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By Jason Stipp and Jeremy Glaser | 12-13-2012 04:00 PM

Who's Buying?

Berkshire, Bernanke, and others revealed further details on their purchase plans this week.

Jason Stipp: I'm Jason Stipp from Morningstar, and welcome to The Friday Five. Lots of interesting buying activity in the market this week. Here to offer the details is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for being here.

Jeremy Glaser: Jason, my pleasure.

Stipp: What do you have for The Friday Five this week?

Glaser: We're going to talk about the Federal Reserve, the Treasury, Best Buy, Berkshire, and finally dividends.

Stipp: We got news this week that the Fed is going to be buying more bonds, but there is an interesting way in which they're going to be doing that buying. What are the details?

Glaser: This was not a huge surprise. It was widely expected that the Fed was going to introduce even more stimulus when the Operation Twist, which was this idea of extending the maturities of Treasuries, was done. Instead of getting rid of that program, they're just going to go out and continue to buy more Treasury bonds. This is on top of the so-called QE3, which is the buying of the mortgage bonds that's going to be happening every month.

But like you said the really interesting thing here was not that this bond buying is going on, it's that the Fed has changed its communication about how long this bond buying is going to go on. For a while, everything was always tied to the calendar. Historically that's how it's been. They said, we're going to do it for x number of quarters, or we think it will go on for this many years. This is what Bernanke has said, and now they've switched to looking at economic indicators.

We saw the first inkling of this with QE3, where they said employment was going to be really important. We got an explicit target this time of 6.5% unemployment rate. Until the unemployment rate gets to that level, while inflation is remaining under control, the Fed is going to keep these extraordinary measures and going potentially add even more measures to get to that.

Now, this certainly is not said in stone. Bernanke was very clear that if it turns out that we just get to that rate because a ton of people dropped out of the labor force or if inflation gets out of control, or if things look stronger elsewhere, that they'll make moves when they need to. But providing that target certainly is a big change in strategy, and I think it's an interesting move for the Fed.

Stipp: The Treasury found buyers for AIG shares this week. These are shares that it bought in the height of the financial crisis. Can we finally put a bookend now on the financial crisis?

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