This page has been archived and commenting is disabled.

Bill Gross' Explains The FOMC Decision: "QE 2.5 Today, QE 3, 4, 5 … Lie Ahead"

Tyler Durden's picture




 

Pimco just saved you lots of garbage sellside "research" "analysis" on the topic.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 01/25/2012 - 15:30 | 2097209 The Alarmist
The Alarmist's picture

Is Gross an overloaded operator here? Both the analyst and the analysis.

Wed, 01/25/2012 - 15:32 | 2097221 Silver Bug
Silver Bug's picture

Bill Gross calls it like it is, QE to infinity, it is the only option the government has left!

 

http://jimrickards.blogspot.com/

Wed, 01/25/2012 - 15:39 | 2097251 Captain Kink
Captain Kink's picture

I think he's become a ZHer... What's his Avatar?

Wed, 01/25/2012 - 16:16 | 2097412 trav7777
trav7777's picture

there IS no other option.

Organic credit growth is in reverse.  The Fed will either print the coupon or else the monetary system will collapse...within hours.  Without the CBs STILL guaranteeing coverage on all accounts, commerical paper - they ARE the interbank market now - there would be no money.

All the cash in existence is subject to loans.  Loans mathematically WANT to be paid back.  Every bank, everybody in debt, everything would vaporize very quickly if the Fed does not fill in the gap between interest owed and new credit created.

Wed, 01/25/2012 - 16:40 | 2097518 Bohemian Clubber
Bohemian Clubber's picture

EXACTLY, no surprise here. It will be just like for Japan. And boy it lasted a long time there... They experienced a dozen of QE there so don't act surprised when Ben sticks it into you

Wed, 01/25/2012 - 21:33 | 2098405 dwdollar
dwdollar's picture

"And boy it lasted a long time there..."

It never ended did it? An entire generation waited for it to get better (too long to have children), now the population is in decline.

Wed, 01/25/2012 - 22:49 | 2098593 The Monkey
The Monkey's picture

Bill Gross is the junk bond king.

Core CPI has continued to fall, in spite of everything they have thrown at it, including the kitchen sink.  If the Fed's massive balance sheet expansion and $787 billion dollars worth of fiscal stimulus have not moved the needle on this trend, what will?  The answer is nothing.  Nothing that is not ridiculous, nothing that does not politically lead to an opposite reaction so strong that it could cause a faster deleveraging and deeper deflation.

Deflation looms.  It is coming.

Thu, 01/26/2012 - 01:46 | 2098649 akak
akak's picture

You and Bernanke can take your razor-blade-studded, double-headed dildo of "Core CPI" and mutually fuck yourselves with it.

If you even DARE suggest that the grossly manipulated and laughably irrelevant Core CPI bears ANY relation to the REAL cost of living increases of the average American, I have nothing more to say to such a clueless and/or dishonest pro-Establishment defender other than "Fuck you".

Deflation looms

And so do Elvis and Bigfoot.

Wed, 01/25/2012 - 15:55 | 2097322 GenX Investor
GenX Investor's picture

He is ruining BB's surprise!

Wed, 01/25/2012 - 16:40 | 2097519 trav7777
trav7777's picture

he's a fucking self-interested douche upon whom it is dawning that he won't be able to risklessly collect RENT forever.  The Fed will buy his assets out from under him and dilute his coupon.

Gross is a "bond king" facing an interest climate where ZIRP is the highest rate you can charge to borrow money.

After the "riskless" bonds all go to 0% under the Fed's umbrella, look for this to drive yields down across the spectrum.  Long dividend payers with good cashflows.

You can't get 5% these days easily.  The roys and mlps are the only ones on that "stock screener" these days.

Wed, 01/25/2012 - 16:29 | 2097490 Two Towers AU AG
Two Towers AU AG's picture

/ sarc

No... The Fedreal Reserves does not print money and all of us ZHers are lying morons

http://finance.yahoo.com/blogs/daily-ticker/no-fed-does-not-print-money-just-explain-150433185.html

/sarc end

Wed, 01/25/2012 - 22:37 | 2098558 Buck Johnson
Buck Johnson's picture

Your right, they have no more options left.  All they are doing is buying time, but buying time for what?

Wed, 01/25/2012 - 15:31 | 2097217 Corn1945
Corn1945's picture

You've got to be totally brain-dead to buy US Treasury bonds. You are guaranteed to lose money when the interest rate is below the inflation rate.

How difficult is that to understand?

Wed, 01/25/2012 - 15:36 | 2097237 NotApplicable
NotApplicable's picture

Or brain-less, ala any institution.

Wed, 01/25/2012 - 15:38 | 2097249 GeneMarchbanks
GeneMarchbanks's picture

It isn't difficult unless you understand a little bit of geopolitics.

Wed, 01/25/2012 - 15:50 | 2097302 ghengis86
ghengis86's picture

Return of (slightly less) capital vs return on capital?

Wed, 01/25/2012 - 15:57 | 2097334 GenX Investor
GenX Investor's picture

No one believes in equities, try their darndest to get people to take risk.  The problem is that most smart people believe that there will be another correction to equity shortly, so they can come back in and wet, lather, rince and repeat...ad nauseam

Wed, 01/25/2012 - 16:00 | 2097343 MrBoompi
MrBoompi's picture

If you buy Treasury bonds with electronic digits you just created out of thin air, who cares if you lose money or not?

Wed, 01/25/2012 - 16:09 | 2097379 Shizzmoney
Shizzmoney's picture

+infinity

After the POTUS SOTU yesterday, and this today....is there REALLY any question on who really runs the country?

Wed, 01/25/2012 - 16:43 | 2097528 Bohemian Clubber
Bohemian Clubber's picture

I call BS on that, inflation on what ??? fact is if you were not in fiat and in equities or real estate in the last 5 years you ve been destroyed. Japan had interest rates at 0% with no inflation for more thant 30 years so what do you say on that? By your measure their bond should be worth nothing and yet it's strong

 

 

Wed, 01/25/2012 - 17:27 | 2097659 akak
akak's picture

What a clueless idiot you are.

fact is if you were not in fiat and in equities or real estate in the last 5 years you ve been destroyed.

It is PRECISELY those holding such "investments" who have seen their REAL net worth diminished in the last five years.  And clearly, you have never heard of gold, silver, commodities or other hard assets, all of which are UP not just in nominal but in real terms over the same period.

Japan had interest rates at 0% with no inflation for more thant 30 years so

It has only been a bit over 20 years for Japan's ZIRP, and any Japanese with two brain cells to rub together would punch you in the face if you claimed that they have experienced "no inflation" in those 20+ years, as their cost of living has steadily risen in spite of ZIRP (or because of it).

Wed, 01/25/2012 - 17:49 | 2097830 buckethead
buckethead's picture

He's got a point if you can eat flat screen TVs.

No inflation there.... Real estate? No inflation. Maybe you can grow your own medicinal herbs.

Food? Fuel? Healthcare? Bring your fiat in abundance.

Who can really believe we aren't witnessing inflation in essentials?

 

Wed, 01/25/2012 - 17:57 | 2097857 Bohemian Clubber
Bohemian Clubber's picture

both of you are miserable lemmings. If you have 10M$ what are your fucking possibilities? REAL ESTATE, EQUITIES OR BONDS (financial securities) OR CASH/TREASUIRIES. What the fuck does a hedge fund manager care about medicinal herbs or screen TVs, they are just having fun, fucking lemming food that is.

 

 

Wed, 01/25/2012 - 18:54 | 2097998 akak
akak's picture

If you have 10M$ what are your fucking possibilities? REAL ESTATE, EQUITIES OR BONDS (financial securities) OR CASH/TREASUIRIES.

Gold.

Platinum.

Palladium.

Just for three possibilities, ALL of which can easily be held in one's own personal possession.

"OH NO!  We can't have people holding their savings and wealth in their OWN hands!  That would be .... criminalUnpatriotic!  FINANCIAL TERRORISM!!!"

Wed, 01/25/2012 - 18:00 | 2097875 Bohemian Clubber
Bohemian Clubber's picture

They had negative growth almost the entire time, do you understand what it means ?

Wed, 01/25/2012 - 18:35 | 2097993 akak
akak's picture

And do YOU understand that the Japanese cost of living steadily ROSE since 1989 (and their savings have been steadily eroded), despite your putative (and misdefined) Japanese "deflation"?

Thu, 01/26/2012 - 05:05 | 2099005 The Navigator
The Navigator's picture

@BH

A kindly clue - never post to ZH after 3 hits from the bong or 4 shots of vodka - its kinda embarrassing the next day when you review your up/down arrows.

Wed, 01/25/2012 - 17:02 | 2097586 slowimplosion
slowimplosion's picture

The reason is simple.  Where else would you put your money?  Bank of Sealy, you lose even more.  Equities, yeah, right.  Metals, well some for sure, but not your whole nest egg.

 

People settle for these yields because there is no where else to go where the risk/reward ratio holds up.

Wed, 01/25/2012 - 21:40 | 2098427 LongBalls
LongBalls's picture

Your assuming there is a "real" market out there buying. The Fed is buying them from say, oh, the Caymen Islands?

Wed, 01/25/2012 - 15:33 | 2097225 fonzannoon
fonzannoon's picture

Why does this guy Gross complain about the results that he asks for? He says we need it and then complains that we got it.

Wed, 01/25/2012 - 15:33 | 2097226 GeneMarchbanks
GeneMarchbanks's picture

Yes. All that and more...

Wed, 01/25/2012 - 15:34 | 2097229 Kaiser Sousa
Kaiser Sousa's picture

i aint even trippin....

Got "my precious" stacked and tucked away...

bitch ass bankers!!!!

let's get it on..............

Wed, 01/25/2012 - 15:34 | 2097232 azzhatter
azzhatter's picture

His head is big but seems mostly empty

Wed, 01/25/2012 - 15:35 | 2097235 Dismal Scientist
Dismal Scientist's picture

Time to beef up your equity and commodity businesses, Billy Boy. Whats that, you're doing that already ? How prescient.

Wed, 01/25/2012 - 15:36 | 2097238 RaymondKHessel
RaymondKHessel's picture

Bad Billy is spot-on.

Wed, 01/25/2012 - 15:36 | 2097240 Dermasolarapate...
Dermasolarapaterraphatrima's picture

John Williams at Shadowstats.com shows inflation to be running about 6%. If you hold bonds at 2% return, you are getting swiped 4% at least.

 

Wed, 01/25/2012 - 15:48 | 2097290 fonzannoon
fonzannoon's picture

Not if you refuse to think about it.

Wed, 01/25/2012 - 16:35 | 2097507 NotApplicable
NotApplicable's picture

*LA LA LA LA*

I can't hear you!

Wed, 01/25/2012 - 18:55 | 2098029 blindfaith
blindfaith's picture

non sense...we will make it up on volume !!!!  These guys are smart.

where is that sarcasm button Tyler was going to add last year?

Wed, 01/25/2012 - 15:36 | 2097241 barliman
barliman's picture

 

Financial repression = Once you get a taste for raping savers & the elderly, you just can't stop!!!

barliman

Wed, 01/25/2012 - 15:40 | 2097255 pine_marten
pine_marten's picture

What they all end up lusting for is blood.

Wed, 01/25/2012 - 15:49 | 2097295 Poetic injustice
Poetic injustice's picture

They send you to die, so their wealth is not diminished. Fair enough?

Wed, 01/25/2012 - 15:39 | 2097248 falak pema
falak pema's picture

is this chronic monetary diarrhea..? followed by monetary inquisition and/or constipation...?

Wed, 01/25/2012 - 15:41 | 2097256 Dr. Engali
Dr. Engali's picture

I wonder how long before China finally says fuck you and dumps this shit paper.

Wed, 01/25/2012 - 15:50 | 2097300 XenoFrog
XenoFrog's picture

It's my understanding that China and Russia are already doing that.

Wed, 01/25/2012 - 16:13 | 2097401 Dr. Engali
Dr. Engali's picture

They are in small chunks. I'm talking about the big monster dump.

Wed, 01/25/2012 - 16:37 | 2097510 NotApplicable
NotApplicable's picture

Isn't that just a function of the clock? Last I heard, the avg. duration of their holdings is under 3 years.

So, all they have to do is to demand payment at maturity.

CTRL+P

CTRL+P

CTRL+P...

Wed, 01/25/2012 - 18:00 | 2097879 Ropingdown
Ropingdown's picture

Must be difficult for the Chinese to pick their poison.  EUR?  Axiety there.  Gold? Into deflation (and since it can't be subjected to an FDR-style repricing) might be worrysome short term.  Trade relationships?  Any path the Chinese pick is going to hurt those.  Hard landing?  China will have to hold a fire sale. Or no?

Wed, 01/25/2012 - 19:39 | 2098129 Jay Gould Esq.
Jay Gould Esq.'s picture

The monster dump will be initiated in concert with a full naval blockade and coordinated EM pulse scrubbing of Taiwan.

The U.S. would be completely unprepared for this package.

Wed, 01/25/2012 - 16:43 | 2097527 eddiebe
eddiebe's picture

When they are told that it is ok. to dump.

Wed, 01/25/2012 - 15:41 | 2097264 Cpl Hicks
Cpl Hicks's picture

Just what we needed- twitter posts from Bill Gross.

Wed, 01/25/2012 - 15:45 | 2097277 Poule Mouillee
Poule Mouillee's picture

"... Lie Ahead" should probably read "... And More Lies Ahead"

Wed, 01/25/2012 - 16:55 | 2097513 NotApplicable
NotApplicable's picture

I was assuming that's what the ellipses are for.

Wed, 01/25/2012 - 15:48 | 2097289 kito
kito's picture

keep lining up at the Promise Trough for that imaginary qe3 slop. its not happening. only promises, promises.......................boy, talk about hopium..............

Wed, 01/25/2012 - 15:48 | 2097293 azzhatter
azzhatter's picture

Excuse me, Chairman Dickweasel, why do we continue to punish savers in this country who are searching for yield on their hard earned savings? 

 

Chairman Dickweasel- "When I was blowing Jamie and Lloyd they said fuck the savers" "I just follow orders"

Wed, 01/25/2012 - 16:01 | 2097351 kito
kito's picture

first off, he is not punishing all savers. those that are on a limited budget and are in the process of saving food, medicine, ammo, hard cash, etc are quite pleased that the Chairman is staving off the inevitable a bit longer until ones savings is complete.

Wed, 01/25/2012 - 15:49 | 2097296 HD
HD's picture

There's already so much liquidity in the system - when does it choke the equity market?

Wed, 01/25/2012 - 16:02 | 2097355 kito
kito's picture

how do you choke that which is already dead?

Wed, 01/25/2012 - 16:15 | 2097407 HD
HD's picture

I'm greedy. 1,300 isn't dead enough for me. 950...now that's circling the drain.

Wed, 01/25/2012 - 16:26 | 2097474 ekm
ekm's picture

I've been watching the market every single day it's been 3 years. The higher it goes just on hope of free money, the lower it drops when panic sets in. 950 looks very attainable very soon.

Wed, 01/25/2012 - 16:28 | 2097483 kito
kito's picture

1300 is just the formaldehyde and make up on the corpse. there is no heart beat, no air flowing through those lungs. volume doesnt exist....................

Wed, 01/25/2012 - 15:53 | 2097316 ekm
ekm's picture

I've now officially baptised Quantitative Easing as COCAINATED EASING.

Wed, 01/25/2012 - 16:11 | 2097392 viahj
viahj's picture

"it's a helluva drug"

Wed, 01/25/2012 - 15:55 | 2097320 Boilermaker
Boilermaker's picture

LMFAO...How fucking more gay can this get (or 'gayer'...not sure)?!

What a god damn joke this has become.

Oh yea, the SPX is up 8 handles and they'll gas the shit out of it in the last 30 mins....you know, just for the shits and giggles effect.

Wed, 01/25/2012 - 15:54 | 2097321 Jason T
Jason T's picture

Definition of 'Financial Repression'

term that describes measures by which governments channel funds to themselves as a form of debt reduction. This concept was introduced in 1973 by Stanford economists Edward S. Shaw and Ronald I. McKinnon. Financial repression can include such measures as directed lending to the government, caps on interest rates, regulation of capital movement between countries and a tighter association between government and banks. The term was initially used in response to the emerging market financial systems during the 1960s, '70s and '80s.

Read more: http://www.investopedia.com/terms/f/financial-repression.asp#ixzz1kVAGF3NO

Wed, 01/25/2012 - 16:00 | 2097344 Boilermaker
Boilermaker's picture

Ah...yes, a glorious daisy chain.

Wed, 01/25/2012 - 15:55 | 2097323 carbonmutant
carbonmutant's picture

Bernanke's term is over in January...

Wed, 01/25/2012 - 16:22 | 2097450 kalum
kalum's picture

Thank the Good Lord for hope that if OB loses Chairsatan Bernanke will be shown the door to his cell. Otherswise the world as we have known it will get the final and no return bullet

Wed, 01/25/2012 - 17:20 | 2097681 Citxmech
Citxmech's picture

Because Rommney, Gingrich, or Santorum would appoint Ron Paul to head the Fed, right?

JFC.  It's not Bernanke - he's just a bag-man.  It's that the entire system is run for the benefit of a corrupt elite by a bunch of lacky/whores.  And there's no shortage of them to fill in the appropriate spot, apparently. 

Wed, 01/25/2012 - 15:55 | 2097324 Texas Ginslinger
Texas Ginslinger's picture

Cheap & endless money.

When that combination fails, what then..??

Isn't that how we got to this point in time after the dot com bust..??

Wed, 01/25/2012 - 16:03 | 2097359 blu
blu's picture

QE3+4+5 = EOTWAWKI

The Fed will not telegraph such a reality. They'll slip it in under the radar like monetary ninja.

But the world will end nonetheless for all that stealth.

And you read it right here are ZH

Wed, 01/25/2012 - 16:12 | 2097397 Peter K
Peter K's picture

But the US will finally achieve income equality... like in NKorea:)

Wed, 01/25/2012 - 16:14 | 2097404 youngman
youngman's picture

Face it folks...listening to Obamas speech last night...no cuts there....and with the Feds announcement today...its print print print....China and Russia know it...so does Asia and South America......so do the politicians who are just licking thier lips at all that new cash they can dispense...this next election is very very important...the spenders know it..and the cutters know it too....it is two differernt paths that we have in front of us...its our choice....unfortunatly the person that gives out the most money will win this one as our populace is not that smart to see the big picture....sad but true

Wed, 01/25/2012 - 16:15 | 2097408 ghostfaceinvestah
ghostfaceinvestah's picture

Financial repression won't make a bit of difference if we keep running up $1.5B deficits annually, and Bernanke knows it.  That is why he is effectively monetizing the national debt.

Inflation/deflation/hyperinflation, who knows?  The guaranteed outcome is lower standards of living, regardless of the unit of measure.

Wed, 01/25/2012 - 16:38 | 2097511 Diet Coke and F...
Diet Coke and Floozies's picture

"Financial repression won't make a bit of difference if we keep running up $1.5B deficits annually, and Bernanke knows it." 

You wish it was $1.5 B...

Wed, 01/25/2012 - 16:50 | 2097553 Triple A
Triple A's picture

I heard bonds paid out about 20% last year. Were those 1 year bonds 10 year bonds 30 year bonds?? Also someone explain to me this, if you are holding a 30 year bond for the year and it pays out 3% are you making 3% for the year or the month or what?

Wed, 01/25/2012 - 17:07 | 2097610 onebir
onebir's picture

The yield (interest payment) is given annually. But that 20% figure was probably based on the change in the bond price (bond prices go up when interest rates go down). Not sure if +20% would've been 10 or 30 year bonds, but maybe someone else knows.

Wed, 01/25/2012 - 18:05 | 2097892 Ropingdown
Ropingdown's picture

Memory says 30 yr paid 28.8 total return, 10 yr paid 9.8 total return.

Wed, 01/25/2012 - 17:01 | 2097583 Seize Mars
Seize Mars's picture

I think it's important to note that 'financial repression' is just repression. Ron Paul says there is no 'types' of liberty, just liberty.

 

Wed, 01/25/2012 - 17:05 | 2097596 Chupacabra-322
Chupacabra-322's picture
Don't you think this embargo on Iran is meant to act as a trigger or catalyst for the devalutation of the U.S dollar? If India is going to be using Gold instead of the USD, won’t other countries do the same thing which will make Iran stronger, and the U.S dollar less and less valuable? My take,

40% Dollar devaluation this year!

Wed, 01/25/2012 - 17:08 | 2097613 onebir
onebir's picture

"Presented (almost) without comment:" ;-)

Wed, 01/25/2012 - 18:00 | 2097876 SunBlaster
SunBlaster's picture

Bernie to Gross: U MAD BRO?

Thu, 01/26/2012 - 00:46 | 2098830 chickamonga
chickamonga's picture

ZH,
Please investigate a disproportionate buying of z14 Eurodollar options and futures for the 2 months, but specifically the last 2 weeks. Massive buying of z4, massive selling of z3z4 spreads and massive selling of z3z4z5 flies leads me to imagine that this unprecedented position was both perfectly timed and completely indiscrete, once the fed made an announcement to dissuade a rate hike til z2014. The timing of the initiative and sequential call from Big Ben was too specific for this to have been pure coincidence. There's a leak at the fed.

Thu, 01/26/2012 - 01:40 | 2098905 Nage42
Nage42's picture

If you read the small-print on the UST it states that you can only sell them if the Treasury allows it (similar to the US being able to suspend human rights, voting, due-process et al. whenever they like).

So China is not "selling" per se, but rather they are not rolling over holdings as they come to term. Sure would like to see the breakdown (oops, Freudian there) of the holdings by-year so we know the total-holdings drops according to the calendar. Anyone know where I can find that out?

Thu, 01/26/2012 - 02:01 | 2098923 Trenchf00t
Trenchf00t's picture

Nipponization, bitchez! Been enjoying the fruits of my macro strat, and it looks like there will be no changes this year. Looking forward to being a landlord in a wasteland.

Thu, 01/26/2012 - 11:14 | 2099539 SMFStreetTrader
SMFStreetTrader's picture

Stock Market Trends 2012 QE3 Short Interest & Upside Volatility http://www.youtube.com/watch?v=lHWYie3Kk1o

Do NOT follow this link or you will be banned from the site!