Loading ...Central Banks are starting to feel the heat…
Look for the oil market to turn on a dime in here – and that will remove all of the “deflationary fears”that are keeping the bankers tossing and turning as the mere spectre of disappearing bonuses gets vapourized with one keystroke from 133 Liberty St…Here is a comment this morning from a widely-followed charting service that capsulizes the events that have led to a 300+ point drop in the Dow Jones and a 30-point crash in the S&P500.
These Central Bank “interventionalists” are going to do anything and everything to prevent deflationary expectations from becoming engrained into the minds and psyches of investors worldwide because they are loaded to the gills with “risk assets” and deflation means weakened collateral value for those assets and bankers cannot abide by anything vaguely resembling “weakened collateral” because Hank Paulsen is retired and I doubt that Janet Yellen would be willing to get down on her knees and beg Congress for yet another bailout. So to hell with bailouts; they will just juice the oil market and then launch QE4,5, and 6 in order to stem the U.S. dollar’s surge and VOILA! Banker problem solved.
— COPPER PLUNGES TO SIX-YEAR LOW
— FREEPORT MCMORAN PLUNGES ALONG WITH IT
— 10-YEAR BOND YIELDS FALLS TO 20-YEAR LOW ON DEFLATION THREAT
— FALLING BOND YIELDS HURT BANK STOCKS
— RISING VIX SUGGESTS PERIOD OF LOW VOLATILITY MAY BE ENDING
— S&P 500 NEARS TEST OF SUPPORT
— WEAK DJ WORLD STOCK INDEX RAISES RISK LEVEL FOR U.S. STOCKS
“Deflation is Kryptonite for the Central Bank Supermen” is my new mantra for 2015 so since it was oil that started this deflationary avalanche, I fully expected the Plunge Protection Team to step into the crude oil market (like today) so that those High Yield Junk (Energy) bonds don’t bury their banker brethren with defaults.