QE2 in round trillions

When you're dealing with a debt failure with a 100 handle in front of the trillions, anything below a trillion won't be considered 'shock and awe'. The real 'shock and awe' will continue to come from the public in terms of the consequences of these actions.

Here is a back-of-an-envelope guess by David Greenlaw at Morgan Stanley on what the Fed can expect from a second blitz of bond purchases, or `Shock & Awe’ as he calls it.

If Ben Bernanke does a further $2 trillion (on top of the $1.7 trillion already in the bag) the yield on 10-year US Treasuries will drop 50 basis points to around 2.2pc.

Source: blogs.telegraph.co.uk

From Jack