Economy Not Improving Enough to End QE2


Economy Not Improving Enough to End QE2 [CNBC] "The Federal Reserve gave a lukewarm economic assessment on Wednesday despite recent signs the recovery was strengthening, saying high unemployment still justified its $600 billion bond-buying program. In a statement following its policy-setting meeting, the central bank also said measures of underlying inflation were "somewhat low" although it acknowledged rising commodity prices that have fueled global inflation worries."

Treasuries Dip as QE2 Sticks Around [Bloomberg] "Treasuries declined as Federal Reserve policy makers maintained a $600 billion program of debt purchases while saying the economic expansion is continuing at an insufficient pace to reduce unemployment. Government securities dropped earlier after a report showed sales of new homes rose more than forecast in December and the U.S. sold $35 billion of five-year notes. Ten-year Treasury Inflation-Protected Securities show bondholders expect the consumer price index to increase 2.26 percentage points a year on average over the life of the debt, compared with a forecast for an increase of 1.7 percent this year by economists surveyed by Bloomberg News."

Bernanke: A popular Guy—With Unpopular Policies [Bloomberg] "Investors love Federal Reserve Chairman Ben S. Bernanke. It's just his policies they don't like so much. Sixty-six percent of investors have a favorable view of the 57-year-old former Princeton University economist, compared with 31 percent unfavorable, according to a quarterly global poll of 1,000 Bloomberg customers who are investors, traders or analysts conducted Jan. 21-24. Bernanke is more popular than his European counterpart, Jean-Claude Trichet, and scores higher than all other world political and economic leaders in the poll with the exception of German Chancellor Angela Merkel."

Galleon Group Trader Pleads Guilty to Insider Trading [NYT Dealbook] Things appear to be heating up on the insider trading front: "A former Galleon trader pleaded guilty Wednesday to charges of insider trading in the latest admission of guilt in the government's multiyear investigation. Adam Smith admitted to using insider information from an investment banking contact, sharing that information with the others, including the firm's founder, Raj Rajaratnam, and then destroying evidence following Mr. Rajaratnam's arrest in late 2009."

State Takes Away the Checkbook from Half of Long Island [NY Times] "A state oversight board has seized control of Nassau County's finances, saying the wealthy and heavily taxed county had nonetheless failed to balance its $2.6 billion budget despite months of increasingly ominous warnings. The 6-to-0 vote here on Wednesday afternoon by the Nassau County Interim Finance Authority gives it veto power over the county's budget, labor contracts, borrowings and other major financial commitments."

It's Not Good for Facebook When Its Founder's Page Gets Hacked [CNN] "Facebook is adding new security features, which come after a pair of high-profile cracks in the site's defenses that surfaced this week. One new mechanism is called 'social authentication.' To combat spam and prevent strangers from weaseling into your account, the system will sometimes show the user a friend's headshot and ask to match a name to that face."