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There is no way the folks at Chase and Goldman couldn't have known what the end of QE would bring.  As I've been saying for 7+ years, the problem isn't liquidity but solvency, and since QE is a liquidity fix, it had to have some purpose other than actually righting the ship (Many have said that things haven't straightened out because there hasn't been enough QE, that the Fed brought a knife to a gun fight.  Actually, the Fed brought a flamethrower to a funeral: QE was a completely wrong response to the event.).  That purpose was simply to fill Chase's and Goldman's money hoses so they point them wherever they wanted.  They found a way to securitize oil that the Saudis could accept (See my earlier comment on bai' al 'inah.) and went to town with everyone else's money.  They knew that, when QE ended, the hoses would empty, and repositioned themselves accordingly.
by rifek on Tue Jan 27th, 2015 at 02:37:09 PM EST
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