Via Finanz und Wirtschaft's Christoph Gisiger,
James Bianco, president of Bianco Research, expects more turmoil to come and warns that there will be no easy way out of zero interest rate policy.
The world has yet to fully digest what is currently happening in Japan.
Japan is the global leader for Keynesian Central Banking insanity. The ECB and US Federal Reserve began implementing ZIRP and QE after 2008. The Bank of Japan has been employing both ZIRP and QE since 2001.
Put simply, by the time the Great Crisis of 2008 rolled around, the Bank of Japan had nearly a decade’s experience seeing what QE, ZIRP, and the like could accomplish.
Last week, WalMart doubled down on the wage hike debacle when the world’s largest retailer decided to give everyone a raise in February.
The all-in cost will be around $2.7 billion. While some were surprised at the move, it was easy to see coming. Indeed, we’ve long said that the company’s decision to hike wages for its lowest-paid employees would eventually necessitate similar raises for workers higher up the corporate ladder.
With Ray Dalio warning that QE no longer works:
"it is difficult to push the prices of these assets up and it is easy to have them fall. And when they fall, there is a negative impact on economic growth. When debt levels cannot be increased without reducing spending — stimulating demand is more difficult."
It might behoove some investors to "hedge" as opposed to BTFD in FANGs. As BofAML's Jason Galazidis explains,
"Do not worry," investors are told day after day, this is just a swoon because companies are blacked out from buying back their own shares and supporting the irrational valuations in stock markets. Well, Credit Suisse just smashed another leg on the 2-legged stool of equity market perma-bullishness as they explain in their daily note that "talk of seasonal oscillation in buyback activity is over-exaggerated."
Lot of talk around buyback blackout periods