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Through The Jackson Hole Again?
Two years ago, in August of 2010, Ben Bernanke pre-announced QE2 at the annual Jackson Hole economic policy symposium. What followed was a 20% spike in the stock market as the impact of another liquidity deluge was digested by the market, leading to such luminaries as Tepper to make his first ever TV appearance telling everyone he was "balls to the wall" long. The QE effect came and went, and Tepper made money, and then lost it, as QE2 was followed by Twist, and then by more easing out of Europe, including a global coordinated intervention. This year, as the US and global economies have been floundering, the Fed has so far disappointed, and despite a "mere" continuation of Twist, has so far refused to implement the same bazooka measure that it did 2 years ago, no doubt well aware that doing so would merely confirm that every successive intervention has less of an impact, and last about half as long as each previous one (as we demonstrated over the weekend). The market, however, like the honey badger, does not care: and with stocks trading just shy of 2012 highs, and with Crude having soared by 20% since July, and with Brent at 3 month highs, is very much convinced that the imminent Jackson Hole symposium of 2012 will be a repeat of 2010, and Bernanke will announce something (and if not, there is always September, and if the disappoints then there is October, and December - in a world addicted to Fed liquidity the only thing that matters is when is the next fix). So what happened in the last run up to the 2010 Jackson Hole meeting? Here is a visual and factual summary.
From BofA:
The nearby table shows the market trends in the second half of 2010. After the Fed’s Jackson Hole meeting, the markets moved in divergent directions. The turn in the equity market was particularly notable. Stocks rose 16.6% from Jackson Hole to the day after the announcement of QE2 on November 3 (see chart). Many analysts point to the chart as proof of the powerful impact of QE. The dollar was also weak and commodity prices rose. Ironically, the market most directly impacted by the buying program was effectively flat over this period: 10-year Treasury yields rose slightly, as implied inflation expectations rose more than real yields fell.
Decomposing the 16.6% stock price gain into six parts, we find:
- Over this period “no news was good news,” in the sense that the market rose a cumulative 3% on days without major events.
- US macro data boosted the market by a cumulative 4%. The data was much better than expected and recession fears faded.
- Corporate news on net boosted prices by 1 ½%; better news from Europe added ½ pp and other macro news added 3 pp.
- Finally, there were three days where Bloomberg identified the Fed as a significant driver of the markets. The cumulative rise in stocks on these days was about 5%.
What is unsaid: the end result of QE2 was merely a delay of the inevitable, with the economy now growing at an even lower run-rate than in Q2 2010. Furthermore, with commodity costs spiking, and food prices soaring, not to mention a presidential election 2 months after the meeting, any hopes of a Fed announcement will promptly be dashed.
But that will not prevent the market from once again entering into the "no news is good news... and bad news is even better" mode for at least a little longer, and certainly until September comes and reminds us that nothing has been fixed neither in Europe nor anywhere else.
Finally, one notable presence at this year's Jackson Hole meeting will be Mario Draghi who will speak on September 1, and will likely rehash everything he has said... and nothing he has actually done, which to date is absolutely nothing but talk.
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most crackheads can't wait this long for a fix. they fall apart.
S&P needs to go below 1200 at least for Ben to announce QE in August. I don't see that happening. Some catalyst in September or some time has to preceed it.
I'm rooting for Tiger Woods this year.......simply because Ben Shalom's short game has gone straight to hell lately.
I don't know who the fuck is junking dlmaniac, but if anyone thinks that there's the slightest probability that the Fed is going to pour money for unsterilized securities purchases, with the Dow @ 13200, S&P @ 1400 and crude @ $95, then he/she is highly deluded.
Draghi is speaking at J hole this year.
when the genie gives me three wishes. One will be to stop the QE talk. Its so old tired and not gonna happen at these levels. The market can levitate at these levles without it. Bens goal of the last year is complete. Totally hijack the market and put a gun to the heads of short sellers. Mission complete!
The world is bust.... inflation or default, pick your poison.
I'm sure they'll pick one.....I'm giddy with excitement to find out which.
I bet old shalom ben knows a hell of a lot about jacksons hole.
Seeing as the little cunt has his nose firmly implanted up the fucker.
Fuck you bernanke you horrible little fucking world wrecker. Go off some place with a bottle of vodka and as many fucking pills as your stupid little legs will let you carry, then have a party on your own you shitheaded fuck nut. See, follow mixys plan and do the world a favour you fucking shithawk.
Jackson's hole could probably use a few stitches...
The only good that will come from this is that people will (should) realize that Bernanke does not give one shit about the real economy. QE is all about the market.
Right, but who is the market anymore? Just TPTB siphoning off those siphoning off those siphonong off individual fools.
I look at the market now as the remaining middle class. The big money is in real assets by now. Real estate, metals, foreign currency and even some cash. The lower class have nothing. The remaining employed middle class have one carrot left in front of them and that is their 401k. So Ben is going to keep this market levitated no matter what. If you are one of those middle class that lost your job then Ben has one less person to worry about.
That makes sense to me. Obummer will tell the middle class that Uncle Ben is protecting their assets by buying them. Then he'll say, just for safe keeping, we'll be managing your 401K's from now on so you can sleep well going forward. "What better guarantee than the full faith and credit of the United States Of America."
BTW, that is an actual quote I heard a congressman use when they combined SS funds into the general funds.
It's that time again: the A-holes at J hole
Jackson Hole is going to be a dud. They will talk about their bazooka. They will assure everyone they have it, and that it will be effective. The camera's will be very careful to zoom in only on Ben's face. If they were to pan down and see he is completely naked that might cause some concern.
"we have tools"
"We ARE tools."
Jackasshole
Telling us all to eat pie hole.
eewww, can't believe I said that.
Hello Ben? Lloyd here. Listen, I have a 20 lb. bag of shit I have to get rid of. Either you buy it or I'll have to unload it on Burt & Ernie.
Better yet, light that 20lb. bag o shit on fire and drop it off on Ben's front porch.
edit: When it falls into Bert & Ernie's hands they should cut it in half, and put the other flaming half on Lloyd's front porch...
Honey badger don't give a shit.
I smell a dollar devaluation of at least 35% coming. It worked for the elites under FDR.
Oil is $94 today.....35% purposeful devaluation? Thats $6 gas.
The market doesn't care...the market is SOOOOO NASTY!!!
Hmm, you still call it market?
The Fed may have disappointed but that doesn't mean the quality of its 'assets' has improved. The Fed credit bubble continues to inflate. When it blows? Nobody knows.
I think the stock markets will soon start to wonder:
At what point can't a sinking ship be bailed out?
Once there was a Kingdom, which was going broke.
One of the ministers suggested to the King that he should start charging toll tax from people using the only bridge into the city, daily.
King said, "No, the people would be rioting in no time" but the minister insisted to try it.
So King imposed a toll tax on commuters and nothing happened.
A month later, the minister goes lets double the toll and this will get us more revenue.
King said, "No way they will agree to it, the people would be rioting in no time" but the minister insisted to try it.
So the King doubled the toll tax on commuters and nothing happened.
A month later, the minister goes lets raise the toll 10 times and this will get us more revenue.
King said, "No way they will agree to it, the people would be rioting in no time" but the minister insisted to try it.
So the King raised the toll tax 10 times on commuters and nothing happened.
A month later, the minister goes lets raise the toll 15 times and also search and humiliate the commuters everytime they cross the bridge.
King said, "No way they will agree to it, the people would definitely be rioting in no time" but the minister insisted to try it.
After a few days some people gathered outside the King's palace and King goes to the minister, "See, did'nt I tell you they would never put up with this!!"
So he asked the minister to get the representative of the protesters and asked him what was the issue and why were they protesting?
The representative replied, "Your majesty, everytime we go over the bridge we are required to be frisked and searched and there is not enough security staff to do that and we get late to work.
Can you please increase the number of security personnel at the bridge?"
alex jones with max keiser:
http://www.youtube.com/watch?v=-5rLVQnfdAg&feature=player_embedded
my guess is that more qe comes between the november elections and black friday.
They don't need QE anymore. Look at the 5yr chart of the VXX. Mission accomplished. Try to bet against this machine and you end up feeding it. As for the idea that they need to print to fund the defecit...they don't need formal announcements to do that. That will be revealed in Ben's memoir's pubished in 2347.
generally agree....
and yet,
so many hungry swans circling above...
so few "Maestros" below....
This post is right on. Nothing of consequence is going to occur until September except more layoffs, more threats, more mud slinging between what America calls "adults." And more bullshit about how it is all getting better.
And how do our great companies continue to "improve profitability". Here is your answer:
Bloomberg:
Google is cutting about 20% of Motorola Mobility's workforce, a move the company said is designed to return its mobile-devices unit to profitability.
all part of their "don't be evil bitchez" campaign
"in a world addicted to Fed liquidity the only thing that matters is when is the next fix"
They fall apart or go cold turkey. If they go cold turkey we can expect durations of shame and regret followed by long periods of responsible behavior while they put the pieces of their/our lives back together again. Unless, of course, the crack/liquidity dealer stakes out their house yelling " first one is free!!!!". Then, we might be in trouble. Now if the FRBNY is giving away Master Blasters (that's when you take huge hits off the pipe while a 'ho is sucking your cock) we are in big trouble. No one can resist the Master Blaster.
Fed will once again let down the markets at the end of this month. Should send the dollar sharply higher.
http://wp.me/p2CT0a-2N
I can't find the schedule for the Jackson Hole FED Symposium, anyone else?