At just gone 3 pm BST yesterday, the IMF released an opinion piece pointing out what tens of thousands of us have been saying for years: corporate borrowing is out of control, and the party’s over Baby Blue.
Within fifty minutes, every market in the world went south at an alarming rate….until such thought processes as these gargoyles enjoy creaked forwards as follows:
Trader 1: Holy shit, did you read that? Christ let’s get TF outta here….SELL! SELL!! SELL!!!
Trader 2 (1O mins later): Er, waidupaminuteheyurr…just because we bin found out doesn’t change shit man.
T1: But that Lagarde broad, I mean, she’s like saying it’s all a sham built on quicksand….
T2: And you didn’t know that already?
T1: Um, well….come to think of it, yeh. Yes I did!
T2: Get yo ass back in there man and BUY. Sheeyit, we got positions to defend here. We doin’ God’s work and holdin’ up the ‘merican Dream.
T1: BUY! BUY!! BUY!!! YES WE CAN!!!!
And so it came to pass that, by the NYSE close, two-thirds of the losses had been recouped.
At the latest 3-month T-Bills auction, every last Bond was bought….and for the first time ever, the yield was 0%.
In August 2008, QE purchases represented 0% of the Japanese economy. Today, they’re in excess of 60%…and Abe has made it clear he’ll buy more.
Four out of five institutional investors think asset price volatility will continue. Two in three think Central Banks have lost all credibility.
Yet, in this surreal context, the price of an ounce of gold has fallen from $1302 last January to $1145 today.
Where there is no known value, there are always hucksters.
Where there is a heavily-dented can, there will always be worms.
Where there is political balm to reassure us, there is an economic catastrophe on the way.
Where there are inexplicable highs, there will soon be unpredictable lows.
None of this is doomwatch: all of it is common sense. Don’t listen to what the bastards say, watch what they do. The big, smart money is piling into glitz bricks, pulling out of the markets, and pissing itself laughing.