Friday at 3 o’clock
Uncle Ben is scheduled to give his big speech this coming Friday at 3:00 pm in Jackson Hole. He has hinted at some new program that would include asset purchases (aka QE3) several times in recent history but only if it looks like we are moving toward a deflationary period. His view is inflation good and deflation bad. Inflation is clearly bad. I am not so sure that deflation is so bad. I suppose it comes down to "bad for whom" ? If I pay less for energy and food why is this bad ? Of course deflation probably also means higher unemployment – that would be bad. Right now there is inflation and the inflation is pretty bad no matter what the government says. Go to shadow stats and check it out. They keep changing the way it is calculated to make it look like less – a nasty lie.
Wall Street has become addicted to big easy money that comes from QE and its associated asset purchase programs. I suppose big free money is pretty cool if you get some of it. I do not get any of it. I am trying to figure out if I can retire before I am dead (FDAK – Found Dead At Keyboard) and the top bank/fund people get more in their bonus that I will make in my entire life. QE looks real good to them. Another year of massive bonuses. On the other hand, the new Bloomberg data on the secret Fed Res bailouts is shocking. No wonder they did not want to give out the information. You should check that data out. The big banks were flat broke and were doing to close here and in Europe until Uncle Ben moved in and put up 1.2 Trillion dollars to float them. That must be nice when you make a bunch of high risk bets and Murphy shows up and Uncle Ben moves in and pays you out to the point where the next years you get all time record bonuses.
If Uncle Ben does not cough up big bucks for QE on Friday there will be a blood letting in the markets.