Central Banks

"All Eyes On Central Banks" In September, But "No Reason To Smile"

September will be quite a busy month for investors since there are around 30 major central banks meetings scheduled. Since the Bank of England’s last policy announcement, the total monthly amount in global official quantitative easing has reached almost $200 billion, which corresponds, for the purpose of comparison, to Portugal’s annual GDP in 2015. Long-rumoured and oft-discussed, QE infinity is now a reality.

The Central Banks Are Now Ready To Launch Their 'Brave New World'

What analysts out there need to understand, whether they are independent or mainstream, is that a great shift in central bank policy and attitude is coming. Christine Lagarde at the IMF calls it the “economic reset,” some Fed officials, like Atlanta Fed President Dennis Lockhart, state that central banks are entering a “brave new world.” These are highly loaded phrases that represent a drastic overhaul of the global financial system; an overhaul that is quite deliberate and inevitably destructive for certain nations and economies, including the U.S.

This Is The "Bubbly" Chart That Keeps The Fed's Rosengren Up At Night

 “Should a large negative shock occur, firms and households would be exposed to greater losses through their holdings of riskier assets than they would be if they were not reaching for yield.... should prevailing economic conditions change in response to a large negative economic shock, commercial real estate prices could decline relatively quickly, leading to large losses at leveraged firms.”

"The Fed Has Mastered Market Manipulation" - Bill Gross Explains Why He Is Not A "Broken Clock"

"The problem with Cassandras, such as Gross and Jim Grant and Stanley Druckenmiller, among a host of others, is that we/they can be compared to a broken watch that is right twice a day but wrong for the other 1,438 minutes. But believe me: This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies. Sooner rather than later, Yellen’s smooth shot from the fairway will find the deep rough."

In Historic Event, China Sells First World Bank SDR-Denominated Bonds In Decades

In one of the most closely followed bond issues in recent history, overnight the IBRD, one of the five member-institutions of the World Bank Group, sold 500 million SDR-denominated three-year bonds carrying a coupon of 0.49% at an auction in China's interbank market on Wednesday. This was the first SDR denominated offering in three decades, with the issuance symbolically taking place in Shanghai one month before the official inclusion of China's currency in the SDR basket. 

Futures Flat, Global Stocks Rise As Treasury Yields See Biggest Monthly Jump In Over A Year

The August market doldrums were on display on the last day of the month as S&P futures were fractionally lower on non-existent volume, while both Europe and Asia were modestly in the green; ten-year Treasury yields headed for the biggest monthly jump in more than a year while the dhe dollar gained for a sixth day against the yen in the longest winning streak since March. European stocks advanced for a second day, adding to a monthly gain as oil trimmed its advance in the best month since April.

Stanley Fischer's Bizarre Justification For Negative Rates

"Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors."

Deutsche Bank Calculates How Much Of The S&P's Value Is Due To Central Banks

If the ERP is responsible for 92% of the S&P500 move since 2012, or just over 800 points, that would imply that central bank policies are directly responsible for approximately 40% of the "value" in the market; any moves to undo this support could result in a drop that leaves the S&P in the neighborhood of ~1,400.

ICI Lists Three Ways The Market Is "Weird"

  • Eequity Capital Markets volume is down ~50%, we’re in our 10th straight month of down y/y volume
  • PE funds are doing more selling vs IPO'ing lately and block trades are 3x their normal percentage of secondary volume as sellers look to take the money and run 
  • Several industries (like energy, biotech/health care and parts of technology) have been lesser participants

Wake Up America - It's Time To Eliminate The 'Pusher'

Central banks can only do one thing, and that's provide monetary welfare for the wealthy. Wake up, America. The only way to stop widening wealth and income inequality and kick your smack addiction is to eliminate the pusher.

Futures Flat, Global Stocks Higher As Dollar Resumes Rise

The quiet overnight market had been focused on the upcoming comments by Stanley Fischer, who is set to give a Bloomberg TV interview at 6:30am ET, where he was expected to expand on his recent hawkish comments. Heading into Fischer's appearance, the dollar strengthened, global stocks rose, oil hovered around $47, while US index futures were largely flat and Treasuries fell.

Former Barrick Gold President: "A Big Move Has Begun. There's Something Fundamentally Wrong With The Economy"

"I think a move has begun... When you have bonds at negative interest rates you know there’s something fundamentally wrong with the economy. That’s a statement of the relative safeness of currencies... when people actually feel they can buy that bond and pay money to keep it in that bond just because it’s a safer haven than other investments then that’s pretty bad."