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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: pcyhuang who wrote (12867)	10/13/2011 12:57:27 AM
From: Hawkmoon	3 Recommendations Read Replies (2) \| Respond to of 33421

PC.. yes.. it very well could be a Euro focused QE3.. But it's still leveraged to a high degree.. which means it's subject to event risk that could unravel it's benefits very quickly. And we see events like Dexia, which just passed a "stress test" with flying colors earlier this year, not defunct.. And we have Erste bank suddenly disclosing billions in CDS exposure they never previously reported.. And this is all assuming the European people are willing to pay for it.. because this is just the start.. I still submit that we undertook QE1/2, in part, to make sure the Euro didn't break $1.19 (it's original value in 1999), we weakened the dollar to save the Euro. Now we're effectively asking them to weaken the Euro with a massive QE are we not? What will that do for the USD? And will the Fed be willing to match Europe's QE in order to preserve the exchange ratio between the Euro/USD? A lot of unanswered questions. But I'm still not convinced yet that it's safe to dip my feet into the long side of the market for very long. Will feel better when I see the bank sector recover.. That's why I was watching FAS the past couple of days. Hawk