WSJ: "Markets Are In Thrall To Central Banks Rather Than Caring About The Health Of The Economy"

Tyler Durden's picture

It was about 5 years ago, roughly the same time we launched our crusade against HFT, that we also first made the accusation that as a result of QE and the Fed's central planning, the forward-looking, discounting mechanism formerly known as the "market" no longer exists, and instead has been replaced with a policy vehicle designed to create a "wealth effect" if only for those already wealthy. In other words, while HFT may have rigged the market, it was the Fed that has openly broken it.

Today, none other than the WSJ is the latest to confirm this. To wit:

We’ve had more proof that financial markets are in thrall to central banks rather than caring about the health of the economy. Data out of Asia and Europe were disappointing, with China suffering a drop in both exports and imports and with industrial production in Italy softening as deflation worries persisted in France. Yet markets are stronger everywhere today. In Asia, that was partly explained by the largely expected but still significant news that China will allow Hong Kong shares to trade in Shanghai, marking a further easing in capital controls. But the real driver has been expectations of continued monetary accommodation from central banks. First, it was the minutes from the Federal Open Market Committee yesterday, which gave the impression that the Fed is eager to convey a message that it wants to keep providing long-term stimulus. Then it was the poor data in Europe, which, rather than unnerving investors, simply raised expectations that the European Central Bank will take aggressive steps to ward off deflation.

And to think 5 years ago this would be considered daylight, fringe tinfoilhat bloggery. Our advice to the WSJ, next time use quotation marks as follows: "markets"

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Haus-Targaryen's picture

ITT: The WSJ confirms that good news is now bad news, and bad news is good news. 

The sad thing is, despite all the evidence that the "markets" are rigged, and the entire economy is running on nothing but hope and change.  When it all collapses 99% of the population will be MAF because "no one saw this coming." 

Serfs Up's picture

Correction:  Need to use more quote marks to accurately convey just how corrupt, rigged and irrelevant the """"market"""" has become.

ArkansasAngie's picture

Do tell

They are picking the winners and losers.  

I want a different set of pickers and a different set of winners and losers

Let the market decide ... not a bunch of currupt arse holes


Babaloo's picture

The next time the WSJ is right will be the first time.  Anybody who quotes them as an authority on anything is delusional. 

buzzsaw99's picture

they have that backwards

Shizzmoney's picture

Also in the WSJ: "Bears shit in the woods".

SilverIsMoney's picture

Theres so much ZH smoke being blown by the MSM right now you just know weve gotta be close... Thats what I hope anyway...

PlusTic's picture

how dare you speak of such conspiracies!  lol!

Ribeye's picture

Conspiracy nuts

Bill of Rights's picture

Conspiracy is failure to think.

101 years and counting's picture

by definition, it is, and always has been, a PONZI.

Shad_ow's picture

But now there are NO rules if you are connected, you cannot lose.  If not, too bad.

yogibear's picture

Nothing else matters to the Fed except keeping asset prices moving higher. Even if it means killing the 80% of the population financially.


ArkansasAngie's picture

Greater good?

Horse manure.


Shad_ow's picture

Really?  Those who are "greater" are good.  Everyone else not so much.

One And Only's picture

High stock values are great for the economy.

Just look at the IBVC. Up 310% in the last year.

MFLTucson's picture

It is the best way for the Federal Reserve to enrich the  the Jewsih bankers, the only group they are interested in.  

Flakmeister's picture

I am more worried about the crooked White Anglo-Saxon sociopaths that went to Wharton and the like...

Take your jew baiting and shove it up your ass... 

Dr. Engali's picture

I blame the Malagasy people for the world's woes. Do a little research and you will find they secretly control everything.

Proofreder's picture

But, I thought it was all about the juicy bankers - you know -

those so ripe they pop when you squeeze 'em.

Squeeze a juicy banker today and then stand back!

CharlieMike's picture

Jew baiting?  The fact that Jews control a disproportionate number (in terms of % of the population) of high level positions in Government, Finance and Major Corporations cannot be disputed.

The only argument is do they represent the best interests of average Americans or not.

Flakmeister's picture

Take your faux concern trolling elsewhere buddy...

And since when was acting in the best interests of the American people a monlithic cultural requirement?

BTW, ask Paul Ryan about the "culture of work" and get back to us...

CharlieMike's picture

Since when was acting in the best interests of Jew bankers a monlithic cultural requirement?


Flakmeister's picture


Go troll someone else...

buzzsaw99's picture

<--- there will be MOAR

<--- the fed will make billionaires cry

CHX's picture

o'curse, there'll be moar. Fed owned by the TBTFs, and the Ponzi must going on, till the fat lady sings. And by then, the billionairs will also have enough gold, so in the new system most of the now-1%ers will likely still be the 1-2%ers, but some current 99%er-PM-shrimps may well rise into that category as well.  

Flakmeister's picture

Yet another symptom of the end of growth....

pods's picture

The thing that chaps my motherfuking ass is that if we didn't have a fractional reserve currency and need exponential growth I could be on the beach fishing somewhere enjoying the last 100 years of productivity gains.


ArkansasAngie's picture

They are stealing time

aka servitude.

Flakmeister's picture

The Fed never changed the tax code that allowed those in the boardroom to steal most of those gains...

Those gains accrued to labor before the 1980's....

You can blame the Fed to the extent that Greenspan was Randian acolyte who was ok with the "greed is good" meme...

pods's picture

Bigger than that Flak.  Compound functions.  Look at any debt curve for the last 100 years.  Debt has been going up at an exponential rate.  Exponential growth is needed to service the interest on that debt.

That is why all these pie in the sky sustainability ideas are just that. Because our money system requires exponential growth.

The last 30 years look worse because the amount of debt is increasing exponentially as well as the interest.  Interest is where the bankers make their killing.  

It is the logical outcome for our money system.

Those who conjure money and lend it out with interest will make more as more debt is required.

Sure there are the spreads between rich and poor. Aways happens when interest rates are held abnormally low to increase debt production. Those at the top get the largesse.  Those close to the money get the bulk of that largesse.


Flakmeister's picture

It is a complicated phenomena and if one had to choose a theme it would be the wholesale adoption of the meme that unfettered greed is good, throw in reinforcing feedbacks from the tax code and eh voila...

The financialization of the leading world economy at its apogee is not a new thing, the Spanish, Dutch and British all did it in turn. It is not a surprise to students of history that it has occured in the US, and having gold backed currency  made no difference...

overmedicatedundersexed's picture

flaky flak, quick to defend the chosen people, quick to defend man made global warming, lover of the FED, what percent of fed chairs have been non chosen people the last 40 years or 1980 if you must? at times one might think he is really a cnbc host for hot money. is that you Jimmy? anti rand and when facts get in the way the king of ignore the elephant in the many non jews run finance again? and in true flak style the old deflect the subject with the odd question, what percent of earth's atmosphere is water vapor and what percent is C02???

Flakmeister's picture

Go fuck yourself....

And how much water vapor would there be if there was no C02, you deluded ignorant shit....

daveO's picture

Plenty. Methane's the biggest greenhouse gas, thank god and cows.

Flakmeister's picture

Dave, you aren't allowed to make shit up...

So while CH4 is a very potent GHG, it is not the most important non-condensing one:

daveO's picture

Greenspan wrote in favor of the Gold Standard in 1966. Then, after crashing the market 20 years later, he kept rates too low(almost entirely) from then on. We have now had all but a few years of sub par interest rates thanks to him, Bernanke and the newest one.

For anybody new reading this, when Inflation is 2% that means the FED has stolen all productivity gains PLUS 2%. Why do people keep working for FRN's? They're selling themselves into slavery to New York City and it's Puppet on the Potomac. 

Flakmeister's picture

Greenspan and his belief in self regulating markets and similar drivel is also to blame...

Funny, how shit starting going south when a Randian was put in charge of the Fed....

Tsar Pointless's picture

In other news, there was more than one gunman during the Kennedy assassination. Nixon WAS a crook. The attacks of 9/11 were an inside job. Bill Clinton really DID have sex with that woman, Monica Lewinsky. And, I shot J.R.

NDXTrader's picture

Maybe it's because I read this site every day, but I thought everyone already knew this

bnbdnb's picture

Tyler, your name is Jack. Figure it out.

Waterfallsparkles's picture

The shame of it is that the more the Fed Prints and indebts the Country the more Wall Street rallys their decision.

The problem for most Americans is that it is in a sence a redistribution of Americas wealth to Wall Street and the Banks.  After all it is the average Person that will be responsible for paying that Debt back.

Plus, it is the average American which is already seeing this redistribution of the Nations Wealth in the increase in their Food, Gas, Heating Oil and all of the other items they need to survive go thru the roof.

daveO's picture

The average citizen will only have to pay back this debt to the extent they are exposed to FRN's. If you keep your savings out of FRN's, it's possible to be less exposed than the average Egyptian was a few years back. The FED is stealing from dollar holders worldwide. That's how they've kept bankrolling the charade.

Dr. Engali's picture

As I was getting ready this morning listening to CNBS, for the first time in months, I couldn't believe my ears when I heard some idiot fund manager stating that the market performance was all based on fundamentals and had nothing to do with QE. His argument was that Europe doesn't have QE and look how well their markets have performed. I never heard anything so  idiotic when it comes to explaining the markets.