Asian markets were saved from implosion on Monday by news that China launched its largest credit expansion since Imagined Realities 2015:
Dec. 2014
"There are times when an investor has no choice but to behave as though he believes in things that don't necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully...China is set to record its weakest growth in GDP in 25 years. Yet it seems to have entered a bull market and may be where we deploy much more of Your risk capital in the coming year, as China amply demonstrates the power of imagined realities"
Fast forward to now:
"China has opened the liquidity floodgates."
Bank lending in China hit an all-time high in January, signaling that recent mandates to boost lending to businesses are taking broad effect."
Beijing is taking an extremely loose monetary-policy position, embarking on its most aggressive stimulus measures since 2015."
Given this backdrop, Beijing authorities will likely pull out all the stops to boost onshore equity markets."
What could go wrong?
Meanwhile in Europe the ECB is on the cusp of capitulation as well:
"Central banks around the world are following the Federal Reserve in reining in plans to tighten monetary policy. The ECB itself has already changed its language to warn of downside risks to he outlook, while India’s central bank unexpectedly cut interest rates last week and easing inflation bolstered bets that more reductions could be on the cards."
In the U.S., notwithstanding Powell's recent capitulation, policy uncertainty has reached a record high as the greatest con job ever hits the brick wall of reality:
Tomorrow morning before the open we learn via Walmart earnings what is taking place with the jobless consumer vis-a-vis the Anti-Keynesian government shutdown and the tax refund haircut.
There is a substantial likelihood it will move markets
