This page has been archived and commenting is disabled.
Goldman's Prepared NFP Kneejerk Reponse: "QE Probability Now Above 50%"
The NFP number was released at 8:30 am. At 8:40 am Goldman Sachs' Jan Hatzius hit "send" on a 356-word email to clients which was checked, vetted, and given the sign off by compliance, in which the Goldman head economist read through the NFP data, and concluded that "Probability of QE3 Next Week Now Above 50%." Curious why the risk assets first dropped then soared as if stung? Because today, once again, good is great, but worse is greater. Let the global liquidity tsunami continue!
From Goldman:
BOTTOM LINE: With today’s August employment report showing a nonfarm payroll gain of 96,000 and an unemployment rate of 8.1% because of a drop in the participation rate, we expect a return to unsterilized and probably open-ended asset purchases at the September 12-13 FOMC meeting.
MAIN POINTS:
1. We now anticipate that the FOMC will announce a return to unsterilized asset purchases (QE3), mainly agency mortgage-backed securities but potentially including Treasury securities, at its September 12-13 FOMC meeting. We previously forecasted QE3 in December or early 2013. We continue to expect a lengthening of the FOMC’s forward guidance for the first hike in the funds rate from “late 2014” to mid-2015 or beyond.
2. While there is significant uncertainty around the details of any new program, our base case is that QE3 will be formulated as an open-ended asset purchase program of around $50 billion per month, with an end date that is not given in advance but made dependent on progress in the economic recovery. We expect the criteria set for ending the program to be formulated in qualitative terms in the FOMC statement but explained in more detail in Chairman Bernanke’s press conference and in a statement from the New York Fed. We expect Operation Twist 2 to be continued until its scheduled completion at the end of 2012.
3. The return to asset purchases at this time is not a given. It is also possible that Fed officials will limit themselves to a lengthening of the forward guidance. In that case, we believe that they would try hard to find a way to not only lengthen the guidance but make this guidance more powerful by coupling it with a statement to the effect that “…a highly accommodative stance of monetary policy was likely to be maintained even as the recovery progressed.” It is even possible that the committee would adopt Chicago Fed President Evans’ proposal to signal no rate hikes until the unemployment rate has fallen to a specific level (in Evans’ version 7%) unless underlying inflation rises above a specific threshold (in Evans’ version 3%). But that is not our base case.
- 7818 reads
- Printer-friendly version
- Send to friend
- advertisements -


Probability of QE with food inflation about to hit overdrive at the store and oil/fuel at these levels, 0.000000001%
On a long enough timeline given the current conditions the inevitability of printing......goes to 100%.
Bring it on! QE to infinity! ... 'cause the last couple rounds of it have had such a POWERFUL impact on creating jobs ...
But on a brighter note - gold is up 22 bucks on the bad NFP number
QE3 was oil and food spiking?
AND with UE rate dropping?
NO CHANCE.
Repubs will have a field day if Ben blinks.
Haven't you heard? ... "inflation expectations remain well anchored"
Thats for the algos and momotards.
Gas and food prices havent moved yes?
Core inflation vs. Headline inflation = apples and oranges ... come on -- get with the program!
"if it don't read through, then it ain't true!"
(do I really need a /SARC for this one?)
C'mon now its Goldman. They are probably shorting commodities, stocks, etc because QE wont happen next week. Always do opposite what GOldman says...
Yeah................maybe to some helium balloons.
There is a four day waiting period if you want to buy more than 1 helium balloon for a party. Helium is in short supply.
ECB not financing sovereign debt: Germany
http://www.france24.com/en/20120907-ecb-not-financing-sovereign-debt-ger...
Yes, 2008/2009 redux. Will the banks and financial houses get a bailout this time? Place your bets...
Gold is up on the euro short squeeze. At least that's what this website I found, called Zerohedge, said.
Agree with you GZGold.
"The Federal Reserve's actions are not intended to benefit everyone." - Ben Bernanke
The fed dual mandate is unemployment, right? So really, if they can just get the partcipation rate to continue to drop like a rock things will be looking sweet...
To be real, tough to push the pedal to floor with $100 oil and a dropping unemploment rate (regardless of the reason) but doesn't mean they won't do it. But wow, watching the crack heads on tv is stunning...these folks are down to their last few bucks to buy the next hit and are terrified they'll not get the next one.
On a long enough timeline Jan Whorehouse will get hit with a bat or a truck!
Sad...really pathetic and sad.
Oh, and corrupt. I almost forgot.
I just paid $3.96 a gallon of gas and Ben is going to do QE right before the election... riiigght.
Productivity UP
Last IMPORT PRICE INDEX NUMBER DOWN
unemployment/spending shrinking/saving
That is called anchored inflation expectations. Real wage growth is possible with increased productivity - in fact HIGHLY DESIRABLE (share the gains) but if unemplomyent goes up then that is bad news pre election.
Romney in = Ben out.
Obama in = ???
productivity is going to tank becaues we're not investing jack squat in machinery.
yeah thats the scariest thing and when that feeds through .......
You don't need machinery if you're not building anything. Oh, my bad, I guess we'll need some more drone factories.
Record Cash. S&P sitting this administration out.
http://www.factset.com/websitefiles/PDFs/cashinvestment/cashinvestment_6.27.12
@Jason T
My thinking as well. The real laugher here is that GS put the odds as 50/50. That's the ultimate hedge.
If Goldman just told you the fed is for sure going to do it...you better run like the f*ing wind cause they are getting ready to hand everyone else the bag. History clearly shows when it comes to being honest Goldman rates a zero.
Gold and Silver went straight up like a rocket. I'm sure Fraud Street will open with a nice long green candle. President ChoomPrompter gets to take credit for a "reduced" FunEmployment rate.
So. Much. WIN.
The erection on the gold chart is giving me one of my own.
Both gold and silver have each broken out from the year-long consolidations they have been in, and are likely to go much higher over the next year or so.
Fed firing up the helicopters now
Romeo Foxtrot.......let's dance.
http://www.youtube.com/watch?v=ZkH5Ak4wAnY
ahhh yes, the Goldman "public release".
time to buy puts.
Well it looks like Goldman gave up on feeding the contrarions.
Did gold just shoot up $25 in seconds?
http://finviz.com/futures_charts.ashx?t=GC&p=m5
Yes, yes it did.
Congratulations chief......looks like you pissed off someone.
<yawn>
Oh you better just watch yourself lil mister!
Curious why the risk assets first dropped then soared as if stung?
INO.com Markets - Chart for U.S $ INDEX (NYBOT:DX)
whack-0-BiCheZ!
Are you telling me that when a currency goes down that things priced in that currency go up?!?
WTF!
I am curious how that works exactly. How many pips must DX fall to generate $1 of lift in dollar denominated assets? I imagine there is some "friction" involved.
well, it's hard to tell; maybe we could ask tyler and he could quote a squid report L0L!!!
sometimes the dollar and gold go the same way; i seen it wif me own eye!
but here, the dollar whacking is getting me slewie sense to tingle a bit, especially of you look at a coupla weeks, it's a pretty good "takedown" to this pi-rat, fuu
but it IS supporting the euro! and there is that "correlation to markets" there
also interesting this morning is the first time i checked the long bond, it was -.88 and on another screen, same time? +.99!
price discovery with a time-lag?
now this screen has gone even higher DOWFUTURES
here's something we know will make sense Mogambo Nontraditional Policies (MNP)
By: Richard Daughty
where's my bong?
SGXNifty has been flakey for me the last few days, just not as flakey as me.
That article rocks...is that you?
Dr. G.G. Gono knows: http://www.rbz.co.zw/pdfs/2008%20MPS/AprilMPS2008.pdf
Why doesn't the Fed just set a ceiling on the 10 year? Wouldn't that be the same thing as open ended QE?
Because it's more fun to set a target on something that you have no intention of achieving, like employment. Then you can finally print as much as you want and hand it to your buddies.
If so (and 50/50 odds is a good hedge, GS), then mogas is going over $5/gal. Just look at the prices paid subcomponents of ISM.
I wish it would go to $10/gallon. Blue/Red America deserves it at this point.
Agreed. We get the government and economy we deserve. I feel like one of the roaches in a wood pile, trundling through the feces and decay.
Good people shouldn't have to pay for the stupidity of others. I shouldn't get fucked in the ass because some women cried during Chairman Bama's speech.
America didn't vote for this administration. The handlers voted this administration in for us. Or do you realy believe Harry Reid won the Nevada election with real votes cast by actual people.
@adr
Look, I'm not happy about the world we inhabit, either. The fact is, as Jon Dunne once said, no man is an island. Why is that so hard for so many people to understand? Unfortuantely, we have to live with others and the mistakes of others. This is why you have to fight - every day - against corruption and attacks on liberty. Look at our education system. What about the state of families? Instead of family matters handled in private, now everything is a matter of state control, comrade. Yes, it looks as though we are doomed because our forefathers became lazy and subservient.
unsterilized and open ended asset purchases help the unemployed how exactly? hopefully hatzius will end up in the bread line too. JOIN US [/evil dead 2]
@buzzsaw99
Yep. The "transmission mechanism" stops at bank balance sheets and exchange-traded asset prices. QE just creates inflation, not real economic activity.
BS, no reason for an official QE announcement with twist in effect in perpetuity.
Correct, I mean with ZIRP there is no cost for capital creation, right? Can't wait for negative interest rates. Any chance the bank will pay me to take out a loan?
WORSTIER than expectations..
tyler really. we need to stop the "what goldman thinks" posts..fuck them. I dont give attention to idiots and criminals.. lets have a mandate. No qe talk. no what the squid thinks talk.. were just giving them the attention they want. Playing right into their game.
Yeah, lets ignore them, thats a great idea. Because if we dont look at them, they will obviously stop what they're doing.
From the Democratic convention, brainwashed vaccine damaged, fluoride drinking aspartame zombies
https://www.youtube.com/watch?v=07fTsF5BiSM
Gold's new boner says Ben is going to print.
Doc I would start thinking a lot about what type of side salad you want.
It's getting close. Time is running short.
Seems a tad optimistic to me.....but if it works for you, I'd say go with it.
If goldman wants QE so bad why do they keep mushing it with their predictions?
@fonzannoon
How is 50/50 a serious prediction? I'd laugh at Mel Kiper if he said the Redskins had a 50/50 chance of winning this Sunday. And so I'm laughing at this crap of a "prediction" from GS.
It's not serious. It's a joke. The point is as Goldman themselves raise their forecast of QE they mush it. Because they fuckin suck.
Why worry? Even an 80% chance didn't hit the target weeks ago, so no nodding here.
yea that was pathetic.. Did biden think he was talking to 2 year olds. I cant believe what i heard from him. that was sad..
The BEST Biden speech EVER!:
http://www.youtube.com/watch?v=mcjet2MwUR0
are you lost? on the wrong string or site?
pretending to answer someone about joBlo?
we're soooo sorry ya don't feel more perky after a night's rest, too
ain't it just awful? a crying SHAME?
did ya know how mittens stayed outa 'nam? after leaving stanford after 1 year he went back to michigan where daddy had was being re-elected goobernator
and he was appointed "minister" for the WHOLE STATE by the LDS
so, he got to stay home and play w/ the dog while being a mormon; later he became a "bishop"
did he ever write anything or give any speeches? they would be fun to read!
those would be romney's speeches from the LDS pulpit in 1966 or later
can you put some up for us?
Wow...next week in no particualr order:
Fed meeting with QE3 on the table
German Constitutional Court on ESM
AAPL and mini iPad and iPhone5 maybe
Plus, as an added bonus from http://www.theultimateholidaysite.com/holidays/2012-9/
Sep 09 National Teddy Bear Day, Weinerschnitzel Day, Grandparents Day
Sep 10 National Swap Ideas Day, Sewing Machine Day, TV Dinner Day
Sep 11 "I Want to Start My Own Business" Day, Make Your Bed Day, National No News Is Good News Day
Sep 12 National Chocolate Milkshake Day
Sep 13 Fortune Cookie Day, National Defy Superstition Day, National Peanut Day, Positive Thinking Day, Snack a Pickle Time, Uncle Sam Day
Sep 14 National Cream-filled Donut Day
Sep 15 Make a Hat Day, National Felt Hat Day
Mmm, GS bullish on gold reaching $2000/oz by year end. GS predicting QE3 which pushes up gold over $25/oz. They must be planning a bear raid on gold.
I'm still trying to figure out when did qe stop
it never did. Twist is just QE in another name.
right, thats why i'm long on toilet paper, they are going to use a lot of it to clean thoes fans
You didn't get the memo? ZIRP and trillion dollar deficits are the new normal.
EUR/USD at the top of a rising channel that began July 25.
Sure that this is the top? I expect asians to dump dollars asap, so expect a rise on sunday night.
.
nice to see silver go from second bellybutton shrinky dink to raging boner in an hour lmao.
Hi, I'm a financial superstar and I predict a 51% probability.
There's no way they do unsterilized treasury QE because of one so-so NFP print...not going to happen. I would put the chances of MBS QE at maybe 20% and a rate language extension or an "Evans proposal" at 50-60%. Stocks have been on a tear, hell, bernanke has said himself that equity appreciation was a sign that QE was working. If the market really wants QE they'll need to let the S&P drop 150pts.
But this very QE bullish tone could easily be Jan just feeding the "Buy gold ahead of QE" trade since as someone noted above Goldman's bullish on Gold. Wouldn't be surprised if they're dumping Gold prior to the meeting next week.
i don't give a hatzius
what hatzsius thinks....two days ago i loaded up on some short squeeze hedges = sell covered PUTS and buy deep out of the money calls when spx @ 1405 BUT STILL KEPT ALL OF MY SHORTS.
today @ spx 1436 = i unloaded all of my short squeeze hedges !!
and added to EUR shorts @ 1.27+
well we just hit my target top point
The Fed would be reckless and stupid if the did QE now. Look what's coming at the end of the year. Far larger than making any Wall Street flunky their bonus.
Well, nobody else has said it yet this morning:
The markets are broken, BitChez!
Something to watch for in the near future: COUNTERFITTING
Fuck Golum Sack and the 4 horses they rode in on!
The Golden Scrote s the worst
S&P 1250 predition
QE prediction
That's basically prediciting heads I win tails you lose
Why does anyone even listen to them? They are there to screw you