• 4 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 6 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 8 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 9 hours Schlumberger Warns Of Moderating Investment In North America
  • 10 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 11 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 12 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 14 hours New Video Game Targets Oil Infrastructure
  • 15 hours Shell Restarts Bonny Light Exports
  • 16 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 23 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 1 day British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 1 day Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 1 day Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 1 day OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 2 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 4 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 4 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 5 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

Why Wall Street Is Bullish On Refiners

Wells Fargo has noted that…

Alt Text

Goldman’s Commodity Unit Sees Worst Q1 In A Decade

Investment bank Goldman Sachs saw…

Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

The End of QE2 is In the Market

The End of QE2 is In the Market

No one has been more negative about the long term outlook for the Treasury bond markets than I. At the rate that we are piling on spending while chopping back on tax revenues, the collapse of the whole house of cards was a mathematical certainty. That’s why my long term target for the leveraged short Treasury bond ETF (TBT), now trading at $36.40, is $200.

So no one was less surprised than me when Standard & Poors put the debt of the United States government on negative credit watch for the first time in history. If nothing else, this reaffirms the deep lagging nature of the ratings business, which is infamous for closing the barn door after the horses have bolted. They all should have been put out of their misery (and ours!) after the subprime crisis.

What was surprising was the markets’ reaction. I fully expected to get a spanking on my short bond put position, which had recently gone from strength to strength.

The opening saw major selling of stocks, bonds, the Euro, oil, and commodities, and panic buying of gold, silver, and the dollar. Then two hours into the dump, everything abruptly changed course. Treasuries made back their entire two point loss, and stocks rallied steadily, while the (TLT) was well up on the day, leaving many traders scratching their heads in puzzlement.

There is only one possible reading of this response. The end of QE2, Ben Bernanke’s massively simulative monetary program, is now fully priced into the market. This was not a great stretch, as the Fed announced the June 30 end date when the ambitious program was made public in November. It means that the coming summer correction in stock markets will bring a quiet bond market at worst, and a robust one at best.

Flight to safety will be the driving force in the markets, and this will be great for government bonds and the dollar. Those awaiting Armageddon will have to wait a few more months. And my bond market puts? My thrashing turned out to be a short, forgiving one, and the position closed out the day at a new high.

By. Mad Hedge Fund Trader




Back to homepage


Leave a comment
  • Anonymous on April 18 2011 said:
    Ben Bernanke and friends should be tried as traitors. The attitude of printing money just kills honest peoples finances. I wonder if he even cares.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News