Friday, March 11, 2016

Central Bankruptcy

ZH: Mar. 1, 2016
China Exports Most Deflation Since 2010
Corporations import poverty and Central Banks monetize it into 0%, which is then invested in ghost cities, oil fields, crack shacks, revenueless Biotech, profitless IPOs, Netflix and most importantly stock buybacks which paper over the fact that the corporations are putting themselves out of business. It all makes sense to total fucking idiots...Markets are gyrating non-stop because all four major Central Banks meet over 7 days starting yesterday...

The ECB met yesterday - less than two weeks since the G20 summit and Carney's (BOE) statement that negative interest rates are a global zero sum game, therefore Super Mario cut Euro interest rates deeper negative. Risk markets soared and then crashed because he committed the cardinal sin of saying this was the last rate cut. In the Idiocracy asinine ideas like invading countries on false premise, are not the problem, it's telling people when they're going to end that's the real problem. 

I will get to the BOJ and Fed in a bit, but the most interesting meeting is the PBOC which is having its annual Monetary Policy circle jerk this weekend. At first I was going to write them off as failed money printers, but then I realized that I'm underestimating their ability to monkey hammer risk markets...

BBG: March 10th, 2016
Yuan Erases 2016 Losses
"Figures released earlier this week showed a 25.4 percent tumble in exports"
"China has no incentive to depreciate the currency to boost exports, the PBOC’s Zhou said last month"

I think we all see where I'm going with this...right now they're in 'squeeze mode' which is killing exports. Which means...
“Foreign-exchange policy will be opportunistic, seeing ‘ease then squeeze’ episodes. ‘Ease’ when conditions are right, ‘squeeze’ when conditions aren’t right.”

It's been two months since the Chinese last monkey hammered risk markets with an "easing"...

Yuan (red) with S&P 500:

BOJ: Monday and Tuesday (Monday night EST)
More clusterfuck expected. Analysts divided on whether or not they can tank global markets as well as they did last month with negative interest rates

Fed: Tuesday, Wednesday. Odds on do nothing this month other than to extoll the virtues of the .25% recovery.