Effect of QE2 ending

[trading1]

Quote from Ash1972:

Agreed. We need QE3 because QE 1 and 2 have been so brilliantly successful

That's what I think many people believe. The Fed seems to be voicing something different.

 

[Ash1972]

Quote from trading1:

That's what I think many people believe. The Fed seems to be voicing something different.

I hope my sarcasm didn't go undetected...?

 

[trading1]

Quote from Ash1972:

I hope my sarcasm didn't go undetected...?

Of course not, I was actually addressing it. IMO, theres alot of scarcasm on the topic, thats fine and good. But it seems that traders are too willing to believe the scarcastic arguments rather than the literal ones. The Fed can't argue sarcastically, and IMO, I think their comments are being taken at a discount.

 

[Ash1972]

The point is, the Fed needs to stop QE for purely selfish reasons, i.e. any more of it will send it bankrupt. Therefore, the best and most face saving way out is to claim that it has been a success, so we don't need any more.

I doubt the Fed will ever act against its OWN interests.

 

[trading1]

Quote from Ash1972:

The point is, ...

Point's well made.

 

[luisHK]

Quote from trading1:

Of course not, I was actually addressing it. IMO, theres alot of scarcasm on the topic, thats fine and good. But it seems that traders are too willing to believe the scarcastic arguments rather than the literal ones. The Fed can't argue sarcastically, and IMO, I think their comments are being taken at a discount.

Same feeling here, and a bit worried of the market reaction once faced with the end of QE and worse, increase of ST interest rates. Inflation worries seem to be escalating in the media and the fed might need to fight it. Several speeches from fed members definetely point to this directin.

 

[ammo]

Quote from Ash1972:

Three points:

1) Since QE2 was announced last Summer, long bond prices have fallen like a rock. So much for intervention.

2) There is growing opposition both inside the Fed and politically to even allowing this round of QE to finish.

3) Monetizing other people's debt """"""will eventually drive the Fed bankrupt""""". It is a private corporation with shareholders who will not let it go bust.

NOW what do you think will happen?

may already be bankrupt,will keep playing their cards til house /senate catch on....when;s the last time they caught anything...madoff?

 

[RiceRocket]

End of qe 2 will be lower treasury yields, as well as lower commodity and stock prices.