Economists pumped out notes this week on how the market would react to the Fed's recently announced quantitative easing program, many offering a unique take on how fixed income instruments and commodities would move.
But more so then not, they didn't offer many compliments to Bernanke and his new policy: one economist went so far to call it heroin that has traders hooked.
Beyond easing, we heard arguments on China and Japan relations, as well as new forecasts for equities.
ASWATH DAMODARAN: The Fed's Latest Plan To Save The Economy Looks Like A Step Toward Insanity
"I am sure that I am missing some significant piece of the puzzle, but as I watch the news coverage and market reaction, I am reminded of one of my favorite movies, 'Groundhog Day,' he writes in a new blog post. "I was a skeptic on the efficacy of QE2 and Operation Twist and I remain unpersuaded on QE3. If the definition of insanity is that you keep trying to do the same thing over and over, expecting a different outcome, then we seem to be fast approaching that point with the Fed."
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DAVID BIANCO: October Will Be Huge For The Stock Market
"October is the next test of market risk appetite. Investors seem to be ignoring weak 3Q EPS, but widespread misses should cause a dip. If investors tolerate weak 3Q EPS, then we are likely to drop our tactical dip call, as we expect y/y EPS growth to resume in 4Q. Our 1500 12-month target is likely to be raised if Republicans take control of the Senate, but not cut if Democrats retain control."
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DAVID ZERVOS: Bernanke Is 'Absolutely' Lying About What QE Does To Interest Rates
"Conventional wisdom suggests that when the Fed takes duration out of the market, bond prices are supposed to rise. Even our fearless Colonel Bernanke tells us he is lowering interest rates. But that's not happening. Is he lying? Absolutely!! Has the myopic Treasury trading community completely misunderstood how QE affects bond yields? Absolutely."
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See the rest of the story at Business Insider
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DIGITAL JUICE
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