{"id":23404,"date":"2017-04-01T09:21:05","date_gmt":"2017-04-01T14:21:05","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23404"},"modified":"2017-04-01T09:21:05","modified_gmt":"2017-04-01T14:21:05","slug":"prepare-for-manias-panics-and-crashes-an-ominous-warning-from-bank-of-america","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23404","title":{"rendered":"Prepare For “Manias, Panics And Crashes”: An Ominous Warning From Bank Of America"},"content":{"rendered":"

Prepare For “Manias, Panics And Crashes”: An Ominous Warning From Bank Of America<\/a><\/h3>\n
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Bank of America’s Michael Hartnett is back with another controversial note overnight, reminding readers that “it ain’t a normal cycle<\/strong>” for one overarching reason: central banks.<\/p>\n

As Hartnett explains, the catalyst for bull in equity and credit markets since 2009 was the “revolutionary monetary policy of central banks” who, since Lehman, “have cut rates 679 times and bought $14.2tn of financial assets<\/strong>.” And, once again, he warns that this central bank \u201cliquidity supernova\u201d is coming to an end, as is “the period of excess returns in equities and corporate bonds, as is the period of suppressed volatility<\/em>.”<\/p>\n

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With an entire generation of traders having grown up “trading” in centrally-planned markets, few can make sense of the fundamentals that accompany the market. As a result, Harnett writes that “risk markets continue to climb a wall of worry, defying bearish structural trends in the financial industry, taunting skittish skeptics <\/strong>by paraphrasing Margaret Thatcher\u2026\u201dYou turn if you want to. The market\u2019s not for turning.\u201d<\/div>\n<\/div>\n<\/div>\n

Demonstrating how insane just the past year has been in markets, Hartnett reminds us that just eight months ago belief in debt deflation & secular stagnation induced lowest interest rates in 5000 years.<\/p>\n

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