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QE Ends in the US… And Won't Begin in the EU…
The markets continue to operate based on complete delusions.
The single biggest driver of stock prices has been the Fed’s QE programs. QE has accomplished nothing other than a higher stock market. EVERY-time that the Fed was not engaged in QE, the markets have fallen as the below chart shows.
QE is over. It just ended. And the Fed will not be launching it anytime soon. The media is finally catching on that QE increases wealth concentration (note the slew of stories recently pointing this out in mainstream media outlets).
Between this and the statements on income inequality from various Fed officials, it is clear that the political climate has changed regarding QE as a monetary policy. Barring an absolute stock collapse, QE is off the table for now.
Beyond this, the market is rallying based on hopes of… QE… from the ECB. This is impossible. The ECB cannot and will not engage in QE based on the current legal framework of the EU. It can corporate bonds and other securities, but NOT EU sovereign bonds.
The reason is simple: Germany will not stand for it. Germans still remember the hyperinflation that buying sovereign bonds induced in the past. Any attempt by the ECB to buy sovereign bonds will be political fuel for the anti-Euro party in Germany… which could give Angela Merkel real trouble.
Politics drives everything in Europe. Without Germany’s approval that suggestion is dead in the water. So the market is misguided there too.
Be warned…
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And if the stock markets continue to go up after the QE ending, I suppose we will have another explanation as to why they continue to go up?
Most players have an acute self-interest in seeing the markets stay up and that is the reason why the markets are up. QE3 ending is not a surprise, it has been anticipated an factored in by the markets. They will crash, but because of an event that could not have been anticipated in occurance or scale and not before then.
When system threatens with a new crisis
http://failedevolution.blogspot.gr/2014/02/when-system-threatens-with-ne...
See the fate of QE
qe breakers yards images
Famous last words:
"QE ends"
"I wont cum in your mouth"
"just the tip, I proooomise"
"I'm on the pill, dont bother with a condom"
as a commenter alluded to, and i agree, and this would be best for america.
start qe4, the brics and dozens of other countries are going to say enough.
they'll realize theres nothing behind the curtian, the US has reserve currency, and a strong military thats it.
they've had enough, US has been using their only 2 assets to destroy their countries.
they'll try to kill 2 birds with 1 stone, join brics, destroy us reserve currency, and that will weaken their military.
the progressive democrats sealed americas fate in 1913, they wouldn't agree to the federal reserve act, until there were changes, the death nail was changing the obligation of federal reserve notes, ( their debt), from the banks, to american tax-payers.
why isn't ron pauls, audit the fed. repeated daily in congress, tell all these tele-marketers i'll answer your survey after the fed.'s been audited.
the federal reserve act can be repealed.
Why?
Why would they need the Fed to start QE4 for them to realise that?
Again, why would they need the Fed to announce a QE4 for them to do that? They can't kill the US$ without some of them taking a bit hit themselves. It is anybody's guess if and when they will be ready to do that.
The EU is on the point of collapse.
But soon they will have much bigger problems as hundreds of millions of people slosh back and forth .
http://andreswhy.blogspot.com/2014/10/the-new-black-death.html
"...Barring an absolute stock collapse, QE is off the table for now. ..."
so QE will be back
this market pump on low volume is yellen spending interest from bond buys and buying up anything that moves - but yellen has been using this interest income for several months - likely four or more - as taper cut off her stupid spending habits
in short, interest income will soon have little or no impact - watch out for higher rates soon
Ad blocker plus doesn't do much good when the articles are advertisements for newsletters.
Again this morning I awoke to find a market where stock futures were soaring ever higher even after important economic numbers being released came in at below expectations. As the stock market continues to remain at historic highs please tell me what is so good? What is so much better?
As I see it the weight of carrying a large number of unemployed and nonworking people who have dropped out of the work force will wear down society through attrition. The article below points out some of the glaring flaws in the argument that blue sky lies ahead as the stock market seems to indicate. As I look at a landscape of empty and under-leased buildings that once housed thriving businesses that provided Americans with good paying jobs I'm forced to ask, How are things getting better?
http://brucewilds.blogspot.com/2014/10/tell-me-again-how-things-are-getting.html
Wait a minute. If the ECB can buy corporate bonds and other bonds but not sovereign bonds, that actually provides more goose than US-style QE. Remember, the bulk of US QE was mortgage backed securities - which had the biggest effect by refloating the housing market. Buying corporate bonds at above their fair market value is real money printing. A real transfer to the corporate sector. That is QE on steroids.
The markets have spoken, "QE?, We don't need no stinkin' QE!"
...I gues it's back to tax and spend
jb
And outright confiscation is even more profitable.
A lot of people say that the Fed HAS to step back in. I suppose they would, if you accept the fact that they will continue to support the markets. And why wouldn't they?
I've given this some thought, and it occurred to me that the fragility of the system is obvious to them. And it cannot have escaped them that several years of QE haven't had the effects they wanted. A LOT of people in government must be taking note.
Now, if YOU were in a position to do something, and you realized that the whole thing was going to collapse anyway, what would you do? Would you keep trying in vain?
Or might it occur to you that a strategic decline in the markets (which you know will happen anyway) could be managed rather than prevented?
Now, if you were one of those folks, and you happened to be one of those who AREN'T beholden to the bankers, might it not also occur to you that a nice hard fall would wipe out a lot of your annoying enemies, and cut the rest down to size? Sure, the little guy would suffer, but hell, doesn't he suffer no matter WHO wins?
See, if it was ME, that's exactly how I'd be thinking. Those big bank SOB's with all their huge money have always been untouchable, too big to fail. And now they've become arrogant and they're gonna kill the economy if they aren't stopped, which is going to hurt YOU and yours. This is maybe a once-in-a-lifetime opportunity to cut them right off at the knees, without a single riot or revolution. Don't even need Congress (not that they'd do anything anyway.), and a lot of THOSE fuckers will be wiped out as well. The whole thing could be passed off as the inevitable result of markets without rules, then you could position yourself as the one to help pick up the pieces.
I guess what I'm saying is that if I was someone at the Fed, I'd be having second thoughts about going down with these big bankers, just for a futile attempt to save their skins. I'd be thinking that if this thing is going down, and I'm going to be blamed, then those assholes are coming with me, one way or another. Too big to jail? Maybe, but never too big to get your sorry ass wiped out in the markets. And who'd be in the best position to "guide" investors to where they want them to be at any particular time?
A market crash that you realize is inevitable COULD be guided to strategically take out a lot of people otherwise untouchable. It might be your only shot.
Markets can be manipulated upwards to enrich some, why can't they be manipulated down to impoverish others? Forget the little retail investor, why would you use that power to fuck with him? You NEED him for any recovery afterwards anyway. You'd want to aim for bigger targets, I'd think.
Just brain-storming, folks...It's an ongoing fantasy of mine...someone within the system going rogue. The fantasy also includes my being present to see the looks on the faces of TPTB when they realize they've lost control, although I know this is unlikely. But, it's fantasy, so I figure I'd just go for it...
There is going to be no recovery after the next crash. It will be a reset. That is the reason that Fed is doing everything it can to delay the crash for as long as it can. Another way to look at it is that the Fed is blowing bubbles each bigger than the previous one knowing that next burst will likely be impossible to recover from. But then the Fed seems to have more ammunition at its disposal than I have imagined. So it is possible they have some more tricks up their sleeve and may be able to blow another bubble after the next crash. We don't have to wait for long to find out.
firstly the amount of extra money that QE put into the markets will be active for some time. it would take a long time to drain the swamp. and at least at first they get the benefit of the boost in inflation that removing some of the malinvestment created, so that the market might euphorically believe it can walk on water, and smoothly transition from life support to running in the olympics. when it becomes obvious that the economic growth is not appearing magically on its own, then more government stimulus, like Obamas shovel ready programs. secondly they bring out the old tools, including REPO and POMO, which were state of the art ten years ago. if i loan you 1 million dollars every month at ZIRP rates, and you just come back and roll it over indefinitely, what's that? thirdly the new market cycle is political, the end of one presidency (like Bush, particulary if the leader is feckless and corrupt, such as Obama,) is when markets crash. such events are like the come out roll on the crap table, where the big bankers have all their money on the numbers, and the backline and such, so for the come out roll the bets are off, in market terms this means there is a temporary crash until the new gangsters move into the WH and make their deals. then its back to casino banking
but isn't the FED just a group of big bankers anyway? i'm not trying to be sarcastic - but am i missing something?
Yes, they are. But if you were part of a group that was once useful, but have now begun to threaten YOUR own stability, would you remain loyal? Especially if you were uniquely positioned to do something about it?
They must know they'll get the bulk of the blame when things go wrong anyway. A hard fall that takes out portfolio values in a big way also neuters a lot of the power that money gave. It hurts the little guy too, but it's a lot easier and cheaper to restore him to function and set him loose to go out and grow an economy than it is to hold the hands of the super-wealthy and listen to all their bullshit knowing that NO amount you give them will ever be enough to get them off their asses. And you get the crash anyway, and the blame. Not everyone agrees to fall on their sword for the cause, and sometimes you get the right person in the right place at the right time...
If they were to stop QE, who would pick up the slack? Belgium and the various Caribbean Island account fronts? They just may indeed announce an end to QE, then continue it "out the back door." I wouldn't put it past them to do just this. Here is what you have to understand, and it is quite easy: Each year, more debt MUST be created than the last, else the whole show comes crashing down like a circus tent that lost it's pillars. They can NEVER CEASE QE. If they say they have, they are lying to you.
Why should anyone pick up the "slack"? Yes, the markets will start dropping and probably crash on the next bad news, but that is likely the plan too. Until 2007-8 crash the economy as experienced by ordinary folks and the stock market indices were correlated, but since then there has been a huge divergence. So majority population no longer cares what the stock markets indices are, since their lives don't seem to have gotten any better even as the stock markets were setting new highs. So there won't be any public demand to "do something" when the markets crash. I am not implying that the Fed is responding to public demand so far, only that the public probably would have hoped for a turn around in their own personal situation as the stock markets rallied because of QE and tacitly supported QE, while even that hope no longer exists.
With no other options left and unemployment surging, the government will probably turn to the recommendations of the Modern Monetary Theorists, likely through the Trillion Dollar (face value) Platinum Coin route and some kind of universal supplemental income scheme (every adult gets some money every week/month/year from the government). That will probably cause the rest of the world to try to get rid of their USD holdings while they can still get something of value for it. Eneter hyperinflation and collapse of the US$.
Clearly the Fed will do something. A 'nice little' recession which in the past allowed clearing of malinvestment simply won't work. The system is now too fragile.
So the moneatry authorities will have to support derivatives in some other way.
It apears they do have ways to stuff that market with trillions if they need to. My bet is they already know what they will do and it will be simply pumping more dollars into the system on the sly. All of this will be noted by those who are on the inside and it will be the reaction of the world's major producers that counts. If China says 'enough' then the Saudis will probably get that message and in the blink of an eye we could see real problems for our beloved dollar.
Fiat regimes always have ended in hyper inflation...always. How we get there will probably be a surprise but if history is repeated and math still works that is where we are heading.
If they did that it would start a trend where people would time quick entries and exits to take the 'skim', recognizing it as a Fed handout. But true investing would continue to decline. Eventually even the desperate value-seekers will give up, and the Fed will be left holding its own dick in its hand when the curtain goes up.
Impossible, the FED has no dick...
;-D
So we can have either continued QE and increased wealth inequality or the Obama Depression. Choose wisely...
"Barring an absolute stock collapse, QE is off the table for now."
T-minus...?
QE did achieve something.. the only mandate The Fed actually has.. it propped up crap bankers ..and banks
What a load of crap ..job done!
at least as important for the banks was the suspension of generally accepted accounting principles such that they could mark assets to "model" instead of to "market" and hence not be declared insolvent. it is what turned the stock market in march of '09.
is qe by any other name still qe? it's never going to end.
If it looks like shit, and it smells like shit, and it tastes like shit, it's probably....... wait for it...........
QE (Queensize Evangelism in honor of Mm. Yellen...)
;-D
He may be wrong, but I won't be betting on it you guys can go all-in on QE4 all you like though, good luck degenerate gamblers.
Anyone who thinks the Fed will not be stepping back in is out of their minds. This government and it's phony economy lives and dies by QE. These gutless slimes cannot allow a recession or worse so it will not happen until they lose control.
I don't doubt they would if they could...but it is entirely possible that enough people will realize that QE was the CAUSE of the problem, making its implementation politically impossible...
Not just hard, but truly im-fucking-possible. In fact, ANY attempts to diddle the lady-parts of the economy might be viewed with considerable contempt for awhile by a populace recovering from previous efforts.
and that qe doesn't really make the profits of the corporations whose stocks are involved any higher. a good deal of the higher eps in the last few years is increased leverage to buy back stock. the rest is government deficits to fund food stamps, unemployment comp. etc. flowing to corporations.
that zero hedge's readers are convinced the stock market cannot fail because the fed "has its back" is not actually bullish for the stock market.
The Fed considers a complete collapse in the market anything over a 10% drop. So yes, they will restart QE when the market is headed for what used to be a natural correction.....
I wonder how much money is Phoenix Capital running ? perhaps they may have had 1,000 bucks in 2009, but now they must be running their HF with 2 cents...
Graham Summers now is hiding his name, he's FINALLY a little bit ashamed of his retarded posts.
This guy is so stupid. can we ban him from posting in ZH ?
He's just copy/pasting other stuff from ZH and has been saying to short the market since 666 on the SP and buy gold from 1900$ down to 1300$
I guess he's got no time to post more clever stuff as hes got to flip burgers to make a real living now.
If you think this is bad, read "Fuc to Market"'s weekend horseshit.
The only rational explanation as to why this schmuck is allowed to post on ZH is that he has incriminating photos of Tyler he is blackmailing him with.
unliikely ..clicks are clicks. And this stuff may be bad but there is plenty of other crap in the top board posts to keep it company.
"Politics drives everything in Europe". My goodness, this sounds so... accusing. Do you have a better alternative? This very sentence tells so much about who wrote it, and from where
right.... written by another armchair Europe "analyst" who failed high school, polishing a leather office chair cushion with his ass somewhere in North Carolina.
Indeed. There is only one thing worse than politics driving everything and that's freshly printed money.
Q f’n E is not over.
Somehow, some way the Fed is still printing in secret.
The “market” action has to have a catalyst besides buy-backs and the drying-up foreign Treasury market has to be replaced.
Maybe Somalia will see a huge balance sheet increase soon.
should the secular bear market have begun again following the recent high, one would expect a powerful countertrend rally nearly back to it (note, for instance, silver in '11).