Graham Summers can't make up his friggin' mind

Graham Summers last month:
There will be no QE 3. [...] the whole QE game is over. I know that most folks believe Bernanke will issue QE all the way to infinite [sic], but the actual likelihood of this is low given the public’s outrage over the continued bailouts and the like. Obama and the rest of Washington can sell out to the Wall Street banks all they want. But when the US starts experiencing the sort of turmoil that is rocking the Middle East (and it will, mark my words) the QE game will end.

Graham Summers today:
Indeed, the Fed HAS to engage in more QE 3 if it doesn’t want the entire market to collapse. Given the breakdown in Europe, the IMPLOSION in the Middle East, and the ongoing nuclear disaster in Japan, the removal of Fed liquidity would kick off a MASSIVE systemic Crisis.

Remember, we had a full-scale market breakdown when QE 1 ended and that was because of Greece: a country with a GDP of $329 billion. Removing liquidity from the markets when Japan, the fourth largest economy in the world (if you count Europe as one economy), the largest Oil exporting region in the world (the Middle East), and Spain and Portugal are all breaking down would lead to an absolute market DISASTER.

The Fed will not risk this. Besides it HAS to keep the liquidity going if it’s to continue supporting the TBTF banks in the US. Remember, 99% of what the Fed’s done in the last two years has been aimed at supporting the large, Too Big To Fail (TBTF) Wall Street banks.

To be fair, I've been a little uncertain on QE3 myself. I've been of the mind that the Fed will eventually have to monetize the giant deficit, but they'd need a big excuse like a market crash to do it.

What's changed between Summers' two forecasts that made him do a 180-degree turn? The Japan disaster, European deterioration, and US GDP slowing. I don't think that's enough yet to overcome gas prices and "Let them eat iPads." But it's probably getting close.

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Nailed it

Twitter (X) : To be fair, though, I thought they'd come up with someone more appealing than Cackles Harris.