Mutual Funds, ETFs at Risk of a Run Warns Stockman
In one of his starkest warnings yet, Former White House Budget Director (Office of Management and Budget, OMB), David Stockman has warned that banks and the global financial system remain vulnerable and there is likely to be another global financial crisis which will be worse than the first involving "a run on mutual funds and ETFs."
Stockman warns in a Bloomberg interview that Deutsche Bank
Ever since the BoJ took the plunge into NIRP late last month analysts and commentators alike have begun to express a high degree of skepticism about the wisdom of adopting negative interest rates.
Once seen as a kind of peculiar policy experiment confined to Switzerland, Denmark, and Sweden, NIRP has escaped the lab so to speak and now that Kuroda is negative and Draghi is contemplating another depo rate cut in March, people are starting to realize that the entire developed world might be about to go Keynesian crazy. Even the US.
Just like two days ago, when for the first time since 2011 the BOJ intervened directly in the USDJPY market, moments ago Kuroda's trading desk once again decided to sell a boatload of Yen, with the key carry pair trading at 111.25 and threatening to take out the 110 support, in the process sending the USDJPY higher by 175 pips in a matter of seconds to just above 113.
The move quickly filtered through to all other asset classes:
Here is this morning's market update from JPM's Adam Crisafulli
It's hard to imagine an uglier morning. The two things markets hate most right now (neg. central bank rates and bad bank headlines) occurred overnight as the Riksbank dropped its rate further into neg. territory and SocGen put up bad earnings/guidance.
Yesterday morning, when musing on the day's key event namely Yellen's congressional testimony, we dismissed the most recent bout of European bank euphoria which we said "will be brief if not validated by concrete actions, because while central banks have the luxury of jawboning, commercial banks are actually burning through funds - rapidly at that - and don't have the luxury of hoping for the best while doing nothing." This morning DB has wiped out all of yesterday's gain.