80% Of Bond Managers Expect QE3 In 2012, Says JPMorgan

Tyler Durden's picture

Ever the contrarian, we were somewhat taken aback by the overwhelming majority of respondents to JPMorgan's fixed income manager survey who expect LSAPs in 2012. With 80% expecting QE3, a majority expecting to add to Agency MBS (and high yield and investment grade credit), it seems the Fed's bang for buck from actually enacting the balance sheet expansion will be significantly lower than it hopes. Maybe third time is the charm but it seems evident from discussions that traders have become numb to this manipulation - even if it does have short-term portfolio rotation impacts - but the difference between managers who expect to reduce EUR assets and those that expect to increase USD assets suggests everyone and their cat is waiting to jump in.

The diversification/currency trade seems popular as local denominated EM assets are among the classes managers expect to add the most to but duration risk seems very evenly split as the great majority expect 10Y to hold the 1.5% to 2.5% range.

It also seems they are more positive on the European endgame (despite a view to reduce EUR assets) as two-thirds do NOT expect Greece to leave the Euro next year and 75% do not expect any other country to leave by 2013.

It seems the lack of belief in any significant fiscal stimulus is being discounted by the strong belief that the Fed will ride to the rescue once again.

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markmotive's picture

Did you look at their responses on Europe?

Clearly the market has not priced in the collapse of the Euro.


InternetInfidel's picture

Uncertain as of yet, but it seems likely that Italy won't be able to raise 600 billion Euro next year given its most recent bond auctions.  That being said ECB/Fed printing money could extend the "2012" event into 2013.

txsilverbug's picture

... says JPMorgan.


In other words, JPMorgan wants more bailout.

SheepDog-One's picture

In other words, JP Morgan, every other Wall St bank, and most all bond managers are FUCKED right now...

slewie the pi-rat's picture

survey says:  2012


FED watching and gambling 4ever, BiCheZ!

now, these same managers will have cover for losing the ranchette.  again

GeneMarchbanks's picture

The other 20% expect QE4.

Hansel's picture

Welfare queens want more welfare?  Shocking.

Random_Robert's picture

Isn't it hilarious (read: pathetically sad and despondent) that traders and market analysts have completely migrated away from trying to time the markets based on supply, demand, and technicals, to spending nearly 100% of their energy trying to time the Fed?  

Hmmm... why could that be?

After all, the Fed isn't the markets... is it?

Printed currency is seemingly more addictive than either crack or crystal meth.

FL_Conservative's picture

Well how else does a bankster get a bonus?????????????? 

Random_Robert's picture

Back in the olden days a banker would get a bonus based on the number of new customer accounts they opened (marked by how many free toasters they gave away)


Today's bankers are not bankers- they are financiers- wanna be Rothschilds, every one.

Milton Waddams's picture

It seems the lack of belief in any significant fiscal stimulus is being discounted by the strong belief that the Fed will ride to the rescue once again.


Which is almost exactly the opposite of what Bernanke desires.  He has more or less said the Fed has run its course and it is now up to the government to tackle the problem(s) (preventing a big down shift in long term growth potential- but if you look at a chart of GDP, it is rather evident that it is already happening).



Manthong's picture


Secret Fed Loans...

"The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he“wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year."


kito's picture

expectations, expectations, when it comes to qe3, its always what will be, but never what is. the fed loves to promise and not deliver. its been working well with stock markets only about 15% off ALL TIME HIGHS. the hyperinflationary herd has been expecting qe3 ever since qe2 ended. and every time it doesnt come to fruition, they say it will come. 

anybody stop and think where oil, which has been parked at or near 100 for a while,  might be headed if another round of massive purchases were to occur? 150? 200/bbl?  and the fed is not aware of this? maybe one can explain, if one believes ben is just some robotic money printer without thought as to the consequences, why hasnt he initiated qe3 by now?

slaughterer's picture

QE3 will be announced at the Dec FOMC in a special communications initiative.  It will begin in Q1 2012.    It will be a major factor in leading to the re-election of POTUS.  

SheepDog-One's picture

So...the MOST hated action in opinion of most all americans, QE, will be suddenly looked upon as favorable? I think you have this backwards here. 

Au_Ag_CuPbCu's picture

No offense intended, but when have TBTF given one shit about the opinion of most all Americans in the last 100 years?

SheepDog-One's picture

Exactly Kito this is ALL bullshit!

Notice the sudden squaking from all corners saying FOR SURE more money printing is coming real soon?

They all want out, big time.

Stax Edwards's picture

If the herd rallies on rumors alone, why print?  It is like all the good parts of QE without those nasty commodity bubbles.


sydneybound's picture

"Four years into the crisis it is surely time to accept that the underlying problem is one of solvency not liquidity – solvency of banks and solvency of countries. Of course, the provision of additional liquidity support to countries and institutions in trouble can buy valuable time. But that time will prove valuable only if it is used to tackle the underlying problem.......But the underlying problems of excessive debt have not gone away. As a result, markets are now posing new questions about the solvency of banks and indeed governments themselves." Mervyn King, Governor of the Bank of England, 18th October 2011.

Mark123's picture

Why even quote this self-serving hypocrite?  Every word he utters is only to further the interests of the European banking cartel.

SheepDog-One's picture

Yea he is a douchebag...I pay very little mind to what he and the other freeloading leeches think.

As far as Im concerned, if hes out there spouting that all this free money is coming soon, hes only trying to get you to buy what hes selling. 

Piranhanoia's picture

Pritchard just came out with a doosie.   http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/891878...

I think he is asking Ben to bail out Europe, but he seems to parse his words very carefully.  It appears that he has lost his war with his ideals and moved on to the print to save my luxurious ass stage of denial. 

There don't really appear to be any conservative when it comes to finance.  Eventually they all take the leap to state sponsored fascism if their lifestyle is threatened.  

SheepDog-One's picture

Total desperation suddenly springs up from what only a couple weeks ago was economic Nirvana....Europe was fixed, US economy was just fine...right back to total disaster and last ditch ridiculous 'money printing' being cried out from all the bankster and Wall St world.

I dont believe any of it, I think theyre trying to get the hell out by spreading rumors of huge bailouts which would only implode the entire structure to rubble.

Bailouts? OK also you get $150 oil, $3,800 gold, $400 silver....hey lets do it! Go for it idiots!

Mark123's picture

What a perverse world...they are planning to buy more Agency MBS....what???????????  That is an asset entirely backed by the fickle support of a self serving private central bank.  F--king lemmings.

Snakeeyes's picture

Between Europe and a dead housing market, The Fed will buy MBS and Treasuries that no one else wants at 2% or less yield.



SheepDog-One's picture

Keep printing and bailing...real soon we'll have $150 oil as the new floor to go along with total bankruptcy.

I hope they do it today in fact! Go for it, idiots! But I say theyre all full of crap!

lotsoffun's picture

sd1 - i usually agree with everything you say 100% - but this time, if i look at the posts today, and the news - bennie gonna keep printing, and i'm sure, somehow, right now, he's printing.  he has to get it through to next year so the bankers get this years bonuses, doesn't matter where oil goes after that - they cash out now.  this is cash out time.  they know it.  this is the last stand, and they are going to have itgoing down until next spring. push it to the limit.  in between also buys time, because the powers work out how they want to deal with the obama problem.  such as - do we stick with him, do we stick it to him and keep him, do we replace him etc.  it's not a given.

what helps me - i don't have any positions in place.  i knew today was huge up day and was dying to put on longs on friday (stocks) and dow short leaps at the end of the day - but i just can't, as much as i want to find a way to make better than .04% on my cash - i can't handle the volatility - but it helps keep it in perspective.




frugartarian's picture

More like perpetual QE

LawsofPhysics's picture

Already happening and will continue until it becomes resource-limiting.  Sorry, print all you want, at the end of the day you still need energy and real materials to "produce" anything of real value.

We will all be billionaires, even trillionaires soon.

TooBearish's picture

TY- can u please devote some ink to the red herriing floated this AM on IMF bailout - think high prob IMF(US) gunna write a check to fund the PIIGS for additional can kicking


Mark123's picture

You can really see clearly today how the banks decide on the market action.  On "normal" days there is lots of ups and downs - today we get the same old rumor on Sunday, ramp up in European markets, with added rocket fuel when the US markets open.  There is a gap up first thing, then complete stability during the day, and likely we will get a nice goose into the close.

Gotta love these free markets!

Hedgetard55's picture

Bernanke already has committed treasonous acts and needs to be tried and if found guilty, punished.

lotsoffun's picture

he knows that also.  he knows his masters.  anybody seen corzine lately?  nothing will happen to any of these clowns.  in bernake's mind, he's not a 'citizen' of the US.  he's the overseer for his masters.  you need more whipping boy?  when will anybody get it?

'we gave you $2 waffle irons.  that wasn't good enough?  you want more?  that doesn't keep you quiet?  you gonna get a whipping boy'

you want your money from your account?  what?  didn't you read the papers you signed?  you lent us that?  you want what?  sorry, we lost it.  tough.  you know, you do work for us.




prains's picture

Looks like the fuckwits anonymous meetings are going to see a huge increase in enrollments next year

common_sense's picture

Money from where??  more debt???

Sandy15's picture

I think I'll start printing my money to pay off my debt too........

lotsoffun's picture

it is sort of implicit that at this point, the .gov doesn't care about counterfeiters - because all they are concerned with is that there are more $ in circulation - doesn't really matter who creates them as long as they exist.  it's a funny idea if you think about it.



SheepDog-One's picture

'80% of freeloading leeches expect to be handed piles of magical free money pretty soon'

Yea well I wouldnt count on it myself, parasites.

J 457's picture

Didn't nearly all bond managers miss the collapse in 2008?  Hmm.  So, they must be right this time....

txsilverbug's picture

Bond holders will get bailed out.  Thats the name of the game.  Banks buy toxic bonds, and government comes in and bails them out.  Its the hip new craze! 

SheepDog-One's picture

Yea? Go talk to the GM bond holders, who got kornpoled FIRST!.

Snakeeyes's picture


We also have Fannie, Freddie and the FHA to bailout as the housing market remain stagnant AND blocking economic growth.


New Home Sales Lowest Since 1963