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QE-On As Retail Sales Disappoints
Once again the reflexive response that bad is good is occurring in risk markets. No ssoner had the dismal retail sales number printed than we are seeing Treasury yields tumble (within a basis point or two of record lows), the USD snap lower, and Gold snap higher. It seems the relatively sanguine nature of stocks this morning was the target for gold and USD's move but ince again we remind any and every dip-buyer that NEW QE can't come when everyone expects it and asset values are at least primed for a little jump (not within mult-year highs) as the deflationary threat Bernanke is primarily concerned with is clearly not evident.
Treasury yields plunge to near record lows as USD crumbles, Gold rips and stocks are stable...
or is it front-running of another day-session open gapfest?
Charts: Bloomberg
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Greed is good. Bad is greed.
There is greed and there is risk. Neither of these forces is 'bad' or 'good'. In a free market there is a balance and overall this prevents it from being self-destructive.
Canadian 10 year hit jut hit an all time low. Exactly what the hell is QE going to do at this time? Yes a short asset pop, so a quarter of #wealtheffect.
What bothers me, is everytime a number comes in below expectations, market participants go into "more QE" mode. Why? It will have little to no effect. Boat is starting to tip in favor of unintended consequences becoming greater than intended. But worst of all is the QE scream, show a complete lack of imagination. As long as QE is the "only" fix, even though everyone acknowledges it actually "fixes" SFA at this point, nothing outside the QE paradigm can be contemplated (such as doing nothing).
I believe the U.S. must and will inflate their way out of debt. The wealth effect is an added bonus to buy time with the plebes. In the meantime, TPTB are running PMs up and down, shaking out ma and pa and anyone else they can, so that when that banking Holiday finally gets here, they are holding most of the cards. JMHO
QE fixes nothing and makes things worse. Here's how you fix things. (1) Fix the banks, nuke if necessary (2) Start a real jobs program along with a massive increase in basic research, (3) Stop deficiet spending, (4) Wait. It'll take a decade but we'll get through it.
Deflation is the booger man upon whom the bernank hangs his hat.
1) Steal underwear.
2) ???
3) Profit!
The founding fathers are laughing at the current government. These guys are pathetic. This stuff sucks.
Whose friggin idea was it to add the General Welfare clause that makes misinterpretation and abuse of the founders' intent so easy and that which has allowed the fed to balloon in size and power?
There is a problem with the contention that QE cannot come when everyone expects it - since every bit of bad news and the slightest market dip will make QE expected all the more. If that is true, then it must mean QE will come after a 1,000 market RAMP.
Looking to add to my shorts......play both sides....go long and hard stops....go short and let the bastards run...love this whacky market of fucking hopium.
The Bernanke is a one trick pony with one catch phrase: "QE to infinity and beyond!"
Bernank has many many tools.....all shaped like hammers.
When incomes are dying, falling or stagnating, the best thing to do is to cause prices to rise.
Its impossible to have QE3 with spx at 1350,
Equities may have to drop from 5-15% to justify really another QE bullet.
Unless the goal is SPX 13,500. Which of course, is the goal.
Hugo,
Equities may have to drop from 5-15% to justify really another QE blank.
There, i fixed it for you.
It has been so long I do not even remember what a "free market" feels like anymore. When market direction is formed on what our politicians say and do, well, that is closer to the end game. Will never work long term.
American retail sales probably rose in June for the first time in three months, reflecting a pickup in demand for automobiles, economists said before a report at 8:30 a.m. in Washington. Sales will increase 0.2 percent, after a 0.2 percent-drop in May, according to the median forecast of 72 economists surveyed by Bloomberg.
U.S. Stock Futures Slip After Weekly Rally; Goldman Falls By Namitha Jagadeesh - Jul 16, 2012 7:25 AM EThttp://www.bloomberg.com/news/2012-07-16/u-s-stock-futures-slip-after-weekly-rally-goldman-falls.html
i think last summer july to sept was the last time anything traded on a reality data driven basis. at least it "felt" like a market then with normal ebbs and flows.
Stopping the debt collapse is important to asset prices than a functioning economy. If the debt collapses, so does the dollar, and the economy. To stop the debt collapse, you inject real money without debt backing into the economy.
Maybe more like a 2006/2007 timeframe
The grand resource misallocation will likely come after the erection.
For now, the team Obama will continue to misallocate its resources on ZH.
Wish Barack happy birthday? Click, click, click, ...
WORTHLESS stats......
It does not matter one bit IF THE FED IS BIDDING EVERY EQUITY KNOWN TO MAN....
SKEWED OR IS IT JUST ME???
It's getting more obvious that the Fed is lip synching instead of singing....
whatever..
QE is like Anti Claus. He brings presents to all the good little longs, but only if they DON'T believe in him. Sadly, now that everyone has seen him twice, it's going to be tough tricking them into not believing in him a third time.
Just do it and get it over with.
Ben and his turd-polishing ponzi posse will come along when we least expect it....wax on?
I don't care about Retail Sales. I just wait until Christmas with a very long list for Santa.
It is just like the silly Crop Reports. I don't care about stupid farmers and their crops. I get everything that I need from the grocery store.
Retail XMAS sales fell LAST year (but corporations still posted profits...thank you debt and accounting shenanegians!).
OH 'QE-on' again yes I see well can we first get markets down from a few% from all time record highs first? Or just shovel the coals to the already full speed train engine.
This is terrible. But at least Treasury and mortgage rates keep falling!!!!!
http://confoundedinterest.wordpress.com/2012/07/16/good-new-for-residential-mortgage-rates-retail-sales-fall-again-goldman-cuts-q2-gdp-to-1-1/
The only "recovery" I see is the collective recovery of shaking heads at realizing that yes, our lives are still just as shitty as they were 4, 8, and even 12 years ago.
I'm bullish on continued fail ,and the contined covering up of that fail by our centrally planned bullshit economic system.
Take the inflation out of those retail numbers and we're even further down.
Totally; deflation (or the ignoring of it) is totally ripping into corporate earnings.
Of course, workers will pay the price. Becasue god forbid the CEO's can't buy that 3rd yacht, the thing is on sale at 50% off!