Central Banks

The Trump Collapse Scapegoat Narrative Has Now Been Launched

"I have been warning since long before the election that Trump’s presidency would be the perfect vehicle for central banks and international financiers to divert blame for the economic crisis that would inevitably explode once the Fed moved firmly into interest rate hikes. Every indication since my initial prediction shows that this is the case. The media was building the foundation of the narrative from the moment Trump won the election."

Crispin Odey: "Why Do I Remain Stubbornly Bearish?"

"When it comes to markets, we have to watch for ‘the Minsky moment’. Minsky argued that periods of low volatility, presaged crises because they encouraged excessive risk taking. Well, we are into the risk taking. But this fund truly does not demand that the end of the world comes tomorrow."

The Keynesian Cult Has Failed: "Emergency" Stimulus Is Now Permanent

What do we call a status quo in which "emergency measures" have become permanent props? A failure. The "emergency" responses to the Global Financial Meltdown of 2008-09 are, eight years on, permanent fixtures. Everyone knows what would happen if the deficit spending, money-printing, zero interest rates, shadow banking, asset purchases by central banks and all the rest of the Keynesian Cult's program stopped: the status quo falls apart.

A Bearish Positive Carry Trade?

The Eurostoxx outperformance of the past month has garnered a lot of attention, but there is another similar trade many investors are missing. Not only that, but it has a positive carry, something that is sorely lacking in this day and age of NIRP.

Does The World End In Fire Or Ice?

Japan has managed to offset decades of deflationary dynamics, but at a cost that is hidden beneath the surface of apparent stability. Do we implode in a deflationary death spiral (ice) or in an inflationary death spiral (fire)?

RBC: Welcome To "The Insanity Loop"

"It's a classic 'pennies in front of a stream-roller' / 'negative skew' return profile - a Taleb distribution...The problem is….IT KEEPS WORKING, because market expectations for rates / curves / inflation expectations remain D.O.A., which perversely keeps the major global central banks 'reflexively easy'..."

Trader "Appalled" At Market Reaction To Manchester Bombing "There's More To Life Than Next Few Basis Points"

"...the market reaction to the bombing in Manchester was appalling. And an indictment of a system that rewards, time and again, through official reaction functions, utter callousness and obliviousness to events... Look around you. It’s high time central bankers, politicians and, even, investors realized that there’s more to the world than the next few basis points."

Cudmore: "I’m Failing To See Why Dip-Buyers Aren’t Correct"

"U.S. equities are more likely to melt-up rather than melt-down in the short-term. Too many investors seem obsessed with the fact that U.S. stocks are "expensive" and "overvalued" when compared to historical metrics. I’m not disputing those statements. But when there’s an unprecedented amount of liquidity in global markets, then valuations at unprecedented levels don’t seem completely illogical."

Why The Chinese Yuan Won't Be The World's Reserve Currency

"The desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations." Disconnected from the dollar, yes - but not connected to the yuan...

BofA Finally Asks "Is The Tech Bubble Happening Again?"

"US growth stocks just surpassed 2000 “bubble” highs vs global value stocks; data on valuation, flows, and the relationship between equities and bond yields are all good clues that a speculative overshoot has begun; there are nascent signs we are in the very early stages of an overshoot."