reductions) beginning in early 2015 and the initial stages of a protracted and measured period of Federal Funds Target Rate increases during the second half of 2015. In this regard, we believe that the Fed will follow a similar blueprint to the one they employed in 2004 - 2006 when they raised this key interest rate by 25 Basis Points (0.25%) on seventeen different occasions over this three-year time period.

In summary, interest rate is set to rise in 2014.

[princess_morbucks]

Blood shed today...will STI drop below 3000?

[phantom_opera]

Blood shed today...will STI drop below 3000?

take this opportunity to buy!!!

[DC33_2008]

There will be no "Horse Run". Started queuing.

take this opportunity to buy!!!

[star]

Latest update:

China's purchasing managers' index (PMI), which tracks manufacturing activity in factories and workshops, fell to 49.5 this month.

[star]

I see market more drop after chinese new year.

[RCT]

Big question is still the rate of rise?

Asia Indices as at 9.43am:
Nikkei Down 3.13%
Hang Seng-314.28-1.42%21,827.33
<li data-ticker="AS51:IND">ASX 200-48.71-0.93%5,180.30<li data-ticker="SHCOMP:IND">Shanghai-3.98-0.19%2,045.93<li data-ticker="FSSTI:IND">Straits Times-29.10-0.95%3,018.83<li data-ticker="SENSEX:IND">Sensex 30-36.21

Of course... Let emerging world enjoy so long already. Time for US to enjoy. Rate will interest. USD will raise. Emerging market will have recession. All will have to listen to US again... Looks like another 1997... We should start to see interest rate of emerging market raising to stop the fall of their currency.

[Simi]

I see market more drop after chinese new year.

Bro star

same here

as for S&P....see a possible 100plus points to go

[lionhill]

Of course... Let emerging world enjoy so long already. Time for US to enjoy. Rate will interest. USD will raise. Emerging market will have recession. All will have to listen to US again... Looks like another 1997... We should start to see interest rate of emerging market raising to stop the fall of their currency.

looks like true. but I do not understand why this happen. With the tapering, US does not provide any new opportunies, to my opinion. Any expert to explain?

One thing I think is that only if other ASEAN countries can avoid a crisis like 1997, SG interest will keep low no matter US raise her interest or not. ASEAN is stronger than 1997, right?

[puffer_fish]

My cheque book is ready, now all I need is to find that unit

[DC33_2008]

Going for the kill?

My cheque book is ready, now all I need is to find that unit

[pmet]

My cheque book is ready, now all I need is to find that unit

Hold your horses, I once said market will correct by 20-25% by 2016 and 2013 should be the year of the bears (but it didn't happen thanks to Benanke for delaying the taper).

[pmet]

looks like true. but I do not understand why this happen. With the tapering, US does not provide any new opportunies, to my opinion. Any expert to explain?

One thing I think is that only if other ASEAN countries can avoid a crisis like 1997, SG interest will keep low no matter US raise her interest or not. ASEAN is stronger than 1997, right?

No brainer, they did that to jack up their stock prices. SG does not set its own interest rates, it follows the FED. We already have enough discussion on this which is also the primary reason for the property bubble we have today. What they did with the QE was to give people an illusion of a seemingly good economy. They did that during a deep recession out of desperation. They deceived, they cheated, they lied, they tricked alot folks into thinking the economy was good and they should spend more. What's happening today is they are slowly unwinding it to attract capital inflow to the US which will also help investments and stocks in the long run as their economy is recovering. The net effects are higher inflation (in the US) and rising interest rates, which is the reverse of what they have been doing for the longest time to suppress inflation and interest rates (this is the reason why inflation in the US is still so low today). Win-win for them but not for EM like Malaysia and Singapore. We are just like the beach, tide comes in we're all flooded, tide goes out and we're dry like desert. Like I said in another post, SGD is a pisai to them. They won't even give a damn about other EM like Malaysia, Indonesia, India, Argentina, Turkey. The only valid reason for FED to pause tapering is if contagion spreads to Europe and maybe China (it depends). Get ready for blood bath in year 2014. 2016-2017 shall be the consummation. Save your bullets for rainy days and durian picking ahead.

[puffer_fish]

What I meant was getting the unit I want, in the right location, facing and view would be more reasonable.

saw more good units on the market recently

cheers for everyone, happy new year

[lionhill]

SG does not set its own interest rates, it follows the FED.

If I remeber correctly, when US rate is above 4% in 2005, SG rate is about 1%.

What they did with the QE was to give people an illusion of a seemingly good economy. They did that during a deep recession out of desperation. They deceived, they cheated, they lied, they tricked alot folks into thinking the economy was good and they should spend more.

To me, people did not believe that economy was good. People spent at most just because they believed in inflation. They believe that the more they bought assets, the more they would gain.
With the tapering, the issued faux money has been circulated in the market. Inflation is already a fact. If USA could take back and burn the faux money, the asset prices would drop like a fall, otherwise, how?

[pmet]

If I remeber correctly, when US rate is above 4% in 2005, SG rate is about 1%.


To me, people did not believe that economy was good. People spent at most just because they believed in inflation. They believe that the more they bought assets, the more they would gain.
With the tapering, the issued faux money has been circulated in the market. Inflation is already a fact. If USA could take back and burn the faux money, the asset prices would drop like a fall, otherwise, how?

Negative. It was around 2% in 2005 and you can see from the charts above it's tightly pegged against the FED's rates. Inflated stock market gives people the "illusion" of a healthy economy because people are loaded with cash from equity gains. Now, inflation was suppressed due to QE and also a number of govt measures like farming subsidies. I can tell you this because the money from QE didn't go anywhere except for equities and risky assets like Gold, Oil, EM, etc. Their economy is still in a limbo today because that QE money had no effects.

[indomie]

Negative. It was around 2% in 2005 and you can see from the charts above it's tightly pegged against the FED's rates. Inflated stock market gives people the "illusion" of a healthy economy because people are loaded with cash from equity gains. Now, inflation was suppressed due to QE and also a number of govt measures like farming subsidies. I can tell you this because the money from QE didn't go anywhere except for equities and risky assets like Gold, Oil, EM, etc. Their economy is still in a limbo today because that QE money had no effects.

U are reading old economy book. US is no longer a dominating force. There is EM + China now. Expecting a blood bath at EM market? Please don't hold your breath. I predict at most EM and developed market sink and float together.

[RCT]

My cheque book is ready, now all I need is to find that unit

Still early.. Expect things to go ugly after chinese new year ard march/april.. All we can do is to get ready for anything that can happen.

[RCT]

U are reading old economy book. US is no longer a dominating force. There is EM + China now. Expecting a blood bath at EM market? Please don't hold your breath. I predict at most EM and developed market sink and float together.

I don't think so. China financial strength have yet to be tested, we really don't know how good are they in playing this game. But we know US are just expert in this game. US will definitely try to sink this YUAN ship. Just like how they sank YEN and EURO.

[indomie]

I don't think so. China financial strength have yet to be tested, we really don't know how good are they in playing this game. But we know US are just expert in this game. US will definitely try to sink this YUAN ship. Just like how they sank YEN and EURO.

There is no better position to be in than China position now. China is practically milking the USA. China will want this situation as long as possible. However when China rises up to be No. 1 economony, don't expect China to be a gracious master. The world under US is relatively free of economy repression. Its only ideological conflict mostly. When China rises up, all the world resources will be sucked up dry. Then inflation will have a new meaning.

[indomie]

US economy is behaving like a losing chess player. Toward the end of the game, the losing player increasingly make predictable moves. What China is avoiding right now is the breaking up of USA. If USA is breaking up, it will be difficult to face. A single enemy is easier to fight.