Federal Reserve chairman Jerome Powell. The Fed made an open-ended commitment to buy bonds "in the amounts needed to support smooth market functioning" on Monday. AP Photo
Federal Reserve chairman Jerome Powell. The Fed made an open-ended commitment to buy bonds "in the amounts needed to support smooth market functioning" on Monday. AP Photo
Federal Reserve chairman Jerome Powell. The Fed made an open-ended commitment to buy bonds "in the amounts needed to support smooth market functioning" on Monday. AP Photo
Federal Reserve chairman Jerome Powell. The Fed made an open-ended commitment to buy bonds "in the amounts needed to support smooth market functioning" on Monday. AP Photo

Fed announces open-ended asset-buying programme


Michael Fahy
  • English
  • Arabic

The US Federal Reserve said it was committed to using its “full range of tools to support households” as it announced an unprecedented open-ended asset purchase programme.

The Fed said it would buy bonds and asset-backed securities "in the amounts needed to support smooth market functioning", citing a mandate from Congress to promote maximum employment and keep prices stable.

It also pledged to buy a broad stream of assets from commercial paper held by large employers to asset-backed securities linked to student loans, car loans, credit card loans and small business loans in a bid to ensure credit flows through the whole economy.

The Fed said on Monday, “It has become clear that our economy will face severe disruptions”.

“Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate.”

Despite the announcement, US markets were trading sharply lower on Monday as investors await the details of a third fiscal stimulus package of up to $2 billion (Dh7.34bn) from policymakers.

The Dow Jones Industrial Average was down 3.8 per cent, the S&P500 index fell 4.7 per cent and the Nasdaq Composite fell 2 per cent.

Gold prices jumped, with spot gold trading 2.6 per cent higher at $1,422.57 per ounce, and one-month gold futures up 3.6 per cent at $1,542.20 per ounce at 7.09pm UAE time.

"The Fed move created an explosive upward move in the gold price," said Naeem Aslam, chief markets analyst at forex broker Avatrade.

"We have been saying all along that gold price below $1,500 is a bargain. However, it is important to keep in mind that if the current move fails to calm the market nerves, then we have a real problem because the Fed is completely out of all bullets," Mr Aslam said, adding that gold could fall again if panic selling ensued.

Goldman Sachs forecast that GDP in the US is set to decline by 24 per cent in the second quarter of 2020, but said a recovery in the second half of the year would mean a GDP decline of 3.8 per cent for the world’s biggest economy this year.

JP Morgan forecast a shallower GDP decline of 14 per cent in the second quarter, but also a shallower recovery.

“There is no longer doubt that the longest global expansion on record will end this quarter. We now think that the Covid-19 shock will produce a global recession, as nearly all of the world contracts over the three months between February and April,” said Bruce Kasman, JP Morgan's chief economist.

Neil Shearing, group chief economist at Capital Economics in London said that on the basis that most economies will face widespread shutdowns of 10 to12 weeks, most economies will suffer quarter-on-quarter GDP declines of between 10 to 20 per cent either in the first or second quarter of the year, depending on when the impact of the virus is most keenly felt.

"We've marked our forecast for global GDP in 2020 down from plus 2.9 per cent year-on-year to minus 1 per cent. That would eclipse the fall in output in 2009 [minus 0.5 per cent] and be the worst year for the global economy since the 1940s."

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
The National Archives, Abu Dhabi

Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.

Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en

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Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates
UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

'Tell the Machine Goodnight' by Katie Williams 
Penguin Randomhouse

Brolliology: A History of the Umbrella in Life and Literature
By Marion Rankine
Melville House

The Little Things

Directed by: John Lee Hancock

Starring: Denzel Washington, Rami Malek, Jared Leto

Four stars

UAE currency: the story behind the money in your pockets
Tributes from the UAE's personal finance community

• Sebastien Aguilar, who heads SimplyFI.org, a non-profit community where people learn to invest Bogleheads’ style

“It is thanks to Jack Bogle’s work that this community exists and thanks to his work that many investors now get the full benefits of long term, buy and hold stock market investing.

Compared to the industry, investing using the common sense approach of a Boglehead saves a lot in costs and guarantees higher returns than the average actively managed fund over the long term. 

From a personal perspective, learning how to invest using Bogle’s approach was a turning point in my life. I quickly realised there was no point chasing returns and paying expensive advisers or platforms. Once money is taken care off, you can work on what truly matters, such as family, relationships or other projects. I owe Jack Bogle for that.”

• Sam Instone, director of financial advisory firm AES International

"Thought to have saved investors over a trillion dollars, Jack Bogle’s ideas truly changed the way the world invests. Shaped by his own personal experiences, his philosophy and basic rules for investors challenged the status quo of a self-interested global industry and eventually prevailed.  Loathed by many big companies and commission-driven salespeople, he has transformed the way well-informed investors and professional advisers make decisions."

• Demos Kyprianou, a board member of SimplyFI.org

"Jack Bogle for me was a rebel, a revolutionary who changed the industry and gave the little guy like me, a chance. He was also a mentor who inspired me to take the leap and take control of my own finances."

• Steve Cronin, founder of DeadSimpleSaving.com

"Obsessed with reducing fees, Jack Bogle structured Vanguard to be owned by its clients – that way the priority would be fee minimisation for clients rather than profit maximisation for the company.

His real gift to us has been the ability to invest in the stock market (buy and hold for the long term) rather than be forced to speculate (try to make profits in the shorter term) or even worse have others speculate on our behalf.

Bogle has given countless investors the ability to get on with their life while growing their wealth in the background as fast as possible. The Financial Independence movement would barely exist without this."

• Zach Holz, who blogs about financial independence at The Happiest Teacher

"Jack Bogle was one of the greatest forces for wealth democratisation the world has ever seen.  He allowed people a way to be free from the parasitical "financial advisers" whose only real concern are the fat fees they get from selling you over-complicated "products" that have caused millions of people all around the world real harm.”

• Tuan Phan, a board member of SimplyFI.org

"In an industry that’s synonymous with greed, Jack Bogle was a lone wolf, swimming against the tide. When others were incentivised to enrich themselves, he stood by the ‘fiduciary’ standard – something that is badly needed in the financial industry of the UAE."

The Bloomberg Billionaire Index in full

1 Jeff Bezos $140 billion
2 Bill Gates $98.3 billion
3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
10 Carlos Slim $55.2 billion

WHAT IS GRAPHENE?

It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were experimenting with sticky tape and graphite, the material used as lead in pencils.

Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But when they repeated the process many times, the flakes got thinner.

By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment led to graphene being isolated for the very first time.

In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. 

No more lice

Defining head lice

Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.

Identifying lice

Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.

Treating lice at home

Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.

Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital

Kibsons%20Cares
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The 10 Questions
  • Is there a God?
  • How did it all begin?
  • What is inside a black hole?
  • Can we predict the future?
  • Is time travel possible?
  • Will we survive on Earth?
  • Is there other intelligent life in the universe?
  • Should we colonise space?
  • Will artificial intelligence outsmart us?
  • How do we shape the future?
Where to buy

Limited-edition art prints of The Sofa Series: Sultani can be acquired from Reem El Mutwalli at www.reemelmutwalli.com