QE, not QE that is the question.

Discussion in 'Trading' started by adadadog, Jun 3, 2012.

  1. Given the dismal us employment number and looming global economic recession, it is reasonable to expect FED QE in June 19th meeting,
    but Obama has pissed off Jews by his hesitation of waging war with Iran. There is even open calling of his assassination in Jewish news paper( ilegal? not for jews). Jews are not likely to help him get elected with new QE.
    That is my bet, but not ready to put money on it.
  2. No, there will be no QE until after elections. We need the markets to continue to stay low to keep public sentiment against Obama until the elections then we can go back to QE3.

    Obama is dangerous and must not be reelected...
  3. bgp


    what would another magical QE accomplish ? besides more substandard living for the common person and reinflating inflation . who is the real beneficary of this shit ? wallstreet ? bankers ? frik 'in crooks ! i've never heard of buying my way out of debt . if that was true why is every time i borrow money it's listed as a liability against my dwindling assets ? debt is not an asset .

  4. U.S. dollar is little different, QE can shift debt to foreign countries, a form of tax in the World.

    I am just stating what the Wall Streeters expecting, 50%+ chance of QE.
  5. We are in the process of having an incredible amount of easing. Not only is Europe buying bills and the two year but they are pushing down yields on the 10 year and flooding our banks with demand deposits.

    At this point, further Fed easing is likely to bump up against an age old reality -- diminishing returns become a near certainty. Since Europe is already the surrogate for QE3 (or QE4 depending how you figure it) we are already experiencing the diminishing returns.

    The fastest way to reflate is for the federal government to immediately push out a trillion or so to the states so they can rehire teachers, cops etc. and follow that up with another two trillion over the next three year for roads, bridges, electrical grid etc.

    The reality is there are two choices -- reflate or bite the bullet. Politicians do not bite bullets and, at this late date, buying another round of inflation will be massively expensive. There will be a day of reckoning and we all know that. The question is whether it is around the next corner -- within the next three to six months -- or a few years off ... maybe three or five but almost certainly not ten.

    Is there anyone here that believes we can overcome the West's years of binging without massive dislocation -- what has been called "The Reset".
  6. plyka


    QE is irrelevant and of zero consequence. The only thing which matters to the economy is the FED FUNDS RATE TARGET. Quantitative easing is really meaningless.

    Assume X amount of money for the FED funds rate to be at X%, their target. If you go out and buy whatever with freshly printed money (QE), the FED funds rate will start to fall below their target, and they will automatically go out in the market and sell gov bonds (reduce money in circulation) in order for the FED funds rate to rise back up to their target.

    Basically QE is meaningless, unless it gives them an opportunity to buy different assets, other than gov bonds. Even here, the money supply should not be affected by QE at all, as it is neutralized on the other end by open market operations. So i really see no difference between QE and no QE.
  7. Zero chance that QE/LTRO will happen before Greek elections.

    And it will be LTRO or something else from the Euro's first as their house is burning down ~

    I can't see QE until after the elections unless there is an epic disaster.
  8. gtor514


    Hasn't the bond market provided all the QE for the FED? Interest rates are already at record lows. Maybe they can purchase some mortgage backed securities from banks but it's my understanding that banks are already flush with cash. The limit on my credit card keeps getting increased by my bank. The banks can't find ways to give money away.

    The most the FED can do is make an anouncement in the hopes it will lift the stock and commodities market and produce some wealth effect. But what good will it do? The market was already at yearly highs just a few months ago, and what good did it do?

    The job market still is bad and growth is non-existent. They just simply cannot fix this economy with monetary policy.

    My bet is the next FED statement says something like "We just don't know what we're doing and can't help you, the US is just plain screwed."
  9. Good point on the bond part. Another reason Fed QE will not be here in June.
  10. bgp


    this article i'm posting is written by tyler durden , this says it all.

    The reality that the global Status Quo has fixed absolutely nothing in four years is finally coming to roost in the global economy. Though there is an endless array of complexity to snare the unwary, the source of instability is both visible and easily understood: too much debt that will never be paid back. Making matters much worse, much of the money that was borrowed--by sovereign governments, local governments, households and private enterprises--was squandered on consumption or malinvestments, and so there are precious few assets or collateral underlying the debt. Even when there is an asset--for example, a vacant house in a vacant development in Spain, or a Greek bond--the market value is considerably lower than the purchase price. The reality is that trillions of dollars, euros, yen and renminbi in phantom wealth will disappear when the losses that have already taken place are finally recognized. Everyone in the world with exposure to the global economy will become poorer in terms of abundant money floating around buying goods and services as credit dries up and deleveraging wipes out trillions of dollars, euros, yen and renminbi of phantom wealth.
    #10     Jun 4, 2012