Between 2008 and 2015, central banks pretended that they had fixed the economy.
In 2016, they’re starting to admit that they haven’t fixed much of anything.
The current head of the Bank of England (Mark Carney) said last week:
If Saudi Arabia is shocked at the relentless ability of the U.S. shale "marginal producers" to continue pumping even with oil prices below breakeven costs for many (which as reported recently have mysteriously tumbled from $70 to $40) at a time when the junk bond market - the traditional conduit of how energy companies have financed themselves - it should thank Wall Street, for one simple reason: investors have pumped a whopping $9.2 billion in new equity into energy companies year to date, the most since Bloomberg records began in 1999.
Authored by Mark Cliffe, originally posted at VoxEU.org,
After the recent sharp spike higher in the S&P which has pushed it 150 points off its lows, the market may be down 3% since the beginning of the year. However, while many have blamed the 2016 selloff and subsequent rebound on central bank policy confusion, what many are forgetting is that a key factor pushing stocks lower are corporate earnings. And, as JPM reminds us, even with stocks 3% lower for the year, the overall market is more expensive now than it was at the start of the year.
Following last night's yuuge inventory build reported by API (+9.9m) and large rise in Cushing levels (+1.8m), DOE reported a crude build of even yuuger 10.37mm barrels (against the 7.1mm expectation) - the largest since early April 2015. Cushing saw a 1.2mm build - the most in 3 months.