Business

A few months ago, we noted that the Bank of Japan had decided to throw every textbook out of the window and crank their plunge-protection to '11'after reports surfaced that they owned a staggering 75% of Japan's ETFs.

The BOJ first started their buying spree in December 2010 - when they held no ETFs at all - and have since accumulated some $150 billion in aggregate holdings.  The buying was all as part of unprecedented "economic stimulus" which has undoubtedly contributed to the Nikkei 225 Stock Average surging roughly 125% since December 2010.

Once upon a time, Wall Street analysts had just two things to worry about: interest rate risk and corporate profits - virtually everything else was derived from these.  Unfortuantely, we now live in the new normal, where central banks step in every time there is even a whiff of an imminent market correction (as BofA explained last week), and the result is that nobody know what is and what isn't priced into the market any more, simply because the market in the conventional sense of a future discounting mechanism no longer exists (as Citi explained earlier this summer).

Authored by Lance Roberts via RealInvestmentAdvice.com,

Review

I have been traveling a lot the last couple of weeks, so a big “Thank You” goes to Michael Lebowitz for “pinch hitting” for me. This week, I just want to review a couple of things as we begin to wrap up 2017.

CBOE Global Markets Inc and CME Group Inc will launch futures contracts on bitcoin on Dec. 10 and Dec. 17 respectively. Here are some of the differences between the products to be offered by the exchange operators.

CONTRACT UNIT

• The Cboe Bitcoin Futures Contract will use the ticker XBT and will equal one bitcoin.
• The CME Bitcoin Futures Contract will use the ticker BTC and will equal five bitcoins.

PRICING AND SETTLEMENT

In a merciful transition from Wall Street's endless daily discussions and more often than not- monologues - of why vol is record low, and why a financial cataclysm will ensue once vol finally surges, lately the main topic preoccupying financial strategists has been the yield curve's ongoing collapse - with the 2s10s sliding and trading at levels last seen in April 2015, and with curve inversion predicted by BMO to take place as soon as March 2018. And, according to at least one other metric, the yield curve should already be some -25bps inverted.