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Jim Grant Explains Why QE3 Is Coming

Tyler Durden's picture





 

Once again we are reminded why we like Jim Grant so much. From his latest Grant's Interest Rate Observer (which, trust us, is worth the subscription): "Almost 30% of the respondents to a poll conducted by UBS a few weeks back said they anticipate a third round of so-called quantitative easing... We count ourselves among the expectant 30%. To its congressional directed dual mandate the Bernanke Fed has unilaterally added a third. It has undertaken to make the markets rise. The chairman himself has more than once taken credit for the post-2008 bull market (on one such occasion in January, he reminded the CNBC audience how far the Russell 2000 had come under Fed ministrations). Could he therefore stand idly by in the face of a new bear market. Byron Wien, vice chairman of Blackstone Advisory Services, went on record the other day predicting a summer swoon in stocks following the scheduled winding down of QE2 in June. Let us say that Wien is right, and that, furthermore, drooping stocks are accompanied by sagging house prices and a weakening labor market. Bernanke was hard put to explain why he chose to let Lehman go while acting to save Bear Stearns. He would be harder put to explain why he chose to implement QE1 and QE2 but, in another hour of need, refused to launch QE3." And "Sooner or later, gravity turns speculative markets into investment markets. When this transformation occurs, the Fed will confront the need to bail out the innocents it had previously bailed in. Hence, QE3." And therein lies the rub. Simple, sweet, and, for the US dollar, suicidal.

 

 


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Thu, 04/21/2011 - 17:34 | Link to Comment slow_roast
slow_roast's picture

Bernanke not likey Grant; he ruins the surprise!

Thu, 04/21/2011 - 18:17 | Link to Comment slaughterer
slaughterer's picture

He would be harder put to explain why he chose to implement QE1 and QE2 but, in another hour of need, refused to launch QE3

Why is Grant ascribing the ability to reflect and the need for justification to Bernanke? The Bernank will never need to explain himself except in a cheesy autobiography long after the fact, when it does not matter.  I am sick of every analyst with some "insight" into the Fed writing as if they could see inside the Bernanke's mind.  

Thu, 04/21/2011 - 18:37 | Link to Comment markmotive
markmotive's picture

Three reasons that QE3 is inevitible (eventually):

1) 70% of rich Americans still think we're in a recession (although they're spending more).

http://www.planbeconomics.com/2011/04/19/70-percent-of-affluent-american...

2) Simply raising rates by a quarter-point would require a full-reversal of QE2

http://www.planbeconomics.com/2011/04/21/john-hussman-on-rising-precious...

3) The last time the Fed tried to withdraw (2010) all hell broke loose

http://www.planbeconomics.com/2011/03/03/what-happens-if-the-fed-withdra...

 

Thu, 04/21/2011 - 18:41 | Link to Comment kengland
kengland's picture

There will be no QE3 in the short run. Bernanke wants the public to come to him on this one. They will to. The mass are not ready for real rates just yet. To levered still. Baby boomers need to have this market rise, at all costs, in order to retire. Once they see that without his help the thing comes down, they will accept the poison.

 

Book it

Thu, 04/21/2011 - 18:44 | Link to Comment johngaltfla
johngaltfla's picture

I concur. A short term spike in short term (2's,5's) rates with some reverse repos and an overnight and discount rate (25bps or so) hike in June should set the tone. Let the equity markets crash 15-30% hard, reign in the commodity players, help the ECB, and then create a re-elect Obama rally in Q1 with a massive and crushing flood of dollars starting in November or December.

After all, why start QE3 in the middle of a "recovery"? (Snicker, snort, belly laugh)

Thu, 04/21/2011 - 23:24 | Link to Comment Tabarnaque
Tabarnaque's picture


What you say makes a lot of sense. But QE2 is all about
funding the huge government deficit. When it ends in June, who will come to buy
treasuries? The question is: How long can they last (given their spending
madness) without QE3. I doubt they’ll be able to last until November without facing
severe liquidity problem. As anyone tried to guesstimate how long the government
can survive without QE3? One month, two months, maybe three??...

Fri, 04/22/2011 - 08:40 | Link to Comment Commander Cody
Commander Cody's picture

The CONgress will need QEinfinity.

Mon, 04/25/2011 - 19:14 | Link to Comment tomster0126
tomster0126's picture

thoughts on QE578 five years from now?  for real though, things are looking pretty pretty gloomy.

 

www.forecastfortomorrow.com

Fri, 04/22/2011 - 10:52 | Link to Comment Goldust
Goldust's picture

PIMCO got a lotta cash hanging around, and would probably like to buy a dip in treasuries, no?

Fri, 04/22/2011 - 11:37 | Link to Comment smlbizman
smlbizman's picture

there will be no qe3.....they will call it something else, it will be the same program but it will be something patriotic, so patriotic we will not even ask for any lube.....

Fri, 04/22/2011 - 12:36 | Link to Comment Pegasus Muse
Pegasus Muse's picture

As anyone tried to guesstimate how long the government
can survive without QE3?

As anyone tried to guesstimate how long the dollar can survive with QE3?

DXY now at 74, down 1.5 in two days. The Bernank is boxed in.  

Fri, 04/22/2011 - 13:47 | Link to Comment citizen2084
citizen2084's picture

I think you and Schiff areright on this point. QE to help the economy justification is bulls%^t.  This is about funding the emipre. The Fed has acquired >$1t in 6 months, it took China 20+ years to acquire a trillion, and they are not going to acquire an additional trillion. 

The Fed has to fund the empire. Warfare and welfare is expensive.

Ciao

Thu, 04/21/2011 - 19:12 | Link to Comment linrom
linrom's picture

As John Cleese would say "Smart, very smart."

Thu, 04/21/2011 - 19:21 | Link to Comment Boston
Boston's picture

Exactly.

 

And 10s rates could dip--temporarily--until "hints" of QE3 get dropped again, ala Jackson Hole 2010.

Thu, 04/21/2011 - 19:27 | Link to Comment Lord Welligton
Lord Welligton's picture

Excellent kengland.

A generational war.

And a class war thrown in.

The children of the baby boomers will not thank their parents for this.

And all that college debt as well.

 

I can see some family infighting on the horizon.

 

Euthanasia is looking bullish.

Thu, 04/21/2011 - 19:51 | Link to Comment narnia
narnia's picture

The baby boomers are the big losers here.  They are our nation's creditors.  The Fed is taking us down the path of a $ breakdown, which equates to a national bankruptcy that, at this point, has no judge. Trust me, you are better to be 20 with your whole life ahead of you than 60 looking into the abyss.

Thu, 04/21/2011 - 20:59 | Link to Comment subqtaneous
subqtaneous's picture

Losers? If you're 60, your whole adult life has been one of the rarest, longest golden opportunities to get your financial security in order.

Thu, 04/21/2011 - 23:29 | Link to Comment ManOfBliss
ManOfBliss's picture

Very insightful. I totally agree. Nobody has had a better chance to become wealthy.

Thu, 04/21/2011 - 21:03 | Link to Comment Heavy
Heavy's picture

Though one had 60 years to look at abyss and fix it, I mean it was right fucking there, Fed Res has been bad for 100 years, we all knew/know it, apply fire already.  The other has twenty years, the sins of their father, ambition, and easy access to fire.  One bought the ticket and took the ride.  The other got drug along for the ride.  I'm somewhere in the middle.

Thu, 04/21/2011 - 19:54 | Link to Comment nodoctor
nodoctor's picture

This.

The line from The Godfather was "Today the Corleone family settles all debts" - that is what will happen in about 45 days. Fourth turning indeed, it will be the great intersection of trends:

To QE or not to QE
Debt ceiling
Tea Partiers
Budget
Social Security
Taxes
Silver spike
Gold spike
Banks with horrible books
Fukushima
2Q GDP
Oil spike
Gasoline spike
ZIRP
Libya
Iraq
Afghanistan
Comets
Supervolcanoes
Pestilence

It is all coming to a head very soon and I believe the powers that be would rather destroy everyone else's currency than their own. The fall will be choreographed and all markets will suffer. The government may shutdown. Then they hope that the people will beg for a government solution, for a central bank solution. The media will comply. God help us if they give us those solutions.

Thu, 04/21/2011 - 21:09 | Link to Comment Heavy
Heavy's picture

Water

Food

Shelter already went belly up and got foreclosed.

Population

Solar Maximum

Monetary Evolution/Collapse/Clusterfuck?

Deforrestation

and lets say Middle East Awakening (though how awake can they be if they're signing up for central banks?)

 

There that should help finish the confluance list.  Both of our lists may exceed 45 days by a bit however

Thu, 04/21/2011 - 21:29 | Link to Comment nodoctor
nodoctor's picture


45 days for the beginnings of the great financial inhale soon followed by the great financial exhale which will be something more horrible still.

I do see everything coming together though into one great singularity of dread. Maybe even by October. Something beautiful may be born from this. Something beautiful may die.

Either way remember the four P's

Provisions
Protection
Precious metals
a Plan

Thu, 04/21/2011 - 23:07 | Link to Comment Logman
Logman's picture

Junked for a sentence containing the one word "This.".  Take your shitty memes back to your crappy gamer forum.

Fri, 04/22/2011 - 08:22 | Link to Comment tmosley
tmosley's picture

Junked for being a pretentious ass.

Fri, 04/22/2011 - 07:27 | Link to Comment Popo
Popo's picture

I'll take it a step further:   There will never be anything actually called "QE3".  It will be 1000 small operations which are done in stealth.  These operations will of course, amount to QE3, but they will never be referred to as that, or even as individual parts of a greater program.  The Fed knows full well that the only way it can possibly continue to decimate the dollar is to do it in obscurity.

Hence the Fed's recent propaganda campaign promising a new era of "openness".  The exact opposite is what's coming.

There will be QE3.  But it will never be discussed, acknowledged or alluded to.   QE3 will be a black op.

Fri, 04/22/2011 - 10:18 | Link to Comment taint
taint's picture

this +10

Mon, 04/25/2011 - 19:07 | Link to Comment tomster0126
tomster0126's picture

no matter what, nobody's kids or grandkids are going to be secure in the future.  Thoughts on restructuring a new Social Security plan?

 

www.forecastfortomorrow.com

Thu, 04/21/2011 - 19:21 | Link to Comment NotApplicable
NotApplicable's picture

The Bernank will never need to explain himself except in a cheesy autobiography long after the fact, when it does not matter.

To be titled, "If I did it."

Fri, 04/22/2011 - 02:04 | Link to Comment All Risk No Reward
All Risk No Reward's picture

>>To its congressional directed dual mandate the Bernanke Fed has unilaterally added a third<<

wrong.  you are being played like a chump.  there is no dual mandate.  read the mandate in section 2a of the federal reserve act.  google it.  it is there.  you can read it.

the mandate is singular - to keep monetary and credit aggregates in line with GDP growth.

that's it.  after the singular mandate are the dual benefits OF FOLLOWING THE SINGULAR MANDATE.  reading comprehension for the win!

the fed pawns off, orwellian style, the dual expected results of the mandate as the mandate itself.

why would they do that?

SO THEY CAN BREAK THE SINGULAR MANDATE AND CRIMINALLY BLOW THE WORLD'S LARGEST CREDIT BUBBLE / BUST OPERATION IN HUMAN HISTORY, THAT'S WHY!

and since you have no idea what the real mandate is, you don't call them on it.

but you should!

Fri, 04/22/2011 - 17:41 | Link to Comment Paul E. Math
Paul E. Math's picture

The Humphrey-Hawkins act of 1978 is interpreted by most as giving the Fed that 2nd mandate. 

That's the way law-makers intended it and the Fed has been only too happy to accept this additional mandate.  How else could the Fed justify the role it played in bailing out its Wall Street masters?  Bailing out Wall St certainly had nothing to do with growing the currency level in keeping with the growth of GDP.

Whether they should have this additional mandate is another matter entirely.  Personally, I think the Fed should have no mandate whatsoever, the Fed should not exist at all.  But that's another issue.

Fri, 04/22/2011 - 22:43 | Link to Comment Tail Dogging The Wag
Tail Dogging The Wag's picture

"Investors need to diversify, they need to own some real estate, they need to own some farmland, they need to own some equities, some cash, and some precious metals..."   Marc Faber —Investment analyst

Got real estate and farmland outside your home country yet?

http://www.thorssoncapital.weebly.com

Thu, 04/21/2011 - 17:39 | Link to Comment tmosley
tmosley's picture

Pfft, a loser like you is questioning Jim Grant's record?

I guess beggars CAN be choosers.

Thu, 04/21/2011 - 17:39 | Link to Comment EvlTheCat
EvlTheCat's picture

+slam

Thu, 04/21/2011 - 17:46 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

I guess the proof will be in the pudding Leo. Are you willing to say that the US economy can stand on its own two feet without any more stimulus?

So - if/when QE3 comes into play will you finally admit that the US economy is completely reliant on Fed provided life support and isn't 'recovering' as has been previously sold to the public?

Or will you instead ignore the life support of QE3 and keep on claiming things are getting better?

 

Thu, 04/21/2011 - 17:55 | Link to Comment hambone
hambone's picture

Leo???***crickets***chirp***

Leo, kinda hard to not acknowledge the $150B dollar monthly entirely unsustainable deficit that keeps the economy from shutting down and falling off a cliff.  But if it's maintained dollar falls off cliff.  Classic lose - lose.

Fri, 04/22/2011 - 15:27 | Link to Comment akak
akak's picture

LOL, yet another smug, ignorant, and explicitly pro-status-quo comment by Leo junked into oblivion, with over 50 members here disgusted enough by it to junk it as the statist, conformist, bow-to-our-sociopathic-masters crap that it was.  Good job ZeroHedge cleanup crew!

Thu, 04/21/2011 - 18:45 | Link to Comment Billy Bob
Billy Bob's picture

Mr Mosley

Leo is a respected contributor to this site.  His reporting on Pension issues is welcome, and insightful. He has been bullish on the market and he has been right.  His opinion about the direction of the market has brought him significant criticism and character assignation.  Why diminish the contributions to our site by a very hard working, insightful, and usually correct contributor by calling him names.

It is one thing to view the macro economic environment and have a bullish outlook.  Frankly, that outlook is easily dismissed.   But having the macro outlook and also being right on the market has brought Leo and people here like him much criticism.  I suspect Leo, and the others with his view, have done pretty well for the past 2 years, while the doom and gloomers (myself included) who have continually expected the market to decline, have suffered substantial losses. 

 

I love to read Leo, and Robotrader.. .they have been right where it counts.. in the pocket book.  It really takes an adult to hold the economic views of much of the reader ship here, my self included, and still be able to BTFD because the TA tells me I should.  Have we seen the top today?... I think maybe we have, but I went into the close long, with very tight stops.

Can't we appreciate the views of those with whom we disagree with out casting aspersions?  After all, this is not religion, sex or politics?  Or is it?

 

Bill 

Thu, 04/21/2011 - 18:59 | Link to Comment tmosley
tmosley's picture

In real terms, they have NOT been right.  In real terms, they have lost purchasing power.

Respect in this field is earned by outperformance.  Both Robo and Leo have consistantly underperformed, as far as I can tell.  But then, they only really tell us about their winners.  How long has it been since we heard from Leo about his Chinese solars?  Big stinkers that he held onto for WAAAAYYYY too long.

I used to trade.  I made a lot of money.  Often, I even beat the market.  But I don't trade anymore, because I can see this "market" for what it is, a shambling zombie coming to suck out the purchasing power from anyone stupid enough to gamble in it.  The fact that these "bulls" have been unable to see the fundamental changes, and indeed support the Ponzi, and WORST OF ALL, try to get others to throw away their purchasing power, makes them truly despicable.

I don't really care about pensions, and have read very few of his posts on the matter, and those long ago.  Pensions don't matter--they will be nationalized within two years at the longest.  That is the truth of the matter, the "gospel", that I have used to become quite wealthy, and have encouraged anyone and everyone to follow.  Physical silver and physical gold.  Anything, really, that you can hold in your hand, have physical access to, and defend if necessary.  At this point in history, owning ANYTHING else is a sure ticket to poverty.

Further, the fact that little old me has been able to outperform the numbskulls by simply owning physical silver makes me right, and them wrong.  That is the only thing that matters--purchasing power.  Who gained it, who lost it, and who preserved it.  Follow these hucksters to your collective doom if you like, but I will continue to call them out until I myself am proven wrong.  If that should happen, I will be HAPPY, because it means I can keep working at a job I love in a flowering, vibrant economy.  I don't think that is going to happen.

Thu, 04/21/2011 - 19:25 | Link to Comment NotApplicable
NotApplicable's picture

All pensions will go the way of PBGC, which will be the aggregator that feeds the Treasury "market."

Thu, 04/21/2011 - 19:34 | Link to Comment 1100-TACTICAL-12
1100-TACTICAL-12's picture

Well said tmosley, I quit a 6 figure job 3yrs ago in construction traveling, so I could see my kids grow up. I wondered what do I do for income? Thankfully my wife has damn near a 6fig job in health care. Any way to make a long story short I found ZH cashed in my 401K took the hit bought silver. Thank god for ZH. I now have a badass garden 100's of mason jars full of non GMO's. The market will certainly hold up as long as there is QE. "Anything you can hold in your hand" words of wisdom....

Thu, 04/21/2011 - 19:44 | Link to Comment High Plains Drifter
High Plains Drifter's picture

i keep telling people they are going to nationalize those damn things.(pension fund and retirement accounts ) ....hey should take the money out and take the hit and go buy PM. They think I am crazy. Oh well.

Thu, 04/21/2011 - 21:33 | Link to Comment greenrain
greenrain's picture

OK.  How does this work?  There is no "I want to buy PM" box to check on the early withdrawl form.  What kind of penatly did you pay?

Thu, 04/21/2011 - 22:16 | Link to Comment OldPhart
OldPhart's picture

I took a loan from my 401-k, justifying it by withholding house payments until I got a foreclosure notice.  Paid the mortgage up to date, took the notice and pulled half my 401k stash out.  Making interest payments to my self at 7%, tax deductible, along with a increase on the prior 401k contribution.  Took the cash, bought silver in 2007.

I watch my 401k allocations pretty closely, as closely as possible that is, and move my allocations regularly.  YTD I've done about 13%.  I'm hoping that things hold together until next April, when I'll take another loan out and purchase more.

Thu, 04/21/2011 - 22:42 | Link to Comment High Plains Drifter
High Plains Drifter's picture

well one person i have been working on about it, has about 650,000 in a ira . she is 67. i told her to get the damn money out of there. she won't do it. oh look, the markets are going up and up and i am making money. i say to her. ok, where is the money. show it to me. she sees numbers on a page and she thinks everything is ok. can you just imagine how often this happens all of the time. these older people see numbers on a page and they think everything is alright. i tell her, they will confiscate it one day soon. national emergency if you will.  in answer to your question, of course there will be a penalty and most likely a taxable event. that is the way they have it set up. they want you to keep the money there under their control. this is why they have these penalites etc. the whole thing was a sham from the start if you ask me......so now all of this money is sitting there and evil men are looking at it and want it.......and.....they will get it..........

Mon, 04/25/2011 - 19:10 | Link to Comment tomster0126
tomster0126's picture

nice--my life story follows not quite the same path but similar after the part about finding ZH, lol.  silver and gold have saved my life.

 

www.forecastfortomorrow.com

Thu, 04/21/2011 - 19:02 | Link to Comment Atlas Shrieked
Atlas Shrieked's picture

what planet are you from?  As long as QE is in place, you cannot fight the Fed.  Going long since March 2009 was a no-brainer, if somewhat dicey, which I caught with some biotechs (lucky).  But going long SLW Nov. 2008 was complete skill.

For long-term bullion holders, dips are for accumulating.  One can trade staircase rise in PM, but being right and sitting tight I suspect has been more profitable and easier on the ulcer.

Thu, 04/21/2011 - 19:09 | Link to Comment Shell Game
Shell Game's picture

Though I do not appreciate the viewpoints of the two gents you mention, I fully support their presence here.  Confirmation bias is not the cream that rises...  http://en.wikipedia.org/wiki/Confirmation_bias

Thu, 04/21/2011 - 23:16 | Link to Comment akak
akak's picture

Billy Bob,

Leo Kolivakis is nothing but a terminally short-term-thinking, completely amoral, contemptible coward and shameless Quisling for a massively corrupt, failing, and utterly unsustainable system run by sociopaths for the sole benefit of said sociopaths.  His numerous and unapologetic admonitions of surrender, both financial and moral, to these sociopaths and their evil web of debt, corruption, injustice and manipulation make Leo a blight on this site, and his presence here an insult to everyone who values honesty and the truth, particularly inasmuch as virtually everything he espouses --- his constant pro-Establishment drumbeat --- is in direct contradiction to everything that ZeroHedge itself espouses and for which it otherwise stands.

Yes, I damn Leo and all apologists for evil like him with every fiber of my being, and will be damned if I will ask for your or anyone else's forgiveness for doing so.  In fact, if you value truth and honesty in this time of precious little of either, you would join the vast majority of other members here who have justifiably junked the numerous vile comments of Leo into oblivion,  who challenge and denounce his disingenuous and ignorant shilling for the statist status-quo, and who oppose his incongruous inclusion as a contributor to this site.

Thu, 04/21/2011 - 23:40 | Link to Comment bobert
bobert's picture

I for one am glad that we have available to us an opinion that is different than your's dumb ass!

 

Fri, 04/22/2011 - 00:55 | Link to Comment akak
akak's picture

Hollow and disingenuous pro-Establishment propaganda, malicious disinformation and unabashed support for an out-of-control and clearly malevolent financial and political elite do not constitute a "different opinion", as much as spineless cowards who refuse to stand up to evil try to thereby excuse it.  It is disheartening that there so many apologists for those shilling for the corrupt and sociopathic power elite like Leo even on this site.  What is wrong with you and all the sheep like you --- why are you so congenitally unable to recognize evil, and to confront it?  Are you THAT much of a coward?

Fri, 04/22/2011 - 03:13 | Link to Comment Temporalist
Temporalist's picture

Akak there is something called the Endowment Effect where people place greater value in a posession merely because they own it.  Leo may never change and while it may be you find that a personal flaw to attack him it is actaully possible that many people are psychologically wired to stick with what they own, or another way, stick with what they know (their personal knowledge base and philosophy). 

Another possiblity is the Stockholm Syndrome.  It is better to be like my tormentors as they may torment me less.

Also Leo isn't young and it's hard to teach an old dog new tricks. 

I guess it's like Shawshank Redemption...it's hard to live a different reality from the one you've been conditioned to.

Fri, 04/22/2011 - 03:36 | Link to Comment akak
akak's picture

Good points all, Temporalist, and thank you for sharing your thoughts.

I guess I get so damned outraged at the complacency and cowardice which I see as rampant in American society today because I am just an ordinary guy, of in fact less than average income (by choice), and of quite modest means.  So if I can see so clearly that this country is radically on the wrong track, then I wonder to myself, why can't almost EVERYONE see the same obvious reality?  But as we both know, the vast majority do NOT see what we see, and refuse to engage their minds or their hearts. 

The willingness to acknowledge and confront what is happening, I have noticed, has absolutely nothing to do with intelligence, social station, or income --- I have met, both here and in person, people of average or even below-average education and intelligence who nevertheless see the dark reality for exactly what it is.  On the other hand, I have met a vastly largely number of (otherwise) highly intelligent people whose denial of reality is literally pathological.  Why are some so able and willing to declare that the Emperor has no clothes, even while so many others remain willfully blind to the obvious reality all around them, or even worse (as exemplified by Leo), willingly collaborate, enable or defend a system which they recognize to be corrupt and unsustainable?

Fri, 04/22/2011 - 01:10 | Link to Comment traderjoe
traderjoe's picture

+1 - fuckin' a sweet smackdown

Thu, 04/21/2011 - 23:57 | Link to Comment 45north
45north's picture

After all, this is not religion, sex or politics?  Or is it?

I think it's religion:  Some insight or intelligence that provides perpetual security, an oasis in the desert, shelter from the storm.  The sort of things that Christianity offers.  The degree to which some people attach importance to a particular view, their dedication and emotional intensity is like a religious conviction - as if their souls depend on it.

 

Thu, 04/21/2011 - 17:45 | Link to Comment spiral_eyes
spiral_eyes's picture

jim grant has a great record. not as great as jim rogers, or nassim taleb, or nouriel roubini, but certainly greater than the faux-oracle of oligarchy warren b (i prefer warren g).

Thu, 04/21/2011 - 17:51 | Link to Comment Fyodor Does DF Ski
Fyodor Does DF Ski's picture

True dat! Man I miss Nate...

Regulate http://www.youtube.com/watch?v=1plPyJdXKIY

Thu, 04/21/2011 - 19:50 | Link to Comment spiral_eyes
spiral_eyes's picture

you can't just be any geek off the street, paul krugman.

Thu, 04/21/2011 - 20:34 | Link to Comment Careless Whisper
Careless Whisper's picture

@ Fyodor

i'm giving you Best Link Of The Day award.

Mon, 04/25/2011 - 19:16 | Link to Comment tomster0126
tomster0126's picture

Krugman is a savage.  The Krug, you're the coolest geek off the street i know

 

www.forecastfortomorrow.com

Thu, 04/21/2011 - 18:42 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

He sure as fuck has a better record than Leo who told us month after month last year that the employment report was going to be an upside blowout.  Still waiting for that.

And Grant is not a total doomer, either, during the crash he had some great advice on buying some busted convertible bonds.

Thu, 04/21/2011 - 19:54 | Link to Comment spiral_eyes
spiral_eyes's picture

unlike all the permabears i can't wait for the REAL crash. gonna sell all my PMs and buy the fucking dip in real estate, heavy industry, and mining. like rothschild said, buy when there's blood on the streets, baby.

Thu, 04/21/2011 - 23:39 | Link to Comment ManOfBliss
ManOfBliss's picture

You said it.

Thu, 04/21/2011 - 17:48 | Link to Comment Yancey Ward
Yancey Ward's picture

A "shameless promotion" would be Grant writing the promotion himself.  This is simply a promotion from a subscriber, as far as I can tell.  You are free to question whether the subscription is worth it, but it hardly shameless for Zero Hedge to offer the opinion that it is.

Thu, 04/21/2011 - 17:52 | Link to Comment VegasBob
VegasBob's picture

US economic momentum is picking up?

Huh?

Sorry Leo, but Benocide Bernankebub's fake recovery will wither on the vine and die the moment he turns off his printing presses.

Thu, 04/21/2011 - 17:59 | Link to Comment gorillaonyourback
gorillaonyourback's picture

who gives a shit what you think after that neil "whatever" fund manager dick suckin you gave him. jim grant has always made rational sense when i listen to him,  maybe he will prove to be wrong but at least it makes sense to me now.

Thu, 04/21/2011 - 18:03 | Link to Comment 1100-TACTICAL-12
1100-TACTICAL-12's picture

Yea if you wan't to work @ mickey d's shit is really looking up.... I never read your post leo it's like the congress bitchin over a few billion a waste of time.....

Thu, 04/21/2011 - 18:07 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

Leo, when you see what is coming at the state and city level in the next 2 months.....you will be shocked...housing is now where near bottoming yet....

Thu, 04/21/2011 - 18:13 | Link to Comment Quintus
Quintus's picture

Let us not forget the shameless 'Buy Greek Debt, everything is fine there if only the dastardly media would stop highlighting problems that don't exist' call from a certain ZH contributor.

Dodgy track record much?

Thu, 04/21/2011 - 18:25 | Link to Comment Yancey Ward
Yancey Ward's picture

LOL!  Did he really advocate buying Greek debt?

Thu, 04/21/2011 - 18:41 | Link to Comment Quintus
Quintus's picture

Oh yes.  Credibility -> *Poof*

Thu, 04/21/2011 - 18:46 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

His credibility was shit long before that.

Thu, 04/21/2011 - 18:51 | Link to Comment Quintus
Quintus's picture

I was being generous.  Holiday weekend has put me in an expansive frame of mind.

Thu, 04/21/2011 - 19:01 | Link to Comment High Plains Drifter
High Plains Drifter's picture

don't forget chinese solar stocks.........

 

Thu, 04/21/2011 - 19:12 | Link to Comment blunderdog
blunderdog's picture

Chinese solars are going to pay off as soon as the factories start scrapping their production and reclaiming the silver.

You'll see...

Thu, 04/21/2011 - 19:41 | Link to Comment High Plains Drifter
High Plains Drifter's picture

LOL !!!

Thu, 04/21/2011 - 19:52 | Link to Comment tmosley
tmosley's picture

lol indeed.

I actually agreed with Leo on the true fundos on those.  The problem is governments.  If a bunch of "ifs" that have nothing to do with the industry itself were properly aligned, I would own them myself.  

Full disclosure: long physical solar panels (made in China).

Thu, 04/21/2011 - 19:03 | Link to Comment tmosley
tmosley's picture

lol, I forgot about that.

Thu, 04/21/2011 - 18:25 | Link to Comment High Plains Drifter
High Plains Drifter's picture

the grant letter is probably better than the kolivakis letter doncha know.

Thu, 04/21/2011 - 18:29 | Link to Comment High Plains Drifter
High Plains Drifter's picture

leo, are you going to vote for obama in 2012  ?

 

Thu, 04/21/2011 - 18:43 | Link to Comment Tater Salad
Tater Salad's picture

Leo says..."And I'm not convinced QE3 is on its way...US economic momentum is picking up...stay tuned"

Leo, based on what metrics exactly make you think economic momentum is picking up?  The stock market is not the economy and nearly every metric that matters regarding the economy is either in the crapper or completely anemic.  On a relative basis [to other recoveries] we're f'd!

So, I won't stay tuned  but rather fade this rally into the end of QE2 only to go long when QE3 is announced, rinse and repeat.

Thu, 04/21/2011 - 18:48 | Link to Comment johngaltfla
johngaltfla's picture

Dude, unless you are a grand master of credit markets you have no clue as to what you speak. Especially with the momo comment alluding to that fact.

Thu, 04/21/2011 - 18:52 | Link to Comment topcallingtroll
topcallingtroll's picture

Stay strong little brother.

Thu, 04/21/2011 - 19:29 | Link to Comment Lord Welligton
Lord Welligton's picture

"what's his track record?"

What's your track record?

 

Thu, 04/21/2011 - 19:36 | Link to Comment NotApplicable
NotApplicable's picture

I got nothing against Jim Grant but what's with the shameless promotion ''which, trust us, is worth the subscription''?

Jealous much?

As for the "what's with ..." comment, you should really be smart enough to recognize that Tyler is stating that he believes Grant provides value for the money. Which provides value to those of us who do not subscribe. It's called word-of-mouth advertising, something you might recognize if you were to provide value yourself instead of ragging on Tyler.

I take it he's never said the same about your services.

Fri, 04/22/2011 - 01:22 | Link to Comment chindit13
chindit13's picture

Yes, that comment was out of place, as it indicated poor comprehension of the piece.

Long time readers of Grant's know that the only self-promotion Grant does is kind of tongue-in-cheek, where he often describes the people he quotes as "a fully paid subscriber".  As one whose career was in that nastiest of industries, I can tell you that every firm and every fund for which I worked subscribed to Grant's, and no matter how many copies arrived in the office, a fight always ensued as to who would get first read.

It is difficult to criticize someone who built an odd business (newsletter) from absolutely nothing, and after several decades is still widely read and eagerly awaited amongst an elite who fancy themselves the best of the best and rarely, if ever, give anyone credit for doing anything well (except themselves).  People who would rip anybody's and everybody's favorite icon a new a**hole still do not have a bad word to say about Grant.  Well, except maybe Leo.

Thu, 04/21/2011 - 19:41 | Link to Comment tom
tom's picture

Jim Grant's record, his subscribers and his contributors are top notch. So it should surprise nobody that Leo has never heard of him.

Thu, 04/21/2011 - 20:19 | Link to Comment anynonmous
anynonmous's picture

"but what's with the shameless promotion"

 

Mr. K do you normally bite the hand that feeds? 

Thu, 04/21/2011 - 20:45 | Link to Comment glenlloyd
glenlloyd's picture

This 'economy' and I use that loosely, is built on sinking sand, it takes billions in fed pump money every day just to keep it from sinking. Anyone who counts fed support as perpetual will in the end regret it. When you need an exit there won't be one.

The market, and the next downleg in the depression, are anchored to a perpetual spigot of money from the fed, and any reduction in the flow will only help to resume the downtrend...which should have happened back in late 2008.

Fri, 04/22/2011 - 05:51 | Link to Comment Coldfire
Coldfire's picture

Leo - I took this to allude to the relatively high price of GIRO, not so much as a promotion. Track record of course is fundamentally relevant.

Thu, 04/21/2011 - 17:40 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

as many of us have said here before. he is right.

Thu, 04/21/2011 - 17:42 | Link to Comment slaughterer
slaughterer's picture

Count me among the 70% who do NOT think QE3 is coming... at least, not immediately after QE2, in any case.  It would be suicidal for the dollar, and homicidal for large percentages of the global population.

Thu, 04/21/2011 - 17:44 | Link to Comment unwashedmass
unwashedmass's picture

you seem to believe that any of these guys give a shit about the 70% of the population that will be decimated. they are peasants, who cares?

Thu, 04/21/2011 - 17:49 | Link to Comment youALREADYknow
youALREADYknow's picture

More like 99% of the population.

Thu, 04/21/2011 - 20:25 | Link to Comment Chuck Walla
Chuck Walla's picture

Now, now, they will need worker bees. Whose to serve the scotch and cigars for master if not the few left?  Whose to dig the potatoes? Cook and wash and paint the yacht?

Fri, 04/22/2011 - 08:32 | Link to Comment tmosley
tmosley's picture

To be fair, to decimate means to kill every tenth man.  Thus, even if 99% of the population was decimated, there would still be 89% of the population left.

Fri, 04/22/2011 - 19:28 | Link to Comment MrSteve
MrSteve's picture

Does your 89% incorporate a birth/death adjustment or a hedonic improvement compensation factor. If not, just reply "rounding error".

Thu, 04/21/2011 - 18:27 | Link to Comment High Plains Drifter
High Plains Drifter's picture

so, do you think they will extend the debt ceiling?  rand paul, (another paul running for the presidency ) said today on the medved show that he is against raising the ceiling, more or less.......

Thu, 04/21/2011 - 18:54 | Link to Comment bonin006
bonin006's picture

If they don't extend the ceiling, don't they need to cut the budget by something like 60% ? I seem to recall a month long fight over a supposed 2% cut that actually turned out to be more like 0.1%

Wait - I forgot about Goldmen Sachs, they can just hire them to cook the books a bit more than they already are. 

Thu, 04/21/2011 - 19:00 | Link to Comment High Plains Drifter
High Plains Drifter's picture

paul said the first request will be about  1 trillion.   he said they would blow through that , i believe by august.........God help us.......

Thu, 04/21/2011 - 19:51 | Link to Comment centerline
centerline's picture

Makes for great a show though.  Kind of like modern Keystone cops.

Thu, 04/21/2011 - 19:44 | Link to Comment NotApplicable
NotApplicable's picture

Umm... pretty much 100% of people believe that QE3 will not be immediate. In fact, I've never seen that position stated by anyone. The only debate going on is whether it will eventually happen or not at all.

Since it is the only play in their book, I'm quite certain that it will (TINA told me so), but it's obvious that The Bernank is going to let a bunch of shit break first so that he is "forced" to act.

Politcal theater at its finest.

 

Sat, 04/23/2011 - 00:04 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Some of us real cynical (or wise) types believe The Bernank will be the one doing the breaking of the shit!

Fri, 04/22/2011 - 00:01 | Link to Comment spastic colon
spastic colon's picture

the economy is being destroyed by design (isn't it obvious) There will be no recovery, just restructuring. The U.N. Agenda 21 (global depopulation) is in full play. Codex Ailementarius (global food control) is well underway. 2nd amendment will be infringed on in the near future.The elites dont give a shit about the sheeple. This bull market is giving folks who are thinking outside the box a chance. Food-water-shelter-arms-ammo-gold-silver. I am riding the bull bitchez!

Fri, 04/22/2011 - 01:30 | Link to Comment bothsidesnow
bothsidesnow's picture

+ 1 Don't see how it could happen. Eurozone unemployment about the same or worse than US and ECB raised. Look for the Fed to raise and guess what the markets and the world to cheer as commodity prices drop.

Also do the math 38 billion debt cut is equivalent to 0.25% on 14 trillion.

More government austerity to come, which is good thing for everybody, and frees up money for private investment and higher cost of debt service.

It's coming the Fed meets next week.

Be prepared to see the PM's drop and I hold physical but I hedged it by shorting spot at 45.64 in a Forex account.

The charts do not look good for PM's in the short-term.

 

 

Thu, 04/21/2011 - 17:42 | Link to Comment nah
nah's picture

Bernanke 2012... bullshit you can believe in

Thu, 04/21/2011 - 17:45 | Link to Comment falak pema
falak pema's picture

The world believes in WS levitation and Benocide's recipe to saving both the banking system through asset bubble inflation and the debt accumulated through controlled monetary inflation without junking USD's role as reserve currency; thus US world hegemony. What an Houdini and we all black ball him! He'll be the next Nobel peace prize winner, mark my words like they be the indelible signs of the 'black spot'!

Thu, 04/21/2011 - 20:26 | Link to Comment newworldorder
newworldorder's picture

You may not be far off. I dont know about your interactions with co workers or people in general. By my interactions, those that are still employed believe the things are getting better. The system has been "saved" and all we need is for the politicians to get together and agree to compromise on the budget. The level of awareness that we have at ZH does not exist within most of the general population. The concern that we have is not there.

Thu, 04/21/2011 - 17:43 | Link to Comment treemagnet
treemagnet's picture

It still doesn't matter - when US debt service gets rolling, its over.  

Thu, 04/21/2011 - 17:47 | Link to Comment justbuygold
justbuygold's picture

Of course QE3 is coming.  The FED has bought 80% of all Treasury auctions over the last 6 months.  He may call it "QE2 extended lite" or some seeming innocent name but there is zero chance of there not being more monetization.  Unless of course he want to see a comlete collapse of the bond market within a matter of a few weeks thanks to an 80% drop in demand.  Fat chance that will happen becuase interest rates will suddenly be 180 basis pts higher and with oil north of  $110  and true unemployment at 18% the economy will take a nose dive from its already depressed levels ,and the housing market will drop another 15%.

Oh Yes.  QE III  is a given.  !  The rally in precious metals this week and also in the stock market are telling us all the that it fait accompli.

Bernak is nothing more that a monetary Heroin pusher with a bad beard.

 

 

Thu, 04/21/2011 - 19:49 | Link to Comment SilverBaron
SilverBaron's picture

And when everything falls apart no one in the MSM will blame the bernank, just like no one is blaming him now for rising oil.  Everyone will blame bond vigilantes, or congress for not raising the debt limit in time.  I'd say ben may be thinking that it's time to let this ship sink.  All of us ben haters will hate him either way,  and the general public will be none the wiser.  When the fed or treasury testify before congress, you notice they always try to put the blame back onto them.  They say things like "you were the ones who allowed this", and they are technically correct.  QE III is not a given, but the absence of it will not be sufficient to restore confidence in the U.S. or its dollar.  Get ready for 2008 act II with or without it.

Fri, 04/22/2011 - 01:37 | Link to Comment bothsidesnow
bothsidesnow's picture

The  bond market the king of leverage I was amazed when I started investing in the 80's how you could leverage bonds what a brilliant idea but a great way to screw up an excellent tool for providing investment capital. People could not be happy with lending money and being paid interest on the money they loaned a simple and effective idea. No the greedy bastards had to leverage, buy insurance, sell derivatives, blah, blah.

Let the bondholders take a loss most of the bond traders I have run across have an IQ south of 40.

 

Thu, 04/21/2011 - 17:49 | Link to Comment SmalleyD
SmalleyD's picture

If there is no QE3, who will buy our Treasuries?

Thu, 04/21/2011 - 17:52 | Link to Comment Global Hunter
Global Hunter's picture

Leo

Thu, 04/21/2011 - 18:03 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

crap.. you owe me a keyboard GH..

Thu, 04/21/2011 - 18:47 | Link to Comment topcallingtroll
topcallingtroll's picture

Lmfao! Brother.

Thu, 04/21/2011 - 18:11 | Link to Comment EvlTheCat
EvlTheCat's picture

+slam^2

Fri, 04/22/2011 - 05:01 | Link to Comment css1971
css1971's picture

IMF

Thu, 04/21/2011 - 17:50 | Link to Comment Yancey Ward
Yancey Ward's picture

The Fed has boxed itself in.  There are no good options now.  QEIII, if it comes will be secret and/or called something else.

Thu, 04/21/2011 - 19:26 | Link to Comment narnia
narnia's picture

No QE3 sounds hawkish.  QE2 without a stated maximum accomplishes the same objective without tipping the hand.  They'll be breaking their arms patting themselves on the back if they game Gross & Rogers for a few months.

The QE narrative gamesmanship actually fits into their stealthy ways pretty well.  Hope the people asking them questions get wise to it, and stick to- will the Fed's balance sheet expand or contract.  That's the important information, not the name that growth or contraction takes.    

All that said, I don't know how they are going to keep a floor on the $ (probably some derivative game out there with the world bank/IMF) or rates WHEN inflation comes in hot or a major creditor reversal. a flood of $ will be upon us at some point. 

Thu, 04/21/2011 - 19:40 | Link to Comment Lord Welligton
Lord Welligton's picture

"QEIII, if it comes will be secret and/or called something else."

I agree. Though I think it will come.

It cannot be called QEIII.

Welcome to your new and improved World Bank.

Thu, 04/21/2011 - 19:49 | Link to Comment NotApplicable
NotApplicable's picture

Question is, which weekend will they form it?

Fri, 04/22/2011 - 19:40 | Link to Comment MrSteve
MrSteve's picture

BigBrother Ben said he might recycle bonds, presumably reselling the bonds he has bought from the primary dealers who bought them from the Fed. So as long as Ben pays the dealers to buy bonds at the discount window, the FRB-UST daisy chain circle will be unbroken. The economy can't bounce until consumers get a positive cash flow. Until then, the circle will be unbroken.

Sat, 04/23/2011 - 00:12 | Link to Comment TruthInSunshine
TruthInSunshine's picture

The problem with this suggestion, mathematically, and which even Rickards, as smart as he is, doesn't get, is that if wholesale bond buying of an equal or greater amount stops, replaced by smaller scale purchases, interest rates rise, further decreasing and choking The Bernank's income stream and portfolio value.

In fact, even while conducting 600 billion in treasury purchases over the past (soon to be) 6 months, interest rates have crept up for The Bernank.

The Bernank's well is poisoned. The only way for him to stop short of full fledged QEtoInfinity is the put strategy suggested on ZH a couple of days ago, and ultimately, that blows up (it's inevitable).

The question is not whether The Federal Reserve implodes, due to an unsustainable finance model, but the questions are when, how spectacularly, how it impacts the U.S. (and how the U.S. reacts), and what new system will be ushered in, by decree or invitation, to replace it.

Thu, 04/21/2011 - 17:51 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

Tyler its been a while since i hear anyone at ZH speak about anonymity; why don’t you tell us all about how you are getting along with that particular trip?

Thu, 04/21/2011 - 18:24 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

Please, junkers, lets be having you; lets see who you are and get the show on the road.

Thu, 04/21/2011 - 18:45 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

You first, post your name and address.

Thu, 04/21/2011 - 19:02 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

ok, you dont know your dad...it aint me dog, leave it alone.

Thu, 04/21/2011 - 21:02 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

been around a while, i see how that could work.

Fri, 04/22/2011 - 03:22 | Link to Comment Diplodicus Rex
Diplodicus Rex's picture

There's no anonymity. Tyler's real name is Neo, Mr Smith.

Thu, 04/21/2011 - 17:53 | Link to Comment AldousHuxley
AldousHuxley's picture

Just like the iraq war. You can't pull out now. Past the point of no return.

Political dilemma with elections coming up.

Thu, 04/21/2011 - 18:12 | Link to Comment SilverBaron
SilverBaron's picture

But what if they've already come to the conclusion that no incumbents will win no matter what?  I think they are all doomed unless they can pull a rabbit out of their ass and get gas prices back under $3/gallon.

Thu, 04/21/2011 - 18:24 | Link to Comment EvlTheCat
EvlTheCat's picture

long hemorrhoid cream and laxatives!

never gonna happen!

Thu, 04/21/2011 - 19:45 | Link to Comment Lord Welligton
Lord Welligton's picture

"Political dilemma with elections coming up."

For both sides of that Gold coin.

Tweedledum Tweedledee.

They have no answers.

Thu, 04/21/2011 - 17:54 | Link to Comment EvlTheCat
EvlTheCat's picture

Like BB-brain is worried about what will happen if QE3 is put in pause and the world shutters.  He has no choice but to see if his theoretical ideas are actually fostering "real growth".  He has to see if others are going to buy the the U.S. dip for real.  He still has part of QE2 to play with if things seem to be hemorrhaging out of control.  I would also bank on more misdirection events and sheeping pills to keep American from looking to hard.  The final game is on and its all in for Ben.  I say if he goes directly to QE3 there is no stopping QE to infinity.

Thu, 04/21/2011 - 18:41 | Link to Comment JFK.4PREZ
JFK.4PREZ's picture

Misdirection... as in a false flag operation in Iran, Yemen, North Korea?  They'll take us to war before their game is over.   

Thu, 04/21/2011 - 19:54 | Link to Comment SilverBaron
SilverBaron's picture

I talked to a friend who knows a guy in the military that says we're gearing up for Korea.  He says we're sending a shitload of armaments right now. 

Fri, 04/22/2011 - 19:52 | Link to Comment MrSteve
MrSteve's picture

You neglected the geopolitical reality of Libya and Bahrain and Syria.

Thu, 04/21/2011 - 19:50 | Link to Comment Lord Welligton
Lord Welligton's picture

"I say if he goes directly to QE3 there is no stopping QE to infinity."

I think QEinfinity happened at QEII.

Bernanke like all Central Bankers is basically a mad scientist.

The economics of the late 20th and early 21st centuries is going to be thrown into the dustbin of history.

Thu, 04/21/2011 - 17:54 | Link to Comment dbTX
dbTX's picture

What does QE3 do for JPM's short silver position?

Thu, 04/21/2011 - 18:41 | Link to Comment topcallingtroll
topcallingtroll's picture

Depends on how long the summer correction lasts and how deep it goes.

Thu, 04/21/2011 - 17:52 | Link to Comment lynnybee
lynnybee's picture

.....luv Jim Grant, he's super cool in my book !

Fri, 04/22/2011 - 19:54 | Link to Comment MrSteve
MrSteve's picture

-5 junks to square the count. Grant's far horizon perspective is almost unique in a world looking at its shoe laces.

Thu, 04/21/2011 - 17:58 | Link to Comment plocequ1
plocequ1's picture

Of course its coming. Who said its not?  Let those whining Sissy girls who say there will be no QE3 step forward and take your Bernanke bitch slap like a fucking man. 

Thu, 04/21/2011 - 18:38 | Link to Comment topcallingtroll
topcallingtroll's picture

Does qe3 coming no earlier than fall qualify for a bitch slap?

Thu, 04/21/2011 - 19:51 | Link to Comment NotApplicable
NotApplicable's picture

Nope, it's all or nothing.

*adds topcallingtroll to the Aye column*

Thu, 04/21/2011 - 17:52 | Link to Comment TroyPDX
TroyPDX's picture

After 2nd quarter earnings start coming in they're going to have to do something or it's going to be blood bath. The only thing keeping all the pension funds from imploding is the ponzi equities market. It's cheaper to keep blowing that bubble than to bail out every state and municipality.

Thu, 04/21/2011 - 17:53 | Link to Comment SoNH80
SoNH80's picture

Can't wait for the day-glo pink $100,000 bills with Lyndon Johnson on the front and the Pruitt-Ingoe Housing Project on the back.

Thu, 04/21/2011 - 17:54 | Link to Comment RobotTrader
RobotTrader's picture

That is why it is suicidal to be short stocks.

Thu, 04/21/2011 - 19:52 | Link to Comment Lord Welligton
Lord Welligton's picture

In Dollars only.

Fri, 04/22/2011 - 20:01 | Link to Comment MrSteve
MrSteve's picture

Being thick as a stump, I can't figure out how to short a stock in other than its homeland currency. It always goes back to the domiciled currency doesn't it? If not, I'd like to follow the explanation.

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