{"id":17698,"date":"2016-02-12T12:27:45","date_gmt":"2016-02-12T17:27:45","guid":{"rendered":"http:\/\/olduvai.ca\/?p=17698"},"modified":"2016-02-12T12:27:45","modified_gmt":"2016-02-12T17:27:45","slug":"637-rate-cuts-and-12-3-trillion-in-global-qe-later-world-shocked-to-find-quantitative-failure","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=17698","title":{"rendered":"637 Rate Cuts And $12.3 Trillion In Global QE Later, World Shocked To Find “Quantitative Failure”"},"content":{"rendered":"

637 Rate Cuts And $12.3 Trillion In Global QE Later, World Shocked To Find “Quantitative Failure”<\/a><\/h3>\n
\n
\n

2016 is shaping up to be the year that everyone finally comes to terms with the fact that the monetary emperors truly have no clothes.<\/p>\n

To be sure, it\u2019s been a long time coming. For nearly 8 years, market participants and economists convinced themselves that the answer was always \u201cmore Keynes.\u201d Global trade still stagnant? Cut rates. Economic growth still stuck in neutral? Buy more assets.<\/p>\n

It was almost as if everyone lost sight of the fact that if printing fiat scrip and tinkering with the cost of money were the answers, there would never be any problems. That is, policy makers can always hit ctrl+P and\/or move rates around. But in order to resuscitate anemic aggregate demand and revive inflation, you need to tackle the core problems facing the global economy – not paper over them (and we mean \u201cpaper over them\u201d in the most literal sense of the term).<\/p>\n

Well late last month, central banks officially lost control of the narrative. Kuroda\u2019s move into negative territory reeked of desperation and\u00a0given the surging JPY and tumbling Japanese stocks, it\u2019s pretty clear that the half-life on central bank easing has fallen dramatically<\/strong>.<\/p>\n

And so, as the market wakes up from the punchbowl party with a massive hangover,\u00a0everyone is suddenly left to contemplate \u201cquantitative failure.\u201d<\/strong>\u00a0Below, courtesy of BofA’s Michael Hartnett is a bullet point summary of 8 years spent chasing the dragon… and a list of the disappointing results.<\/p>\n

* \u00a0* \u00a0*<\/p>\n

From BofA<\/em><\/p>\n

Whether the recent tipping point was the Fed hike, negative rates in Europe & Japan, or simply the growing market dislocations and macro misallocation of resources and wealth, the deflationary theme of \u201cQuantitative Failure\u201d is stalking the financial markets. A multi-year period of major policy intervention & \u201cfinancial repression\u201d is ending with weak economic growth & investors rebelling against QE.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

637 Rate Cuts And $12.3 Trillion In Global QE Later, World Shocked To Find “Quantitative Failure” 2016 is shaping up to be the year that everyone finally comes to terms with the fact that the monetary emperors truly have no clothes. To be sure, it\u2019s been a long time coming. For nearly 8 years, market […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1750,10661,68,1719,124,12344,285,366,3761,12345,452,6040,534,7523,661,662,775,4318],"class_list":["post-17698","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bear-market","tag-bear-stearns","tag-ben-bernanke","tag-bond","tag-central-banks","tag-ethan-harris","tag-eurozone","tag-global-economy","tag-global-trade","tag-interest-rate-cuts","tag-japan","tag-main-street","tag-monetary-policy","tag-nominal-gdp","tag-qe","tag-quantitative-easing","tag-switzerland","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17698"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17698\/revisions"}],"predecessor-version":[{"id":17699,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17698\/revisions\/17699"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}