Goldman's Take On Ben's Remarks: "Probability Of Easing Over Next 6-9 Months Is Higher Than Probability Of Tightening"

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Wed, 07/13/2011 - 11:23 | 1451908 Mongo
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Ron: Is gold money?

Ben: No



Wed, 07/13/2011 - 11:28 | 1451944 What does it al...
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This is all jawboning.  (by GS.)  How can the fed ease further?  QE 2.x or QE 3.0?  The fed fund goes to -0.25%?

Seriously, this is a serious question.

Wed, 07/13/2011 - 11:31 | 1451974 plocequ1
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This is all jawboning

No it's not. 

Wed, 07/13/2011 - 12:14 | 1452299 eureka
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Right, it's not, because the ponzi continues till US empire collapses, if you don't make things - you have to make UP things.

Informative article on the Blowhorn today about the wondeful works of the masters of the universe - a.k.a. Walll Street's Casino-Math-Wizards (OMG they're just like Harry Potter!).

Gamble for empire - if it makes you feel better about yourself - gives you a sense of purpose in life - it may or may not replace your inability fo love your country, your fellow man, the world - and God.

Wed, 07/13/2011 - 15:49 | 1453254 Fish Gone Bad
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Bernanke is such a piece of shirt! 

Wed, 07/13/2011 - 12:01 | 1452202 eureka
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The Fed can ease further buy buying more bank garbage assets, and by lending banks money at the socalled discount window at zero percent interest, and by putting caps on treassury yields, and by buying more treassuries - all of which are card-house games - i.e. US government and US banking sector making up paper "assets" - and the Fed and the Goververnment WILL KEEP DOING THESE THINGS AND MORE - IN ORDER TO KEEP US EMPIRE GOING.


Anyone who thinks they are a Libertarian - must decide to give up US empire - or be a philosophical moron. Empire is the antithesis of Libertarianism. Those who are still proud of US military might and US world occupation ARE IDIOTS. They have no business on a Libertarian anti-Fed website. US empire is THE only reason for the Fed to exist.

US Fed + US military = US empire. On e cannot exist without the other - just like US + CHina = co-dependent centralized plan-economies.

No more proud hegemon speak from zerohedge commentators, please. I call out every hegemon here: stuff your hard nationalism or admit that your anti-Fed stance is hypocrisy.

Wed, 07/13/2011 - 11:24 | 1451915 Mike2756
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Wow, they get paid for this?

Wed, 07/13/2011 - 12:09 | 1452263 bigdumbnugly
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nothing like going out on a limb.

Wed, 07/13/2011 - 11:26 | 1451935 Bay of Pigs
Bay of Pigs's picture

QE is set in stone. No question of that now

Bernanke also just said "gold is not money".

What else do we need to know? 



Wed, 07/13/2011 - 11:30 | 1451962 Cleanclog
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Gold is not money because central banks can't devalue it => central banks love their fiat!  And thinking of the car and "Fix It Again Tony" . . . Fund it Anew Trichet?

Wed, 07/13/2011 - 11:34 | 1451991 Tense INDIAN
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what might happen to the Nifty tomorrow with this QE3-kind of whisper

Wed, 07/13/2011 - 11:36 | 1452013 Rainman
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The Eurozone is the crazy aunt living in Ben's basement. " Policy support " may end up being a prop for the money funds. 

Wed, 07/13/2011 - 11:38 | 1452024 Careless Whisper
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Do you have any "bold" conclusions from Los Zetas?

Wed, 07/13/2011 - 11:43 | 1452065 Hondo
Hondo's picture

The probability of any rational macro prudential policy out of the FED or Washington is 0% over the next 6-9 months.........I'll put some big money on that!!

Wed, 07/13/2011 - 11:48 | 1452091 Hedgetard55
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Stocks again forget that they have to FALL before QE can rescue them. DOH!

Wed, 07/13/2011 - 11:52 | 1452118 dracos_ghost
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Here's my predictions:

- There is a 50% chance of easing or a 50% chance of tightening.

- The markets will go up and down on a daily basis over the next 6-9 months.

Phew, this Ekonomist thing is easy.

Wed, 07/13/2011 - 12:03 | 1452214 Whatta
Whatta's picture

Does this mean Risk On for the next six months (interrupted by short down jerks caused by "sudden concerns" for some various bankrupt European Country)?

Wed, 07/13/2011 - 12:09 | 1452265 jack stephan
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Old Indian: Once upon a time, a woman was picking up firewood. She came upon a poisonous snake frozen in the snow. She took the snake home and nursed it back to health. One day the snake bit her on the cheek. As she lay dying, she asked the snake, "Why have you done this to me?" And the snake answered, "Look, bitch, you knew I was a snake."

Wed, 07/13/2011 - 12:15 | 1452304 GFORCE
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He has to ease or it's game over. Soap opera.

Wed, 07/13/2011 - 12:23 | 1452344 monkeyshine
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"Stocks again forget that they have to FALL before QE can rescue them. DOH!"

I used to believe that but now there may be another dynamic.  Until yesterday (very convenient of me) I was short the euro via EUO calls.  EUO ETF went from 16.80 to 18.05 in 4 days, representing a big fall of the euro.  US maket should have taken a bigger beating at the weakening of the euro.

If Fed thinks Euro is going to fall due to contagion from PIIGS, and/or if the Fed wants to goose the stock market to new highs, then they can do QE3 at any time. No need to use falling market to justify it, the jobs numbers and growth numbers alone will sell it to the American people, while behind the scenes keeping the dollar relatively weak to the weakening euro being another reason.  Weak dollar to euro means greater profits from overseas operations.

Final speculation: If dollar is down 40% since 2007 against euro, market needs to be 40% higher than its 2007 benchmark. If it feels toppy here, then QE3 is there to goose it.

I started shorting S&P yesterday and doubled down today, so my personal wants are to see the correction long speculated here.  But maybe it ain't necessary.

Wed, 07/13/2011 - 12:27 | 1452382 fxpert
fxpert's picture

Okay so what do we do now, buy dollar? Apparently tightening is what GS actually expects. Bernank just gave away billions for corporations to beef up their balance sheets, expecting that this will result in more hiring. Wall St gave a finger to Bernank, paid out the bonuses and cut labor force. Even Bernank can't be that stupid right? Can someone please arrange a meeting between this idiot and German finance ministers? Or has a decision already been made to destroy the dollar and become Japan 2.0?  

Wed, 07/13/2011 - 12:35 | 1452420 fxpert
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[BERNANKE ON THE PATH OF FISCAL POLICY] Bernanke has said both that the economy still needs a good bit of support, and that there is already a "good deal of fiscal contraction" due to the decline in federal stimulus spending and fiscal retrenchment among the states. His view, as it has been for some time, is that the way to finesse the issue is to put fiscal restraint in place for the medium term, while avoiding large cuts to the deficit now. Asked if additional revenue is needed, Bernanke declined to answer, but did say that broadening the tax base is a good idea.

Wed, 07/13/2011 - 12:48 | 1452484 swissinv
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and we entering into the same drama again - the market is now already expecting QE3 and nobody can afford to disappoint the markets... 

Wed, 07/13/2011 - 13:33 | 1452687 NotApplicable
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The only tightening out of the Fed is Bernanke's asshole around the buttons on the hot seat.

Wed, 07/13/2011 - 14:30 | 1452916 Sokhmate
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My opinion is that probability of the possibility is more possible than the possibility of probable impossibility. If it was more probable than impossible, then the improbability would be more impossible. Possibly, though, it is more probable.

Wed, 07/13/2011 - 17:07 | 1453617 AldousHuxley
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23 Things They Don't Tell You About Capitalism

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