bank

Authored by Mark St.Cyr,

One of the premier features that was to help markets interpret upcoming policy moves made at the Federal Reserve was the idea and implementation of: forward guidance. This new feature was enacted by the former Chairman Ben Bernanke. The reasoning? In a nut shell it was no more than a heads up to the financial markets of what the Fed. would do, and when. i.e., Hit this metric of X and the Fed. will do Y. So – position accordingly.

Back in August 2012, when negative interest rates were still merely viewed as sheer monetary lunacy instead of pervasive global monetary reality that has pushed over $6 trillion in global bonds into negative yield territory, the NY Fed mused hypothetically about negative rates and wrote "Be Careful What You Wish For" saying that "if rates go negative, the U.S.

“I haven’t found any nuggets of good news.”

That’s from Investec’s Ian Gordon, who isn’t particularly enamored with RBS, which on Friday reported its eighth consecutive annual loss.

The bank - which was bailed out to the tune of $64 billion by British taxpayers during the depths of the crisis - lost $2.77 billion last year, which was actually a marked improvement from 2014. Pre-tax profit which strips away all of the bad things like litigation plunged by nearly a third to £4.4 billion, just shy of consensus.

Whether this week's market surge was catalyzed by two consecutive "technical problems" in the bond market, first the unexpected failure of the Fed's MBS POMO on Wednesday and then the 7 Year Treasury auction's last minute cancellations yesterday, and quite clearly it was...

... is irrelevant as the short squeeze has not only returned with a vengeance...

... but the critical 1,950 resistance and 50 DMA in the S&P500 was taken out...

Submitted by Patrick Barron via The Mises Institute,