Notice the market acting like a kid in a candy store!!!

Discussion in 'Wall St. News' started by S2007S, Apr 3, 2012.

  1. S2007S


    Kids want all those sweets when they walk into a candy store and wallstreet still wants all that QE and trillions of dollars!

    As soon as the minutes were released and wallstreet finds out that BUBBLE ben bernanke and friends are less likely to push another round of stimulus the market dips. What does that tell you, it tells you that this market is only pushing higher because of these cheap liquidity injections by BUBBLE ben bernanke, the market is worthless without it. What they can do is push stocks down 20-30% and hope for more liquidity and QE by BUBBLE ben bernanke because thats the only thing this market knows.

    Fed Appears Less Keen On Further Easing: Minutes
    Reuters | April 03, 2012 | 02:10 PM EDT

    Federal Reserve policymakers appear less keen to launch a fresh round of monetary stimulus as the U.S. economy improves, according to minutes for the central bank's March meeting.

    The Fed policymakers noted recent signs of slightly stronger growth but remained cautious about a broad pick up in U.S. economic activity, focusing heavily on a still elevated jobless rate.

    However, the minutes suggest the appetite for another dose of quantitative easing, so-called QE3, has waned significantly.

    Following the minutes release, U.S. stocks added to losses while U.S. Treasury debt prices turned negative. Meanwhile, the U.S. dollar turned positive versus the euro and gained versus the yen.

    The March meeting minutes noted "a couple" of members thought additional stimulus might be needed if the economy loses momentum or inflation remains too low for too long.

    That contrasted with a much broader characterization in January, when the minutes cited a few members as seeing a possible need for additional easing before long, and others thinking stimulus might be required if economic conditions worsened.

    Still, the Fed remained sober about U.S. economic prospects.

    Members "generally agreed that the economic outlook, while a bit stronger overall, was broadly similar to that at the time of their January meeting," the minutes said.

    The Federal Reserve has expanded its balance sheet to nearly $2.9 trillion and is in the midst of the $600 billion "Operation Twist," in which the central bank is selling some of its shorter-dated securities and buying longer maturities in an effort to drive down long-term borrowing rates. Operation Twist is expected to end June 30.

    The Fed cut rates to near zero in December 2008. Recent news that hiring has been stronger than expected has led many analysts to project the Fed will have to raise interest rates earlier than the late 2014 date it has indicated.

    Last week, Fed Chairman Ben Bernanke said the relatively modest pace of U.S. growth is unlikely to lower the 8.3 percent unemployment rate quickly, and that further stimulative action would remain an option.

    On Monday, Dallas Fed President Richard Fisher told CNBC that the economy is well on its way to recovery and not in need of any more quantitative easing measures, including an extension of the ongoing Operation Twist debt-buying measures.

    He added that the Fed's recent decision to define a specific long-term inflation target of 2 percent was a landmark.
  2. Too big to fails.

    The market is not worthless without QE. Earnings are growing high double digits, so you can't make that argument without coming off as a fruitcake.
  3. S2007S


    The market is totally worthless without QE, if the BUBBLE ben bernanke didnt inject the trillions worth of stimulus as he did the SPX would still be sitting under 800!

    The market and the economy has become to dependent on these money printing games.
  4. I don't see it that way. While big banks and small regionals may have received $16 trillion there were other industries without subsidy growing 20+% in book value every year since 2009.

    It doesn't hold water that this effects anything but commodities and commodity producers and/or refiners. The market's up because there is a cash hoard on corporate balance sheets in excess of $2 trillion, and that's not counting the $5 trillion in individual accounts that could come rushing in. Generally the corporate accounts will have more precise information about any acquisitions or mergers, and that is really what's driving this market.

    The dollar can't go down forever because other countries are printing faster than we are.

  5. So should I buy, sell, or do nuttin'?
  6. With or without QE, the market is fine. It goes up and down like the wheels on the school bus.
  7. Not exactly. Each time the market goes out "on its own" (i.e. post QE1 and QE2) the sell-offs were substantial enough to ensure further rounds of QE or backdoor type monetizing. This latest round of buying came after the Fed's assistance with the European banking system and the announcement of ZIRP thru 2014.

    Basically, each round becomes more unprecedented and without comparison. I can't even imagine the market levels we would be trading at if rates were raised to a historically "neutral" level.
  8. S2007S


    Notice the headline from today.



    This should be the question on everyone's mind, if it isn't than you haven't a clue whats going on in the market place, everyone seems to in make believe land, reality is that the trillions they have pumped into this market have caused equities and commodities and everything else to rise these last few years.

    Can Markets Continue to Rise Without More QE? | April 04, 2012 | 06:40 AM EDT

    The negative market reaction to signs that the Federal Reserve is unlikely to take part in more quantitative easing soon has led to worries that the market rally will fade.

    Markets have rallied this year after the Fed’s Operation Twist and two rounds of liquidity injections from the European Central Bank. Some had expected a third round of quantitative easing from the Fed later this year, but these hopes were dampened by the news that only two of the Fed’s 10 board members backed further easing at its most recent meeting.

    “Markets are only going up because of central banks’ extraordinary measures and the underlining economy is struggling with severe headwinds,” Stewart Richardson, partner at RMG Wealth Management, told CNBC Wednesday.

    “If we don’t get any more QE from the Fed or LTRO from the ECB , markets will take a step back and reassess why they’re going up.”

    He warned that recent U.S. economic data has been buoyed by the weather and seasonal variations, and data in coming months may show “stall speed”.

    Others argue that recent U.S. data suggests that the massive amount of cheap money pumped into the economy has revived it enough.

    Russ Koesterich, chief investment strategist for BlackRock's iShares ETF business is optimistic that the US economy is stabilizing, based on recent news on the labor market and the manufacturing sector – and thinks markets are already pricing in slow gross domestic product growth of around 2 percent for this year. He added that the recovery was “subpar.”

    Profit margins will be key to maintaining the market recovery, Koesterich argues. Many corporates have improved their margins by relatively low wage growth and cheap borrowing costs.

    “Gains will be predicated on margins staying high and marginal GDP growth, rather than the type of monetary expansion seen in the last six months,” he told CNBC Wednesday.

    He predicted that margins will stay high for the next six months to a year.

    “Margins probably will revert in the long term, but in the near term the cost of wages and the cost of rates are likely to stay low,” he said.

    “Corporate margins will be key for several quarters. If we revert back to mean or below, the valuation of equity markets doesn’t look so good. It’s going to be a struggle,” Richardson said.

    Key risks to margins include high energy costs and faster-than-expected wage growth – which could particularly affect companies such as Foxconn, which have large workforces in developing economies.

    High energy costs are more likely to affect margins by reducing consumer spending in the US than by raising companies’ cost bases, according to Koesterich.

  9. I only have one thing to say to what you wrote:


    or you could sell/sell short.

    Or buy bonds.

    Or hold cash.

  10. B.T.D.

    or you could sell/sell short.

    Or buy bonds.

    Or hold cash.
    #10     Apr 4, 2012