::: ANALYSES 2016 :::

1st quarter musings

April 2016: When central bank go all-in one

After the first two weeks of the year metamorphosed from the worst ever for equity markets into another epic market reflation, risk assets managed to finish the quarter more or less unchanged notwithstanding a barrage of downbeat macro economic data and news. As with each preceding market drawdown, the easy money cacophony grew louder with each tick lower in the S&P until the monetary suzerains delivered their goodies. And delivered they did! This will be remembered as the quarter when all major central banks took out their monetary bazookas: first off to the race was the PBOC with a mind blogging credit expansion of over half a trillion dollar in January alone (that’s almost the Swiss GDP) and a projected 3 trillion dollars for the full calendar year (add a Germany GDP to the credit tab). China credit bubble of 35 trillion dollars and counting is truly on its way to put to shame the US sub-prime bubble.(more)