Bank of Japan
The BoJ Just Promised To Buy $2.5 Billion In Make-Believe ETFs: What It Means For Japanese CorporatesSubmitted by Tyler Durden on 12/21/2015 12:11 -0400
“These kinds of ETFs don’t exist now. Using capital spending as a factor in deciding what goes in an ETF is quite unusual. I think the message from the BOJ is for us to go out and make them.”
“To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything.” ~Edward Abbey
What happens the next time global GDP takes a nosedive when Central Banks have already used up all of their ammunition?
When the 'Land of the Rising Sun' jumps into the abyss...
Just in case yesterday's weakness was mistaken for "well, it's just stabilizing before the next leg higher," US equity markets are pooping the bed this morning with the Dow down over 500 points from its post-Yellen highs, FANGs plunging red, credit collapsing, and bond yields slumping. Between the widely watched quad-witching, Fed policy error concerns, and the utter failure of the Bank of Japan's efforts to save the world, global stocks and bonds are flashing red warnings for the end of centrally planned markets.
For a brief few minutes, overnight saw exactly the reaction that central planners had hoped for when The Bank Of Japan announced it would buy 'moar' stock ETFs and extend bond duration buying ad nauseum. However, within just 15 minutes something happened that we haven't seen since the world embarked on this experimental nightmare. Despite the front-ran promises to buy Japanese stocks "whatever it takes" traders sold... and sold large.
Futures Slide As Quad-Witching Has A Violently Volatile Start After Massive BOJ FX Headfake; Oil TumblesSubmitted by Tyler Durden on 12/18/2015 07:49 -0400
Following the latest BOJ statement, the market found itself wrongfooted assuming the BOJ was actually launching another episode of easing, sending the USDJPY soaring, until suddenly the realization swept the market that not only was the incremental action not really material, but even Kuroda spoke shortly after the announcement, confirming that "today's decision wasn't additional easing." The result was one of the biggest FX headfakes in recent days, perhaps on par with that from December 4 when EUR shorts were crushed, as the biggest carry pair first soared then tumbled and since the Yen correlation drives so many risk assets, also pulled down not only Japanese stocks but US equity futures.
Take note, these charts signal that the bull markets of the last six years are ending. The markets are primed for another Crash, just as they were in 2000 and 2007.
We have reached the apogee of history’s greatest credit inflation. Now we’re hurtling into a prolonged worldwide deflation. You can already see this deflation in the plunge of oil, iron ore, copper and other commodity prices. We are in uncharted waters after nearly 20 years of madcap money printing by the Fed and other central banks. The world’s central banks are finally out of dry powder. They no longer have the means to inflate the global credit and financial bubble. That’s why today’s FOMC meeting is the most crucial inflection point since 1929.
We are nearing a crucial inflection point in the worldwide bubble finance cycle that has been underway for more than two decades. To wit, the world’s central banks have finally run out of dry powder. They will be unable to stop the credit implosion which must inexorably follow the false boom.
In a recent survey not a single major central bank could provide an example of an accurate “a priori” recession forecast. The silence from the Federal Reserve, European Central Bank, BOE, BOJ and the Bank of Canada is deafening.
The central banks are simply trapped. They have bought in bonds under the theory that this will stimulate the economy by injecting cash. But there are several problems with this entire concept. This is an elitist view to say the least for the money injected does not stimulate the economy for it never reaches the consumer. This attempt to stimulate by increasing the money supply assumes that it does not matter who has the money... The attempt to “manage” the economy from a macro level without considering the capital flow within the system is leading to disaster.
What do you do when you're a government statistician and the economic data doesn't say what you want it to say? Why you "adjust" it of course.
Global Stocks Tread Water After Two Consecutive Terrorist Scares; Oil Rises, Industrial Metals TumbleSubmitted by Tyler Durden on 11/18/2015 08:03 -0400
If this weekend's gruesome terrorist attack on Paris ended up being hugely bullish for stocks, then two subsequent events, a stadium-evacuation scare in Hannover (where Angela Merkel was supposed to be present) and a raid in north Paris which left several dead in the ongoing manhunt against the alleged ISIS mastermind, appear to have but some question into if not stocks then algos whether a rising wave of terrorist hatred across Europe is truly what central bankers need to unleash more QE. That said, we expect the current weakness to last only until the traditional USDJPY carry ramp pushes stocks traditionally higher.