QE3 looming

rblong2us

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thought i had covered that, Ancona

"they have to be able to pretend they are solvent by holding a % of their nominal loan book"

It just seems so simple to give em even more on the condition they DONT hang on to it, yet whatever they can earn from it they keep.

And the % they are supposed to hold is utterly irrelevant if they are deemed too important to fail .........
 

escobar

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my gut tells me with stocks up they will wait for a pullback or another mini disaster to do it.
 

swissaustrian

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OK, the QE3 trade has clearly started as of today (abysmal unemployment numbers). Now the speculators will return to pm markets, making them much more volatile over the next three weeks (FOMC meets June 19-20). If the FED doesn't deliver, we might see a huge selloff in pms (like on 2-29). But I'm sure they'll be higher than today by then. The joker is the USD. If it appreciates much more, pms might not go up that much in USD terms. But besides that we should have bottomed out at 1530 / 26.2 for the next three weeks.
 

ancona

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Futures are off almost 200, but I have seen that in hte morning and a vapor rally at 3:30 bringing the market all the way back to even. We'll see, but today looks like rough water sailing with pretty strong headwinds.
 

swissaustrian

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The turnarround in stocks has already begun. European stocks are off more than 1% of their 8:30 am lows. EUR/USD is up 0.4% from it's lows.

It's gonna be a green day for stocks today ;) (j/k, probably not)
 

pmbug

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Just got an email from Graham Summers:
June 1, 2012

Sorry Folks, QE 3 Ain't Coming... Even the Fed Doves Admit It

Once again the US economy is tanking and everyone is talking QE 3. Sorry folks, it ain't coming. Bernanke said point blank that it was less attractive as a monetary tool as far back as May '11!!!
Q. Since both housing and unemployment have not recovered sufficiently, why are you not instantly embarking on QE3? -- Michael A. Kamperman, Waco, Tex.

Mr. Bernanke: "Going forward, we'll have to continue to make judgments about whether additional steps are warranted, but as we do so, we have to keep in mind that we do have a dual mandate, that we do have to worry about both the rate of growth but also the inflation rate...

"The trade-offs are getting -- are getting less attractive at this point. Inflation has gotten higher. Inflation expectations are a bit higher. It's not clear that we can get substantial improvements in payrolls without some additional inflation risk. And in my view, if we're going to have success in creating a long-run, sustainable recovery with lots of job growth, we've got to keep inflation under control. So we've got to look at both of those -- both parts of the mandate as we -- as we choose policy"
http://economix.blogs.nytimes.com/2011/04/28/how-bernanke-answered-your-questions/

Even the biggest monetary doves are now agreeing with Bernanke. Bill Dudley, of the New York Fed, who's been braying for more QE for over a year had the following to say on Wednesday:
Fed's Dudley: If Growth Continues, More Fed Stimulus Unwarranted

The leader of the Federal Reserve Bank of New York repeated Wednesday his expectation that the U.S. central bank will not need to provide additional stimulus to the economy, even as he left the door open to further action.

Acknowledging the options before the central bank each have costs and benefits, New York Fed president William Dudley said "as long as the U.S. economy continues to grow sufficiently fast to cut into the nation's unused economic resources at a meaningful pace, I think the benefits from further action are unlikely to exceed the costs."
http://online.wsj.com/article/BT-CO-20120530-712819.html


Folks if you're buying into the whole QE 3 is coming on June 6th argument you're out of your minds. This is an election year. If the Fed announces QE 3 now, Obama is done. Do you really think this is going to happen when even the Fed's biggest doves are noting that the consequences of QE outweigh the benefits?

With that in mind, Europe will be collapsing as no one (not the ECB, not the IMF, not the ESM, and not even the Fed) will be stepping in to prop it up. The reason? NONE of these entities have the funds (Europe's banking system is $46 trillion in size) to do so (bank runs are pushing leverage levels even higher in Spain, Greece and elsewhere).

Moreover, the political environments for their organizations (the US for the Fed and IMF and Germany for the ECB and ESM) will not permit a massive intervention. If the Fed cranks up the printing press, Obama loses any hope of re-election. If the ECB cranks up the printing press, Germany walks. End of story.
...
 

swissaustrian

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This Graham Summers guy is also posting on ZH (as "Phoenix Capital Research") and he has been calling an "imminent" collapse since late 2010 over and over again.
He also gets a lot of facts wrong, e.g. confusing the EU (European Union = supranational organization of nationstates) with the Eurozone (monetary union which does NOT unite all EU member states, e.g. Great Britain, Sweden, Denmark, the Eastern members) repeatedly.
In this email he says that "the whole QE 3 is coming on June 6th argument" is flawed. I agree, because the FOMC meets 2 weeks later, on June 19-20: http://www.federalreserve.gov/whatsnext.htm
This is typical for Mr Summers, he can't do simple research it seems.

I'm with Jim Rickards (see video above: http://www.pmbug.com/forum/f4/qe3-looming-32/index4.html#post7468 ), either the FED announces QE3 in June or they won't act until after the election. The August meeting is too close to the election.
 

pmbug

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Pretty much everything Mr. Summers posts or emails is an ad for his investment newsletter, so definitely take with a grain of salt. What I thought was interesting was his view that QE3 would be bad news for Obama politically. Maybe the initial annoucement will cause some grumbles in the small segment of the population that cares about a sound dollar, but I believe that the heroin-like high from new money would carry good favor politically in November. Anyway, I thought it was interesting for a contrarian take.
 

swissaustrian

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Coxe also discussed QE3: “The payroll number, what this did was remind people that the figure who said the US isn’t doing very well at all was Ben Bernanke. The market quite correctly assumes that this is going to mean that he’s going to be forced into QE3. He won’t be fighting it.
But he’s got members of the Fed Board who, up until now, have opposed him because they thought the economy was stronger. So we have the combination of the eurozone, which may find a way to try to get some gold in to save its system, and we now have the reasonable prospect of money printing over here. In other words, the case for gold is starting to get quite wondrous.”
http://kingworldnews.com/kingworldn...mergency_Fed_Meeting_&_Gold_Backed_Bonds.html
 

ancona

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After Friday, I believe we will see some contagious fear trading this week. I have a very clear memory of 4, 5, 6 and eve3n 700 point drops on the Dow just a few short years ago, and the problems plauging the system have only grown since then. Nothing substantive has been fixed.

Every single bit of positive legislation aimed at the banks has been successfully watered down and even completely cock blocked by the banking loibby, who poured billions on to K street.

It will take a full on catastrophic crash of the markets for the Fed to respond in any meaningful way.
 

pmbug

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Goldman Sachs setting QE expectations and ZH comments on the likely timeline ...

Goldman's Jan Hatzius ...: "Our confidence that the FOMC will ease policy once more at the June 19-20 meeting has also grown... Our baseline remains that Fed officials will purchase a mixture of mortgages and long-term Treasuries, financed via balance sheet expansion and possibly coupled with an extension of the forward guidance into 2015. ..." Well, if anything, global or Fed-based easing will most likely not come before the Greek June 17 elections - after all Greek confidence has to be crushed heading into the Euro referendum, and the only way to do this is by facilitating collapsing markets. So those hoping for a groundbreaking ECB announcement on June 6 will be disappointed. But June 20? That is fair game. ...
http://www.zerohedge.com/news/crunch-time-goldmans-confidence-qe-will-be-announced-june-20-has-grown
 

DSAbug

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So since goldman is saying it's going to happen, do we get short going into the meeting?
 

bushi

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Just got an email from Graham Summers:
Bernanke said:
Q. Since both housing and unemployment have not recovered sufficiently, why are you not instantly embarking on QE3? -- Michael A. Kamperman, Waco, Tex.

Mr. Bernanke: "Going forward, we'll have to continue to make judgments (...) but also the inflation rate...

"The trade-offs are getting -- are getting less attractive at this point. Inflation has gotten higher. Inflation expectations are a bit higher. It's not clear that we can get substantial improvements in payrolls without some additional inflation risk. And in my view, if we're going to have success in creating a long-run, sustainable recovery with lots of job growth, we've got to keep inflation under control.
Wait a second, does that above mean, that mr. Bernanke assumes, that whatever free-money they provide to "economy", it ends up as payrolls increases??? Is he mad? Folks down the pecking order (re: payrolls recipients), don't even get a whiff at that money, as it is all being used to perpetuate the robbery of the savers/middleclass by the big financials. Let me make it clear: payrolls NEVER catch up with inflation. IF you need a proof, just look at the average '50 middle-class family (and before), where only father was a single bread-winner (and the family was better off, financially). Since ten, this whole disposable income/standards of living/savings things, are only going down, on average (and studies have been done, showing this clearly).

I always held the academics, who are this completely disconnected from the reality, in my deepest contempt.
 

DSAbug

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well.. To say payrolls never catch up with inflation isn't accurate. There are periods where payrolls increase in real terms but we certainly aren't living in that period today.
 

bushi

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...well I meant more along the lines of mean, not average , and in the reasonably recent history (like quoted).

Wysyłane z mojego GT-I9100 za pomocą Tapatalk 2
 

pmbug

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ancona

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These "leaks" are getting a bit tiring. If the Fed does anything big before the election, the dihmmicrats can kiss their 'collective' asses goodbye. So, in that sense anyway, I say bring it on!
 
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