QE3 - The Fed, FOMC, Congress, and Election Year equals... ?

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So if QE3 is priced in, what do you suppose happens when QE3 is officially announced?

Mike

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I think a more interesting question is how much of QE3 is priced into long term bonds. 20 year yields are at 2.13% (negative in real terms), while TLT is up 37% year-on-year.

How much more can long-term yields fall with QE3? Personally I'm long long-term treasuries in anticipation of QE3 but so seems to be everybody else...it's a crowded trade to say the least, and I'm going to start thinking of exiting if yields go a bit lower.

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Big Mike

So if QE3 is priced in, what do you suppose happens when QE3 is officially announced?

Mike

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Interesting thread.

Let's say foreign entities and the central banks stop purchasing our treasuries, and the dollar starts to dive-bomb, along with the rest of the major indices. Sending our economy into a total downward spiral.

Do you think "day trading" will ultimately die? It's hard not to worry about our trading futures.

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Bau250

Interesting thread.

Let's say foreign entities and the central banks stop purchasing our treasuries, and the dollar starts to dive-bomb, along with the rest of the major indices. Sending our economy into a total downward spiral.

Do you think "day trading" will ultimately die? It's hard not to worry about our trading futures.

The Fed can just buy any paper the Treasury puts out, so I don't think that kind of catastrophic scenario is a possibility. Worst case you get a lot of inflation, which is a problem, but not that serious.

In any case, real rates are negative. People are paying money for the privilege of lending to the government. I don't think we're close to any kind of demand shortfall for treasuries.

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Quoting from a different thread:

josh

So now, we are not only buying the market based on hopes for QE, but we are buying in July because even though the next meeting probably won't bring QE, the one in September might... wow.

@josh, yes I got a laugh too. It makes you wonder. Now we are frontrunning what The Fed might do several months from now...

Are we that desperate for the market to continue moving higher, even as we might be entering another recession?

Friday's Impending U.S. GDP Report: Are We In A Recession? - Seeking Alpha

Mike

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Check out this link too.

shadowstats. com/article/no-414-hyperinflation-special-report-2012

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Source: Is Third Time The Charm For Central Bank Intervention Prayers? | ZeroHedge

Quoting

Of course this time is different, right?

Mike

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Big Mike

Source: Is Third Time The Charm For Central Bank Intervention Prayers? | ZeroHedge

Mike

Buy the rumor, sell the news.

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NFP 163k vs 100k expected, impact on QE predictions?

Mike

QE3 - The Fed, FOMC, Congress, and Election Year equals... ?

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QE3 - The Fed, FOMC, Congress, and Election Year equals... ?

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