Is Today's Market Pricing A Forthcoming Reactionary-QE By The Fed?

Tyler Durden's picture

Our earlier discussion of the relationship between ECB and Fed balance sheets as the driver of risk correlations this year seems particularly timely as we are seeing quite notable divergences among US asset classes and FX flows today. EUR is now up relative to the USD on the day (DXY is down and tracking stocks higher), Treasury yields are falling fast and the curve flattening (2s10s30s dropping rapidly) and Silver is rallying hard off its lows (Gold perhaps being held back for now by collateral/cash/redemption calls for now). Oil is back green for the week also. Is the market starting to comprehend that the non-QE of the ECB's LTRO and SMP is in fact QE and implies the currency wars just went to 11 - forcing the Fed's hand?

Dollar (inverted) vs S&P 500 vs 10Y Yields.

Commodities are starting to surge again. Even Gold is now on the move too.

Charts: Bloomberg

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Jim in MN's picture

Komprehenshun, bitchez!

Popo's picture

b.b..but I thought there wasn't going to be any more QE.   Poor Mr. Denninger's head is going to explode.

Tsar Pointless's picture

Who? The same Mr. Denninger who bleated incessantly that Chairman Ben wouldn't take interest rates on a Japanese-style ZIRP ride back in 2007-2008? I challenged him on each and every cut, saying Ben would, while Mr. Denninger said he would not.

The same Mr. Denninger who posts more tickers on his forum per day than other people post replies or threads to his forum?

The same Mr. Denninger who bans anybody who disagrees with him?

Yeah, that's the one. I know it.

optimator's picture

The same.  The guy that said gold wasn't going anywhere.

nope-1004's picture

I don't know if the market is frontrunning a QE announcement, but I do know that QE is going on under the cover of darkness.  Two or more European banks were fueled up in the last 60 days, as ZH reported.  Benocide can't announce it though, because doing so would show the USD what it really is - a POS.

I continue to buy PM's, not so much based on a potential QE announcement, but because the global bankers are FORCED to print, are printing, and will print, but are not formerly announcing it, at the same time holding PM's down.  I also believe the Crimex is coming to a head with its crooked and fraudulent schemes, so PM's are my choice right now.

And I don't need to do anything, just sit back and watch.  The banksters need to be active everyday, sweating, hoping, manipulating.  Not PM holders... we have the real deal.


eureka's picture

Soros sees gold prices on verge of bear market (bloomberg, today) - Russel: under $1500 gold tanks.

Point: if US survives - and EU and China tanks - it will not be due to the inherent moral, philosophical and productive capacity of the US citizenry, but to its absolute submissiveness to its elite - and to its henchmen, the ruthless and purely self-absorbed bankster and security scum, who run the US - the world's second largest economy - after EU.

Gold is tanking, Bitchez - and who do you thank for that?

economics1996's picture

There is already more dope in the pipeline.

vast-dom's picture

Yet another day I feel like spontaneously combusting right the fuck off the planet!

whstlblwr's picture

Don't combust, rest your head on Bernanke lap.

On other topic, Ron Paul needs to stop responding to newsletter question. When asked about newsletter, instead he should talk of what he's done for civil rights, talk of MLK vote, ignore assholes who try to put him on defensive.

Tanz der Lemminge's picture

Don't poke fun at the Karl or he might ban ZH posts from his forum.




Oh - wait -- half the posts on his forum are re-posts of original ZH stuff

lizzy36's picture

Market is pricing in decoupling.

In other delusions Santorum will become POTUS, and i will become Mrs. George Clooney.

Happy New Year indeed.

firstdivision's picture

Can I be the new Peter North?

ACP's picture

Only if you use QE to SPOO.

JPM Hater001's picture

Oh, can I be Peter Faulk?

"Ah, I'm really sorry to be such a bother to you Mr Romney but more question.  Why are you such a duesch Bag?"

disabledvet's picture

Whadyaa mean "phucktards" isn't a word?

Stoploss's picture

In 24 hours, Gold will have outperformed the S&P by at least 5% on the year, even after the coordinated bashings.


Print away Ben, I triple dog dare 'ya..

strannick's picture

And I triple time beg you

firstdivision's picture

QE right now is just plain suicidal.  Hard to justify a QE, even a stealth one with prices where they are.  I would say the market has become too stupid for itself.  Front running a QE in advance like this does nothing but delay QE.  Also, the markets are up just becuase they do not want to end the year down. 

SeverinSlade's picture

Agreed.  Bernanke launching QE3 with equities where they are makes him look like a villain that only cares about the wealthy financial oligarchs (which he is).  Bernanke would much rather appear to be a savior (Can he be Time's Man of the Year again?) by launching QE3 with markets plunging.

My guess is that S&P gives us a nice New Years present sometime in January and downgrades all of Europe.  Equities plunge, dollar strengthens, and Bernanke with his new dove majority can launch QE3.

john39's picture

the choice is not bernanke's.   he is front man for a very large cabal.  he, like obama and the european leaders, will do what they are told, and when they are told...

SeverinSlade's picture

I totally understand and agree.  I just say "Bernanke" because it's shorter than "the illuminati lucifarian financial oligarchy."  Bernanke's just a front man like you said.  I'm sure they have some dirt on him just like everyone else in power which is how they control them.

john39's picture

good point.  need some good shorthand for these clowns that doesn't inflate their importance...   i suspect that the bernanke puppet is an actual member of that cult...  the politicians, not so much...  just dumb and corrupted.

ekm's picture

I see S&P at 900 before WSJ and Bloomberg beg him to do QE3? What do you guys think? 950? 1000?

FinHits's picture

Share prices and paper wealth values going down is not the end of the world.

I find absurd the current wide-spread obsession on somebody having to do a QE somewhere. A couple of years ago nobody even knew what a QE is. We should all just move along and find a new event fetish somewhere else.


Possibly one angle that ZeroHedge has not studied much yet is the "global economic war" impact of QEs.

On the one hand QEs debase the currency, leading to potentially a weaker fx-rate which is good from the "currency war" point of view to the country doing the QE. On the other hand, we have different fingers... just joking... the QE is a "global freebie" for the other countries, who get part of the improved purchasing power of the free helicopter money as demand boost for their products and financial instruments.

Methinks he who QEs last or not at all, wins this global game.

ekm's picture

Oh I agree with the conclusion. But it doesn't help with 6 month horizon investing. As to QE, central banking is based on continuous QE as a functioning mechanism. The reason it's called QE now is just camouflage as if it is something that never happened before. If not continuous QE, no need for a central bank. The question is how much of QE at any given time.

DosZap's picture


Bout time some folks woke up around here.

QE has NEVER stopped,it's going full bore, by another name, or no name at all.

QE pissed of the  working class,so they now just do what they want, since we are no longer a Republic, and no longer are citizens with any rights,Why should they give a flying fook what WE think?

Answer: They don't, and their doing anything and everything they damn well please.

They learned  Partial honesty was not the best policy, so they back tracked to the old ways.

It's far easier to get forgiveness than permission.

But since we have gone FULL FASCISM, it just doesn't matter.

They need neither.

SheepDog-One's picture

Really John, well what if theyre told 'WW3 starts tomorrow'? Do people really think 'the plan' now is just to keep printing and floating around these stupid markets FOREVER? Hardly.

john39's picture

see my comment just a few inches down the screen.

ShoeShineBoy's picture

well, maybe it has already been in the prices? 

how about US pensioners realizing that on the back of 2.8% 30 yr US Treasuries, their pensions are massively UNDERFUNDED not only because of their underperforming plan-assets but also because of that delusional strong USD and all time low 30 yrs.. I guess sometime they use 10 yr IG corps but even they are in a bubble territory, if not inside of that..


so, to your point, uncle Ben better start being a savior for those said US pensioners


ekm's picture

SeverinSlade, I see S&P at 900 before WSJ and Bloomberg beg him to do QE3? What do you think?

SeverinSlade's picture

It may get that low.  They really defended the 1080 mark last time.  Anything below that is going to sound the alarms.  Whatever happens though it's going to happen fast.  We're not going to have a controlled fall down.

ekm's picture

Thx a lot for the answer. Could you elaborate on "THEY". Plunge Protection Team? If yes, what do you think is their capital? It's always finite capital and they can't defend 1080 for a long time if no suckers get on board to comply? I'm eager to know your feedback. Thx.

zonkie's picture

Guys,  Tyler is talking about ECB LTRO not actual QE3 here. QE3 is happening in disguise which the markets are now waking up to. 

DormRoom's picture

And is the Fed going to rescue China when its economy collapse from the property bubble?


The Fed can't rescue the world from the end of the debt super bubble.    The Fed is replacing exogenesis risk with endogenious risk (more money printing via swap lines) . Risk isn't removed. It's reshuffled.  But someone is going to have to pay very soon (2012--trillions in  debt rollovers).


Whether it's the pleb (general pop) via hyperinflation, or the elites from a massive asset deflation.

john39's picture

they need to keep it going just long enough to unleash the wars and the crackdowns...

SheepDog-One's picture

The way I look at it, they just need SOPA passed, theyve got NDAA Indefinite Detention bill passed already, and then its takedown time. People who are now conditioned to believe we just keep printing to support fake bankrupt markets with 0% interest funny money to 'keep things looking stable forever' will get the rudest awakening in human history real soon.

john39's picture

yeah, i totall agree... wealth was never the end game....  just a means to the end (total control by a small class.  this story is as old as time, but most are dead asleep.  eyes wide shut?  kubrick was trying to tell us something but most still are not listening.

SheepDog-One's picture

Right, those 'elites' dont care about MONEY or STOCKS...theyre grabbing up every resource in the world. When you own all the oil, and food production, and the dirt itself, money means nothing at all, you own everything. Money is for peasants.

The owner of the resort doesnt need to worry about paying his bar tab, he owns the whole damn place.

john39's picture

yup, like a giant game of musical chairs.... when the music stops, the cabal has all the chairs while the peasants hold a pile of worthless paper.  anything they didn't get when before the music stop, they use control to just take away...  off to the fema camp if you complain.

CvlDobd's picture

Did Obama sign NDAA?

If he did that one skipped past me. I'll down vote myself.

JimmyTheHand's picture

Oops, that's from last year... sorry.  Not sure if he signed it yet or not.


JohnG's picture

It is listed as "pending" on whitehouse website.

Since I forced myself to look, I'm going to go puke now.....

valley chick's picture

ding...ding...ding!  We got a winner!!!  :-)   About control of the people.

spekulatn's picture

And is the Fed going to rescue China when its economy collapse from the property bubble?

john39's picture

hard to understand why those crazy tin foil hat types think that the rothschilds are evil...  /sarc:

earleflorida's picture

thankyou for the link :-))

to begin with, evelyn is a very complex person,... but, with a great many fine qualities that some agree to, and others disagree with - besides the point - that being apart of the rothschild family, he is very much different philosophically, and fantastically pragmatic with a heartfelt humanitarian side for the little guy ---  fact is, i find this rothschild to be quite upstanding regarding his sensitivity to the world's betterment, and for all mankind in general.

ps. when i hear all the negative things said about evelyn,... i wonder aloud just how could this be --- just my gut feeling i suppose, but, i've always been a contrarian to heresy and the horrible psychological damage it fosters/creates with lasting/ unwarranted stigmatization.


Cult_of_Reason's picture

~$100 oil and Bernank starting QE-3 ($150 oil, $5 gas, and 9% unemployment to help re-elect da ganstar)?!?
Nah, ain't gonna happen.

They (NY Fed, JPM [aka Fed's proxy], and Goldman [aka Bernank's master]) would have to bear raid oil before Bernank can resume any money printing.

What you see today is PMs flagrantly marking up equities on record low volume fumes.

lolmao500's picture

Just do QE3 and attack Iran and blame the rise of oil on Iran. The sheeple will believe it.

Cult_of_Reason's picture

You are correct -- da gansta attacking Iran kills two birds with one stone (attract Jewish voters and having a convenient scapegoat to blame for high oil prices).