[CROSSTALK] This is been, a very, very eventful time since we were last here, you know that, the ,uh, FOMC met and announced ,uh, quite astonishingly, Bernanke said he's going to Keep, keep buying mortgage backed securities until the pain, pain goes away. until, until employment improves this is quite astonishing for a central banker to do, sort of unlimited support QE for the market going forward. In retrospect we can see how he was preparing, preparing the market for that in some of the comments that he made at Jackson Hole and so forth. But it's still astonishing particularly coming on the heels, so in one week we have Mario [UNKNOWN] at the ECB saying. He'll do what's, whatever's necessary, and Bernake's saying he'll do whatever's necessary. So the central bankers are determined that they are going to use their balance sheets to keep anything particularly bad from happening in the economy. we can, we'll be discussing a lot in this class about you know exactly what is the mechanism through which that's supposed to be working? One of the interesting things in today's ft is an op ad by one of my favorite columnists Wolfgang Muchaou/g. why qe would be the right policy for Europe too. He says here, and it get it made me aware of some features of the ECB's announcement. That I had not been aware of before, I guess this is probably because of the different political situation, in Europe. And the limitations on [UNKNOWN] It turns out that Mario Draghi said that he would buy bonds of Spain and Italy if they asked him to. Okay, so they have to ask him to do this, and that is, Wolfgang is saying that, that may a problem for leader of a country to say, oh I'm in bad trouble, please buy my bonds is, is, is a, is a concern. Whereas if he had made a unilateral announcement that he was going to buy them, okay, that would be another thing. That's basically what Bernanke has done. Bernanke has said, I'm going to do that. I'm not going to Wait for anybody else to ask me. I'm just going to do it. And so, Wolfgang [INAUDIBLE] says that would have been the right policy for Europe, too. He's a little concerned that if, if Spain and Italy don't ask, Why should the price of these bonds move? You know? If, if the ECB doesn't actually do anything. Is it just expectations? Are we trying to change people's feelings or seomthing like that? And he wants to emphasize, and I definately endorse him, that that is a weak read to depend upon. Okay, expectations. I know economists talk a lot about influencing expectations, but in this course we're going to look at what the Fed actually does. And what the ECB actually does. what I, what, what, what we will be thinking of both of us QE both Bernanke and Draghi, we'll be, we will, in this course we don't quite have the apparatus yet to talk about it that way, but I will be referring to these actions as dealer of last resort actions. In a sense that they are promising to buy these bonds at a particular price and as a consequence no one is ever going to, going to buy them for less. Okay? And by buying them at a high price, they lower the yield on them. They lower the interest rate on Spanish bonds. They lower the interest rate on Italian bonds In order to make this go, this had to be a credible promise to buy, meaning they actually have to buy, okay. And Bernanke is going to be buying. And you will not expect to see the market any different then, that will immediately move the price to where Bernanke, what Bernanke is paying. The question is if Spain and Italy don't ask Draghi to buy, will the price move. To what Draghi said it should be or not, okay, and I think we will see that it won't. It won't move there until, until Draghi actually is buying and it will, it will probably be somewhat lower, the yields will be somewhat higher. The market reacted immediately, very optimistically thinking he was going to be buying, but apparently there's this political obstacle in, in the way. These are very new kinds of actions. I just want, want to underline that. You're going to have a very interesting semester here. Central banks are doing things they've never done before. They're, and they're say, being very bold. They're being very bold, let's be clear, because the fiscal authorities are not being very bold. Okay? The fiscal authorities are all caught up in politics, and saying, we have to have austerity. We have to blame Greece or something. and the same as in the U.S., OK, the Republicans and the Democrats can't get together on anything. and so the central banks are trying to hold the system together. Their trying to hold the system together through election cycle, until possibly the fiscal authorities will be able to sort things out. This is not a job that's central bank, any central banker ever signed up for. That's not really what they want to be doing. OK. but they are doing it. and that's why I say we're in uncharted territory. this semester. So, stay tuned.