Three Days Ahead Of Jackson Hole, EURUSD Expects The New QE To Be...

Tyler Durden's picture

Just five weeks ago, EURUSD traded back to 'fair-value' with its comparable ECB and Fed balance sheets. Since 7/20, things have got a little hope-fueled and now the picture is quite different. Based on EURUSD at 1.25, this 'implies' a Fed/ECB ratio of around 1.05x - which in turn provides us with a nice round $400bn expectation for NEW QE in the short-term. Of course, if Draghi goes full retard then the Fed's 'counter' will have to be even higher, but we suspect (ever so subtley) that this afternoon's action (with high beta, QE-sensitive 'everything' selling off) hints at more than a few 'investors' getting cold feet.



Chart: Bloomberg

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vast-dom's picture


Xibalba's picture

they call this a stimulus.  blowtards..

saturn's picture

I doubt the investors' feet will defrost as desired when the cb finally lets off the qe-bomb. Im however ready to watch the nuclear barbeque in the markets.

The Big Ching-aso's picture



The morning after will be a bitch especially when she's coyote fugly.

indygo55's picture

Really basic question, and I mean from the fucking ground up,,, who the fuck is Bernanke to seem to be so fucking all powerful that every whisper from his bearded fucking mouth is awaited by every person with a clue on the fundamentals of the entire financial world and not be an elected official? Just asking.

fonzannoon's picture

Whats another 400 billion.....

What if he announces no QE...but really promises he is prepared to do more? Then in Sept he does nothing, but really really promises he is prepared to do more?

PicassoInActions's picture

Promise worth more this days to cartel than real actions. On Promises they can speculate, on real thing they will have to deal with the facts.

Hopiums and Promisses are the way to go.

gunsmoke011's picture

Bingo - that is exactly what he is going to do - because if he actually does go ahead with QE - the effect will be a few points higher in AAPL and the carck addicts will be calling for more. The half life on his QE's is getting shorter and shorter with each attempt. It is more effective to keep promising he is ready to do so than to actually delivering. Of course - every time the S&P sells off 10 - 15 handles - he will be a fixture telling us it is coming - but at some point it will be like the little boy who cried wolf.

Meesohaawnee's picture

"The half life on his QE's is getting shorter and shorter" what?!! u are kidding us?? . Look at the chart of the SPY the last year and explain to me why its shorter?

SheepDog-One's picture

I dont know Fonz how many times wolf can be cried before everyone, even HFT computers, say 'Aw BULLSHIT!"

LMAOLORI's picture

fonzannoon "What if he announces no QE...but really promises he is prepared to do more? Then in Sept he does nothing, but really really promises he is prepared to do more?"



Well the Fed meets in Sept. then they don't meet again until Oct. right before the election and too late for more QE to have an effect so it's do or die and Ben's a Fabian Socialist in fact QE is a Marxist tool (Theory of Reflexivity) so he won't let obama die. If the markets/wall st. do well historically the incumbant does well. Leftists/Socialist's will not vote against their own interests so don't expect them to punish obama for being a paid off pig.  They may whine about the Banks but in reality as long as someone's wealth is being stolen and redistributed to them in the end that's all that matters. They don't even understand that they do much the same (stealing from another) as the Banks they are complaining about.

In fact some of those big banks in particular the ones who put obama in office also donated to causes like Acorn and worked with the Leftist groups they just don't advertise that fact. Right now the DNC is busy calling Bank Of America Stadium something else to hide their deep ties.

Dem convention head won’t say ‘Bank of America,’ defends calling it ‘Panther Stadium’


Stocks Have Predicted Who Will Be President With 88% Accuracy



Jlmadyson's picture

$400B ain't going to plug shit in this economy. Wouldn't even plug the collateral needs of Morgan Stanley this month.

fonzannoon's picture

Thats a good point...I have not seen much about more repo's being done since a few weeks ago.

Winston Churchill's picture

Last repo report still dated 8/7 on NYFed site.

They sure as hell are still doing them,just stopped reporting on  them.

This is where a systemic collapse would start and/or hyperinflation if the

SBS buffer effect is removed.I can smell the fish from here in Florida.

fonzannoon's picture

How would that veil come off? Thats' big.


Winston Churchill's picture

You would need some contacts in the SBS.That usually funds the repo market.

The  fact that the Fed had to come in to supply funding is very worrisome.

The SBS must be worried about counterparty risk, or underlying collateral value.

Either of which are bad.

Meesohaawnee's picture

the goal isnt to plug shit into the economy. they know that . They just use the word "stimulus" as a way to hide the reality called raping pillaging and looting from gramma and the middle class. The only goal of QE is propaganda and siphoning money from the middle class to a select few.

Mugatu's picture

Look at the pretty double rainbow!

mick_richfield's picture


And after the rain, there's a rainbow,

And all of the colors are black.

It's not that the colors aren't there --

It's just imagination they lack.


dannyboy's picture

So does this mean Stolper got one right ?

Jlmadyson's picture

Stolper has a long way to go before he gets anything right.

PicassoInActions's picture

Here is an interesting article how Ireland was forced into bailout.


Damn, when are we going to start hanging bankers..?

Fractal Parasite's picture

Wow! It seems that in the last couple of weeks the media has started slowly revealing the truth to the masses.

"It is now beyond doubt that Mr Lenihan was threatened directly by Mr Trichet, and that Ireland was bounced into the troika programme by unelected officials at the ECB."

yogibear's picture

Benny Bernanke and many of the other fed members are Wall Street's puppets. Wall Street demands more QE and the flunky, Bernanke,  PhD obeys. Wall Street tells Bernanke to jump and he ask, "How far?"  

Wall street knows the Fed has become a branch of Wall Street. Count on infinte QE/printing to pacify the traders on Wall Street.

vertexa's picture

how bad will the u.s. Economy be by the end of the year?

q99x2's picture

I would feel less safe there than I did going cross country in a jet last week. 3 days of AssHoles. I'm glad I'm not going.

Cheshire's picture

I guess money does talk.


Neither the FED or ECB can actually do anything this week. It's the republican convention this week. Bernanke is hiding in Jackson Hole not going there for some super solution party. If the ECB could have done anything it already would have. Whenever, the market doesn't get a shot it goes down. Everyone knows the markets going down on Friday at the latetest. They started getting ready last week, based on my view.


On another note, everyone that bought and has been holding has plenty to gain. Based on what I can tell, if some one in Europe farts sidewise this markets headed to whole sale rates. JPM in the news is just all around bad, but JPM in the news regarding CDS-A whale- and the word billions is a keyword time bomb. It would be funny if the market crashed ON Romney offical induction into uppdy cracker for president mode.

css1971's picture

3 days? Too late then, all the speeches are already written.

Tombstone's picture

With another $500 billion, Benny's leverage will be about twice JPM's.  It won't be long before his balance sheet exceeds the US debt.  Then the real fun will begin. 

XtraBullish's picture

There is not going to be another "QE" event announced ever - you know why? It never ended. It is one massive daily counterfeiting op that will continue until we have hyperinflation and food riots in Des Moines Iowa. As Santelli said today, it is a global "counterfeiting scheme" to try to re-ignite the financial sector but guess what? Banksters are toast and farmers rock. Sell fiat; own hard assets.

GlomarHabu's picture




Conventions are upon us. Reps first then the Dems. Speculation abounds as to what obama will promise. Well here it is, the obama save the Democratic Socialists plan.

  • He'll make pot legal with a minimum tax. This will expand the cadre of the mindless even further.
  • He will declare video games to big to fail, ensuring an even larger cadre of mindless to probe further their mindlessness.

Just these two moves will cement the booboisie (HL Menchen..thanks) in permanent booboisie land. Then all election will be run from Chicago Central Voters Clearing House ensure acccuracy.





    bobert's picture

    You impress me!


    Up arrow from me.

    Totentänzerlied's picture

    Man say what you will about potheads, we could all use a ride on the ol' choom wagon once in a while (or more), reality just aint' what it used to be.

    Meesohaawnee's picture

    if they do 400 billion in more QE washington should look like tiananmen square. go ahead give me 130 crude. It just might make the sheep wake up from their I-funk

    bushwarcrime's picture

    Get ready for the reset.  Ever wonder why they decided to change the fiat paper dollars to the new Funny Munny?  Well, the old funny money will be declared worthless and the new funny money will be worth 1\2 of the old value, yep that's right.  Most of the old funny money is outside the country, stealth default.

    chump666's picture

    400billion?  well stocks will sell off brutally and oil will go bid.  Nice.

     Then maybe riots in spring...maybe.

    Europe will blow apart no doubt there with the mad 'Goldman' Italians running the show.

    SheepDog-One's picture

    And what if its not $400 billion but -0-?

    chump666's picture

    800 point drop on the Dow

    bobert's picture

    Can't go both ways on a single announcement.

    Try this - QE = + 800 on S&P over one month. No QE = - 800 on S&P over then next month. Positive words  and no mention of QE = more muddle along and the S&P trades within it's current channel.

    phyregold's picture

    Golds pops

    Silver pops


    Lets make some fiat!

    mccoyspace's picture

    My guess is a pretty good sell off based on the speech. S&p down, EUR down, gold down. At least that's how I'm going to play it.

    But remember, do the opposite of my trades and you will make money....!

    All Out Of Bubblegum's picture
    Ben and Paul, two economists, are walking down the street. They see a pile of dogshit.

    Ben says to Paul, "I'll give you $5000 if you eat that dogshit."

    Paul chokes it down and gets paid. They continue on their walk.

    They see another pile of dogshit. Paul says to Ben, "I'll give you $5000 if you eat that dogshit."

    Ben chokes it down and gets paid. They continue on their walk.

    After a couple of blocks, Paul says to Ben, "You realize we just ate dogshit."

    Ben says, "But we initiated $10,000 in trade."

    slackrabbit's picture

    I want $20 trillion!!!!!

    The would be good for gold and bad for the sheeple, but always give idiots what they want....