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Two-Thirds Of Citi Survey Participants Say Central Banks Are Now Fully In Control
With nearly $2 trillion in 5-year-and-in eurozone govies sporting sub-zero nominal yields and with ~16% of global government debt sitting in NIRP territory, it’s abundantly clear that the idea of the “market” (a word which at this juncture has virtually no meaning) functioning as a price discovery mechanism is now absurd. Even when reality came calling in mid-January courtesy of the SNB’s abrupt abandonment of the euro peg (which of course amounted to a tacit admission that central banks aren’t omnipotent after all), the ECB took us right back into the monetary policy twilight zone barely a week later (apparently “whatever it takes” turned out to be around 1.2 trillion euros worth of asset purchases), and in the process ensured that investors’ inevitable front-running of Q€ would serve to blunt any upward pressure on sovereign and corporate spreads occasioned by the drama set to unfold in Greece.
It comes as no surprise then, that even in the face of hopelessly contentious negotiations between Greece and its creditors, yields on Spanish and Italian 10s are hanging out near multi-year lows (although up around 20 bps since the Draghi’s presser) and euro IG yields are at record tights. This despite the fact that Spain appears to have, in the words of Syriza parliamentary spokesman Nikos Filis, caught the “Syriza virus,” Italy is being thrown under the bus by a Yanis Varoufakis intent on proving Greece isn’t the only insolvent country in the currency bloc, and European stocks have diverged dramatically from corporate earnings estimates.
But at the end of the day, it’s all about the central bank put. Just ask … well, just ask anyone. From a Citi global credit survey:
“...over 65% of respondents said they believed action from central banks in Europe and the US would be the principal force driving credit index spreads [and] surprisingly, in a year with major political catalysts in Europe, and ongoing regional tensions in the Middle East and Russia, only 4% of respondents felt that geopolitical risk would be the major factor driving spreads.”
Even last week, when political tensions both in southern Europe and in Ukraine reached a fever pitch, Q€ front-running still appears to have been a controlling factor, at least in cash credit, as IG cash has diverged markedly from CDS. From Citi: “ECB QE already squeezing out the IG bond market? Seems cash investors aren’t waiting any longer to load the boat…”
And with Q€ set to compress IG spreads, investors are getting squeezed into high yield:
We’ve heard this story before:
And so it goes. It appears even Grexit and the threat of a new Cold War aren’t enough to offset investors’ perception of the power of the printing press. Trade accordingly, but remember that "a few more episodes like the SNB's shocking, and confidence-crushing, reversal in January, and the faith in central banker omnipotence will slowly but surely start to evaporate, and as it goes, it will also reveal just how much risk there truly is in this biggest "frontrun-the-central-banks" bandwagon trade of all time.”
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Oh thank god. Now I feel safe to buy stocks. SARC
The end of the EU is near
But markets are showing no fear
A central bank fraud
Has made them like god
Their control of our markets is clear
It's a great time to start a career in farming!
-John
http://naturecoastpermaculture.com/2014/12/unemployed-try-wwoofing-work/
sheeples ARE sheeples...
believe what they want to believe.
Only 2/3rds?
Well, all I can say is that "yours truly" is 100% in full control of the THIRST MUTILATOR CENTRAL BANK.
Of course they are in control, but "this too shall pass".
Yes, they are in control... of a runaway train headed for a cliff.
Casey Jonestein
Epic response!
Heading? Brother, we're been in full balls out ramming speed free fall off the cliff already for quite sometime now.
The other 1/3 answered, "Baaaaaaaa"
They were given the alternate survey:
a) baaaaaa
b) moooo
c) please sir, may I have another?
Control of what?
This shitshow?!
Hell yeah they are in control of this shitshow! It's their fucking child, not ours. Their idiotic policy, not ours.
We need a survey for that?
The more fucked up it gets, is directly proportional to CB intervention.
Is this as fucked up as it gets???
The survey says?
X
of what exactly? Be specific of fuck right off.
They are correct to follow the money in times of many questions. They seek a former transient reality that was where the money/banks/government was temporarily the bedrock of it all. They don't see that today it's a thin facade over a real life nightmare, or that this drama has played out many times before. Some probably suspect deeper problems but don't really care to know how bad it is anyway.
I would say they are fully out of control.
QE/Print until someone goes down hard.
Then it's every bankster for himself.
There is no honor among thieves.
65% Rigged.... seems a bit light.
NUEREMBERG TRIALS NOW
HANG THE BANKERS!
We need to regain control over our nations.
The people who can print money determine the value of the money? WEIRD!
"Control is only an illusion you silly little twit."
Now that all developed Western societies have rapidly aging populations the banks can siphon off their assets by telling Central Banks to pay nothing in interest while funding their gambling with public debt.
I wouldn't be surprised to see U.S. national debt at $34 Trillion by 2020 if not sooner. NIRP and ZIRP to punish savers and churn any retirement they might have while underemployed or unemployed children and grandchildren live off what is left.
The ZIRP and NIRP are a very serious problem for all but recently esp a problem for the O&G sector layoffs [aka, firings]. Those unemployed Middle Class engineers get 0.01% on their savings acct and a huge loss in their pension plan since most of it was held in their own deeply depressed O&G company stock.
Add to them the retirees, insurance companies, etc who relied on at least 4% and my financial advisor tells me we are heading into an economic [and scoial] hellstorm of mega proportions.
Oh yeah, and don't forget all the new tax increases including Obamacaretax, cap gains tax increases, that foreign tax for those holding/hiding stuff abroad, and on and on.
Its all noise. Ignore it and stick to your mind set.
In time, the truth will be heard.
So it would appear people are figuring out what I have said for years. There is only ONE CENTRAL BANK.
"When government becomes irreversible, dictatorship is at the door." -- Dr. Fred Schwarz, "You Can Trust the Communists (to be Communists)"
These people are fanatics.
Where have we seen fanatics push fake, unworkable, unsustainable economics?
Mao, Pol Pot, Stalin, Hitler.
This will not end well.
If central banks now print more money than governments need and this money is driving up the various stock markets then the circus never ends. How lucky we live in a day where debt doesn't matter. Or does it? I guess we could ask the Greek people about it.
@…”only 4% of respondents felt that geopolitical risk would be the major factor driving spreads.”
When you get something like a survey from one of the banks you can be assured it makes them look good; otherwise, they don’t release it. They are total liars; they’ve proven it daily.
http://www.telegraph.co.uk/finance/economics/11378193/How-central-banks-...
The comments section is entertaining too.
I agree 100% with this...50 years ago noone knew who the Central banks were...now we all sit on the edge of our seats everytime they take a breath...they know it too...they love the press..the stardom....all the cameras and mikes....they are bigger than rock stars now....disgusting yes....we are just slaves now to the ruling class...
But when somebody tries to so much as monitor the Fed, the establishment media throws a fit:
President Paul? Wall Street on high alert
His ‘audit the Fed’ push makes him dangerous in the eyes of finance execs.
Read more: http://www.politico.com/story/2015/02/rand-paul-wall-street-2016-elections-115226.html#ixzz3S1U4cKPN
It's not the Central Banks that are fully in control -- it is the TBTF banks that are in charge of the Central Banks that are in control!
Lets just hope the economic crazy bus never goes under 55mph.
Who knew at the time it came out that that movie would be a key metaphor for America, banking, the economy, you name it
Only 65% responded Central banks ..? What did the other 35% respond...The IMF ?
Seriously Tyler .. waht were the other choices in the survey?