Global Macro Trading Journal

Quote from Martinghoul:

Well, I do believe it's a bit more nuanced than that, given what's going on in the background. Moreover, I am not sure I am prepared to swallow the convenient story of property prices in Germany rising due to the effects of the "cheap ECB money". IMHO, it actually has a lot to do with flight-to-quality and the need for NDEM-denominated assets (as I think we have discussed earlier in this thread).
More...

Well 1% rates may be low for Germany, just as 0% rates are probably low for Iowa or North Dakota at the moment. Central planning is a tough game.

I think a lot of money is flowing into Germany. I'm adding to it by upping my position RWE.
 
So my goldstock portfolio has gone to flat for the year after being up 20% at some point.

2 ways to look at it, either I lost not selling or I haven't lost year to date on them.

I think I will chose door nr 2 thank you. :D
 
Fed might have to found a loophole here. They can do this OTwist 2 and then if the economy weakens, let the short-term deposits expire, expanding the balance sheet, effectively doing a delayed QE3 without much attention brought to it
 
Quote from Daal:

Fed might have to found a loophole here. They can do this OTwist 2 and then if the economy weakens, let the short-term deposits expire, expanding the balance sheet, effectively doing a delayed QE3 without much attention brought to it
More...

And on the other side of the coin, they might realize considerably less effect from this than from regular QE. You get two effects from QE, the "I have some printed money now which I must put somewhere, so I'll bid for stocks/gold/oil" (currency debasement) and "the Fed is coming in to rescue the economy and support stocks, so my fears are unfounded" (boost to confidence/reach for yield/etc). With stealth QE you'd lose the second effect, perhaps significantly dulling the benefits of the program, while Fed balance sheet "room" in effect represents a finite resource - and stealth QE would consume this resource just as quickly as the regular variant.

This is not to say they won't do it but it could turn out to be a big misstep.
 
Quote from Specterx:

And on the other side of the coin, they might realize considerably less effect from this than from regular QE. You get two effects from QE, the "I have some printed money now which I must put somewhere, so I'll bid for stocks/gold/oil" (currency debasement) and "the Fed is coming in to rescue the economy and support stocks, so my fears are unfounded" (boost to confidence/reach for yield/etc). With stealth QE you'd lose the second effect, perhaps significantly dulling the benefits of the program, while Fed balance sheet "room" in effect represents a finite resource - and stealth QE would consume this resource just as quickly as the regular variant.

This is not to say they won't do it but it could turn out to be a big misstep.
More...

I think thats right. They will argue that what matters is how many bps they take off the back end of the curve and how much that will raise GDP in some models. But to me expectations are more important than whatever small impact it will have on rates
 
You must log in or register to reply here.
Back
Top