I’m sick and tired of half-baked econ PhDs trying to centrally plan our lives.
The European Central Bank cutting rates and devaluing The People’s currency as European growth is accelerating (not a typo) took my level of disgust up another notch yesterday. I didn’t think that was possible. I guess I thought wrong.
Like the Fed, the European central planners thought that cutting rates was going to “stimulate growth”, or something like that. Meanwhile, the market’s reaction to yesterday’s European rate cut “news” was global #GrowthSlowing.
Yes. Much like the “growth” style factor being for sale in US Equities ever since the Fed’s unaccountable decision not to taper (Financials down, Staples/Telcos straight up), that’s precisely how Mr. Market voted, worldwide, after the ECB rate cut:
- US Growth Stocks got killed yesterday (Nasdaq -1.9%); Russell2000 now -3.7% from its YTD high
- European Growth Stocks stopped going up (yes, we sold everything on the ECB “news”)
- Asian Stocks continued lower overnight – China and Japan down another -1.1% and -1.0%, respectively
Actually, since the Fed’s slow-growth-no-taper decision and ECB rate cut, from their recent highs:
- China’s Shanghai Composite Index is -6.7%
- Japan’s Nikkei is -4.7%
- US Growth Stocks like Facebook (FB) and Tesla (TSLA) are -12% and -27%, respectively
These academic wonks of the Keynesian empire fundamentally believe that Deflating The Inflation (from the world record inflation they perpetuated via currency devaluation in 2011-2012) is now the world’s greatest threat.
No. To be clear, their most recent policy moves are the new threat.
Are these un-elected people at the Federal Reserve and ECB frauds? Or are they just completely bought and paid for by the Bond Bull Lobby and currency debauchery camps?
I don’t know. But I do know that ECB chief Mario Draghi worked at Goldman Sachs. And I also noticed that Goldman just had the worst FICC (Fixed Income, Currency, Commodity) quarter in the Federal League…
Was Goldman’s prop and/or FICC team choking on too much illiquid bond and currency bubble paper that they finally had to start taking some marks?
Why is Goldman’s Hatzius such a raging dove? Why is he trying to scare the hell out of the Fed on #RatesRising when his own desk is saying the opposite? Why is he all of a sudden lobbying for the Fed to change the goal posts on a lower “unemployment” target?
Who can really get out of any of these bubbles (MBS, REITS, etc.) that Bernanke backstopped? How will it end? Or are they trying to convince you, like they did in late 2007, that nothing could possibly go wrong?
(Editor's note: This is an excerpt from today's Morning Newsletter written by Hedgeye CEO Keith McCullough.)