On Monday last week in my preview of FOMC and BOJ policy meetings “FED AND BOJ WILL DO EVERYTHING THEY CAN THIS WEEK TO SAVE THE STOCKS BUBBLE ONCE AGAIN” I assumed the BOJ would be cognizant of the overall situation, hence I saw zero possibilities they would have hiked…
Category:Macro
THIS IS NOT 1987, 2000, 2008 OR 2020, BUT A WHOLE NEW MARKET MONSTER
These days there are a lot of comparisons being made with what happened in previous financial crises that unfolded after times of irrational exuberance and reckless monetary policy, but many are failing to grasp how the current situation is hardly comparable to what happened in the past for many reasons….
A TRAVELER GUIDE TO NAVIGATE THE BANK OF JAPAN MESS
First of all, let’s do a quick recap of how we got here: At this point, something very important happens. On the 30th of July, right after US stocks opened for cash trading, someone very big was clearly being margin called and liquidated as I warned in this post here…
FED AND BOJ WILL DO EVERYTHING THEY CAN THIS WEEK TO SAVE THE STOCKS BUBBLE ONCE AGAIN
This week #FED and #BOJ have a lot to lose and very little to gain, a situation they put themselves into and that nobody tried to stop them from falling into. The money printer made so many people happy since the aftermath of the GFC, no motivation for anyone getting…
CHINA HAS BEEN THE FIRST ONE TO ABANDON THE QE ABERRATION, WHO IS GOING TO BE NEXT?
“Higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.” This is how on the 5th of November 2010 the almighty Ben Bernanke himself was…
WHY THE BANK OF JAPAN IS DANGEROUSLY PLAYING WITH THE DERIVATIVES FIRE
On the 29th of April, something very special happened, yet many did not grasp the importance of the event. Even if that day was a public holiday in Japan, hence there was no real liquidity in the US Treasuries (both spot and related derivatives) market overnight hours as usual, the…
THE GREAT LIQUIDITY AVALANCHE – FROM MAG7 TO EVERYTHING ELSE?
Every avalanche always starts with that last small drop of a snowflake that makes the whole pack of snow too heavy to stick on the mountain. Since the #FED and fellow Central Banks joined the BOJ in the great money-printing crusade to “save the world” from COVID-19 in March 2020,…
HOW ARE FINANCIAL MARKETS GOING TO REACT IF JOE BIDEN ENDS UP DROPPING OUT OF THE PRESIDENTIAL RACE?
The current market structure, though robust on the surface, maybe one of the most fragile in history. On one side, you have investors, both retail and professional, who tend to #FOMO into anything that rises (although professional investors call that the “momentum” strategy). On the other side, you have algorithms…
A PEEK INTO THE FUTURE: USD/JPY ROAD TO 300
Three months ago, in “Why a Historical $JPY Currency Crisis Is at the Doorstep of Japan”, we discussed the precarious state of the Japanese yen (#JPY). Considering the volume of JPY printed, the size of Japan’s economy, and its foreign reserves, the yen should have been trading at 298 against…
MARKETS WILL QUICKLY STOP FEARING THE RISK OF “POLITICAL CHAOS” IN FRANCE
Emmanuel Macron’s decision to call snap elections in France after the disastrous results of his party in the latest European elections not only caught his fellow European leaders completely by surprise but also caught the ECB completely unprepared to deal with last week’s panic in French financial markets. Beware, financial…