Goldman's Take: "Fed Returns To Monetary Easing"

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Tue, 08/09/2011 - 15:26 | 1543511 JuicedGamma
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I think I'm turning Japanese, I really think so....

Tue, 08/09/2011 - 15:46 | 1543591 Popo
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I'm not sure I agree with the analysis that "Goldman ordered it.  Goldman got it".

There was no new round of QE announced today.  Just some words about "standing at the ready".

What we just saw was what a lot of people expected we'd see:   Jawboning and nothing else.

The Fed is out of bullets.  Their last round of QE utterly failed in every possible way **and** wrecked the dollar to the tune of 20% of its value.    

The Fed was faced with a crashing market and no bullets, so instead of shooting they pointed their gun and threatened to shoot.

So far, the market believes the skit that was just acted out on global television.  But soon enough they'll figure out that it was only a skit.

Sure, it could still happen.  But I sure didn't see Goldman getting QE3 just now...

 

Tue, 08/09/2011 - 15:53 | 1543620 Robot Traders Mom
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Very well said Popo. Gut reaction that will come back in the morning in a big way...

Tue, 08/09/2011 - 16:00 | 1543648 kaiserhoff
kaiserhoff's picture

Yes, Popo, but failure is so familiar and comforting.  Let's by all means have more heaping gobs of it.

I'm waiting for the five year to go negative 5%, then I'll back up the truck.  What can these idiots be thinking?

Tue, 08/09/2011 - 16:10 | 1543696 NumNutt
NumNutt's picture

Wow, sure glad the market closed up (dow 420+) for no good reason. Hmmm couldn't be any market manipulation going on could it? Lets see just after midnight dow futures go from approx 10,500 to 11,000. Hmm then all day they are headed down just to go from negative up 420 points to finish above the all important 11,000 mark. What a fucking joke, oh well, common everyone get your free cash while the US gov is handing it out. Maybe I should buy some BAC shares since I am sure they will be bailed out by the fed in 3, 2, 1, .....

Tue, 08/09/2011 - 15:27 | 1543512 nope-1004
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Need more debt to pay our debts.

What a wonderful world.

Tue, 08/09/2011 - 15:27 | 1543514 Iriestx
Iriestx's picture

I feel like I'm taking crazy pills.

Tue, 08/09/2011 - 15:31 | 1543516 SheepDog-One
SheepDog-One's picture

LOL go ahead FED, 'ease' away, as the dollar tanks and gold flies to the sky.

'FED can take steps for more Queezing from here should conditions significantly worsen'...so we're looking at Armageddon shortly then?

Tue, 08/09/2011 - 15:28 | 1543519 HelluvaEngineer
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In other words "We're going to sell to you, morons."

Tue, 08/09/2011 - 15:42 | 1543578 tickertapeguide
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+1

Tue, 08/09/2011 - 15:28 | 1543520 Clorox Cowboy
Clorox Cowboy's picture

And the market rallies...what a bunch of spineless cowards out there.  Don't fight the Squid...I mean Fed.

Tue, 08/09/2011 - 15:29 | 1543522 Iriestx
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"The reason we can't pay off our credit card debt is because they won't loan us any more money, so we're going to shop for some additional credit cards from other companies to borrow more to pay off that credit card."

 

Sound financial decision making from the world's supposed best and brightest leaders.

Tue, 08/09/2011 - 15:31 | 1543523 Stax Edwards
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No QE3.  They got a statement that ZIRP lasts till 2013.  I disagree that Goldman got what they wanted no matter how you try and spin it.  As of today, No QE3 is the takeaway.

Even you (TD) claimed QE3 was coming yesterday. 

About F'N time IMO.

Tue, 08/09/2011 - 15:32 | 1543531 Tyler Durden
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Considering that it is Goldman itself saying they got more than it wanted, we fail to see the spin... And taking out 2 year of duration risk is effectively the same thing as Operation Twist 2. In case you missed it, the 2 Year is trading inside both IOER and Libor.

But yes, no LSAP.

That will come in due course.

Tue, 08/09/2011 - 15:41 | 1543572 LawsofPhysics
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yep, the Fed and the banks are indeed getting what they want for now.  People piling into treasury paper that is returning less and less.  At all costs, the debt must remain payable.  Jews and banks care about only two things, gold and usury.

Wed, 08/10/2011 - 02:32 | 1545334 Socrates
Socrates's picture

"Jews"?- what a good little Nazi you are. I thought your stinking carcass died at Stalingrad screaming, "But the Fuehrer said he was sending winter clothing"....I hope you die slowly.

Wed, 08/10/2011 - 07:24 | 1545530 Watauga
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I abhor the anti-Semitic remark, as well, but seriously, why would you say, "I hope you die slowly."  That seems awfully un-Socratic to me, Socrates.  I would prefer to read your brilliant analysis that makes the anti-Semite look like a fool.

Tue, 08/09/2011 - 15:42 | 1543579 Snidley Whipsnae
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Question TD... Do you believe that the Fed is afraid to QE aggresively due to another credit down grade hanging over the US? I'm curious how much, if any, a possible downgrade influenced their decision? Thanks, you guys/gals do a terrific job!

Tue, 08/09/2011 - 16:05 | 1543672 Greater Fool
Greater Fool's picture

Yeah, guess I hadn't seen the benefit in the two-year promise right away, but last quarter 2Y Fed Funds swaps went as high as 75bp, for a little while anyway. Same instrument traded at 17bp yesterday and will probably be lower still tomorrow.

Not that this helps you unless you happen to fund at OIS....

Tue, 08/09/2011 - 16:42 | 1543867 slaughterer
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Tyler and Goldman are right (I leave it up to you to decide who is more right).  The HFTs are obviously going in Goldman's direction.  For tape followers like me, that is all that matters.   The duration risk has been reduced substantially for the big boys.  Add to that, the LSAP, which will come at JH "in due course," this is explosive.  You really need a staff member schooled in Fed hermeneutics to understand how bullish this Fed release is.  The whole rest of the year of trading is laid out for us today.  Thank you Tyler, thank you Ben, thank you printing press.  

Tue, 08/09/2011 - 15:33 | 1543536 XenoFrog
XenoFrog's picture

So no QE3, just continued easing as necessary. Did you think they would come right out and call it QE3?

Tue, 08/09/2011 - 15:36 | 1543548 Ned Zeppelin
Ned Zeppelin's picture

Agree that the next move may not have an obvious label on it - I did not expect a big QE announcement and this FOMC statement is decidedly nuetral, but if GS wants t read into it, I guess we can't stop them.

Is the dollar down/equities up correlation in full swing this afternoon post FOMC? Why would stocks be rising as the 10 yr rate is falling? Mysteries wrapped inside enigmas.

Tue, 08/09/2011 - 15:40 | 1543568 Stax Edwards
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No I don't expect that saying ZIRP will last until at least 2013 would be called QE3 because it is not QE3.  As for rolling maturing issues back in, this was already known.

Tue, 08/09/2011 - 16:33 | 1543730 YHC-FTSE
YHC-FTSE's picture

"Just continued easing as necessary". Well that is QE, so saying no QE3 is a tad bit misleading, no? Since we don't know when or even how much easing there will be, I guess we'll just have to wait until they feel like it, and a few billion is sneaked into the markets. Will we then declare to all and sundry that's what we thought all along? Or will we play with semantics to justify the fluff and bluff. 

 

I hate this convoluted clap trap. "The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings". Well if we knew how much they got coming, we'll know how much will be reinvested. 

 

The economic outlook is bleak. I think we're all on the same page about that, even the msm. But the potential here of "More of the same", looks very much like good news for short term equities, particularly software, insurance, and luxuries (As per Credit Suisse recommendations on debt ceiling extension). It feels wrong, but that never stopped people from making money off it. What do you think?

Tue, 08/09/2011 - 23:36 | 1545141 TheAlchemist
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It's not what I think, it's what I'm doing:

 

Selling depreciating assets, spending less money, and saving more in a fashion I see fit.

Tue, 08/09/2011 - 15:47 | 1543537 SheepDog-One
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This is just shit stew statement, 'Yea things will be extended, more 'measures' can be taken blah blah blah'.....certainly this is no expected C-130 drop of pallets of free trillions to Wall St.

As markets now do 2% apeshit swings based on nothing like a manic depressive.

Tue, 08/09/2011 - 15:31 | 1543527 Greater Fool
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Man, those guys pack a mean bowl of hopium.

Tue, 08/09/2011 - 15:38 | 1543560 schoolsout
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with extra kief sprinkled on top for good measure?

Tue, 08/09/2011 - 15:32 | 1543528 TruthInSunshine
TruthInSunshine's picture

Nice spin, Goldman.

In the meantime, the algos are going wild trading LULU back and forth, while no one wants to write anything about any 'trend' as VIX has taken a moonshot.

Go long the precious and VIX, bitchez.

Tue, 08/09/2011 - 15:31 | 1543530 SeverinSlade
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Anyone care to venture a guess as to how long this BS rally lasts?

T-minus 2 weeks and 3 days until Jackson Hole.

Tue, 08/09/2011 - 15:51 | 1543614 TradingJoe
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My "Guess": S&P @ 1100 before JH!

Tue, 08/09/2011 - 15:32 | 1543534 Ned Zeppelin
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Pretty thin reed to be basing a strategy of buying US equities right now.

Tue, 08/09/2011 - 15:33 | 1543538 irishlink
irishlink's picture

All the countries who need a weak Euro are now sidelined. They have nothing but strikes against them. Austerity . strong Euro, high debth ,plunging GDP. Sounds like a great  recovery plan.

Tue, 08/09/2011 - 15:34 | 1543541 chet
chet's picture

" As expected, the statement included a significant downgrade of the economic outlook. The committee views growth as having been "considerably slower" than expected, highlighting "deterioration in overall labor market conditions," "flattened out" household spending "

In bizzaro world, all of this means we should buy stocks.

Tue, 08/09/2011 - 15:35 | 1543542 fonestar
fonestar's picture

global hyperinflation before 2013?

Tue, 08/09/2011 - 15:48 | 1543603 Hacked Economy
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The target timeframe to expect the final roll-off of the slippery slope is about late 2012 to mid-2013. We're setting the final pieces on the stage now...get your popcorn and find your seats in time for the show.

Tue, 08/09/2011 - 15:49 | 1543608 Youri Carma
Youri Carma's picture

My best guesstimation would be that the year 2013 will be D-Year the final hyperinflation fase.

 

But who knows? Could come a lot quicker now in this hyperbolic fase of gold.

Tue, 08/09/2011 - 15:36 | 1543549 buzzsaw99
buzzsaw99's picture

LMAO Like we didn't already know it was gonna be zirp 4evah bitchez!

 

It's a man baby!

http://www.youtube.com/watch?v=WgOIEGz7o_s

 

Tue, 08/09/2011 - 15:54 | 1543624 Youri Carma
Tue, 08/09/2011 - 15:36 | 1543551 monopoly
monopoly's picture

Looks like we may be in the right investment for the next two years. lol

Tue, 08/09/2011 - 15:44 | 1543552 gangland
gangland's picture

 

ot, manchester riots video supposedly 30 minutes old

http://yfrog.com/jbmb8z

http://www.pycsessions.com/wp-content/uploads/2011/08/xm3ie.jpg

certainly no florence and normandy...

Tue, 08/09/2011 - 15:37 | 1543553 Scalaris
Scalaris's picture

So the American + Eurozone economies are fixed now, no?

Tue, 08/09/2011 - 15:41 | 1543569 gangland
gangland's picture

yep, pretty much.

Tue, 08/09/2011 - 15:53 | 1543618 Scalaris
Scalaris's picture

My mistake, Bloomberg just said that DOW = +300 points so world economies have just now been fixed. I guess.

Tue, 08/09/2011 - 15:56 | 1543635 gangland
gangland's picture

 

Victory gin on the house!

Tue, 08/09/2011 - 16:09 | 1543681 -Michelle-
-Michelle-'s picture

Isn't it wonderful? I'm going to just go sell all my PMs and start loading up on Apple products. Life is grand.

Tue, 08/09/2011 - 15:39 | 1543561 irishlink
irishlink's picture

And next month Obama will start his bid for another term and he will refute the entire FOMC report. This will be the SPIN of SPINS

Tue, 08/09/2011 - 15:39 | 1543563 alien-IQ
alien-IQ's picture

USD plummeting = Mission Accomplished.

Tue, 08/09/2011 - 15:40 | 1543565 unionbroker
unionbroker's picture

there is only one buyer of stocks and they will always pay higher so don't fight it

Tue, 08/09/2011 - 15:40 | 1543566 etrader
etrader's picture

Speaking of Goldman...

Great uncle warren is now under water on his stock postion

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