{"id":21627,"date":"2016-09-10T18:45:46","date_gmt":"2016-09-10T23:45:46","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21627"},"modified":"2016-09-10T18:45:46","modified_gmt":"2016-09-10T23:45:46","slug":"time-to-get-real-part-i","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21627","title":{"rendered":"Time to Get Real: Part I"},"content":{"rendered":"

Time to Get Real: Part\u00a0I<\/a><\/h3>\n
\"its-time-to-get-real1\"<\/a>In a world where fair value is a central bank veiled enigma it\u2019s frankly a challenge to keep\u00a0things real, but I\u2019ll have a go at it in what will be a 3 part series\u00a0covering central banks, the underlying\u00a0fundamental picture,\u00a0and a technical assessment of charts. In this part I\u2019ll be covering central banks and putting their actions into context of the realities of a changing world and will aim to address some of the implications.<\/p>\n

Part I: Central banks<\/strong><\/p>\n

After years of watching central bankers do their bidding I\u2019ve come to the conclusion that they are the\u00a0designers of the ultimate Pokemon Go game by leading investors to ever more extreme locations to find little yield nuggets on their screens.<\/p>\n

My largest criticism of this game has been\u00a0that free market price discovery is largely dead and nobody knows what is real any longer, producing a false sense of security as, at any signs of trouble,\u00a0central banks feel compelled to intervene ever further removing markets from their natural balance. In short: Creating a bubble with devastating consequences we will all end up paying for in one form or another.<\/p>\n

For now\u00a0one may call it a market of pure multiple expansion as GAAP earnings and price have completely\u00a0diverged in 2016:<\/p>\n

\"gaap\"<\/a><\/p>\n

Indeed, as earnings have declined since their peak in 2015 we have seen one central bank intervention after another. Just in 2016 alone we have witnessed dozens of new rate cuts, the ECB modified and added to its QE program with\u00a0QE3<\/strong><\/em><\/a>\u00a0an almost forgone conclusion, Japan added stimulus with the BOJ on track to own\u00a060% of all ETFs in Japan<\/a>\u00a0<\/strong><\/em>with\u00a0more to come<\/a><\/strong><\/em>.\u00a0China intervened repeatedly, the UK cut rates and\u00a0re-launched QE<\/strong><\/em><\/a>\u00a0as well, and central banks such as the SNB\u00a0have been busy expanding\u00a0their\u00a0share\u00a0purchases of\u00a0US stocks<\/strong><\/em><\/a>.<\/p>\n

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

Time to Get Real: Part\u00a0I In a world where fair value is a central bank veiled enigma it\u2019s frankly a challenge to keep\u00a0things real, but I\u2019ll have a go at it in what will be a 3 part series\u00a0covering central banks, the underlying\u00a0fundamental picture,\u00a0and a technical assessment of charts. In this part I\u2019ll be covering […]<\/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":[57,85,124,9307,233,8258,282,4405,431,452,1390,14251,661,662,2701,1555],"class_list":["post-21627","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-boj","tag-central-banks","tag-earnings","tag-ecb","tag-etfs","tag-european-central-bank","tag-gaap","tag-interest-rates","tag-japan","tag-monetary-policies","tag-northmantrader","tag-qe","tag-quantitative-easing","tag-snb","tag-swiss-national-bank"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21627","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=21627"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21627\/revisions"}],"predecessor-version":[{"id":21628,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21627\/revisions\/21628"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}