Since all central bankers are congenitally optimistic, a warning this week from Bank of Canada governor Stephen Poloz that the Canadian economy was ‘atrocious’ in the first quarter, may be understating the matter…Here is a direct video link.
Automated trading machines incited by central bank jawboning the world over, have helped to push global stock markets to the highest valuations since March 2000 and October 1929. Meanwhile earnings and sales are plunging…from a Q1 analyst consensus for S&P earnings growth of 4% in January, EPS expectations have fallen 9%, now at -4%.
The next wave of the financial crisis lies ahead…
U.S. markets struggled in the first quarter as investors worry over the impact of falling oil prices on overall earnings and the effect of a strong dollar on multinational companies, whose products are more expensive in foreign markets when the greenback firms up. Here is a direct video link.
Also see former Fed Governor Kevin Warsh (now at the Hoover Institution) on CNBC this morning.
“The markets think they have Yellen’s number,” that she will never allow markets to go down, Warsh warns “that is a very dangerous development.” Here is a direct video link.
“There will never be a good time to raise rates off zero when you’ve been there for six years,” Peter Boockvar, chief market analyst at The Lindsey Group, told CNBC. “The Fed’s screwed, essentially.”
Actually, the Fed members are well looked after financially, it’s the economy and asset markets that must pay the price. Here is a direct video link.
“…the Fed has indicated a desire to tighten at a time when its biggest global counterparts are easing. That’s resulted in a firming of the dollar, a looming earnings recession in which U.S. profits are forecast to decline in two consecutive quarters—and could well turn negative for the year—and first-quarter GDP gains that could be anemic or nonexistent.
…some on Wall Street believe the market has not come to terms yet with just what is about to happen with monetary policy.”
