The stock market dropped 200 points on Wednesday after Ben Bernanke announced that the Federal Reserve would wind down the $85-billion-per-month stimulus known as QE3.
The program involves the Fed unleashing money into the economy by buying up bonds. The Federal Reserve will taper off purchases starting in late 2013, ending in mid-2014, Bernanke said today.
Bernanke's announcement affected today's market by confirming investors' fears. But long-term, rolling back the stimulus program is the right thing to do, Bernanke said. He claimed that the recovery now looks stronger, and predicted that unemployment would have fallen to near 7% by mid-2014. If the jobless rate stays at 7.6% or higher, the Fed would consider considering the stimulus for longer, Bernanke added.
Let me see if I understand this correctly. Wall Street which was at record highs, and made record profits the last five years in a row from a recession they caused to devestate the working class, is panicking because the govt isn't going to give them SOME of the free money they've been giving them for four years in a row. Boy talk about sucking on the welfare teat.
@jessejaymes - You summed it up just right... no welfare check, they'll take profits from their investors instead... Did you know if corporate tax entitlements were abolished, we could fund 100% of the ACA? And it is no coincidence that the corporations that receive the most tax breaks are those with huge gov't contracts (ie. more dependence on the taxpayer) and a plethora of lobbyists who get hired to high gov't positions (ie. corruption).
If the Federal Reserve would allow the markets to find their own levels, rather than propping them up with government funds, we could get back to normal. Normal may be a recession, and if so, let it happen, lets get over it and move on. When government messes with private businesses, all we get is one hell of a mess.
QE3 was just a way to take more of publics money and give it to Bankers as reward for doing good job ripping off the public making Federal Reserve stronger. Federal Reserve should be out of business, yesterday.
@WallStreet You go right ahead lauding the benefits of day traders. I would mention however to those who read your recommendation that day traders have the highest rate of suicide of any profession in the USA and based on yearly figures, 97% of day trades lose money. Big money.
It's one of several social engineering policies that have backfired. Including the minimum wage (spawned illegal immigration, underground human trafficking, gangs, drug war), "housing fairness" (spawned lax mortgage standards, financial meltdown, federal debt explosion), food stamps, ethanol, Obamacare, etc.
A lot of you understand the mystery of economics. With all of the added currency floating around, what is the most likely path to be taken to raise the value of the dollar? QE is wiping us out down here. The only thing that makes this okay is that the dollars of the Bum Class are worth no more pennies than ours here amongst the poor folk.
Kind of amusing because I just read that many companies/corporations were using their profits to buy back their own stock. Not sure how this will shake out but rest assured the rich aren't ready to "trickle" on you just yet. So no new jobs for now. They are greedy and want a larger share of the wealth. Remember "greed is good".
It is not the job of the government to use tax payer money to falsely hold up the stock market. That is a case of stealing from the poor to give to the rich. I hate to admit, but I didn't know our government was still giving stimulus money to Wall Street. It should have stopped a long time ago!