When Zero Is Just Not Enough: The End Of QEZIRP And The Beginning Of Rational Market Pricing

Reggie Middleton's picture

With rates spiking and equities dropping, all due to the long overdue realization that Bernanke can't goose the markest forever, I take this time to review my many warnings of this moment as it it approaches.

Reggie Middleton Featured in Property EU, one of Europe's leading real estate publications

Those who wish to download the full article in PDF format can do so here: Reggie Middleton on Stagflation, Sovereign Debt and the Potential for bank Failure at the ING ACADEMY-v2.


Here comes that lost decade, albeit three years tardy...

At the ING Valuation Conference in Amsterdam: Inflation + Deflation = Stagflation 



And from Reggie Middleton ON CNBC's Fast Money Discussing Hopium in Real Estate

That visual relationship is corroborated by running the statistical correlations...

The relationship is obvious and evident! In addition, we have been in a Goldilocks fantasy land for both interest rates and CRE for about 30 years. CRE culminated in the 2007 bubble pop, but was reblown by .gov policies and machinations. The same with rates. Ever hear of NEGATIVE interest rates where YOU have to PAY someone to LEND THEM MONEY!!!

So, BoomBustBloggers, where do YOU think rates are going to go from here? Up of Down???

Comment viewing options

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

Reggie, your ego has to be as big as your dick. 

Unless you are lying, that's pretty fucking big.

Even all the chart porn was less retarded.

Now, it is all " Look at me Reggie, King of the Utuberous Tribe "

Time to trot out the loin cloth and spear again for the photo ops. 

maximin thrax's picture

Where will interest rates go from here? Depends on whether or not bail-ins come to the US. A bail-in is simply negative interest rates catching up with a depositor. An insolvent bank paying interest gives the appearance that all is well, but if the resultant bail-in costs the depositor more than the puny interest accrued then he has been paying the bank all along to hold his cash. He just didn't know it.

Negative interest discourages deposits, obviously. But if you can follow positive interest rates with a bail in, then you keep that capitol in your bank and dare the depositor, who now owns your bank stock in lieu of his deposit money, to start a run on the bank and watch those bank stocks go to zero.

donsluck's picture

I vote sideways. Of course at the present rates, movements of only 1/4% equate to large relative movements.

shovelhead's picture

Chinese Black Swan.

It's what's for dinner?

Spigot's picture

Oh, and Reggie, you are my favorite empowered, ethnic minority Quant. 'sthruth. You're the bee's knees!

Spigot's picture

Rates will be determined by Asia's "liquidity needs". IE - whoever can not borrow very short term will sell assets, of which US T's are most liquid. Essentially the FED is in reactive mode here. Biggest concern is if the music stops playing and there is ony 5% of one chair remaining for 20 players to try to grab and sit in...messy, messy, messy. If we get to the point where the China contagion hops outside of its borders we may get some very interesting results as the entire global banking system gets ice nined. At that point its all over except the owing.

g'kar's picture
"The End Of QEZIRP And The Beginning Of Rational Market Pricing"


We can only hope.

NotApplicable's picture

Hope? I about choked when I read that headline.

There are many, many wars to come before we get back to anything resembling "rational." To imagine that criminals would willingly give up their privileged positions in order to fix the economy is pure delusion.

Millions will likely die before any balance is reached.

pitz's picture

No surprise there.  Now the big question on all of our minds is whether or not gold/silver will display the sort of inverse correlation to long-term interest rates that many of us have traditionally associated it with. 

So far, we've been profoundly dissappointed, although arguably gold really isn't trading as anything but a commodity these days. 

Midasking's picture

When people figure out that ALL roads lead to inflation gold and silver will go far beyond anyone's predictions http://tinyurl.com/mem7o7x

SafelyGraze's picture

didn't recognize him without his shurt off