No "QE2" till 2011?

[we_are_toast]

Re: No "QE2" till 2011?

Hell, there's just as much chance the market takes off upward after the mid-terms.

As soon as the mid-terms are over the race will be on for 2012. The Dems will be throwing everything they can into getting Obama, and themselves, re-elected. Never, ever underestimate the desire of politicians to get re-elected. Before this is over we could well see unimaginable new highs in the levels of stimulus coming from the government and the Fed. With the rest of the world showering the US Treasury with unlimited money at all time low interest rates it's pretty damn difficult for this observer to imagine there will be any spenidng discipline coming from D.C.

Also, how do you see a concurrent dollar and equity crash? Generally in the present sort of circumstances they are inversely correlated.

I'll take the opposite view on this one. Republican control of either house of congress will lead to incredible chaos. They are running on severe austerity with big cut backs in government, and big tax cuts, and that's what they'll fight for. I see scandal hearings to occupy the public, budget crises after budget crises, state and local governments left to fend for themselves, and even a refusal to increase the national debt. No chance of responding to any economic crises. 2 years of grid lock. I can't see how the world markets will respond positively to this.

The worlds economy may truly be in Bernanke's hands.

[ThePythonicCow]

Re: No "QE2" till 2011?

Republican control of either house of congress will lead to incredible chaos. They are running on severe austerity

I'm wondering if perhaps what politicians are running on is a contrary indicator for what they will do if elected.

[thunderdownunder]

Re: No "QE2" till 2011?

From Automatic Earth - they adjusted some facts to realtime and ended up with one scary prognosis.
http://theautomaticearth.blogspot.co...e-gdp-and.html

Quote "Barring some sudden reversal in consumer attitudes and habits, the 2010 economic slowdown will be longer and at least as painful as the one experienced in 2008. Furthermore, the shape of this contraction event indicates that it is probably not an independent "double dip", but simply a continuation of the "Great Recession" of 2008 after a few quarters of now lapsed consumer stimulation." unquote
I posted 3 months ago on this site that the indices we use (18) showed that when the September quarter closes you will see your "double dip".
The US needs to spend on Main Street and it needs to spend it wisely. Put money where it will do the most good, in the wallets of workers. Yes you will say they will spend it badly. I don't think so.
You can pull all the levers you want, it will be pointless until those levers are connected directly to the real machinery of wealth creation - the producing hands.
America you need a 'real' pay rise at the (Temporary)expense of profits. Henry Ford would insist - Believing that well-paid laborers are the best consumers, he hiked his employees’ wages from $2.34 for a nine-hour day to $5.00 for an eight-hour day. The move proved to be highly profitable. Instead of constant employee turnover, the most expert mechanics flocked to the company, raising productivity and reducing training costs. Ford called it the "wage motive."

[sishya]

Re: No "QE2" till 2011?

Thank you. This article from automatic earth is tallying with what "flow5" is forecasting.

[sishya]

Re: No "QE2" till 2011?

Sorry, I don't think so. Jan 2011 will be the top. I know you are knowledgeable but lets see. I will wait till
September end and if it turns I turn my 401k from stocks to money market.

I prefer not to beat my chest about this call, but couldn't help since that was against a majority opinion. So far winning. Long S&P till year end in play money(401K is play money, since we either will have means testing when we want to cash out, or given diluted money or taxed or raise age limit without penalty)