- To believe the Fed can simply accommodate the financial markets with the most gradual and transparent “taper” and everything will magically normalize is more than wishful thinking.
- Prolonged QE has fomented market dysfunction and deep structural maladjustment.
- How it somehow became reasonable to stick with $120 billion monthly QE in the face of such momentous asset market inflation and speculation is difficult to understand.
- There’s always an Ebb and Flow associated with financial instability, and this week there was a Beijing-directed hiatus in the evolving Credit crisis.
- If the marketplace is beginning to lose faith in the almighty Beijing meritocracy, I see the “small” banking and local government finance sectors susceptible to “risk off” contagion.
For further details see:
Weekly Commentary: Ebb And Flow