Over the last five-plus years in regard to today’s financial markets, the most revered memes that are recited in unison whether it’s in the form of a silent prayer or, it’s done in a near backwoods revival fashion from the televised financial shows “pulpit” in a “Can I get an …. !!!” stylized homily are: “It’s different this time!” followed with “The Fed’s got you’re back.”
However, what they mean today may find those that put all their “faith” into such dogma finding that faith severely tested. For as of today July, 26, 2015 It truly is – different this time. And what else is different is: the Fed. may indeed have one’s back. Only problem this time is – that back may no longer be “yours.”
(Note: I’ve used the “you” and “yours” for ease of writing the conversation. It’s to be taken in the air quotes manner I’m trying to express. i.e., the general or population at large.)
Let’s view the “It’s different this time!” first as to show just how much it no longer may imply what so many have taken for granted since the initial collapse of the markets.
What’s different this time? Nothing less than the only thing which has both propelled as well as sustained the financial “markets” in an anemic (if not outright pathetic) economic recovery since the crash of ’08: Quantitative Easing aka QE. The difference? It was discontinued at the end of 2014. (Technically there is still a part or parts of it remaining such as the re-investment portions and/or other residuals from the program, but for all intents and purposes the direct inflow of near a TRILLION dollars annually (i.e., $80+ BILLION per month) ended in mid November 2014.)
Although it was only mere months ago (which to many feels like forever) some of those “differences” now seem too obvious to ignore even to the staunchest beholders of the faithful. Today, not only have the markets barely risen – some have turned negative for the year. e.g., The Dow™.
What’s been unnerving for many of the “true believers” is the fact of just how desperate the televangelist styled, next in rotation fund manager has been to accentuate the positive to hide behind the negatives. Many have been shouting, “The market is up over 1% today! Buy, buy, buy!” only to be followed either the next day or within a week “This 2% sell off shouldn’t cause any worry. This too shall pass.” Which it does, only to be followed by the same: again, and again, and again, and again. So much so many are wondering if what they’re watching is live or prerecorded reruns because the markets have gone virtually no where for nearly 8 months except for some unnerving gyrations within a range-bound level.
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