Global Macro Trading Journal

Quote from ralph00:

They were just trying to create a bounce in the euro to allow banks to unload even more.:p
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Exactly ... wait till its over and punt away... such a waste of effort.
 
Quote from Martinghoul:

Part of job description, I'm afraid, achilles... And yes, sure, things are fluid and minds might change, but it's quite interesting that the objections that are put forth by the hawks are of the right sort. Specifically, they are pointing out that the cost/benefit analysis of QE suggests that it's just not worthwhile in a deleveraging economy such as the US. It's interesting how the whole idea of a "balance sheet recession" filters through the establishment.
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Martinghoul I value your opinion (thanks for pointing out months ago that JPY might not tank for years), but I am wondering if your views on QE3 have changed in light of Hilsenrath's WSJ piece today?

Also, given you agree that 'things are fluid and minds might change', what kind of unemployment rate (or other economic stat) and stockmarket level would you think that the chances of QE3 increase to 51% or higher?
 
Quote from m22au:

Martinghoul I value your opinion (thanks for pointing out months ago that JPY might not tank for years), but I am wondering if your views on QE3 have changed in light of Hilsenrath's WSJ piece today?

Also, given you agree that 'things are fluid and minds might change', what kind of unemployment rate (or other economic stat) and stockmarket level would you think that the chances of QE3 increase to 51% or higher?
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Hi guys, I'm new here but have been following (and enjoying) the thread for quite a while.

If I can intrude into the discussion, I don't think they would implement QE3 as a mere solution to unemployment...QE and QE2 did nothing in terms of this.
In his testimony in front of the congress, Bernanke said clearly that a new QE would be considered in case deflation picks up.
And stockmarket's behaviour is not directly part of Fed's mandate.

Also in order to carry our another QE, I guess they would need quite some cash, which I am not sure they have at the moment.
 
Quote from m22au:
Martinghoul I value your opinion (thanks for pointing out months ago that JPY might not tank for years), but I am wondering if your views on QE3 have changed in light of Hilsenrath's WSJ piece today?

Also, given you agree that 'things are fluid and minds might change', what kind of unemployment rate (or other economic stat) and stockmarket level would you think that the chances of QE3 increase to 51% or higher?
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I don't know, m22, to be honest... IMHO, Hilsenrath's story doesn't change much. Moreover, I don't think it's a matter of unemployment/stock mkt. The very first test is to determine whether the current situation is a "soft patch" and we're in for a bounce in Q3 or whether this is for real. So I am pretty sure the Fed will sit on its hands until things become clearer. Secondly, I do believe that there is a growing awareness at the Fed that QE2 didn't stimulate the right mix of nominal and real growth. I could be wrong, but I do think that the threshold for the Fed to engage in another QE is a lot higher and that they may try to come up with other solutions. Obviously, if there's a Eurocalypse and there's a liquidity situation, everything changes.
 
Quote from Martinghoul:

I don't know, m22, to be honest... IMHO, Hilsenrath's story doesn't change much. Moreover, I don't think it's a matter of unemployment/stock mkt. The very first test is to determine whether the current situation is a "soft patch" and we're in for a bounce in Q3 or whether this is for real. So I am pretty sure the Fed will sit on its hands until things become clearer. Secondly, I do believe that there is a growing awareness at the Fed that QE2 didn't stimulate the right mix of nominal and real growth. I could be wrong, but I do think that the threshold for the Fed to engage in another QE is a lot higher and that they may try to come up with other solutions. Obviously, if there's a Eurocalypse and there's a liquidity situation, everything changes.
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thank you for your analysis Martinghoul
 
"Could There Really Be A Recession Risk In Germany?"
http://fistfulofeuros.net/afoe/could-there-really-be-a-recession-risk-in-germany/

"Suddenly People Are Starting To Ask: How Screwed Is Germany?"
http://www.businessinsider.com/german-recession-odds-2011-8

"It's all the more reason for Germany to keep bailing out its neighbors. A Eurozone without the PIIGS, or a a Germany on the Deutsche Mark would see a much stronger currency and much poorer neighbors, killing exports."

I understand that logic. But I'm swayed by the other side of it, ie, if the German economy is also heading for a recession, then there may not be as much political room for German politicians to help out Spain and Italy.

German citizens might rightly ask "If German unemployment rises, then why should the govt help out Spain and Italy when it should help out its domestic economy?"
 
Quote from m22au:
thank you for your analysis Martinghoul
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No problem...

FWIW, there's talk (based on some comments by Brian Sack) about the possibility of the Fed changing the maturity composition of its balance sheet (selling shorter-dated USTs to buy longer-dated ones). So the Fed might do a big flattener. This was from a recent WSJ article. Otherwise, they might lower the rate of IOER.
 
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