He just gave onshore investors one trillion reasons to sell stocks and buy treasuries. He will also put off offshore investors by exchange rate volatility and will want to avoid dollar denominated assets. Every investor is p*ssed the rules have been changed for the n-th time, even if they managed to make money the last couple of weeks. Everyone wants stability and predictability not a headless chicken running around manipulating market prices.
i thought it was me!!! i feel instantly better with your post. i was sure it was me that had no frickin idea what these guys are doing!!! now i just have to giure out what to do now!
A policy measure of this magnitude should have caused a SPX pop of at least 50 points, instead it went up by just 16 points, almost a non event. The world will be mulling the ramifications of this monetary nuclear bomb over the next few days. There will be several changes of trend.
Of course they know very well what they are doing, they are protecting their inner circle of wealth and power at the expense of John Q Public.
Quant easing should of been expected going into this release giving that they warned they were considering it in January. The total amount they are going to buy is what shocked me.
This move will obviously give short term traders the knowledge that they can buy treasuries because there is great big new buyer behind them. A huge new buyer. As far as this helping the economy. I don't think so. Whatever help this move gives to rates will be more than drowned out, imo, by the uncertainty of just what the heck the gov't is going to do next. What business that is currently downsizing is going to reverse and start hiring people knowing that just about anything could happen at any time. This congress and this Fed is willing to do whatever feels good at the moment regardless of long term consequences. Don't look too good, folks.
The U.S. has fallen into the time old strategy of 'inflate or die.' Basically, this strategy is an overt attempt to screw over all creditors, foreign and domestic, as each dollar loaned to the U.S. will be paid back in dollars worth vastly less in real purchasing power. No one knows if the U.S. can even reflate asset prices, given the death spiral of deflation gripping the globe, no matter how insanely the federal reserve 'expands its balance sheet,' nor no matter how much stimulus the U.S. government ushers forth. It's all a shot in the dark at this point, and Bernanke is a disaster.