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What To Expect As QE 2 Ends, And Why By The Time QE X Is Over "Bernanke Will Be The Biggest Landlord In The Country"

Tyler Durden's picture


We have long claimed that 2011 is playing out in a manner virtually identical to 2010, almost to the tic. And as we approach the end of QE2 in 6 weeks, a quick glance at what happened with stocks following the end of QE1 in March of 2010, will be illustrative of what to expect this time around, because contrary to what Comcast's business channel would want its ever declining viewers to believe, it never really is "different this time." To help with that comparison, here is a David Rosenberg summarizing what happened between the end of QE1 and Bernanke's August 27 announcement of QE2. If this is all it takes, then as we (and Scott Minerd earlier) have predicted, get ready for not only QE3, but 4, 5 and so forth. And not only that, but Rosie joins the likes of Zero Hedge, Minerd, Koo, Janjuah and all other pragmatics who realize that the Fed will never, never, allow deflation to run its course even if that means collateralizing the dollar with sewer bonds and physical housing, which incidentally is what Rosenberg predicts: "the day the QE programs run their full course, the Fed will have
likely added physical housing units to its balance sheet as opposed to
just mortgage paper. Ben Bernanke will be the biggest landlord in the
country at that time."

Rosie reminds what happened laste year between the end of QE1 and the surprise start of QE2

  • S&P 500 sagged from 1,217 to 1,064
  • S&P 600 small caps dell 394 to 330
  • The best performing equity sectors were telecom services, utilities, consumer staples and healthcar, in other words - the defensives The worst performers were financial, tech, energy, and consumer discretionary [sound familiar?]
  • Baa corporate spreads widened +59 bps from 237 bps to 296 bps
  • CRB futures index dropped from 279 to 267
  • Oil went from $84.30 a barrel to $75.20
  • The trade-weighted US dollar index (against major currencies) firmed to 76.5 from 75.5
  • The yield on the 10-year US Treasury note plunged to 2.66% from 3.84%

and yet...

  • Gold was the commodity that bucked the trend as it acted as a refuge at a time of intensifying and financial uncertainty - to $1,235 an ounce from $1,140 and even with a more stable-to-strong U.S. dollar too.

In other words, for those who have forgotte, gold was the only commodity that outperformed and in fact rose, as at least someone had an inkling that QE 2 was coming...

And Rosie's prediction:

The Fed is seriously contemplating an end to QE2 but make no mistake, QE3 will come down the pike, but at completely different levels on everything. It is certainly not going to happen at 1,330 on the S&P 500 but we do know that the strike price last fall was 1,040 and lots of chatter of a 'double dip' recession.

Bernanke, Yellen and Dudley, in contrast to the Fed Bank Presidents, would love nothing more than to quickly embark on QE3 and keep economic growth above 2% but they do not have enough support on the FOMC or on Capitol Hill. But that day will come when we see QE3 and it will be the day when all the folks who are complaining and lamenting QE are lining up begging for it. (And, the day the QE programs run their full course, the Fed will have likely added physical housing units to its balance sheet as opposed to just mortgage paper. Ben Bernanke will be the biggest landlord in the country at that time.)

Which means that by then, the dollar will be collateralized by multi-family apartments, warehouses and, appropriately, sewer bonds. Which also means that the dollar will be approaching an inverse asymptotic valuation. Which, lastly, means that the Fed will be monetizing every last piece of paper to come out of the Treasury, as America changes its name to the United States of Weimar.

And for those who missed Minerd's thought on the issue earlier, here it is again from the horse's mouth.

Guggenheim Partners - Market Perspectives - The Case for More Monetary Elixir


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Thu, 05/19/2011 - 17:14 | 1293397 ZapBranigan
ZapBranigan's picture

Bernank Slumlord Bitchez!

Thu, 05/19/2011 - 17:19 | 1293424 Fish Gone Bad
Fish Gone Bad's picture

The Fed will buy up all the tranches and put the bonds back together again.  Yes, the Fed will indeed own everything that was securitized.

Thu, 05/19/2011 - 17:23 | 1293439 cat2
cat2's picture

Bernanke will not be the owner, he's just president.  The owner of these properties bought with dollars printed from thin air will be the shareholders of the Federal Reserve Bank.  And that is clearly... err...  ?????

Thu, 05/19/2011 - 17:31 | 1293468 cat2
cat2's picture

That boat on the top of the report is NICE.  That's the kind of boat only maid raping banksters can afford.

Thu, 05/19/2011 - 17:37 | 1293500 Xibalba
Xibalba's picture

dime a dozen nowadays...

Thu, 05/19/2011 - 18:08 | 1293600 camaro68ss
camaro68ss's picture

Its my birthday today bitchez!!!!

If your wondering, a silver eagle is a good present

Thu, 05/19/2011 - 19:17 | 1293804 I am Jobe
I am Jobe's picture

Happy Birthday

Fri, 05/20/2011 - 01:52 | 1294718 Michael
Michael's picture

Thank goodness the Federal Reserve is Federal, which means all the people of our country own that property, given the fact that the people are the government.

Thu, 05/19/2011 - 19:39 | 1293858 sgorem
sgorem's picture

how bout a couple of spray cans of Red Rustoleum for that 68 Cam :)HBD.....

Thu, 05/19/2011 - 19:44 | 1293860 savagegoose
savagegoose's picture

happy birthday


1 silver eagle certificate , present in person to collect.

Thu, 05/19/2011 - 17:35 | 1293503 smlbizman
smlbizman's picture

please forgive ot. but earlier during obama speech , i could not help but notice that they had the tassels on the flags hidden, i am under the understanding that tassels = military rule. i think this went in place in the 70' them trying to conceal admits, finally, to there actual meaning?...once again i apologize for the interuption

Thu, 05/19/2011 - 18:13 | 1293606 Moe Howard
Moe Howard's picture

I found this explaination, long read.

Hope it helps. I'm more distressed about the U.S. Constitution that he is using as a door mat rather than a flag he wouldn't even salute nor wear on his lapel during the campaign.

Thu, 05/19/2011 - 18:11 | 1293609 blunderdog
blunderdog's picture

No man, don't worry about it, that's a red-herring.  If we were under military rule, the gummit wouldn't have it's act together enough to make sure the flags had tassles in the first place.  Honestly it's a wonder they manage to make sure it's 50 stars.

Thu, 05/19/2011 - 20:32 | 1293990 ParaZite
ParaZite's picture

Eh, The Chinese make all of our American Flags... therefore your argument is invalid. 

Thu, 05/19/2011 - 21:14 | 1294108 Yen Cross
Yen Cross's picture

Nice name  change!

Thu, 05/19/2011 - 18:15 | 1293615 YHC-FTSE
YHC-FTSE's picture

It's the Maltese Falcon, the largest privately owned sailing super yacht in the world from the Perini Navi shipyard. Yours (2nd hand) for a bargain $100M.

Thu, 05/19/2011 - 22:03 | 1294257 Problem Is
Problem Is's picture

"Well, if you lose a son, it's possible to get another. But there's only ONE Maltese Falcon!"

Kasper "Fatman" Gutman

Fri, 05/20/2011 - 01:56 | 1294725 ViewfromUnderth...
ViewfromUndertheBridge's picture

if I remember correctly the Maiden Lanes have got boat loans in 'em...probably not that one

Thu, 05/19/2011 - 19:29 | 1293828 Fedophile
Fedophile's picture

Bernanke will not be the owner, he's just president.  The owner of these properties bought with dollars printed from thin air will be the shareholders of the Federal Reserve Bank.  And that is clearly... err...  ?????

It doesn't matter, the colateral provided by the UST to the Fed in it's creation was lent to the bankers who then bought the shares in the Fed. It's a 0 risk trade when UST defaults.

Thu, 05/19/2011 - 17:25 | 1293453 Sgt.Sausage
Sgt.Sausage's picture

SlumSatan Trillionaire!

Thu, 05/19/2011 - 18:02 | 1293581 Votewithabullet
Votewithabullet's picture

Makes sense that the Bernanke is the Biggest slumlord, the Federal Gov is the largest land owner. Writings on the wall... I cant read it but I see the markings.

Thu, 05/19/2011 - 18:29 | 1293661 hamurobby
hamurobby's picture

Well some old guy in history named Thomas Jefferson warned us about this happening, ....but that was over fifty years ago, Shurley, no one was alive back then....

Thu, 05/19/2011 - 22:44 | 1294337 johnnynaps
johnnynaps's picture

This population barely remembers the Katrina response time! If I were dictator, I would........!!!

Thu, 05/19/2011 - 18:23 | 1293638 Calculated_Risk
Calculated_Risk's picture

LOL, careful.. robobitch will get offended.

Thu, 05/19/2011 - 17:17 | 1293400 Rodent Freikorps
Rodent Freikorps's picture

Molon Labe, bitches.

Thu, 05/19/2011 - 17:20 | 1293425 RobD
RobD's picture


Thu, 05/19/2011 - 17:29 | 1293459 Sgt.Sausage
Sgt.Sausage's picture

I see what you did there!


Thu, 05/19/2011 - 17:31 | 1293481 WaterWings
WaterWings's picture


Thu, 05/19/2011 - 17:16 | 1293406 Spalding_Smailes
Spalding_Smailes's picture

Solid Recovery Bitchez™

WASHINGTON, D.C. – May 19, 2011 – The Association of American Railroads (AAR) today reported steady results in weekly rail traffic with U.S. railroads originating 294,271 carloads for the week ending May 14, 2011, up 1.6 percent compared with the same week last year. Intermodal volume for the week totaled 231,875 trailers and containers, up 6.3 percent compared with the same week in 2010.

For the first 19 weeks of 2011, U.S. railroads reported cumulative volume of 5,527,357 carloads, up 3.3 percent from last year, and 4,234,798 trailers and containers, up 8.8 percent from the same point in 2010.  Combined North American rail volume for the first 19 weeks of 2011 on 13 reporting U.S., Canadian and Mexican railroads totaled 7,196,689 carloads, up 3 percent compared with the same point last year, and 5,249,054 trailers and containers, up 8 percent compared with last year.

Thu, 05/19/2011 - 17:26 | 1293442 tmosley
tmosley's picture

You keep saying that, but it never happens. It just keeps getting worse, and worse, and worse.

Tell us more about Mars, Calvin.

Thu, 05/19/2011 - 17:34 | 1293484 Spalding_Smailes
Spalding_Smailes's picture

About 4 weeks ago you took Silver, I had GLUU Mobile .... How's that crow soup, I made it extra spicy .... ???


MINNEAPOLIS, Minn. & LOS ANGELES, Calif., May 11, 2011 The Ceridian-UCLA Pulse of Commerce Index™ (PCI), issued today by the UCLA Anderson School of Management and Ceridian Corporation fell 0.5 percent on a seasonally and workday adjusted basis in April, marking a continuation of the see-saw economic performance experienced over the past twelve months.

Year-over-year growth in April was again positive, up 3.5 percent. This was the seventeenth straight month of year-over-year improvement in the Index and a clear indication that the economic recovery continues. From an absolute standpoint, GDP remains ahead of the previous peak reached in Q4 07. But the PCI and industrial production are still about 5 percent below their previous peaks – meaning that the goods producing component of GDP is still well below its previous high.

“Over time, the PCI has shown a substantial correlation with industrial production,” explained Craig Manson, senior vice president and Index expert for Ceridian. “In fact, the PCI forecast of 0.8 percent growth in industrial production for March matched the estimate subsequently released by the Federal Reserve. This was the second straight month that the PCI matched the subsequent government estimate. Based on the relatively weak April result, the PCI is calling for growth of 0.25 percent in industrial production when the government reports its number on May 17.”
The PCI is not only closely correlated with industrial production, it has also shown a remarkable correlation with retail sales over the past ten years. This month, we have broadened the scope of the Index report to include a discussion of that relationship.

Thu, 05/19/2011 - 17:55 | 1293568 tmosley
tmosley's picture

Why are you still doing odd jobs if you are such a great trader?

Answer: you aren't.

Also, you have only been "saved" by the last three days of trading, and more specifically, some new company giving it a "buy" rating. Good luck with that shit.

Thu, 05/19/2011 - 18:18 | 1293624 Spalding_Smailes
Spalding_Smailes's picture

Odd jobs .... ? After my import / distributor license comes in that will be business number three ... Lol'


Make sure you fluff your boss before his euro vacation .... Fluffer Boy™ ... 

Thu, 05/19/2011 - 18:22 | 1293644 akak
akak's picture

Everybody please stand at attention, as Spalding will now sing the national anthem of Trollistan:

Thu, 05/19/2011 - 20:10 | 1293933 Shell Game
Shell Game's picture


Fri, 05/20/2011 - 08:18 | 1294980 Blankman
Blankman's picture



I don't know why by I felt compelled to watch the whole ???song???  It just seems to keep going and going and going and....    

Fri, 05/20/2011 - 10:02 | 1295193 akak
akak's picture

That is what I find so creepily funny about the thing --- it is instantly and obviously bad, Bad, BAD, yet it seems to compel almost everyone to keep watching, and to go back to and watch again and again!  Is this some novel form of Soviet mind control?

(It is from a 1970s Soviet television program, in point of fact.)

Sat, 05/21/2011 - 17:47 | 1298824 BigJim
BigJim's picture

You're saying Akak is gay?

That's, like, devastating, man.

Sat, 05/21/2011 - 20:51 | 1299226 akak
akak's picture

Yes, BigJim, I have to come out of the closet and admit it: I am gay.  But only for Spalding and MethMan --- they are such perfect and eager bottoms, I just CANNOT resist them!

Hey Spalding, you got a real purdy mouth ....

Thu, 05/19/2011 - 18:45 | 1293722 francis_sawyer
francis_sawyer's picture

Why would you even need a "business #3"???

Isn't CHINA paying you handsomely (in yuan) for those golden showers?

Thu, 05/19/2011 - 18:53 | 1293745 Spalding_Smailes
Spalding_Smailes's picture

Why would you even need a "business #3"???


Why not ... ? 

I'm not expecting social security and I want to be in Marco Island when I'm 55 on a fishing boat. 

Thu, 05/19/2011 - 18:56 | 1293756 akak
akak's picture

I want to be in Marco Island when I'm 55 on a fishing boat.

If there is any justice in the world, you WILL be on that fishing boat --- as chum.

Thu, 05/19/2011 - 19:37 | 1293846 The Profit Prophet
The Profit Prophet's picture

Poor little Troll....haven't you heard? Marco Island will be a pillaged wasteland.  It currently holds down the 3rd spot on the "Place to find the Greedy Bastards who destroyed the economy" list of the pitchfork brigade.

T.E.I.N. everyone! 

Fri, 05/20/2011 - 09:52 | 1295176 boiltherich
boiltherich's picture

I thought the list was

1) Marin County

2) Suffolk County

3) Nantucket

4) K Street

5) Rancho Santa Fe/La Jolla

6) the State of Connecticut

and THEN the Florida Isles like Marco and Fisher

Though I had lobbied for Gestadt if it is winter in the number two spot and most importantly Dubai for all those that got away.

Thu, 05/19/2011 - 18:48 | 1293731 tmosley
tmosley's picture

Spalding the delivery boy is starting a new business eh?  What's wrong, the delivery business drying up?  You stopped delivering BJs to the corrupt pols ordering lawn furniture from your pal?

Also funny that Spalding goes on and on about the strength of American manufacturing being strong, but is opening up an IMPORT business.  You should be exporting.  But you aren't.  Because there is nothing to export.

I should also note that our "bet" was made on April 15th, with a term of two weeks.  I won that shit, hardcore.  Funny that you decided to extend the term to today, when you are only "winning" by staying even.  That shit is funny right there.

Thu, 05/19/2011 - 19:25 | 1293818 Spalding_Smailes
Spalding_Smailes's picture

Averaged $ 2,200.00 over the last 7 weeks. - taxes, -$350.00 in diesel ( now 3.79 and dropping )..... 

Printing is easy money. Shirts, letterhead, banners, ncr forms ect .... All from my computer.



 .... nice call on silver last month ( never below $35 again as you called for not 50, not 60 .... !!! ) Lol' 


Thu, 05/19/2011 - 17:27 | 1293462 Tyler Durden
Tyler Durden's picture

Thu, 05/19/2011 - 17:37 | 1293498 Spalding_Smailes
Spalding_Smailes's picture

When can I post charts ..... ??? I was on the old Zero Hedge from the the start ( jesus 2.0 ) :-P



Thu, 05/19/2011 - 17:55 | 1293567 Rainman
Rainman's picture

....on a long enough timeline longevity is a curse.

Thu, 05/19/2011 - 17:57 | 1293573 tmosley
tmosley's picture

When you contribute something of value.

I know, that thought is beyond your ability to comprehend.

Thu, 05/19/2011 - 18:08 | 1293603 Votewithabullet
Votewithabullet's picture

That pussy is perfectly able to comprehend He chose Judge smales grandson for a reason" $ 50 bucks says the kid eats it" that pussy is here only to annoy,If he wonders into the wrong neighborhood the call will be" Shoot it paw".

Thu, 05/19/2011 - 22:11 | 1294265 Problem Is
Problem Is's picture

"I was on the old Zero Hedge from the the start..."

Tyler has you at 39 weeks...

Get in line behind me and Rainman, bitch...

Thu, 05/19/2011 - 17:45 | 1293527 EnglishMajor
EnglishMajor's picture

Of course railroads are up, look at the price of oil/gas and its relation to the trucking industry.  Buffett isn't an idiot for buying a railroad.

Thu, 05/19/2011 - 17:51 | 1293559 That Peak Oil Guy
That Peak Oil Guy's picture

Oil price goes up, trucking volume goes down, rail volume goes up.  You sure like to cherry-pick your data.


Thu, 05/19/2011 - 18:08 | 1293594 Spalding_Smailes
Spalding_Smailes's picture

Analysts across markets watch shipping levels to help gauge the state of the U.S. economy. Truck freight accounts for close to 68 percent of tonnage carried by all modes of domestic freight transportation, according to the ATA.


ARLINGTON, Va. -- US truck tonnage rose 1.7% in March, after falling a revised 2.7% in February, according to the latest data from the American Trucking Associations (ATA).

March tonnage reached the highest level since January of this year.

Compared to March 2010, seasonally adjusted US truck tonnage was up 6.3%, better than February's 4.4% year-over-year gain but below the 7.6% y-o-y jump in January, the ATA reports.

For the first quarter of 2011, tonnage was up 3.8% from the previous quarter and 6.1% compared to Q1 2010.


Thu, 05/19/2011 - 19:04 | 1293763 CPL
CPL's picture


Best site out there for trolling.

Sat, 05/21/2011 - 17:48 | 1298831 BigJim
BigJim's picture

March tonnage reached the highest level since.... January... of this year?

Where'd I leave that champagne?

Thu, 05/19/2011 - 19:51 | 1293872 sgorem
sgorem's picture

personally deleted for profanity......

Thu, 05/19/2011 - 20:27 | 1293984 lizzy36
lizzy36's picture

 Yes it is.

(Dow Jones) US rail carloads fell 2.6% from a year earlier last week, the worst performance of 2011, the Association of American Railroads reports. It comes after April logged its first monthly drop since February 2010 and as the US economy has shown signs of slowing anew. But the AAR notes last week's rail traffic was hurt by flooding in the upper Midwest. Intermodal traffic, which entails moving freight via multiple modes of transportation, remained strong, rising 11% on year last week. (

[ 05-12-11 1513ET ]

Thu, 05/19/2011 - 17:18 | 1293409 SilverDoctors
SilverDoctors's picture

The real question is what to expect when the dollar collapses.

Living Through a Currency Devaluation

Thu, 05/19/2011 - 17:25 | 1293437 Aquiloaster
Aquiloaster's picture

A firsthand account from someone who went through Argentina's hyperinflation.

Thu, 05/19/2011 - 17:30 | 1293423 Aquiloaster
Aquiloaster's picture

QE II ends. In my opinion, this will lead to temporary painful deflation, which will give an occassion to bring on QEIII to restart the inflation engine. As things unravel, the pendulum swings more widely.

TURNING and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;

-The Second Coming by William Butler Yeats

Thu, 05/19/2011 - 17:39 | 1293518 Rainman
Rainman's picture

Japan is entering recession # 3 in just ten years. Bernank will follow the Rising Sun.

Sat, 05/21/2011 - 17:50 | 1298839 BigJim
BigJim's picture

Not sure about the Yeats... but I agree with your QEIII call. It's the option that makes the most sense, if our worldview of how things really work here at ZH is correct.

Thu, 05/19/2011 - 17:23 | 1293429 cabernet
cabernet's picture

I agree that the "Bernank" has painted himself into a corner and additional will come our way once QEII ends. However, I do not believe the FED will own any real estate. Yes they do own a few billion dollars of private label mortgages. However, virtually all the MBS the FED hold on its balance sheet is issued by the agencies Freddie, Fannie, Ginnie and probably a few FHLB Bonds as well. Recall that the FED talked the Treasury into unlimited guarantees on Agency debt about a year an a half ago. So now the guarantee is explicit and binding. Therefore it will not be the FED that owns all the real estate, it will be the US Treasury through the agencies. The FED will me made whole.... naturally.


Thu, 05/19/2011 - 17:36 | 1293493 narnia
narnia's picture

the cleanest way for the Fed to manage this would be to purchase the notes directly from the banks, rather than let the FDIC shut down a TBTF...  which would cause a bank run of epic proportions.  Your understanding of how it "should" work is accurate, but how it should work is not something the Fed would allow.  

Thu, 05/19/2011 - 17:21 | 1293431 RobotTrader
RobotTrader's picture


Transports still pinned at lifetime highs.

Tough to be bearish on the market when these screamers are still pushing up.

Thu, 05/19/2011 - 17:45 | 1293535 Spalding_Smailes
Spalding_Smailes's picture

My accounts / receivable jump'd $ 11,000 in 8 weeks, its nice living 20 minutes away from the largest industrial park in the USA. And when your running work to the same chrome plating businesses & heat treaters every day, guess what, you land new accounts ....


Chicago, IllinoisAmerica’s crossroads, the nations’s transportation hub — where all modes of travel and freight movement intersect. Five federal highways and six of America’s major railroads pass through Chicago. Chicago’s airports have been critical to the global aviation system since the dawn of flight. And, well before trucks, trains, jets and planes moved people and freight, Chicago’s port facilities played a central role in America’s transportation system.


Thu, 05/19/2011 - 18:19 | 1293634 akak
akak's picture


(Hey look!  I can cut-and-paste too!)

Thu, 05/19/2011 - 21:49 | 1294225 rocker
rocker's picture

@ROBO   Man, give a old guy a break. 'Transports at all time highs'.  Please, it is a selective statement at best.

You have KNX, YRCW, @ 52 week lows, ABFS with others might be there soon.

Rails are the winners. Because they are carriers of most things. Price of Fuel, you bet. And they carry a heavy weight in the indexes. So Yes. But can that trend be a top.   Things that make me go HMMMMMM.

Next up and more important to me.  The Baltic Dry Index.   Nobody wants to talk about it. Hello Zero Hedge.

Tyler: Could we have more charts on the world's most important index for world trade.  I can't post this chart.

In my conclusion. The tanker companies have no Growth, their stocks are on the 52 week low list every week. Enough said.

Thu, 05/19/2011 - 17:59 | 1293571 Spalding_Smailes
Spalding_Smailes's picture

North American Class 8 orders up 37% since March up 157% over last year. 

Backlog for trucks sits at 55-month high ...

Thu, 05/19/2011 - 18:23 | 1293639 akak
akak's picture

I now ask everyone to please rise for the national anthem of Trollistan:

Thu, 05/19/2011 - 19:52 | 1293885 Votewithabullet
Votewithabullet's picture

U niggers need to get a room. Your only encouraging the fuck.To ignore is much more effective.

Thu, 05/19/2011 - 19:59 | 1293905 cosmictrainwreck
cosmictrainwreck's picture

Yer right, of course... but the little twerp is just irresitable. Such a dweeb, ya just wanna slap 'im. Hey Smells! How 'bout I call the fucking TOP right here, right now?

Thu, 05/19/2011 - 20:05 | 1293919 Spalding_Smailes
Spalding_Smailes's picture

Silver = $ 20.00 .... Ready, set, .....

Thu, 05/19/2011 - 20:06 | 1293913 Spalding_Smailes
Spalding_Smailes's picture


The thirst for dollars rolls on and on ..... Troll ( Spalding )??? What do you want to talk about treasury velocity or not .... ? Or you just a doomer™ gold troll ?



HONG KONG, April 26 (Reuters) - Indonesia plans to sell a benchmark-sized ten-year U.S. dollar-denominated bond with a price guidance cited in the "low 5 percent area", banking sources told IFR.

If realised, the yield on this paper would be lower than Indonesia's last dollar bond in January 2010 when it raised $2 billion, indicating that the appetite for the country's debt which is on the verge of an investment grade rating, remains robust.


(Reuters) - Kazkommertsbank (KKGByq.L) KKGB.KZ, Kazakhstan's largest lender, said on Wednesday it would issue medium-term dollar-denominated debt after May 2.

It said it had mandated J.P. Morgan and UBS Investment Bank to lead manage "a U.S. dollar-denominated ... benchmark transaction of intermediate maturity". (Reporting by Dmiry Solovyov; Editing by Lidia Kelly and Louise Heavens)


RIO DE JANEIRO (Dow Jones)--First-quarter net profits at Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, benefited from a stronger real currency that helped reduce the cost of the company's dollar-denominated debt, CFO Almir Barbassa said Monday.

The financial gain was the 'great differentiator' in Petrobras's year-on-year 42% jump in net profits in the first quarter, Barbassa said.

About 80% of Petrobras's debt is dollar-denominated, Barbassa said. Petrobras ended the first quarter with net debt of BRL66.1 billion, up from BRL62.1 billion in the fourth quarter 2010. In the first quarter, Petrobras launched a $6 billion bond offer in three tranches, as well as raising between $1.5 billion and $2 billion in credit transactions with financial institutions, Barbassa said.

Thu, 05/19/2011 - 20:07 | 1293929 mynhair
mynhair's picture

Soros owns Petrobas, you numbnuts.

He bought it while you were sleeping off

your dopeover.

Thu, 05/19/2011 - 20:17 | 1293948 Spalding_Smailes
Spalding_Smailes's picture

Got dollars .... ?


SAO PAULO/RIO DE JANEIRO, May 19 (Reuters) - Brazilian oil company OGX (OGXP3.SA), controlled by billionaire Eike Batista, plans to sell up to $2 billion of seven-year senior notes to fund offshore exploration and development plans, two sources familiar with the plans told Reuters on Thursday.

The debut sale of U.S. dollar-denominated debt will be the first issuance in international bond markets by any of the companies in Batista's EBX conglomerate, which includes firms in the mining, electricity and shipbuilding industries.


The official said there would be a provision for cancelling a fund’s licence.

Among other checks, foreign entities buying dollar-denominated bonds issued by infrastructure debt funds would not be allowed to sell these in India. This is being done to stop black money from entering the country. The official said overseas bonds would be bought and sold outside while the bonds issued in India would be traded only here.

He said both trusts and companies would be allowed to float infrastructure debt funds. Trusts floating units will be regulated by Sebi, while companies that issue bonds will work under the Reserve Bank of India (RBI) regulations. “Both the units and the bonds will be listed, so that they can be traded,” said the official.


Malaysia is said to be planning a 10- year dollar-denominated Islamic bond, its second sovereign sale of Shariah-compliant debt in a year, four people familiar with the matter said.

Three local investment banks submitted pitches proposing a size of $500 million to $1.7 billion, said the people who couldn’t be named as the matter is confidential. The deadline for the request for proposals from bankers has closed, they said.


Senegal sold 10-year dollar bonds, its first international offering since 2009, at a yield that was almost three percentage points higher than similarly rated Nigeria’s. The government raised $500 million in the sale of the bonds 2021 that were priced to yield 9.125 percent, a banker with knowledge of the deal said.

Standard & Poor’s assigned a B+ assessment, its fourth-highest junk rating, to the West African nation’s bonds, it said in a statement today. Standard Chartered Plc and Standard Bank Group Ltd. were underwriters of the sale.

Thu, 05/19/2011 - 20:34 | 1293999 akak
akak's picture

I bet you totally hogged all the scissors and glue during kindergarten, as cutting and pasting (desperate pro-Establishment talking points and propaganda) seems to be an obsession with you still.

You may not have noticed it yet, but nobody in this forum gives you the slightest bit of credence.

Thu, 05/19/2011 - 20:41 | 1294013 centerline
centerline's picture

LMAO for sure.  Compelled to share this and save it for future use!

Thu, 05/19/2011 - 18:36 | 1293694 Highrev
Highrev's picture

Nice comments Spalding, and much appreciated.

Objectivity is difficult to achieve, but thanks to the multiple input system we have here, it’s now a little less so.

You know, it’s like the Japan supply line thing supposedly slowing down the rest of the world when perhaps it’s the rest of the world that will pick up the slack (i.e., the competition benefits). And I won’t even mention the superficial, cartoonish treatment of the “Spanish Revolution”. What a joke. (Maybe I’ll comment some more on that later with the next post on the subject.)


Thu, 05/19/2011 - 18:44 | 1293710 Spalding_Smailes
Spalding_Smailes's picture

Well the doomers™ got blasted over the last month. They can sing about prior purchases bla, bla, bla ...but we all know they all got blowtorched™, leverage kills and most of the doomer™ sect got killed .... Lol'

Thu, 05/19/2011 - 18:50 | 1293723 akak
akak's picture

You are just spouting hate and lies, having NO idea what you are talking about, and yet again taking a terminally short-sighted view a la RoboLemming, declaring the game over in the middle of the second inning.

The only thing "blowtorched" here is your credibility --- not that it was not DOA long ago already, but it is fun to see it burnt to ashes by your hysterical cut-and-paste denials of the larger reality.

What motivates you diehard defenders of a corrupt and failing status-quo, anyway?  I would LOVE to just get into the head for just five minutes of a blind sheep and acquiescent slave to the sociopathic power elite such as you, just to finally know which is the predominant mover there: ignorance, or cowardice?

Thu, 05/19/2011 - 19:46 | 1293873 The Profit Prophet
The Profit Prophet's picture

It's actually much simpler than that.....they are paid by the post.

T.E.I.N. everyone!

Thu, 05/19/2011 - 19:57 | 1293910 jm
jm's picture

If you could see how ridiculous this is, you would hang your head in shame.

Thu, 05/19/2011 - 20:07 | 1293924 akak
akak's picture

I'm ignorant and stupid --- please explain it to me.

Thu, 05/19/2011 - 20:11 | 1293935 mynhair
mynhair's picture

Simple:  Obama.

Thu, 05/19/2011 - 20:51 | 1294040 centerline
centerline's picture

There is no doubt a huge difference between preparing for the end of the system as we know it, outright mad max doom crap, and playing this crazy market.   Robo points this out daily.  From a trading perspective - right on.  Got to suspend disbelief and play the tape without bias (hold nose and BTFD, LOL).  Clearly that is why folks playing long in silver arena a few weeks ago got bodyslammed.

From a reality standpoint, all I can say is that I sincerely hope you dont think the wheels are going to stay on this bus indefinately.  We got ourselves a regular mexican standoff going on... and the Fed only has one tool in the toolbox aside from conjecture/spin/propoganda/etc.  Remember, financial crisis (theft) = soveriegn crisis = political crisis = public crisis (people's crisis) = currency crisis.  So far, right on track.  Caveat of course is war and it sure seems the MENA flames are being fed pretty regularly now.

Thu, 05/19/2011 - 19:57 | 1293903 sgorem
sgorem's picture

thanks anyway.......

Thu, 05/19/2011 - 20:59 | 1294062 centerline
centerline's picture

Dude, its not entirely the slack. It's what the response will be.  Do you think Japan will go quietly into that good night (setting sun)?

They will inevitably have to take drastic financial action.  That will have consequences - action/reaction - on other currencies.  The race to the bottom will accelerate.  

Thu, 05/19/2011 - 18:14 | 1293621 Rainman
Thu, 05/19/2011 - 19:26 | 1293821 razorthin
razorthin's picture

Triple top coming right up, perhaps.

Thu, 05/19/2011 - 20:20 | 1293964 cosmictrainwreck
cosmictrainwreck's picture

or That double top Dow 12620-ish was a beauty, though

Thu, 05/19/2011 - 17:24 | 1293432 somethingelse
somethingelse's picture


I'm picturing Monopoly: FED Version 

Special Rules: Only Banker Can Win the Game

Watch the Bernanke run round the board putting up houses/hotels and taking others' houses/hotels when he bankrupts them.     oh joy  can't hardly wait

Thu, 05/19/2011 - 17:30 | 1293436 Zero Govt
Zero Govt's picture

Bernanke deserves all the property in the US. He is afterall the ultimate buyer of crap of last resort in the US

Crap MBS's, any crap Wall Street wants to offload, crap US Govt debt and now the crap made by the US Govt of the US property market

Bernanke loves buying crap, he's cornered the market in buying American crap, I say let him take it all  

Thu, 05/19/2011 - 17:49 | 1293541 Rainman
Rainman's picture

....he can take the little chillens too. Impose the old involuntary servitude rule. Student debt about to breach 1 Trillion fiatscos....full recourse.

Thu, 05/19/2011 - 18:29 | 1293642 Zero Govt
Zero Govt's picture

yes cornering (conning) the youth of America into a debt yoke has just about got everyone now... and with 30 Year bonds stretching to 100 Years soon there's a Century of new born debt-slave babies on the hook too ... God bless the US Govt

Thu, 05/19/2011 - 19:27 | 1293824 Rainman
Rainman's picture

The Doctor did a scary piece on the student loan issue. Student loan debt is now equivalent to 7 % of US GDP



Thu, 05/19/2011 - 21:27 | 1294137 Zero Govt
Zero Govt's picture

Yep there's no doubting the student loan crisis is a crisis US housing... US banking... US healthcare ....US foreign policy fact pretty much everything and anything Govt is involved in

Thu, 05/19/2011 - 17:23 | 1293441 Dreadker
Dreadker's picture

he's gonna be like the barons back in ye olde england... We won't even be able to poach for food on his lands without prosecution... Also i'm sure he'll just posess all that will be repossessed... So he'll have the largest number of boats, cars, houses... and just auction them off to foreign investors...


I'm already seeing the pinch of the second(third or is it fourth or maybe fifth) housing dip around us.... theres over 17 places for sale or foreclosed on our street of maybe 30 houses... weirdly they're all up for a ludicrous price so how they'll sell to non existent buyers is beyond me... I'm envisioning living on a street where only 15% max of the houses are occupied... Ghost towns...  My wife can be mayor and i'll be sherriff lol  We'll kick the tumbleweed while the fed keeps kicking the can ;-)

Thu, 05/19/2011 - 17:52 | 1293539 spinone
spinone's picture

dupe deleted

Thu, 05/19/2011 - 17:51 | 1293546 spinone
spinone's picture

fun until the municipality shuts doff the water and sewer to the area, since half the rate payers are gone and it doesn't cover the cost of doing business there anymore.

Thu, 05/19/2011 - 19:13 | 1293791 dracos_ghost
dracos_ghost's picture

shaun the sheep rules


Thu, 05/19/2011 - 17:26 | 1293443 silvertrain
silvertrain's picture

US land and RE will be the backing of the new and improved dollar..Natural resources will be put up and we will continue to borrow for many years to come...

Thu, 05/19/2011 - 17:23 | 1293444 max2205
max2205's picture

Let me know when he buys my mortgage and I will with great pleasure quit paying. :>)

Thu, 05/19/2011 - 17:35 | 1293457 ebworthen
ebworthen's picture


That's right, and when they can't give you the SS and Medicare you paid into for 40 years they'll offer you an apartment in Detroit & medical care at the local meth clinic.

If you're young enough you can work at the munitions factory or the naval yard to aid in the fight for oil against the Sino-Russian alliance.


Thu, 05/19/2011 - 17:27 | 1293463 kito
kito's picture

why isnt gold holding up nowwwwwww????

Thu, 05/19/2011 - 17:33 | 1293474 ebworthen
ebworthen's picture

Speculators needed some cash to play in the LinkedIn bounce house.

Besides, it's only at 1,493, holding better than oil or housing ;-)

Thu, 05/19/2011 - 17:33 | 1293492 cat2
cat2's picture

QE3 hasn't started yet, and until we do deflation is building.  Gold hasn't crashed because there are still lots of buyers.

Thu, 05/19/2011 - 17:33 | 1293480 Silver Bug
Silver Bug's picture

Even if they don't officially call it QE3, there will be a QE3. They have gone too far down the rabbit hole. Just keep accumulating more physical Silver and Gold for the eventual blow off top. Eric sprott and some other experts just had a leaked phone conference call about this and more.

Thu, 05/19/2011 - 20:12 | 1293937 Bay of Pigs
Bay of Pigs's picture

Funny so many think QE is the only reason gold and silver can or will go up. WTF are people talking about? What about the PM bull market from 2001-2008?

This kind of talk is way off the mark, IMO.

Thu, 05/19/2011 - 20:24 | 1293966 Michael Victory
Michael Victory's picture


Agree. QE... only a variable.

Let us not forget about fear.


Thu, 05/19/2011 - 20:29 | 1293991 akak
akak's picture

As usual, good point Bay Of Pigs.

Not to mention all the wailing and gnashing of teeth regarding the prices of gold and silver and their putative plunge should Bernanke  --- gasp! --- raise interest rates a whole 2 or 3%!  Aside from the fact that such a move would explode the federal balance sheet and deficit, and implode the dollar, it also ignores the fact that gold and silver continued to rise all through the decade of the 2000s, even as interest rates rose, then fell to 1.0%, then rose again to over 5.25%; gold and silver just kept chugging along.  Of course, those rate increases did not really matter much at all, because throughout the last decade real interest rates were at all times negative, and below the real rate of inflation (currency depreciation).

Thu, 05/19/2011 - 20:58 | 1294058 iLoveMisesToPieces
iLoveMisesToPieces's picture

I'd say it is mostly the money supply increasing that's decreasing the purchasing power of the dollar which is driving the nominal price of gold.  I don't think the real price has moved up that much.

Thu, 05/19/2011 - 17:35 | 1293489 Dr. No
Dr. No's picture

Hey Commonwealth brothers, is the Soverign (Queen) the official land owner of property and common people only "lease" it from the queen?  Many years ago I was talking to a kiwi friend and he indicated in legal transactions regarding property were actually with the Soverign.  If this is true, can we start to get some coins with the Bernak on them?

Thu, 05/19/2011 - 17:35 | 1293501 cat2
cat2's picture

When the GSE's were bailed out, I theorized in the OLD forums (gone now) that we may get real estate backed currency (instead of gold backed).  I think this has been done before.

Thu, 05/19/2011 - 18:13 | 1293616 American Sucker
American Sucker's picture

The assignat, issued by the Revolutionary French government.  It failed spectacularly.

Thu, 05/19/2011 - 19:26 | 1293827 wisefool
wisefool's picture

Yeah, I don't see how it could be a currency, redemable for all debts public and private.

Cause then couldn't a person say (monopoly metaphor) I am going to give you Pacific Ave in exchange for Marvins garden's and you have to accept it because the value is higher. keep the change.

Thu, 05/19/2011 - 19:56 | 1293907 cat2
cat2's picture

Real estate backed, not the real estate itself.  So each $ is worth 1 sqft of a McMansion, for example.  And with factional reserve lending, there will be 10x the $ as actual sqft.  But you COULD redeem for a house.  That would be real estate backed I think.

Thu, 05/19/2011 - 17:46 | 1293540 slewie the pi-rat
slewie the pi-rat's picture

14 months ago, while sharing thoughts on another site about the FED "mopping up" starting in april, 2010 (unhh..., no, ...?), i pointed out that when all was said and done, the FED was gonna own a heluvalotta US Real Estate, via backstopping loans with post-crash bailout green stamp purchases of whatever they bought. 

while we stare down the barrel of the debt cannon.

can we at least agree that the banksters take pretty damned good care of themselves?   

Thu, 05/19/2011 - 21:16 | 1294115 Yen Cross
Yen Cross's picture

The dark inventory is getting started Slewie! Trade well.

Thu, 05/19/2011 - 17:48 | 1293547 Platinum_Investor
Platinum_Investor's picture

There will be pain first before QE3  I'm quite surprised the markets

have not started to slip even the slightest.  I bet it will once we are

in June.  Everyone "expects" QE3 but the FOMC and Fed are holding their

cards tightly and not giving any slight indication they will bend as of now.

Heck they won't even bend with the debt ceiling right now.  So this will be

a battle for QE3 untili we see the pain it will cause without it.  Thus why

I am getting short now.  Bought FAS PUTS today.  Selling equity long positions

and preparing.

Thu, 05/19/2011 - 18:00 | 1293576 Boston
Boston's picture

Yup. And don't forget to buy some Treasuries.

Note what Rosie said about the 10-year T-Note plunged last time; it could plunge again.

Thu, 05/19/2011 - 18:15 | 1293620 Robslob
Robslob's picture



Two Top Fed Officials say Easy Money Still Needed

Chicago Fed President Charles Evans, who, like Dudley, is known for his dovish views on fighting inflation, echoed that sentiment in Chicago, telling a business group that still-high unemployment is keeping inflation under wraps.

New information, such as stronger-than-expected GDP growth or evidence that wage pressures are boosting inflation, could force the Fed to reassess its policy, Evans said.



Thu, 05/19/2011 - 18:31 | 1293668 akak
akak's picture

Two Top Fed Officials say Easy Money Still Needed

Needed by whom?

Thu, 05/19/2011 - 18:34 | 1293678 lizzy36
lizzy36's picture

Please, Dudley thinks interest rates should be hiked the year my 3 yr old neice graduates from med school.

Thu, 05/19/2011 - 17:58 | 1293566 plocequ1
plocequ1's picture

Does this mean i can call him Uncle Ben?

Thu, 05/19/2011 - 17:57 | 1293575 Eireann go Brach
Eireann go Brach's picture

And the Chinese will own the deed to the White House!

Thu, 05/19/2011 - 17:59 | 1293580 baby_BLYTHE
baby_BLYTHE's picture

Peter Schiff said once QE 2 ends we will experience a collapse much more sevre than we experienced in 2008!

Less than 1 month before the greatest collapse in US history. Buckle up, folks!

Thu, 05/19/2011 - 18:14 | 1293612 Cassandra Syndrome
Cassandra Syndrome's picture

Yeah, he said that it is the necessary short term pain we need to readjust the market and start afresh. Let resources reallocate and a new exchange process emerge with voluntary exchange.

Thu, 05/19/2011 - 23:52 | 1294535 akak
akak's picture

Aw, come on SockPuppet!

I hardly think Baby_Blythe deserves the ultimate castigation reserved for the vicious and rabid anti-PM trolls here.  Her comment was not really trollish at all.  You are being unfair!

Thu, 05/19/2011 - 18:01 | 1293586 SOLnow
SOLnow's picture

I think Harrisburg has an incinerator they'd like to dispose off.  Good place to burn off those unwanted FRNs.

Thu, 05/19/2011 - 18:11 | 1293610 TrueStrengthTur...
TrueStrengthTurnsTheCheek's picture

yeah bring on the QE to Infinity! let me get more of that fiat so I cans turn it into sweet sweet silver.

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