QE Cold Turkey
By James "Rev Shark" DePorre
Apr 04, 2012 | 8:40 AM
These people talk about quantitative easing as if they didn't mean to debase the currency over which they have temporary control. --Jim Grant
The old market saying, "Don't fight the Fed" has been working extremely well for about three years. The liquidity created by the Federal Reserve's quantitative easing programs has had few places to go but into stocks and commodities. It has provided an endless bid under the market and provided some of the most lopsided action we've ever seen.
Yesterday, the Fed indicated in the minutes of a recent meeting that it might not be so generous with quantitative easing in the future. It didn't completely cut off the possibility of more QE, but made it clear that there will need to be some economic weakness to justify more.
As everyone with some economic knowledge knows, the danger of quantitative easing is that it eventually leads to inflation. The Fed continues to state it is unconcerned about that issue, but that can't be ignored forever. Indiscriminant printing of more cash will cause problems sooner or later and the market has no choice but to acknowledge that fact -- although it definitely does not want to.
Quantitative easing has been like crack cocaine to this market, and now we are experiencing withdrawal. The supply might not be totally turned off, but it is causing anxiety and concern and it is going to be the focus of this market.
In addition to the QE issue, we also have pressure caused by the deteriorating economy in Europe. The Spanish bond auction went poorly and bond yields are rising around the continent.
Ironically, the poor economic situation in Europe may give QE addicts a little hope. The danger that the European problems will eventually weaken our economy can't be ignored, and if the Fed doesn't assist the European Central Bank by keeping pressure on interest rates in the U.S., it may accelerate the issues in Europe.
The important thing is that the bears finally have strong justification for selling, and there is some pressure for it. We have been consistently ignoring all negatives for months, but the market is definitely paying attention to this QE issue.
My advice has been to stick with the trend as long as possible but be quick to react when trouble develops. Well, trouble is in the air and now is the time to be more careful. We have to see what the dip-buyers do. Don't expect the market to go straight down, but there have been warning signs in individual stocks and the selling catalysts are building.
If the bounces fail and we start making a series of lower lows, we'll have to start working harder on the short side. I expect a very bumpy ride as we sort through the fundamental issues out there. Keep those defenses tight.
ymeramees
SNDK - paistab, et ei ole suuremat üllatust. Jäädakse teesi juurde, et 2H tuleb parem. See tundub mulle aprillis suurem argument kui jaanuaris. Natuke kahtlen, et siin müügisurvet tuleb.
Minust jääb torkimata täna, ei ole tunnet, et ask nõrk oleks, pigem bid. Pealegi on täna päris palju nn. callistocke, millel seda va riski ehk vähem on. Turg on muidugi ka kaunis punane.
In reaction to strong earnings/guidance: MON +2%.
Guid. üle võlli igas asjas ja head tüübid müüsid hoopis selle peale.
Väikselt long
Guid. üle võlli igas asjas ja head tüübid müüsid hoopis selle peale.
Väikselt long
stocker
In reaction to strong earnings/guidance: MON +2%.
Guid. üle võlli igas asjas ja head tüübid müüsid hoopis selle peale.
Väikselt long
ise ka üllatusin kui -2% peale müüdi
meanwhile, kui mujal maailmas on teenindussektor üllatanud pigem positiivselt, siis USA märtsi näit hoopis pehmem
March ISM Services 56.0 vs 56.7 Briefing.com consensus; February 57.3
March ISM Services 56.0 vs 56.7 Briefing.com consensus; February 57.3
MON - ei tea sellest suurt midagi, aga openi aeg käis conf call.
Seal öeldi muuhulgas selliseid lauseid:
Monsanto says sees 2H earnings flat vs. last year
Monsanto says sees soy gross profit flat to down vs. 2011
Monsanto sees 2H U.S. sales growth less than 1H
Lisaks:
26.03 Morgan Stanley - Monsanto named a long RTI.
Betime pos tulemustele, väike kasumivõtukoht?
Lisaks tänane turg.
Seal öeldi muuhulgas selliseid lauseid:
Monsanto says sees 2H earnings flat vs. last year
Monsanto says sees soy gross profit flat to down vs. 2011
Monsanto sees 2H U.S. sales growth less than 1H
Lisaks:
26.03 Morgan Stanley - Monsanto named a long RTI.
Betime pos tulemustele, väike kasumivõtukoht?
Lisaks tänane turg.
Lisaks Q EPS-i beat ei väljendu kuidagi FY guidos.
tänud, ma ise olin cc ajal eemal. Teise poolaasta ootus ja tänane turg ilmselt põhjendavad ära
Kass vahendab kuulujuttu, mida täna levitatakse. Siiski on see raskesti usutav...
High above the Alps, my gnome is hearing a rumor that Greece is pulling out of the euro.
High above the Alps, my gnome is hearing a rumor that Greece is pulling out of the euro.
Erko Rebane
Kass vahendab kuulujuttu, mida täna levitatakse. Siiski on see raskesti usutav...
High above the Alps, my gnome is hearing a rumor that Greece is pulling out of the euro.
See oleks ju super, kui ta seda ise teeks.
Äkki see on seoses tänase Frankfurter Allgemeine Zeitungi artikliga, kus viidati, et Lord Wolfson on välja pannud omanimelise preemia (250 000 naela) sellele, kes tuleb välja parima plaaniga eurotsooni liikme väljaarvamiseks (esimeses järjekorras siis Kreeka). Kokku on oma analüüsi ja ettepanekud esitanud 450 "majandusteadlast" üle maailma ning võitja selgub 5. juulil.
MON- ei tundu kindlana koos turuga jah. Parem juba out flat, tänud valgustamast. Mingi katse oli, aga eih.
Reuters reporting that IMF has completed its review of Portugal's economy and has approved disbursement of EUR 5.17 bln