FOMC part 2: FED did panic...... They are now doing 'open ended' bond buying

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From the Floor: Bullish macro data push indices higher – #SaxoStrats

The start of this trading week saw a slew of strong macro releases with both European and US PMI readings surprising to the upside.

09 April From the Floor: How long can Treasuries hold these levels?

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22 March From the Floor: Dollar sharply lower after FOMC

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22 March Looking to buy gold: O'Hare

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Squawk / 13 September 2012 at 17:08 GMT

Steen Jakobsen

Chief Economist & CIO / Saxo Bank

Denmark

FOMC part 2: FED did panic......

They are now doing 'open ended' bond buying - no finite time or amount...hence this will go down as QE Extreme.

I remain of the view this is final phase...

I'm long stocks, gold, short us dollars next 24-48 hours but ..on the anniversary for LEHMAN... tonight could be the day where FED did too much.

Low yield and monetary policy stopped having an impact two years ago, tonight could be the night where after the rally low rates no longer impact stock and risky asset - the only cheap asset right now is: money ...every time this has been the case in history it has ended in bubble and tears.

My expectations for FOMC: http://www.tradingfloor.com/posts/fomc-will-do-more-not-less-211139245

Trade of the day for FOMC: http://www.tradingfloor.com/posts/trade-of-the-day-fomc-position---bought-gold-oct-2012-at-1825-319161083

Safe travels,

Steen

5y

bvlaerhoven

totally agree. This is the bridge too far. Maybe even the FED themselves know/acknowledge as 40bio monthly is not the blowoff amount they could have done.

5y

bvlaerhoven

On the other hand, buying MBS is the better way to do this. Best of the worst?

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