10 Years Of Hell

For you brave souls who can actually endure it (and might understand it), read the Open Markets Committee minutes here.  I get about 15% of it on my own, so I rely heavily on Bill McBride at Calculated Risk.

Here's a snippet from the minutes:
Most participants now viewed the risks to their growth forecasts as being roughly balanced rather than tilted to the downside, but uncertainty surrounding these forecasts was still viewed as quite elevated. Downside risks to growth included the continued weakness in the labor market and its implications for income growth and consumer confidence, as well as the potential for credit availability to remain relatively tight for consumers and some businesses. In this regard, some participants noted the difficulty that smaller, bank-dependent firms were having in securing financing. The CRE sector was also considered a downside risk to the forecast and a possible source of increased pressure on banks. On the other hand, consumer spending on items other than autos had been stronger than expected, which might be signaling more underlying momentum in the recovery and some chance that the step-up in spending would be sustained going forward. In addition, growth abroad had exceeded expectations for some time, potentially providing more support to U.S. exports and domestic growth than anticipated.


I think the plan at this point is to keep pushing the stimulus bucks out the door (as of Oct 31, just a bit over 30% of the money had been delivered), and hope that the pent-up consumer demand is released over the holidays to a sufficient degree that it carries us thru the January Slump and gives us a little jump start come spring.  I guess the kicker is that we don't know what most people are going to use to finance their spending*, so it's likely we're not going to see big numbers.

*studies are coming out now that strongly suggest that the housing bubble enabled an awful lot of people simply to postpone their money problems - they were drawing out their home equity in order to pay their credit card bills, but got caught up in the belief that real estate never goes down, and so they could just inflate their problems away.  Sound familiar?

Anyway, we're stuck in the classic dilemma - we have to spend something, but it appears we have nothing to spend.