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ECB hears the message and spikes the punch bowl

This morning the ECB announced several new supportive policy measures (punch bowl spiking) to prevent the stock market from dropping -ahem- maintain the efficacy of its monetary policy transmission mechanism. The Greedometer algorithms continue to warn when central banks need to spike the punch bowl or risk the possibility of price discovery and actual market based mechanisms inflicting reality. No, the ECB is not […] Read the rest of this entry »

Note to Central Bankers

Hello Fed, ECB, BoJ, PBoC, SNB. At least one of you must threaten to spike the punch bowl this week. Otherwise reality will start to happen again.    

Fund Management: $T Opportunity coming

  First, the punchline:  $40-50T is going to evaporate from global equities over the next 12-18 months (the end date depends on effectiveness of central bank ammunition that is yet to be deployed). FYI we’re still down $10T from the peak in January 2018.  The crash that will unfold in 2019-2020 is going to introduce a significant opportunity for investment strategies that profit (or […] Read the rest of this entry »

Todays FOMC: Fed caves

The Fed caved to what markets wanted (needed?). Chairman Powell did an admirable job in his press conference of calmly conveying a message that everything is somewhat  awesome, but the global economy is slowing, and the Federal government shutdown is  having a dampening effect (neither of those things are the fault of Fed policy).  So, we’re now fully migrated to expectations for no rate […] Read the rest of this entry »

Tomorrow: Powells Big Day

Today and tomorrow the Fed has an FOMC meeting. Tomorrow afternoon has the statement  and presser. BTW now every FOMC meeting has a press conference -instead of every second meeting. So every meeting gives the Fed a chance to calm/steer markets. Fed Chair Powell will announce one of these three things tomorrow: Maintain the “everything is great” position and threaten 2 rate hikes this year. […] Read the rest of this entry »

Can you quantify next year? Would you like to?

The past quarter has been a tough one if your portfolio was heavily tilted towards risk assets. You may be wondering what 2019 will look like. Well, the Greedometer algorithms say 2019 is going to be brutal. By the end of next week, the Greedometer algorithms will  have a pretty tight forecast for: the month the U.S. economy enters recession the scale of recession […] Read the rest of this entry »

GDP Report: does not matter- but not why you think

A few minutes ago the BEA (commerce department branch that estimates GDP) provided their 3rd estimate on Q3 GDP. their 1st estimate was +3.5% their 2nd was +3.5% today’s was +3.4% BEA Q3 GDP data since year 2000 yields these observations: 2nd estimates are 0.3%  higher than the 1st 3rd estimates are  0.02% higher than the 2nd (essentially the same) years after the fact, […] Read the rest of this entry »

and the BoE too

On Monday this week I did a blog post wherein I wondered which central bank would spike the punch bowl this week to keep the party going / stop it from ending. I did this because the Greedometers suggested stock market pain was once again on our doorstep. On Tuesday morning my question was answered when the PBoC dropped bank reserve ratios in a […] Read the rest of this entry »

Answer: PBoC

Yesterday I did a blog post asking which central banker will spike the punch bowl this week? This morning around 7am east coast N America we got the answer: the PBoC -so far. In a surprise move the PBoC lowered reserve requirement ratio for banks a full 1% (that’s a fair bit).  Loads of yummy risk-seeking liquidity came /will come into global markets. Unfortunately […] Read the rest of this entry »

ECB asks DB about winding down

Arguably the most important bank in Europe is Deutsche Bank. And yet it continues to struggle with the worst price to book of any systemically important financial institution. Over the weekend the ECB asked it to submit plans about how it would wind down its investment bank. FT article here.  Hmm. Gone are the days when the ECB & EBA were made laughing stocks […] Read the rest of this entry »