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QE3 - The Fed, FOMC, Congress, and Election Year equals... ?
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
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I'm sticking with what I said earlier that there will not be an additional QE from a "traditional" sense.
- It's a political liability
- It's proven to be ineffective in the long term
- It does not create economic stimulus/employment
- It simply favors the banks (political liability)
- The Fed is most likely hinting for the ECB to do something first
- Should there be additional stimulus, it will not cater to equities
Can't have QE3 now, look at gasoline price at the pump. At the highest levels; can you pay 7$ for a gallon if inflation hits? what about corn?
Also, most if not all QE3 effect is already factored in the price, we rallied on hopes of QE3 how can that not be factored in?
Moreover, for the Fed to perform such an action, they would definitely be looking to get the max bang for the money, and this means QE would be most effective when we are at dead lows.
I do believe we will have an international QE round coming from China, Europe and the US around mid winter or so, and that would inflate the stock market pretty much throughout the entire 2013. But for now, I do expect a major correction by the end of Fall which would take us back near those lows and QE would have the most effect.
In my opinion, Fed is more concerned of high yields, than stock market in itself.
Their major interest is to reduce that interest :-) otherwise, that would really be bad for the economy.
Successful people will do what unsuccessful people won't or can't do!
I haven't read through this whole thread but I was wondering if Romney gets in and the Republicans are running the show might they NOT let another QE take place.
The Bernank will get tossed out on his ear and I think there will be pressure to change course policy wise.
Of course I could be naive and it's inevitable but I still wonder.......
