That central banks are essentially "all in"
is, in the short term, good news for all types of
markets-especially when compared to the air pocket
hypothesis. Yet, as I detailed in Thursday's Financial
Times, investors should not get too carried away.
There is a limit to how far and how long prices can
deviate from fundamentals. This is particularly the case
when central banks, acting without the support of
other government entities, do not have
sufficiently-refined tools to secure good and sustainable
economic outcomes.
As argued in Thursday's column,
investors' romance with the "central bank put" should
not be unconditional or everlasting.
Moreover, it needs to be accompanied by significant
portfolio differentiation, responsive management of overall
risk exposures, and positioning that also reflects more
durable global themes.
Central banks should be respected. And they can
certainly counter air pockets, but not forever.
Either fundamentals will improve
or asset prices will fall. Which outcome we eventually
see depends in large part on whether other government
entities finally step up to their policy
responsibilities
My Comment:
So.......do you think, (last sentence) that
governments will FINALLY step up to the
responsibilities?????? THAT is the question.
I like this writer/investment manager (Mohammed
El Erian and his boss). His boss (I forgot hs
name....ugh!) wrote an article in Dec 2007 that I
NEVER FORGOT! He said "I see things in the US
financial markets that could bring the US financial system
to its knees in 2008" !!!!!! So, when
these guys speak, I LISTEN!!
What this guys says in this article is this:
IF THE GOVERNEMENTS OF THE WORLD DO NOT DO THEIR
PART TO FIX THEIR ECONOMIES........THE FACT THAT THEIR
CENTRAL BANKS HAVE BEEN "INFLATING" THIS MARKET IWLL NOT
LAST....AND THE ECONOMIC BUBBLE WILL
BURST!!!!!!!!!!!!!!!!!!!!!!!!
mark my words here.......... 2013 could go
BOOM, economically, if the governments of US/Europe/ and
others, DO NOT GET THEIR ACT TOGETHER.
Remember the infamous "fiscal cliff" that the
United States is facing? And WHY?
Because WAY BACK IN the summer of
2011.......2011!!!!!!!!!!!!!!!!!............... when
the US Government could NOT come together to fix the
soaring US Debt level...and S&P downgraded our debt
rating......
.......they "kicked the can down the road" until
the end of 2012. At which time, certain CUTS will
take place automatically.
And HEY....whether they take place automtically,
or whether they STILL CAN'T COME TO AN AGREEMENT to fix
any of this financial mess in the US.....
THE MARKETS WILL NOT LIKE IT......AND THE MARKETS
WILL IMPLODE.
THAT....IS....THE...RISK..... WE SHALL
SEE..................
Keep an eye posted.....
on:
1) The election
2) israel / Iran ? USA
and
3) The US Fiscal CLIFF!!!!!!!!!!!!!!!!!!!!
TICK TOCK................................BOOM!!
YFIC,
Randy
PS....."ALL IN" Where have I
heard THAT expression before??? lol...
Oh ya.....I WAS ALL IN FOR ROSH HASHANAH 2012, AS
"THE" DATE OF THE RAPTURE...
AND....how did THAT work out for me...for
us?????? IT DIDN'T
Hmmmmmmmmmmmmm
HOW DO YOU THINK "ALL IN" WILL WORK FOR THE
CENTRAL BANKS.....WHEN.....NOT IF.....BUT WHEN....
THE RESPECTIVE GOVERNMENTS DO
NOT....NOT.....NOT..... GET THEIR JOB DONE?????
BOOM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! And
then the world economy impldes? Oh, could it be? Or
will optimism once again solve all the world's
problems?????????????????????????????
BOOM!!