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Hilsenrath: Fed's Kohn Says Will Give "Very Serious Consideration" To QE3

Tyler Durden's picture


As always happens, about a week after Goldman telegraphs the need for QE3, which they did last Friday, the WSJ's Fed mouthpiece Jon Hilsenrath reaches out to the media and proceeds to give the secret QE handshake. Now in its third iteration. In an "exclusive" interview with the Fed's last tree monetary affairs committee, Donald Kohn, Vince Reinhart and Brian Matigan, Hilsenrath observes that according to these masters of the universe the chance of another recession is 20-40%, which we are confident is a given at 100%, but more importantly, he quotes Don Kohn who "said the Fed still has some options to support the economy, but "they're kind of limited." He said he expects the central bank, which holds a policy meeting Aug. 9, to wait and see whether the recovery is really losing steam before taking any action. If that's the case--and inflation is coming down--then he would give "very serious consideration" to a new round of bond purchases, he said." Well, the 30 Year is at 2011 lows, TIPS are screeching, and stocks are plunging: all indications that the market anticipates deflation. Looks like the only wildcard is whether the FOMC will determine next Tuesday that the economy has slowed down. Which it has. We believe the August 9 statement will be very interesting to most, and will result in some quite serious market volatility, as ever more are pricing in hints of an imminent resumption of LSAP or, in the least, Operation Twist with the confirmation likely to come at this year's Jackson Hole meeting, as we predicted back in April.

From the WSJ:

In an exclusive interview this week with The Wall Street Journal, Donald Kohn, Vincent Reinhart and Brian Madigan--the last three directors of the Fed's powerful monetary affairs committee--put the risk of a new economic contraction at between 20% and 40%. Madigan and Kohn said the Fed should consider a third round of bond purchases only if inflation slows from recent elevated levels and if the economy continues to underperform. But they cautioned a new purchase program, dubbed QE3, wouldn't represent a cure-all.


Reinhart, who said he gives Congress "a very low grade" like most Americans, believes the odds of a credit downgrade by rating companies haven't changed following the debt deal. Standard & Poor's was looking for 10-year budget cuts of $4.0 trillion to confirm the U.S.'s top-notch AAA rating. 


Madigan, who advises Barclay Capital and teaches at Georgetown University after retiring from the central bank a year ago, said the Fed's $600 billion bond purchases that ended in June had a "relatively modest" positive effect on the economy. "Purchases of that order of magnitude could be helpful at the margin," he said in his first public interview since leaving the key position at the Fed.


"We're flying the plane slower and closer to the ground, so we're less resilient to adverse shocks," said Reinhart, who puts the odds of a new
recession at 40%. Following a financial crisis, seven out of 15 countries studied by Reinhart have experienced two recessions over a 10-year period.

Most important were Kohn's remarks:

Kohn said the Fed still has some options to support the economy, but "they're kind of limited." He said he expects the central bank, which holds a policy meeting Aug. 9, to wait and see whether the recovery is really losing steam before taking any action. If that's the case--and inflation is coming down--then he would give "very serious consideration" to a new round of bond purchases, he said.


Kohn noted the deal leaves lots of uncertainty over the path of fiscal policy, making it harder for the Fed to decide what to do with monetary policy. The debt deal doesn't specify what happens to the payroll-tax cut enacted in January and passes on the key long-term decisions of cutting the deficit to a bipartisan committee.


While more bond purchases could help the U.S. economy at the margin, Madigan said that providing more explicit guidance on how long the Fed's short-term interest rate remains close to zero--another easing option mentioned by Bernanke--wouldn't be so effective.

The irony is that we all know the Fed knows one thing and one thing only: printing, and any of its infinite variations, which can be named anything but which do nothing to change the fact that the Fed will i) continue to push risk assets higher, ii) continue to take on ridiculous duration risk: its DV01 now is about $1.5 billion if not more, and iii) issue its daily Conviction Sell Price Target on the USD as zero in the medium- to long-run.

Everything else is much overused foreplay and strategically placed mirrors.


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Wed, 08/03/2011 - 13:32 | 1521251 malikai
malikai's picture

Meanwhile, in slumberland.

Wed, 08/03/2011 - 13:49 | 1521344 spiral_eyes
spiral_eyes's picture

it'd be stupid if they do. china and russia and all the treasury holders are pissed at hell at this loose money zero interest rate policy bullshit. just yesterday putin came out with this:

Wed, 08/03/2011 - 13:56 | 1521384 Dr. Engali
Dr. Engali's picture

When has anything these clowns have done made any sense?

Wed, 08/03/2011 - 15:16 | 1521637 Bastiat
Bastiat's picture

Maybe he should "seriously consider" accepting the Flying Spaghetti Monster as his personal saviour?

Wed, 08/03/2011 - 13:57 | 1521387 john39
john39's picture

could set up a great head fake with rumors of QE3 however.  image the carnage when it fails to materialize.

Wed, 08/03/2011 - 17:23 | 1522063 alangreedspank
alangreedspank's picture


Yeah, that could be a possibility. It's not like TPTB were not caught before betting against the financial products they themselves sell.

Wed, 08/03/2011 - 14:36 | 1521521 malikai
malikai's picture

Words that politicians say mean nothing. Until they put their "money" where there mouths are, it means tee-tee.

Wed, 08/03/2011 - 23:34 | 1522865 mason5566
mason5566's picture

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Wed, 08/03/2011 - 13:33 | 1521256 BaBaBouy
BaBaBouy's picture

PRInT !!!

Wed, 08/03/2011 - 13:50 | 1521353 Sudden Debt
Sudden Debt's picture

HHMmmm.... PRInT!!! .... looks like a nice logo to put on the jetpack for Silver :)

Wed, 08/03/2011 - 13:53 | 1521362 TruthInSunshine
TruthInSunshine's picture




Dumbass Kohn was supposed to wait until 3:15 or 3: 25 p.m. to make this announcement!

We will see red reassert itself now, and everyone will worry their pretty heads off as tanks do a double intraday reversal!

Oooooh, The Bernank is gonna be mad at The Kohn!! Kohn is going to get cornholed before Moloch at Jackson Hole.

Wed, 08/03/2011 - 13:55 | 1521378 Sudden Debt
Sudden Debt's picture

that's the real problem these days. Nobody is sticking to the script to the letter.... I even wonder if they all read it...


Wed, 08/03/2011 - 14:17 | 1521463 Hedgetard55
Hedgetard55's picture

I was wondering what juiced stocks back to flat. Yea, dumbass should have waited.

Wed, 08/03/2011 - 14:49 | 1521547 Cdad
Cdad's picture

This is a very sickly looking snap back.  The quote stuffing directional moves are coming minute to minute, which is exactly what my board looked like this morning before she plunged.

Good luck with there is obviously zero confidence in it.

Wed, 08/03/2011 - 14:12 | 1521446 tekhneek
tekhneek's picture

He meant "BUY AGQ!!!!!!!!!"

Wed, 08/03/2011 - 13:33 | 1521257 baby_BLYTHE
baby_BLYTHE's picture

it is very simple

the money printer will continue to print money.

He will print or die trying.

"The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost."

Wed, 08/03/2011 - 13:39 | 1521290 Mae Kadoodie
Mae Kadoodie's picture

Does QE3 trigger an automatic downgrade of US debt?

Wed, 08/03/2011 - 13:42 | 1521308 baby_BLYTHE
baby_BLYTHE's picture

if the rating agencies want to have any credibility, then yes.

Wed, 08/03/2011 - 13:46 | 1521334 Dr. Engali
Dr. Engali's picture

They gave up their credibilty a long time ago. They showed their true colors when they jumped on the scare band wagon then followed up with a the imortal words of Emily Litella...... "nevermind"

Wed, 08/03/2011 - 15:45 | 1521734 tyler
tyler's picture

The rating agencies are a carbon copy of the CFTC.  All bark no bite.

Wed, 08/03/2011 - 15:20 | 1521650 Buckaroo Banzai
Buckaroo Banzai's picture

If the ratings agents are dirty whores, then no.

Wed, 08/03/2011 - 15:23 | 1521662 Buckaroo Banzai
Buckaroo Banzai's picture

But in defense of the ratings agencies, the ratings are supposed to reflect the possibility of the return OF one's investment, not return ON one's investment. Since we can "print to fit", then technically, we'll always be AAA.

Wed, 08/03/2011 - 13:45 | 1521321 Quintus
Quintus's picture

If you ask a real ratings agency then I guess they would say 'Yes'.

However, if you ask Moody's S&P or Fitch, they are more likely to take the view that more QE should result in an upgrade to the newly-created AAAA rating on the basis that there will be lots more money available with which to pay interest on the national debt.  More money is always good, right?

Wed, 08/03/2011 - 13:46 | 1521335 Cash_is_Trash
Cash_is_Trash's picture

Dagong, bitchez

Wed, 08/03/2011 - 13:54 | 1521370 Bam_Man
Bam_Man's picture

Get it on,

Bang Dagong,

Get it on!

Wed, 08/03/2011 - 13:48 | 1521347 DonnieD
DonnieD's picture

They will upgrade our credit rating to Quad A when Congress removes that pesky debt ceiling. Once you do that, your invincible in the eyes of those morons.

Wed, 08/03/2011 - 14:10 | 1521435 TruthInSunshine
TruthInSunshine's picture

Moody's is rethinking its position and has spoken about the possibility of re-rating the U.S. as AAAA+++XtraSpecial, which is a new category they would create.

Wed, 08/03/2011 - 14:40 | 1521532 Josh Randall
Josh Randall's picture

Everyone knows the US has been on DOUBLE SECRET PROBATION since 2008, so this may just be more jawboning by Moody's

Wed, 08/03/2011 - 14:34 | 1521518 TruthInSunshine
TruthInSunshine's picture

Bernank sez:


It puts the lotion on its skin or else it gets the hose again.


But will it listen?

Wed, 08/03/2011 - 13:34 | 1521259 Iriestx
Iriestx's picture

This should be enough to immediately end the consecutive losing streak.


Edit: Boom, straight up, here we go to a green close on the most vague suggestion of QE3.

Wed, 08/03/2011 - 13:35 | 1521270 EscapeKey
EscapeKey's picture

On the contrary - this could add to the losses.

The PDs, upon seeing this, should come to realize that if they depress the markets, it will force the hand of the FRB.

Wed, 08/03/2011 - 13:40 | 1521291 malikai
malikai's picture

I'd reckon they already knew. And beyond that, there has probably been some active crushing of indices and commodities this week. Gold and silver are the rogues, but they will be dealt with. The objective is a point-to for "lessened inflation expectations". As for gold and silver, they (silver) will be vulnerable in the next couple of days to margin hikes and late US day takedowns. Once the downward momentum in everything is started, they will try to make the case for QE3.

Wed, 08/03/2011 - 14:02 | 1521404 slaughterer
slaughterer's picture

Problem is: inflation is not expected to lessen until 2012. 

Wed, 08/03/2011 - 14:06 | 1521419 EscapeKey
EscapeKey's picture

Growth in producer input prices are heading downwards, this change amazingly materialized almost as soon as QE2 ended. Soon, input prices will decrease.

However, just because their input prices go down, does not mean consumer prices will fall as much as they increased. Ie, I keep seeing price increases down my local patrol station, but the drops do not match the equivalent rises.

Wed, 08/03/2011 - 14:36 | 1521522 Joe Davola
Joe Davola's picture

This week my Quicken Inflation Index hit 9 - the number of budget categories I will exceed this calendar year.  I only wish I could eliminate inflation in stuff required to live as easily as the Bernank claims he can.

Wed, 08/03/2011 - 14:57 | 1521568 EscapeKey
EscapeKey's picture

Well, obviously you don't buy enough iPads.

Wed, 08/03/2011 - 15:10 | 1521619 Joe Davola
Joe Davola's picture

True that - it was the iProperty Tax that pushed the number to 9.

Wed, 08/03/2011 - 15:56 | 1521766 malikai
malikai's picture

Have you seen the new iStopPaying? It's pretty cool. Value up 100%. It's guaranteed to give you 100% or your money back.

Wed, 08/03/2011 - 14:12 | 1521444 slaughterer
slaughterer's picture

Oh yes, second problem is: Donald Kohn is retired from the Fed.

Donald Lewis Kohn (born November 7, 1942) is an American economist who served as the former Vice Chairman of the Board of Governors of the Federal Reserve System. He is considered a moderate dove on fiscal policy. He retired after 40 years at the central bank in September, 2010.

Wed, 08/03/2011 - 14:51 | 1521553 TruthInSunshine
TruthInSunshine's picture



Justin Bieber voiced his support for a QE3 like program and the markets loved it.

Coincidentally, 7 out of the top 10 spots on RoboFader's playlist are occupied by Justin Bieber songs.

Wed, 08/03/2011 - 17:59 | 1522151 Firing Pin
Firing Pin's picture

Good call re: retired. Also, he said the same thing in Sept of 2010:


-sorry for the link to the liberal rag NYTimes...

Wed, 08/03/2011 - 17:59 | 1522152 Firing Pin
Firing Pin's picture

Good call re: retired. Also, he said the same thing in Sept of 2010:


-sorry for the link to the liberal rag NYTimes...

Wed, 08/03/2011 - 13:40 | 1521295 Iriestx
Iriestx's picture

Robots gotta robot.  There's no humans on that swtich. 

Wed, 08/03/2011 - 13:41 | 1521303 fuu
fuu's picture

Dead cat bouncing.

Wed, 08/03/2011 - 14:04 | 1521412 knukles
knukles's picture


Wed, 08/03/2011 - 14:30 | 1521505 fuu
fuu's picture


Wed, 08/03/2011 - 13:36 | 1521265 -Michelle-
-Michelle-'s picture

Oh, I thought there was no inflation.  Well, gee.

ETA: Up goes the Dow and down goes gold...

Wed, 08/03/2011 - 13:34 | 1521269 Bonesetter Brown
Bonesetter Brown's picture

double plus good

Wed, 08/03/2011 - 13:35 | 1521271 Josh Randall
Josh Randall's picture

Tea Leaves = Read

Wed, 08/03/2011 - 13:36 | 1521278 Cognitive Dissonance
Cognitive Dissonance's picture

That was the BJ the market was looking for.

Aaaaahhh, blessed relief.  :)

Wed, 08/03/2011 - 13:47 | 1521330 knukles
knukles's picture

Relief rallies of how long these days before it's rediscovered it's all back to fucked up normal, no way out of the box, screwed again, more of the same?

Who gets today's Gimp Mask award?

God I love it when it's just not wierd enough, yet.

Wed, 08/03/2011 - 13:52 | 1521364 Cognitive Dissonance
Cognitive Dissonance's picture

Bring out the Gimp.

The Gimp

Wed, 08/03/2011 - 13:38 | 1521284 idea_hamster
idea_hamster's picture

Jon Hilsenrath reaches out to the media and proceeds to give the secret QE handshake

That was NOT his "hand."

Wed, 08/03/2011 - 13:45 | 1521325 hedgeless_horseman
hedgeless_horseman's picture

The one armed violinist...

Wed, 08/03/2011 - 13:56 | 1521379 Cognitive Dissonance
Cognitive Dissonance's picture


That was NOT his "hand."

Well, it did feel like a limp prick hand shake. So you're saying..........what exactly?

Wed, 08/03/2011 - 13:40 | 1521285 TruthInSunshine
TruthInSunshine's picture




QE3 will fix everything because interest rates are really high right now.

It's not like job growth, wage growth, or access to credit (none of which will happen for a helluva long time; at least until the big reset happens) are important fuel sources for consumption.

It's not like small to midsized business won't welcome another round of inflationary inputs into their business, so they can raise their prices some more, and lose even more volume, while their existing margins contract, also.

 It's not like consumers are dying the death of a trillion paper cuts, and that if only by lowering mortgage rates another 25 basis points, all will be well.

The Bernank is a genius. Do more of the same, BernankBananacide.



Wed, 08/03/2011 - 13:41 | 1521298 EscapeKey
EscapeKey's picture

I still wonder who the fuck buys US Treasuries. Wow, a few percent yield, while the DXY is tanking. Makes no sense, and I suspect the PDs are mopping up all treasures at present, draining their reserves with the FRB.

The latest information with regards to reserves @ FRB dates back to June, when QE2 was still in effect, and hence worthless.

Wed, 08/03/2011 - 14:24 | 1521493 Stax Edwards
Stax Edwards's picture

With money going for 0.18% at the discount window, any treasury yield above that equates to free money.  It is an incestuous circle jerk between the .gov and the banks.

Wed, 08/03/2011 - 17:53 | 1522143 Bonesetter Brown
Bonesetter Brown's picture

Who buys UST's?  Anyone with enough info to profitably front-run the Fed.

Wed, 08/03/2011 - 13:43 | 1521314 spongeBOB
spongeBOB's picture

QE in reality has nothing to do with mortgage affordablity or job growth. It is designed to inflate assets and that show up as growth, granted a fake one , but still pads the GDP numbers at least until after the elections.

Wed, 08/03/2011 - 13:56 | 1521380 TruthInSunshine
TruthInSunshine's picture

And how.

If CPI indexed items double in price, even while sales of the items drop by 25% percent, The Bernanke declares it a raging success!

Wed, 08/03/2011 - 13:42 | 1521287 hedgeless_horseman
hedgeless_horseman's picture




Live From Martha's Vineyard: Anticipation



Wed, 08/03/2011 - 13:39 | 1521288 kaiten
kaiten's picture

Surprise, surprise.

Wed, 08/03/2011 - 13:39 | 1521292 rosiescenario
rosiescenario's picture the Jackson Hole confab was a success as telegraphed by the PM markets...


Hopefully, The Morgue was given sufficient notice to cover all silver shorts and get out of Dodge????


...they are part of the 'No Primary Dealer Left Behind' program, aren't they?

Wed, 08/03/2011 - 13:40 | 1521297 knukles
knukles's picture


Print that fuckin' money, buy them bonds, get them rates to -53.9% who gives a shit whether its nominal or real, save the fucking domestic economuy, save Europe, make another 116 Billion secret loans, loan out more of that tungsten plated shit from Ft.Knox, quick Blythe cover them silver shorts, rediscover the reality of no gold anywhere that ain't been segregated, allocated and unencumbered.

The Fed Is Your Friend!

Go Ben, Go Ben, Go Ben

And the Congress is taking 5 weeks off, exhausted from all that debt negociations, no fucking budget, let's all go hame and play o the slip n' slides, drink beer, never to be seen with the electorate...

Screw It Up, Screw It Up, Screw It Up 

Wed, 08/03/2011 - 13:41 | 1521301 the not so migh...
the not so mighty maximiza's picture

glory yes hallelujah!!!!!, prophicy fullfilled!!!!

Wed, 08/03/2011 - 13:51 | 1521359 Sudden Debt
Sudden Debt's picture

I don't know... they haven't mentioned QE4 yet...


Wed, 08/03/2011 - 13:56 | 1521383 knukles
knukles's picture

Oh we passed that about an hour ago. 
Take the next left, down the hill. 
It'll be somewhat different there.
You'll never recognize the old place.

Fer sure.

Wed, 08/03/2011 - 14:25 | 1521495 Spigot
Spigot's picture

I gave you a vote UP just for generally being a funny dude. Sharp wit without too much injury :)

Wed, 08/03/2011 - 13:41 | 1521302 Jovil
Jovil's picture

George Carlin's words are truer today, "They don't give a Fu@k about you."

Wed, 08/03/2011 - 13:41 | 1521305 DonnieD
DonnieD's picture

Krugman wins. Sheeple lose. Zero sum game, bitches.

Wed, 08/03/2011 - 14:49 | 1521548 Bob Paulson
Bob Paulson's picture

Well said

Wed, 08/03/2011 - 13:41 | 1521306 oogs66
oogs66's picture

they are trying to talk this market up as much as possible...they are all confused and scared

Wed, 08/03/2011 - 13:43 | 1521317 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Anymore QE and the $dollar is instantly dead, and rightly so.

Monopoly money is able to keep it's purchasing power longer than the $dollar.

Wed, 08/03/2011 - 14:12 | 1521447 NotApplicable
NotApplicable's picture

What's death to a zombie?

Besides, with DXY being relative to the Euro (57.6%), Japanese Yen (13.6%), Great Britain- Pounds Sterling (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%), and Swiss Franc (3.6%), it's like a "least ugly" beauty contest (except for the smaller components, perhaps).

Wed, 08/03/2011 - 13:44 | 1521318 TruthInSunshine
TruthInSunshine's picture

I am wearing my Dow 12,000 hat (that I bought in 1998, originally) as I hear this vague, verbal diarrhea.

But, now, I am thinking I should take the rally cap off, actually.


Hey, this Dow 12,000 hat is worn to shit!

Wed, 08/03/2011 - 13:50 | 1521354 DonnieD
DonnieD's picture

Perhaps you can find a Gold 12,000 or a Dollar 0 hat.

Wed, 08/03/2011 - 15:17 | 1521640 rosiescenario
rosiescenario's picture

...putting Lazlo's ruler on the 5 day chart confirms you better dust off the older DOW 10,000 hat....

Wed, 08/03/2011 - 13:45 | 1521323 dwdollar
dwdollar's picture

Still not ready to BTFD.  They could tease the market for at least another month.

Wed, 08/03/2011 - 13:45 | 1521324 pods
pods's picture

If the FED does not come in, who is going to buy up all the new debt that the treasury needs to sell?

The FED has to come in, so equities will tank for a couple of weeks, a few puff pieces will be out about how the debt ceiling fight stalled the economy, and the FED will step in to goose it once again.

Easy call.


Wed, 08/03/2011 - 13:45 | 1521326 LarryKudlow
LarryKudlow's picture

The great knight is putting on his shiny armor and is getting ready to ride to our rescue on his white horse. Oh, Gandalf, you will be welcome !

Wed, 08/03/2011 - 13:45 | 1521328 spongeBOB
spongeBOB's picture

Major short squeez underway !

Wed, 08/03/2011 - 13:47 | 1521340 Archimedes
Archimedes's picture

Wow! Like Pavlovian Dogs. What on earth do these bots think more QE will do?

Wed, 08/03/2011 - 13:49 | 1521348 Van Halen
Van Halen's picture

So on top of the $14 trillion debt we get another $2.4 trillion in new spending and then QE3? At what point does the country just... collapse?

Wed, 08/03/2011 - 13:52 | 1521361 spongeBOB
spongeBOB's picture

If you are referring to the $2.4T debt raise, that money was already spent.

Wed, 08/03/2011 - 13:49 | 1521349 Dr. Engali
Dr. Engali's picture

They had to ge that out there before Jack Off hole.  There wasn't time to wait. Market was going to bust 1200 in no time.

Wed, 08/03/2011 - 15:26 | 1521358 Mr Lennon Hendrix
Mr Lennon Hendrix's picture



"Alls wes gots is dis here hammer!"

"Naws, wes gots a chappa!"

"Get to da chappa!"


Wed, 08/03/2011 - 13:52 | 1521360 TradingJoe
TradingJoe's picture

Robots are clinging to ANY "rumor", they have to! This "market/casino" will go DOWN before Benjie can re start his printing preses! But re start them he will, just not right now! A bit more "selling" is in order, the "substantial" kind! We ain't closing green today nor tomorrow and for sure not Friday! We'll have them "12 days" of selling and more! Short Term, yes everything is "oversold: :))! Use every DIP to buy more Physical's!

Wed, 08/03/2011 - 13:54 | 1521367 Sudden Debt
Sudden Debt's picture

They still have to "negotiate" about QE3, so it won't be for a couple of weeks/months before they launch it and by than the DOW will be at 8000.

Wed, 08/03/2011 - 14:07 | 1521425 sitenine
sitenine's picture

Politely disagreeing. QE3 has been planned out since before the launch of QE2. The Fed is going by the textbook, chapter and verse.

Wed, 08/03/2011 - 14:34 | 1521514 InconvenientCou...
InconvenientCounterParty's picture

gold doesn't believe the QE3 rumor. If it did we'd be across $1690 by now. This is orchestrated PPT in action.

Wed, 08/03/2011 - 15:21 | 1521654 rosiescenario
rosiescenario's picture thought exactly....the PPT made a stick save or we'd be off 200 by now.....that's the good news....


.......and for the bad, they borrowed the funds from social security....

Wed, 08/03/2011 - 14:34 | 1521517 InconvenientCou...
InconvenientCounterParty's picture

gold doesn't believe the QE3 rumor. If it did we'd be across $1690 by now. This is orchestrated PPT in action.

Wed, 08/03/2011 - 13:55 | 1521377 Sigma X
Sigma X's picture

This is the Fed asking the market to step away from the ledge.  The problem is, the patient is still suicidal....  We'll see how this works out for the 3rd time.

Wed, 08/03/2011 - 14:23 | 1521489 TruthInSunshine
TruthInSunshine's picture

So QE3 = the full frontal lobotomy portion of One Flew Over the Cuckoo's Nest?

I never thought of it that way.



Is Obama Nurse Ratchet?

Who plays the role of Big Chief?

Wed, 08/03/2011 - 15:59 | 1521783 the left behinds
the left behinds's picture

bIG cHIEF would be every taxpayer, i suspect..

Wed, 08/03/2011 - 13:57 | 1521388 MethodMan
MethodMan's picture

Where else is all that new debt going to come from? China?

Wed, 08/03/2011 - 14:00 | 1521398 DonnieD
DonnieD's picture

Indirectly, yes, as I'm sure the computer and printers used in creating this "money" were made in China.

Wed, 08/03/2011 - 14:01 | 1521390 dwdollar
dwdollar's picture

Nothing like a rumor of QE3 to break the losing streak.  A notably event that would undoubtedly be on the nightly news and scare the masses into more selling.

Must... break... losing... streak...

Wed, 08/03/2011 - 13:58 | 1521393 Bam_Man
Bam_Man's picture

Yes, that's right - inflation is coming down.

Gas prices have fallen from $4.00/gallon in June to $3.85/gallon today.

All clear for QE3.

Then say hello to $4.50/gallon gas and $6.00/gallon heating oil just in time for the winter. And a complete deflationary collapse early in 2012. QE3 will buy the monetary maniacs another six months, at best.

Wed, 08/03/2011 - 16:00 | 1521786 the left behinds
the left behinds's picture

bought our heating oil 3 weeks ago at $3.44/gal.

Wed, 08/03/2011 - 13:59 | 1521394 Fantasy Planet
Fantasy Planet's picture

I want my, I want my Q-E-3

Wed, 08/03/2011 - 13:59 | 1521396 lizzy36
lizzy36's picture

Correct me if i am wrong but isn't Donald Kohn retired?

So we are rallying on what again?

Oh yes and just so everyone is aware, NO NEW TAXES FOR THE RICH, but taxing the poor through successive QE's is GREAT.

Wed, 08/03/2011 - 14:42 | 1521539 Bam_Man
Bam_Man's picture

It doesn't matter.

With bond yields so low, they have to keep the stock market Ponzi FULLY inflated or EVERY insurance company and pension fund will be belly up in less than a year.

They have no choice. This is the corner that 25 years of "easy money" has painted them into.

Wed, 08/03/2011 - 14:47 | 1521543 TruthInSunshine
TruthInSunshine's picture

Correct me if i am wrong but isn't Donald Kohn retired?

So we are rallying on what again?


Buzz Aldrin also spoke to the WSJ and said that he may voice support for a QE3-like policy.

The markets lapped it up.

Wed, 08/03/2011 - 14:03 | 1521410 Sudden Debt
Sudden Debt's picture

Maybe inflation in the US isn't that high and even comming down, but every time they do a QE3, everywhere else in the world inflation steps it up a notch.

I wonder which countries will revolt now because of rising food and energy costs....

Putin's right. The US is stealing from the world through their reserve currency.

If they don't watch it out a bit more, they'll might lose that status faster than they think.


Wed, 08/03/2011 - 14:11 | 1521437 EscapeKey
EscapeKey's picture

Head over to the UN FAO, and you'll see food prices are stagnant (near record levels).

Let's see how far up it'll go, when QE3 is kicked off.

Wed, 08/03/2011 - 14:04 | 1521414 PulauHantu29
PulauHantu29's picture

QE3 straight up?...or on the Rocks?


Man, oh man, can you say $5,000 gold (as many predict)

$145 silver (as John Williams estimated)

$220 oil (as Nomura predicts)

and who knows what coal, copper, etc will do.

However, it looks like The Bernank now has no other choice but to support the economy and devalue the dollar so we can pay our massive debts with cheaper dollars. Too bad for Japan, China and the hundreds of pension funds and ins companies and banks that hold dollars.

But, hey! Nothing's perfect!

Wed, 08/03/2011 - 14:13 | 1521451 Sudden Debt
Sudden Debt's picture

I'd rather have a Global Bailout 3.

And where  is Berny? I WANT MY USUAL WAITOR!


Wed, 08/03/2011 - 14:05 | 1521415 RobotTrader
RobotTrader's picture

<--QE3 is on!! Let's Party!

<--Crap, I chased it on the short side this morning and got burned


Looks like a carbon copy of the 1997 low with this morning's -1472 TICK reading, making the 9 consecutive day -1,100 TICK streak the longest I've seen.

Anyone who wants to see what the 1997 low looked like, here it is:



Wed, 08/03/2011 - 14:14 | 1521457 slaughterer
slaughterer's picture

Robo ist der Mann!

Pull up the 2002 chart, too.

Wed, 08/03/2011 - 14:21 | 1521476 d00daa
d00daa's picture

got any more laughable, shitty calls for us fucknut??

i hope you don't trade for a living.

Wed, 08/03/2011 - 14:23 | 1521486 slaughterer
slaughterer's picture

C'mon, let's be nice. 

Wed, 08/03/2011 - 14:24 | 1521490 d00daa
d00daa's picture

i'm serious.  what happened to spx 1400??  you must be puking up blood.

Wed, 08/03/2011 - 14:39 | 1521529 Careless Whisper
Careless Whisper's picture

This morning around 10;30 there was panic and capitulation. You could feel it. TNA  ohhh la la !!!


Wed, 08/03/2011 - 14:23 | 1521487 d00daa
d00daa's picture

talk is cheap robomomo.  put your $$$ where your cocksucker is, go long and disclose.  otherwise stfu already.

Wed, 08/03/2011 - 14:04 | 1521416 John McCloy
John McCloy's picture

I called it 1:45 QE rumor. How predictable are these clowns at this point. 

Maybe a job creation stimulus rumor tomorrow?

Wed, 08/03/2011 - 14:15 | 1521460 TruthInSunshine
TruthInSunshine's picture

I called it 1:45 QE rumor. How predictable are these clowns at this point. 

Maybe a job creation stimulus rumor tomorrow?


Obama Will Embark on Mid-August Bus Tour to Talk Jobs


Obama plans on doing a bus tour and he will "talk about jobs."

That is going to do wonders.

I plan on talking about the cold fusion reactor I never built, that I plan on selling for 100 trillion fiatskis.

Wed, 08/03/2011 - 14:31 | 1521506 John McCloy
John McCloy's picture

     I mean..when do these bobbleheads cease to have attention paid to the same old script for going on 3 years now? Those jobs are gone and now being replaced by robots. Perhaps if the press did their job and stopped giving all these clueless Joe's a pass we might get to the core issues. 

Wed, 08/03/2011 - 15:29 | 1521682 rosiescenario
rosiescenario's picture

"Obama Will Embark on Mid-August Bus Tour to Talk Jobs‎"


....and having never had one himself, he better hope the guy feeding his teleprompter has.


I'd be willing to bet that Obama, if given a socket wrench, wouldn't know which end to use.


His talking about jobs is like having a dress designer write up gun controls...oh, that's right, we did that.

Wed, 08/03/2011 - 14:04 | 1521417 Deepskyy
Deepskyy's picture

Melt up bitchez... Melt right on up.

There is no logic in this market.  None.  Glad I am a poor as fuck graduate.


Wed, 08/03/2011 - 14:07 | 1521423 bania
bania's picture

...straight into the junkie's vein.

Wed, 08/03/2011 - 14:08 | 1521428 Dr. Engali
Dr. Engali's picture

And heerrrreeeees Robo.....

Wed, 08/03/2011 - 14:23 | 1521431 buzzsaw99
buzzsaw99's picture

Beldar Kohnhead:

When my people come to colonize this planet you will be on the protected rolls, and no harm will come to you.

Wed, 08/03/2011 - 14:11 | 1521436 Mariposa de Oro
Mariposa de Oro's picture

He said he expects the central bank, which holds a policy meeting Aug. 9, to wait and see whether the recovery is really losing steam before taking any action.

We they really mean is they'll wait to see if they can keep the sheeple believing there's been a recovery before they take any action.


Wed, 08/03/2011 - 14:12 | 1521443 TruthInSunshine
TruthInSunshine's picture

How many points on the Russell 2000 does each trillion of QE buy?


I am laughing my ass off here because this is going to fail so badly for those who believe it is all going to be equity market supportive.

Wed, 08/03/2011 - 14:15 | 1521459 John McCloy
John McCloy's picture

All these QE programs have seen to do is have gold higher, oil higher, unemployment rampant, idle S&P/Dow and enriched bankers. Seems like a great deal for the middle class right Ben?

Wed, 08/03/2011 - 14:13 | 1521449 tictawk
tictawk's picture

If the Fed only knows printing, and the dollar is toast, the bears on Stocks are wrong because it can theoritically go to infinity as the dollar collapses.  I suspect that bonds will be the equalizer and collapse as the Fed tries to get more aggressive.  The collapse in bonds will provide support for the dollar

Wed, 08/03/2011 - 14:14 | 1521452 Rikki-Tikki-Tavi
Rikki-Tikki-Tavi's picture

If QE3 translate into keeping rates low for a very long time then what will the effect be? Should only have an effect if anybody didn't already expect this - I doubt that is the case. If it means rebalancing the maturity profile of FED's current positions again I fail to see any major impact except adding duration risk to FED's 50+ times leveraged balance sheet. The consequences of buying more assets I think is very clear to all of us and it is painfully clear and even as debt will be monetized further won't the negative effects (hyper inflation, likely trade wars, limited demand for future UST issuance (unless FED plans to by everything forever), foreign dumping of dollar assets, ...) far outweigh this? What about some infrastructure projects aimed to kick start the economy or similar - what is wrong with actually trying to solve the real problem?

Wed, 08/03/2011 - 14:17 | 1521466 r101958
r101958's picture

....and who pays for 'infrastructure projects'........we, the taxpayers do!

Wed, 08/03/2011 - 14:21 | 1521474 slaughterer
slaughterer's picture

Problem is: with a medium-term fiscal policy of deleveraging, there is no money for any substantial infrastructure projects.   

Wed, 08/03/2011 - 14:34 | 1521516 Greenhead
Greenhead's picture

Solving the real problem isn't going to be done by monetizing more debt or by increasing federal spending.  The real problem is too much debt dragging on the economy.  The real problem is the inability of the economy to reset to sustainable levels because it keeps being propped up so it staggers along and can't recover.  Building a few bridges and adding a few miles of highways might be good for a few contractors and laborers but it will add a greater burden to the rest of the taxpayers who have to pay for the job.  Whether we extract it from the taxpayers in the form of taxes or we extract it in the form of lost purchasing power, the extraction will happen.

Wed, 08/03/2011 - 14:14 | 1521458 r101958
r101958's picture

Yep, could be 'lip service easing'. All to prop up the market. Same ole schmidt, different day.

Wed, 08/03/2011 - 14:22 | 1521477 slaughterer
slaughterer's picture

The market is not choosy: it will take any close above 1250 you give it. 

Wed, 08/03/2011 - 14:26 | 1521498 d00daa
d00daa's picture

sooooooo....  you're long here, right?  disclose or stfu.

Wed, 08/03/2011 - 14:18 | 1521467 Everybodys All ...
Everybodys All American's picture

Debt ceiling raised and now QE infinity can continue to ruin this country. Thanks Obama.

Wed, 08/03/2011 - 14:22 | 1521482 rsnoble
rsnoble's picture is HUGE in terms of t/a for the markets.  It is a pivotal day, if not 'the' pivotal day and here comes the White House claiming no double dip and talks of QE3.  I hope they fall on their fucking faces.  The line is being defended right now.  And please, save me the bs stories that t/a doesn't work as I see it play out time after time again. 

Wed, 08/03/2011 - 14:25 | 1521494 rsnoble
rsnoble's picture

Also for the naysayers are the corresponding events that take place at such important levels........they know damn well what's going on.

Wed, 08/03/2011 - 14:26 | 1521496 slaughterer
slaughterer's picture

Brian Sack: Must ... not ... close ... red.  Otherwise... I have ... to... feed ... the PDs ... more .... money. 

Wed, 08/03/2011 - 15:12 | 1521624 rsnoble
rsnoble's picture

Well whoever gave me the -1 can be happy that the line is intact, I covered and bought a few calls.

Wed, 08/03/2011 - 14:26 | 1521497 Cassandra Syndrome
Cassandra Syndrome's picture

Anyone interested in a debate on Economics, there is a recording from the LSE from last week about Keynes V Hayek in 35 mins (7pm GMT or 3 EST) on the BBC Radio 4. Here's a link


Hayek rules bitchez!


Wed, 08/03/2011 - 14:29 | 1521502 TruthInSunshine
TruthInSunshine's picture

08-03 14:17: Talk in the pit of possible QE3 in the markets


Pavlovian dogs (words of another ZHer) in the pit don't know whether to lick their balls or take a dump, but their tails are wagging like crazy.

Is this what the trading floor has really been reduced to? Mass retardation?

Wed, 08/03/2011 - 14:29 | 1521503 GiantWang
GiantWang's picture

You know what I miss?  Boehner and Obama daily press conferences.

Wed, 08/03/2011 - 14:31 | 1521507 knukles
knukles's picture


Wed, 08/03/2011 - 15:13 | 1521625 Gohn Galt
Gohn Galt's picture

Are you going to the birthday bash?

Wed, 08/03/2011 - 15:16 | 1521626 Gohn Galt
Gohn Galt's picture


Wed, 08/03/2011 - 14:32 | 1521511 markar
markar's picture

Meanwhile, WH spokesperson Carney say they see no double dip recession. bwhaaaaaaaaa!


Emperor Nerobama fiddles while Rome burns.

Wed, 08/03/2011 - 14:32 | 1521512 kito
kito's picture

White House:  "there is no risk of double dip recession"

...what was it we are supposed to do when the president declares something wont happen?

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