{"id":30954,"date":"2018-02-13T10:30:12","date_gmt":"2018-02-13T15:30:12","guid":{"rendered":"http:\/\/olduvai.ca\/?p=30954"},"modified":"2018-02-13T10:30:12","modified_gmt":"2018-02-13T15:30:12","slug":"swan-song-of-the-central-bankers-part-1-last-week-wasnt-an-error","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=30954","title":{"rendered":"Swan Song Of The Central Bankers, Part 1: Last Week Wasn’t An Error"},"content":{"rendered":"

Swan Song Of The Central Bankers, Part 1: Last Week Wasn’t An Error<\/a><\/h3>\n
\n

Last week’s twin 1,000 point plunges on the Dow were not errors. Instead, these close-coupled\u00a0massacres, which wiped out $4 trillion<\/strong> <\/em>of\u00a0global market cap in two days,\u00a0marked the beginning of a bear market that will be generational,<\/strong> not a\u00a0temporary cyclical downleg.<\/p>\n

What hit the casino\u00a0wasn’t an air pocket; it was a\u00a0fundamental change of\u00a0direction, signaling that the\u00a0three decade long\u00a0central bank experiment with Bubble Finance has now\u00a0run its course.<\/p>\n

Moreover, this\u00a0epochal pivot is not tentative or reversible in\u00a0any near-term time frame that matters. That’s because\u00a0the arrogant but clueless Keynesian academics and apparatchiks who run the Fed\u00a0think they have succeeded splendidly and that the US economy is on the cusp of full-employment.<\/p>\n

So they’re now hell-bent on positioning<\/strong> the central bank for the next downturn. That is, they are\u00a0reloading their recession-fighting “dry powder” thru interest rate\u00a0normalization and a second giant experiment—-this time\u00a0in shrinking their balance sheet by huge annual\u00a0amounts under a regime called quantitative tightening\u00a0(QT).<\/p>\n

Needless to say, both the magnitude and the automaticity of this impending monetary shock are being completely ignored by Wall Street in favor of bromides like “the market knows”\u00a0QT is\u00a0coming because the Fed has been transparent in its forward guidance.<\/p>\n

So what? Knowing the steamroller is coming doesn’t stop you from getting crushed if you remain in its path. In fact, the $600 billion<\/strong> annualized\u00a0bond dumping rate incepting in October is a fearsome number; it’s larger than the entire\u00a0$500 billion<\/strong> Fed balance sheet as recently as\u00a0the year\u00a02000.<\/p>\n

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

Swan Song Of The Central Bankers, Part 1: Last Week Wasn’t An Error Last week’s twin 1,000 point plunges on the Dow were not errors. Instead, these close-coupled\u00a0massacres, which wiped out $4 trillion of\u00a0global market cap in two days,\u00a0marked the beginning of a bear market that will be generational, not a\u00a0temporary cyclical downleg. What hit […]<\/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":[124,5979,2120,216,303,506,3650],"class_list":["post-30954","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-contracorner","tag-david-stockman","tag-dow","tag-fed","tag-markets","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30954","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=30954"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30954\/revisions"}],"predecessor-version":[{"id":30955,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30954\/revisions\/30955"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=30954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=30954"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=30954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}