Friday, April 15, 2016

Black Swan Diving Into Pavement: There's No Fed "Put"

At the end of every cycle, Wall Street fantasizes that stocks can't crash because the Fed won't let it happen. You know, like 2000 with that -50% crash, or 2008 with that -55% drawdown. This time will be different, because how else can they sleep at night when they're totally unhedged...

Last year, the People's Bank of China encouraged stock market speculation by way of trickle down Ponzinomics. When to everyone's shock and awe, the market went straight up and straight down, they panicked and banned short selling, halted thousands of stocks for days on end, banned institutions from selling, and as a last resort stepped in to buy hundreds of billions worth of stocks.

They even asked the Federal Reserve for their "Crash playbook", which deals with what to do AFTER the crash, it doesn't prevent crashes from occurring...

Chinese stocks with S&P:

Now we learn that the Japanese government owns half of Japan's ETFs and just pledged to buy more. I think we all see where I'm going with this...

ZH: April 15th, 2016
BOJ Owns More Than Half of ETFs, Pledges To Buy More

I've said this before, but if you have a bag of rocks losing value every day, and some fucktard is willing to pay a trillion dollars for them, you should sell all of them ASAP.

Because that transaction won't in any way change their value.

Only a Central Banker would believe it does.