Random Thoughts: Ben Bernanke Hints at QE 2.5

By Todd Harrison  JUL 13, 2011 10:45 AM

When in doubt, lay it out.


Federal Reserve Chairman Ben Bernanke hit the tape this morning, offering that the Fed is "prepared to respond" if more stimulus is needed.

Buy, Mortimer, Buy!

The very next headline was that Bernanke said "the economy may also warrant less accommodation."

Sell, Randolph, Sell?

Did he just announce QE 2.5?

Was it double talk?

I don't know so I'll say everything and hope something sticks?

I love you but I can't be with you?

It's not you, it's me?

Cats and dogs?

There was one?

I'll tell you, one day we'll (hopefully) tell our grandkids about this juncture in history, much like our grandparents shared stories of their youth -- along with examples of why they remained "thrifty" their entire life -- because they learned a valuable lesson during The Depression, and tried to pass those lessons down the generational food chain.

It's not too late to learn... but it seems like we'll be force-fed that lesson the hard way.

In the meantime, we've got headline risk coming out of every orifice; trade -- or don’t trade -- accordingly as the market chews through this process of price discovery.

As my friend John used to say, the world continues to get curious and curiouser.

Dollah Hollar!

Minyans know the ol' saw by now; a lower dollar is a necessary precursor to -- but no guarantor of -- higher asset class prices. In other words, both the dollar and asset classes can decline, but we're hard pressed to see the two rally together.

With that in mind check the level of the dollar, which is still trending higher (higher lows), and let's use that as a third base coach as we round (the) second (quantitative easing).

Click to enlarge

Random Thoughts:


Follow Todd on Twitter @Todd_Harrison!

No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.