QE’s: What are They Good For?
QE1 saved the markets from going to zero and was good for 550 SPX points, from 666 to 1220 in one year.
QE2 was leaked in August of 2010 and was good for over 300 points, from 1050 to 1365 in six months.
Operation TWIST began in September 2011 combined with a fresh trillion dollars for Europe in December and was good for almost 350 points, from 1075 to 1420 in six months.
The latest “Euro-save” and QE3 was leaked last week at 1330 and has so far brought us over 50 points in less than a week.
If past performance is indicative of future results then there is another 250 points of upside from here. That will put us at record highs just in time for the Presidential Election. Think about that for a second.
18 Responses to QE’s: What are They Good For?
sooooo no QE and we rally
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No QE now means QE later. QE now means more QE later.
With the market-effectiveness of money printing, it will be a commonplace and daily occurence until it no longer works.
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What happens when it stops working?
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It depends where we are, of course…
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But I don’t think you have to worry too much about that because if you look at last weeks reaction, there is an endless supply of upside to coincide with an endless supply of digi-money
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I think I will buy some more gold.
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Long frustrated gold bugs will tell you that they can manipulate that too…
Is there any historical precedence for devaluing our money this much? Or are we in uncharted territory here?
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So many trillions, who cares if there is a few more?
Executive Summary: There’s tons of precedent.
Carmen M. Reinhart, Kenneth S. Rogoff, This Time is Different: A Panoramic View of Eight Centuries of Financial Crises (original 125-page paper available.)
That was the paper that inspired the 500-page book that made a splash a couple of years ago.
I can’t count many folks I know basing their investment strategy on the QE’s. Irrational exuberance. The market won’t breath freely again until 2015.
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You may not, but the machines do. So do those who manage OPM.
2015? I figure 2020 at the earliest…
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If this market doesn’t start making gains for the retail investor, Obooba is doomed.
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“That will put us at record highs just in time for the Presidential Election”
And the usefult idiots at CNBC will be talking up the market’s new highs thus inducing the retail investor back into the market only for the rug to be pulled out from underneath them yet again.
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sorry…useful. A-game!
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Who gets the newly printed money? Can I get in that line?
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So it appears to me that the key question today is whether liquidity infusions from the Fed/FRBNY-ECB-BoE triumvirate and their owners will trump the views of the overwhelmingly bearish professional sell side strategists (who, according to Merrill’s quants and Barry Ritholtz today h/b a contrarian indicator anyway).
My bet is on the Central Bankers for the next couple months, despite the seasonality factor that Fly pointed out earlier today. They have a lot to lose if this market takes a dive IMO, and they know it. What’s the old saw: “Desperate times require desperate measures”?
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if no qeiii today, isn’t hilsenrath in a bit of hot water? he basically leaked that it was coming.
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