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I think it's a combination of Trump's win,Brexit,le Pen etc etc combined with an increasing realisation that QE has achieved nothing except to sustain zombie companies and prop up stock markets.

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I'd imagine assets skyrocketing and stocks being more overvalued than pre 2000 crash are seen as the poster boys for QE, and this is perhaps as strong as economies will get for the next few years.

 

Capture-large_trans_NvBQzQNjv4BqqVzuuqpFlyLIwiB6NTmJwfSVWeZ_vEN7c6bHu2jJnT8.PNG.4575635a00a0b76b408c1bd8a1b821b4.PNG

http://www.telegraph.co.uk/business/2017/07/14/causes-stock-market-crash-headed-another/

 

Governments know very well when the next crash is near, don't let the gentile publicised rhetoric fool you otherwise, Yellen's wish to pursue tightening into a likely recession is surprisingly gutsy but she sees the greater evil of not doing so, as do many around her.

Bit like that scene in 127 hours where he chops his arm off.

 

Edited by Barnsey

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1 hour ago, Barnsey said:

I'd imagine assets skyrocketing and stocks being more overvalued than pre 2000 crash are seen as the poster boys for QE, and this is perhaps as strong as economies will get for the next few years.

Capture-large_trans_NvBQzQNjv4BqqVzuuqpFlyLIwiB6NTmJwfSVWeZ_vEN7c6bHu2jJnT8.PNG.4575635a00a0b76b408c1bd8a1b821b4.PNG

 

http://www.telegraph.co.uk/business/2017/07/14/causes-stock-market-crash-headed-another/

Governments know very well when the next crash is near, don't let the gentile publicised rhetoric fool you otherwise, Yellen's wish to pursue tightening into a likely recession is surprisingly gutsy but she sees the greater evil of not doing so, as do many around her.

Bit like that scene in 127 hours where he chops his arm off.

 

I agree with all of that,apart from Yellen being gutsy.I think the Fed is making the biggest policy error since 1937 by tightening into a recession.However to be fair to her missing out a full business cycle last time is where the problems were stored up.(like productivity,why invest when there is no margin due to zombie competitors kept afloat on debt)

The key problem in the world is debt and the earnings to support paying it.Its so tight even at almost zero rates that any fall in earnings will see mass defaults.I think thats very close.In the UK inflation due to currency is doing the damage,not interest rates.

Interest rates will be back on the floor soon and the printing huge.Interest rates will start moving a lot higher during the next cycle.For consumers its crucial to de-leverage quickly now,and is what everyone should of been doing the last 10 years.High leverage going into this will be a disaster.

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17 minutes ago, durhamborn said:

I agree with all of that,apart from Yellen being gutsy.I think the Fed is making the biggest policy error since 1937 by tightening into a recession.However to be fair to her missing out a full business cycle last time is where the problems were stored up.(like productivity,why invest when there is no margin due to zombie competitors kept afloat on debt)

The key problem in the world is debt and the earnings to support paying it.Its so tight even at almost zero rates that any fall in earnings will see mass defaults.I think thats very close.In the UK inflation due to currency is doing the damage,not interest rates.

Interest rates will be back on the floor soon and the printing huge.Interest rates will start moving a lot higher during the next cycle.For consumers its crucial to de-leverage quickly now,and is what everyone should of been doing the last 10 years.High leverage going into this will be a disaster.

I agree with this but, to use the avatar of someone on this forum we have a "zugzwang", a situation where there are no good outcomes. The indicators the Fed uses are highly ambiguous and many of them have been soft for quite some time now and, as you say, tightening into an incipient recession is a recipe for tears.

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25 minutes ago, durhamborn said:

I agree with all of that,apart from Yellen being gutsy.I think the Fed is making the biggest policy error since 1937 by tightening into a recession.However to be fair to her missing out a full business cycle last time is where the problems were stored up.(like productivity,why invest when there is no margin due to zombie competitors kept afloat on debt)

The key problem in the world is debt and the earnings to support paying it.Its so tight even at almost zero rates that any fall in earnings will see mass defaults.I think thats very close.In the UK inflation due to currency is doing the damage,not interest rates.

Interest rates will be back on the floor soon and the printing huge.Interest rates will start moving a lot higher during the next cycle.For consumers its crucial to de-leverage quickly now,and is what everyone should of been doing the last 10 years.High leverage going into this will be a disaster.

The last 8 years was the time to leverage up. Certainly on shares, that could be sold now at a huge profit. 

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6 minutes ago, crouch said:

I agree with this but, to use the avatar of someone on this forum we have a "zugzwang", a situation where there are no good outcomes. The indicators the Fed uses are highly ambiguous and many of them have been soft for quite some time now and, as you say, tightening into an incipient recession is a recipe for tears.

I do agree the tightening is really just to send a message that normal is returning.However you only have to look at the US government deficit announced yesterday again to see how far away from normal we are.

Through the first nine months of this budget year, the budget deficit totals $523.1 billion, up from a deficit of $399.2 billion during the same period a year ago.That doesnt look like an economy firing to me.

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3 minutes ago, Democorruptcy said:

The last 8 years was the time to leverage up. Certainly on shares, that could be sold now at a huge profit. 

Well yes,but im talking from a housing/debt side.High leverage on housing going into this will be a disaster.As ever the people buying at the top and thinking they are BTL guru's will be worst hit.

Over in the US insiders have been massive sellers of equities in their own companies.Consumers massive buyers the last quarter.(apart from energy stocks that have seen huge insider buying).As ever that is why the rich stay rich and the poor stay poor.

The UK stock market probably has pockets of value where companies have already been whacked.Retail being one.We will have to see how it plays out over the next 18 months.

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Investor relief as US rate expectations fade. :rolleyes:

Quote

By Jemima Kelly

LONDON (Reuters) - Global stocks scaled record highs on Friday, capping their best week in over two months as the dollar stayed close to nine-month lows, with bets on a gradual U.S. Federal Reserve rate hike path and hopes for a strong earnings season boosting risk appetite.

After a scare at the end of last month, when stock markets skidded on the view that the era of easy money might be coming to an end across the globe, investors have been soothed by a run of more dovish comments from central bankers.

Dallas Fed President Robert Kaplan on Thursday advocated a go-slow approach to further tightening after two hikes so far this year, saying he first wants to see more evidence that inflation is heading back up to the Fed's 2-percent goal.

Fed Chair Janet Yellen also said on Thursday that the central bank's further rate hikes could be gradual, given persistently low inflation despite an improving economy.

European shares were poised for their best week since late April as investors piled back into equities, though moves on indexes on Friday were muted as investors hunkered down ahead of earnings reports from major U.S. banks including JPMorgan (JPM.N) and Citigroup (C.N) later in the day.

The pan-European STOXX 600 (.STOXX) index inched up 0.1 percent, adding to earlier gains on stock markets in Asia that took MSCI's world stock index (.WORLD) to an all-time high.

"(The Fed comments) add to our conviction that no further Fed hike should be expected for the rest of the year, which should prove reassuring for markets concerned about excessive tightening risk globally," Mizuho's head of euro rates strategy Peter Chatwell said in London.

https://finance.yahoo.com/news/cautious-fed-lifts-global-stocks-005229429.html

 

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1 hour ago, crouch said:

I agree with this but, to use the avatar of someone on this forum we have a "zugzwang", a situation where there are no good outcomes. The indicators the Fed uses are highly ambiguous and many of them have been soft for quite some time now and, as you say, tightening into an incipient recession is a recipe for tears.

Sadly very very true.

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Let's see what the US banks report today on their earnings, should be very interesting to see the reaction in the stock market either way.

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