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"This Feels A Lot Like 1999" Beware "The QE Bubble"
It appears few remember the epic failure of Japan's first experiment with quantitative easing from 2001 to 2006 (that even the NY Fed can't find a silver lining to crow about) and yet, not only is QE heralded as a success (or not) but additional QE seems to be something to celebrate (even when it's shown to fail to achieve anything economically).
How's QE working out for Japan?
As Michael Chadwick notes in this oddly bearish interview on CNBC, where has Japan gone in the last 14 years (since its QE started), "absolutely nowhere," and yet, he exclaims, "sadly, across the globe all central banks are following the same failed path." Chadwick reflects on the explosion of central bank balance sheets and asks, rhetorically, "do we really need QE every time the market gets nervous?"
Chadwick, rightly proclaims: "At this point not much matters apart from central banker comments, QE, and political promises... I wanna know about valuations, I worry about the consumer; this feels a lot like 1999 to me."
"We have to wonder, are the central banks working together; our QE ends one day; Japan QE ramps up the next - you gotta wonder?"
"Right now the world is a very vulnerable place... we are in the midst of a big bubble that will - down the line - be referred to as 'The QE Bubble'"
Brief clip below:
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It's amazing how different the media viewed gold in November 2009 vs. November 2014 with gold at the exact same price:
http://www.ftense.com/2014/11/better-buy-at-1166-gold-in-november.html
http://www.planbeconomics.com/2014/11/julian-robertson-says-bubble-devel...
I am all about buying gold at this level, that said the trend in 2009 as it broke 1100 was bullish. Not so much now.
You buy gold now. I'll trade you a dented can of Shur-Fine cat food for it later.
Doubt you'll give up your last meal for it, Bon Apetite
Just added the star of david to my profile in honor of all the quasi NAZI's here that can't seem to understand that Bush, Obama and quite a few others are just as willing of participants in the slide towards a banana republic as any welfare recipient with an EBT or banker.
Thats the plan. You certainly won't exchange it for the papaer money now in your pocket.
Of course the central banks are working together, they told us they were going to work together 5 yeas years ago. Where has Chadwick the Clueless been?
It's not about the economy it's about asset inflation. mainly equity prices but also to an extent real estate. By pretending it's mostly about the economy they can act like it's about the little guys.
Don't you know the fed's mandate is to prop up the equities and real estate markets?
gold is a pump and dump; basically we have massive deflation; the government wants you to part with your cash asap; before they sold the golds, now they sell'n the stocks. art works, etc.
i stiil gots my golds; but you know, government ain't stupid; and they have all the time in the world to fuck you.
But do they have all the gold in the world to deliver when the demand exceeds production and the price is below the average cost of production?
No, that's called GAME OVER.
And the US had better hope those ~9k tons of gold really do exist.
See Germany....You can have a CONtract that is settled in paper if you like. ...Hope..you can believe in!
Hang on to your gold: Check. Government ain't stupid: Check. All the time in the world to boff you? A few years ago perhaps, yes. Today? If you have any doubts, just look at what has happened geopolitically within the past (2) short years with Russia and China, then re-evaluate those doubts.
No, the Government IS stupid... they're just stupid like a ravenous zombie that smells fresh blood.
Don't forget municipalities are toast without real estate valuations staying elevated, they are taking advantage of this temporary levitation now by raising property tax as far and as fast as they can.
The valuations used by the government seem to have little to do with marketplace value.
I think they will continue to raise property taxes regardless of what the property might be worth in an actual sale.
In my neck of the woods, property tax up 4.5% this yr, and broadcast, today, 5% for next year. You think you own your house? Deny them their flesh for 2 mths.
This feels NOTHING like 1999.
10-11 Trillion MOAR $'s and NOTHING is fixed.
I'm long pine planks and steamed hemp rope! Bitchez
ANY SANE trader knows that they're living on borrowed time.
I'm stupid, and yet see the book value of consumer staples and transport stocks overvalued.
Don't let your FEELINGS govern your trading strategy.
Classic rookie mistake. "Do the math first" and remember "numbers don't lie." If you're fighting the tape AND trading you're spam in a can buddy.
I do get the feeling you're using real money here. Just because I'm an American doesn't mean I'm saying "buy the dollar." I am saying "protect the dollars you have.". Just ask Europe circa 1946.
Yeah, but, you get the feeling this fucking charade could go on for a long time yet...
It's the final charade. When it ends, it's game over. Frankly, I hope it lasts a little while longer. I'm in no hurry to get to get killed fighting with some other starving, desperate asshole over the last can of beans.
"We have to wonder, are the central banks working together; our QE ends one day; Japan QE ramps up the next - you gotta wonder?"
This guy is like a freaking hillbilly that's been reading propaganda for the last 6 years--and believing it. ZH readers can only laugh when they hear stuff like this.
He probably believes that law, order and justice are providing social stability. HaaHaaaHaaa. somebody throw some rotten fruit at that bozo.
AE 9/11 Truth researchers plan lawsuit to seek release of 500,000 documents held by FEMA, NIST
LOL dude! It's only an emergency in money-for-nothing land.
Those of us who have no pensions, and no connections to that thing you call a market are laughing our asses off at you stupid motherfuckers who thought you were wealthy, but are not.
Yes, 1999. Bob Brinker was encouraging people to go to cash. I eventually did in early 2000 before THE BIG SLIDE which has long been forgotten like the one in 2007/08 and all the rest. We have had about 50 recessions in 200+ years U.S. history. Amazing we jumped a recession since the QEs.
Bob Brinker - like many other 'old timers' who have known nothing but the 'stability' of the U.S. Treasury market and the $dollar for their entire lives, are going to be made to feel 'young again' before they check out this time around. 'Young', as in 'never saw it coming'... That is the moment when Decades of 'balanced portfolios' (equities and fixed income) are going to be blown to smithereens, like the the built stick house that sat 1/4 mile away from the Nevada test site detonations in the 40's, 50's, and 60's...
China, Korea & the 'Emergings'.....are not just gonna sit there and cheer Japan on.
And I keep wondering how vulnerable the Saudi regime feels dropping oil prices as they are.
Too much stress leads to indigestion my dears.....don't ya think?
They're desperately pulling out the stops so the easy money will continue.
They are most definitely working together and are really pulling out the stops right now to interfere in our election.
NO. Not 1999. $4T and more by other CBs with the recent Japan's supply has been released into the market.
Simply collapsing price discovery...already collapsed in many sectors.
Simply trade the blips in liquid markets and where the CBs wud hv the most temp influence. You don't care about bubbles floating in different gravitational spaces.
"this feels a lot like 1999 to me." - wow, he is optimistic!!
Gee, you think?
"We have to wonder, are the central banks working together; our QE ends one day; Japan QE ramps up the next - you gotta wonder?"
His appearance doesn't come across as very natural.
Is this clown reading off a teleprompter?
As long as people don't understand the very simple fact that debt is now equal to money, they will be slaves. Slaves to the few that have the ability to create the money. It's that simple. Everything else is obfuscation.
By the way most everyone is hanging on every word coming out of the mouth of the likes of Yellen, it doesn't seem like there is much understanding at all or worse yet collusion.
This feels more like 2007. Desperate times, desparate measures - but totally below the radar of most people. Just remember Aug 17, 2007 and October 18 2007. Sure rhymes with Bullards's "Moar QEeeeeeeee" and this BOJ printfest. I wonder what the grain of sand will look like, that starts the next financial doomsday avalanche?
I would suggest looking at the SPX during end-of-2007 and 2008 and trade as if the rest-of-2014 and 2015 rhymes with it. Sure smells the same - and it ain't teen spirit.
2000 Dot-Com Bubble
2007 Housing Bubble
2015 QE Bubble (My guess to the peak)
"We have to wonder, are the central banks working together; our QE ends one day; Japan QE ramps up the next - you gotta wonder?"
"Are you shitting me"? "No, I am shitting ON you".
What idiot even asks that question? Does he also ask if the sun rises in the East and sets in the West?
Chadwick=dumbdick...sheesh!
Other than many ZHer’s, people in general seem quite content. They are thrilled the Fed has pushed the stock markets ever higher. They don’t give s *** if it takes QE27 to keep their 401k’s going up. Most don’t have a clue what fiat currency is, or about big deficits or GDP. Most think having $30k on two or three credit cards and making the min payments each month, is normal. If the repo man snags the Excursion, they go buy another with nothing down. They love their new I-Phones, even though they have 3 more sitting at home. Most important is who will win ‘Dancing with the Stars’ or their favorite NFL teams’ standing. They have enough to live on and EBT cards are okay too. There are millions living on disability benefits and many have government jobs too. Social Security checks keep coming.
The repubs seem poised to take back the senate, but just wait ‘till they try to push thru ‘austerity’ on the entitled masses. Watch what happens when they try to cut back on Medicaid, Medicare, SS, veterans benefits, double and triple-dipping government employees, etc, etc. Try to roll back the ‘New Normal’ and it will be Hillary in 2016 for sure!
Good mini-essay.
Try to roll back the ‘New Normal’ and it will be Hillary in 2016 for sure!
Are you sure? When Japan finally implodes, and when our great crash happens, the entitled masses may be forced to adjust to austerity.
As an example, look at welfare reform in the 90s. Back then, that was big-time austerity, but the negative consequences of it were almost nil, almost like a stealth blip on the radar.
It probably feels like 1999 because of the record irrational exhuberance accompanying market highs built on the sands of debt. The debt bubble will burst, it's just a matter of time - and not much time.
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
I miss fuckedcompany.com. I hope Pud starts a 2.0 version when the tech bubble bursts.
okay
It's a lot worse than that. Let's face it, buckaroos:
The banks
The institutions
The mutual funds.
the brokers
the hedge funds
the pension funds
HAVE 'CORNERED' THE DOW 30 THANKS TO QE FUNDS
Actually, it's the Dow 20, because, as the late, great Joe Granville used to say, if you move the 20 best Dow stocks, the lesser 10 will follow.
THE MARKET WILL KEEP GOING UP UNTIL THE EARTH IS IN FLAMES
edit: all the willing sellers of the Dow stocks have had 6 years to get out. The few stragglers that are left have no effect on the price of the Dow.
The sell-offs we've seen so far are the Cabal selling off some of their stock. Along with selling calls and buying puts. Knocking the market down, oh, let's say 1000 points, taking profits which they put back into the market to make new all-time highs next month.
It's quite simple to do if you have the money.
With out their bubble they wouldt have everything they wanted. Their bubble, their pin. Everyone else's bubble popped years ago, now we just get to watch them get all they want. Like watching a sporting event on the tv, your (or I'm) not playing.
According to Barron's Online:
http://online.barrons.com/articles/barrons-up-down-wall-street-tokyo-thr...
What markets didn’t know and didn’t expect was that Japanese officials would move so dramatically to try to spur that nation’s flagging recovery. Specifically, the BOJ upped its goal for the expansion of its monetary base, to 80 trillion yen ($720 billion) from ¥60 trillion to ¥70 trillion, a move the central bank’s governor, Haruhiko Kuroda, said is aimed at ending Japan’s “deflationary mind-set.” As a result of the plan to print more yen, the Japanese currency weakened to nearly 112 to the dollar from just under 108.
Meanwhile, Japan’s $1.1 trillion pension fund said it would shift its portfolio strongly toward equities—allocating 25% each to domestic and foreign stocks, up from 12% each—while trimming domestic bonds to 35% from 60%. In gambling terms, this is going all in on Abenomics, as the stimulus plan is called, after Shinzo Abe, Japan’s prime minister.
This is truly a dazzling example of 21st century government finance. The government runs a deficit covered by IOUs, or bond borrowings. The central bank buys those bonds to fund the budget shortfall and also purchases bonds sold by the pension plan, all with reserves it creates out of thin air. The pension fund uses the newly printed yen it receives from the BOJ for its bonds to buy claims against the future earnings of private industry—that is, common stocks.
Those are the financial impacts. In the real world, the effect is to make Japanese exports cheaper and to export deflation to Japan’s trade partners.
They say two thousand zero zero
Party over, oops out of time
We're runnin' outta time
So tonight, we gonna, we gonna (tonight I'm gonna party like it's 1999)