Wednesday, July 13, 2011

Bernanke - Economy

So Mr. Bernanke is confirming what we have worried about - 2nd half of 2011 has some risks of being slower than expected. FED Chairman is hedging his earlier view of US economy with "maybe more stimulus is needed" words. Market loves it at the moment. Dollar is thrown under the bus and all risk is bought.
I just have one question - did Helicopter Ben just give the market a candy, or as I sad yesterday a pacifier? Crying baby will calm down, but after this candy is gone (2-3 days), what we will really have is "maybe" out of that phrase. There will be lag between end of QE2 and decision to continue QELite. I am thinking that we sell off after this initial reaction, as big money realizes that earnings have to be revised and price targets lowered, and perhaps by a wide margin on some high flyers.

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