Fed Asks Dealers to Estimate Size, Impact of Debt Purchases – Rebecca Christie and Craig Torres, Bloomberg
You can’t make this stuff up. The Fed has asked bond dealers to weigh in on their expectations of quantitative easing 2.0 (a.k.a. more money printing). The Fed is trying to gauge market expectations to avoid a potential downside surprise. This is idiotic. The Street knows what the Fed is up to and they are the primary beneficiaries of more money printing. Do you think Goldman is going to tell the Fed that they only expect a few hundred billion in money printing? Not a chance, bond dealers are going to overestimate in hopes of getting an upside surprise from the Fed. I’m afraid, Bernanke & Co., are about to be schooled by the Street.