Saturday, January 30, 2016

Central Banks Are Out of Ammo

The Bank of Japan's latest gambit barely moved the Nikkei, much less the rest of the world's risk assets...Central Banks went ALL IN this week to save the casino. Now they have no dry powder left over for when shit goes sideways to down...

Global RISK OFF due to insolvency was deemed unacceptable to Central Planners hobnobbing at Davos. So Kuroda san was nominated by Super Mario to obliterate all shorts and thereby flip the switch back to RISK ON, if only for a few hours...One Central Bankster to control $200 trillion in global assets by taking interest rates to -.1%. 

Let's see what happened to "RISK"...

Here below is the ratio of the Japanese Nikkei to the JPY. If you squint with a magnifying glass, you may be able to see the latest rally...meaning that the amount of monetary juice it takes to move the needle keeps going up.

RISK OFF visualized:
Rollover of the Nikkei/JPY ratio coincides with S&P tops...the tail is no longer wagging the dog...

S&P is in black

The S&P with Dollar/Yen

Aussie/Yen: A key RISK ON carry pair
Tracked the S&P as usual, on Friday:

Aussie/Yen medium term...the fifth lower high in three years...

Submerging Markets:
Skynet will have fewer shorts to pay out at the bottom thanks to the BOJ

West Texas Intermediate Crude with USO ETF volume overlaid
"You'll never see these prices again"

Junk Bonds...
"Why are we covering?"

Leveraged loans aka. Mergers/Acquisitions, stock buybacks, special dividends...

"ALL IN? Yeah, we're fucked..."

EM Debt
"Hey, we're back to last Tuesday"

EM Currency
It's an IQ test for Central Bankers...