Fed Launches QE3

[iamwhatiseem]

It should be noted - in all due respect to Zander - that the deflationists have been incorrect. Clearly, the money printers have won. And if we get inflation or hyperinflation out of it, asset prices will rise. Cash will lose its value. If we're going to have inflation and no response from the central bank, stocks and gold are going to go higher.

Hey Toro...something to think about...only a tiny-tiny portion of the country earns their living via the markets. As a B2B business that sells products to all walks of industries - people are dying out here.
I use to get an auction notice in the mail of a like business closing their doors maybe 4-5 times a year before the crash. Then I was getting them - seriously - 2-3 a week in 2009 and 2010. But then the closings slowed. Until this year. I am getting about 4-5 a month currently.
August was shit. September is a little better...but October is looking like crap again. Something is in the air.
I am glad you feel good that your investments are finally coming back...but the gains you see now is pure cotton candy. I also believe that the markets will likely reach 15000...maybe higher. But this time when it falls...there will be no 2009.
(BTW - honestly I am astounded that you have not done well since 2011...WTF man?...the market is up 3000 points since 2011 - BEFORE the 500 plus QE3 bubble...maybe you need to switch firms?)

 

[expat_panama]

...only a tiny-tiny portion of the country earns their living via the markets.

--and while only a teeny tiny teensie weinsy portion of the country makes a living in banks, and virtually all Americans have accounts and earn interest. Most Americans own stocks directly or with mutual funds, and the vast majority own stocks indirectly through trusts pension plans.

 

[william the wie]

It should be noted - in all due respect to Zander - that the deflationists have been incorrect. Clearly, the money printers have won. And if we get inflation or hyperinflation out of it, asset prices will rise. Cash will lose its value. If we're going to have inflation and no response from the central bank, stocks and gold are going to go higher.

Even though I have mini S&P index calls and puts I have more money in GLD and SLV. The news from Australia and China sounds grim. Are you buying out of the money January index puts to cover downside risk? If so, I have no advice because it sounds like you are takung reasonable pre-cautions, if not I think Zander has a point even with velocity and multiplier in the toilet.

 

[iamwhatiseem]

...only a tiny-tiny portion of the country earns their living via the markets.

--and while only a teeny tiny teensie weinsy portion of the country makes a living in banks, and virtually all Americans have accounts and earn interest. Most Americans own stocks directly or with mutual funds, and the vast majority own stocks indirectly through trusts pension plans.

Your point?
Most Americans own stocks in the same manner that most forests have mushrooms....with equal involvement. Hell - I would wager that 90% of 401k and Mutual Fund "investors" -- to this day-- have no idea to the extent the financial system is a mirage.
Earn interest???? Since when??? And when will a savings account earn appreciable interest again???...maybe 2030???

Seriously?

 

[william the wie]

...only a tiny-tiny portion of the country earns their living via the markets.

--and while only a teeny tiny teensie weinsy portion of the country makes a living in banks, and virtually all Americans have accounts and earn interest. Most Americans own stocks directly or with mutual funds, and the vast majority own stocks indirectly through trusts pension plans.

Your point?
Most Americans own stocks in the same manner that most forests have mushrooms....with equal involvement. Hell - I would wager that 90% of 401k and Mutual Fund "investors" -- to this day-- have no idea to the extent the financial system is a mirage.
Earn interest???? Since when??? And when will a savings account earn appreciable interest again??? 2020...maybe 2030???

Seriously?

2023 is the way to bet based on age related spending. But the more I look at cashflow in reproductive technology the more convinced I am that this correction is due to the sypilis pandemic of 1494-1942 seriously tweakubg reproductive neurology. Now that it is over the untweaking has begun and that is making econometrics less effective. So even 2030 might be premature.

 

[Middleoftheroad]

Your honesty goaded me into looking because for quite a while I've not wanted to see that stat.


Huh. Relieved to say I'm up one percent higher than I was on Jan. 1, 2011!

Good for you.

I was down over 8% last year and am up 5% this year. I've never had a two year stint as bad as this. My only condolence is that a lot of really smart money have struggled over the past two years.

But I think we're going back to test the all-time highs. That's what will happen if past patterns of QE play out over the next few months.

So will you hire me if I can prove I am up 20% since january '11?

 

[Toro]

It should be noted - in all due respect to Zander - that the deflationists have been incorrect. Clearly, the money printers have won. And if we get inflation or hyperinflation out of it, asset prices will rise. Cash will lose its value. If we're going to have inflation and no response from the central bank, stocks and gold are going to go higher.

Hey Toro...something to think about...only a tiny-tiny portion of the country earns their living via the markets. As a B2B business that sells products to all walks of industries - people are dying out here.
I use to get an auction notice in the mail of a like business closing their doors maybe 4-5 times a year before the crash. Then I was getting them - seriously - 2-3 a week in 2009 and 2010. But then the closings slowed. Until this year. I am getting about 4-5 a month currently.
August was shit. September is a little better...but October is looking like crap again. Something is in the air.
I am glad you feel good that your investments are finally coming back...but the gains you see now is pure cotton candy. I also believe that the markets will likely reach 15000...maybe higher. But this time when it falls...there will be no 2009.
(BTW - honestly I am astounded that you have not done well since 2011...WTF man?...the market is up 3000 points since 2011 - BEFORE the 500 plus QE3 bubble...maybe you need to switch firms?)

I am the firm. I have not trusted this rally so I've done poorly. I did well during the Financial Crisis but have been too cautious over the past 21 months.

I am not saying that things are going well. What I'm saying is that the Fed has been very clear about what it intends to do, which is good for stocks, real estate, gold, etc. It may be a sugar high, but it may not, I don't know. What I do know is that the market wants to go higher, has behaved a certain way when the authorities have turned on the presses, and there is no reason why this will be any different. I expect problems after the election, but right now, the market is talking and I'm listening. You trade the market that is front of you, not the market you want.

 

[xsited1]

Because the first two were so successful. What makes anyone think our problem is high interest rates?
Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates - Yahoo! Finance

It's tricky to know how far this 'sugar rush' will take the markets before the big crash. After more than 35 years of investing, I've got to say my adrenaline rush for riding this house of cards is at an all-time high. The last crash was fairly easy to predict, but not this one. It's like I'm surfing on a tsunami!

 

[EdwardBaiamonte]

It may be a sugar high, but it may not, I don't know.

of course it is. common sense will tell you that inventing new products( what makes an economy grow) involves more than printing money.
There is no free lunch! Wouldn't it be nice if all we needed to do is print money? All economic problems would be solved.

 

[Zander]

So far this "rally" has been like a fart in a mud puddle aka a Polish bubble bath....

 

[The Rabbi]

So far this "rally" has been like a fart in a mud puddle aka a Polish bubble bath....

As I pointed out several posts ago, stock prices ultmately price in expectations for company earnings. Who here thinks earnings will be higher the next quarter or so? No one.

 

[iamwhatiseem]

So far this "rally" has been like a fart in a mud puddle aka a Polish bubble bath....

There is one point that makes all other points null and void:
The stocks today are very near all time highs
The stocks today are actually doing better than 2005-07...when the economy was f*cking beautiful. Unemployment was less than half what it is today, social programs were at their lowest, manufacturing, housing, auto, technology - ALL were having a f*cking blast in an economic party.
Yet...somehow, today when everything else is still deep in the abyss - the stock market is on fire. Why is that? Because the government is propping it up with a mirage of money printing and handing the finiancial system $100's billions of our money straight into their pockets.
This has to end.
And what will happen when the government stops giving them our money?

 

[Toro]

So far this "rally" has been like a fart in a mud puddle aka a Polish bubble bath....

As I pointed out several posts ago, stock prices ultmately price in expectations for company earnings. Who here thinks earnings will be higher the next quarter or so? No one.

Stock prices go up for many reasons in the short run.

 

[The Rabbi]

So far this "rally" has been like a fart in a mud puddle aka a Polish bubble bath....

As I pointed out several posts ago, stock prices ultmately price in expectations for company earnings. Who here thinks earnings will be higher the next quarter or so? No one.

Stock prices go up for many reasons in the short run.

Absolutely. But in general and typically they reflect earnings expectations.
They also go down in the short run for many reasons. And a lot faster than when they go up.

 

[thereisnospoon]

So far this "rally" has been like a fart in a mud puddle aka a Polish bubble bath....

There is one point that makes all other points null and void:
The stocks today are very near all time highs
The stocks today are actually doing better than 2005-07...when the economy was f*cking beautiful. Unemployment was less than half what it is today, social programs were at their lowest, manufacturing, housing, auto, technology - ALL were having a f*cking blast in an economic party.
Yet...somehow, today when everything else is still deep in the abyss - the stock market is on fire. Why is that? Because the government is propping it up with a mirage of money printing and handing the finiancial system $100's billions of our money straight into their pockets.
This has to end.
And what will happen when the government stops giving them our money?

BINGO!...I have referred to the Quantitative Easing schemes as "printing fake money"..
Of course the Obamabots are just giddy with glee. Meanwhile other major currencies rise vs the weaker US Dollar.
Further proving the fact that every time government steps in with an attempt to manipulate the marketplace, disaster is usually not far behind.
This manipulation has no recognition of party lines. Both Nixon and Carter attempted wage and price controls with negative results.

 

[EdwardBaiamonte]

So far this "rally" has been like a fart in a mud puddle aka a Polish bubble bath....

There is one point that makes all other points null and void:
The stocks today are very near all time highs
The stocks today are actually doing better than 2005-07...when the economy was f*cking beautiful. Unemployment was less than half what it is today, social programs were at their lowest, manufacturing, housing, auto, technology - ALL were having a f*cking blast in an economic party.
Yet...somehow, today when everything else is still deep in the abyss - the stock market is on fire. Why is that? Because the government is propping it up with a mirage of money printing and handing the finiancial system $100's billions of our money straight into their pockets.
This has to end.
And what will happen when the government stops giving them our money?

BINGO!...I have referred to the Quantitative Easing schemes as "printing fake money"..
Of course the Obamabots are just giddy with glee. Meanwhile other major currencies rise vs the weaker US Dollar.
Further proving the fact that every time government steps in with an attempt to manipulate the marketplace, disaster is usually not far behind.
This manipulation has no recognition of party lines. Both Nixon and Carter attempted wage and price controls with negative results.

yes last year the Fed bought 77% of Federal debt thus allowing Barry to issue more and more debt. Without the Fed doing this the party would be long over and we'd be on the road a responsible fiscal policy much as Europe appears to be.

 

[DSGE]

There is one point that makes all other points null and void:
The stocks today are very near all time highs
The stocks today are actually doing better than 2005-07...when the economy was f*cking beautiful. Unemployment was less than half what it is today, social programs were at their lowest, manufacturing, housing, auto, technology - ALL were having a f*cking blast in an economic party.
Yet...somehow, today when everything else is still deep in the abyss - the stock market is on fire. Why is that? Because the government is propping it up with a mirage of money printing and handing the finiancial system $100's billions of our money straight into their pockets.
This has to end.
And what will happen when the government stops giving them our money?

BINGO!...I have referred to the Quantitative Easing schemes as "printing fake money"..
Of course the Obamabots are just giddy with glee. Meanwhile other major currencies rise vs the weaker US Dollar.
Further proving the fact that every time government steps in with an attempt to manipulate the marketplace, disaster is usually not far behind.
This manipulation has no recognition of party lines. Both Nixon and Carter attempted wage and price controls with negative results.

yes last year the Fed bought 77% of Federal debt thus allowing Barry to issue more and more debt. Without the Fed doing this the party would be long over and we'd be on the road a responsible fiscal policy much as Europe appears to be.

Thoroughly idiotic since the yields even at the long end of the curve, which the Fed can't control, are at an all time low. The Fed has nothing to do with "the party", the government can borrow so cheap because everybody in the world wants to hold Treasury securities.

 

[editec]

All that liquidity has to go somewhere.

Seems pretty clear its going into the market.

And as the real estate market seems to be slowly turning around, the whole point of easing seems to be doing the job it was intended to do.

 

[Toro]

BINGO!...I have referred to the Quantitative Easing schemes as "printing fake money"..
Of course the Obamabots are just giddy with glee. Meanwhile other major currencies rise vs the weaker US Dollar.
Further proving the fact that every time government steps in with an attempt to manipulate the marketplace, disaster is usually not far behind.
This manipulation has no recognition of party lines. Both Nixon and Carter attempted wage and price controls with negative results.

yes last year the Fed bought 77% of Federal debt thus allowing Barry to issue more and more debt. Without the Fed doing this the party would be long over and we'd be on the road a responsible fiscal policy much as Europe appears to be.

Thoroughly idiotic since the yields even at the long end of the curve, which the Fed can't control, are at an all time low. The Fed has nothing to do with "the party", the government can borrow so cheap because everybody in the world wants to hold Treasury securities.

Over half of the Treasury recent supply has been bought as the Fed has extended the duration on it's portfolio. So the Fed does greatly influence the long end of the curve. Even if the Fed is not engaged in QE, it still has significant influence on the long end because of the term structure premium that investors are willing to receive further out on the curve.

 

[DSGE]

All that liquidity has to go somewhere.

Not really, it can just sit in excess reserves earning 25 basis points.