From Zero Hedge:
For now it was just Jan Hatzius calling for QE3 now if not sooner. With the addition of JPM to the list of banks now implicitly expecting (read demanding) QE3, it is now quite clear how Wall Street feels – after all someone has to pay those Wall Street bonuses – it sure won’t come from M&A activity, underwriting of Chinese IPO frauds, or trading volume. Here is the key sentence from a just released note by JPM’s Michael Feroli: “We believe the minutes lend themselves to our view that there is a somewhat better-than-even chance the Fed takes action at the next meeting to increase the average maturity of assets on their balance sheet.” Keep an eye on the market tomorrow for confirmation: a third day of the same low volume meltup we have seen this week should make the open QE3 question into case closed…
For those unfamiliar, a “low volume meltup” is when the stock market rises high for no reason (or, indeed, even rises when the news clearly indicates a down day) on low trading volume. For the most part of late, if you see the market dropping it is a much higher volume trading day than the days you see it rise. All part of the fake, ponzeconomy we currently have.
Anyways, getting back to the Fed printing money. I’m still figuring it won’t happen. I understand that the only way we may avoid an “official” recession (ie, where the government numbers clearly show it) is by printing up money…but even that isn’t a sure thing, and any “good” you get out of it will have to be counterbalanced by the knowledge that more printing will lead to more inflation for basic necessities (food and fuel). To me, there is far more downside political and economic risk in printing than in not printing. But rumors of “QE3” keep flying, and now there this statement from someone at JP Morgan saying it may well happen..and if anyone is juiced in to Fed decision making, it would be a firm like JP Morgan.
I hope they don’t do it as it would be, long term (and possibly short term) a catastrophe for the economy. But the Ruling Class is desperate – something has to be done to get unemployment down below 8% by August of next year or Obama and his Ruling Class liberals are doomed. Dying Ruling Classes do tend to cast around for desperate expedients to stay alive…even rather stupid expedients. And, so, even though I still think they won’t print, I have to put money printing in the realm of distinct possibility…we’ll see how it comes out.