onsdag 22 april 2020

Dysfunktionen i systemet allt mer blottlagt.

FED köper högränteobligationer  och "räddar" felallokerad placerare, Carl Icahn varnade för en kris på högränteobligationsmarknaden för 5 år sedan.

Negativa priser på olja, negativa räntor....

Centralbankerna delar ut pengar till alla invånare.

Detta är förstås bara en del av en policy som pågått i snart 10 år:

Fyfan vad obehagligt allt detta är, desperationen för att hålla ihop systemet är tydligt. Kanske fixar dom det, bara gud vet. Varför har centralbankerna slutat att intervenera dagligen nu när börsen går upp? Det är förstås självklart om man betraktar ovanstående citat.

 Vad händer om det visar sig att ekonomin inte kan återhämta sig omedelbart efter 22 miljoner nya arbetslösa/permitterade i USA? Eller folk i gemene är skrämda och tillväxt inte återgår på 9 månader?

Vad är nästa steg? Ska Centralbankerna börja göra direkta stödköp på börsen? Skicka ut 10 000 USD till alla tiggare? Köpa upp all olja som produceras i USA för att bygga upp de nationella nödlagren (kanske en av de mer vettiga åtgärderna de kan göra nu)? 

I allt väsentligt syns dysfunktion tydligare nu än tidigare.

Should it be a surprise that stocks go straight up and then crash straight down? Which part of “record prices, record valuations, record leverage, record derivatives trading and record complexity” should investors be excused from understanding? Any outright long investor who is not waking up in the middle of the night sweating and worrying whether there will be a next leg of the bear market (despite the desperate and gigantic policy moves) is either Cool Hand Luke or oblivious.
We are not in the business of calling market turns. Why did most managers, economists, strategists and policymakers miss it? Certainly as the virus was getting underway, advisors should have been incorporating it into their thinking. Certainly as the global economy started shutting down, advisors should not have been upgrading their recession probability forecasts “from 20% to 25%” and modestly downgrading their Chinese growth forecasts “from 6.1% to 5.6%.” Maybe investors DIDN’T miss it. Maybe they actually thought that no matter what happens, the authorities want stocks to go up, and that is all you need to know.
The central bankers, particularly at the Fed, should be ashamed of themselves for fostering that belief, and for allowing the policy mix to be so skewed toward free and (overly) plentiful money. The solution is now pouring unlimited money into the boiling cauldron. MMT has come along just in time to justify everything. Not in productive ways, not in the building of useful infrastructure, not doing a better job of educating our workforce so we can grow like crazy, but just to save the screwed-up system that we have, just to hold things together. Helicopter money has made the job of active investing harder, and the suppression of interest rates by central bankers lowers the forward rates of return for everyone. You might say, “But it has enhanced the to-date rate of return.” We would retort, “That is true, but despite the artificially enhanced to-date rates of return in bonds and stocks, net debt has skyrocketed, pension plans are universally underfunded and developed world infrastructure is oriented toward political pet projects and is inadequate to support needed economic growth going forward." (Paul Singer)

"As for me, with the yesterday’s Fed announcement of unlimited QE and its “will buy or support almost anything,” along with the pending passage of a $2-2.5 trillion stimulus package, this is the end of the capital markets as we have known them. We have now entered unlimited QE and MMT where there is no escape. It is the Roach Motel all over again. In Chairman Bernanke‘s 2010 Washington Post op-ed, he argued that QE would lead to a virtuous economic cycle; therefore, the Fed would eventually be able to exit from its QE operations. I argued that once initiated, a reversal would be impossible. It would be like the Roach Motel, “You can check in, but you cannot check out.”
With the initiation of the Fed’s complete takeover and control of the US financial economy, there is now absolutely no accurate pricing discovery in the capital markets and we have entered a period of total manipulation. In light of this, the only markets I have an interest in are those where the heavy hand of government is not involved or only minimally involved. This leads me to rare commodities and collectibles. The public equity and debt markets are now nothing more than greater fool markets that are led by the greatest fools of all, the Fed and the Congress. US capital markets, RIP!" (Robert Rodriguez)

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