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The Pain Trade: Market Sees 70% Chance Of More Fed Easing

Tyler Durden's picture


Think the Fed will pump more today? You are not alone: an implicit 7 out of 10 market participants do so too (and have for the past 70 or so S&P points, urged by nothing more than hopes of more easing as economic data after economic data has come in worse than expected). Which naturally means the pain trade today will be one of disappointment. But fear not: everyone will be able to sell ahead of everyone else if and when the Fed disappoints. Or so the thinking goes. Others like Citi, Deutsche and now SocGen, believe that a real policy intervention will come in only following a market crash. Bottom line: nobody knows anything. Correction - we know one thing. Absent central bank intervention everyone now agrees that the economy would be a complete disaster, so at least we can stop pretending that the word "recovery" makes any sense.

Source: BofA


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Wed, 06/20/2012 - 08:18 | 2542522 DormRoom
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Fed easing is the new Roman coin dilution with base metals.  The Empire continues to fail, but the elite have time to plan.

Wed, 06/20/2012 - 08:26 | 2542554 GetZeeGold
GetZeeGold's picture



They just did it wrong back then.........we'll totally do it right this time.


Wed, 06/20/2012 - 08:32 | 2542567 CPL
CPL's picture

Yeah we learned from Napoleanic France.  


Over leverage capital and real assets then over extend military resources on some half cocked idea England is Terrorism to France and her future.  Print lots of "money" from a Central bank run by "the People" (who they are who knows) sell anything not nailed down.  Go from world super power to laughing stock for a couple hundred years.


Easy button.

Wed, 06/20/2012 - 08:35 | 2542579 GetZeeGold
GetZeeGold's picture



Easy button.


Yeah....the French just pushed that button in the last election. No will be different this time.


Wed, 06/20/2012 - 08:34 | 2542571 Stock Tips Inve...
Stock Tips Investment's picture

The need for intervention by the Fed is the recognition that the economic situation is not very well here. This intervention is nothing more than an effort to manipulate the market from falling. Pro these interventions have a limit. I prepare for a major correction.

Wed, 06/20/2012 - 08:19 | 2542527 tocointhephrase
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Wed, 06/20/2012 - 08:21 | 2542532 ZeroAvatar
ZeroAvatar's picture

(2:21 P.M.)  "Get out!  Now!   Sell!  Sell!



Wed, 06/20/2012 - 08:27 | 2542559 Wynn
Wynn's picture

12:30 and one nanosecond

Wed, 06/20/2012 - 09:59 | 2543032 BlandJoe24
BlandJoe24's picture

Attention (fellow) Drama Junkies: 

it is possible the fed will announce something middle of the road, some kind of moderate intervention that provides enough hopium to prevent a withdrawal/crash, but not enough hopium for a another big high. 

in so doing, it may present itself as the voice of reason and responsibility - giving the markets/"economy" a little  help while letting it know it has to solve it's problems on its own.....

so possible today will see only moderate moves


Wed, 06/20/2012 - 08:21 | 2542534 mrktwtch2
mrktwtch2's picture

buy the rumor sell the fact??..will that be the winning trade today??

Wed, 06/20/2012 - 08:36 | 2542580 CPL
CPL's picture

Without any real solutions to a ponzi math problem, the only thing have been doing is buy and selling on rumour.


The truth is much more awful and boggles people's minds to anger and self delusion.  The truth is, there really is no such thing as money.  Just trade and trade value.

Wed, 06/20/2012 - 08:26 | 2542536 Mercury
Mercury's picture

Think the Fed will pump more today? You are not alone: an implicit 7 out of 10 market participants do so too ...Which naturally means the pain trade today will be one of disappointment. But fear not: everyone will be able to sell ahead of everyone else if and when the Fed disappoints. Or so the thinking goes.

Unless those 7 are actually recommending one way and trading the other, Goldman style...

Wed, 06/20/2012 - 08:21 | 2542537 RobotTrader
RobotTrader's picture

General Jim and all the King World New boys getting the "Jerry Sandusky" treatment this morning.


Gold getting bombed again.

Those poor guys can never get a break.

Virtually 100% of their forecasts lately have been dead wrong.

Wed, 06/20/2012 - 08:22 | 2542541 ZeroAvatar
ZeroAvatar's picture

I, for one, did not miss you while you were away.  Please go away, again.

Wed, 06/20/2012 - 09:06 | 2542736 Floordawg
Floordawg's picture

ROBOtrader is still away... ROBOTtrader is a cheap immitation.

Pay attention people and quit entertaining these lame mimics with zero creativity, it degrades us all.

Wed, 06/20/2012 - 16:59 | 2545063 fuu
fuu's picture

Robo Trader is 1 year 37 weeks old.

RobotTrader is 2 years 50 weeks old.

Wed, 06/20/2012 - 08:23 | 2542546 tmosley
tmosley's picture

Gold doesn't have it 1/10th as bad as your JCP.

Should we call you Mr. Hands?  lol

Wed, 06/20/2012 - 08:25 | 2542548 bdc63
bdc63's picture

"Virtually 100% of their forcasts lately have been dead wrong."

Maybe they should start doing what you do ... you know, predict things after they have already happened ...

Wed, 06/20/2012 - 08:27 | 2542556 Snidley Whipsnae
Snidley Whipsnae's picture

Gold has been getting bombed every time Benny Boy/Fed have had a pow wow. Nothing new here...

Tomorrow gold will recover what ever it loses today.

Wed, 06/20/2012 - 08:43 | 2542597 GetZeeGold
GetZeeGold's picture



Jack the markets anyway they want....everyone knows the endgame is gold.


Wed, 06/20/2012 - 09:28 | 2542603 Gief Gold Plox
Gief Gold Plox's picture

I'll help it get there. Promise.

Wed, 06/20/2012 - 08:34 | 2542573 razorthin
razorthin's picture

The solace that I take in that is since both PMs and the economies of the developed world are imploding - the ES is not far behind.

Wed, 06/20/2012 - 08:55 | 2542647 CPL
CPL's picture

I'll get worried when gold is close to 700 and silver approaches 9 per ounce.


Besides Robo, to see where the world is headed I only need to look at food prices now to determine where gold and silver will be in three months.  Pull that graph back and notice the bumps...notibly energy prices.  Equities don't drive anything.  The paper tiger trade is over.  The world of commodities is now king.  Which is a good thing for the health of the economy.  Great in fact.  Means we'll have something we've badly needed.


Human population reset.


It's obviously not happening fast enough, but there is one thing that was noted after The Black Plague of Europe, everyone got more comfortable.  Not wealthy, comfortable.  All those dead people ceased using resources and space that the folks left could stretch out a bit.  It also made a labour shortage, people could pick and choose.  Serf wasn't the main option anymore.  You could choose to be a destitute factory worker.  Possibly join the military without being born of cousins or half brother of a full blooded minor noble.  Lots of spare lean to's and huts to live in.  


Think of the boomers, once they are dead and buried over the next 20 years, imagine all those propertities released back into families.  Gold and silver passing hand to avoid the dead taxes.  Whatever.  In Canada that's 40% of our population.  In the US that around 30%.  What the world cannot have is that demographic taking it's money out of the paper markets or it'll wipe out whoever is left holding that bag...the thing is it'll be taken out for daily expenses like food, medical, insurance, cars, repairs, marriages, basically.

What appears to be a run in equities is really just people paying bills by the millions...every month...for twenty years...double whammy as well, to pay those people their pensions which have always been an unfunded liability the government has to print to fill that bucket.

Got silver?


Wed, 06/20/2012 - 11:45 | 2543634 Ragnar24
Ragnar24's picture

Exactly. However, do you really think this map of unfunded liabilities will be financed with more contributions from the Boomer beneficiaries? Or will they expect state and Federal governments to simply auction bonds to cover the shortfalls?

The Boomers have proven over their lifetimes that they have no aversion to living beyond their means, and we can expect them to be in control of political and corporate offices for at least the next decade.... so we can also expect that this morally bankrupt generation will finance the remainder of their lives with debt until the Echo and younger generations finally revolt.

By the time the younger generations figure it out though, the Boomers will have completed their lifetime of living beyond their means.

Wed, 06/20/2012 - 08:33 | 2542542 bdc63
bdc63's picture

7 out of 10 people think the FED is going to ease? ... you gotta be kidding me! 

The FED has to keep it's powder dry for "the big event".  We're close, but we're not there yet.

Today we'll get an extension of Operation Twist (if they don't continue twist, it's the same thing as 'tightening').

Then, sometime between next week and 3 months from now Europe implodes.  When it does, we'll not only see QE3, but another TARP-like initiative (complete with Timmy begging on his knees to congress).  When congress refuses, Obummer will declare ML in the name of saving the country.  He'll send Congress home, authorize the ransom payment to the banks, and then things get REALLY interesting ...

Wed, 06/20/2012 - 08:35 | 2542577 Peter Pan
Peter Pan's picture

The price (or should i say value) of gold is relevant at the point in time that disaster hits and in the aftermath of a collapse. In the meantime the occasional up or down is just a distraction from the big ugly picture that is forming. A parachutist does not worry about the price of his chute. He just worries if he has one on his back.

Wed, 06/20/2012 - 08:51 | 2542628 Hubbs
Hubbs's picture

I like this explanation. To clarify, the parachutist is also concerned whether the chute will deploy.

Wed, 06/20/2012 - 08:57 | 2542663 mess nonster
mess nonster's picture

A golden parachute is about as worthwhile as a lead parachute. Gold is nothing more than a prepper's psychological prop. The irony that I can't get over is that an enthusiasm for gold is really a vote for the status quo.

HELLO??? In the event of an honest to goodness collapse, how is gold going to help you? Where are you going to sell it? To whom? And for what? Gold as a hedge works only as long as the system goes down, but doesn't break. Gold-bugs are betting things get bad, but that nothing collapses. Bernanke is the gold-bug's best friend.


Wed, 06/20/2012 - 09:06 | 2542740 Hubbs
Hubbs's picture

I think the idea behind the "non-gold bug's" strategy of owning gold is to hang onto their wealth through the impending financial turbulence, and after having emerged on the other side, go about redemption...although it may be tricky on timing the sale then, just as timing the purchase before entering the storm.

Sell too late, long after the dust has  settled and the economy is back on track, you lose. Sell too early, before the economy has righted itself, and you may wish you hadn't.

Wed, 06/20/2012 - 09:10 | 2542771 Hubbs
Hubbs's picture

Oh yeah, and forgot one thing. The first rule of "prepping" is to get your guns, beans, bandaids etc secured first. Only after you have these--i..e the means to sustain yourself through the carnage without having to rely too heavily on money of any kind, then you may turn your attention to perserving what's left over of your money on PMs.

Wed, 06/20/2012 - 09:17 | 2542805 Hubbs
Hubbs's picture

A farmer, a mechanic, a gunsmith etc may be very happy to accept gold or silver in lieu of a check or paper money. He doesn't report the transaction, you don't report it. ( To the IRS.) A variation of a barter/underground economy.

Gold may be too concentrated a form of wealth, so you may want it in 1/10 ounce coins, easily denominated, as opposed to melted stuff. Or better still, silver for day to day barter.

Wed, 06/20/2012 - 09:26 | 2542861 mess nonster
mess nonster's picture

I have to agree. The half-crown is a great little gold coin. That and the old-timey five-dollar piece, smaller than a dime (and easier to lose). But I think, in these situations, see my comment below, that a gold holder will realize a significant penalty in trying to exchange the gold for goods or services. A proffered gold piece is a signal of desperation. If I'm a vendor, and you offer me gold, I'm going to jack my price 30% minimum, just because I know if you're giving me gold, that means you are dipping into your panic reserve. You NEED what I have. If i'm offering it, I'm nowhere near as desperate as you are. So then all that remains is how you want to value your gold. if a loaf of bread costs 1/10 of an ounce, what does that mean? That the loaf of bread costs $160.00? Or does it mean that the price of gold has fallen to $40.00/ounce? You go figure.

Wed, 06/20/2012 - 10:18 | 2543163 Marginal Call
Marginal Call's picture

You think you'd be able to hustle somebody like that?  Anybody who's put any amount of thought into their plan will have a variety of coinage.  You're loaf of bread?  Here's a 1963 dime.  And you'll take it.

Wed, 06/20/2012 - 12:28 | 2543803 LoneCapitalist
LoneCapitalist's picture

MN You should read up on Weimar.

Wed, 06/20/2012 - 09:04 | 2542729 markettime
markettime's picture

Extension of twist, wait until a big drop for the big print. Keep the markets floating with rumors in the meantime. 

Wed, 06/20/2012 - 09:55 | 2543022 Nobody For President
Nobody For President's picture

It's not 7 out of 10 people, bdc, it is 7 out of 10 *traders* (and maybe their HFT machines)...

Wed, 06/20/2012 - 08:24 | 2542547 Mordan I
Mordan I's picture

No one thinks the FED will or has ever eased.

Wed, 06/20/2012 - 08:29 | 2542549 midgetrannyporn
midgetrannyporn's picture

The chart appears to be at the lows during the past two qe announcements. Only the bankstas know for sure because they pull the bernank's strings. I see 100% pain for everyone who isn't connected to the fed's titty.

Wed, 06/20/2012 - 08:25 | 2542551 EZT
EZT's picture

So the chart is telling us that it is at all time high hope of intervention, guess the inverse shirt squize in the (hope) chart could be good...

Wed, 06/20/2012 - 08:25 | 2542552 JustObserving
JustObserving's picture

How can you call it a market if the only thing that matters is Fed policy?  Our "markets" have degenerated into a monopoly controlled by the Fed.  Follow the Fed or lose everything.

Wed, 06/20/2012 - 08:29 | 2542562 GMadScientist
GMadScientist's picture

And that's just the people willing to play in their cesspool.

Wed, 06/20/2012 - 08:37 | 2542569 RobotTrader
RobotTrader's picture

If there were gold and silver shortages, you would not see gold down $18 in 10 minutes before the market even opens.

If the crisis is going to get worse, why is the Dow only 500 points from 4-year highs?

If we were heading into a recession, why are stocks like Under Armor making world record highs?  $20 to $110 in 3 years?

Where's the "hyperinflation" John "Big Mac" Williams is predicting?

CRB Index has gone nowhere in 3 years despite the biggest money printing campaign in history.

Wed, 06/20/2012 - 08:41 | 2542592 Peter Pan
Peter Pan's picture

For a minute I thought you were serious when I read your questions.

Wed, 06/20/2012 - 09:09 | 2542764 mess nonster
mess nonster's picture

Even though RT's comments read better with the "facetious" button ON, he makes a point- look, if gold works at all, it is a bet for inflation. Every ounce of gold purchased is a plea for the Fed to print. Inflation is the only answer that works for the current zombie "controlled" market system. If the FED and associated central banks can't kickstart the inflationary self-reinforcing feedback loop into action, we're headed for a horrible deflationary crash.

God forbid we have a deflationary depression. If that happens, besides all the other pain, here is what gold-owners can expect:

1. Massive wealth destruction. Damn! You bought at 1600 and sold at 300? Too bad for you!

2. Confiscation. 'Nuff said.

3. Black market rip-off. Sure, I'll buy your gold... you want cash? I'll give you 70% OFF the spot price. Oh,you want to trade? OK, here's a loaf of bread for an ounce, or 10 .22 rounds for an ounce. Thank you very much.

4. If you live in urbia or suburbia and own gold, there's one word for you- SUCKAHHH!

Wed, 06/20/2012 - 09:50 | 2542991 GetZeeGold
GetZeeGold's picture



Yeah.....that piece of paper with 100 printed on it is going to be so much more valuble.


Wed, 06/20/2012 - 08:41 | 2542593 somethingisrotten
somethingisrotten's picture


Wed, 06/20/2012 - 08:45 | 2542600 GMadScientist
GMadScientist's picture

Because some people (like you) are easily impressed by nominal gains from monetary handjobs and somehow can't remember when those highs were made, much less how, much less what has happened between then and now and will again.

Please... do jump in the fire.

Wed, 06/20/2012 - 08:33 | 2542570 blueridgeviews
blueridgeviews's picture

Are these 7 out of 10 market participants all in bed with the fed?

Wed, 06/20/2012 - 08:33 | 2542572 Dr. Engali
Dr. Engali's picture

"Correction - we know one thing. Absent central bank intervention everyone now agrees that the economy would be a complete disaster, so at least we can stop pretending that the word "recovery" makes any sense."

That won't stop CNBS, according to Cramer if Europe can get some growth this market will take off.

Wed, 06/20/2012 - 08:34 | 2542574 Silver Garbage Man
Silver Garbage Man's picture

What's the big deal, they print everyday to fund the deficit .It won't end until it blows up. Just make sure you have precious metals. If you are reading this and you have no metals,WAKE UP before it is too late!

Wed, 06/20/2012 - 08:34 | 2542575 Silverhog
Silverhog's picture

I think Ben is going to play another "Wait and See" card. Even still, Gold & Silver (paper) will get taken down dispite it showing little interest in recent QE rumor.

Wed, 06/20/2012 - 08:41 | 2542591 LawsofPhysics
LawsofPhysics's picture

"taken down" to what?  The dollar cost average on my physical gold is around $300?  LMFAO.  But yes, i agree, Ben will change nothing and continue ZIRPing right into WWIII.  The savers can never be allowed to be rewarded or be the actual source of real capital and innovation again, this is why the western world will burn.  Irresponsible behavior continues to be rewarded.

Wed, 06/20/2012 - 08:37 | 2542584 overmedicatedun...
overmedicatedundersexed's picture

FED up, FED up I am just FED UP.

Wed, 06/20/2012 - 08:39 | 2542589 TWSceptic
TWSceptic's picture

Actually I'm contrarian, I think they're all wrong. There will be no easing at this point I believe. And gold seems to be expecting exactly that looking at yesterday and todays drops.


Bernanke will probably talk a lot but do very little. However I think they will look at how the market responds and may still act in de weeks or months after. I'm sure they will at some point do more easing, when they see the stock market drop significantly.

Wed, 06/20/2012 - 08:48 | 2542610 Snidley Whipsnae
Snidley Whipsnae's picture

Duh! Every time Benny goes in front of a camera, at least the last few times, gold has been taken down by massive intervention in the paper market.

Whats not to understand about this action?

This is another opportunity for Asia/Mid East to buy the dip and take delivery...


Wed, 06/20/2012 - 08:55 | 2542648 TWSceptic
TWSceptic's picture

You can call it what you want, I think some people with a lot of money know what's coming or rather what's not coming...

Wed, 06/20/2012 - 08:42 | 2542595 razorthin
razorthin's picture

Well then fukk it.  I've never benefited from being in the majority.  Now I say they won't ease.

Wed, 06/20/2012 - 08:49 | 2542618 Snidley Whipsnae
Snidley Whipsnae's picture

More jawbone today... Easing coming nearer the election... They gotta save whatever powder they have left for political reasons.

Wed, 06/20/2012 - 08:55 | 2542653 BudFox2012
BudFox2012's picture

Most likely.  The length of time easing is "effective" shortens each time they do it.  The next one may only be good for a month or two, so they will probably do it near the election

Wed, 06/20/2012 - 08:57 | 2542667 Hubbs
Hubbs's picture

I would expect QE to be announced just before election,  if Obama thinks he's losing.  Not enough chips on the table presently to get any player to call the bet.

Israel/Iran War more likely to occur before election than say, shortly after?

Wed, 06/20/2012 - 09:18 | 2542813 mess nonster
mess nonster's picture

The war won't start UNTIL Assad crushes the rebel forces within Syria's borders. Mark my words. Syria is NOT Libya. Syria will not fall as did Libya. Right now, Israel is banking on the fall of Syria, but Syria will not fall. Russia and China will not allow it. Iran, as proxy to Russia and China will not allow it. Europe will blink, because Europe will need Russia and China more than it needs the US or Israel.

The rebels wlil be crushed, and this will be the news out of the North that Israel does not want to hear. The news from the East will be something to the effect that Iran has enough fissionable nuclear material for at least one bomb. Thiis combination of news will be Israel's signal to attack with utmost ferocity.

You wanrt a hedge? Place you treasure where moths cannot corrupt, nor thieves break in and steal. Just sayin'.

Wed, 06/20/2012 - 09:04 | 2542723 d edwards
d edwards's picture

Will Fed do more QE? What else can they do? And priming the pump now should create a short term bounce in the stock market which will be hailed as "economic recovery" going into the election.

Wed, 06/20/2012 - 10:36 | 2543074 GeoffreyT
GeoffreyT's picture

Mmmm... I love the taste of stale bull in the Gold market.

Just bought $1597 as all the breakout-trade dummies who BOT above $1630 are bailing. I'll take that shit ALL DAY.


EDIT: I'm not buying this for a hold... this is gonna be a $10 (GC) scalp, that's all. Never fall in love with a financial instrument.  

EDIT II: That's the first $2 banked. (And 1/4 position taken off, just for prudence's sake... $1600 might stop it for a bit).


EDIT III: God stab my fucking vitals... watching GC try to get through $1600 is like watching a fucking pensioner try to overtake a semi-trailer. Just fucking get past it, you fairies... I want to go to bed after it hits $1607...

Wed, 06/20/2012 - 11:21 | 2543382 GeoffreyT
GeoffreyT's picture

Halfway mark - half position closed at $1602 (i.e., 1/4 at $1599, 1/4 at $1602). If it does get to $1607 it's probably going back to $1620 to get some more numpties excited, so at $1607 might leave one unit on. Plus, I wanna go to bed: it's almost 1 a.m. here on the non-rooted side of the world.


EDIT: and there it is... $1607 bid print (a few minutes ago now... I was on the dunny).



Wed, 06/20/2012 - 10:10 | 2543095 Jake88
Jake88's picture

implicit my ass. article is bs.

Tue, 07/03/2012 - 07:33 | 2583086 Silvertrader
Silvertrader's picture

I follow the goldprice also and if there is an opportunity, i trade it with a contract for difference.

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