Back in 2014, just as the market was plunging, St Louis Fed's Bullard stopped the bleeding when in a Bloomberg interview said that a "logical response" to the tumbling market, would be to "delay the end of QE" and strongly suggested ed that "QE4" would be considered to prevent further market losses. The S&P exploded.
When we were discussing the self-reinforcing dynamics of vol-neutral funds yesterday, which may or may not continue selling today depending on what the VIX does, we concluded that aside from the decision-making mechanics of systematic funds, the biggest question would be if the Fed, or other central banks, do not do step in to prop up the market as they have on every other similar occasion in the past 8 years.
Would that imply that traders - be they CTAs, risk-parity, or simply carbon-based - are finally on their own?
Authored by David Stockman via The Daily Reckoning blog,
The Deep State is escalating its war on President Trump but the Wall Street partiers apparently couldn’t care less until today's relatively modest drop. When the machines tagged 2402 on the S&P 500 yesterday, it was surely a historic case of “look ma, no hands!”
It’s hard to imagine what more will be needed to ignite an eruption of fear and panic in the casino amidst Wall Street’s record and wholly irrational state of somnolence.
We warned last week that behind the scenes, professionals were increasingly speculating on a delay to the "baked in the cake" June rate hike.
The sudden surge in interest in Eurodollar calls (vs puts) suggests more than just a few prop bets are being placed on the fact that The Fed does not hike rates in June.
Well the last few days have seen that started to be reflected in the primary markets... as US macro data collapses (and Trumptopia tumbles).
Authored by Michael Snyder via The Economic Collapse blog,