The BOJ unleashed a surprise QE last night. The problem is that the Nikkei, the USDJPY and the SPX futures should have exploded up. Instead they reversed and gave up all their gains and even went lower. Why? We have reached peak central banking marginal return. There are no more buyers. Maximum leverage has been reached and now I am afraid the carry trade unwind may be beginning. The omnipotence of the central bankers was accomplished through willing speculators who levered up. Like all cycles they eventually end. The central bankers really don’t have power except that afforded to it by the market participants. Perhaps the speculators have run out of ammo. We shall see. Years ago I had a trader who when asked why the market was down would always say “There are more sellers than buyers”. At the end of the day its ultimately about supply and demand.If you enjoy the content at iBankCoin, please follow us on Twitter
Recovering Large Cap Growth PM. How I invest my own money is nothing like how I had to play the insane benchmark game.
Joined May 7, 2014
165 Blog Posts