Business

Seven years after ZIRP (then NIRP) was launched and central banks grew their balance sheets by $13 trillion, in the process inflating the biggest bubble the world has ever seen, sending risk prices to record highs and trillions in government debt to record negative yields, first the Fed admitted QE was a mistake, and now the investment banks - especially those who were bailed out and were the biggest beneficiaries of QE such as Citigroup - admit central bank quantitative easing failed.

Earlier this month, Mario Draghi disappointed markets by failing to deliver an outsized depo rate cut and an expansion of monthly PSPP purchases. 

It’s not that the ECB didn’t ease. They did. It’s just that they didn’t ease enough, because when every DM central banker has gone Keynesian crazy (or, “full Krugman” as it were), a 10 bps cut doesn’t “cut” it (so to speak), and a six month extension of QE had been priced in at least since September. 

Via Dana Lyons' Tumblr,

The U.S. stock market has not been lower for any year ending in a “5″ since 1875…that streak is in jeopardy.

There are many observations to be made about the dramatic shifts shown in the chart below which demonstrates the top 20 companies by market cap over the past decade, but what, to us, stands out the most are two things:

1. after a decade of being either the world's biggest or second largest market capitalized company, Exxon has tumbled to 5th spot, something it did not do even during the peak of the financial crisis; and
2. after five years of being in the top spot, it is time for someone to finally dethrone the world's most popular smartphone maker.

Overnight China's finance ministry reported the latest data on state-owned firms profitability. At a cumulative CNY 2.04 trillion (or $316 billion) for the January-November period, this was another nearly double digit decline, or -9.5% from the year ago period, following a -9.8% drop for the 10 month period the month before.