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JPMorgan Stunner: "The Current Episode Of Excess Liquidity Is The Most Extreme Ever"
Curious why everything is being bought in the aftermath of last week's ECB's unprecedented announcement, and both bonds and stocks are either at or just shy of record highs ignoring completely the worst US nonfarm payroll print of 2014? JPM's Nikolaos Panigirtzoglou explains why.
From "The ECB's liquidity boost", here first is the background on where in the global central bank central-planning experiment we stand right now:
The ECB President stated in this week’s press conference that the ECB’s forthcoming programs, i.e. TLTROs coupled with ABS and covered bond purchases, could take the ECB’s balance sheet back to early 2012 levels, i.e. to €3tr from €2tr currently. These remarks, not only suggest that the ECB might have a target in mind regarding the size of its balance sheet, but raise questions about the boost to global liquidity from prospective ECB actions.
In aggregate, G4 central balance sheets started rising rapidly from the end of 2010 driven by the Fed’s QE2 followed by the BoE’s QE, ECB’s LTROs, Fed’s QE3 and BoJ’s QE. As a result of these central bank actions, G4 central bank balance sheets expanded by almost $4tr over 4 years i.e. by $1tr per year since the end of 2010 (Figure 1). With the ECB aiming at a €1tr expansion of its balance sheet, this $1tr per year pace in G4 central bank balance sheet expansion is likely to increase rather than decrease from here, despite the Fed’s tapering. The BoJ is already expanding its balance by close to $650bn per year, so adding a similar pace of increase for the ECB’s balance sheet (€500bn or $650bn per year) should result in an annual pace of G4 central bank balance sheet expansion of $1.3tr, even as the Fed ceases bonds purchases.
This ECB-driven quantitative expansion is hitting the global financial system at a time when liquidity is already very high. And this is true for both “narrow” or “banking sector liquidity” and “broad” or “non-bank sector” liquidity.
The G4 banking system is already flooded with excess reserves of around $4.5tr i.e. reserves commercial banks have with central banks in excess of what they need to meet usual liquidity needs. Given that the banking system cannot get rid of reserves in aggregate, these zero yielding reserves become the “hot potato” that banks try to pass to other each until the relative pricing is adjusted enough to remove the incentive for banks to get rid of these reserves. With the ECB aiming at increasing the amount of excess reserves even further via its TLTRO/bond purchase programs, G4 narrow or banking sector liquidity should exceed $5tr, exerting even more downward pressure on 2-5 year government bond yields of core countries, the preferred habitat of banks.
This is where global liquidity currently stands:
To assess excess money supply, we update the model we previously published in Flows & Liquidity, Apr 26th 2013. Beyond nominal GDP and financial wealth, i.e. the stock of tradable bonds and equities in the world, the model includes an uncertainty variable. Uncertainty is important as it makes agents hold more cash during periods of elevated risk perception, for precautionary reasons. We proxy uncertainty via the US monthly index constructed by Baker, Bloom and Davis. To measure policy-related economic uncertainty, they construct an index from three types of underlying components. One component quantifies newspaper coverage of policy-related economic uncertainty. A second component reflects the number of federal tax code provisions set to expire in future years. The third component uses disagreement among economic forecasters as a proxy for uncertainty. This uncertainty proxy is shown in Figure 2 along with its smoothed version. This uncertainty proxy declined sharply over the past two years and has completely unwound the post Lehman increase.
To estimate the gap between money supply and a medium-term demand target, we regress real money balances, global M2 deflated by global CPI, against 1) real GDP (i.e. the level of nominal GDP deflated by global CPI), 2) real financial wealth (i.e. the total capitalization of global bonds and equities deflated by global CPI), and 3) the uncertainty proxy described above. To remove the impact of FX changes from our global money stock measure, we aggregate the M2 stocks of various countries at constant (today’s) exchange rates. The regression results are shown in Figure 3. All three variables are statistically significant with a positive sign as predicted by theory.
Excess (i.e. the residual in our model) money supply is currently in record high positive territory. The current residual suggests that global money supply which stood at $68tr at the end of August is $5tr above our estimated medium-tem money demand target. The residual of the regression turned positive in May 2012 and has risen steadily since then. This is both because of real money supply increasing and money demand decreasing due to lower uncertainty (Figure 2: Global M2 reached $68tr in August this year and is up by $15tr or 29% since the end of 2010 when G4 central bank balance sheets started rising rapidly. The capitalization of both bonds and equities in the world had risen by a similar 31% over the same period and the current pace of M2 growth suggests that global equities and bonds should continue to grow by at least 6% per annum.
Of this $15tr increase in global M2 since end 2010, $5tr was due to G4 and the rest $10tr was due to the rest of the world, mostly EM. Strong credit growth in EM economies has boosted our measure of excess liquidity in recent years and this force led by China continues unabated. It is often mentioned that this Chinese or EM liquidity is trapped within EM. We disagree. It is true that domestic economic agents in China and other EM economies face restrictions in deploying their capital abroad. But domestic liquidity in China and EM is channeled to the rest of the world via reserve accumulation, i.e. via the official sector, as capital restrictions put upward pressure on EM currencies.
The punchline:
Prospective ECB actions are likely to widen the above $5tr estimated gap between global money supply and demand. That is, the ECB's quantitative expansion is hitting the financial system at a time when broad liquidity is also very high. The rise in excess liquidity, i.e. the residual in the model of Figure 3, is supportive of all assets outside cash, i.e. bonds, equities and real estate. The current episode of excess liquidity, which began in May 2012, appears to have been the most extreme ever in terms of its magnitude and the ECB actions have the potential to make it even more extreme, in our view. Before then, there were three major episodes of excess liquidity (i.e. positive residual) in our model: 1993-1995, 2001-2006 and Oct 2008-Sep 2010. These were periods of strong asset price inflation suggesting that excess liquidity could have been a factor supporting markets at the time.
You don't say.
It is also important to note that liquidity is not constrained by borders. For example, foreign institutions could also sell ABS or covered bonds to the ECB, so the prospective injection of liquidity by the ECB could reach foreign as well as domestic institutions. Anecdotally, both the Fed and the BoE have bought significant amount of bonds from foreign institutions during their QE operations. In addition, in a global and interlinked financial system, via arbitrage, the ECB operations can end up suppressing yields of higher yielding bond universes outside the euro area by more than domestic bonds.
Finally, add JPM to the long list of entities, from billionaires Icahn, Zell, Soros, Druckenmiller, to the BIS, to and increasing number of Fed presidents themselves, warning that the fun days of bubble inflation are almost over.
These liquidity boosts are not without risks. We note that they risk creating asset bubbles which when they burst can destroy wealth leading to adverse economic outcomes. Asset yields are mean reverting over long periods of time and thus historically low levels of yields in bonds, equities and real estate are unlikely to be sustained forever.
Translation: JPM is slowly but surely also getting out of dodge.
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Money has become so cheap to borrow that many people are now arguing that you must take it even if you don't know what to do with it. It is hard to imagine how much this is distorting the economy, markets, and reality in general. A total disconnect between life on main street and the financial world is occurring and it is putting the economy in a very dangerous place.
It is often hard to determine what is true, but a report on Bloomberg that 32 Trillion dollars in funds were held in offshore accounts around the world made me shutter. How safe is this money, and what exactly is it doing? Can you say Cyprus? More on this subject in the article below.
http://brucewilds.blogspot.com/2013/05/cheap-money-more-and-more-and-mor...
“appears to have been the most extreme ever in terms of its magnitude”
Shazam! They must have some real observant fellers over at that JPM place.
All riched up (after looting the taxpayer) and ready to head to the yacht and pretend like "nobody could've seen it coming"
JPM Analyst: "Obvious things are obvious."
I am Chumbawamba.
Consequences bitches! The truth is long gone.
ATH liquidity, perfect time for whales to get their gains on equities. Short, anyone?
Inflation through printing should be defined as forbiden form of slavery in the Jus Cogens of international law.
Lemmings.....unite!
I know it looks a long ways down there.....trust me.....you'll be fine.
Groundbreaking stuff there JPM, let us know when you discover heliocentrism.
so printing Trillions of fiat out of thin air is a bad thing then, right? Makes life soooooo difficult for all those pooooooor banksters to do stuff with it. boo hoo...go suicide yourselves.
JP Morgan ought to know - THEY PURPOSEFULLY ORCHESTRATED THIS!
Liar liar, pants on fire. It was Sinatra.
That is why I say there won't be any bailin.
Just unplug those offshore computers and easy peasy USD extinguishing
The price you pay to preserve the status quo
These are the End Times. "EXTREME" is "good".
Just remember....chicks dig scars.
Don't you know, DEBT is an asset to be maximized!?
/sarcasm for you mouth breathers
I think I will be ok, all my debt is leveraged.
or is it diversified?
Hell, I don't know my adviser said something about "going naked"
that's a good thing right?
Clothing should never be wasted on debt!!! Always go naked!
That surely explains why gold and silver have fallen and have been languishing.
There is no actual real trading on supply demand
Chinese and Russians took advantage of manipulation to import more real gold
If fiat "liquidity" were valued in gold & silver that wouldn't be the apparent case.
But gold isn't three fiddy an ounce anymore either ;-)
Listen, Rabbi, Gold and Silver are immortal, as you know. But for the sake of argument Bit Coins must be considered during the transition so you can find fair value for your fiats.
Good luck!
I would offer you the services of a good jewish shrink if I knew one. But you should probably look into seeing one anyways, jewish or otherwise ;-)
Listen, the best shrinks are at the USSA FED! They shrink your assets while inflating their own!
What does the extra "S" stand for in USSA?
Propaganda is such a wonderful art form of dichotomies I sometimes almost hate to expose its inconsistencies because of its uniqueness, like the Fed is actually a socialist-statist construct...
"Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly."
...where did that come from?...but do carry on ;-)
Dichotomy always had the connotations of a shifting balance of opposing ideas to me, a sort or ying and yang kinda deal.
My take on Propaganda is that it seeks to eliminate dichotomy as a way of limiting freedom of thought...extinguishing the lines of divergence as it were.
Maybe it would be more correctly characterized as the art of destroying dichotomy (a la Newspeak)?
Or maybe I'm just reading you wrong eh? Care to elaborate?
I see the propaganda totally different... they promote dichotomy and then finance both sides. A few people still won't play along with their fake-*ss two party plantation, so they even finance the vast majority of stragglers organizations.
The real independents are never presented to the public, but they can be found if you look - and get a little lucky.
And even then, we all have limited knowledge, experience and understandings, so you still have to wade through the error of the folks really trying to figure this cesspool of fraud out.
Yeah, but that isn't the whole picture.
They operate off a version of the hegelian dialectic which means you have three stages
1.Thesis
2.Antithesis
3.Synthesis
You create or exploit a conflict such as (black vs white red vs blue) and then you wait for the reaction to that conflict at which time you have a ready made solution set to take it's place.
The end result of that conflict is the destruction of the dichotomy (red vs blue) and a synthesis of their creation. I'll certainly agree with you that the bankers have made a killing off of the old conflict stage, but their end goal is for a synthesis (one world gov).
The game doesn't stop at divide and profit, its ultimate end is divide and conquer (e pluribus unum and all that). Of course you guys could be right and the nature of propaganda changes depending upon what stage you're in...Orwell was writing about post synthesis, while we are still pretty firmly in the conflict stage.
I would still maintain that Propaganda has the destruction of dichotomy as it's end goal.
There's a reason we're still talking about the Hegelian dialectic all of these thousands of years later. I'm pretty sure they worshiped Atlas and Zeus back then, but the human brain is still susceptible to this simple technique. Now if you put Machiavelli in the picture (he's relatively young at being born in the 1400's), and then you add mass media, you can come up with shit like we're seeing today. And you'll even get some Atlas in there among the truly far gone. Shrugging.
Is there a Rabbi in the house?
I knew I should have worn a tie this morning.
Hobo, No I think we're on the same page.
Dichotomy: a division into two especially mutually exclusive or contradictory groups or entities <the dichotomy between theory and practice>; also : the process or practice of making such a division
Or, as you say ying & yang, a lie & truth.
To me a truly good propagandist will take elements of the truth and incorporate them into his or her "work". So the work itself cannot be thought of as a complete lie, as there are elements of truth inside it that are easily defended by the propagandist but the entire body of the thing under consideration is meant as a deception away from what is truth.
Remember, we can appreciate the art form itself while despising what the art is used for.
The formation/existence of the Fed is a good subject to study this type of chicanery (propaganda). The normal state of affairs is, a government taxes and can spend no more than what it brings in from taxation. With the Fed in place, endless goodies can be doled out by .gov to corporations and to individuals. I think anyone of sound mind can agree up to this point.
Here's where the propagandist comes in.
They will say "The Fed is a creation of the banks, for the banks and the MIC!" but they will not acknowledge the individual welfare it enables that cannot be afforded by taxation alone. The Fed was created by an act of Congress, the very same Congress that loves to dole out endless goodies to individuals AND corporations.
The truth is, the Fed is a socialist-statist construct created for war AND welfare to benefit politicians long run and cannot exist without the imprimatur of law.
The element of truth to obscure the larger thing that can never be admitted to.
The Hegelian Dialectic strictly employs the use of the False Dilemma Logical Fallacy for effacacy.
It does not allow for the many other options to be considered as that exposes the weakness.
Most understand the thesis, antithesis, synthesis construct whereas they fail to understand the mechanism for the realization of the set goal. It is truly insidious and requires that one thinks outside of the architecture.
It's a subject I should spend more time studying, as it is (like it or not) a very big part of all our lives. Do you think the example you gave would actually be propaganda in the most literal sense though? or just people avoiding self reflection and looking around for a scape goat as they normally do when their world falls apart?
"How did this happen? Who's to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you're looking for the guilty, you need only look into a mirror."
Listen, the best shrinks are at the USSA FED! They shrink your assets while inflating their own!
What are you smoking?
The last time that I looked the FED had $4 Trillion in liabilities on their books backed by some $80 Billion in assets?
The FED has been inflating their LIABILITIES and is technically INSOLVENT.
And as for you???
You are just TROLLING...pretending that you know something...when it is so apparent that you do not.
Get out of here Bangalore Equit. Your type is neither appreciated nor desired.
You are neither seeking truth nor exposing truth, but, instead, you are interested in promoting MISINFORMATION and promoting CONFUSION.
"The FED has been inflating their LIABILITIES and is technically INSOLVENT."
As confirmed by a coversation with a Federal Reserve member while meeting with Jim Rickard's.
It's all Federal Reserve smoke and mirrors now.
Bit coin only works if you have electricity. Achillies heel.
Blasphemy!!!
first of all, its "tree fiddy"....but ya, all that new fiat sloshing around the stock market will be looking for a new home eventually. Im not one of the ones on here who believes gold and silver are going to the moon any day now, but i do believe more and more people are getting wise to the scam going on and will be looking to have some of their savings in something tangible instead of it only existing on a computer. Unfortunately, they will probably wait until half their net worth gets wiped out for the second time in a decade before waking up.
if they didn't keep it low then the sheeple would know something was wrong so take the low prices as a gift to buy...
This is my "stunned" look.
Regarding the global central bank fiat circle jerk, based upon the chart of central bank balances sheets since 2008 it is the ECB's turn to turn up the fiat flames of hell.
<Interestingly China is missing from that chart. I wonder why?>
thats because the narrative around here is that everything in china is hunky dorry and this growth they have been having is real and sustainable, and revealing anything like that may disprove that idea
Read the article carefully.
$5t excess was generated by the G4.
$10t excess was generated by the EM with China leading the EM parade. Apparently China printed/QEased double what the US did.
They don't print.
THEY ISSUE DEBT.
That's $15 trillion that needs to be PAID BACK WITH INTEREST TO THE SAME SOBs THAT LOOTED THE PROCEEDS OF THE $15 TRILLION.
Perhaps the anagnorisis of this fact is simply too emotionally devastating for most to even consider.
BTW, QE debts will be added once the losses on the toxic assets are tallied and THE TAX PAYERS WILL BE RESPONSIBLE.
Perhaps you ought to consider why the Bankster financed government is kicking people the h*ll off public lands... preparing the way for the hand over of the public land as collateral on the inextinguishable debt.
They've done it every where else... I'm not imagining this, I SIMPLY OBSERVE HOW THEY ACTUALLY OPERATE.
They claimed the rights to all Bolivian rain water... and want to tax your exhalations!
moar fracking tho-
http://hedgeaccording.ly/2014/09/airports-in-decline-can-fracking-save-a...
"Hey daddy, why are all those rats jumping off the ship?"
Buying from Universes-are-us would have saved a lot of bother . See
http://andreswhy.blogspot.com/2008/10/bubble-management.html
.....funny I must get 5 phone calls a week from solicitors trying to get me to take out business loans. Both from private banks as well as "government" loans.
Take all those loans move to gold,Put your book assets in someone you can trust,Say a honest hard working pillar of society type.Take it all its free for everyone!!!
Just because somebody steals from you does not justify stealing.
And you promote the same theft that others are doing?
STEALING IS IMMORAL. YOU ARE PART OF THE PROBLEM.
The guillotine blade awaits you and your ilk.
WE HAVE HAD A BELLYFULL PAL!!!
Get ready for a move up that hasn't been seen since 1998 - 2000. After that, I don't even want to know...
I'm expecting a ramp, but not nearly that big. Then you get a collapse so that the debtors have no money with which to pay their debts.
Then, PHYSICAL REALITY is transferred ot the Banksters that loan money from nothing.
$10 trillion at minimum up to $20 trillion reserves are about to vanish in different ways
Many rich people will become poor. Few offshore accounts will disappear
I'll bite. Why and how?
Normal war between ultra rich to control scarce assets. Historically quite normal. They eliminate each other.
I'd say many bank lobby rich will just become poor. Barclays, Deutchebank go down and few offshore centers just go down.
How?
Just unplug the computers.
Cypress is the model - they will just tell people a portion of their accounts are no longer theirs. Period.
Step 1: Create a false two party system funded by the same oligarchs.
Step 2: Take control of the media, and create false competeting ideological media (e.g., MSNBC vs FOX), that pretend to hate each other, and that each speak to the simplistic beliefs of their identified Team.
Step 3: Hollow out the real economy, and print money to give mostly to oligarchs in the name of saving the system, while meting out just enough to the sheeple to avoid revolution. Use the fake team media to convince the people that this was caused by the other Team, and that the bailouts are necessary for all.
Step 4: Print money to build a massive internal spy system, militarize the police, and create new agencies designed to "protect the homeland." Use both fake sides of the media to sell the idea that this is for the safety of the public.
Step 5: Use completely idiotic idelogical bullshit like that espoused by the Mises Institute of Canada to convince the few people who don't believe the fake media, that the real problem is "socialism" and "monetary policy," and not outright theft and sociopathic control by oligarchs who also happen to be what is generally defined by said group as the "productive class."
Step 6: Crash it and take over completely.
"Step 5: Use completely idiotic idelogical bullshit like that espoused by the Mises Institute of Canada to convince the few people who don't believe the fake media, that the real problem is "socialism" and "monetary policy," and not outright theft and sociopathic control by oligarchs who also happen to be what is generally defined by said group as the "productive class.""
Interesting point, LTER
You are going against the grain here. Next you will come up against the Putin Mancrush team....
I've been going against the grain on Mises for a long time here, but at least felt it was a valid debate. The Putin Mancrush team is quite different. The realization that so many here that identified themselves as libertarians, are in fact faux libertarians who just want a strong leader who resembles a centaur, has all but kept me away from ZH for a while now.
I have said it before. You guys want to believe there are not two sides. You are wrong. You had better choose. The guys that try to stay neutral in a barroom brawl always get their ass kicked the worst.
P.S. downies not from me
I hear what you are saying, but there are more than two sides which is precisely the problem. Which side do you fight for when your side is not represented by those fighting?
Never going to be a perfect choice.
Not perfect, but far better than the shit system that exists because everyone wants to force their beliefs on others. Like with religion, which is slowly going away from that.
http://en.wikipedia.org/wiki/Panarchism
Panarchism is a political philosophy emphasizing each individual's right to freely join and leave the jurisdiction of any governments they choose, without being forced to move from their current locale. The word "panarchy" was invented and the concept proposed by a Belgian political economist, Paul Émile de Puydt, in an article called "Panarchy" published in 1860. The word "panarchy" has since taken on additional, separate meanings, with the word "panarchism" referring to the original definition by de Puydt.
De Puydt, a proponent of laissez-faire economics, wrote that "governmental competition" would allow "as many regularly competing governments as have ever been conceived and will ever be invented" to exist simultaneously and detailed how such a system would be implemented. As David M. Hart writes: "Governments would become political churches, only having jurisdiction over their congregations who had elected to become members."
Join the republicans or the democrats?
What's the difference....can't I do both?
Of course there are two sides:
Those who believe in government and those who believe in freedom.
This ^^^^^
And LTER ... socialism IS part of the problem.
I get that you guys see two sides. Doesn't help me. And it doesn't help you either, if you look around and see reality.
I hear what you are saying, but there are more than two sides which is precisely the problem. Which side do you fight for when your side is not represented by those fighting?
YOUR side, LTER...You fight for your side.
Yes, LTER, you fight for that which you believe regardless of having support, or, lack thereof....regardless of the odds for success.
I know. That sounds self interested, Misean, anti socialism, and all of that...
But if you cannot care for yourself first you cannot expect to be able to care for the others whom you care about.
The world is not always simple as that: two sides,, black and white.
Downies don't matter, jack
"The realization that so many here that identified themselves as libertarians, are in fact faux libertarians who just want a strong leader who resembles a centaur, has all but kept me away from ZH for a while now."
You're deliberately missing the point, as usual.
I want a strong leader who will defend The Constitution and limited government to the death.
Funny how the White House wants to dictate what school children are allowed to eat for lunch, yet libtards like you label Putin a dictator.
Sounds about right. The Nephilim brake for nobody.
I think you're onto to something. Just love the talk of all the "lost" wealth. Its not as if the fiat is destroyed, its just transferred, its a zero sum game after all. If the fiat is destroyed, they will just create new currency for themselves. All you have to is look at what happened at the turn of the 20th century. McKinley is assassinated Teddy becomes president, and trys to bust the trust, monopolies. After he's out to ensure that to a great extent it never happens again a new entity is created. 1913 was the great takeover . At this point is there any difference between the FED or the BOE or BOJ or the ECB? All one entity with different acronyms. Not only that, not only do they charge us interest, ( because its "their" money), they also make us protect "their" interests. What a system, same as it ever was.
Step 0: Set up a Debt Money Monopoly where society is enslaved to inextinguishable debt... the rest of the steps are piece of cake.
At its core, this game is about collecting debt money receipts (what people consider to be money) while leaving the debt used to generate to a society that is absolutely clueless their monetary system is the most effective Trojan Horse mechanism ever invented and implemented.
"sociopathic control by oligarchs" = Socialism
Sorry that fact never occured to you. But the fact is that if you want to forcibly redistribute from the able to the needy, there will necessarily exist someone who forcefully brokers that transaction, and they will - again necessarily - have a sociopathic level of control.
The simple fact that they have these powers identifies them as oligarchs.
Hence the creation of oligarchs is part of the definition of Socialism, as exemplified by the phrase "from each according to his ability to each according to his needs". Avoiding analysis of how this transfer must be made to occur doesn't change the definition at all.
When people do all the same things voluntarily we call it laissez faire capitalism.
Guns cannot produce utopia, Socialist or otherwise.
But giving some the power of the gun over others in order to do (whatever) is the hallmark of Utopias.
If it were so great you wouldn't need government to make people do it.
That you do need government to make people do it, necessarily requires the creation of Sociopathic Oligarchs to perform the 'doing'.
"sociopathic control by oligarchs" = Socialism
Sorry that fact never occured to you. But the fact is that if you want to forcibly redistribute from the able to the needy, there will necessarily exist someone who forcefully brokers that transaction, and they will - again necessarily - have a sociopathic level of control.
The simple fact that they have these powers identifies them as oligarchs.
Hence the creation of oligarchs is part of the definition of Socialism, as exemplified by the phrase "from each according to his ability to each according to his needs". Avoiding analysis of how this transfer must be made to occur doesn't change the definition at all.
When people do all the same things voluntarily we call it laissez faire capitalism.
Guns cannot produce utopia, Socialist or otherwise.
But giving some the power of the gun over others in order to do (whatever) is the hallmark of Utopias.
If it were so great you wouldn't need government to make people do it.
That you do need government to make people do it, necessarily requires the creation of Sociopathic Oligarchs to perform the 'doing'.
Arrest Icahn, Zell, Soros, Druckenmiller, to the BIS and redistribute their stolen wealth.
End financial terrorism.
...low levels of yields in bonds, equities and real estate are unlikely to be sustained forever.
forever? this says nothing, and is grossly misleading. low yields will continue for the rest of our lifetimes. bank on it.
as if JPM isn't the one at the fed CREATING this excessive liquidty.
"...thus historically low levels of yields are unlikely to be sustained forever."
I love conclusions that really narrow things down.
How's tha throat cancer treating you Jamie?
Funny that Banksters don't read the fine print when dealing with the devil....
Poetic justice for lying so much. I hope the tumor doesnt stop the guillotine blade.
Being methodical & careful, it can be split in half.
A souvenir of sorts, one half for you, one for me ;-)
It's what Jamie gets rolling cigars with $100 bills.
Y'know, even before 2008, even before 1999, I used to say there was already more loose money sloshing around the world looking for something to do, than there is stuff for it to do. And that was before five years of ZIRP and QE.
In the 1960s and 1970s venture capital was a challenge, today just so you've got the right handshake a billion dollars can be yours overnight for any crackpot idea. "Take my money ... please!" say the 0.01%.
Now they're running out of places to put it, the stock market is so high, they may start stacking dollar bills into old grain silos instead. Amazing that it hasn't inflated the price of gold - or much of anything real. Strange.
Price of all products rigged. You have money and can't really invest in something because all rigged and something like cheap gold you can't buy because there aren't any free gold.
Yeah as long as you don't have to eat or drive then yeah it hasn't inflated anything real.
Agreed
All this liquidity and Gold and PM stocks smashed. Go figure
beach ball yields lower lower lower into the depths of the abyss. and then let go. wow. now we are talking fire works.
If people and business will not borrow at these yields, why would they borrow at higher yields?
JPM wakes up with a hangover this morning, looks in the mirror, says "holy fuck I printed a lot of money last night. "
It's like these assholes can actually pretend they aren't the fed.
Hello... You are the fed. It's in the charter.
Wow, am I the only person on ZH that knows the real definition of economic terms?
Liquidity is the ABILITY to make assets liquid, to make them turn to cash. Cash is of course extremely liquid. Stocks are very liquid. Cars are not as liquid. Houses are not very liquid. Get it?
The financial news ALWAYS uses the wrong words. Why am I the only person that points it out?
You say "THE DEFINITIONS" as though there were only one version. There is not one version. There are many. And they change over time.
LOL, I hope that's sarcasm. God help us if you are serious.
And by the way, I said the REAL definitions. I know there are plenty of fake ones going around. That was my point entirely.
Fucking idiots.
Assets bonds houses stocks are not overpriced.
What is overpriced is the real value of all the fake ponzi useless debauched currencies. From the fucked up and all but but finished $ to the Wiemar busting debt raddled UK £ and especially the fake non currency criminally inspired ponzi voucher called the euro.
I would take any job now paying less than $300 k because I earned $30 k back in 1995 and I reckon that is exactly the equivalent amount of this fucking Delhi used ass wipe wipe called dollars to replicate that.
It the fucking ponzi fiats that are worthless, and only real assets are worth something.
The bubbles will not burst, this time the shitty confetti will find its true value.
Then no one will complain about paying $700k for a house or buying SPY at 2500, when you have $25 k a MONTH income
Fuck what anyone tells you, inflation is coming, one way or another and that shitty piece of paper in your wallet is going to start collecting zeros.
You have no idea what the real definition of inflation is, do you?
Soon they'll be forcing people at gunpoint to borrow dollars.
LOL? don't you do this in USA?
Naw....we only have to buy healthcare.....it's the law.
The Fed prints it, converts it to stocks so that in turn the owners of those large corporations can rape and pillage any market they choose that is smaller than theirs by cashing in on the NYSE. What the fuck could ever go wrong? I don't see how that could creat bubbles? I fight back by buying as much as possible from local producers and avoid wallyworld like the plague, that's what they are, an economic plague brought on by twerking politicians selling their favor to the highest bidder. Hang 'em all
Jef Lee Johnson-Knockin' On Heavens Door
https://www.youtube.com/watch?v=wl1JGWosZ80
Meanwhile in realville... Bloomberg reporting that Japan GDP down 7.1% (annualized) from last quarter.
If that does not shake your snowglobe, Then the 19% drop in consumer consumption (annualized) from last quarter should.
Reallty can be ignored only until the consequences reach out and crush your ass.
http://www.bloomberg.com/news/2014-09-07/japan-s-economy-contracts-more-...
Story has already been pulled.
You think ?
If people think that giving $4 trillion to INSOLVENT bank lobby oligarchs and ............starving Pentagon and US Military, is a sustainable situation, ..................... then you are living in la la la world
This is a "JP Morgan Stunner"???....
6 years of this with not one of the CB'ers going to jail for life in a "pound them up the ass prison"?...
This is but one more widening ripple as the stone skips across the skin of the water increasing in size before the inevitable when it loses all it's energy and sinks -like all rocks do!
The only thing the Central Banks need to decide is when they want to announce how bad the damage has been from doing 6 years of it!
Think the U.S. and Europe will be getting that announcement in the form of another magic "event" especially when you can't get your "proxies"in line to do what you want them to do at the most critical moments -epsecially when you are increasingly funding them with money that only depreciates in value!!!
Counterfeiting to pay for military expenses, to purchase governments and to transfer wealth from populations to the wealthy has never been greater. Arrest Jamie Dimon and Loyd Blankfein.
All of this excess liquidity will bring much volatility to the markets. Bubbles are being blown as we speak, and we all know what happens to bubbles at the end.... Now its a great time to be active in the financial markets with leverage!
Funny, how the TBTF banks were all-in with central bank easing bailouts when they desperately needed it to survive. Now suddenly the consequences of those practices seem all scary and perverse to the banks when they no longer need it.
In other words, “Great job Bernanke, Yellen, Draghi, et al. Now let’s start the cycle all over again. After all, we can’t get churn without someone getting burned.”
But will Obama see it on TV?
Yeah.....aka....security briefing.
Politically incorrect headline for this article: JPMorgan Retards Realize Central Banker Retards Have Gone Full Retard + 1.
This is the top story on my Yahoo page under Reuters...you have to be kidding me. We have to be near a top.
Wall St lower after fifth straight weekly gain(Reuters) - U.S. stocks opened lower on Monday, with the S&P holding near its most recent record high on the heels of its fifth straight weekly advance.
The Dow Jones industrial average fell 21.77 points or 0.13 percent, to 17,115.59, the S&P 500 lost 2.84 points or 0.14 percent, to 2,004.87 and the Nasdaq Composite dropped 1.39 points or 0.03 percent, to 4,581.51.
"Finally, add JPM to the long list of entities, from billionaires Icahn, Zell, Soros, Druckenmiller, to the BIS, to and increasing number of Fed presidents themselves, warning that the fun days of bubble inflation are almost over."
Bubble inflation is followed by bubble deflation. That is when the real fun begins.
Look,
Inflation vs Deflation in the price-sense is ENTIRELY a function of the monetary base, and in a fiat-currency world is ENTIRELY under CB's control.
There are a few things going on here:
1) CBs use their monetary power to push social agendas - Truly. They do.
2) CBs are subject to political influence and/or prohibitions regarding the range of allowable actions reference number 1. So, for example, if I am a CB that loves multiculturalism I could, say, throw red tape at banks that serve the political forces opposing multiculturalism, etc. I could also produce outright inflation, outright deflation, or I could develop independent policies that prefered banks on the basis of their political stances. But the reality is that a CB policy directly intruding in the political realm will get political push-back, prohibitions, and otherwise influence.
3) CBs can control the level of AGGREGATE inflation or deflation directly through control of the monetary base, but they cannot exercise finite control over its distribution, or the effects that necessarily result from the distribution they have. The monetary patway is what it is. This means some get newly created money. Some don't. Generally, the politically connected get the new money - which produces moral hazard with those recipients. It is essentially impossible for CBs to put new money into other hands in any meaningful way. This leads to malinvestment because the CBs' monetary pathway is (necessarily) politically aligned. As a result, no matter whether there is AGGREGATE inflation or deflation, the opposite may be occuring in unconnected industries or areas of business at any given time, and to the detriment of the ovearall economy. Again, this is just one form of malinvestment.
So, if there is an overall contraction in the economy in fiat-money terms then the contraction exists because the CB chose it, or was politically prohibited from preventing it. Nonetheless, it is entirely possible, even probable, that with successive intervenions the economy steadily deteriorates in real-terms while TECHNICALLY remaining the same size, or growing, in fiat terms. And this qualitative difference in economies, is due to malinvestment.
Do the CBs WANT to explode the economy of the West as a way to influence future politics in this case?
Or are they simply unable to address all the consequences of their previous interventions?
Yours to decide. But I think I've given some ideas on how a person might be able to analyze CB actions t determine which it is.
"Asset yields are mean reverting over long periods of time and thus historically low levels of yields in bonds"
Sure, there are plenty of widows in Japan because their husband thought the same and went short JGB's...so long periods of time is looooong indeed.