Fed QE3 is Here with No End in Sight; Isis Hits a Snag

Receiving Wide Coverage ...

QE3 Forever?: The Federal Reserve Thursday outlined its latest plan to spur job growth and bolster the economy. The basic steps include the purchase of $85 billion in long-term bonds a month through the rest of the year, the subsequent addition of $40 billion of mortgage-backed debt per month until the job market gets better and low interest rates through at least mid-2015. Stocks rallied following the announcement of this indefinite QE3, as traders apparently had been sufficiently encouraged to buy "growth-sensitive assets," reports the FT.

Analysts, economists and politicians all seemed conflicted as to whether this plan was "forceful," "sweeping," "dull," "artificial" and "ineffective" or the inverse of all those things, but Reuters blogger Felix Salmon made some good points when he compared the Fed's plan to the recently-debuted iPhone 5: "It's basically the same thing that we're used to at this point, but it's got enough in the way of new bells and whistles to get people excited anyway — and boost economic growth. So, it's a good thing, even if it's not in any way revolutionary."

Of course, "excited" is a relative term. "This action may give Wall Street a boost, but overall it's a bad move," one American Banker reader commented regarding whether the Fed had made the right move. Another wrote, "Of course, the correct answer is, who knows for sure? The image that keeps fighting for my attention is of King Canute, the Danish/English King, who as story would have it commanded the tide not to come in. The question is, was that to prove to his followers that there are limits to what can be commanded, or was it with some belief that he might succeed?"

Delayed: Mobile platform venture Isis has pushed back trials of the product that were slated to take place in Austin, Texas, and Salt Lake City by the end of the summer. The digital payments service, a joint venture between Verizon Wireless, AT&T, and T-Mobile USA, will announce in October a new start date for the tests. The company is declining to say why specifically the trials have been pushed back, though its head of marketing Ryan Hughes did tell CNET "we're not experiencing any major issues." He also said the company is not making changes to its business model. The pushback follows Apple's announcement that its latest iPhone will not support the near field communications (NFC) short range wireless technology that the Isis service will be based on, Reuters notes.

Wall Street Journal

Royal Bank of Scotland is proceeding with the initial public offering of its Direct Line insurance business, even though a number of analysts doubt the move's profit potential.