Investors should prepare themselves for a third round of quantitative easing, Simon Maughn, co-head of European equities at MF Global, told CNBC Wednesday.
“The bond market is going in one direction which is up-falling yields which is telling you quite clearly the direction of economic travel is downwards. Downgrades. QE3 (a third round of quantitative easing) is coming,” said Maughn. “The bond markets are all smarter than us, and that’s exactly what the bond markets are telling me.”
“What’s interesting in the bond markets over the last couple of sessions is, you’ve seen human traders trying to step in and call this turn in the market the same way that equities have done … and they have just been mowed down by the quant funds which are all about leverage, all about momentum and are betting on bond prices going up,” added Maughn.
Once again, the United States will step up as the marginal buyer of bonds, said Maughn.
"One more big injection of cash into the bond market should take you through at least the summer season into the beginning of the fourth quarter.”
“That cash injection will have the normal inflationary knock-on impact, driving back up commodities, supporting industrial stocks, dragging the financials up with them… I think it’s all about the monetary injection trade,” Maughn told CNBC.
29 Comments Total
COMMENTS
| matism | Jun 1, 2011 07:45 AM ET |
Damn them straight to hell for what they have done to this country!
| bluffbarron | Jun 1, 2011 08:27 AM ET |
These are the titans of finance! Looking for more cheap money! The FED is paying off the bankers and now they are propping up the stock market and commodities.
Keep in mind that the Fed is buying their own debt through a scheme called Permanent Open Market Operations (POMO). How long do you think that's going to fly? The dollar will be dead if QE3 is enacted.
Call your Federal Representatives and demand that this STOPS!
Keep in mind that the Fed is buying their own debt through a scheme called Permanent Open Market Operations (POMO). How long do you think that's going to fly? The dollar will be dead if QE3 is enacted.
Call your Federal Representatives and demand that this STOPS!
| Expat1007 | Jun 1, 2011 08:50 AM ET |
Geither and Bernake and their plan to print the country out of this mess is the biggest fiasco since the Wiermar Republic. If this doesn't cause hyper-inflation, it will be a miracle. Wheelbarrows full of Deutsche Marks was exactly what the Germans needed to buy a loaf of bread during the great depression. I guess that is what this administration hopes for for Americans in the near future. This is heartbreaking to read and watch from abroad.
| snaapperboy | Jun 1, 2011 09:08 AM ET |
What do Timmy G and Bernanke not understand about "It's NOT working?"
| jimster2 | Jun 1, 2011 09:48 AM ET |
I"m taking all my extra cash and investing in toilet paper I think it will be worth more and at least it goes farther when it matters.
| davebuc | Jun 1, 2011 09:50 AM ET |
They say the definition of stupidity is doing the same thing multiple times and expecting a different outcome!!!!
Let's see stimulus #1 ONLY shed 1,000,000 jobs!! How many jobs to they expect to lose by further bankrupting, and destroying our countries future??
Will someone please arrest and imprision these criminals and felons who live in DC???
These imbiciles make me sick and want to vomit!! I cannot believe they are DESTROYING America and tranforming it into a third world banana republic!!!
Let's see stimulus #1 ONLY shed 1,000,000 jobs!! How many jobs to they expect to lose by further bankrupting, and destroying our countries future??
Will someone please arrest and imprision these criminals and felons who live in DC???
These imbiciles make me sick and want to vomit!! I cannot believe they are DESTROYING America and tranforming it into a third world banana republic!!!
| beachbum40 | Jun 1, 2011 09:59 AM ET |
The FED should be audited and then shut down when it's discovered that the whole system is a ponzi scheme. Get rid of them all.
| lmnopr | Jun 1, 2011 10:16 AM ET |
You can parse it how ever you wish but real unemployment is at 18%,companies are decreasing inventories and have down sized as far as they can go. The next down size would be out of business. We are in a stagnet economy on the road to deflation since prices are going up and there are no jobs; simply put without jobs there is no demand for goods and services and therefore no production. Obama’s Keynesian economics theory proclaims government can spur the economy, government cannot create wealth it can only confiscate it and when it does it destroys jobs. The proof of that is right before our very eyes with stimulus after stimulus. What does work is less government regulation and oppression and fewer taxes; it worked in the sixties under Kennedy, in the eighties under Regan and under Bush 2000. So why are we on this road? It’s easy because it’s the easiest way for socialist to create government power and dependency among the masses. Keynesian economics is the blue to European Socialism and can eventually lead to Marxism... it’s called central planning the equal distribution of misery.
| Thane36425 | Jun 1, 2011 10:18 AM ET |
If I read this article correctly it sounds like the bnod trading is run by machines now and when actual humans tried to intervene, the machines retaliated by pushing even harder. That's really nice. For all the financial "geniuses" running around Wall Street its a bunch of programs actually doing the trading. Thing is, who programs those things and what happens if some of them get hacked or otherwise go haywire?
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