From David Stockman at davidstockmanscontracorner.com:
This week brought another reason to get out of the casino, and to sell it short if you can tolerate some volatility.
On Friday the Japanese stock market ripped 6% higher and the European bourses were up 5% because their respective central bankers emitted some hints of more easing just ahead. Even the US market managed to find green for the week.
Apparently, the day traders and robo-machines think BTFD still works. But they are going to be sorely disappointed——just as they have been for nearly 700 days running.
That is, since the S&P 500 crossed the 1870 mark in early March 2014, there have been 35 attempts to rally higher. All of them have failed.
Like the bloody trenches of World War I, the movement back and forth in “no man’s land” on the chart above has been pointless. At some juncture in the not too distant future, the stock averages are going to break this trading range, and plunge back down to earth.
In the meantime, you can’t blame the punters for trying. This week they succumbed once again to the BTFD delusion undoubtedly because the “moar money” chorus grew ever louder as Friday approached.
That baleful refrain was led this time around by no less than the posse of oligarchs and apparatchiks assembled at Davos. Thus, when Mario Draghi, the world’s most ludicrous monetary dunce, let on that there were “no limits” on how much fraudulent credit could be emitted by the ECB’s printing press, he surely spoke a frightening truism.
Yet the world largest asset gather, Larry Fink, founder of $4.5 trillion BlackRock, gushed with an endorsement of what was pure monetary crack pottery:
“We’ve seen over the last few years you have to trust in Mario,” Laurence Fink, chief executive officer of BlackRock Inc., said in Davos. “The market should never, as we have seen now, the market should not doubt Mario.”
That’s right. You can’t make this baloney up. As Jeffery Snider shows in a nearby post, the massive ECB exercise in QE, which has already emitted some $700 billion in printing press airballs, has had no impact at all on its ostensible targets. Namely, the generation of a burst of private borrowing in order to stimulate spending and inflation.
To continue reading: 700 Days In No Man’s Land—Why They Can’t Keep It Up
