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QE3 Bitches

reply to post by Shenon


ONLY after the STOCKS FALL much more would it be Politically possible for fed

because right now food inflation and energy inflation resulting largely from QE has caused such a backlash througouth the dollar denominated (priced) world that the fed can't make a move.

SO perhaps in early 2012 (likely actually) the fed wil enact qe 3 or perhaps several months down the line but right now it is way off the table. and the direction of markets is DOWN and pretty big.

Wether the next two weeks of pomo's (before QE 2 expires in june 30) has enough muster to keep S&P 500 above it's 200 day m. a (1275'ish) or wether the levered up equity players are hanging around to find out and getting out now (and wether this has enough momentum to send markets below 200 day m.a is yet to be seen) . the RECENT POMO'S and perhaps those of a nother week or so could serve to let the smart money get out while prices stay levitated for a while. the near record margin debt buying equities is distrubing to see given after next 2 weeks stock market pressure with QE 2 ending is gonna be high....and sell off's (large one's may occur) ....

reply to post by cpdaman


I think Stocks will fall before or shortly after QE2 Ends. Wall Street wants QE3,so they have to sell to bring down S&P 500 (did i get that right?). Me thinks the Sell-Off will speed up now and finish under 1000 just in Time for QE2 to End (as seen today,Stocks are already down over 1% and still falling).

Another thing i´m (NOT) suprised about...is it just me,or is the US Gov. waiting until every Fund is empty before they raise the Debt Ceiling? What is the Reason for that?

reply to post by Shenon


no your right. Because QE2 is ending your going to see the USD get stronger and the stock market and metals fall. Im sure it wont last long because people will be screaming for QE3.

I think this is the do or die moment for america. If we can get by without QE3 we will do better in the future. If they start QE3 im going to have to say game over and america is on life support. We are adictied to money printing and it only accelerates from there

IMO the (short term debt ceiling) DEBATE is such a joke (as in short-term debt is not the ISSUE!) and it is actualy SERVING ....either purposefully or not AS A MAJOR leg to keep the dollar from rallying!

and this is keeping oil and commodity prices up! When the debt ceiling is raised as it BETTER BE SOON (short term debt now) the dollar will have room to move up more as a default risk of $/treasury's of any sort will be kicked down the road where ALL other soverign country's can's are rattling about!

So i see a major driver for an equity sell off and commodity sell off (TIED to the dollar rising) as something that will co-incide with the debt ceiling being raised. And this whole debate serves to put underlying pressure on the dollar (default risk of not raising ceiling) which in turn keeps dollar down and commodity's and stocks from free falling as QE 2 expires and not to mention Global net monetary tightening and slowdown concerns coupled with limited room for fiscal stimulus in USA AND HIGH energy prices serve as factors that will cut into future corporate earnings growth....and estimated earnings will see downward revisions as a result.

I think market is 20-25% overvalued when u combine in future earnings reality's (due to higher energy prices ...slower global growth and the end of QE 2/ economic stimulus running out) ....ALSO very imporant is if there is a NEXT crisis......the gov't can't put down it's credit card.....soverign's are nearly maxed out.

initiated small position in AGA today....(rebalances monthly) within 3 weeks these commodity asset bubbles (and emerging markets) as well should see net outflows ......something is gonna suck up treasury demand when fed steps out.........and inflows into commodity's and emerging markets may be a significant factor in this.

i plan on adding to short positions over the next 14 days....( i think we may see one last pomo hurrah ...but muted) .......i think it's look out below over next 4 weeks in global AGR/ and emerging markets

and please refrain from the supply/demand insistance with the coffee. wheat...corn prices...etc. A run up of 88% Y/o/Y is QE steroid induced.

it's funny money based and the funny money is leaving the building....then stories will play on how global supply is very high and blah blah blah. The fed is looking for a economic recovery by raising food and oil prices.....they are OUTED as LIARS and marketing frontmen for asset prices /financial service industry . I still wonder why there isn't more pressure to get pensions out of commodity's.....they could QE to the moon with less ....international pressure and have dow 15000. Either they don't have the clout or there is *some sort of agenda to control people with food and country's with oil prices (both high!) by supra national financial cabal that is trying to gain more influence over soverign decisons.

Marketwatch

What the hell...Massive Sell-Off today? Whats going on? Did Bernanke scare them this badly yesterday?

reply to post by Shenon



lol u kidding this was in the cards for a while.

i've been harping on a asset price sell off.

it should not be that much suprise. QE 2 was designed to increase assets higher "than they would otherwise be"

yesterday ben bernanke DID NT HINT AT QE 3 in the slightest.....the markets were trying to figure out if it was worth it to sell off ......(i.e how much time they would have between QE's) now they know it will be at least thru august that markets can tank (next fed meeting) .....STOCKS.....and commodity's were LEVITATED by QE....they will now be de-levitated.

The dollar is also at relatively low levels and the euro debt crisis (perhaps it is dawning on people) that it is on goiog despite any very short term fix's. IF IF IF the dollar rally's on this sentiment and gets above 76 and then above 78 .....into the 80's (which it very much can as a flight to the safety of the still reserve currency...backed by oil and our military) then the dow will go down to near 10,500 or so......by the time the fed says "no mas" ....and announces qe 3.

also keep an eye on brent oil prices....finally tanking .....as oil falls into the upper 70's (it will ) the fed will have more political capital to introduce QE 3........although it will probably be different and they will be more keen in putting investing hurdles that send QE liquidity AWAY FROM food and oil.(higher taxes...margins..laws/ etc) ......just look at the G20 countrys cracking down on global agriculture prices spikes....caused by "unregulated markets". its time to short BIG AG and the sheeple watchin msn supply/demand folks will be dumbfounded as even with all those new mouth to feed......that agr. prices can be cut in HALF ez from here.....when pensions and money managers rotate out of such asset classes. they are the conservative dumb money .......who only sells after something has broken below its 200 day moving average.....so since agr prices had a quick and huge run up ...the 200 day MA is still way way way well below the current price...thus they will be selling very late.

the slowing chinese growth is also a concern for global markets as is higher energy prices squeezing profits everywhere.....this is baked in the cake for at least another quarter.....regardless of how low energy prices tank now. the lower earnings ahead thanks to more than robust forward earnings calls ....put additional down ward presure on markets......over the summer. THIS IS A FREAKING LAY UP

"Today may turn out to be the bloodiest day for equities since this so-called recovery began," said Todd Schoenberger, managing director of LandColt Trading. "The Chairman's 'aw, shucks' responses yesterday, along with the Administration keeping their heads in the ground regarding an economy stuck in quicksand, just isn't sitting well with Wall Street folks www.cnbc.com...

reply to post by burntheships


next week and the first weeks of July will be fun. earning come out and we will se the full inpact of japans supply chain disruption. Plus QE2 ends. Hold on tight

reply to post by camaro68ss


The bad side of the QE3 is that the fed will not print more money, they will let the old debt mature for returns and the 600 billion dollars from the last (Economic stimulus) will be poured into the streets because most of that money is still in the hands of the banks.

Then inflation will hit us worst than now, small businesses will start cutting employees, people will have to deal with again losing their homes and livelihoods and the ones that will be feeling the pinch is the working sector in the nation.

And QE3 is not going to fix the economy is just going to force the government to stop spending try to learn how to balance the sheets and cut debt and increase taxes will be heading Americans way.

But is OK, the oil prices are going down in an historical tap on reserves so the people will not feel so bad, after all when they go jobless.

But I think is a sickening side to all this, China and Japan will be stock with the US debt and dollars, the Euro may fall with the Greek situation and all this will benefit The American dollar.

reply to post by Shenon


No oil prices is scary the markets badly, if you have followed CNBC you will know that many experts call the tapping on oil reserves a bad move for the markets and a is causing mass hysteria.

Iran already say the will not lower the prices of crude because that is how they manage their nations budget, with all the santions the UN have on them, Saudi have agree on more output.

Originally posted by marg6043
reply to post by Shenon

 

No oil prices is scary the markets badly, if you have followed CNBC you will know that many experts call the tapping on oil reserves a bad move for the markets and a is causing mass hysteria.

Iran already say the will not lower the prices of crude because that is how they manage their nations budget, with all the santions the UN have on them, Saudi have agree on more output.

on top of that the world uses 63 million barrels a day and we are releasing 30 million. hahaha what good is that going to do!?

reply to post by camaro68ss


Is only going to be good for the next election year along with the "killing of bin laden", this move will ease the summer traveling for the America already strapped tax payer.

August and September will be fun...

Prepare For A Surge Of Treasury Issuance As Soon As The Debt Ceiling Is Lifted

As the chart below shows, since May 16, the cumulative divergence between where total debt is and where it should be is now a whopping $265 billion. That's right: when the debt ceiling cap is finally lifted, and it will be lifted, with republicans "kicking and screaming", Geithner will suddenly find himself needing to plug a gap of over 2 months worth of accrued treasury issuance. Mathematically, this means the Treasury will have to sell not the $100 billion or so in net debt but well over double that in August and September. And this will happen at a time when there is no QE2 to soak up the excess slack.

GOOD STINKING LUCK selling all those bonds...

Me thinks, WITHOUT QE3 by then, we will see the first FAILED BOND AUCTION in a while...And this will be the beginning of the end.

They have to start QE3 or else....the spiral will begin. And interest rates on the bonds are gonna skyrocket...

reply to post by Vitchilo


dont forget. OPEC is P***ed off about the 30 Million barrel of oil release by obama. I believe they have a meeting today and don’t be surprised if they cut production by 15-20%. OPEC simply cant profit on $90 barrel of oil. There will be a HUGE backlash on Obama for this move.

its going to be the 70's all over again

reply to post by camaro68ss


Guess he has to attempt to do something the people can appreciate, huh?
I mean, afterall oil prices could win him an election right?

Originally posted by camaro68ss
reply to post by Vitchilo

 

dont forget. OPEC is P***ed off about the 30 Million barrel of oil release by obama. I believe they have a meeting today and don’t be surprised if they cut production by 15-20%. OPEC simply cant profit on $90 barrel of oil. There will be a HUGE backlash on Obama for this move.

Oh yes they can. It's just that they made their budget according to $90-$100 a barrel expectations... and they don't want to cut those budgets.

Originally posted by camaro68ss
reply to post by Vitchilo

 

its going to be the 70's all over again

Yeah that would be quite crazy.

Another reason why they NEED to do QE3...

Dealers Rescue Very Weak 2 Year Auction As Indirects Flee From Short End, Despite Record Low Yield

In the just completed 2 Year auction (CUSIP: RA0), which just priced at a record low yield of 0.395%, which was a nearly 1 bp tail, all the action was behind the headlines: the Bid To Cover tightened substantially from the 3.46 in May to 3.08 currently, but the kicker was the Indirect take down which at a paltry 22% came at the lowest since February 2008, or even before the Bear Stearns implosion, when central planning was merely a gleam in the central planning cartel's eye. As a result Primary Dealers were left holding the bag on this auction, with 64% of the total notional going to Dealer syndicate, and the balance or 13.5% going to Direct Bidders, also a big drop from the 19.2% in May.

Totally not good. They need to do QE3 or it's gonna be kaboooom.

Horrible 5 Year Auction Sends Treasury Complex Into A Tailspin, 5 Year Yield Surges 22 Bps In Two Days

It has been a long time since we had seen a 5 Year auction as ugly as today's: printing at a 1.615% high yield, the 5 Year had a 3.5 bps tail off the bat to the 1.58% WI where it was trading before. The internals were just as ugly, with the Bid To Cover coming at 2.59 a plunge from May's 3.20, and the lowest since June 2010. Not surprisingly, Indirect interest evaporated once again, tumbling from 47.1% to just 37.6%, with Primary Dealers having to take up more than half, or 52.1%, and the remainder going to Direct Bidders.

In the meantime, the 5 Year yield has surged from 1.35% yesterday to 1.5727%, a mindnumbing move.

And so it begins. They need QE3 or else... it already started.