I will warn you only once. Do not bet on the third round of easing before it happens.
I’m not going to pretend like I can prophesize; I have no idea if the Fed will embark on such an endeavor or not.
What I am cognizant of, rather, are the potential magnitudes of outcomes. Worst case of betting against QE3, at this stage in the game, is you miss out on 5% of upside when the Fed announces plans.
The worst case of betting on QE3 and not having it develop is you get to “enjoy” 20% of downside in commodity related names as the dollar devaluation trade unravels and everyone stuck inside gets their limbs torn from their sockets.
You have been cautioned.
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I enjoy the posting more when imagining an image of a helicopter exploding and John Travolta’s head popping off.
I appreciate the words of caution.
well said !!
this is a great post
i wouldn’t bet on a third round of QE at all
mmmkay?
Obviously you have a few on Wall Street agreeing with your point of view today. I’m sure there will be some sort of “QE3” but I don’t see how it can be more of the same. They will have to figure out a way to keep things propped up without the commodities going crazy. Maybe send $5K credit cards to every tax payer. I still think enacting some restrictions/margin increases on spec trading in commodities would help keep the free money boys from screwing the pooch. The REITS are taking one for the team along with everything else financial today. I’m all in but nice buying opp for someone, me thinks.
The REITs are getting castrated. Especially multi-family, I’d be buying if my cost average wasn’t significantly lower.