QE largesse continues to flow

Not wanting to be left out of the central bank party where money flows from all the bar taps, the Bank of Japan increased their asset purchase program by 10T yen (about $126b) to 55T with the split being half bills and half longer term bonds. The asset purchase time line was pushed to Dec ’13 from June ’13. They also eliminated the .1% minimum bidding yield for longer term gov’t and corporate bond purchases which means yields can get even closer to zero. The yen is little changed vs the US$ but the Nikkei closed at the highest level since May in response. Central banks are intent on making the paper currencies in our pockets confetti. In China, Foreign Direct Investment in Aug fell 1.4% y/o/y, not as much as expected but down for the 9th month in the past 10. In Europe, Spanish yields are lower after PM Rajoy repeated his commitment to cut their deficit but we still obviously await his request for help where the EC said conditionality will be “strict and effective.” In the US, the MBA said for the week ended Friday that refi apps rose .8% while purchases were lower by 3.8% even as the avg 30 mortgage rate went to a new low. According to II and in response to the Fed, Bulls rose to 54.2 from 51.1 to the most since Feb as Bears fell 1 pt to 24.5.

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