Yesterday's sharp Chinese selloff is now a distant memory after the BTFDers emerged, and this morning U.S. equity futures are once again levitating as the FOMC begins its two-day policy meeting, following an uneventful BOJ announcement on Tuesday morning which left all QE parameters unchanged. Asian stocks traded mixed steady while European shares climb.
Another week, another warning regarding financial crash scenarios from those keen minds at the IMF.
In “Here Is The IMF’s Global Financial Crash Scenario” last week, we highlighted the institution’s surprisingly candid discussion hidden away in its latest Financial Stability Report “Rising Medium-Term Vulnerabilities Could Derail the Global Recovery"…or as we paraphrased the IMF’s “politically correct way of saying the financial system is on the verge of crashing”.
The last time the Bank of England raised rates was July 2007, when rates increased to 5.75%. Credit markets began to dislocate a month later (when LIBOR diverged from Fed Funds), equity markets peaked three months after the increase and things eventually got much worse.
With the Nikkei 225 having only suffered one down day (so far) in the whole month of October (a record), The BoJ decided it's better not to rock the boat and left monetary policy unchanged, as expected.
With new members at The BoJ, there was perhaps some uncertainty about Kuroda's decision today...
Boradly speaking Japanese economic data has been supportive but in recent days, disappointment has begun to set in once again...
Over the weekend, when looking at the record high ratio in median new home sale prices to household incomes in the US, we concluded that US homes have never been more unaffordable for the average American.
What about renting? Isn't it intuitive that if buying a house has never been more expensive, then at least renting should be cheap(er).