I have been hearing talk of ending QE2 all morning long. That smug Kudlow on CNBC thinking that once QE2 ends- the economy will stand on it's own. I don't think so.
You can't make an economy healthy when you have robbed 30 million jobs and reduced the income and benefits on existing jobs. You simply lack the capacity to recover. Do not think for an instant that equity prices- having tacked on a 90% gain since Mar of '09- can stand on their own.
I still do not believe that they can end QE2 without a QE3. The bulk of treasury re-financing occurs this year and next in the five year horizon. Debt will have to be re-financed into higher rates. If they do, I see a stampede for the exits. As of today, I am changing my stock market implosion line from a 20% chance to a 25% chance.
Could the media be trying to stop commodity markets' rise and the plunging dollar? Oh yea. Is talk of ending QE2 bullshit? Yes. This is going to get interesting and fast. Very odd, all of this pollyanna happiness this morning. Seems orchestrated. This is the bullshit you must wade through when President Obama buys a network by making Jeffrey Immelt a czar. Government controlled media, the Frankenstein version.
Fed's Lockhart now calling for QE3. I've been reading your mail, pricks. http://money.cnn.com/2011/03/07/news/economy/Lockhart_Fed_QE3/index.htm