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How this works


The algobots go wild buying the ES (SP 500 futures) as Bernanke utters a hyperbullish keyword.


Then, hedgies and bank traders meticulously close the ES/Risk gap that has been exposed driving commodites higher.


Which is why the Fed's best friends are actually its worst enemies.


The moral conundrum is sort of like the matter with Joe's wife and Bob- do you think I should tell Joe?

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Re: How this works


“The promised refi boom from QE2 never happened. Consumer spending was not stimulated (after all, households have the wherewithal to borrow more but are choosing to deleverage, notwithstanding the fact that borrowing is historically cheap and returns to savings vehicles are dismal). Businesses are sitting on trillions of cash and will not invest or hire in this economy based strictly on slightly cheaper financing costs. So, market participants understandably pine for QE3 because it will further artificially inflate the value of the financial assets that they trade, but there is virtually no reason to think that it would make a meaningful difference for the economy.” — Stephen Stanley, Pierpont Securities.

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Re: How this works

Oops. As of 3:12 ET


Looks like ES is closing back to risk rather than the usual vice versa.


Not a good sign for the everything market.

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