The Fed

Its always entertaining to read Fed minutes for their obfuscation and observations on recursivity.  The latest decision to hold off on "tapering" is a good case in point.  So much ado about simple asset swaps that provide no net benefit or detriment to the Economy.  The more insidious effects of QE for financial markets will be felt soon enough.  Removing quality collateral from dealer desks will have some effects with respect to short-term paper, and I fully expect the first convulsions for the next financial seizure to occur within money markets, commercial paper, or other short-term obligations.

Taking into account the extent of federal fiscal retrenchment, the Committee
sees the improvement in economic activity and labor market conditions since it
began its asset purchase program a year ago as consistent with growing
underlying strength in the broader economy. However, the Committee decided to
await more evidence that progress will be sustained before adjusting the pace
of its purchases.

Accordingly, the Committee decided to continue purchasing
additional agency mortgage-backed securities at a pace of $40 billion per month
and longer-term Treasury securities at a pace of $45 billion per month. The
Committee is maintaining its existing policy of reinvesting principal payments
from its holdings of agency debt and agency mortgage-backed securities in
agency mortgage-backed securities and of rolling over maturing Treasury
securities at auction.