One Trader Warns Yellen’s Delusional Statement Means “We’re In A Lot Of Trouble”
by Tyler Durden
ZeroHedge.com
Jun 29, 2017
Former FX trader and fund manager Richard Breslow is worried. Worried about investors’ level of delusion in the markets and worried that central bankers are so convinced of their own omnipotence, that they have become blind to any potential risks just out of their immediate sight. One glimpse at the following chart is all you need to know, Central Banks are the only game in town… and given their recent statements, they don’t know that (even though investors believe they do)..
Via Bloomberg,
Well, if you like central bank excitement, you’re having a pretty good week so far. Round and round the latest messaging wheel has gone with the little ball settling in the hawkish slot. Of course, as we should all know by now, no sooner do the chips get swept away after all the stops have been run, then the wheel is spun again. And that is precisely the problem. We continue to live from hand to mouth in our attempts to return our economies to “normalcy”. Don Quixote would be very comfortable in the world we have created.
Still, there are some important takeaways that are worth considering beyond the simple message that there will be an attempt to inch away from crisis policies. But remember there are certain classes of drugs that they just don’t know if they’ve worked until the patient is weaned off them. And despite any protestations to the contrary, extreme QE is one of them.
There has been a tremendous benefit to the U.S. from being first out of the gate in snugging rates. They were smart or, at least, opportunistic. The Fed has enjoyed free-ridership of doing so while everyone else is still printing away. This has meant that financial market conditions have taken it wholly in stride. To assert that this will be the case when everyone else join is making a big assumption about the efficacy of the cure.
The Rest…HERE
