They were trying to put in a bottom – – again! The sell-off earlier this week amounted to the sixth sizeable ‘dip’ since November 20 – -so the market’s ingrained reflex was back at work all afternoon, trying to scoop up the ‘bargains’.
But the roundtrip to the flat-line shown below is not a classic ‘wall of worry’ and its not a ‘bottom’ that’s being put in. This market is dumber than a mule, and the nation’s central bank and its counterparts around the world have made it so.
The plain truth is that six years of torrential money printing and worldwide ZIRP have not happened with impunity. On the one hand, massive, sustained and universal financial repression caused an artificial growth and investment boom in much of the world, especially China and the EM, which has now run out of steam and is visibly and rapidly cooling.
This post was published at David Stockmans Contra Corner by David Stockman ‘ March 26, 2015.
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