Here's one of those number-of-things-bothering whatever articles popular today on the Internet.This one about five things worrying investors.
We've been discussing all of these for some time and in our view this is just the tip of the melting iceberg. The growing distrust among investors is spreading; the current presidential race in the U.S. and how MSM is dishonestly handling it; the recent comment by the CEO of the huge BlackRock fund, saying he didn't understand why people are so angry; to today blurb about Jamie "Pirpont" Dimon's 35% increase over his pay in 2014 at a time when real wages for the mob has been flatter than Florida for decades, to name just a few that simmer beneath the headlines.
Global financial markets are just plain scared about a lot
of things but perhaps the biggest fear of all is that the world's
central banks are no longer able to rescue them. Here are five things
that are shaking up markets.
1. Central banks out of bullets? The world's central banks rode to the rescue after the 2008 financial crisis, using innovative policies to stop the globe from sliding deeper into recession. The Fed used its balance sheet to add liquidity and unfreeze the credit markets by loading up on mortgages and other securities, and it took the extraordinary step of holding rates at zero for seven years.
Even before the Fed moved forward to normalize rates with
its first rate hike in December, the dollar rose in anticipation,
hurting commodities prices and emerging economies. Now central banks are
trying to encourage inflation and growth, and some, like the Bank of
Japan, are using negative rates in hopes of stimulating activity. 1. Central banks out of bullets? The world's central banks rode to the rescue after the 2008 financial crisis, using innovative policies to stop the globe from sliding deeper into recession. The Fed used its balance sheet to add liquidity and unfreeze the credit markets by loading up on mortgages and other securities, and it took the extraordinary step of holding rates at zero for seven years.
Read MoreYellen: Negative rates not off the table
Negative interest rates, however, scare the markets, and trillions of bonds now have negative yields. The markets have also moved against the BOJ, driving the yen higher and Japanese stocks lower. In the U.S., the fed funds futures market is no longer pricing in a rate hike, but instead is beginning the early speculation about a potential rate cut. This is one reason why traders are wondering if there really is anything left the world's central bankers can do.More:
cnbc.com/2016/02/11/five-things-scaring-markets.
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