El-Erian: Federal Reserve Can't Do Much More To Improve Economy

CNBC:

Despite all the anticipation over today's Federal Reserve meeting, there's little else the central bank can do now to help the economy recover, Pimco's co-CEO Mohamed El-Erian told CNBC.

Read the whole story: CNBC

Comments

[WorldisMorphing]

08:03 PM on 08/11/2010

Precisely Mr. El-Erian; What's needed more than anything else is a vision. The question of purpose will present itself naturally along the way...

[TeaLady005]

09:19 AM on 08/11/2010

The IMF declares the United States is bankrupt!
The CBO releases report which shows we now have $202 TRILLION in unfunded liabilities!

http://www.bloomberg.com/news/2010-08-11/u-s-is-bankrupt-and-we-don-t-even-know-commentary-by-laurence-kotlikoff.html

[hellboundtrain]

07:17 AM on 08/11/2010

How do you expect a cabal of money-men that were set up to work against your best interests in 1913, to work for you now to help you? And, how is it that they will receive benefit for whatever it is they prescribe? Thank congress, 1913,

It is conmore (my correction on the word congress), the group of people in WA that set the policies up, and then removed certain policies that is expected to look after your best interests, but didn't you just admit that they are the ones that set you up for the fall? How is it we are to expect good from them? They are paid the big bucks form their corporatist paymasters how is it that a majority of them will show any preference for you? You don't pay them enough.

Our nation is in one bad-awful mess. The most-great elite may not enjoy the world so much when the masses are starving in the streets that have not been reduced to smoldering rubble; while they remain guarded in their mountaintop gated communities or tropical islands with their millions and billions alone and with no one around to serve them, or to help them count their money. But, you know all this.

[cbwHouston]

04:45 AM on 08/11/2010

Oh, I think the Federal Reserve has the unique capacity to shore-up "the economy" ... if but via two core tenants disclosed in this article:

First,... President Obama has to begin "selling a vision, a long-term vision as to what the policy response is to restore growth and employment...," "then fill it out with proper structural policies...," Pimco's co-CEO Mohamed El-Erian told CNBC.

Structural policies... Democrats were very perceptive, such as Healthcare and Wall Street reforms are the foundations for America's new green-economy. Fact... not fiction, gone global already many American corporations are slowly-but surely, getting out of the "worker entitlement" phase of capitalism in exchange for contract-labor.

Agencies forming contract-worker cooperatives to offer health insurance, vacation, and even retirements-plans are on the rise... again Democrats acting very perceptively. The majority of Republicans act as if they really could care less... like plutocrats?

Wall Street reform was not only necessary, but once again a perceptive move on the part of Democrats-and truly fiscally conservative Republicans. Either reform bill... an established framework or structure, will reign-in future runaway cost and excesses... those which brought America to the brink of yet another 1929 Great Depression in September 2008!

So, economically we’re rushing toward the fifty-yard line… but not there yet.

[Valerie Keefe]

04:00 AM on 08/11/2010

So the discipline of the bond markets is at us again. They want us to borrow and brutally inflict infrastructure and food and economic growth on the American People!

Thank goodness the Republicans and all the SeriousDemocrats(TM) are willing to stand up to these rapacious renewed rothchilds!

Seriously folks, if you can borrow long-term at 1.5%, you can almost never have a debt problem. Remember when Canada 'hit the wall'? Our debt was between 8 and 10 percent. You'd have to have a debt-GDP ratio approaching 350% for the same problem to befall you.

[MissingAmerica]

01:32 AM on 08/11/2010

Guess he doesn't read the Wall Street Journal, does he? They know! According to them, the problem is with the lazy unemployed not taking the jobs, and that if they did there would be about 5 million fewer people back to work. They say that 99 weeks of unemployment sounds pretty good to lazy Americans! My blood is boiling right now and I need to get this out before the inevitable explosion! They have not tried to live on what unemployment pays! I've been there, my family is there now! At least we have this guy verifying that, yes, we have a crappy economy and we need help. Now if only we can get the lardbellies at the WSJ to get their butts out of their overstuffed chairs and down to the soup kitchens they might see how the real world lives outside of those ivory towers on Wall Street. Thomas Jefferson once said that America is not a government of the majority, but rather a government of the majority who participate. Americans, it's time we find ways to participate since it appears that only we little people are the ones who seem to know what is going on in our very real, very scary world!

[MissingAmerica]

01:51 AM on 08/11/2010

Yes, I'm replying to my own post because I (gulp) jumped, but to clarify, I'm still really angry. Upon closer look at this article I was told of, the reporter points out that wages are low and people can't afford to lock into the jobs. He said that competition from China prevents higher wages from being paid and people chance unemployment, but that the numbers of unemployed will continue to grow THROUGH NO FAULT OF THEIR OWN! It's late, and as kvetchy as I am I can only assume I need to go to sleep or get some coffee. But I think the gentleman in the actual post for observing that, yes, we are in dire straits, and I still hold to the bulk of what I said above, because this whole thing shows our utter confusion!!!! We know the truth, now Congress needs to face it and do something about it! We're nervous wrecks here!

[Alien Nation Refugee]

11:03 PM on 08/10/2010

The housing market has over corrected since nearly 100% of the jobs created 2000-2008 were housing related and evaporated with the collapse. Now the unemployed can't pay any mortgage. The Obama Fed must buy up the foreclosed properties NOW and release them back only as prices stabilize. In some heavily blighted areas, foreclosures must be demolished. And hopefully the wingnuts will support America for a change.

[olephart]

07:19 AM on 08/11/2010

Foreclosures need to be demolished? Isn't that like killing children to cut down on teen age delinquency?

[catbite]

09:30 PM on 08/10/2010

We need jobs, we need jobs, we need jobs and the rest will take care of itself.

[hypnotoad72]

08:57 PM on 08/10/2010

The economy depends on the flow of money.

Helping small businesses would seem to do more to turn our economy around...

[Overtone]

07:47 PM on 08/10/2010

An unrecognized emergency promises to require a massive economic and technological effort.

Ironically, once it is widely acknowledged, it is likely to motivate a surprising stimulus package.

The Arctic Global Warming Tipping Point has recently been found to be 400 parts per million of carbon in the atmosphere.

We are currently at 390ppm and adding 2ppm each year.

Replacing fossil fuels with renewable energy systems as fast as possible may soon be recognized as necessary to insure human survival.

See A 5 Point Program at http://www.aesopinstitute.org for a summary and supporting evidence.

If these facts are correct, we need to provide whatever incentives are necessary to produce and deploy renewable energy systems on a 24/7 basis, worldwide. And we need to do that fast!

The earth has experienced two Tipping Points in the distant past. Both destroyed most life on the planet. In one case down to single-celled organisms.

A Tipping Point is unstoppable once it begins. Preventing it still appears possible. If we fail, we can kiss our lives and the planet goodbye.

Check the facts. The life you save just might be your own.

If we confront the challenge, ironically the economy will revive, in a manner analogous to the way in which WWII ended the great depression. The huge number of jobs generated by that war resulted in a 2% rate of unemployment.

Let's demonstrate that we can do as well in meeting a life-threatening peacetime emergency!

[binksmom85]

08:37 PM on 08/10/2010

don't hold your breath waiting for it to happen, it won't with the current crop in the WH, and I know of no way to wrest control of the planet back from the claws of self-entitled elites

[Kenz300]

06:46 PM on 08/10/2010

American Business needs to invest in America.

With the cost of outsourcing increasing and the cost of fuel increasing
shipping costs it is time to bring the jobs back home.

American Business needs to invest in America and provide American jobs.

Lets grow our alternative energy industry and reduce our dependence on foreign
countries that want to do us harm.

How about providing American jobs and support the country.

Every American business should think about what is good for America.

[FREEDOM BELL]

06:39 PM on 08/10/2010

To balance our trade deficit, create jobs, restore our economy and increase our tax base we must all do the following:

VOTE ALL GLOBALISTS AND CORPORATE PUPPETS OUT OF OFFICE !!

Buy only American made and grown products. If we don't make it we don't need it until we can make it. Try to buy from American Only Companies and not from Multinational Corporations.

We are now a second tier country and fast slipping into third world status. This is OK with the globalists and corporatists. Probably their goal.

Bring our world-wide military/police force home.

We need a massive investment in our infrastructure to support future economic activity. We are becoming less and less competitive.

We need to toss Obama and all other globalists out of office and restore our national self interest if we are to survive.

Obama is another version of Bush and Clinton. All put global interests over the interests of these United States of America.

IMPOSE A 30% TARIFF ON ALL IMPORTS !!

The cost savings for transferring manufacturing jobs overseas quickly diminishes due to inventory and shipping problems. Corporate executives get big bonuses for the initial cost savings.

A 30% tariff on imports would immediately "encourage" manufacturing to return to the USA by American and Multinational Corporations. If they want to compete in this market, they would have to manufacture here. There would be little, if any, increase in cost to the consumer and our economy would recover.

YES WE CAN !!

[binksmom85]

08:41 PM on 08/10/2010

well, we didn't. We thought we were, but we have no influence in the process of picking candidates, and the people who do are so short-sighted, they think their narrow focus on personal fortunes is the only way; after all, it has been thie sole perogative of the elites for hundreds or thousands of years, and they imagine no timeline in which it won't be thus. They think if it all comes to an end tomorrow, they are left on top of a planet devoid of people, at least they will go out on top

[olephart]

05:18 PM on 08/10/2010

The Fed is out of bullets. I bring this up because I posted here in 2007 that this would happen. This would not be an ordinary recession. The two tricks, lowering interest rates and spending money, would not work. There are many reasons.

The main reason is our militaristic Foreign Polices that perpetuates wars and confrontations. These produce a one trillion dollar per year albatross that hangs around the neck of our economy. These monies are wasted and yield nothing of substance. We must cut this waste by at least half to afford a recovery.

Corporate written trade treaties to offshore our most productive jobs in return for corporate profits. We have no leverage with China or any of our trading partners so long as we must beg them for money to cover our deficits.

Energy policy, we have none unless you call bend over a policy. We must produce all of our energy here and stop the export of 350 billion dollars per year. This can be accomplished by issuing generous tax credits to businesses and individuals for point of use solar and wind generating systems, tax credits for the purchase of natural gas and electric powered vehicles and taxing non renewable fuels.

All illegal immigrants must be deported. They have depressed wages for the bottom 40% of our workforce. Unscrupulous employers have taken advantage of lax enforcement to crush any upward mobility for millions of Americans. The problems these immigrants have are in their countries of origin.

[Gigel Marinescu]

04:18 PM on 08/10/2010

The Federal Reserve provision of liquidity did spur consumption, investment in some class of assets (e.g. equity) and generated positive economic momentum. However, a weak labor market indicates that the quantitative monetary policy easing was not strong enough to boost prices and keep economic momentum going.

Since the recovery running out of steam, policy analysts and media outlets are proposing a host of monetary policy prescriptions, focusing on restarting Quantitative Easing by massive large-scale purchases of mortgages or government bonds.

With the prospect of deflation, monetary policy alone without strong fiscal policy has a marginal effect in stimulating the economy. By expanding Quantitative Easing by doing portfolio-restructuring, the Federal Reserve will expand the beneficial effects directly into the corporate financing environment.

See article that appeared in:
http://thewallstreetchallenger.com/Index/Monetary_Policy_Prescription.htm

[cgeorgan]

04:47 PM on 08/10/2010

We're just laying more bricks on the road to the destruction of our fiat currency.

[binksmom85]

08:48 PM on 08/10/2010

actually, that is not the real problem; the British and Roman Empires were both built on fiat currency, and destroyed by the coining of gold as the sole standard, by both public (Caesar in Rome) and PRIVATE parties (the goldsmith central bankers in England). It is the attempt to control the output of an empire full of individuals by channeling their assets into private profits that is the 'devil in the details'. Private parties (central bankers) should NEVER be in charge of the issuing of currency of a nation, and setting it's value rates; these are properly the sole and sovereign provence of the nation's representatives. Get the dvd at secretofoz.com and read Web of Debt for further details.