In an interesting interview with Finanz und Wirtschaft, Bianco Research president Jim Bianco discusses a variety of topics such as negative interest rates turning the entire credit process upside down, bank balance sheets being even more complex and concentrated than before the financial crisis, energy loans being an accident waiting to happen, the markets having veto power over the Fed, and gold having more room to run.
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When JPM quant Marko Kolanovic released his latest report today, we were expecting him to read his latest insight on the positioning of quant funds, on the relative imbalance of risk parity, or perhaps whether market gamma was suggesting that the market is poised for an inflection point, either lower or higher.
It wasn't until a week ago that the loud calls for the Bank of Japan to do much more easing came loud and strong, because it was last Wednesday when Goldman announced it had changed its base-case scenario from one of a June easing to making "easing in April our base-case scenario, given the rising risk that business confidence has been dented by recent financial market instability and the Kumamoto earthquakes, and in view of BOJ governor Haruhiko Kuroda’s recent proactive statements on possible additional easing in response to the sharp deceleration in inflation in April." At that
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Japan has proven that decay can be stretched into decades, but it has yet to prove that gravity can be revoked by central bank monetary games.
Japan's fiscal and monetary extremes are in the news again: this time it's the Bank of Japan's extraordinarily large ownership of Japanese stocks, a policy intended to boost "investor sentiment" and prop up sagging equity valuations:
With the Fed decision just one day away, followed the very next day by the increasingly more irrational BOJ, stocks had no desire to make significant moves and overnight's boring session was the result, as European stocks and U.S. index futures rose modestly but mostly hugged the flatline while Asian declined 0.2% for a third day as raw-material shares declined and Tokyo equities slumped before central bank meetings in the U.S. and Japan this week. China’s stocks rose the most in almost two weeks, up 0.6% but failed to rise above 3000 on the Shanghai Composite, in thin trading.