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Did The Market Remove Its Own QE Punchbowl?
There are only three words that send a chill down the spine of Ben Bernanke - Ron, Paul, and Deflation. His life's work is devoted to the avoidance-at-all-costs of the latter (and probably the former in reality). As we discussed here two weeks ago, his actions in extreme monetary policy have all occurred at periods when the market's expectations of future rapid de- or dis-inflation have increased rapidly. As we noted then: without inflation break-evens dropping, the Bernanke put will not arrive; but the market in its infinitely efficient wisdom has created a self-defeating spiral of BTFD reflexive front-running on any rapid spike down in future inflation expectations - which implicitly sparks a non-dis-inflationary reaction and removes Bernanke's punchbowl for another day. This has occurred 4 times this year - with this week's early plunge being caught by Draghi and Hilsenrath - and with inflation break-evens almost at their highest in 10 months, it would appear the 'desperate-not-to-miss-the-life-giving-rally' market just removed its own blood supply.
Each time the inflation break-evens have cracked down hard towards 2.0%, Bernanke has stepped up bowl-in-hand and ladled out the yummy QE Kool-Aid; 2012 has seen 4 'mini-spikes' which have all been triggers for responsive equity buying to front-run Ben's-Bowl. But as is clear, the more this occurs, the less likely the bowl is to actually appear!
Data: Bloomberg
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Does that mean that if you short gold to buy stocks you cannot lose?
Stocks go up and gold won't go up without more QE it seems.
Interesting take.
Asia followed the "trend", behaviour of stocks in europe look very similar to friday,
Pump - pump - pump . let the bl++dy taxpayer bleed, fill the asses of corporate crime.
This "deflation" that these douchebags talk about.......WHAT A FUCKING CANARD!
These dickwipes talk talk TALK about "deflation" - when in the REAL DAMN WORLD, IT'S INFLATION, INFLATION, INFLATION!!!
For the life of me, I cannot understand why anyone doesn't bitch slap any of these douches when they even utter the word "deflation". I would...if that douchedick Bernanke or any of these fuckholes tried it. This, after laughing in their faces.....
WHO ARE THEY KIDDING???
Perhaps you, you actually can have both at the same time. Price inflation where prices go up for some reason, and monitary deflation where nobody has any extra money to spend execpt the folks toward the top of the income ladder. It's the story of the haves -vs- the have nots and each day they are separating more and more inhancing your inflation/deflation illusion. The real problem currently is hyper-inflation, which is when our currency ends up in other countries and we compete dollar for dollar for certain goods and services, this was caused by the trade imbalance when we shipped jobs over seas for a variety of reasons. Quite simple, A.
Herr Schauble just took Turbo Timmy's punchbowl as well.
German Gov put out a press release that Herr Schauble agreed to meet Timmy at Timmy's request. The meeting was at Herr Schaubles vacation residence. I'm assuming the weather was nice :)
I suspect the whole QE debate will ultimately turn out to be one big smoke screen for what determines the fate of the major world economies. While everyone is standing around waiting for the punch bowl to arrive, they overlook the fact that their date is out screwing their best friend in the backseat of his Chevy.
no, qe is still on the way
so this time its our fault ... hmmmmmmmmmmmmm