Mega Investment Bank Suddenly Pooh-Poohs QE…”Is it saying, any more QE, and it’ll kill us all?”
by Wolf Richter
WolfStreet.com
January 18, 2016
We have long lambasted QE, zero-interest-rate policies, and negative-interest-rate policies for the distortions they cause, the wealth transfer they create, the asset bubbles they engender, and for their ineffectiveness in supporting the real economy. And yet, inexplicably, central banks have not paid any attention to us.
But now comes Natixis, a corporate and investment bank and “among the world’s largest asset managers,” as it says, with over $900 billion in assets under management as of September 30, though the global market rout must have whittled that down. Its clients are among the top beneficiaries of QE and ZIRP, of cheap loans and soaring stocks and bonds. But suddenly, a light has come on.
Or are they begging central banks for mercy? They would have good reasons, given what is transpiring in the Eurozone, Japan, Sweden, and other places where the scorched-earth tactics of QE, designed to inflate asset prices, is now doing the exact opposite — and with vicious energy.
Recent stock market losses have reached 19% in Japan, 23% in Germany, 24% in Sweden, 28% in Spain, and a stunning 45% in Italy, all countries with mega-QE right now. Perhaps Natixis is saying: Any more QE, and it will kill us all!
The Rest…HERE
