Wednesday 7 January 2015

Many are now the cheerleaders of that which they once despised

Across the last few years, so many have touted the 'terrible and failed' monetary policy of the US Federal reserve (along with other central banks)... yet here we are....in early 2015... and those very same people are now furiously supportive of the very policies for which they once relentlessly despised.

Money printing HQ
Summary

Today was a particularly interesting day in market land.

Whether this afternoon was a cycle capitulation low of sp'1992 - along with R2K 1153.. and VIX 22.90.. . frankly... its not that important in my view.  We've seen hundreds of such down waves across the last few years... only to be followed by equally strong up waves. Indeed, the last two counter rallies have been especially powerful... each time, breaking a new historic high.. even in the R2K.


Times just get ever crazier...




Across the last few years I've noticed a great many quirky and strange things. Lately, one thing has really started to stand out... that of how many of the original 'free marketeers', doomers... or whatever you want to call them.. are now supportive of what is essentially Federal reserve policy.

First, we have the issue of falling Oil prices. Just a few years ago... everyone - not least those in doomville, would have been delighted with Oil in the $40s. Not anymore though... ohh hell no... low prices are now seen as bad! After all.. the 'deflation monster' will kill us all... right?

Then there is the issue of low interest rates. So many would often slate the Fed for its periodic meddling in trying to determine market interest rates. Now, those very same people are touting that higher rates - even a few percent.. would cause terrible problems.. and thus... 'market forces' should not be allowed to happen.

The third issue of QE is somewhat arguable, but many - not least those in the mainstream, are desperately clamouring for the ECB to start buying EU govt. bonds. Yet, whether that happens this year seems to be of little importance. After all... the same argument was had in 2012, 13... and 2014. Despite no such bond buying, most of the EU equity markets have managed to climb broadly higher since summer 2012.


All aboard the Fed train

It would seem highly likely that more and more people will eventually join the Fed cheerleading squad. Hell, just consider the maniacs on Zerohedge.. they sure are upset that Oil prices have fallen. They have quite literally embraced the mantra of the 'deflation monster' - that low prices are bad for the US and world economy.

What would any of the Tylers (there are dozens from what I gather) say if asked 'So.... you now consider low oil prices are a bad thing.... but..  weren't you screaming 'economic doom' when Oil was $110 in summer 2013. What is the 'right price' to avoid the 'end of the world' ?

I would not expect an answer. After all.... continuing claims of 'imminent financial system collapse' or 'equity market bloodbath' gets the site traffic.. and to them.. that is ALL that matters these days.
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Looking ahead

Wednesday will be pretty busy... with ADP jobs data, intl. trade, and the FOMC minutes (2pm).
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Goodnight from London
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ps.  if you don't get the analogy of Shield/Hydra... then you're just not watching the right movies/TV shows.