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The Wall Street Pleasure And Main Street Pain Of Liquidity
Authored by Michael Hartnett of BofAML,
"I take it for granted, that those eat now who never ate before; And those who always ate, now eat the more.” Thomas de Quincey, Confessions of an English Opium-Eater
The opiate of investors has been central bank liquidity. The degree of stimulus in the past 5-6 years has been unprecedented:
- $12 trillion of financial asset purchases by the big 5 central banks
- 520 central bank rate cuts
- $33 trillion of fiscal and monetary stimulus according to the BIS (an amount equivalent to (46% of the world economy)
- The lowest US government bond yields in 220 years
- 50% (or $20tn) of global government bond market cap trading with a yield below 1%
The decline in global interest rates, aided by $1.4 trillion of inflows into bond funds, has caused asset prices to rise markedly. From the March 5th 2009 lows, global equity market cap more than doubled to its May high of $58 trillion (now $53trn) and $100 invested in US bonds and stocks is now worth $175.
Capitalists have rejoiced, although the workers have been notably less rewarded...
In our view the ultimate macro "pain trade" must be that Bernanke has not made a policy mistake but rather is “rotating” away from Wall Street to Main Street via interest rate expectations.
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Chicken in every pot > 0
Gefilte in every pot > 1
Trust me, they don't even care if there's a gefilte fish in anyone's pot but theirs.
Aww shit... Somebody voted "chicken"... I was gonna have that one framed too...
Labor force participation rate looking very '1970s'. I am old enough to remember the 70s. Shitty decade. Still better than this.
DaFug, man. Like you remember the '70's?
Sumptin' wrong with you...
Image of Dennis Hopper waving arms all over half scream half rant about remembering the 70's
" I am old enough to remember the 70s. Shitty decade. "
But the music was a whole lot better than today's garbage
70's is the best musical decade of all time bar none. That said, there is a lot of good music that is NOT played on radio or otherwise boosted by the MSM. Underground music continues to be excellent. We are in the midst of an incredilbe period for music actually. Not 1970's good by any means, it's also very different, but good nonetheless.
Rotating away toward Main Street?
Had he raise short rate, impacting savers money market funds, deposits, etc. all well and good, but Jesus, with no interest people bought longer term stuff, junk stuff and now that's fucked.
The only people making out is Wall Street.
Ma and Main Street is screwed again, FFS
I wish everyone on main street would give wall street what they claim to ask for, for once knukles. They claim to want the great rotation. Because somehow everyone needs to sell their bonds, but yet at the same time all the fed aholes were out in force saying rates should not be going up.
If wall street followed their instructions for once and sold their bond funds en masse to buy stocks it would be hysterical to watch what ensues.
We are in the midst of the Great Clusterfuck.
Economy is on life support
Nobody can even elucidate what policies and plans are whether the Fed, any other alphabet agency or the Caesar hisself.
There is not gonna be a "recovery"
There is not gonna be an end of "Q-whateverthefuck-E"
Stocks are WTF overvalued, there ain't gonna be no "E" for the P/E
Because there is no viable consumers left except the 1%
Higher rates cannot be supported
And we are flailing about like mad men...
Oh boy, whadda boost to psychology
And I'd suggest Jesse for some great commentary on the metals...
The neighbors on one side of me are yelling, the 105 year old German on the other is playing marching music again, the guy down the street leaves his fucking trash cans out all week, I get into public arguments with hard core Republicans who claim all they gots do is repackage the message (what message?) to capture another 4mm Hispanic votes and everything'll be OK, the shit's still being sprayed in the skies, my doctor today was ranting over GM foods and Fuckyoushittinme radiation is probably poisoning my ass, I'm gonna be sitting outside homeless as I won't be able to pay the higher taxes, in a radioactive rain, covered with open running green oozing pustules and lesions, being fined for no medical insurance, starving, covered with all sorts of biting bugs, bouncing my pecker about for fun and the MSM is telling me every fucking thing is OK and all's the Republicans gotta do is get 4mm more Hispanic votes against Hillary Fucking Clinton who is a fucking shoe-in, as if I fucking care about Republicans anyway, after what they did to whom they shoulda run, Ron Paul, whose been ignominiously shuffled off to obscurity and the NWO is gonna save the fucking day, long after I'm gone, my ass
And people think I'm crazy.
Oh and we're running out of water hereabouts, too.
I mean have you ever contemplated giving yourself an enema for fun?
Well that thought just passed my mind.
No I'm not just all fucking OK.
Jesus....
The way R.P. and the Tea Party were treated will go down in infamy for the GOP. Fuck 'em.
Proof positive elections are rigged frauds
Everybody's pissing and moaning about the SC decision, how that's gonna disenfranchise "certain" voters?
Like it fucking matters in the final result.
The same people finance both wings of "the party"
The candidates are "chosen" And not by the people.
Where the fuck do you think this Hillary, Jeb, Chris et al craps coming from?
Excuse me, but it is 2013, dickwads!
Gimme a fucking break, this 24/7/365/4 year election cycle process
Gotta start the propaganda early after awhile some people actually think it was their idea to vote in "the party" guy.
I second that emotion! All except the enema, I have sensitive cheeks and sphincter. Must be from the ass raping by all in power!
ROFLMAO!
Thank you kunkles.
I feel the same way. Have to call up that old girlfriend that wanted to give me an enema.
You know what is funny....we complain on here all day that the sheep just eat up everything the msm throws at them.
Yet the message all day long is, sell bonds and buy stocks....and no one listens.
Most of Main Street do not own any stocks. Most of the ones who did lost theirs in the Crash of 2008.
The rest was spent buying Gas and Food that the Banks pimped from the QE money the Fed gave them.
Remember when the Morque and Deutche Banksters were buying tankers of Oil. I do.
"Had he raise short rate, impacting savers money market funds, deposits, etc. all well and good"
Knuck, my friend, I have some bad news for you. When rates rise this time the interest paid on your MM, CD or Savings Account will not rise with it. It'll sit at zero for a long LONG time to come.
Mark my words, there WILL be a ZH article about why they still aren't paying anything on those types of savings/investments in the next year. It'll be titled "Rates are up, but still nothing for savings?" or words to that effect.
No, it's even stupider. With interest rates near zero, why are credit card rates so high. Are the banks really that much less of a credit risk than Joe Sixpack?
Crony capitalists living off the .Gov teat (which robs main street) have rejoiced.
Adam Smith wrote in his "Wealt of Nations" about "businessmen" who were all for open capitalism and competition until they got big.Then they would petition the Crown to make them the sole provider or "regulate" their competition.
To parahrase Smith, "Capitalism, I don't think that word means what you think it means."
Yes, that was Mercantilism.
The East India Tea Co, (I believe it was) selling opium to the Chinee with whom the Brits had a war, yeah a war over the right to sell opium to Chinee people..........
Aaraghhh.
Still beats spending trillions in Iraq for what exactly?
making rich richer while the rest get inflation and austerity will only speed the things up. Example is what is happening in Brazil. The generation which is supposed to pay for the bills made in the last 30 years is going to rebel against the standing order. usa is having it easy thanks to the reserve currency status, but the modern style colonies including china are going to be harder to control. if bernanke had any brains, he would quit already, shave and go to live somewhere without eletric power and tv, because what comes after this may be hard to watch, especially for somebody who played his part.
Doucheanomics
I think "capitalists" in this article is synonymous with counterfeiter's, no?
Short ws, Buy ms? And i Don't Mean MyFormer Employer
Corzine is being coached what to say for the muppet show.
Dont call wall st scum "capitalists"
fuck wad
Wall Street holds hostages: retirement funds and pensioners.Even at all time high the former were barely enough capitalized, so what will happen if everything tanks?
Bernanke has to choose between boomers' pensions and workers.