QE3 On - QE3 Off: Bizarro World Wins, As Hatzius Threatens Lowering Forward GDP

Tyler Durden's picture

We have now gotten to the very limits of the market, where any even modestly bad news (Services ISM) even if of a secondary importance nature, sends the market surging higher as expectations that QE3 is inevitable, hit 100%. Then when good news comes, and QE3 is deemed to be impossible, the market plunges. Bizarro world, where bad news is good news and vice versa, has won. Thank you central planning. And for all those who jettisoned gold on expectations the economy was actually, chuckle, improving, here is your chart.

And here is all that took to send the market into an inverse tailspin, courtesy of Jan Hatzius:

1. The nonmanufacturing ISM disappointed expectations in March, with a drop in the headline index to 57.3 from 59.7. The decline was driven by a sharp drop to 59.7 from 66.9 in the business activity index - the biggest drop since late 2008 -- which is the component we have found to be most closely correlated with GDP growth. Other components showed smaller changes, although the employment index also fell to 53.7 from 55.6.

2. The level of the nonmanufacturing ISM is still consistent with above-trend growth in real GDP. However, this is the first meaningful disappointment in a business survey in several months, so it deserves some attention.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
schoolsout's picture

Even if the economy "improves," the debt load is huge and only growing larger...gold will climb

msohn's picture

And gold just broke $1450

jus_lite_reading's picture

WHOA! SILVER AT $40 WAS A GREAT PREDICTION! Dr. Kaku says Fukushima haning by a fingernail now that REACTORS 5&6 ARE CRITICAL AND LEAKING!!!!!


and radioactive fish!!! LETS EAT!


Circlehook's picture

Gold Bitchezzzzzzz! QE Infinatum

spartan117's picture

Congrats to whoever bought the effing dip at 1415.

Cash_is_Trash's picture

Their suppression allows us to accumulate sound money at bargain prices.

Myself, being 27 years of age, see this as a golden opportunity to buy as much metal with my meager salary and convert it into real money.

Yesterday, my ignorant-ass roommate laughed when I said gold and silver are money and dollars are notes with no intrinsic value.

Fuck the youth, fuck the baby boomers, money is VERY cheap.

May the nonbelievers eat their paper.

NotApplicable's picture

Don't forget the lead, those nonbelievers may require some for a balanced diet.

Cash_is_Trash's picture

I agree, the millions of nonbelievers are losing everything as we speak, defend with lead buckshot.

The rug is being pulled out from under; the commoner doesn't understand why the metals, food and energy are rising, they don't care; so I say fuck 'em.

The books and websites are out there, no excuse for ignorance.

RafterManFMJ's picture

Pick up some 12 guage defense loads; 1 oz rifled lead slug with 4 .00 BBs on top. Best o both worlds.

DeadFred's picture

I hear two somewhat conflicting theories on why Blythe keeps shorting a fast rising market.  One is the gov'ment pays her to make the sheep feel good about the security of the fiat dollar.  The other says the Chinese are paying her to keep silver (and consequently gold) down so they load up on the spot market at cheaper prices.  Am I missing any reasons?  How do all you vote?

hedgeless_horseman's picture

The idea that Blythe keeps shorting a fast rising silver market is an old and worn out internet myth. 

Blythe is actually a very intelligent, ethical, and hard working woman.  Did I mention that she is attractive as well? 

hedgeless_horseman's picture

Sorry, I got that backwards.

The idea that Blythe keeps shorting a fast rising silver market is a very intelligent and attractive theory. 

Blythe is actually an old and worn out woman. 

EscapeKey's picture

That's not all - look at the volume.

I'd like to place a bet that the commercial short position in the next COT report shows a dramatic increase, which obviously doesn't clue in the CFTC, as it doesn't feature Sasha Grey (oh, don't google her, she's most certainly NSFW).


FLUSA.com's picture

In keeping with this theme   The final countdown...only 626 days until Dec 21, 2012... 

I Am Ben's picture

Lulz ya, loved that movie

unwashedmass's picture


first "meaningful" disappointment....ah, jan, doncha mean the first piece of data that even all the spinning could paint a cheery smiley face on?

TruthInSunshine's picture

We're headed to under 50 again - it's only a question of when.

The system is so badly warped, they can't even manipulate this number at will, any more (this assumes they haven't already dumped anything tied to any ridiculous notion that the economy is healing).

Say hello to the Big Double Dipper.


Cdad's picture

Brother Truth,

I rather think will be longing for a simple double dip...and that reality is going to be far worse than that if bankers continue to have their way, and DC continues to ignore the financial peril at hand.

It is quite the cosmic bunny hole we have stumbled down today.


TruthInSunshine's picture

Some bunny hole at that.

The Bernank is in the vice jaws of a liquidity trap quick sand pit, and Timmay is too weak and delicate to break him free.

Timmay has resorted to announcing months if not years old news, now, in some pathetic attempt to maintain any relevance to the news cycle, like a lonely and sad hobo, full of Mad Dog 20/20, mozying down the alley way:

Cdad's picture

This cosmic bunny hole in particular is called failure.  Despite trillions of dollars fractionalized and spent, and with a state of largely dependent and sleepy citizens having long forgotten what it means to be free, comes austerity as the last way out;  this, as the market rises, puts on its hockey helmet, walks to the center of the room, and claps for itself.

Brother, I do believe I see unicorns out there in the field.   


TruthInSunshine's picture

Yes, and sadly, those unicorns will have to be put down, as they've been grazing on a patch of highly irradiated Bernanke Confetti, aka FRNs, which has been growing wild around here as of late.

We'll unfortunately have to tag and bag them, and pile them in the barn with the glowing swans we were ordered to take last night.

I loved those swans, before they started glowing, that is. The helped to fertilize the PM crop, but that's thriving now, anyways.

Cdad's picture

Wow...this is one of those days when you can clearly see how deep the cosmic bunny hole is, and how far into the bowels of the BlowHorn [CNBC] the criminal syndicate Wall Street bankers truly are.

1.  We have a defense of Apple call from some blond teleprompter reader citing rumors that people are buying shares of Apple because the Iphone 5 might come early instead of selling shares of Apple because they have to.  

2.  At Abercrombie and Fitch, you have the company patting itself on the back, and the syndicate going 12 percent worth of crazy on the self flagellation. 

3.  And at the noon hour, they toss over to Laszlow Birinyi with the question, "Why will the market go higher?"  The question is absolutely mastered by Birinyi's answer, "Because I say so."

4.  These things...while gold ramps to an all time high.


Liquidating longs...

whatz that smell's picture

pigs have wings, snowballs in hell, and netflix prints red. WTF? BTFD!

10:58:56, bitchz! i can tell my grand children i was there when NFLX was red.

praise be the bernank! may the speculative fever never break!

I Am Ben's picture

No need to praise me, just doing my job



swanpoint's picture

Anybody know anything real about Form 8621 and what's really neeed to elect CEF as a QEF? I plan to buy a lot more and am interested in avoiding get dicked by the IRS. I bought a bunch (first time buyer) of CEF this year (2011), so I think I got to file Form 8621 in 2012 and elect those shares as a QEF? Also, any advise on home safes, guns, bullets, ballastic blankets, et al. is also welcome. Do I bolt the safe to the floor in the master bedroom or in the concrete in basement? If it's in the basement, my guns won't be readily available in the middle of the night? 2 safes? 2 safes, and plaster over the coin in the drywall?

alien-IQ's picture

I had always wondered what ever became of all that bad brown acid that was floating around in Woodstock....Good to see it didn't go to waste.

camoes's picture

It's not bizzaro world Tyler, it's the Buy Anything That Happens Dip scheme, tell your friends and family! Just open a margin account and lever in any randomly chosen asset and enjoy the ride! We will all be billionaires soon enough (cartwheel to carry your monies not included)

yabyum's picture

Yo, Camoes, Thats the ticket! I will go open a home equity loan on my house........wait, I live in the shelter.

ziggy59's picture

what did you think my avatar was? its Bizarro World aka Htrae

alien-IQ's picture

EUR/USD hit the LOD @ 9:30am...been going straight up ever since....what are the odds? LOL!!!!

I Am Ben's picture

New reader here!


Wow - just, WOW - that's a really cool chart you've got there with the colours and all, where did you get that?

Dick Darlington's picture

Seems that everything is good news for equities in the bizarro world The Bernank has created. PM's are the REAL winners though.

lieutenantjohnchard's picture

i hear the bernank's favorite group is the allman brothers. favorite song: one way out.

Clockwork Orange's picture

No QE3?

Shouldn't we be flash-crashing soon?  Or does that come after the spike where we slay the shorts, then pull Gramma into the market.

Oh, never mind, in one of the few glimmers of hope, Gramma has decided with finality she will not be gettiing into the ponzi again. 

No matter what Bullard says. 

Trillax's picture

Damn.. 1446.7 as of 11:06am EST.. big spike again.

Platinum_Investor's picture

I believe QE 3 has to be off for the short term. 

It would be suicide for them to extend it right away.

They will need to spin it some other way that people can`t understand

and will get the job done the same as now.

Misean's picture

How do you game the 401k market? Unlike 2000, this bubble has produced no capital investments at all.

InconvenientCounterParty's picture

Oh, don't despair. Medicare "privitization" is next. That's when the money spigot opens for a new generation of innovators.

Milton Waddams's picture

It's just like the old days of the late-'90s bubble, stocks would rally on higher unemployment... because it was interpreted as disinflationary, thus reducing the odds Greedspan would take away the liquidity punch bowl.  Uncork the bubbly!

lieutenantjohnchard's picture

time for commentary on silver and gold from zh's resident genius' on the topic: spalding "vanishing act" smailes, and the old catfish mouth himself, robotard.

spartan117's picture

So much for resistance.