Can Central Planners Save The World? Nope. (So Short Japanese Equities)

03/29/16 09:56AM EDT

Can Central Planners Save The World? Nope. (So Short Japanese Equities) - central bank cartoon 02.17.2016

Don't believe all the central banking hoopla?

You're not alone.

Here's the latest way to play the breakdown in central planning via Hedgeye CEO Keith McCullough in a note sent to subscribers this morning:

"The yen is down -0.2% vs. USD this this morning at 113.72 and that registers an immediate-term TRADE oversold signal inasmuch as Nikkei signaled immediate-term overbought late last week (buy Yen, short Japanese stocks remains our current view there as the #BeliefSystem in central-market-planning breaks down)"

https://twitter.com/KeithMcCullough/status/714744269173555200

To be clear, Japan's central planners can't arrest economic gravity. That's why we think the recent rally in Japanese stocks will prove short-lived. 

Can Central Planners Save The World? Nope. (So Short Japanese Equities) - boj nirp

Here's the abbreviated tip via Twitter McCullough sent to Real-Time Alerts subscribers yesterday:

https://twitter.com/KeithMcCullough/status/714539311589404673

Meanwhile ... things aren't shaping up too well in Europe either, where Draghi is attempting to save Europe's deteriorating economy. According to McCullough: 

"After an ugly last week, equities are trying to bounce but unimpressively so post the Easter break – Italian Stocks (MIB) were -2.4% last week and +0.6% early this morning, but -14.6% YTD and still in crash mode -24% vs. this time last year when many thought European growth was going to be just fine (its consistently slowing now)"

 

How about Italy?

https://twitter.com/KeithMcCullough/status/714741759180406784

Ouch!

Other European markets off significantly from their 52-week highs?

  • France (CAC 40): -17.7%

  • Germany (DAX): -20.7%

  • Spain (IBEX): -26.0%

The central planning belief system is breaking down.

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