Art Cashin On QE2 As A Religulous Experience – “If You Have Faith, It Will Happen”

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homeDARPAcontributorsnewsforumszh-tshirtstoredonaterssmanifesto Shadow Over Asia + Updated China/Japan presentation Posted by: Vitaliy Katsenelson Post date: 10/14/2010 – 09:26 Interview with Vitaliy Katsenelson on the challenges facing China and Japan and the implications to the rest of the world. Contemplations on Oil Posted by: madhedgefundtrader Post date: 10/14/2010 – 08:06 After a tumultuous 2009, oil has been one of the least volatile assets of 2010. It now appears that this crucial commodity is stretching its muscles, limbering up, and getting ready for a serious move. The net effect of the BP oil spill will be a cut of one million barrels a day of Gulf production, about 5% of US consumption. A serious run on the dollar is adding fuel to the fire. (USO), (XOM), (CVX), (OXY), (RSX) When Pigs Can Fly, the Devil Shivers in Hell, and 30% Gains in Western Stock Markets Will Mean Practically Nothing Posted by: smartknowledgeu Post date: 10/14/2010 – 05:04 Since March 6, 2009, the S&P 500 has seemingly been on a remarkable run, gaining 76.68% when priced in our favorite of monopoly currencies, the US dollar. However, when priced in gold, despite the daily rigging games of the government/banker cartel for the past two years, it has only managed to rise 21.64% over the same time span. When priced in silver, the S&P 500 has astonishingly lost 1.8% during the same investment period. To these enormous anomalies, we ask the question,”Will the real currency please stand up?” Navigation PollsDonate To Zero HedgeRecent posts Shopping cart View your shopping cart. User login Username: * Password: * Create new accountRequest new password Zero Hedge Reads Angry BearBearish NewsBoom Bust BlogChina Financial MarketsChris Martenson’s BlogContrary InvestorCoyote BlogCredit WritedownsDaily CapitalistDaneric’s Elliott WavesDealBookDealbreakerDr. Housing BubbleFalkenblogFibozachiFund My Mutal FundGains Pains & CapitalGlobal Economic AnalysisGonzalo LiraImplode-ExplodeInfectious GreedInvesting ContrarianJesse’s Café Américain Market FollyMax KeiserMinyanvilleMises InstituteNaked CapitalismOf Two MindsPension PulseShanky’s TechBlogThe Daily CruxThe Mad Hedge Fund TraderThe Market TickerThe Technical TakeThe Underground InvestorWall St. Cheat SheetWashington’s BlogWealth.netWhen Genius Prevailed Home Art Cashin On QE2 As A Religulous Experience – “If You Have Faith, It Will Happen” Tyler Durden's picture Submitted by Tyler Durden on 10/14/2010 10:26 -0500

Art CashinBen BernankeBill GrossCapital MarketsCopperDiscount WindowMorgan StanleyNiall FergusonPOMO

In a country rules by Hopium, is it any surprise that capital markets are now governed by faith (in the destruction of the country by one Ben Bernanke). Art Cashin spots the irony of investing in anticipation of religulous rapture:

The prospect of the Fed embarking on another large asset buying program drove stocks and most commodities sharply higher Wednesday.

They roared out of the gate at the opening bell and never looked back.

While the list of skeptics on either the efficacy or beneficial effects of a new QE2 seemed to grow by the minute, it retained enough true believers to raise the prices of lots of assets. Some compared the belief in the beneficial effects to come from QE 2 to a religious experience. Others saw it as either hypnotic or narcotic. If you have faith – it will happen.

It was all about faith; after all, since the Fed had not only not begun the process, they haven’t formally confirmed that there will be a QE 2. Talk about the power of jaw-boning.

And as we highlighted earlier, those against QE2 are not just normal people who don’t stand to benefit from endless cheap money (read: bankers, one pane removed from the Discount Window and POMO monetizations), but the Fed itself.

As we just noted, the list of those skeptical of the beneficial impact of QE 2 has grown in recent days. Steven Roach of Morgan Stanley, Niall Ferguson of Harvard, Kocherlakota of the Minneapolis Fed and even the St. Louis Fed’s newsletter. While these skeptics proved it was okay to doubt the Fed, the market indicated it was suicidal to fight the Fed.

The asset inflation from a looming QE 2 wasn’t confined to the stock market. Gold, oil, copper and a long list of commodities all jumped higher.

In the afternoon, the rally in stocks slowed. The 10 year auction, while not as bad as Tuesday’s 3 year auction was mediocre at best. Treasury bonds began to slip lower.

For the next hour, the S&P struggled against resistance at 1182/1185. About 2:15, they topped out at 1184. Stocks began to drift lower led by the banks as concerns about the rat’s nest in foreclosures intensified.

By the bell, they had given back 30% of their earlier gains. Nonetheless, it was the fourth straight gain for stocks putting the averages at five month highs. The bulls remain on a roll.

What the Fed will end up doing on November 3, probably only Bill Gross knows. Yet one thing is certain – if at 2:15pm the FOMC statement headline scanning robots do no see confirmation of QE2, the market will plunge so fast it will force people to look back at the flash crash with nostalgia.

h/t London Dude Trader

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by SheepDog-One
on Thu, 10/14/2010 – 10:32
#649332

1,200 DOW points and 150 S&P points baked into Q/E2 which will never happen.

Login or register to post comments by Jake Green
on Thu, 10/14/2010 – 11:28
#649555

How can QE2 not happen? Bernanke is like Barney Fife, he only has one bullet, and he’s eager to use it.

Login or register to post comments by Cognitive Dissonance
on Thu, 10/14/2010 – 10:33
#649337

Some compared the belief in the beneficial effects to come from QE 2 to a religious experience. Others saw it as either hypnotic or narcotic. If you have faith – it will happen.

Further proof that perception is reality and that the placebo effect is real and utilized by the Powers That Be on a daily basis.

http://en.wikipedia.org/wiki/Placebo
http://www.scientificamerican.com/article.cfm?id=placebo-effect-a-cure-in-the-mind

Login or register to post comments by Dagny Taggart
on Thu, 10/14/2010 – 10:37
#649350

Sounds like Mr. Cashin is spending some time on Dr. Cog’s couch? Or just marinating the ice cubes and finally reading your work?

Login or register to post comments by Cognitive Dissonance
on Thu, 10/14/2010 – 11:07
#649486

Neither. Just getting near retirement, thus feeling closer to the escape hatch of “free” speech unencumbered by all those nasty conficts of interest aka making a killing on the Street while supposedly working in the clients’ best interest.

While Cashin spouts quaint little sayings and truly does have a unique perspective, when it all comes down to brass tacks, he, like all those who work on the street (myself semi-included, though I don’t actually work “on the street”, thus my free pass to throw stones at windows) know who they really work for. And no, it’s not for the client.

Cashin has simply found an interesting way to quell the inner voices of Cognitive Dissonance. We should all be so lucky. Art has found the pot of Gold at the end of his rainbow, the proverbial way to eat his cake and have it to.

Be still my beating heart.

Login or register to post comments by doolittlegeorge
on Thu, 10/14/2010 – 11:38
#649590

cogent diffidence perhaps then.  i mean “the guy has missed the whole move.”  sometimes it really isn’t about “the game” anymore.  “faith” is good place to start in all matters such as these.

Login or register to post comments by goldmiddelfinger
on Thu, 10/14/2010 – 10:37
#649351

It’s called capitulation

Login or register to post comments by HarryWanger
on Thu, 10/14/2010 – 10:39
#649362

Yes, if QE2 doesn’t happen, you will see a mad dash for the exits until….CNBC tells everyone this is actually good news because the Fed is saying we don’t need QE2. Rally commences on feverish dip buying.

With more POMO announced yesterday bringing the total to somewhere in $100+B range (I may be way off here – I heard someone mention the total last night but I was in a sleepy haze), aren’t we seeing back door QE2 as we speak? Hasn’t it been happening? 

I’ve been quite sure QE2 would happen, until yesterday with the new POMO announced. Makes me think, as I’m sure others, this is QE2 and will continue for some time.

Login or register to post comments by Bill Lumbergh
on Thu, 10/14/2010 – 10:41
#649371

The past few weeks has been a perfect example of if you repeat something often enough people begin to believe…nobody knows what QE will or will not happen but caution has been thrown to the wind and everyone is a risk believer again…when the dollar catches a break from the oversold conditions this low-volume rally of prices gaps will be retracing quickly.

Login or register to post comments by Bearster
on Thu, 10/14/2010 – 10:43
#649381

Mish has posted a number of articles in the past 2 years showing a 20 year graph of the Nikkei (in collapse) and the points at which Japan did their various stimulus and QE…and this was during a time when the rest of the world was booming and Japan was a major exporter

Login or register to post comments by Bearster
on Thu, 10/14/2010 – 10:44
#649392

Mish has posted a number of articles in the past 2 years showing a 20 year graph of the Nikkei (in collapse) and the points at which Japan did their various stimulus and QE…and this was during a time when the rest of the world was booming and Japan was a major exporter

Login or register to post comments by the grateful un…
on Thu, 10/14/2010 – 10:45
#649399

The Great OZ has spoken, and pay no attention to the man behind the curtain. COnfidence and coercion are complementary terms, like carrot and stick. Bernanke is riding us like a rented mule, time to stop.

Login or register to post comments by cossack55
on Thu, 10/14/2010 – 10:47
#649410

“Full FAITH and CREDIT”. Indeed!

Login or register to post comments by doolittlegeorge
on Thu, 10/14/2010 – 11:41
#649605

+1,000,000,000,000

Login or register to post comments by Dagny Taggart
on Thu, 10/14/2010 – 10:48
#649411

ehem.. the pump starts tomorrow. He couldn’t even wait until November. Ben can’t stop. http://www.zerohedge.com/article/why-qe2-qe-lite-may-mean-fed-will-purchase-almost-3-trillion-treasurys-and-set-stage-monetar

Login or register to post comments by walküre
on Thu, 10/14/2010 – 10:48
#649415

QE2 is happening. No announcements neccessary.

Fed buys paper, price of paper is stable or goes up. Simple.

They’re neither putting a time line on it, nor will they disclose how much.

 

Login or register to post comments by TumblingDice
on Thu, 10/14/2010 – 10:48
#649416

Controlled demolition is the goal, not a rapid recovery. QE2 will most likely not happen.

Login or register to post comments by Dagny Taggart
on Thu, 10/14/2010 – 10:50
#649417

dup. post

Login or register to post comments by bada boom
on Thu, 10/14/2010 – 10:51
#649424

Perhaps we can get Art Cashin and Alan Greenspan to share a room in a convalescent home.

It would be interesting to hear them talk.

Login or register to post comments by TradingJoe
on Thu, 10/14/2010 – 10:54
#649431

i’m-a so happy, my shorts will be too! for sure!

Login or register to post comments by Miles Kendig
on Thu, 10/14/2010 – 10:55
#649433

What the Fed will end up doing on November 3, probably only Bill Gross knows

Might I suggest a quiet conversation with Mort Zuckerman and John Paulson

Login or register to post comments by 99er
on Thu, 10/14/2010 – 10:56
#649438

Chart: Dollar

Ain’t going to happen.

http://99ercharts.blogspot.com/2010/10/dollar_271.html

Login or register to post comments by RobotTrader
on Thu, 10/14/2010 – 10:57
#649447

Wow….

Login or register to post comments by SheepDog-One
on Thu, 10/14/2010 – 11:05
#649477

Dollar down stocks down, blood dripping from HFT servers.

Login or register to post comments by Hero Protagonist
on Thu, 10/14/2010 – 11:06
#649484

How do you add images to comments?

Login or register to post comments by Miles Kendig
on Thu, 10/14/2010 – 11:13
#649505

By being a contributor..  Write an article, submit it and see.

Login or register to post comments by Cognitive Dissonance
on Thu, 10/14/2010 – 11:17
#649521

When is Miles gonna join the contributor club? Tyler would be a fool to turn you down.

Login or register to post comments by doolittlegeorge
on Thu, 10/14/2010 – 11:44
#649614

i like the idea that its the Fed job to bailout every company in the S&P 500.  They were part of the 500, right?

Login or register to post comments by bob_dabolina
on Thu, 10/14/2010 – 10:59
#649452

Eat it Charley

 

WFC -4.5%

Login or register to post comments by doolittlegeorge
on Thu, 10/14/2010 – 11:45
#649624

didn’t he say “suck it up”?!!!!

Login or register to post comments by TheJudge2012
on Thu, 10/14/2010 – 11:06
#649483

Tomorrow is stock options expiration. Must keep QE2 doubt alive.

Login or register to post comments by Andrew G
on Thu, 10/14/2010 – 11:09
#649492

There won’t be any robo-crashes any longer. All the trading robots have been upgraded and recommissioned to perform document signing.

And this time around, the signatures will be faked properly, as opposed to half-assed jobs that we just saw.

Login or register to post comments by carbon based unit
on Thu, 10/14/2010 – 11:10
#649494

CBU believes that the FOMC chief [as accusatory and vile an insult as can be mustered] is perched precariously betwixt an economy and a fed space; to wit, he is confronted by the banker’s paradox:  he must manipulate an economy which is so contrived that he is no longer able to lift it.  on the one hand he MUST continue with QE∞, lest his precious markets collapse; on the other he MUST NOT continue with QE∞, lest commodity-price-inflation overwhelm the revolving-credit-capacity of the serfs.  truly this is a vile and well-deserved conundrum he has created and now is impotent to resolve.

Login or register to post comments by Miles Kendig
on Thu, 10/14/2010 – 11:14
#649510

indeed  😉

Login or register to post comments by Bananamerican
on Thu, 10/14/2010 – 11:24
#649542

indeed 😦

Login or register to post comments by dougiefreshhh
on Thu, 10/14/2010 – 11:30
#649558

i’m wondering which bank/individuals are going to be singled out to take the fall for the foreclosure mess. 

the public wants blood, and they want to know the govt will do something about it…for the well being of the public…of course. 

Login or register to post comments by john_connor
on Thu, 10/14/2010 – 11:30
#649560

No doubt; the jawboning already bought at least 100 handles on the SnP.  Not to mention collaborating lies out of Trichet. 

They have run out of outlet valves though.  Japanese, Germans, Aussies, and Swiss eating deflation, big time.  Let’s see how far they can push it.

Login or register to post comments by FubarNation
on Thu, 10/14/2010 – 11:35
#649577

Pardon me Mr. Proprietor – do you still accept Federal Reserve Notes in exchange for merchandise?

Login or register to post comments by Cognitive Dissonance
on Thu, 10/14/2010 – 11:46
#649631

As an experiment that tragically failed, over a year ago I began to ask every person I did business with (post office, grocery store, shoe store, Lowe’s, the phone company etc) over a weeks time if they would accept “Federal Reserve Notes” as payment. Granted most of them were clerks, but not all of them. In several cases, I asked to speak to the manager.

You of course know the results. I was refused every time from tendering legal tender. Until that is they were told it was “money” I was trying to pass and not gas. Except for the shoe store, whose manager believed I was a counterfeiter and refused my cash. Thankfully he accepted my plastic.

Now if I could just break in these shoes? :>)

Login or register to post comments by flacon
on Thu, 10/14/2010 – 11:46
#649627

If it’s like May 6th crash then gold to the moon.

If it’s like Oct 2008 crash then dollar to the moon.

 

I’m betting on gold vs. dollar based on May 6th

Login or register to post comments by doolittlegeorge
on Thu, 10/14/2010 – 11:47
#649633

fresh faces.  love it!

Login or register to post comments by carbonmutant
on Thu, 10/14/2010 – 11:50
#649646

The dollar is at support.

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