Bearbarians qqq how to#

They lean on each other for balance, like two one-legged men walking along with interlocking arms. The US economy is based on debt-financed overconsumption, while ChinaвЂ™s is based on debt-financed overinvestment. вЂњThe Federal Reserve is prolonging the trade war, keeping the biggest financial bubble in history going вЂ“ and risking the entire global system. And in process they are exacerbating this asset bubble with potentially unfathomable consequences as it also relates to the trade war with China, a case well outlined by Andy Xie a former Managing Director with Morgan Stanley and a China expert: It must be, as IвЂ™ve seen no central bank outline how they will ever normalize. The Fed is acting like weвЂ™re in a massive crisis, no really, they are:ДЄs the decade is coming to a close hereвЂ™s a trend based forecast for the next decade. If you are afraid of market sell-offs and aim to prevent markets from cleansing themselves you end up with an every further disconnected spiral. The last time corporate profits stagnated while corporate debt accelerated higher was during 2000 just before the recession in 2001. Or the corporate debt ticking time bomb disconnecting from the underlying earnings picture: No wonder we see daily jawboning and interference at the slightest sign of trouble.ДЄnd hence everything keeps disconnecting from fundamental reality, be it market capitalization from GDP: What would markets and economies look like without the constant interventions? We get the occasional glimpses like December 2018, and they illustrate the potential power of the barbarians at the gate. Hence I keep mentioning how fragile this all must be underneath. I keep making the point that the ECB canвЂ™t even raise rates to zero for fear of a meltdown. With no end in sight as our markets have devolved into this: And that describes the last 10 years, the constant interventions, the low rates, the QE, the not QE, the repos, everything. All phrases that speak to the big trap weвЂ™re all in and a clear recognition of the artificiality of these markets.ДЇear of market turmoil. I suppose it all speaks for itself, but collateral damage, excessive reliance, fear of market sell-offs, fear of unwinding.

Bearbarians qqq how to#

Not sure how to best share the conversation as it was quote tweets back and forth so below are the self-explanatory screenshots and it started off with a dose of sarcasm from yours truly as it relates to the negative rates in place around the world as outlined by Mohammed El-Erian: But guess what? It doesnвЂ™t workвЂ¦.but the Fed canвЂ™t pull back because itвЂ™s worried it will disrupt markets that can be a spillover on the economy.В The FedвЂ™s in a lose, lose, lose situation, they canвЂ™t stay where they are, they canвЂ™t do more, they canвЂ™t do lessвЂќ. LetвЂ™s start with the basics well outlined by Mohammed El-Erian in an interview on November 26: вЂњHow do central banks pursue their economic objectives? By pushing up asset prices by hoping that higher asset prices make us feel wealthier & as we feel wealthier we spend more. The subsequent furious comeback leaving a rather unusual weekly candle on $SPX (IвЂ™ll discuss this separately in an upcoming technical update). After all 90% of November gains simply disappeared in a matter of a couple of days. Trapped in a coming disaster of their own making.ДЄnd be clear: As we saw this week again, the air can come out quickly. All this action hides a rather very uncomfortable fact, a fact that may eventually see the air come out of this ballon faster than it is going in.ДЄnd that fact is that the Fed, and all other central banks, are trapped.