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How much do stocks need to slide this week for a QE3 'hint' on Friday?
invite response
2011 Aug 21, 4:16pm 3,177 views 11 comments
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When do you want it start? The Chairman already showed his hand saying interests rates will remain depressed until 2013.
middleman
2011 Aug 22, 2:13am
No doubt Fed is already employing some form of "QE" (keeping interest rates low. buying treasuries, etc). They don't want to give it a name, because the last two didn't work. If they give it the name QE3 and it fails [again], it'll be catastrophic.
However, not naming the stimulus will render it useless. The general public and Wall Street need a name to go with a face when it comes to stimulus plan.
Catch 22....
uomo_senza_nome
2011 Aug 22, 2:39am
The Fed is stuck in a credibility trap. I wouldn't expect any more QE because they have to save their face. Everyone knows the last 2 QE's did not work for the middle class.
terriDeaner
2011 Aug 22, 4:32am
US markets up ~1% right now. Maybe because of overnight developments in Libya and the weak-but-not-catatrophic Chicago Fed Index...
The Fed is stuck in a credibility trap.
True. So like middleman says, they'll likely need to do (or extend) some sort of 'QE-lite' to give the appearance of doing something, without actually doing anything.
In my mind QE3/lite is FAR more of a political choice than an economic one at this point in time.
However, not naming the stimulus will render it useless. The general public and Wall Street need a name to go with a face when it comes to stimulus plan.
Catch 22....
Not necessarily if the establishment is going to hang Benny out to dry next spring/summer (Obama) or next fall (?). Then they can call it whatever they want. Kind of reminds me of the Rumsfeld exit right after the 2006 elections...
Vicente
2011 Aug 22, 5:00am
I'm not waiting. Picked up AAPL, SBUX, LINE here.
Used about 40% of my available cash, leaving some room for additional purchases if there's further drop.
Everyone knows the last 2 QE's did not work for the middle class.
True, but the Chairman said rates will remain depressed for two more years. The Fed will have to engage in additional easing to make that happen at the same that position is losing votes in the FOMC.
terriDeaner
2011 Aug 23, 2:19am
Richmond Fed Index was miserable this morning. Looks like QE3 is now getting priced in... DJIA up almost 2%.
terriDeaner
2011 Aug 25, 5:08am
Are stock market investors spooked? No QE3 tomorrow?
Bernanke May Forgo Easing as Data Point Higher
http://www.bloomberg.com/news/2011-08-25/bernanke-signaling-no-qe-backed-by-data-from-prices-to-freight.html
DJIA down ~1.4%
Was this presaged by commodities investors and the gold market's sharp decline this week?
Asian markets already in the red as of this post. US futures down ~0.5%. I'm not sure what funky business is on the horizon for the week, but I'm waiting for a drop below the almighty 10K threshold (DJIA) before any hint of QE3.
Note that this year's Jackson Hole speech is coming up this Friday - last year's speech telegraphed QE2.
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