United States

Going into Friday, Japanese monetary policy already stood out as the most egregious example of Keynesian insanity the market has ever witnessed.

You’ll recall the central bank is monetizing the entirety of gross JGB issuance and is on a lunatic quest to own the entire ETF market.

But the BoJ still hadn’t gone full-Krugman by taking rates negative. That changed overnight when the bank took the NIRP plunge as Haruhiko Kuroda reminded the world that when it comes to maniacal monetary policy, no one does it like he does.

As relations between Russia and the West grow increasingly chilly, US officials have revealed that Vladimir Putin is an alien from a cold and distant planet. The Russian leader visits planet RU-thless84 on occasions, where it is rumored he stores his loot from his strong-arm tactics on earth. Putin is reported to have accumulated tens of billions of dollars on his home planet, that is thought to have an extremely cold atmosphere and contains an ocean of ancient fossil life forms under its frozen surface.

Submitted by Pater Tenebrarum via Acting-Man.com,

An Imaginary Bogeyman

What’s a Keynesian monetary quack to do when the economy and markets fail to remain “on message” within a few weeks of grandiose declarations that this time, printing truckloads of money has somehow “worked”, in defiance of centuries of experience, and in blatant violation of sound theory?

Oil prices around USD 30/bbl mean that an increasingly significant volume of future oil projects no longer make sense. Although Deutsche Bank does not expect US crude inventories to reach capacity, rising US inventories and high US crude imports may heighten downside pressures to push prices closer to marginal cash costs of USD 7-17/bbl for US tight oil.

With few plausible scenarios for a strong price recovery in the short term, Deutsche lowers their Q1-2016 price forecasts to USD 33/bbl for WTI and Brent.

Following years of QE-inspired excess returns, investors in 2016 suddenly find themselves embroiled in a broad and brutal bear market. As BofAML's Michael Hartnett notes, the 10-year rolling return loss from commodities (-5.1%) is currently the worst since 1938...

Oil peak-to-trough -80% past four years, EM currencies trading 15% below their 2009 lows, yield on US HY bonds up from 5% to 10% in past 18 months, and equal-weighted US stock index down 25% from recent highs...