Bo Peng's  Instablog

Bo Peng
Send Message
I run a fund based on automated trading and technical analysis. But my favorite pastime is thinking and talking about political economy. I guess I'm George Soros. Writing helps clarifying my thinking. All opinion expressed here is mine, wholly mine, nobody's but mine. And all trading/investment... More
My blog:
  • QE2 Sell-the-news Starts Early? 1 comment
    Oct 27, 2010 4:39 AM | about stocks: GLD, PHYS, UUP, UDN, SPY

    Here's a preview of QE2, from WSJ and footnoted by FT Alphaville: a few $Bs of treasury purchases over a few months. This is so Japan-lost-decadey that it will surely trigger a preliminary sell the news today. Frontrunning the fed is so July. The new trade is frontrunning the Fed frontrunners.

    Expect surge in USD and drop in stocks, gold, commods. Treasuries and TIPS are harder to predict.

    I wrote early last week that the timid nature of QE2 is to be expected. The argument has only been strengthened by the earnings and economic news since then. Even Heli Bernanke now has a hard time arguing for a bazooka QE2. The market's expectation of QE2 has moderated a bit, but clearly still unrealistically high. My guess, which differs from that of FT Alphaville's, is that Fed has realized the danger of sudden disappointment, thus decided to leak the plan in hope of a softer blow.

    So instead of one big crash on 11/3, we'll get two crashes, 10/27 and 11/3. Let's see how well this plan works out.

    Disclosure: None

    Stocks: GLD, PHYS, UUP, UDN, SPY
Back To Bo Peng's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • baystoeninc
    , contributor
    Comments (35) | Send Message
    When everyone expects something to happen, it might not happen.
    27 Oct 2010, 09:16 PM Reply Like
Full index of posts »
Latest Followers


  • Mkts to continue recovering from post-FOMC panic but policy uncertainty to remain. Bad news is again good
    Jul 1, 2013
  • China cenbank bursting bubble in shadow banking & housing. Not a crisis, but managed adj. Long-term bullish.
    Jun 25, 2013
  • Could Bernanke decide to do the right thing Wed, now that Obama has fired him very publicly?
    Jun 19, 2013
More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.