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Thursday, November 29, 2012

Is there a QE ?

Everybody was really gung-ho about QE infinity. Every time there was a QE markets rise up. True.
 So the stocks going up, because QE is comming - there will be plenty of money. Really? Announcement comes and markets tops out.

 There is no QE-n.  It's a hoax.

      Look how illiquid markets are. Had there be a QE - all stocks and ETF's would be swimming in money. I searched for "money supply" and could not  find any data showing that its grown in a past year or two. Molecool agrees: " Right - most of it is being sterilized. We have been pretty flat on the printing front for a year. They still find ways to funnel cash to the PMs of course but we are not vastly expanding the money supply right now."

      O, and by the way, is there suppose to be 40-80 BILLION of QE3 money out there? Cus I don't see it. Not in a market, for sure.  Aren't they  suppose to buy 40 billion MBS per month, plus Twist, plus reinvestment of interest on their own bonds (don't you love that), plus line with Europe, plus reverse repo... I'm sure I left something out.

     Where is the money?   This is what I don't understand.  QE3 is SO much money, that even if a small portion of it goes into stock-market there should be an explosion of all prices. Clearly, this is not a case. You want to tell me that asset allocators are sitting there on a pile of money and not doing a thing? How they are going to explain it to their boss?

Fed doing something else, or nothing at all. Play golf, ride around in limo, collecting paycheck and writing memoirs. But, what do I know. I'm just a little fruit. (don't smoke the leaves)

UPDATE 12/14/2012:
       People go to NY Fed website (link) to see what treasury buys and sells, for how much and when. Some people claim that this schedule can help to time index trade, e.g. "it's a little less liquidity in the system, so far it's paid off at 66% of temp. operation sell days are good for a down move." There are 5-7 sell days per month. 66% of those is 2-4 days per month that are good for down move. OMG, are you fucking joking?
       See, this is a problem with statistics. If we have 70% of down, flat or negative days since the "beginning" of QE3 (or whatever it was from September top), if 70% of days are down - than 66% of good trades from above example offer no edge and can be disregarded as "mental masturbation".
        Why do you people watch this garbage? You know that it's basically the same people who publish GDP, inflation and unemployment? If they can go back and restate years of GDP (it happened a year or two ago), don't you think they can restate years of QE.
"Oops, sorry, there is really no money. What? NY Fed? O, its just a clerical error"

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