Monetary Policy

Satyajit Das: What Does Brexit Really Signify?

History may well record that little changed as a result of Brexit after the long tortured process of negotiation of the terms of withdrawal and arrangements regarding trade and other matters with the EU. But, if the deep seated economic and social divisions within Britain or other societies cannot be dealt with peacefully and through existing processes, the risk is that it will unleash the furies of nationalism and isolationism in unknown ways and with unpredictable results.

 

This Is What Draghi Said To Spark Speculation Of Another Global Central Bank Bailout

The head of the ECB avoided mentioning the U.K.’s vote to leave the European Union but instead called for greater alignment of policies globally to mitigate the spillover risks from ultra-loose monetary measures.  “We can benefit from alignment of policies,” Draghi said at the ECB Forum in Sintra, Portugal. “What I mean by alignment is a shared diagnosis of the root causes of the challenges that affect us all; and a shared commitment to found our domestic policies on that diagnosis."

Key Events In The Coming Week: All About Brexit

With global markets gyrating on every piece of news surrounding the Brexit drama, what’s the timetable for UK-related (and all other macro) events this week and beyond?

Frontrunning: June 27

  • After ‘Brexit’ Vote, Europe’s Leaders Debate Timing of U.K.’s Departure (WSJ)
  • Pound Slumps, Banks Tumble on Brexit Fallout; Bonds Extend Gains (BBG)
  • To Brexit or Regrexit? A dis-United Kingdom ponders turmoil of EU divorce (Reuters)
  • ‘Brexit’ Sparks Political Turmoil Across U.K. (WSJ)
  • 10 ways to leave EU lover; scenarios for Brexit (Reuters)
  • The $100 Trillion Bond Market’s Got Bigger Concerns Than Brexit (BBG)

Brits Lead Revolt Against Age Of Inequality, BofAML Favors "Gold, Vol, & Cash Positions"

Brexit is the biggest electorate riposte yet to The Age Of Inequality created by policymakers to save (some) of the world, and as BofAML's Michael Hartnett warns, investors must anticipate a shift to an increasingly populist policy response. The backdrop of Quantitative Failure nonetheless means a renewed bull market in risk assets is impossible unless fiscal policy can quickly arrest the downside in GDP & EPS forecasts.

The Fed's Rate Hike Plans Are Now "In Tatters" - What Wall Street Thinks

Any “faint prospect” of a Fed July rate increase has entirely vanished, ING economist Rob Carnell wrote in note adding that the longstanding ING call for Sept. hike looks to be “hanging in tatters.”  Here are more comments, courtesy of Bloomberg, from Wall Steet's so-called experts, none of whom predicted the actual a Brexit outcome, about U.S. monetary policy outlook following the outcome of the U.K. referendum.

Greenspan: "This Is The Worst Period I Recall; There's Nothing Like It"

"This is the worst period, I recall since I've been in public service. There's nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I'd love to find something positive to say."

"Don't Try To Be A Hero Today" Veteran Trader Warns "Self-Preservation Is Paramount"

With knife-catching "value" investors proclaiming yesterday that any dip today would be an opportunity, it appears once again that faced with the reality of Brexit blowback, no one (not even the central banks) are buying the f##king dip). As Bloomberg's Mark Cudmore exclaims "Don't be a hero," to those value-investors, warning that "most of the market is still in denial."

America's Seen 50% Surge In Partisan Conflict Since Obama's Second Term Started

'Hope & Change' and devolved into Nope & Deranged... Since the start of President Obama's second term, Goldman Sachs note that the Partisan Conflict Index has averaged 50% higher than its 30 year average. So who is to blame? President Obama's divisiveness? Or The Federal Reserve's extremely accommodative monetary polict removing any need for actual decision-making?

"I've Never Felt So Resigned To The Fact That We Are All Stuck..."

"I’ve never felt so ... resigned ... to the fact we are ALL well and truly stuck. The Fed is stuck. The ECB and the BOJ are stuck. The banks are stuck. Corporations are stuck. Asset managers are stuck. Financial advisors are stuck. Investors are stuck. Republicans are stuck. Democrats are stuck. We are all stuck in a very powerful political equilibrium where the costs of changing our current bleak course of ineffective monetary policy and counter-productive regulatory policy are so astronomical that The Powers That Be have no alternative but to continue with what they know full well isn’t working."