• Badge

    A Decade of Revolution Declare Your Research Independence

Takeaway: The only thing crashing more than markets in Japan and Europe is faith in central planners. Is the U.S. next?

It's Happening: The Belief System Is Breaking Down - central banker cartoon 02.02.2016

The #BeliefSystem that central-market-planners in Japan and Europe can levitate stock markets continues to crash…

According to Reuters, "Bank of Japan Governor Haruhiko Kuroda stressed on Tuesday his readiness to expand monetary policy still further, saying that market moves would be key factors the central bank would examine in deciding when and how it might next expand stimulus."

So... how about those "market moves?"

Some analysis via Hedgeye CEO Keith McCullough in a note sent to subscribers this morning:

"Japan big rip higher in the Yen to immediate-term overbought at 110 (vs USD) smoked Japanese stocks again, -2.4% Nikkei taking the crash from the July US Equity market high of 2015 to -24.6% - negative yields is not working in Japan or Europe (DAX down -2.4% and -22.6% since last year’s top)"

Take a look at the strength of the Yen versus the Dollar, a move in direct opposition to the BOJ's intent:

It's Happening: The Belief System Is Breaking Down - jpy strenght

Meanwhile, in Europe, Germany is crashing...

... Italian stocks? plummeting...

The latest "jig is up" moment for central planners came in India. The Reserve Bank of India cut interest rates to a five year low... and (surprise!) the Bombay Stock exchange fell.

The evidence is piling up. Global central bankers around the world can't fight economic gravity. But how about the U.S. and the Fed?

On that front, Hedgeye CEO Keith McCullough has been pretty candid about what he thinks. Watch the video below: