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Here Is Why Everything Is Up Today - From Goldman: "Expect The New QE As Soon As April"

Tyler Durden's picture





 

Confused why every asset class is up again today (yes, even gold), despite the pundit interpretation by the media of the FOMC statement that the Fed has halted more easing? Simple - as we said yesterday, there is $3.6 trillion more in QE coming. But while we are too humble to take credit for moving something as idiotic as the market, the fact that just today, none other than Goldman Sachs' Jan Hatzius came out, roughly at the same time as its call to buy Russell 2000, and said that the Fed would announce THE NEW QETM, as soon as next month, and as late as June. Furthermore, as Goldman has previously explained, sterilization of QE makes absolutely no difference on risk asset behavior, and it is a certainty that the $500-$750 billion in new money (well on its way to fulfilling our expectation of a total $3.6 trillion in more easing to come), in the form of UST and MBS purchases, will blow out all assets across all classes, while impaling the dollar. Which in turn explains all of today's action - dollar down, everything else (including bonds, which Goldman said yesterday to sell which we correctly, at least for now, said was the bottom in rates) up. Finally, as we said, yesterday, "In conclusion we wish to say - thank you Chairman for the firesale in physical precious metals." Because when the market finally understands what is happening, despite all the relentless smoke and mirrors whose only goal is to avoid a surge in crude like a few weeks ago ahead of the presidential election, gold will be far, far higher. Yet for some truly high humor, here is the justification for why the Fed will need to do more QE, even though Goldman itself has been expounding on the improving economy: "The improvement might not last." In other words, unless the "economic improvement" is guaranteed in perpetuity, the Fed will always ease. Thank you central planning - because of you we no longer have to worry about either mean reversion or a business cycle.

Oh, and if someone at the Dallas Fed could be so nice to bring the following statement to the attention of Dick Fisher, we woul dbe very grateful: "Not easing might be equivalent to tightening." Because last we checked Dick was shocked, SHOCKED, that the market is addicted to QE...

As for Goldman, if one ignores all of the below, the only thing to remember is that Goldman is now selling stocks to, and buying bonds from the muppets.

From Goldman Sachs

Q: What is your current forecast for Fed policy?

A: It has definitely become a closer call, but we still expect another asset purchase program that involves purchases of both mortgage-backed securities and Treasuries. This would expand the Fed's balance sheet, but its impact on the monetary base would likely be "sterilized." We expect this program to be announced in the second quarter, either at the April 24-25 FOMC meeting or the June 19-20 meeting. The argument for April is that this would leave more time before the end of the long-term bond purchases under Operation Twist (more formally known as the Maturity Extension Program), and would thereby reduce the risk of market disruptions as uncertainty about the Fed's role in the market rose. The argument for June is that this would allow Fed officials a bit more time to assess the state of the economy. After June, we believe the hurdle for more action rises, not so much because of the impending presidential election but more because a decision to wait until after the end of Operation Twist would signal greater comfort on the Fed's part with denying the economy additional stimulus.

Q: The economic indicators are improving, financial conditions remain accommodative, and inflation is at or above the Fed's target. So why should they ease further?

A: We see three reasons why additional Fed easing may well be warranted despite the improving data:

1. The improvement might not last.

As we discussed yesterday, the job market numbers and broad indicators of economic activity such as our Current Activity Indicator (CAI) have shown a significant upturn recently (see Andrew Tilton, "Conflicting Signals on US Growth," US Daily, March 13, 2012). However, with real GDP growth tracking just 2% in the first quarter and signs that at least some of the recent strength is probably due to the unusual warm weather and perhaps some seasonal adjustment distortions, question marks still surround the true pace of activity growth. In addition, there are still several actual or potential "headwinds" for growth, including a reduced boost from inventory accumulation, the recent increase in oil and gasoline prices, continued risks from the crisis in Europe, and the specter of fiscal retrenchment after the presidential election.

2. Even if the improvement does last, faster growth would be desirable to push down the unemployment rate more quickly.

Fed officials believe that the level of economic activity and employment is still far below potential. This means a large number of individuals are involuntarily unemployed, which not only causes hardship in the near term but may also translate into higher structural unemployment in the long term (see for example Sven Jari Stehn, "Can Additional Stimulus Prevent Labor Market 'Hysteresis'?" US Daily, September 15, 2011.) This creates an incentive to find policies that speed up the return to full employment.

3. Not easing might be equivalent to tightening.

At a minimum, the bond market currently discounts some probability of QE3. This has kept financial conditions easier than they otherwise would have been, which has presumably supported economic activity. A decision not to ratify expectations of QE3 could therefore result in a tightening of financial conditions.

Beyond this, there is also a possibility that financial conditions have been kept easier via the "flow" of long-term Treasury purchases under Operation Twist. In general, we have found that the Fed's various asset purchase programs exert their impact on the bond market and financial conditions mainly through "stock" effects (see Sven Jari Stehn, "Stocks vs. Flows Revisited: End of QE2 Unlikely to Have Significant Effect on Bond Yields," US Daily, April 13, 2011). However, we empirically found some evidence that "flow" effects might be bigger at the very long end of the yield curve, although this was based on very few observations and not statistically significant. If there is a meaningful flow effect, the end of Operation Twist in June may trigger a tightening of financial conditions if it is not followed by another asset purchase program.

Q: But wouldn't QE3 be inconsistent with the Fed's observed reaction function over the past few years?

A: At some level yes. At least until recently, the threshold for unconventional monetary easing appeared to be quite high. Back in 2010, the move toward QE2 didn't start until inflation had fallen far below the (then implicit) 2% target and at least some signs had appeared that the recovery might be starting to falter. And Operation Twist only got underway when, once again, Fed officials worried about the sustainability of the recovery in the wake of the deepening European crisis.

However, we believe that there has been a change in the reaction function in a more "dovish" direction more recently. At the January 25 FOMC press conference, Chairman Bernanke seemed to indicate a materially lower threshold for additional easing when he said that he saw a "very strong case" for more easing if the economy evolved in line with the SEP projections--which projected neither a large inflation undershoot nor a growth slowdown.

Admittedly, Bernanke has not repeated these comments since then, specifically in his Monetary Policy Testimony two weeks ago. This could mean that he has changed his mind in light of the generally stronger-than-expected data--or perhaps more precisely, that he no longer thinks the economy is evolving in line with the SEP projections. But it could also mean that he is merely reluctant to lay his cards on the table at a time when the committee as a whole is still debating the pros and cons of additional easing.

Q: The bond market has sold off sharply in the wake of the March 13 FOMC statement, as market participants have apparently scaled back their QE3 expectations. Was this justified?

A: We think not. At least compared to our own expectations, the statement was unsurprising. At the margin, the upgrade to the Fed's growth expectations was a bit more pronounced than we had expected, but this was offset by the fact that the softening of the sentence about "significant downside risks" was a bit less pronounced. Meanwhile, the recognition of upside near-term inflation risks was unsurprising given the increase in oil and gasoline prices. Admittedly, it is hard to know what type of statement the market had expected; unlike for economic data releases, there is no easily observable "consensus" for FOMC statements. But we do not believe that our expectations were so far from the market's view that the statement should have been a significant surprise.

Q: What does "sterilization" of QE mean, and is it important?

A: "Sterilization" of QE means that the Federal Reserve purchases assets (agency mortgage-backed securities and/or Treasuries) from a bank by crediting the bank's reserve accounts but then "drains" the resulting increase in excess bank reserves and the monetary base via reverse repurchase operations or by persuading the bank to tie up its assets for a somewhat longer period in a "term deposit."

We do not believe that there is a meaningful economic difference between "unsterilized" and "sterilized" QE. At the zero bound for nominal short-term interest rates, bank reserves are near-perfect substitutes for other safe short-term assets. In the pre-2008 world where the Fed was prohibited from paying interest on excess reserves (IOER), this near-perfect substitutability would have ended as soon as the Fed had wanted to move the funds rate away from zero, because an excess supply of reserves would then have "pinned" the funds rate to zero. Now, however, the Fed has the option of lifting the funds rate even in the presence of excess reserves by lifting the IOER. This means that bank reserves and very short-term assets such as term deposits are near-perfect substitutes even away from the zero bound.

Q: Would the Fed sterilize the impact of any additional quantitative easing?

A: We think so but are uncertain. The argument for sterilization is that it may be a low-cost way to overcome the widespread public discomfort with the notion that the Fed "prints money" (adds bank reserves) to buy assets. It is noteworthy that neither the bond purchases of the European Central Bank (which have generally been sterilized) nor the Fed's Operation Twist (which involves expansion of neither the Fed's balance sheet nor the monetary base) have generated as much worry about inflation as the Fed's QE2 program. Moreover, if a subset of investors believe--wrongly, in our view--that there is a difference between "printing money" and sterilized QE, they might push up commodity prices in response to an unsterilized QE announcement, which could lessen the policy's effectiveness. Why not avoid this by stating clearly that the asset purchases will not result in an increase in the monetary base?

The counterarguments are twofold. First, it might require Fed officials to explain why they didn’t sterilize in the early days of quantitative easing, and might even indicate a little more sensitivity to public and political pressure than the Fed likes to admit. Second, it could put some upward pressure on short-term interest rates because the Fed would need to induce investors to tie up their money for a bit longer. (However, if desired the Fed could overcome this by cutting the IOER.) Overall, we believe it is a close call, but think that sterilized QE is a bit more likely than unsterilized QE. We emphasize that the macroeconomic significance of this decision is minor.

 


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Thu, 03/15/2012 - 15:47 | Link to Comment hedgetr
hedgetr's picture

Goldman Sachs = South Park. CEO Mr. Eric T. Cartman Lee II

Thu, 03/15/2012 - 15:49 | Link to Comment Death and Gravity
Death and Gravity's picture

RESPECT MAH AUTHORITAH!

Thu, 03/15/2012 - 15:51 | Link to Comment SilverTree
SilverTree's picture

~And then I jizzed in my pants~

Thu, 03/15/2012 - 16:46 | Link to Comment TruthInSunshine
TruthInSunshine's picture

WHERE THE HELL IS ROBOTRADER?

 

 

It's all gone so wrong so fast, man!!!!!!!!!!

Bringeth on-eth the autoclaved QE, bitchez!

Thu, 03/15/2012 - 17:24 | Link to Comment Robot Trader's ...
Robot Trader's brother's picture

Robotrader's brother, here...

He had a big short position on AAPL and got his nuts squeezed.

Had to sell everythng, including his computer.

Sends his love...

Thu, 03/15/2012 - 18:16 | Link to Comment Campagnolo
Campagnolo's picture

Robotrader is plowing snow to make a living now, he is about to mowing some grass too

Thu, 03/15/2012 - 18:41 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Gold Bitc....errr....Muppetz!

 

Thu, 03/15/2012 - 18:45 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I hope the new, improved, permanently high plateau doesn't disappoint.

Thu, 03/15/2012 - 21:03 | Link to Comment The trend is yo...
The trend is your friend's picture

Think of the 708 trillion derivative's market as a hot air balloon in the stratosphere.  Greece was a tiny pebble like meteor that hit it and caused a microscopic tear in the balloon.  Once this happens their really is no way to completely repair it, the hole will get bigger and bigger at the microscopic level until a gashing hole lets out all the air all at once and the balloon comes tumbleing down.  The Fed and the ECB have used duct tape to prolong the inevitable.

Thu, 03/15/2012 - 22:41 | Link to Comment ZFiNX
ZFiNX's picture

QE, i.e. WW3

Thu, 03/15/2012 - 15:54 | Link to Comment withnmeans
withnmeans's picture

No volume, government still about the only buyer. Looks the same in the European market as well.

 

SAD, real SAD

Thu, 03/15/2012 - 16:44 | Link to Comment resurger
resurger's picture

lol

+1

Thu, 03/15/2012 - 16:46 | Link to Comment Chupacabra-322
Chupacabra-322's picture

@ withnmeans,

The DOWS 13,000 is a hoax. Why is it a HOAX? It's relitively easy to spot it, there is no volume of trading. The only reason it has reached 13k is the Feds, it's a hollow market.

Hear is one clue to how bad the economy is. It's called DRY BULK SHIPPING index. It's a measure of goods and trade moving through the economy worldwide. Right now the shipping industry is actually losing money with their cargo holds for the most part only half full. They have even gone as far as to tell their shippers they will ship for the cost of fuel only. Why would they do that? It's simple. If a ship sits for more than 2 weeks it starts to become a rusted hulk and tremendous expense to maintain it.

That is my 2 cents.

Thu, 03/15/2012 - 17:36 | Link to Comment Carl Spackler
Carl Spackler's picture

AAPL may be a buyer.

They have to do something with the cash on their balance sheet, following all the I-Pad sales.

Other than that, it is an abyss.

Thu, 03/15/2012 - 16:06 | Link to Comment hedgetr
hedgetr's picture

O-M-G !!! They killed Jamie! Bastards!

Thu, 03/15/2012 - 16:20 | Link to Comment Silver Bug
Silver Bug's picture

Anyone who doesn't think there is going to a massive amount of new QE needs to have there head examined. It is QE to infinity. They have NO choice!

 

http://ericsprott.blogspot.com/

Thu, 03/15/2012 - 19:14 | Link to Comment combatsnoopy
combatsnoopy's picture

There's no logic to Bernanke except for the bribes he pockets from the banks.  The conflict of interest is obvious.  A weaker dollar = larger deficit to OPEC with oil prices being so high thanks to speculators. 

Yields don't keep up with inflation.  Hello!  China!  THe lights are on, somebody's home...something got lost in translation!  Somebody please stop buying Treasuries from Geithner, please!  Let the Federal Reserve and the banks holding the treasuries eat the loss in real dollars, FR has to put the taxpayer paid Treasury yields back in the Treasury anyhow.  

I would much rather learn Mandarin so I can understand why THEIR fiscal policies are so irratic.  They have a surplus cushion, we kind of don't.   

Thu, 03/15/2012 - 16:24 | Link to Comment LongSoupLine
LongSoupLine's picture

"Buy in May and never go away" - Bennie

Thu, 03/15/2012 - 16:29 | Link to Comment hedgetr
hedgetr's picture

i want new designed zerohedge tee shirt... with all the guys from South Park as CEO's of GS, JP etc. will buy 10

Thu, 03/15/2012 - 18:24 | Link to Comment mkkby
mkkby's picture

BULLSHIT!  This means GS is SELLING.  If you want to top-tick the market, buy here.  They see enough improvement and/or inflation so that QE is NOT in the cards that soon.

Thu, 03/15/2012 - 15:48 | Link to Comment achmachat
achmachat's picture

Precious metals didn't get the memo?

Thu, 03/15/2012 - 16:38 | Link to Comment you enjoy myself
you enjoy myself's picture

that's why there's something really foreboding about the absurd rally of the last 3 months.  SPX has rocketed 200 points in a virtual straight line, but gold has barely moved - its at the same level now as it was in the Fall of 2011,  before ECB turned on the spigots and the Fed stealth monetized.  i have no idea what that signals, but it doesn't exactly square with expectations of yet more QE.

Thu, 03/15/2012 - 16:45 | Link to Comment donsluck
donsluck's picture

Liquidation to cover ECB margin calls.

Fri, 03/16/2012 - 01:16 | Link to Comment LowProfile
LowProfile's picture

More of that to come.

It's about the only thing they have left to whack PMs with.  Paper selling isn't giving them the bang for the fiat it used to...

Thu, 03/15/2012 - 15:48 | Link to Comment Death and Gravity
Death and Gravity's picture

I'm guessing everything that can creep is priced in once the QE finally comes, whereafter the markets take a nosedive.

Thu, 03/15/2012 - 16:04 | Link to Comment LowProfile
LowProfile's picture

<- QE DOES NOT come, this is a big front run by The Squid

<- QE DOES come, the squid is telling the troof.

Thu, 03/15/2012 - 16:16 | Link to Comment Death and Gravity
Death and Gravity's picture

It'll come, if not as a necessity to boost a trounched equity market, then as a "compassionate" measure to save all those underwater mortgages, as a lot of them are going to reset this year. (and even more in 2013)

http://static5.businessinsider.com/~~/f?id=4a9664eeb24e995b73fb8eac

(Old chart but the point remains.)

Thu, 03/15/2012 - 16:56 | Link to Comment LowProfile
LowProfile's picture

Yeah but do you thin think it comes by April?   Eventually, yes.  But if it comes before a major selloff/bank re-crisis, it will mean doom for the Fed.  They need political cover.

Thu, 03/15/2012 - 16:47 | Link to Comment donsluck
donsluck's picture

Thanks for the crowd sourcing, LowProfile!

Thu, 03/15/2012 - 16:53 | Link to Comment LowProfile
LowProfile's picture

Should have been more specific on the timeframe (I think it will come, but not by April), but thanks.

Thu, 03/15/2012 - 15:48 | Link to Comment data_monkey
data_monkey's picture

Goldman said it. Ain't gunna happen. Go ahead, put your 1.4 billion back, sheeple.

Thu, 03/15/2012 - 16:15 | Link to Comment Sudden Debt
Sudden Debt's picture

Dow 10000 and than yes, not earlier.
Unemployment is good "offcially"
Stocks are good
Nop. First a severe crash and my bet is still election time. Maybe 2 months before the markets will crash and obummel will urge speed to save us all And go for the votes

Thu, 03/15/2012 - 23:10 | Link to Comment sun tzu
sun tzu's picture

The crash comes near the end of an 8 year term. 

1987

2000

2008

We should expect another 4 years of 0bozo and the fraudulent economy

Fri, 03/16/2012 - 07:58 | Link to Comment GMadScientist
GMadScientist's picture

Sure...it takes more than four years to really work up a good S&L scandal, LTCM implosion, or MBS clusterfuck.

Thu, 03/15/2012 - 16:32 | Link to Comment kito
kito's picture

goldman pump and dump...beautiful.....

there isnt a snowballs chance in hell that any form of easing happens this year. NONE ZIP ZERO NADA. move on already..........

Thu, 03/15/2012 - 16:39 | Link to Comment LawsofPhysics
LawsofPhysics's picture

ZIRP is QE by any other name.  Unless of course you really believe that there is no real cost associated with creating capital.  How has that worked out for Japan over the last 25 years again?

Thu, 03/15/2012 - 16:58 | Link to Comment kito
kito's picture

youre just flat wrong, and when you fail to see gold or silver reach new highs until AFTER, and only after, qe3 is actually implemented, you will understand.....

Thu, 03/15/2012 - 16:42 | Link to Comment TradingJoe
TradingJoe's picture

GS is SELLING STOCKS to it's muppets and BUYING BONDS from them...! As in...muppets free up soe capital so you can participate in the next "leg up" :))) they need someone to dump their FED induced "gains" to!!!

Thu, 03/15/2012 - 16:34 | Link to Comment JohnKozac
JohnKozac's picture

Kermit may file suit in the Southern District Court as early as Friday, unnamed sources say.

Thu, 03/15/2012 - 20:50 | Link to Comment WmMcK
WmMcK's picture

Kermit the (frog) muppet?

Fri, 03/16/2012 - 08:00 | Link to Comment GMadScientist
GMadScientist's picture

I love that green bastard.

Thu, 03/15/2012 - 15:49 | Link to Comment Lost Wages
Lost Wages's picture

Either there will NOT be QE in April, because Goldman is in bizarro world. Or Bill Gross was right.

Thu, 03/15/2012 - 16:16 | Link to Comment Sudden Debt
Sudden Debt's picture

I go for flat

Thu, 03/15/2012 - 15:50 | Link to Comment Manthong
Manthong's picture

It is over.

The future has been rehypothecated.

Thu, 03/15/2012 - 15:52 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

You cannot fuck the future.  The future fucks you.

Thu, 03/15/2012 - 16:30 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

Interesting insight. But what about the Ouroboros?

Fri, 03/16/2012 - 08:00 | Link to Comment GMadScientist
GMadScientist's picture

Eating your own tail: definitely a fucked future.

Thu, 03/15/2012 - 17:53 | Link to Comment HD
HD's picture

I just like the future as a friend. Besides, I'm already being fucked by the present...

Thu, 03/15/2012 - 16:18 | Link to Comment Sudden Debt
Sudden Debt's picture

Just re-rehypotecate it and everything will be fine again for a few months or weeks. Carry on.

Thu, 03/15/2012 - 15:50 | Link to Comment Divided States ...
Divided States of America's picture

So if the economy is sound and on good footing according to Obama...and we still need more QE? Then obviously the bummer is lying or the Bernank is, based on his actions to do more QE. I say lets wait till shit hits the fan, that's when the Bernank takes out the heavy QE artillery.

Thu, 03/15/2012 - 15:57 | Link to Comment Everybodys All ...
Everybodys All American's picture

Do you understand that they have no choice. Any small rise in rates sets the end game for the FED. China is not buying so who in heck do you think is going to buy Treasuries? Answer... the FED er primary dealers. Does this end well. Answer ... NO.

Thu, 03/15/2012 - 16:03 | Link to Comment Divided States ...
Divided States of America's picture

Theres always a choice: Face the problem like a man and take the consequences, good or bad OR keep sniffing up the powder and imagine you are in Neverland with MJ running around with little kindergarden kids and unicorns.

Thu, 03/15/2012 - 16:50 | Link to Comment Troll Magnet
Troll Magnet's picture

Face the problem like a man and take the consequences?

Clearly you haven't been living in the USA for a decade or ten.

Fri, 03/16/2012 - 11:14 | Link to Comment gold-is-not-dead
gold-is-not-dead's picture

Here's a hint who might be buying... some imaginary fella from indochina apparently with a bank ballance of 36 trillions http://www.youtube.com/watch?feature=player_embedded&v=oAK5xzEYq7I#!

Thu, 03/15/2012 - 15:50 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

The Fed.. taking a page from the Barry Bonds/Marion Jones school of success - You want to win? Use steroids..

Thu, 03/15/2012 - 15:54 | Link to Comment Divided States ...
Divided States of America's picture

you forgot Hall of Shamer Roger Clemens...

NO, I swear to God (and Goldman Sachs), that I never taken any drugs of any kind...

oh Roger, whats that needle stuck in your ass with Canseco's fingerprint all over it.

 

Thu, 03/15/2012 - 15:51 | Link to Comment digitlman
digitlman's picture

Not gonna happen.  Not with the DOW over 13K and climbing.

Thu, 03/15/2012 - 16:26 | Link to Comment greensnacks
greensnacks's picture

Releasing oil reserves + priming the markets for more QE. Might it be planning for the onset of a another war in the Middle East?

Thu, 03/15/2012 - 16:57 | Link to Comment Pete15
Pete15's picture

Wouldnt be shocking but Im thinking they can just release the reserves, push down oil, implement QE, and have Israel mostly take care of Iran. We would be funding most of that action anyway, then American troops wouldnt be directly involved in another war which the American people would be fine with. It just comes down to the fact that they cant let rates rise. This is why I love Hugh Hendry and his bond bets, the price cant go down and I dont see the market rejecting the dollar just yet. Whether its smart or not people will run to dollar in times of crisis. Most citizens dont have $ for gold. Countires may be moving away from the dollar but it will be a slow process till it catches fire. Thats why in the next few years there is nothing wrong with holding dollars, just ask Jimmy Rogers. Deflation is going to happen again and it will be bad, then the printing will start and it will be be even worse, then we get gold at 5,000. But until that starts dollar is king like it or not. 

Thu, 03/15/2012 - 17:43 | Link to Comment greensnacks
greensnacks's picture

The fact that the US is turning the Arabian Sea into an aircraft carrier parking lot would suggest countries like Israel won't go it alone if it happens. Then there is Clinton's meeting with Russia too. That's some serious saber rattling for not wanting to get involved.

Thu, 03/15/2012 - 20:13 | Link to Comment Pete15
Pete15's picture

The ships are there dosent mean troops will be on the ground. Thats a big difference, notice how the public could give two shits about Libya, Syria etc because the troops arnt there. We will concentrate on more financial warfare. QE hurt the Chinese more than us, at least at the moment. Just like we help fund the rebels in Libya and Syria we will use Israel's troops to get the job done IF we go in. It is an election year remember, the peace candidate usually does best and the neo cons are hell bent to go into Iran, Obama could take the high road and then after the election go in. I dont think anything big will go on this year. Modest "official" econ numbers and mixed messages on Iran leaning towards not going in. Last election we didnt have an incumbent now we do so you damn well better believe Obama is gonna use the system to keep his job. And he will. Then after I could easliy see a Chinese crash, "One must not invest in over capacity", a crash in the US market for obvious reasons, dollar gaining ground against foreign currencies from deflation, us printing, China either printing or trying to replace us with a gold yuan. No one knows what they are thinking, Porter Stansberry is convinced they will use gold to replace the dollar but can they afford not to export?? I dont know. The one thing we shouldnt hate on is dollars. Dollars and gold. Both great hedges in case of collapse. The world is focused on Europe and Japan, the United States should have its day but not for awhile. I know bonds have taken a hit recently but I wouldnt bet against central banks not being able to keep the rates down. People are afraid, that can only mean good things for the worlds reserve currency, especially when everyone else will print too. 

Fri, 03/16/2012 - 08:03 | Link to Comment GMadScientist
GMadScientist's picture

Fuck paper.

Thu, 03/15/2012 - 15:52 | Link to Comment NotApplicable
NotApplicable's picture

Lot of damn words just to say, "Bend over! Trust me, it's better than the alternative".

Thu, 03/15/2012 - 15:53 | Link to Comment gjp
gjp's picture

Sickening.  Orwellian.  Fascist.  End it already, please.

Thu, 03/15/2012 - 16:41 | Link to Comment john39
john39's picture

confusion reigns, seemingly be design.  at this point the only ones who know what is really happening, are the ones orchestrating it all.

Thu, 03/15/2012 - 16:50 | Link to Comment donsluck
donsluck's picture

Nothing compared to actual, physical torture, which is now legal.

Thu, 03/15/2012 - 15:54 | Link to Comment Everybodys All ...
Everybodys All American's picture

Yeah it's going to happen. Who else is going to buy the garbage?

Thu, 03/15/2012 - 15:54 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

No one will accept that the earnings are illusory until deadbeat non mortgage payers get evicted and stop spending mortgage payments on iPads.

That will be soon.

Thu, 03/15/2012 - 15:55 | Link to Comment espirit
espirit's picture

Goldman for Prez... Goldman for Prez.

Hallelujah, we're saved!

/snark

Thu, 03/15/2012 - 15:58 | Link to Comment the not so migh...
the not so mighty maximiza's picture

hahaha they allready got a black guy and white guy running for them

Thu, 03/15/2012 - 15:55 | Link to Comment gwar5
gwar5's picture

Jim Sinclair said something significant would happen between March 14th and 20th.  We'll see. Maybe it will be a shooting war in Iran. I would give cover to Owebama for high gas prices and the FED for QE.

Thu, 03/15/2012 - 18:01 | Link to Comment greensnacks
greensnacks's picture

http://www.bloomberg.com/news/2012-03-15/swift-will-halt-financial-messa...
http://www.zerohedge.com/news/enterprise-just-4-days-away-arrival-swift-...

"The Society for Worldwide Interbank Financial Telecommunication, known as Swift, the dominant messaging service for international financial transactions, said today it would halt service for some two dozen Iranian banks that have been sanctioned by the European Union, including Iran’s central bank. The cutoff, effective March 17 at 4 p.m. London time (noon New York time),"

That's between March 14th and 20th.

Thu, 03/15/2012 - 20:47 | Link to Comment WmMcK
WmMcK's picture

And a good time to have a pint and some corned beef, too.

Fri, 03/16/2012 - 08:05 | Link to Comment GMadScientist
GMadScientist's picture

"And then I tol'em we had snakes!" - Patty

Thu, 03/15/2012 - 20:49 | Link to Comment LowProfile
LowProfile's picture

 

Jim Sinclair said something

I see your problem right there.

Thu, 03/15/2012 - 15:57 | Link to Comment e-man
e-man's picture

Does this mean the next crash will happen just before April?  Otherwise, why would we sheeple be begging for another round of QE?

Thu, 03/15/2012 - 15:57 | Link to Comment resurger
resurger's picture

This coming drop will be a good one...... lots of $$$$

It's better to fall off a high cliff than a small one!

Keep pumping the markets sheeple

Thu, 03/15/2012 - 15:57 | Link to Comment Randall Cabot
Randall Cabot's picture

"As late as June" So sell in May and come back in June.

Thu, 03/15/2012 - 15:58 | Link to Comment monopoly
monopoly's picture

I agree. There would be a shitstorm if he prints more with the DOW at 13,000 and spoos at 1,400. A freaking riot.

So GS now shorting this market?

Thu, 03/15/2012 - 16:02 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Really. Riots?

Honest to Satan, monopoly, have you been hiding under a rock or something the past four years?

Riots? Where? In the Fascist States of Amerikkka? Not a damn chance.

Not unless every sporting event and reality teevee show is canceled will there be riots in these States.

I don't care if it's $12/gallon gasoline and $10 bread and milk. As long as the circuses are in good order, all will be well.

Besides - we're all either rich now or going to be rich in the future. We're Amerikkkans. It's our manifest destiny.

Thu, 03/15/2012 - 16:08 | Link to Comment 10mm
10mm's picture

No riots,just higher theft,home breakins,muggings,etc etc etc.

Thu, 03/15/2012 - 16:26 | Link to Comment dark pools of soros
dark pools of soros's picture

as long as SNAP keeps going they can still get their iPAD money from selling drugs

Thu, 03/15/2012 - 20:33 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Tsar Pointless said:

Besides - we're all either rich now or going to be rich in the future. We're Amerikkkans. It's our manifest destiny.

Is this what is meant when people speak of American citizenism, the new theory of historical propagandized economic resource extractionary depletionism as an ideology of global domination that I've been hearing so much about?

 

Thu, 03/15/2012 - 16:44 | Link to Comment RobD
RobD's picture

Nobody but us hedges know what QE is. Next time you are out in puplic ask someone what QE is and you will get............nothing.

Thu, 03/15/2012 - 16:01 | Link to Comment aVian
Thu, 03/15/2012 - 16:00 | Link to Comment Vince Clortho
Vince Clortho's picture

Once the Verbal Diarrhea lobe of the brain is activated, it is extremely problematic to regulate or turn it back off.

Thu, 03/15/2012 - 16:00 | Link to Comment debtor of last ...
debtor of last resort's picture

Why don't they just implement kind of steady permanent qe...  like every month 5 b dollars fresh printed. And euro's, please let's finish this nonsense. I can sit in my garden listen to birds instead of qe crying out loud beggars. When economy is a farce, then be honest about it. AAPL in certain weeks up 1.3%, another week down 1.1%. Draghi and Bernanke in a rubber boat, fishing together, buy something at the market and at home, pretend, look what we caught.....

Thu, 03/15/2012 - 16:02 | Link to Comment debtor of last ...
debtor of last resort's picture

And, of course, lost their gold & silver while struggling with the fish at the market, pardon, you know.

Thu, 03/15/2012 - 16:02 | Link to Comment alien-IQ
alien-IQ's picture

It's Goldman for fuck sake. The opposite is true.

Thu, 03/15/2012 - 20:26 | Link to Comment amadeusb4
amadeusb4's picture

Agreed. If QE3 is coming, then GS needs the market to crash in order to go long again. But before that happens, they need to exit their current longs they entered back in October which explains the current pony show that is standard for the first act of the pump and dump. The only question is why is ZH on board with this?

Thu, 03/15/2012 - 16:05 | Link to Comment Tsar Pointless
Tsar Pointless's picture

"I swear - I'll do it! QE-whatever is on its way! Maybe this month. Maybe next month. Perhaps the month after. I don't know, just wait and see! Quick - pull my finger, and I'll fart some digi-dollars just to prove it!" Chairman Ben

The threat of QE will be enough to push the equity markets to new all-time highs.

Thu, 03/15/2012 - 16:07 | Link to Comment Cursive
Cursive's picture

GS: we're addicted to easy money.

We'll be paying $10 for a gallon of gas.

Thu, 03/15/2012 - 16:56 | Link to Comment Troll Magnet
Troll Magnet's picture

ten pieces of paper for a gallon of gas?  that doesn't seem like a bad deal to me for some reason unless you're the one selling gas.

Fri, 03/16/2012 - 16:17 | Link to Comment mkkby
mkkby's picture

Or laboring in exchange for those pieces of paper.  Didn't think of that one eh Einstein?

Thu, 03/15/2012 - 16:06 | Link to Comment All Rise
All Rise's picture

The impact of each QE is becoming less and less, one day they will do it and the market will go down. Then what?

Thu, 03/15/2012 - 16:07 | Link to Comment the not so migh...
the not so mighty maximiza's picture

thats the true turning point

Thu, 03/15/2012 - 18:22 | Link to Comment I should be working
I should be working's picture

Then instead of QE to buy bonds we'll have QE to buy stocks.

Thu, 03/15/2012 - 16:06 | Link to Comment tdogg
tdogg's picture

We as a society are here .....

 

http://www.youtube.com/watch?v=Rlwhv7m3CSI&feature=fvsr

 

"we got MACHINES motherfucker!!"  (wallstreet)

"laws are made to be broken" - Jon Q public

"don't try Jon Q's patience Henry" - politicians / regulators

 

works until it doesn't.  then.... counter party risk can be a real bitch.

 

 

 

Thu, 03/15/2012 - 16:07 | Link to Comment czarangelus
czarangelus's picture

They won't be able to justify this to the public, I think. Not with gas at $4.50/gal and the stock market "roaring."

Thu, 03/15/2012 - 16:22 | Link to Comment dark pools of soros
dark pools of soros's picture

I hope gas goes to $8..$10....$20 a gallon to finally wake the fuckers up

Thu, 03/15/2012 - 20:42 | Link to Comment John Wilmot
John Wilmot's picture

.

Thu, 03/15/2012 - 16:07 | Link to Comment barliman
barliman's picture

 

One thing rules them all ...

... and in their darkness binds them.

The Fed CAN NOT lose control of the curve - short, long or in between - if they lose control of the curve it is GAME OVER

Sterilization is a HOPIUM dream, you've got to be drinking the kool-aid or a complete idiot to believe the banks/markets can exist without MORE subsidies.

On the plus side, if they lose control of the curve - they will have ALL the justification they could ever need for more QE.

My thoughts ... they have already lost control of the curve.

barliman

Thu, 03/15/2012 - 16:10 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

The usual view here at ZH is that GS is FOS and any advice /calls are to be faded.   Does that view apply here?

Thu, 03/15/2012 - 16:15 | Link to Comment Conman
Conman's picture

GS is to be faded because they have admitted to taking the counterparty risk to investments made by Goldman for their own clients! So they win on commisiion and then win on the trade! This is why they are pure evil!

Thu, 03/15/2012 - 16:10 | Link to Comment Tsar Pointless
Tsar Pointless's picture

S&P closes above 1400!

Woo-hoo!

And to think - there were those who had me truly believing back in the summer of 2009 that we'd start to plunge toward new market lows by the time the leaves were falling off of the trees.

At that time, the S&P was about 600 points lower.

That didn't make me look like a fool everytime I told people, "The end is near! The end is near!"

Not at all.

Thu, 03/15/2012 - 16:13 | Link to Comment czarangelus
czarangelus's picture

A meltup is even worse than a meltdown, in all but the shortest of terms.

Thu, 03/15/2012 - 16:12 | Link to Comment mayhem_korner
mayhem_korner's picture

"The improvement might not last."

 

And there we have it...the one truth universal to all drugs.

Thu, 03/15/2012 - 20:41 | Link to Comment WmMcK
WmMcK's picture

... But the first dose is free.

Thu, 03/15/2012 - 16:13 | Link to Comment FinalCollapse
FinalCollapse's picture

These fuckers want bonuses - they don't care about USA. The more Fed prints the more they can gamble.

Thu, 03/15/2012 - 16:17 | Link to Comment hedgetr
hedgetr's picture

btw... to tell the truth... i don't care about usa toooo... waiting for your ++++ mates :)

Thu, 03/15/2012 - 16:18 | Link to Comment TooRichtoCare
TooRichtoCare's picture

But if that's the case then why aren't treasuries rallying?

Thu, 03/15/2012 - 16:19 | Link to Comment Bam_Man
Bam_Man's picture

Japan no longer has a trade surplus and the Chinese economy is slowing dramatically (some say crashing). Neither one will be a big buyer of Treasuries for the foreseeable future. That is why we will see QE3 and further QE's. There are not enough willing buyers out there to absorb the enormous amount of new issuance at today's artificially low and extremely unattractive rates. The Fed will keep the game going as long as it can through one QE after another.

The Fed has painted itself into a corner and they have no choice. There is no "exit strategy". There is only - in the immortal words of General Jack D. Ripper - "Total commitment".

Thu, 03/15/2012 - 16:21 | Link to Comment kito
kito's picture

tyler, it is your obligation to put a surgeons general warning label on all things goldman, as they are clearly carcinogenic. if not a surgeons general warning, then certainly a black label warning, as any advice dispensed from their bottle has massive side effects..............

Thu, 03/15/2012 - 16:21 | Link to Comment dark pools of soros
dark pools of soros's picture

BTFD in May and go away...

Thu, 03/15/2012 - 16:21 | Link to Comment chancee
chancee's picture

So they finally figured out how to push the market up in perpetuity.  Threaten QE EVERY MONTH.

Thu, 03/15/2012 - 16:22 | Link to Comment Son of Loki
Son of Loki's picture

Will the Muppets fall for it?

Thu, 03/15/2012 - 17:39 | Link to Comment Carl Spackler
Carl Spackler's picture

Will the Muppets fall for it?

 

That is the  trillion dollar question.

Thu, 03/15/2012 - 16:26 | Link to Comment LongSoupLine
LongSoupLine's picture

Well, time for massive May puts...

Thu, 03/15/2012 - 16:27 | Link to Comment the grateful un...
the grateful unemployed's picture

from the Bob "Slope" of Hope

Thanks for the transparency

you still plant the story

that proves your greater glory

The buying's sterilized

no rumor to the lies

Thanks for the larceny

The BOA shareholders

should speak to Eric Holder

Thanks for the sodomy

you did the dollar in

the economy is thin

so Obama gets his win

and you get four more years

 

Thu, 03/15/2012 - 16:34 | Link to Comment Stock Tips Inve...
Stock Tips Investment's picture

If this happens, we will see prices of commodities in the sky. Especially gold, silver and oil. And we will see in hell, the future of our children and our grandchildren.

Thu, 03/15/2012 - 16:36 | Link to Comment riphowardkatz
riphowardkatz's picture

Pump fake by Goldman. Want another market disappointment. No QE until after election regardless of consequences. Ben needs to flex his muscles. Banks are riding this run up until middle of the year then they will short a big drop until the end of the year down then buying beginning of 2013. 

Politicians and banks are bedfellows who can't stand each other but rely on each other. Every once in awhile the banks need to show who is boss. Politicians respond with rhetoric, lawsuits but in the end banks win throw a few bones to the policitians and everyone is happy, except the people who generate wealth who are robbed.

Thu, 03/15/2012 - 16:38 | Link to Comment vegas
vegas's picture

Can there possibly be any muppets left out there that are actually going to buy into this shit after what has transpired with the "retiring" partner? Vampire Squid should definitely keep track of the retail suckers who will now take any of their recommendations, as these sheeple will have proven themselves to do just about anything. WTF.

 

http://vegasxau.blogspot.com

Thu, 03/15/2012 - 16:42 | Link to Comment ekm
ekm's picture

Cocainated Easing # 3 = Food Riots

No Cocainated Easing #3 = 2000 points drop of Dow in one single day = year 1987 "elevator shaft" market collapse.

Seeing that BAC is almost 100% up in 10 weeks from the low of $4.92 in Dedember, we could be at a point that the primary dealers have bought up all the market, something similar as in 2008 or even better, as in 1987.

Thu, 03/15/2012 - 16:43 | Link to Comment q99x2
q99x2's picture

Get ready to shift gears into the FB put.

Thu, 03/15/2012 - 16:49 | Link to Comment TradingJoe
TradingJoe's picture

folks go back on the charts and see where gold the dollar oil were when they did "tarp" and then QEs...its the same this time, they need gold and silver and oil down,(despite Iran etc. although they are positioning..), the dollar DXY..up...selling bonds to do what...buy overpriced stocks (AAPL) on the "dip", NO, they need someone to sell their shit to!

This "thing" is getting ready/prepared for a "sell off - correction", I can hardly wait to get my hands on more PHYZZZ at way cheap(er) levels and then why not ride the paper wave too!

Thu, 03/15/2012 - 16:53 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

slewie translation of hazMat's + tyler's bullshit:

  • chance of QE in april = zer0
  • FED will try for no QE till july:  & fuk you if ya don't like it!
  • MBS are out:  let gross eat that shit.  again
  • any questions?  kiss my fuking ass! 

 

 

Thu, 03/15/2012 - 16:54 | Link to Comment ekm
ekm's picture

Concurr.

As to the ass, which part of it are you talking about?

Thu, 03/15/2012 - 17:07 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

i'm translating, ekm

trying to capture the generic attitude of the hazMat rapster

perhaps "kiss my bankster ass" woulda been truer to the original greek...

thanks! 

Thu, 03/15/2012 - 17:03 | Link to Comment bankrun
bankrun's picture

On a side note, does anyone else thinks this looks just a bit too much like the Bernanke?

http://www.bbc.co.uk/news/science-environment-17370170

Thu, 03/15/2012 - 17:03 | Link to Comment Bunga Bunga
Thu, 03/15/2012 - 17:04 | Link to Comment Lou's Tavern
Lou&#039;s Tavern's picture

I see why everyone wants to legalize dope. Because this stuff makes more sense when you're high.

Thu, 03/15/2012 - 17:42 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

listen, L_T:  we want to enjoy the life and the love and yes, the different perspectives and processes

so many who have been around this issue for decades and decades and decades work, together, primarily toward de-criminalization and not some giant social/political "hot-button campaign issue"

"everyone wants to legailze dope" is an interesting first post after 16 weeks; if you choose to self-medicate with a toke, that's great, but we don't need the deflection into the totally wrong dichotomy for anybody except corporation, the legislature, and the taxman, ok?  it's just trolling, or could be,  and others have tried the same exact angle on the same exact subject, right here in riverCity, too, since you may not be aware of that f-a-c-t about what trolls actually try here, from time to time in their relentless fuking assaults on others' "frameworks"

i mean it.  please don't pretend to see something that isn't here or start some "dialogue" about: "legalization:  yes or no?" on zH strings;  you'll get slapped silly!  L0L!!!  welcome!  Haha!

be careful in your first daze of "innocence" here, dude or dudette...

Thu, 03/15/2012 - 17:21 | Link to Comment Lady Heather...UNCLE
Lady Heather...UNCLE's picture

... lets face it, the Fed has constructed a perpetual motion machine. Deficits do not matter because thet can be funded by printing therefore government progligacy can continue ad infinitum (ggod for votes). Stocks only ever go up. If they even look like dropping the Fed (or its agents) sends the algos off on a 'pay all offers and bid on' bukake party(or failinyg that hint at QE). Interest rates can never rise because Fed will hint at more LSAP. Headline inflation will remain 'muted' because they do not count things like fuel rises. Employment keeps rising because the BLS says so. And it does not matter if you cannot get a job because you will get social welfare paid for by monetisation of deficits (see above). The only problem for the Fed is controlling commodity prices since to suppress prices they have to sell. This is the side that fucks the Fed because they cannot print what they wish to sell. Sure, they can play in the derivatives and just keep offering at a price ad infinitum but delivery might become a bitch. Look, if the Fed says I want 30 year rates at 1% tomorrow and the S&P at 1500 simultaneously, they can make it happen. They have a monopoly on USD creation...the worlds reserve currency. Whilst that monopoly remains, they are omnipotent. BTFD.

Thu, 03/15/2012 - 17:54 | Link to Comment Tyler Durden
Tyler Durden's picture

Thu, 03/15/2012 - 18:33 | Link to Comment devo
devo's picture

China is so clearly next in line.

Thu, 03/15/2012 - 19:51 | Link to Comment chump666
chump666's picture

You are right.  A total disconnect trade occurring, markets could trade a little higher but Asia will start to either sell or hit volatility. Which is a warning sign since Asia are creditors and America is a debtor running on Fed print jobs and Obama debt ceiling blowouts.  It will give at somepoint, 13000 on the Dow is the top, just a momo greed rally after the JPM rally.

You know things are out of whack when airline stocks rally with the oil price.   Profit taking that will kick in now and we will start to drift lower. All eyes on Hormuz Straits next 48hrs. 

Thu, 03/15/2012 - 20:12 | Link to Comment devo
devo's picture

I don't know if 13000 is the top. It could go on a lot longer depending what's going on behind the scenes.

Thu, 03/15/2012 - 20:20 | Link to Comment chump666
chump666's picture

yeah a few more days, maybe.  but i'd be getting ready for war.  I think the market will start to price that in.  Asia could be first to blink and sell.

Thu, 03/15/2012 - 20:49 | Link to Comment TradingJoe
TradingJoe's picture

Right on Chump!

Fri, 03/16/2012 - 02:33 | Link to Comment HungrySeagull
HungrySeagull's picture

Will people STOP watching the DOW? Natural forces require it to Fall and VERy hard.

I am so sick of 12 K this, 13K that. Phooey!

Thu, 03/15/2012 - 18:36 | Link to Comment cat2
cat2's picture

Might as well start the China row.

Thu, 03/15/2012 - 18:39 | Link to Comment devo
devo's picture

They need another 2-5 years to accumulate gold. Dollar has a couple more years in it.

Fri, 03/16/2012 - 16:30 | Link to Comment mkkby
mkkby's picture

The dollar will last until most other debtor nations go thru the austerity/bailout ringer.  Until then the scared money will go to USD assets.  Once the scared money can go back home and feel reasonably safe, it's all over for USD assets.  The fed will have to print like a muther fucker to fill that hole, or let the austerity here bring on massive poverty.

It's taken 2+ years to half fix Greece.  So we may be subjected to decades of this slow torture.

Thu, 03/15/2012 - 17:44 | Link to Comment zrussell
zrussell's picture

Nothing "crash" is going to happen until the Global Bankster's main servant gets re-elected. Then, they will continue the aquisition of the US soveriegn assets. The strategy has been consistent from 1935, except now the next generation GBs are at the wheel.

If anyone thinks the FED only does things after announcing them- they are in dreamland.

Fri, 03/16/2012 - 16:32 | Link to Comment mkkby
mkkby's picture

After 25 weeks here you shouldn't still be so dumb.  The banksters don't care who gets elected.  They have both parties covered with acceptable candidates.

Thu, 03/15/2012 - 17:50 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Muppets!!

Thu, 03/15/2012 - 17:50 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Muppets!!

Thu, 03/15/2012 - 18:33 | Link to Comment devo
devo's picture

My opinion: they're predicting QE in April because the upcoming earnings season will be sub par. Hard to justify these valuations when wages are decreasing and oil is increasing.

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