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David Rosenberg On QE3 ETA
As we wave goodbye to David Rosenberg, with his last free Breakfast with Dave issue coming out today, we present his most recent free thoughts on QE3.
QE3 WILL COME BUT NOT AS EARLY AS MR. MARKET WOULD LIKE
Portfolio managers as a group are running their funds overweight equities by an average of 67% relative to their typical benchmarks. And polls show that one-third of them believe QE3 is coming this summer. We already know that this Bernanke-led Fed is willing to be extremely aggressive, but as we saw in 2010, the hurdle is high for quantitative easing. We need (i) signs of a double-dip, (ii) a stock market correction of at least 15%, and (iii) deflation, not inflation. How on earth will the Fed be able to do anything at all by then if headline inflation is running north of 4% and the other central banks of the world are either snuggling policy or moving in that direction ? unless the central bank really wants to trash the dollar. We are certainly not inflationists and still see deflation in credit, real wages and housing prices.
Since the market will have a heart attack unless QE3 resumes on July 1, we tend to agree. July 2 would be quite a delay and certainly "not as early as Mr. Market would like." In the meantime expect a complete washout in all asset classes with an emphasis on commodities, which will allow the FOMC to push the reset button on inflationary expectations, and announce QE3 the very next day.
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So, let me know if I'm wrong here, but fed member banks get a 6% dividend on the profits of their local Fed right? Even with the fed returning the majority of their interest collected to the treasury at the end of the year, they still hold all the debt that they "monetize" and the banks stil get their dividends.
It sounds like a perpetual money machine.
If so, I gotta get me one of these.
Www.bigeye.com/griffin.htm
For the history of the Fed.
Either way, PM's to the moon. Love it!
Watch USD as it goes to parity with Brazilian reals, is worth half the Australian and Canadian dollar, and is not accepted in Zimbabwe shops any longer.
On the brighter side, everybody is going to be millionaire, and house prices will go up until the banks are not in the deep shit any more.
Voila!
"Washout:" sell mining shares in May and go away?
Farewell Rosey , I'll miss you !
If they don't continue to house of cards falls, so in all probability they will continue.
What happened to Nic Lenoir?
Did he also go paid only?
or maybe he didn't want to pay anymore
Glad someone brought that up .
Was wondering where he'd gone myself .
QE3 will likely be a point of no return.
Bernankincide has swelled the Federal Reserve's balance sheet from 8 billion to 3 trillion.
Some fine appetite the man has.
I am fairly confident that Bernankincide has no good options left, and I'm not even sure that he will initiate QE3 when the markets tank.
The one thing I still don't see people putting enough emphasis on is the fact that the Japanese Economy will contract dramatically, and that although Japan is a massive net exporter of goods, the disruption to global commerce to come will break everything, given how much stressed and distorted markets are.
dude, i think you're on the wrong site. stormfront.org is ---> way.
Are you talking to me?
If you are, WTF are you talking about?
Also, that's the 2nd time you said that exact same thing to someone in this thread where it makes absolutely no sense.
Fuck off, troll.
1. Bernanke believes and tells Congress QE2 is working and inflation is not really that bad. 2. National debt has hit $14 trillion and the country is still afloat.
In his mind 1+2= QE3.
QE 3 is already here, great interview with Rickards.
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/27_Jim_Rickards.html
I vote for deflation. Stop punishing the savers.
Bottom line: Months and months ago we (the U.S.) should have had targeted fiscal spending. Instead the Republicans squashed that so they could have big banker welfare, broker/dealer welfare in the form of QE 1, QE 2, ad infinitum until the idiot masses figured out monetary policy is not going to help the long-term economy. But I guess as long as GE, Cisco, etc keep getting tax rebates and paying less than 10% in corporate taxes, the wealthy will keep fucking the low-income sheep in the rear, sans lubricant.