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Wednesday, June 20, 2012

Market Sees 70% Chance Of More Fed Easing | ZeroHedge

Blogman's Notes: As surmised in the Zero Hedge article below, the Market is hooked on Easy, rather Free money, from Central Banks, the US Federal Reserve and the European Central Bank in particular. So dependent has the market (primarily the Stock Market) become on Stimulus from the Central banks, that it is plain to see that without such stimulus, there would be no market. So let's leave the illusion of 'Recovery' behind, once and forever! It is plain to see that without Central Bank interventions, the market would be dead! If after four years of the greatest coordinated interventions, or liquidity injections, into the Global banking system, the banks still need to be rescued, then I believe that we are in a no-win situation. All these 'BAILOUTS', rather 'HANDOUTS' to the banks do is to increase the burden on the already over-burdened with heavy debt Middle Class taxpayers of the world (see picture below). The elites, like Christine Lagarde of the IMF pay no taxes, and neither do the poor, so the burden must needs be carried by the Middle Classes in developed countries. This burden falls, mostly on the Middle Class citizens of US, Canada, Western Europe, Japan, Australia and New Zealand because even the Middle Classes in countries like India and China pay little taxes. So the end result of this madness of the policy of Quantitative Easing or Money Printing being implemented by the policy makers will be to impoverish the Middle Classes of the wealthiest nations in the world. These policies will bring us down to the level of the rest of the world, not lift the rest of the world to our standards! Einstein defined insanity as doing the same thing over and over again and expecting different results each time. In the case of US FED, on whom the market is placing great hopes today, June 20th, of providing more of the QE drug to prevent it from going into fatal cardiac arrest, more of the same medicine that has failed to heal the patient the last few times cannot possibly make the patient (the Stock Market) healthy. This insanity may result in a temporary high but the patient will eventually die from an overdose or from violent withdrawals. Perhaps, that is the game plan; to keep the patient alive just a bit longer till it becomes absolutely impossible to keep him alive, and then pull the plug without warning, at least for the masses who are being deluded into believing that there is a Recovery underway.

Think the Fed will pump more today? You are not alone: an implicit 7 out of 10 market participants do so too (and have for the past 70 or so S&P points, urged by nothing more than hopes of more easing as economic data after economic data has come in worse than expected). Which naturally means the pain trade today will be one of disappointment. But fear not: everyone will be able to sell ahead of everyone else if and when the Fed disappoints. Or so the thinking goes. Others like Citi, Deutsche and now SocGen, believe that a real policy intervention will come in only following a market crash. Bottom line: nobody knows anything. Correction - we know one thing. Absent central bank intervention everyone now agrees that the economy would be a complete disaster, so at least we can stop pretending that the word "recovery" makes any sense.

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