Fed: Economic Activity Picking Up

" Well Jim McKay got grasping for straws here but about the only good news for folks worried about the decline in the dollar is they said they'd finished. With the purchase of treasuries that was about a 300 billion dollar purchase the Fed is finished -- and they begin to cut back. Or to tweak their purchase of the Fannie and Freddie securities. From my guess 200 billion down 175. Million so they're trying to suggest that they're concerned. Are about buying too much dead about fulfilling filling up the portfolio Wharton already and it's."

" We don't -- language. Sounds almost slide show last -- I I wonder if they issued the September statement by mistake because Syria and you can. As one of our other panelists noted. It's just it's not just the fact that -- worried the public it's it's our congress and the fiscal policies. And a possible course of all these programs and we're going to raise that debt level to trillions. This is what's causing. The flight. Of money from this country into -- foreign markets which -- played in the commodities. And it's Gresham law bad money is driving out the good people want to lock in the something of value. And when the Fed says that inflation is subdued. It's hubris."

" And Charles Charles freedom and we started out target -- carry trades I mean you know if there's ever I think -- was actually right carry out of the carry trades I mean is essentially free money we're continuing. With a free money a little further here. Well you know it's it's going to last until as the first real uptick in the demand for credit by companies by individuals. Right now there is the world is awash with dollars at the demand is declining bank loans consumer credits all declining. What happens when demand for money actually increases. That's what you're going to see of this big spike in interest rates and that's what things are gonna get really crazy. In the financial markets but I don't see that happening for awhile Diana when when does that happen when does demand start to grow things start to pick up where the banks. Have to get rid the banks have increased their reserves by a factor seventeen over the past few months because of all this. Money from the Fed when they begin to unload some of that which could cause inflation."

" The question of the hour. I -- I have a belief that we are going to have a long slow uneven. Recovery and so I would hazard a guess that we will see some of these bubbles. Both grow and pop. Before there is that they wired sustained demand. The economy itself remains incredibly weak although we have these huge speculative bubbles and I frankly don't see an awful lot that's going to -- battle --"

" David Jones what about you you used to be an economist for the Federal Reserve. Is there any economist in there that -- this is the wrong policy we got a titan are we got a new suddenly get rid of that portfolio. That's right there are some hawks. They're completely out -- by the doves were more worried about the economy than they are. About inflation and that's why this decision was to keep interest rates unchanged there are couple of -- slacker at the Richmond fed. -- at the Philadelphia fed among them. Who say we ought to tighten sooner rather than later so. There is some debate within a fair bit right now the doves are winning out and I don't think the hawks and correct me if I'm wrong David I don't think boxer voters and that's right his -- voter. I -- I don't think he has. At this particular moment but he can still speak at the -- sure make its point clear he can make his point clear but again it was a unanimous decision today to keep rates at zero -- Michael church what about the market we saw the market jump up about a 13040. -- You know said may scratch your -- thought better of it came down mallet is trading the Dow is trading at about 79. -- how do you think it eventually will react to this news."

" I think this is a non event from the gecko. As far as we're concerned to keep an eye on the economic data going forward looking towards the holiday season. I think the holiday sales seasons in new -- first task for this market in this rally. And that's we're going to get a sense of where demand goes and I think you're going to find that the inventory cycles -- and kick in. Missing manufacturing data come in batter -- so will support data going forward into next year if we get an okay holiday season things -- better than most expect."

" You gotten a call about a nickel that a ladies on look at -- that doubt now the Dow is trading in the sixties. Just after the Fed it was a 140 what's happened. Yeah all right these are the days where you hold on -- like David Paterson and through stock. We had come over to me and said they push it out before the Fed announcement and then a felon really. These announcements are sometimes a double edged sword because if they don't say what they say one thing their damage they say another they're down and that sometimes. What happens you know and and if they order a high rate you know hiding. -- the rate that would you know be top on the market. And when they start to just leave things the way they I -- that they are not optimistic enough about an economic recovery. So they that they feel like them the sense of optimism is not there so it's one of those double edged sword type of situations but often. You will say and not only here on that day but I had of Fannie and had an announcement of big announcement. I'm using the market run up that they can only sell off when news breaks and certainly and also I thought in April 30 the futures have changed originally. That was at a 56%. I'll level up. The folks thinking that there would be rate hike in May develop findings and that has dropped now to 50%. So that's something to watches while they are expecting -- rate hike in April that flat out all right Nicole."

" I -- ladies Phil Flynn David Jones and Diana Joseph's Jim makes a -- Michael church Charles Biederman what do crew thank you so much for staying -- and analyzing."