Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Let Us Prey
In case I haven't been firm enough with this point, I'll state it again: the "oomph!" of each QE has been decreasing each time. I offer the chart below as evidence; I have colorfully illustrated the successive power each round of "easing" has produced for the Dow 30 chronologically. Green is QE1; Blue is QE2; Red is Operation Twist; Purple is Twist Extension. Only time will tell what QE3 is going to do for the market, but if it ultimately becomes market-negative, then Benjamin Shalom Bernanke is toast.
Quantitative Teasing
Howdy, Slopers.
I woke up this morning – as I almost always do – at an obscenely early hour and staring at the ceiling, contemplating life and its purpose (I have a lot of time for such things). I actually fleshed out a fairly comprehensive view which was so completely dark, I felt it wasn't worth sharing. I guessed, though, that it was something akin to nihilism – a term I'd heard often but never explored – and, sure enough, my ruminations have already been well-defined here.
Existential nihilism seems closest to what I believe, although I would tack on one other thing: the only thing you can do to add "meaning" to life is to either reduce suffering or prevent suffering.
There are many who believe life's purpose is to glorify God. Good heavens, what a load of crap. The supreme being I contemplate isn't burdened with such pathetic insecurities. Others believe a life well-led will lead to immortality. Again, God in heaven, spare me from such a thing. Most people don't know what to do with a rainy Sunday afternoon; do these nit-wits really yearn for a never-ending existence? I think they got Grace mixed up with Hell.
Oh, wait. You wanted to try to figure out how to make money using charts or something. I forgot. Let me turn back to that.
It goes without saying that the annoying, nettlesome, cursed topic of QE3 is going to reach fever-pitch this week, as we crawl our way to Thursday's big event. I hope Bernanke DOES pull out his bazooka and get it over with, but I'll go out on a limb (again) and predict he does this: Dick. He has one bullet left, and he knows once it's shot, it's shot. If he launched more "accomodation", I think it would give the market one quick, final spurt and then send it spiraling down.
I think what'll happen instead is that he'll announce nothing, the market will briefly drop in "disappointment", and then – completely inexplicably – rally. That's sort of the worst of all worlds, since it'll prove once again that the THREAT of QE3 is more powerful than the DEPLOYMENT of it.
Just look at the chart below. QE1 is tinted yellow. Huge move. QE2 is in green. Medium-sized move. Operation Twist is in cyan. Smaller medium-sized move. OT Extension is in magenta. Smaller move still. The potency is declining. QE3 would be an even punier move and, possibly, perversely, could actually REVERSE the market. Then Ben would be fucked beyond imagination.
As for a target, it's tough to say, although the first line in the sand I'm watching is the wedge that's forming on the S&P. The price point is close.
I am very, very lightly committed to this "market" – a mere 28% in short positions, and the rest in cash. I won't be comfortable until Beard-face is done.
Oh. Have a nice day.
Bernanke Plays it Perfectly
Excerpted from NFTRH 202:
Bernanke Plays it Perfectly
From last week’s opening segment:
“Another way to look at it is
that the market’s fate appears to rest with the jawbone of the man about to
speak at Jackson Hole on Friday.”
From last week’s closing ‘Wrap Up’ segment:
“I think the theme now is that
if you are a trader and if you have profits it is a logical time to take some
or all of them.”
Full Transcript of Bernanke Speech
WASHINGTON (MarketWatch) — The following is the text of Federal Reserve Chairman Ben Bernanke’s speech at Jackson Hole, as prepared for delivery:
“When we convened in Jackson Hole in August 2007, the Federal Open Market Committee’s (FOMC) target for the federal funds rate was 5-1/4 percent. Sixteen months later, with the financial crisis in full swing, the FOMC had lowered the target for the federal funds rate to nearly zero, thereby entering the unfamiliar territory of having to conduct monetary policy with the policy interest rate at its effective lower bound. The unusual severity of the recession and ongoing strains in financial markets made the challenges facing monetary policymakers all the greater.
