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And More Cold Water From Goldman: "Bernanke Speech Suggests Fed Squarely In Zone Of Inaction"
Following the earlier note on the "irrational exuberance of QE3" at current conditions, Goldman does a one-two to the face of the long-only slow money crowd which are about to realize that what goes up the escalator, will go down the elevator, repeating that the next round of monetary easing "would require a notable further deterioration in the outlook to be considered seriously." As a reminder the only "outlook" the Fed keeps an eye out on is the 50 DMA of the Russell 2000.
Just out from Jan Hatzius:
Fed Chairman Bernanke's speech at the International Monetary Conference acknowledges slower growth but views this as at least partly due to temporary factors. Easy monetary policies “are still needed” given the economy continues to perform “well below its potential.”
1. Fed Chairman Bernanke began his remarks by acknowledging the "slower than expected" growth so far this year. He specifically cited supply chain disruptions stemming from the Japanese earthquake and tsunami as a factor slowing growth in Q2. However, despite the "frustratingly slow" pace of recovery thus far, Bernanke sees growth as "likely to pick up somewhat in the second half of the year" as manufacturing activity normalizes and gasoline prices ease a little.
2. Noting the headwind from fiscal drag, Bernanke emphasizes the need to “move quickly to enact a credible, long-term fiscal consolidation plan.” His wording makes clear that he sees a strong case for rapid decisions and action, but a tightening that is gradually phased in so as not to be “self-defeating”. Such a plan could also provide short-term benefits if it improved confidence and/or lowered long-term borrowing rates. In the question and answer session following the speech, Bernanke ducked a question asking him to choose between near-term stimulus and long-term tightening, repeating that he saw the problem as fundamentally long-term in nature.
3. Bernanke notes "the recent increase in inflation is a concern" but suggests that "there is not much evidence that inflation is becoming broad-based or ingrained in our economy". Given that gasoline prices account for most of the pickup in inflation, Bernanke takes the view that "developments in the global market for crude oil...rather than factors specific to the US economy" are the main driver of higher inflation in recent months. Bernanke goes on to argue that the sharp increase in commodity prices in recent years is primarily driven by strong gains in global demand alongside constrained supply, rather than the byproduct of easy Fed policies. In any case, he expects considerable labor market slack and stable long-term inflation expectations to keep US inflation restrained going forward.
4. No surprises in the commentary on monetary policy: "QE2" is to wind down at the end of the month, but reinvestment of principal payments on the Fed's securities holdings will continue. In Bernanke's words: "Although it is moving in the right direction, the economy is still producing at levels well below its potential; consequently, accommodative monetary policies are still needed. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established." That implies a fairly high bar for any monetary tightening. At the same time, there is of course no mention of the possibility of another asset purchase program--this would require a notable further deterioration in the outlook to be considered seriously. In short, we remain well within the “zone of inaction” for the Fed.
5. In the question and answer session following the speech, Bernanke attributed recent weakness in the US dollar partly to the relaxation of risk aversion following the crisis, and partly to the “quite weak cyclical position” of the US economy relative to many trading partners (especially emerging markets). In his view, the best way for the Fed to support the dollar “in the medium term” is to keep inflation stable and help the US economy recover.
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Tyler,
Check this out: http://www.cnbc.com/id/43313319
You nailed it and now others are realizing it.
SHTF time.
Dick Bove upgraded Lehman to a Buy 3 weeks before its bankruptcy. In the pantheon of irrelevant, pathologically clueless career circus performers, he is just below cramer.
Fool he may be, but even so, he is catching on: “These numbers indicate that the banking system never put the QE2 money to work in the economy,” he says. “They simply redeposited it back in the Federal Reserve itself. However, the new money did have one clear impact. It drove up asset values.”
Game on S&P 1100! (or more)
You do not want Dick Bove on your side.
It's bait and switch time. Looks like he is setting up to be the anti-QE3 cheerleader (by telling the truth too late) in order to help break everything, creating the mandate for... QE3!
Tada!
At which time he will shut up again, until he is needed to handle the next message.
Hegel would be proud.
True dat. However, the fact that Bove and Dimon are whining is the first positive sign in years.
Anybody? GLD today pacific time
13:17:01 150.43 8 FINRA TRF 13:19:25 150.42 4 PCSE 13:19:25 150.43 4 PCSE 13:19:25 150.43 2 NSDQ 13:19:31 150.38 1 PCSE 13:19:58 1,150.43 100 CHX 13:23:13 150.41 1 PCSE 13:23:38 150.37 1 CBOE 13:19:58 150.43 100 CHX 13:25:13 150.38 1 PCSE 13:26:56 150.36 2 BATShttp://www.nasdaq.com/aspxcontent/ExtendedTradingTrades.aspx?selected=GL...
It took Little Dicky "weiner envy" Bove this long to figure that out? And CNBS this long to stage the Revelation?
The timing's about as propitous as Camping's Rapturefest of last week.
speaking of Lehman, have you checked the chart lately TD? maybe it was just a case of "bad timing"?
wut
still trading. 6 pennies. i agree "tough day today, down 28 percent." still, has a high of 11 pennies. still doesn't have the "billion bucks" from Barclay's yet ("appealed")--sounds like a lot of money. who knew something so little could be so expensive?
Lol'
Paging Anton Valukas: Dick Fuld Secretly Transferred Jupiter Island Home To Wife
Posted by Tyler Durden FRIDAY, JANUARY 23, 2009
While John Thain will be enjoying his creme of the crap status of reviled interior decorators for some time, Dick Fuld is about to upstage him in the shady asset transfer category. Cityfile hasbroken the following bombshell: the Gorilla's $13 million home on Jupiter Island, which was held by both Mr and Mrs Dick, was recently transferred singly to Kathy. Dick sold his portion of the house on 265 S Beach Rd, Jupiter Island to his wife for the princely sum of $100. The transfer occurred on November 10, as the sordid details of Lehman's bankruptcy were becoming public knowledge.
In what many consider to be the boldest call on the Street in a while, Punk Ziegel's Dick Bove called Citigroup [C 37.58 -0.49 (-1.29%) ]the best buying opportunity he’s ever seen.
I think the stock will be trading at $55 in the next 3 years, concludes Bove, which is double from where it is at the present time. “You only get a once in a generation chance to buy a stock like this at this price. This is it,” he says. (March 7, 2008)
http://www.cnbc.com/id/23522110/Trade_Of_A_Lifetime
And Cramer from the WSJ last week -
Sent out under Mr. Cramer's name, with the subject line "My portfolio is CRUSHING the S&P 500," the email said Action Alerts PLUS is "producing some truly incredible results." From Jan. 1, 2002, to April 1, said the email, the portfolio's "total average return has averaged more than DOUBLE the return of the S&P 500." An accompanying bar graph showed the S&P 500 returning 15.5%, versus 39.2% for Mr. Cramer's portfolio.
Incredible indeed, if you include dividends for Mr. Cramer's portfolio and exclude them for the S&P 500. With dividends, the total return of the S&P over the same period was 38.3%.
http://online.wsj.com/article/SB10001424052702304563104576363892725584866.html?mod=WSJ_PersonalFinance_PF5
wish i had the piece you did on how reinvestment of principal payments was not near enough
If the Dollar Bill did say so himself on May 2 ...
http://blogs.minyanville.com/dollar-bill/2011/05/02/the-bernank-hath-spoken/
The Fed was paying those banks to keep the excessive reserves at the Fed, which discouraged lending. You see the Fed used bailout money to bailout banks from all that bad paper. But in so doing they where paid/told/arm twisted to keep much of the reserves (if not all) at the Fed. And this was because of the fear of inflation/hyperinflation happening (which is already happening). They knew that the banks would start over again if allowed to put that money back into the system and re-leverage. They also knew that if done, all that printed money would do what I described earlier to cause the hot economy to become to hot. And if they wanted to cool it down they couldn't because raising interest rates would be a dagger on those assets that aren't worth the paper it's written on. They wanted to hold these assets so that in some future time they can slowly wind them down.
The problem is that these assets where owned by investors, and they still had to be paid regardless. So the longer you held them the more the value of the house went down compared to the amount of the mortgage or mortgages that where taken out on them, so people where walking away. And all this shadow inventory that have houses sitting with nobody in it is being damaged to the point that you couldn't sell it if you wanted to for any decent amount of money. What truly amazed me today was the fact that Obama himself said that he dismisses a double dip recession. He knows that everything failed and is trying to sing along a silver lining for everybody.
That last paragraph is the type of thing that makes you want to smash his face into the ground over and over and over until it is mush, then hang the corpse from the Capitol building's flag pole.
These assholes have been claiming the economy is on the verge of recovery for 3 years now, treating us as if we're fuking dumbasses! And maybe we are, for not yet smashing their faces to a pulp and hanging them all up on light poles!
Confidence blew with that Fed speech, Dog. Prepare for Plunging and Screaming trades. No more free money to criminal syndicate Wall Street = end of the dumbass light volume mark up rally.
So true...three years..."we're almost there"...to our summer of recovery. Three years and $7 trillion in fiat stimulous. Unbelievable that the sheeple are so still and so quiet. Minus a US default, the sheeple have condemned their children to be the payers of this debt nightmare.
Serfs. All of us.
Let's see if our children actually pay it though. I'm slowly coming to the opinion that this debt is going nowhere, the next generation is going to laugh at what we've done, and the 100 year central banking clusterfuck is going to end in a spasm of indiscriminate hangings.
And yet ZIRP will still be in effect. QE is half the battle (talk about 'inaction').
Nice Goldman, nice.
ZIRP & the revenues from QE1&2 - is this not already like drinking 24 beers a day? Or am I stranded in time & space? 8-/
It is, but to call the lack of QE3 'inaction' is a little disingenuous.
I tried drinking 24 beers one day at the beach.
I woke up next to 20 empty beers, 2 empty shot glasses and a half bottle of Patron, naked in the bathtub.
I have no idea what happened after beer 13.
Re-D, lightweight.
Agreed. Weak performance.
It's very expensive to achieve a decent blackout. Too bad they don't last.
(Takillya is the worst - avoid.)
your butt wasn't sore was it?
i imagine it would take a big strong dude to get you up into the bathtub from the beach.
come to think of it . . .
come to think of it . . .
lol, good anecdote. Reminds me of Oktoberfest last yr, rather, reminds me of beers 6 and before, nothing after.
We'll all be stranded in zombieville. Banks sitting on free money from the Fed, milking taxpayers with credit card fees while they have their HFT algos "make money" in a perpetual sideways market of meaninglessness.
It's a dream world built to keep us under control in order to change a human being into a financial slave. Welcome to the desert of the real.
Except there are no jobs.
Yeah that's a sticky problem for them, isn't it.
I think they've lost it. Really lost it. Their entire world is slowly imploding around their heads.
Either they jump or we hang them. It's gonna suck to be a banker.
bravo
I think Sinclair's description of equites going into the "Blackhole of Calcutta" without QE as being more appropriate.
http://goldandsilverlinings.com/?p=1151
With most S&P 500 companies having reported operating profits for Q1 2011, roughly 68% of them have exceeded analysts’ expectations. The highest rate of upside surprises came from sectors historically associated with the midcycle phase of expansion.
The rate of growth for both profits and sales continued to moderate, relative to recent quarters, but remained at healthy levels. Earnings and sales results surpassed expectations across most sectors.
Earnings guidance has remained firm for the coming year, as companies continued to be upbeat about prospects for profitability despite headwinds from higher energy prices and other macro challenges.
Q1 2011 U.S. earnings update - Fidelity Investments
Will the huge debt overhang and subsequent interest payments put downwards pressure on growth?
LOL Spalding rice paper thin.
Awww...let's watch as it's time for tears on Wall Street: waaaa! no QE!
By late summer this will blossom into a full blown tantrum: if we don't get QE we're gonna blow ourselves up and take the whole economy with us!
Then the overly indulgent father Ben will come through with ice cream for everybody! Yay!!
That has been my call.
Anticipate the inflation deflation swings and play contrarian but it sounds suspiciously easy.
Can the stock market melt up without qe3 and leave me behind in cash?
Yes. The USA will be booming over the next few years ...
Will the huge debt overhang and subsequent interest payments put downwards pressure on growth?
No. We have had a brutal debt overhang for a long time everyone is in the same boat. But most peg so they drink uncle ben's inflation and will always feel the pain because of said peg .... The dollar is still King no other choice, not China, not the E.U.
The dollar being low helps the global monsters that call the USA home. Look at the earnings of google, apple, halliburton, boeing, yum brands, starbux, wal mart, ford, prudential, johnson and johnson ....booming over the last 8 quarters
Video
Chinese Economy: Victor Shih, Awash in Debt
Yep, USA will be boom boom booming with dirty bombs and other nukes over the coming months.
I admire your optimism. Seriously.
/nosarc
Yep. Late 2008 redux. Wailing and gnashing of teeth at the loss of QE. If Congresscritters don't relent, market crash will be programmed to go on until the sheep are *begging* for further QE-based slavery. Uncle Lloyd needs his 0.2% Fed window fix so he can *$!*#%@ you in the ass with 30% int on your remaining credit card. Can we parachute Max Keiser into the next Bernanke meeting so he can shriek at him. I would so love to see Goat Boy void in his pants on live tv.
tyler, why cant you accept the possiblity that the fed will just leave interest rates low and that the market may bounce around but not plunge?
Ever hear of Trickle Down? No trickle, no tickle. Without smack, this economy is a zombie.
Mr Market is now a Frankenstein monster with a $7 billion a day smack habit, this will get ugly fast.
Because unlike the Fed which is convinced in the stock primacy of LSAP, we in turn are entirely in the flow camp.
http://www.federalreserve.gov/pubs/feds/2010/201052/201052pap.pdf
Because the only thing pushing stocks to 200 P/E bubble valuations was an artificial Fed-provided liquidity which is now being temporarily removed.
in simple terms - not having Tyler's background and intelligence - they have to move it up and down in order to kill some weak...
So the only reason the fortune 500 businesses in the USA are making money is because of QE 2 ... ?
spalding, dare i say you are a voice of reason?!?!?!?
Voice of a dumbass, you and Spalding.
Easy Dog, Spalding is very excitable.
I'll take a page out of Bernanke's book here. Those record profits are 'transitory'.
I'd have record profits too if I could get piles of free money to sit on like those banks and funds did.
Maybe we'll find out, huh?
More than the QE1, QE2, ZIRP, etc. is the sum of all of it wrapped in huge budget deficits / debt and trade deficits...all of it is resulting in the weak dollar on life support. That is the mothers milk of this rally.
Absent the continuation of the downtrend (via QE3, etc.) in the dollar, I daresay nearly all fortune 500 will suffer and maybe mightily.
they don't seem convinced of anything reading that. "brownian motion" theory??!!! that's nothing but code for "who the phuck knows?" ("phucknose? who has a phucknose?" says the Bernank in one of the more awkward moments of heated Fed policy discussion minutes.) they weren't even sure if these asset purhcases would have any effect on treasury rates! as an uber-bear on this project i stand humbled before "the madness of crowds." (with hat tip to Fukushima as inappropriate and wrong it is to say that. can't deny its truth, yes, yes?) and as admitted by the authors "lower yields does not necessary result in higher equity prices either" and of course "may in fact mean the opposite"! those that have bought into "the bernank" however have been richly rewarded because "what alternative has he given us as asset managers?" gold? you gonna advise the NYState Pension Board to "go all in on gold?" not that i would mind that of course! point being "it's called buy low/sell high for a reason" and now we know...insofar as the past two years is concerned "100 percent ain't bad." did the same in treasuries? how about foreign equities? cash when the Fed is monetizing the debt???? and of course "the big kahuna" called real estate. "put yourself in the shoes of an actual asset manager and ask what he/she is doing here." needless to say "this is in no way an indictment of gold or silver as an asset class."
Lemme see here.
If it's;
1.) Temporary and,
2.) Caused by Fuckyoushittin'me then,
3.) Simple Syllogistic logic demands that Fuckushittin'me is temporary.
Now, let us pray....
The disaster in Fuckyoushittin'me is indeed temporary in the following sense.... Somewhere between now and forever, it will be fixed (whatever that might mean, similar to War is Peace or Arbacht mach frei) the mess cleaned up (by what standard is debatable, indeed questionable to the point of moot irrelevance) area repopulated (with what, nobody has a fucking clue) returning to a productive nature (depends upon what the meaning of is, is) so, Benji can rest easy that he's told the truth, the whole truth and noting but the truth, so help him Yo'mamma.
And so can you.
Smiles and applause all around.
Praise be to the God of Mushroom Farming.
Tyler, had to junk you.
Junk me! Albiet I'm 15+ west coast time!
This Fed Res article blew my mind. My question is what happens when the monthly purchases go down from 100 billion / month down to the reinvestment level of about 17 Billion / month. My guess is it will be a credit, commodity and Stock bloodbath. Right now the players in the know have been and continue to slowly pull out of the market, the tipping point comes when the sheeple start to catch on and pull out. Gonna be an interesting summer.
Because Bernanke has now made clear that he wants to see how the patient functions without life support (QE), our best analogy is the post-QE1 period in 2010.
And what happened?
Stocks and commodities plunged.
Treasuries rallied.
Why would history NOT rhyme?
Confirmation its all been a total fail.
The Fed can "leave interest rates low" by creating pari passu fake money and making real depositor's money worth-less. Something is worth less when the alternative fake new counterfeit FRNs drive real money into 0.5% de minimus return. What does the current market return in terms of Swiss Francs?
Ah, I said it in the previous post: this "Tyler" is the best. Does Jan have the patent on the phrase "zone of inaction"? Because it quickly summarizes what is to be expected for the next 6 months: an inactive Fed, just passively reinvesting divi proceeds like an IRA account possessor. Expect alot less drama in the Fed circus this summer, as the world goes to hell in a hand-basket. Look towards Trichet and the Motley Euro goons for excitement this summer. The Fed, it is inactive this summer.
http://www.youtube.com/watch?v=WgOIEGz7o_s
Bens', ( Scatter Brain) sums it up.
Flash, August 23rd, 2011: China to provide QE3 as gesture of friendship between nations, and further consolidate it's rescue of the PIIGS, Belgium, Iran and Scotland
Really? Scotland gets it's independence, joins the EU, adopts the Euro as it's currency all by August 23rd?
Cool.
Yeah, but China gets control of the golf courses in the deal
thats funny...i hear senator lieberman will be with Glenn beck in Jerusalem the next day, august 24....more turmoil....
And then China will own, patent, twist and reinvent the meaning of "fair way'' as they drive us down from one hole to the next.
That's when you know China has peaked and about to fall off a cliff... when they start buying up the golf courses. Remember back in 1989 when Japanese investors were buying paying ungodly sums for golf courses. It was a sure indication that economic expectations were fully detached from reality. It will be interesting to see how China handles its stock and real estate markets plunging 75%.
History may rhyme once again....
The squid is the Queen of Headfakes -- they are gaming you if you don't believe QE will continue...oh sure it will take a Freedom of Info Request a couple years to prove it was going on when they say it wasn't, but they can't raise iterest rates. The Fed is in a box - and not a little Blue one from Tiffany's
The squid will say anything to scare people out of bonds. They make money on the spread.
http://www.youtube.com/watch?v=DV5c16vOzSs&feature=related
They are going to have the banks borrow at zero and buy treasuries and make huge bonus profits. Then use those treasuries to back the 600T in derivatives the banks have.
With goldman saying this, I would look for qe3 announcement with three weeks. Goldman makes statement, markets sells off some, goldman buys the lows and rides it up as fed capitulated on qe. All done with the feds blessing. If they say black, I turn to white. They are as trustworthy as a filthy whore telling you they are clean.
jtmo3, well said. +1
TG has been very quiet lately..he usually leads the hit parade, some pain lies ahead.
Screw Bernanke. He has no control of geology.
Has anyone even remotely NOTICED that Brent is now about 18 friggin dollars over WTI? Don't you realize this has never happened before?
thats because they are pouring raspberry juice into WTI to up the supply ante..its shows in pricing.
http://www.youtube.com/watch?v=Ruso8yKLkt8&feature=player_detailpage
Cushing, Oklahoma is drowning in WTI from a myriad of traditional sources to which Canadian sands oil is added. Many in the oil business believe that this distortion in WTI relative to the rest of the world is not only significant but likely permanent enough to question the validity of WTI as an international crude benchmark.
You're right. And a boat load of folks have taken what appear to be quite permanent baths assuming the spread to return to a more "historical" norm.
Next.... Watch the current appeal by several entities in one segment of the oil business who've recently petitioned the SecState's office to halt pipeline deliveries of Canadian tar sands distilates to the US predicated upon "ecological risks."
Yes, read it again.
Go figure.
Tyler. I love the material you post.
I missed a lot of the spew. Saw a deer in the headlights and am now out 1 TV with no venison.
The Bernank must be doing something right .... the leeches are impatient!
F@c$ the leeches!!
All those Goldman recos gives me the shivers.....
Probably a huge reversal coming, I'll be ready if it happens.
1320, or bust!
That's the Weiner Spirit RT!
(Missed the Weiner fare, dammit.)
http://www.youtube.com/watch?v=83ciwAd9D8g
Bruce, my man.
;)
http://www.youtube.com/watch?v=twcK2T6aeXY&feature=related
Once on the dole, always on the dole, bitchez.
The whole "Growth" story in this economy since 2008 has just been easy money, the economic "empty calories" that built nothing. Even glimpsing reality will make 'em sh*t themselves: wake up! We're in the middle of The Greater Depression but we've been too drunk to realize.
Some of us do realize, hence the drunk part.
No QE3 and No NFL.......Oh No !
There is always Australian Idle, for those with Usenet.
They need the NFL stadiums this fall for New Orleans style roundup points.
Resettlement camps. One way in. One way out.
The way out is a chimney.
Damn those Judas goats.
After all these years does anybody really consider any public statement from the money-worshiping vermin at GS to be actionable?
Its another random disinformation campaign for the bewildered herd and the MSM. Nobody of any real wealth is getting their investment advice from a public source - not in years - and keeping their wealth.
"Zone of inaction" is GS code for QE3 for the elite banks only.
I really do not see asset prices, employment or the national character improving until the community and regional banks are consolidated under the primary dealers under some Basel 3 tough love program. So keep waiting for 2018 friends - if there is even an Amerika left.
Define 'real wealth'. To be anecdotal, most of my neighbors are old as dirt here in SW FL, and had put into the pig ponzi in the 70's or 80's. They have zero clue about current conditions and could care less as long as the dividend spice flows. They made it through 87 and 00, and see no difference now. It's scary.
AND THEY HAVE BROKERS!
can't argue with bewilderment. and i mean that literally: "you LITERALLY can't argue with bewilderment." i've tried. it doesn't "work"--"so let's hope it does!" as such i would argue "the herd is baffled" moreso than "bewildered." sauce for the goose? have you even seen a "bewildered herd?"
"bewildered herd?"
Group shot of the Oblahma administration?
Asset prices, employment, and the national character will ALL head south, like you said. Check out David Michael Greer's book, "The Ecotechnic Future". In the "return on energy investment" department, we're badly overdrawn. The only question is, "Will we run out of money before we run out of oil?"
A correlation between oil production declines and debt overhang? Can someone produce the chart???
I can kick the smack man...yeah...I can kick any time. But right now, I'm jonesin' bad, and I might have to break in and steal someone's 401k if I can't get some QE juice quick...
Mr Market and his $7 billion a day smack habit....it wont be pretty to see when that is cut off in any way. In fact Mr Market will fly into withdrawals and go on a murderous rampage immediately.
+ a nickel bag of QE3
with the Chair Economix dumbell in failure
Austan Foolsby, and that driviot, Jared Bernstein, for the bumbler,
add the third stoogie, Christine Roemer,
and you got failure of a Keynsian Crapload.
Just add the Berflunky for taste?
I think Turbo Timmy is smelling in the crapper.
anybody wanna buy an IPO of a car company?
Hmm, 10%+ deficits as far as the eye can see and massive unfunded liabilities.... sooner or later, they'll have to print.
I'm not an economist/trader but with ZIRP, aren't the primary dealers effectively able to monetize the deficit?
that seems inflationary to me?
look at PM's - they aren't showing any sign of this impending deflationary apocalypse everyone now thinks is imminent... forget the 20% drop that triggers QE3 - QE3 is already here! and when the market realises, the Crack Up Boom will continue.
Go ahead and print, dollar drops to 60's, oil and PM's sky. So what have they accomplished? Nothing.
Who cares about stocks? At their next attempt to print, stocks wont be able to keep up with the falling dollar, impossible.
Goldman is right here in a way, the FED is faced with inaction...theyre done.
Actually, I care about stocks. Got a lot of GPL today.
That's what they'll have to do to stand still on employment numbers and stocks.
Alternative, don't print = immediate liquidity crisis, sovereign and corporate defaults, skyrocketing unemployment.
They'll print.. They ARE printing... QE3 is here - I'm in the Faber/Rogers camp on this one. $150 oil year end and strengthening CNY... USA and EU export prospects will not improve proportionately.
Tuh Duh! Agreed. They have no choice but to print. There is not enough demand to fund the Treasury otherwise.
But in the deflationary apocalypse, all the rules become meaningless. Inflation and QE3 in this case, and all the subsequent QE iterations, are like a man using a shovel to get out of quicksand.
Or, for another analogy, we'll all die paupers, buried in an avalanche of worthless money. Deflation is like having no food or water. Inflation in a deflationary apocalypse is like having no food or water on a planet made of solid gold.
Thank you, POSTERS. you people amaze me. IN THE BEST WAY! Yen
Try a ride on USDHUF. Looking for 180.02 in and 182 out tonite, maybe.
That's the initial look. Need 6 more beers.
You have the guts enough! I'm on your side!
YEN
Errr, out means 'when I regain consciousness'.
Out means (CHARTS) study.
Bernanke sez: Consume you bitchez!
perfect take.
haha - yes - we're like his horse
he's digging in his spurs and flogging us but we've run out of juice
Exactly, we've been rode like mad loaded down with piles of debt heaped on us, and Bernank yells 'GIDEYUP, RUN FASTER'!!
Just after 25:30 in this video, Bernanke announced QE3.
http://video.cnbc.com/gallery/?video=3000026286
Continued reinvestment of principal payments.
Is it enough to keep stocks up? I don't know. But it is continued monetization.
Sorry, old news and not enough to replace POMO.
I have no idea how much it is or what it includes. As far as I can tell it is a smokescreen for endless indeterminate QE.
I'd have laughed my tits off if after all that waffle, at the end of the speech, he'd have just come out and said:
ZOI.
Zone of Inaction, bitchez.
IMPENDING BILDERBERG MEETING...
EVENTS TO FOLLOW...
As equities and commodities sell off, where does the money go? Into bonds, and more specifically into US Treasuries. Sorry but it is what it is. The stealth QE is on the part of the banks (brother can you spare I dime, cause I ain't got no mo Pomo) buying treasuries with every bond manager and his uncle piggybacking. It will be the "No QE" QE, which is rather impressive if you think about it. And as the SPX heads back to 1050, more time is bought, cans are kicked down the long deleveraging road. Corporate balance sheets can withstand the deluge. Zero interest rates will assuage the fall in asset prices. With truth and foodstamps for all, we head down the merry path of salary convergence with Asia. Middle Class? We don't need no stinking middle class ...
Is the FED status quo? Or is the FED going to tighten? Short term notes seem to be (LOOSE)
Get ready for the Government seizure of 401k's and IRA's. It's your fault anyway. You should have bought more useless Chinese trinkets from Wal-Mart for your yard-sale.
Get ready for the Government seizure of 401k's and IRA's. It's your fault anyway. You should have bought more useless Chinese trinkets from Wal-Mart for your yard-sale.
Get ready for the Government seizure of 401k's and IRA's. It's your fault anyway. You should have bought more useless Chinese trinkets from Wal-Mart for your yard-sale.
I've seen deer in my headlights that were also in the "no-action zone".
Yeah in the asian sense of "fighting without fighting" Bernanke promises QE without QE. Effortless QE, it simply prints itself!
QE3 will happen, but you'll need an over 20% stock correction. The FED will attempt to bid the USD up, keep China happy. As Faber says, and he is 100% correct, Bernanke is a S&P500 watcher (he gauges stocks prices)...and of course money printer.
Major correction ahead now. Hedge funds will devour dow/s&p500, risk trades for 3mths or so.
spot on
+8.6
And that QE3 will help for a month or two or three - before the lights go out.
This whole drama is not a matter of liquidity - this whole drama is a matter of where the factories and jobs are (gone).
No way for them to come back before Euro and Dollar are sooo cheap that these factories and jobs come back.
Increasing debt or austerity measures will make things just worse.
I think there'll be a correction after QE 2 in stocks as anticipated here at ZH. I think there'll be a dip in gold, too, and it will be a good buying opportunity. If gold dips 20%, that's OK for me too.
yes - and if 2010 and 2009 are a guide - then buyback around late July.
zone of inaction = panic disguised as calm.
Stiff upper lip, etc.
I fear the Abyss beckons.....come hither, and see.
QE3 not before fall. And once it comes everything will be a lot lower. So get out of Indexes, commodities and dollar shorts as long as you can. Those not respecting the charts and drying up liquidity (see GSR) will get a religious experience.
April 29/ May 2 was the peak and will remain that way for months - maybe even for years. Draw the lines. Draw trend channels - it's everything there, for everybody to see.
Get the hell out of dodge.
As soon it will be too late.
Golddigger Sucks can say what it wants. It's safer to believe in the tooth fairy rather than them.
And as for the Fed. They are damned if they do QE3 or damned if they don't.
The only problem is that the people have already been damned by them
Share prices are MOPE.
In a market with more liquidity like what Greenspan and Bernanke provided the PE ratio gets skewed. In a bear market it returns to normal. I guess if they had their way the PE would be 50 times , similar to the banking leverages being observed now and permitted by the so called authorities who use tax payers money to bail out the banks.
Trading in the markets is a no win situation with HFT and the systemes being used as unfair advantage. It has become a mugs game.