Automated Lift (song for QE)

With apologies to Elton John.....

Goodbye, then, QE
Though I never liked you at all
You ensured financial markets
Answered the Fed's each beck and call
You'd show your hand each morning
And you'd get into our brains
While you raised the stock of reserves
They gave you a fancy name

And it seems to me that you lived your life
Like an automated lift
You took financial assets
To the sky
And I would have liked to known how
The economy had done
If you were kept in the Fed's pocket
After QE #1

The early years were tough
The toughest rally you ever made
Eurozone created catastrophe
And pain was the price we paid
And even when you died
Oh the press still hounded you
All the papers had to say
Is "We need QE 2!"

And it seems to me that you lived your life
Like an automated lift
You took financial assets
To the sky
And I would have liked to known how
The economy had done
If you were kept in the Fed's pocket
After QE #1

Goodbye, then, QE
Though I never liked you at all
You ensured financial markets
Answered the Fed's each beck and call
Goodbye, then, QE
From the man you drove off of the street
Who sees you as the enemy of anyone
Who thinks while in a seat





Previous
Next Post »

18 comments

Click here for comments
Nico G
admin
October 28, 2014 at 1:49 PM ×

market psychology .. would you be afraid to be short before FOMC, like every time, hence a grind up into the minutes

or that one time, would you be scared to be long and the bounce high is already in

Reply
avatar
CV
admin
October 28, 2014 at 2:08 PM ×

This rally is too strong into the FOMC, I am bracing myself for a little ... "oh shit, so you mean that the are actually going to STOP buying".

Claus

Reply
avatar
Leftback
admin
October 28, 2014 at 2:13 PM ×

I'm not sure. "e's not dead, MM, e's just resting"...

The Scandies are at it now, Sweden joining the ZIRP zombies:

Riskbank Cuts Rate

NEVER trade FOMC, Nico. Just trade the reaction to it. Otherwise you can get a very sore bottom. Granny can be quite stern with Mr Shorty at times, so why bend over on Wednesday when she might very well have a red hot poker in her hand? There's always Thursday, and the Q3 GDP...



Reply
avatar
Leftback
admin
October 28, 2014 at 2:21 PM ×

Purchases ARE over. That's a done deal, so surely we are all trading the "dot plot" now for the mythical rate hike. So they will balance the end of QE with a more dovish dot plot, VIX will plummet, Spoos will top out somewhere, small caps will soon roll over again and then we will all go on our merry way.

Reply
avatar
Anonymous
admin
October 28, 2014 at 2:38 PM ×

The bubble blower's daughter.

I can't take my eyes off of you...
...'Til you find QE anew.


northshore

Reply
avatar
Nico G
admin
October 28, 2014 at 3:00 PM ×

haha i wasn't asking for advice - my point was that if you want to trade a third leg down you might miss it if you do not brace into FOMC like Claus did

like you I've been in this game for decades, FOMC trading always looks like panicked midgets thrown onto an oily bowling lane

Reply
avatar
Anonymous
admin
October 28, 2014 at 3:13 PM ×

hmm, hope this isn't premature ;)
JL

Reply
avatar
Corey
admin
October 28, 2014 at 3:33 PM ×

Oh c'mon LB. Surely they will leave at least 5bio in purchases on the table squeeze another 30 pts in spoos and what not. I think they get a kick out of doing this type of thing.

Reply
avatar
Mr. T
admin
October 28, 2014 at 3:36 PM ×

To go along with the end of purchases I think everyone expects some exceptionally dovish jawboning post release (no presser) as well as a full-dove statement. Given that US bulls think the economy is doing pretty well and set to do better, with interest rates at ZERO still, there is literally no price to high to pay for assets based on rate-based models.

Anyone watching biotech stocks? The biotech INDEX is +19% in the last 2 weeks. I'm not one to judge the valuations of those stocks but in broad terms this seems like late-stage bull psychology. The indexes are playing that amazing game again where they are nudging up to all time highs and yet all the stocks on my watchlists are nowhere close to highs.

Things can get really silly in the late innings. 2100 on the spx wouldnt surprise me into EOY, with outperformance by smallcaps.

While I see some EUR strength lately (not so much other crosses) I think the better way to play TWINE in europe is via equity index spreads - SX5vsSPX etc. If Draghi cant get consensus about buying Italian debt perhaps he can get consensus to fill his balance sheet with equities?

Reply
avatar
abee crombie
admin
October 28, 2014 at 3:57 PM ×

I was listening to Lee Cooperman of Omega talk last night about his views, which I think summarizes quite nicely what a lot of L/S equity guys are doing and who at the moment are the marginal buyer and seller of US equities.

They are under performing YTD bc of oil exposure. Not worried yet but they will review if we hold below $75. As for US economy, they speak to lots of CEO's and they dont see any signs of a recession. They are not super bullish, but they are adding selectively to beaten down holdings. They dont see a retest of the 1820 lows in the cards in the near term and would have to re-evaluate if it were to occur.

Mr. T. Yes IBB has gone nutty, i should have known better given that it held up so well in the downdraft. Similarly with AAPL. But lets see if they can keep the leadership. I think R2k might take the reigns. It would be even better if EZ did, but that is hoping for too much ;)

Reply
avatar
Leftback
admin
October 28, 2014 at 4:02 PM ×

Mr T, we think alike, sir. I think that pair trade [Long Eurostoxx:Short Spoos] is a winner, indeed. On the USD we can continue to agree to disagree.

The biotechs are officially this year's nose bleed sector. The small caps in that group always have a massive amount of debt (in fact sometimes that's all they do have) so they love easy monetary policy and the slightest hint of tightening or liquidity shortage will blow them up. Beware of shorting the IBB for now, at least until the doves have flown south for the winter.

Reply
avatar
Leftback
admin
October 28, 2014 at 5:40 PM ×

US small craps out-performing, with "most shorted" leading the way, we've all seen this movie before. Our IWM 112 was left in the dust already. No point in stepping off the curb in front of that bus. The Dash for Trash is on, for today, at least.

Reply
avatar
Nico G
admin
October 28, 2014 at 6:39 PM ×

you have the right to remain silent

http://www.aljazeera.com/news/europe/2014/10/spain-moves-block-catalonia-vote-20141028101936638321.html

Reply
avatar
Anonymous
admin
October 28, 2014 at 7:43 PM ×

"infamous" anon checking back in...everyone ok? As T.Swift would say, faders gonna fade fade fade fade fade!

Reply
avatar
Leftback
admin
October 28, 2014 at 8:00 PM ×

Ah. Sounds like Infamous A.N.O.N. is doing a spot of bear-baiting. Nice one, but sometimes excessive bear baiting in the MM comments is itself a contrarian indicator.

Fascinating to note that the IWM chart had a tiny gap just below 114. That's been filled. Perhaps Dame Janet leaked the Dot Plot already?

Maybe this isn't a retracement after all, but a move back up towards Polemic's mythical New Real Top, at which point the US economy really does recover, dentists finally go long and taxi drivers give stock tips. We shall see.

Possible V-bottom in Brazil this week, we'll see whether that sticks. Even the RSX had a good day. Wonders never cease.

Reply
avatar
Polemic
admin
October 28, 2014 at 8:30 PM ×

Ha.. thanks for the NRT theory plug LB!

It ain't over til the fat taxi driver sings

Reply
avatar
Nico G
admin
October 29, 2014 at 10:54 AM ×

the greedy bulls too, will fade away

https://www.youtube.com/watch?v=oXt7xGzmw60

Reply
avatar
Polemic
admin
October 29, 2014 at 1:15 PM ×

Oil - though Mr Opec said that they will keep pumping and basically 'tough' on high cost producers.. oil does look as though it is trying to break higher. Buy those super trashed high beta secondary oily things?

Reply
avatar