When Fed QE Goes Bust - Real Time Insight

Date : 07/16/2012 @ 10:17AM
Source : Zacks
Stock : Spdr S&P 500 (SPY)
Quote : 270.05  -1.35 (-0.50%) @ 7:19PM
Spdr S&P 500 share price Chart

When Fed QE Goes Bust - Real Time Insight

I'll admit it. I've been a Keynesian. To me, pumping money into the economy, and monetizing debt through quantitiatve easing (i.e., printing new money), was the best course of action since 2008 because the alternative -- a Japan-style deflationary spiral -- was unacceptable and entirely avoidable. Inflation, of any amount, was worth all the risks.

But something curious is going on. The economy is not recovering in a robust way. After today's disappointing retail sales trend continued, Goldman Sachs lowered their 2Q GDP estimate another 2/10ths to 1.1%. They had dropped it to 1.3% from 1.6% just last week on more dismal economic data.

Yet financial markets -- stocks, bonds, gold, commodity prices -- seem to really benefit from QE. Below is a chart from a group called Phoenix Capital Research which plots the S&P 500 index minus the 24-hour pre-FOMC price ramps.

Granted there are other ways of looking at the effectiveness of QE on both markets and the economy. But today I am wondering if QE is still a necessary evil, or if it's actually distorting markets and could possibly damage the long-run health of the economy.

What do you see for the next 6-18 months of the US economy, with or without QE?

CRYSHS-AUS DOLR (FXA): ETF Research Reports
CRYSHS-EURO TR (FXE): ETF Research Reports
SPDR-GOLD TRUST (GLD): ETF Research Reports
SPDR-SP 500 TR (SPY): ETF Research Reports
US-OIL FUND LP (USO): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research

Spdr S&P 500 (AMEX:SPY)
Historical Stock Chart

1 Year : From Feb 2017 to Feb 2018

Click Here for more Spdr S&P 500 Charts.

Spdr S&P 500 (AMEX:SPY)
Intraday Stock Chart

Today : Wednesday 21 February 2018

Click Here for more Spdr S&P 500 Charts.

Latest SPY Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....

No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts
Your Recent History
Gulf Keyst..
FTSE 100
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P:41 V:us D:20180222 00:34:28