{"id":18032,"date":"2016-02-20T09:58:10","date_gmt":"2016-02-20T14:58:10","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18032"},"modified":"2016-02-20T09:58:10","modified_gmt":"2016-02-20T14:58:10","slug":"why-according-to-one-bank-massive-central-bank-intervention-is-imminent","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18032","title":{"rendered":"Why According To One Bank, Massive Central Bank Intervention Is Imminent"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2016-02-20\/why-according-one-bank-massive-central-bank-intervention-imminent\" target=\"_blank\">Why According To One Bank, Massive Central Bank Intervention Is Imminent<\/a><\/h3>\n<div class=\"tabs\">Any time the relative performance of global financials to US Treasuries has stumbled as far as it has, as shown in the chart below, it has meant one thing &#8211;\u00a0<strong>a major central bank intervention was imminent.\u00a0<\/strong><\/div>\n<div class=\"node\">\n<div class=\"content\">\n<p>At least that&#8217;s the interpretation of BofA&#8217;s Michael Hartnett, who shows that in order to provide the kick for the bounce in this all too important &#8220;deflationary leading indicator&#8221;, central banks engaged in major unorthodox easing episodes, whether QE1-3, or the ECB&#8217;s QE.<\/p>\n<p><a href=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user5\/imageroot\/2016\/02\/09\/intervention.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user5\/imageroot\/2016\/02\/09\/intervention_0.jpg\" alt=\"\" width=\"600\" height=\"327\" \/><\/a><\/p>\n<p>Why intervene now? Here are the problems according to Hartnett:<\/p>\n<ul>\n<li><strong>Problem 1:\u00a0<\/strong>US economy in \u201cbad Goldilocks\u201d, i.e. US economy not hot\/strong enough to lift global GDP &amp; EPS; but not cold\/bad enough to induce global coordinated response<strong>\u00a0<\/strong><\/li>\n<li><strong>Problem 2:\u00a0<\/strong>global policy-maker rhetoric in recent days shows \u201ccoordinated innocence\u201d not stimulus<strong>, all blaming global economy for weak domestic economies<\/strong>(\u201cOverseas factors are to blame\u201d\u2026<em><strong>Japan PM Abe<\/strong><\/em>; &#8220;drag on U.S. economy from greater-than-expected-slowdown in China &amp; other EM economies\u201c\u2026<em><strong>FOMC minutes<\/strong><\/em>; \u201cincreasing concerns about the prospects for the global economy<em><strong>\u201d\u2026ECB Draghi<\/strong><\/em>; \u201cthe change in China\u2019s growth rate can be attributed in part to weak performance of the global economy\u201d\u2026<em><strong>PBoC<\/strong><\/em>)<\/li>\n<\/ul>\n<p>Problem 2 is static, meant for media propaganda and jawboning; it can easily be removed once the global economy takes the next leg lower.\u00a0 Which incidentally would also resolve the gating factor of Problem 1 &#8211; as we have said for months, the Fed and its central bank peers need the political cover to launch more stimulus.<\/p>\n<p>And in a reflexive world, where the &#8220;economy is the market&#8221;, this means just one thing &#8211; a big leg lower in stocks is the necessary and sufficient condition to once again push stocks higher, as policy failure is internalized, and global risk reprises from square 1.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Why According To One Bank, Massive Central Bank Intervention Is Imminent Any time the relative performance of global financials to US Treasuries has stumbled as far as it has, as shown in the chart below, it has meant one thing &#8211;\u00a0a major central bank intervention was imminent.\u00a0 At least that&#8217;s the interpretation of BofA&#8217;s Michael [&hellip;]<\/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":[7659,124,130,12391,233,282,366,6417,534,661,662,2721,1031,4318],"class_list":["post-18032","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-bank-intervention","tag-central-banks","tag-china","tag-credit-conditions","tag-ecb","tag-european-central-bank","tag-global-economy","tag-michael-hartnett","tag-monetary-policy","tag-qe","tag-quantitative-easing","tag-us-treasuries","tag-yuan","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18032","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=18032"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18032\/revisions"}],"predecessor-version":[{"id":18033,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18032\/revisions\/18033"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}