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The Markets Just Sounded the Death Knell For QE

Phoenix Capital Research's picture




 

The Central Bank intervention fiasco continues to unravel before our eyes.

 

Globally all Central Banks have kept an eye on the Bank of Japan, which announced the single largest QE program relative to its GDP in history. That one single QE program announced in April 2013 is equal to over 20% of Japan’s GDP.

 

Japan experienced two brief quarters of improved economic activity, before things turned south again. Turns out that printing trillions of dollars to buy bonds doesn’t create growth.

 

The latest example is Sony, the Japanese electronics giant which just announced a 70% COLLAPSE in its profit outlook. Sony’s CEO had stated previously that a weak Yen, caused by the Bank of Japan’s QE program was actually a “disadvantage.”

 

We now have concrete proof as Sony’s profits outlook evaporates.

 

This is the death knell of QE. We now know for a fact that the Fed and other Central Banks are aware that QE doesn’t create jobs nor does it improve the broader economy.

 

All that leaves is stocks… which have benefitted enormously from QE, with the S&P 500 rising to new record highs boosted by the Fed’s money printing.

 

However, ultimately stocks react to profits. And as Sony has proven, QE hurts rather than helps profits. Indeed, Sony’s stock is down over 1.5% on the earnings outlook drop. And it’s essentially breakeven since the Bank of Japan announced its massive QE program.

 

 

The writing is on the wall. QE is good for very little these days. If the Bank of Japan can spend over $1.4 TRILLION and corporate profits fall while stocks go nowhere, it’s the end of the line for Central Bank money printing.
 

This concludes this article, swing by www.gainspainscapital.com for a FREE investment reports Protect Your Portfolio, which outlines how to protect your portfolio from bear market collapses.

 

Best Regards

 

Phoenix Capital Research

 

 

 

 

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Fri, 05/02/2014 - 05:07 | 4719063 dreadnaught
dreadnaught's picture

 n/t

Fri, 05/02/2014 - 01:03 | 4718933 kurt
kurt's picture

So, Like

What?

Thu, 05/01/2014 - 21:43 | 4718489 rsnoble
rsnoble's picture

A few things.....

Sony is only down 1.5%(which is nothing for a daily move) on a 70% profit decline forcast?  LMAO!!!

If stocks "are all that matters" is it really the end of the road? LOL.

Lastly.......does this mean another vist to the shrine in Japan where war criminals are burried??

Thu, 05/01/2014 - 21:02 | 4718389 RMolineaux
RMolineaux's picture

There are two problems with this item:  The author asserts that US QE has inflated the US stock market, while the Japanese QE has deflated the Japanese stock market.  The author does not explain the discrepancy.  Also, the author fails to explain why Sony has not benefitted from the QE.  Perhaps the answer is that most of its electronic components are now imported from China at higher prices.

Thu, 05/01/2014 - 20:54 | 4718372 AdvancingTime
AdvancingTime's picture

Japan continues to slide towards an economic abyss with each passing day. The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency.

This means paying off their debt with worthless yen where possible and in many cases defaulting on promises made. Japan's public debt, which stands at around 230% of its gross domestic product (GDP), is the highest in the industrialized world. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html

 

Thu, 05/01/2014 - 20:51 | 4718351 AdvancingTime
AdvancingTime's picture

We may soon be forced to face our economic Armageddon. The forces that have driven stock markets ever-higher and upward may be beginning to wane. Many markets became distorted years ago when QE and super low interest rates hit the economy in an effort to lessen many of the missteps of recent years.

The policy of QE it now appears has been more helpful in holding up the underlying value of assets and derivatives than helping to repair a wounded economy. Unfortunately the economy has not fared as well as these asset prices and in many ways these policies have harmed Main Street. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/05/facing-our-economic-armageddon.html

 

Thu, 05/01/2014 - 18:56 | 4718016 Freedumb
Freedumb's picture

The beatings will continue until morale improves!

Thu, 05/01/2014 - 16:56 | 4717649 ebworthen
ebworthen's picture

Well, according to this the retail crowd is buying the Central Bank stock ramp while hedge funds and institutions are selling:

http://www.zerohedge.com/news/2014-05-01/greater-fool-rotation-whos-buying-and-whos-selling

Looks like they are going to rake Mom and Pop's chips off the table all over again.

Can't believe people are falling for it, again.

Bailouts and QE after the crash.

Or it's "Tanks in the streets".

Just ask Hank Paulson.

Or his replacement.

Thu, 05/01/2014 - 19:14 | 4718076 RaceToTheBottom
RaceToTheBottom's picture

Should be tanks running over Hank Paulson....

Thu, 05/01/2014 - 22:20 | 4718621 jeff montanye
jeff montanye's picture

very small tanks.  leaking diesel, badly.  aflame.

Thu, 05/01/2014 - 21:22 | 4718444 weburke
weburke's picture

ooops, missed the phoenix capital 

Thu, 05/01/2014 - 15:56 | 4717419 Kreditanstalt
Kreditanstalt's picture

"However, ultimately stocks react to profits..."

Not in the new normal.  They only react to YIELD.

Thu, 05/01/2014 - 14:54 | 4717121 Conax
Conax's picture

QE has worked just fine.  The owners are stinking rich.

Thu, 05/01/2014 - 14:01 | 4716900 nuclearsquid
nuclearsquid's picture

I am pretty sure infinity is bigger than 20%

Thu, 05/01/2014 - 14:18 | 4716973 drendebe10
drendebe10's picture

Doesn't take a rocket scientist that the QE is only about enriching the uberwealthy capital cronies and the ruling elite... the gum flapping to the sheep that it's about boosting the economy, jobs and other assorted obscene lies is just a buncha Mr. Ed horsepucky....  that's life as a tax paying American citizen serf and peasant under the thumb of the ruling elite and uber wealthy... welcome to the new medeival dark ages...  ain't it grand!!!

Thu, 05/01/2014 - 14:00 | 4716896 I Write Code
I Write Code's picture

The fed learns this one from Islam:  "We love death more than you love life".

Thu, 05/01/2014 - 14:07 | 4716919 what's that smell
what's that smell's picture

dear troll,

why do you hate muslims so much?

smells like irrational fear.

Fri, 05/02/2014 - 01:53 | 4718979 Riprake
Riprake's picture

Dear stinky,

That vomit-inducing odor you smell is yourself. You really should hit the showers after you've been out burning crosses on Jewish families' lawns all night.

P.S. Supposing Rand Paul runs for President in 2016, will you cross-burners be voting for him, considering that he's taking huge steps to distance himself from the paranoid racist xenophobic conspiracy theories of that drooling senile daddy of his?

http://www.jpost.com/Diplomacy-and-Politics/Rand-Paul-Cut-aid-to-Palestinians-unless-they-recognize-Israel-as-Jewish-state-350705

Thu, 05/01/2014 - 21:14 | 4718423 drstrangelove73
drstrangelove73's picture

Oh,because they behead noncombatants,use women and children as shields,

stage operations out of hospitals and schools and generally behave as women on the battlefield,running and screaming

like little girls at the approach of the enemy.Because they lie as a matter of policy,murder civilians and noncombatants alike

and generally behave as cowards.Because they perform clitorectomies,treat women as chattel,have a low view of hygiene and a high view of pederasty.

as G.K Chesterton observed:"The fierce monotheistic god of the mohammedans illustrates,that it is not good,even for God,to be alone..."

Thu, 05/01/2014 - 22:17 | 4718612 jeff montanye
jeff montanye's picture

imo it was a kind of gutty thing for hamas to say to israel.

someone's got to take it to the zionazis.  they act with such impunity and nearly run the united states' foreign policy.

Fri, 05/02/2014 - 01:33 | 4718966 Riprake
Riprake's picture

Dear hypocritical  treasonous racist goose-stepper Nazi thug: prepare to burn in Hell with your fellow swastika-humping "anti-Zionist" goose-steppers, including these fellow child-molesting baby-butchering jackbooted terrorist Islamofascist faggots for whom you just expressed your disgusting admiration:

http://endoftheamericandream.com/archives/why-is-the-media-silent-about-the-crucifixion-of-christians-by-radical-jihadists

Know that when this global economic collapse for which you goose-steppers are slavering finally occurs, those of us who've actually been prepping instead of engaging in your retarded racist conspiracy theories will be sure to point the roaming violent hungry hordes of former welfare recipients toward the hideouts of every one of you fat ugly flamboyant Hitler rimjobbers, since there's no good reason to protect you from your fellow perverted parasites. Prepare to be barbecued and roasted on a spit like the swine you are; pray to your jihadist buddies' Allah and to Wotan and Hitler and all your other false deities that the hungry hordes decide to slaughter you first.

Ironically, the "Zionists" on whom you project your own bigoted ideology are likely the only ones who might refuse to eat you, since long pork is no more kosher than the short kind. Also, part of how Jews got so civilized and influential as they are is by taking the long view and planning ahead, which is why there are so many of them among us preppers; they will not be out searching for food in such great numbers as your fellow swine will. May they find you tasty.

Thu, 05/01/2014 - 19:24 | 4718123 intric8
intric8's picture

he doesnt recognize who the real enemy is

Fri, 05/02/2014 - 01:37 | 4718971 Riprake
Riprake's picture

You don't recognize who the real enemy is; but you'd figure it out pretty quick if you were to be deported to Iran as you deserve.

Thu, 05/01/2014 - 13:55 | 4716864 CHX
CHX's picture

TPTB will justify MOAR that the failure so far is bcs it was not enough...

Thu, 05/01/2014 - 13:11 | 4716687 joego1
joego1's picture

yep, that trick is all used up...... next comes war and genocide!

Thu, 05/01/2014 - 22:18 | 4718616 OldPhart
OldPhart's picture

First, let's break more windows...

Thu, 05/01/2014 - 12:49 | 4716572 JRobby
JRobby's picture

Does this mean Bernanke is not a genius................?

Thu, 05/01/2014 - 22:13 | 4718598 jeff montanye
jeff montanye's picture

maybe not, but at last he can afford some sweet wheels.

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