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Chart Of The Day: With All Of QE3 Priced In, The Only Way Is Down Should Bernanke Disappoint
The following chart from Bank of America shows that with a few short hours ahead of the dangling strawman known as Bernanke's J-Hole address (now that Mario Draghi has more pressing issues to deal with elsewhere), expectations for QE3, in the form of what is actually priced in, just hit an all time high. So is, by implication, the potential for disappointment and that the petulant market, no longer caring about such trivia as fundamentals, technicals, newsflow or frankly anything except what the Chairsatan ate or what side of the bed Bill Dudley woke up on, will not get what it demands. It then begs the question: if the S&P is at 1400 with virtually all of QE3 priced in, what is the "fair value" if there is, gasp, no QE3 announced either today, in two weeks when the FOMC delivers it periodic oracular address to the plebs, or until the post-election FOMC meeting, which will take place on December 12, and just days ahead of the Fiscal Cliff arrival (which will certainly not be resolved by then)?
Some comments from Bank of America:
We anticipate a relatively dovish speech that signals a high probability of additional easing at the September FOMC meeting. But "easing" and QE3 are not synonymous. In our view, a change in the Fed's rate guidance is very likely, but Bernanke is probably not ready to preannounce QE3. Indeed, he is unlikely to front-run his Committee, so we would expect a speech that is long on historical defense of the Fed's easing to-date but short on details of any future actions. Given that the markets have priced in a high probability of QE3 (Chart of the Day), in our view that could be a disappointment.
A hawkish dove
In our view, more unconventional policy is just a matter of time. Thus, we expect Bernanke to emphasize three key points, without actually signaling the Fed's next steps. First, he is likely to underscore the bias statement in the minutes: if the economy does not improve substantively, the Fed will ease further. Second, he may discuss the Fed's options in more detail, building on some of the discussion already noted in the minutes. Third, he is likely to argue vigorously that unconventional policy is both necessary and effective.
The Bernanke Fed has not been shy about introducing new ways to use language or its balance sheet to stimulate the markets. However, we do not expect an outright signal of QE3. Keep in mind that "easing" and QE are not synonymous. When Fed policymakers signal that they are ready to ease, they mean not only changes in their balance sheet but also changes in their forward rate guidance and other language changes. Further, Bernanke will likely remind everyone that monetary policy is not a panacea - without naming names, he will likely point to the pressing need to deal with the fiscal cliff. He is also likely to note that unconventional policy comes with costs as well as benefits.
Rates market implications
In our view, the rates market could be disappointed by Bernanke's speech. Our model currently indicates that a greater than 85% chance of QE3 is priced into the market in the near term (3-4 months). This probability is at recent highs, indicating that the market is likely expecting some explicit signal of further QE by the Chairman at Jackson Hole - and the lack of one is likely to be taken as a disappointment by the market.
One could argue that selling nominal 10y Treasuries may be the way to position for a Bernanke disappointment trade. However, at 1.61%, we do not believe that nominal Treasury levels are extreme by any means. A return to risk aversion or disappointment on the economic data can lead 10y rates lower: just a month ago, 10-year Treasuries were at 1.39%. Selling 10y real rates, at close to all-time lows of -0.72%, offers more compelling risk-reward, in our opinion.
A significant portion of the rates market reaction will also depend on the reaction in risky assets. A risky asset sell-off triggered by the lack of a strong signal for QE could also mute the reaction of higher nominal rates, in our view. In this case, inflation expectations as priced in by TIPS breakevens should head lower. We recommend that investors tactically short 10y real rates and 10y TIPS breakevens to position for a disappointment from Chairman Bernanke.
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But but but, everybody's so bearish and noone expects QE is the mantra. LOL!
Long treasuries is the no lose play
Gold has only one way to go...DOWN
We've just put together a few screenshots of some of our models (silver, gold, usdx, and eurusd) as of this morning, worth a look: http://blog.quantsig.net/
Also, as usual, gold is running on the public console: https://www.quantsig.net
Will update throughout the day.
NONONO. Tomorrow is VERY simple. If BBking QEs Long PMs HARDASFUCK.
If BBking doesn't QE market fall should continue. Now noting the historical trends of buy the fed meeting rumors sell the fed meeting news, and that the buy rumor portion has been moderately bearish at best, expect the sell the news portion to be a fucking shitshow.
Tomorrow is simple simple trade. Long Gold silver, long vix futures. maybe short market as well.
But far as I'm concerned trading through the speech is just stupid.
Long term, absolutely. But today is Friday and it's a Fed speech day, so whatever makes rational sense is usually not what happens.
Now, come Monday, we can probably come back to a bit of rationality, if only a tiny bit.
no doubt that post meeting dip sometimes takes a bit to occur. But still, long pms if he QE's. Say goodbye to 1600 gold.
BREAKING NEWS:
BREAKING NEWS:
China and Germany will no longer do business in USD, Euros and Yuan preferred;
http://www.cnbc.com/id/48838061
Should I be buying EUR/USD ???????
Should I be buying Yuan ???????
Should I go out and buy a heap,...???????????
Should I wait,...???????????
What if they disappoint ???????? Is it all priced in ?????
So,... How come Tyler hasn't picked up on this?
Come on Tyler, why ain't you helping us out.
Seriously dudes,.... why is this topic being ignored ??????????
Probably because you are posting about it using a BOLD font.
Because you have been recognised already as a Zionist shill (either that, or you're as dumb as a box of rocks).
Congratulations! You've taken the award for the shortest-lived shill ever to appear on here. Even Max Fischer took longer!
Wow,... an award. Thanks.
b/c ur a stupid fat fatty. Now short the dollar and go long the euro.
Uh...How wrong could anyone be in the least amount of words used? - We have a winner! C'mon, here's the trade TILL KINGDOM COME; Long anything that perpetuates the color of the Wallpaper draped over muppet's head. Short anything that reveals the hyper-inflation it causes (as a day trade). Why is this paint so hard for everyone to see? The Fed is the market, trade the Fed's ideal outcome (LIE).
QE is alive and well. You saw it yesterday in the Dow's 120 point drop. Slow, methodical...Theatre!! A pullback created for realism that has no chance of taking root. It was as FAKE as any upside move we've seen in last three years. Ben's got this market on a real short leash. Trade it based on the big lie, which means: buy every dip in equities and short every commoditiy ramp in anything that exposes inflation (as a day trade)!!!...Or get ROASTED. I'll short oil, gold and silver for a day trade today - I'm long spy, diamonds and Q's from yesterday's "fiddler on the roof"well placed pullback. I will cash in 50% my long ETF's before the Fed language release. Leaving half in the trade, knowing that Ben will flood equities during and immediately after speech...Leaving no doubt what the result will be (security before a 3 day weekend) - Regardless of what the language says!
Au contraire psychofella, it can for sure go up too! As your comment is typical of the dominant comment this week, I just bought a load of Dec 2013 +3000 call options just to be a contrary git.
Bring it on :)
Cheers!
@spotgoldprice
Ballsy. I like that. I hope you see them in the money soon.
Long treasuries is the no lose play
Gold has only one way to go...DOWN
theMAXILOPEZpsycho ...... yep.
Durdens of Zerohedge:
Something is very odd in the agro futures and bond futures markets...
http://finviz.com/futures_charts.ashx?t=ZB&p=m5
http://finviz.com/futures_charts.ashx?t=ZN&p=m5
What is happening to the futures market?
What the Fuck?
I have no tradestation :( What is happuning?
That shit looks bizzarre. Unless proven otherwise, I would expect that is some sort of problem with their feed. I just checked my feed source (CFD from futures), and I don't see that, nor do I see ridiculous spreads, so I don't think what finvis is seeing is accurate.
EDIT: Actually, it looks like finviz is rolling their quotes to the december contract. So it is probably correct. The price they are showing is the dec, while the previous price is probably the old contract.
are they alternating contract months over to december? What are they donig it so fucked up if so?
I want my poot poot back. Fucking bitch I gave it to ghosted the corrupt data back onto my newly wiped drive. dumb bitch.
Edit: yea I'm sure that is what they are doing. maybe they forgot to unlist the previous month so both months are streaming simultaneously?
It's definitely a strange way to do it. I don't know what they've got going on there. Most places I know roll the contract out on a Sunday night, not a Thursday. I guess this is why.
EDIT: I think you're right. It looks like they did forget to pull the old contract.
but they rolled the nat gas yesterday, and that was seemless. Prob just a glitch and we are wasting time figuring out something stupid.
edit:
http://www.youtube.com/watch?v=UXzCFnD9Si0
.
'tis an odd crap lying on yonder roadside.
The agro futures you read
reflect a problem with the feed.
The source, as you will see,
is indeed the CFD.
(Catastrophic Fucking Drought)
LOL. The limerick king strikes again!
The Limerick King operates on a level to which I can only aspire. His is truly the Majesty of Mirth.
Marketmakers went home, leaving a large bid/ask spread, which were traded lightly?
not sure... try playstation? (sry; couldn't resist!)
i'm seeing the 10-year got whacked which means (?) risk0n usually
and the index futures are up 0.2-0.4%
and the dollar is dipping but not more than randomly imo Chart for U.S $
we have had some articles here about how these "rates for Ts" can get moved around
tyler is w/ some girl that jumped outa a cake right now... what have you been drinking?
The big wooden barrel next to the cake is filled with swish.
It's a regular pattern... perhaps an algo racing trying to increase/decrease the trend obstinately by the same value.
Both t-bond charts are somehow related. The strange behavior starts at 8.00 PM yesterday on both charts but in opposite direction. It seems to me like 10y bonds are being sold in favor of 30y bonds being bought simultaneously.
No soup for you.
"We are ready to take further actions if the S&P drops another 20 points"
More of the same...
Fuck Chairsatan
FUCKIN-A_ Post facto!
No QE, but a lot of bullshit.
i don't buy the propwash abt the FED agreeing to more easing if the economy doesn't... blahblahblah
WTF does the chairsatan care what the "markets" expect at this point?
he will say that while he was watching the animals rut the thought came to him: gold and silver coinage as legal tender?
slow the "meat ball"down Slewie\\ You are extremely, hyper smart! I know you are Alpha. CHILL out,\\\\
i can relate 90 ():
well you can regulate yer ass and i'll regulate mine, ok?
this isn't the first time you have "advised me" about my political speech here
really, bro
and :> you need to stop pretending you don't know what i'm saying, ok?
if you don't know what my ideas (based on the constitution) about PM coinage are, don't blame me
you are not here enuf to know what is happening on the ground and what i am doing at present
altho people may be "telling you" or you "think" you have a very high level of absolute ignorance about many things and probably should just mind your own business as far as slewie's writing and blogging is concerned
i know you like to e-mail people whom you flatter and flitter with here, but leave me outa yer "social life" ok?
if you have "delegated" the job of following zH, you will be revealed as a fool
you don't get it do you?
I would not ordinarily do this, but the only way to go is down and it is late Eastern. And Dio is literally doing "God's" work. http://www.youtube.com/watch?v=xSjlEjpyA9g
QE never stopped, and it will continue, but they won't admit it.
I think they want a short-term correction between J-hole and Sept. 13. Imagine getting a 10-15% drop in PMs and stocks before launching a big QE package...must be every central banker's wet dream to come riding in on his white shiny printing press to solve the deflation fears...
Whether it’s disappointment or a hint that a further monetary boost to the economy is on its way, the speech on Friday from Federal Reserve Chairman Ben Bernanke is likely to trigger a strong swing in either direction in U.S. stock, currency and bond markets, which are sitting on critical technical levels, one analyst says.
https://miningstockvaluator.com/news.php?id=32
That QE-3 read is highly (in-effin) Flated. Yes ! I can read stupid charts.
let them eat USD when they get hungry, or maybe share certificates taste better
http://www.guardian.co.uk/world/2012/aug/30/us-soldiers-death-penalty-mi...
"Get more sugar syrup ready and make sure that machine is on Timmy!"
http://www.circusmafia.com/wp-content/uploads/2012/06/cotton_candy_machine.jpg
If Ben doesn't spin more cotton candy there will be crying.
Tyler was ( ) full of poop! If you look @ the top (ascending) line you can clearly see, 20% max deviation.
Technically, tyler posted,blue moon Theory
.
Fair value is 90 trillion dollars. This is calculated by consulting the chart:
http://www.southparkstudios.com/clips/222636/90-trillion-dollars
How the chart works:
http://www.southparkstudios.com/clips/222638/bailout
What an incestuous Socialist circle jerk .... and Bernanke is first fiddle !
Don't test me. Your cousin wants you (evaporated)
Should the election go badly for the democratic anarchists in Congress the matter of the fiscal cliff surely being resolved is far from a settled matter.
During Watergate,James McCord said he wasn't going down alone but that "every tree in the forest will fall"
ob-la-de-ob la-da obama has the best anarchist training that Bill Ayers et. al. could give him. he and his anarchist buddies will, during the lame duck period try everything in their power to burn this country down ....he hates the USA more than any other adversary we have.
Monedas
I'm Boris, and you are "Slewies Benifactor" ( Any Questions?)
me! me!
is your last name Bones? i wanted to thank you!
is it the radiation?
i think i was channeling the spirit0comedyJihad last wekend
call me "The Hamptons"Boris
that fits
and use a ken doll for an avatar?
just as an alter- for when you're feeling superHero-ey
do you have pumpkins for us this year? or did they get stopped out too?
Slewie is photographic! nice
I'm expat slewie. Australia and Singapore.
The average person is very excited about the prospect of more QE from the fed. [/sarc]
Buzz, you are what you never wanted to be!
A Leader. a-Man of valor! I/WE love you BUZZ!
Hi Yen! :warm fuzzy:
Market has been taken up high enough to get a big drop which will then justify intervention and QE3.
The drop i think would be 20-25% for the justification.
Alongside maybe we will also have the attack on Syria by NATO.
Well, the coming days will be very interesting. Hope people get their money out of the banks in time
Not to mention their trading capital which will likely be siphoned off. Trading is for the HFT players- not the average individual.
Also please make sure your stocks( what you stll have) are safe and secure .
I don't have any stocks. I got rid of them long ago.
But I do have clean underwear and socks.
i don't say that very often myself
either
Tyler, no shit. I have double short posistipn open. My broker, xcan't close the trade. I already have a position!
Should I close the other half? I'm not joking? Should I be "dishonest", and lie?
Y/C wells :> vapor wars
sure! then tell them you are just kidding and pay for lunch too?
it would be cheap at twice the price
funny too!
we were talking about this earlier Chart for U.S $
fly FXAIR
maybe one of these tired cliches will help?:
1) No guts, no glory.
2) If you can't stand the heat, get out of the oven.
Hope that helps. :)
It's not the heat, it's the humidity
(just pumping up your fine cliche examples)
Is it lying when the entire game is rigged against you? A moral lemon.
I don't care what Bear nanke gets up to in Jackson's hole, just as long as my shorts pay off.
<<:Oct 29 falls on a monday
<<:I hear they are hiring at McDonald's
a slewieOpinionPoll: which do you consider least irrelevant?
and please! no cheating this time!
I get it ! Slewie Man .
Another 4 hours to go before The Bernanke opens his foul mouth and the stink hits the markets
everybody is short, in anticipation of disappointment.
after his speech, they will close out their shorts.
the market will go up.
this is so easy, a child could do it .....
<--- Yellen for fed head, she has chutzpah! [/troll]
The Bernanke circa 1978
http://mlatrader.com/waiting-on-bernanke-no-trades/
The euro is rallying big time this morning. Paris' stock market is flying high too. Europe is doing well. That's what the markets are saying and as well know, the market is always right.
the article is actually about QE3 and Bernanke, but anyway, since you mention it (slewie the pi-rat is back in force and he is the only one that seriously scares me, here) -> are you sure this is not just a month's end rally? I expect gold to go down a bit next week, for example, even though every time Prof. Dr. Chairman Bernanke speaks the USD rises and all his "enemies" are nicely bashed down.
EFFIn Slewie & Buzz kick azz! :0 azz in oohhh. I'm gonna ke/pit kleen !
The utter stupidity of the chair of the country's central bank chatting up the stock market is going to become clear in time.
Algos only drive on one way street but they can slow down. Markets at least US markets can only go Altucherly higher over medium term.
Jim Willie’s latest Hat Trick Letter, ‘Firestorms & Currency Twisters‘ is a MUST READ!!
Willie states that Morgan Stanley faces IMMINENT FAILURE & RUIN, that The older employees are selling all of their stock, and that Many workers are making contingency plans for their next positions in another firm.
He states that JP Morgan will devour the carcass, and that The Morgue may be preparing to execute the 1st ever private stock account vaporization/ rehypothecation.
AN ABSOLUTE MUST READ!!!
Yen Didn't sanction this post!
Chart Of The Day: With All Of QE3 Priced In, The Only Way Is Down Should Bernanke That is long priced in!Disappoint Tyler, I'm not thrilled, over the fact, that you used my post for advertisment. The forum knowsTYlèr? 2 times?v not good
Dudley will keep pushing Bernanke to feed Wall Street with endless QE. Bernanke and the Fed might as well announce QE until the DOW is like Zimbabwe's level.
Bernanke, Dudley and Yellen can print until the DOW matches Zimbabwe's Industrial index after their hyperinflation episode.
QE 3? WTF, all QE all the time.... Only the names are changed to protect Oligarchy.
It interesting that Wall Street will actually react to what Bernanke says even though Bernanke has no choice but to prop up the banks and buy up their bad investments.
I suspect that some program will be announced because the JPM whale trade bailout has to be explained somewhere on the Fed balance sheet as part of some program. The leveraged losses have to more massive than Dimon would ever consider admitting to. I think the bailout there continues.
More shooting....this time in a New jersey supermarket. Gunman killed, three others dead, several injured.
Impossible. Check your sources. Carrying guns is illegal in NJ.
A water canon perhaps?
blah blah blah blah blah
Regarding the conspiracy towards world gov't, are russia and china going to go along with that? Or are they done bought off also?
Things will have to get considerably worse to conceivable pull that off. War with Iran, a few nukes tossed at the US, etc. I don't ever see it working but we're certainly going to get fucked good over the ordeal just so our bankers can be happy and continue their beliefs of being god. Everything about this is just fucking stupid, 9-11 is all too obvious, a market low of 666?--yeah fucking right. So basically you know what happens when the crazies all realize they've been found out? That's when tshtf. Save themselves at all costs, no matter how many millions die.
With all the 'buying off' the Fed has done, we all better get 5 more jobs! Because thats ALL this is...'I'll hand you money today to shut up, we'll make the American slave pay you back, I promise!'
they put jackson on some of the coinage
they meet at jackson hole
jackson hated those maggots
disgusting
They tried to whack Ole Hickory too.
EUR/USD has been spiking for 6 hours already, and still rising. Hard to meet that expectation, so disappointment seems assured.
sounds bullish to me.
Bullshit...all this is about is 'How can we convince people we've got somethin?'
By the way, FUCK YOU Bank of America! For posting armed guards and arresting people trying to close their accounts!
If they do come out with an open ended nominal GDP program, how could that be priced it..?? It can't.
QE = more loans.
Fiscal stimulus = more loans.
There is no more productivity to the loans, no point to any QE. Instead, more loans = the real likelihood of insolvent central banks.
That is, more loans by the private sector. The public sector balance sheet is footed in private sector: 'reserve' increases are liabilities on the private sector accounts. Sorry, no free lunches anywhere on this planet.
If all the banks are insolvent including the central banks there are incentives to remove whatever currency that can be had into the Posturepedic- or the Backyard National Banks.
Bernanke/Draghi are smart enough to realize this, so far there are no runs out of bank accounts in the US, little increase in asset purchases (a run out of currency). There is also little in the way of ongoing deleveraging/deflation. 'Growth' talk is cheap but no shortage of believers.
No limit to central banker gum-flapping.
Any increase in the gold price would be reflective of run out of currency rather any increase in amount of loans/'money' supply. The quantity of money isn't important if its quality deteriorates as is occurring now.
they don't have a need to do QE3 until they get their pullback to 1150/1080 /es, or so. Just put a little fear into it... Try and not politicize the election. (yeah right). I could be wrong. (actually I have no freakin' idea about economics) Not wrong about charting where the market is going tho, imo. I'm taking my (short) bet off at any 1415. We broke an 'ext long' last week. Now we go 'all the way half way back'. And that hwb started at 865's, to H. Do the math. It works off math,,,fibonacci. eminiaddict teaches. beatchssszzz