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Uh-oh Part 5

June 11, 2013

So, if you recall the Uh-oh! post, do not go looking for “Uh-oh!” parts 2–4 because they don’t exist. However, it could have been a whole series of developments that run contrary to the recovery theme so dominant in the current financial news. It might have been about how the Nikkei is now down nearly 17 percent from its highs just over a month ago. Or maybe it could have been about Greece reemerging as a problem after the experts put their stamp of approval on their debt problems being fixed only to recently discover that they are in need of another bailout (gee, what a surprise!). Or, might the crumbling bond markets be worthy of an “Uh-oh” update?

Here is the lead explanation for why the US markets were opening sharply lower this morning (even though we seem to once again be able to shrug off this news and have erased most of our losses in early trading this morning, 6/11/13). Maybe by the end of the trading day we will return to our winning Tuesday ways:

From Yahoo Finance pre-market news:

“The BOJ’s decision not to follow up its $1.4 trillion stimulus program announced in April at its latest policy meeting with measures to ensure bonds yields stayed low rattled mainly foreign investors who had expected further action.

The decision unnerved investors already highly sensitive to any signs of a lack of commitment from global central banks to the ultra-loose monetary policies that have fuelled rapid gains in asset prices this year.”

That is worth a second read!!! “Signs of a lack of commitment from global central banks to the ultra-loose monetary policies…” It is amazing that our financial gurus can make this a public confession from one side of their mouth and then from the other side claim we are in a recovery! Someone needs to explain this to me: If the only way we can stay afloat is to adopt ever-increasing stimulus programs (monetary easing, ZIRP, QEs, etc.) from our central banks, what makes us think we are recovering? It seems perfectly clear to me that our recovery is only a product of their ‘ultra-loose monetary policy.’

Come on guys, this party ain’t over!!!


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