"Has the bull market in government bonds finally ended... A change in the wind is being felt as governments listen to the central banks’ recent call for fiscal, rather than monetary policy, to do the heavy policy lifting from hereon in. Is the long bull market in bonds now over."
the German Economy Ministry wants to protect high tech companies in Germany from unwanted takeovers, especially from state-owned and partly state-owned companies in non-European countries. The emphasis is, of course, on Chinese acquisitions of European firms using "hot" money.
"the fact that negative rates would be temporary and deployed only during severely adverse economic conditions would be an advantage. Like quantitative easing, which was also unpopular in many quarters, a period of negative rates would probably be tolerated by politicians if properly motivated and explained" - Ben Bernanke
"One thing we learnt from Japan is that the equity secular valuation bear market takes many economic cycles to unfold and ends when equities are ?dirt cheap?. US equities did not get dirt cheap in March 2009 at a Shiller PE of 14x - they just got cheap. To be dirt cheap they needed to half again from the 666 level they reached."
"I believe times are about to get quite rough economically and politically. But, at the same time, I’m very optimistic about what’s happening in science and technology. So let me hazard some predictions..."
"There is an argument that a Brexit might look similar to the aftermath of sterling?s ignominious exit from the ERM on ?Black Wednesday? 16 September 1992. In a current environment where central banks and governments have failed to generate a strong enough economic recovery to normalise interest rates amid persistent deflationary pressures, one would have thought a substantial decline in one?s currency would be welcomed ?- for that is one way to inject a modicum of inflation back into the economic system."
"Our attention has been diverted. China has embarked on a stealth devaluation of the renminbi. Its new trade-weighted currency basket has fallen 10% since just before its initial August 2015 devaluation (white line in chart below) and it has continued to decline since January even as the Rmb/dollar has stabilised."
“Everyone has a plan until they are punched in the face.” This famous Mike Tyson quote spells out the outlook for investors in the years ahead according to SocGen's Albert Edwards, who warns that investors will not only be punched in the face, they will also get knocked to the floor and kicked repeatedly in the ribs.
China was, in essence, the right shoulder to the greatest head and shoulder pattern in the history of mankind. Central banks and federal governments will do everything in their power to maintain the present system. They will attempt anything and likely everything to maintain what ultimately cannot be maintained. Unfortunately, no one knows how much is too much and the economic, financial, and societal ramifications. Invest accordingly?!?
"I'm not really sure how much more of this I can take. So here we are 5, 6 or is it now 7 years into this economic recovery and it still remains pathetically weak. And so it should in the wake of one of the biggest private sector credit bubbles in history. The de-leveraging hangover was always going to be massive and so it is. Quick-fix monetary QE nonsense has made virtually no difference to the economic recoveries other than to inflate asset prices, make the rich richer, inequality worse and make Joe and Joanna Sixpack want to scream in rage."
"Albert Edwards sees the possibility of a 75% decline from the peak if all his fears were to manifest themselves. Now many view this as an incredible and somewhat outlandish forecast, yet it is not that unreasonable in our view.... These types of declines would leave indices down rough 60-65% from peak, and would send leverage ratios skyrocketing."
Yesterday, when looking at the market's "Bullard 2.0" moment, which in many ways was a carbon copy of the market's response to Bullard's "QE4" comments from October 17, 2014 until just a few minutes before the market close when suddenly selling pressure appeared, we said that either the S&P would soar - as it did in 2014 - hitting all time highs just a few months later, or the "Fed is now shooting VWAP blanks." Judging by what has happened since, in what may come as a very unpleasant surprise to the "the market is very oversold" bulls, it appears to have been the latter.
"The party's over and bond investors who always tend to be more sober types, realize this and have headed for the exits whereas equity investors are so intoxicated they haven't realized that the music has stopped. Equity investors are still gyrating around the dance floor - just as in 1999 and 2007... I believe the Yellen Fed will soon be treated with the same contempt the Greenspan Fed was in the aftermath of the 2008 financial crisis. And they will deserve it."
While the populations of Europe and the US are fed raw propaganda about the regional aims involved, the reality is far different. While we might be tempted to sit in our Western environs, secure in the idea that at least we aren’t ‘over there’ where all the bad things are happening, it would be a mistake to think that this turmoil will not impact you.