Tag Archives: Ben Bernanke

Market Update May 15, 2014

So far 2014 has proved to be quite frustrating and confusing. We ended 2013 on and upbeat note with the Dow and S & P making new all time highs. At the time only 16% of investors were bearish on the market. In December 2013, then Chairman, Ben Bernanke, of the US Federal Reserve started to taper bond purchases by $10 billion per month.Continue Reading

US Federal Reserve Monetary Policy 2013-2014

Monetary policy is an important driver of economic growth. It sets in motion and controls, by and large, the supply of money available for lending and commerce. As 2013 comes to a close, the Dow Jones Averages, the S & P and the Nasdaq are setting new highs. On December 20, 2013 the Dow closed at 16,221.14, the S & P at 1818.32 and the Nasdaq at 4,104.74. Much of this spectacular gain was the result of US Federal Reserve Monetary Policy.Continue Reading

Janet Yellen’s Testimony and What it Means for Investors

The Stock Market crash threw the United States and the world into a state of chaos. Within a few months 7 TRILLION of American’s wealth vanished into a black hole. 16.4 TRILLION was lopped off real estate values. To plug the dike Ben Bernanke, Chairman of the US Federal Reserve, embarked on a never before tried program of Quantitative Easing whereby the Fed bought bonds and mortgage backed securities from banks and mortgage companies. The big banks received this money as credits on their balance sheets.Continue Reading

The Words Federal Reserve Chairman Bernanke Said That Turned The Markets Into a Tailspin

Bonds, bonds, bonds. It’s all about bonds. For those of you who don’t invest in bonds, they function in a special way. When the yield (interest paid) on bonds goes down the price of the bond goes up. When the crash of 2008-09 occurred, seven trillion of wealth disappeared almost overnight. The US Federal Reserve is like the bank of last resort and functions like a central bank in other countries. There were no more options open to stop the bleeding from the crash. The only answer was to pump money back into the economy and quickly. The way to do this was for the Federal Reserve to buy bonds and mortgage- backed securities from the banks and mortgage companies. The two largest holders of mortgages are Fannie Mae and Freddie Mac. They hold about 80% of all US mortgages.Continue Reading