Great fucking work Ben; I think you got that 2% inflation target yesterday. Can you point to a commodity that wasn’t up?
A Zerohedge guest post yesterday was discussing the models the Fed is using to define core inflation. Take a look right at them; the variables include oil prices, which are presently going on a tear. The price of oil is given an entire relationship unto itself, it’s so important.
Just looking at that model, the only way that Bernanke’s idiotic “commitment” to more stimulus passes is if the dollar gets so strong that cheap imports flood the system, overcoming the rest of the game (not that the model makes much sense anyway; substituting an estimator for an entire economy of activity is foolish).
By his own standard, he pretty much crushed hopes of devaluation yesterday by setting off the coke run. Although the point of the model isn’t to make sense; it’s to bait idiots who aren’t confident enough to call him on it.
And where are these reports of QE3 promises coming from? I’ve looked for every transcript of that speech imaginable, and nowhere does he say “I’m going to be dipping into MBS paper.” I see the same thing he’s been saying time and again; if deflation returns with a vengeance, he’ll engage in more easing.
You think he’s going to do that here?
The guy said we’d have low yields…maybe. That’s about it.
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Welcome to the United States of Cognitive Dissonance…
Ben is out of bullets. I guess we did turn Japanese after all.
Sometimes I picture Ben as some master puppeteer, manipulating the market to his will, but I can’t let myself believe even he thought that the mere idea of QE3 would spur rallies for this long.
We may very well end up with over a years worth of rallies spurred by nothing other than the mention of a possibility of QE3.
If that was his intention, well then Ben is one smart SOB.
I think Ben would prefer it if he could create rallies in equities without subsequent rallies in commodities.
If equities blow out again, you have a lot of retiree age people in trouble. But the commodity price rallies threaten everything.
The guy is in a precarious situation.
The important fact you are forgetting about his economic model is it is true because he assumes it is true (LOL).
Seriously though, what can he do? Not buy US bonds and watch rates go all Mediterranian and shit?
Forgot to add, sysinct, insightful as usual. Love reading your posts.
True his hands are tied at a minimum. But he already holds most short term U.S. debt, so it’s not like his inaction is going to force a U.S. default or rate blowout.
Further easing just seems pointlessly inflationary. He’s going to crush demand on the front end, worrying about it on the back.
That’s funny, I thought that housing had bottomed? Silly me, remembering what dozens of market commentators have said.
The same commentators that said gold was a bubble at $1000? Or nflx was a good buy after dropping from $300—> $200?
If I’m ever on the same side of a trade with the market commentators, I usually liquidate come morning.