Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (20197)

10/25/2017 1:33:18 AM

From: John Pitera

Respond to of 33421

Hi Don, my response to Fintas on Zman's thread

Message 31318870

his response to me that prompted the below note

Message 31317448

To: Fintas who wrote (14967)	10/25/2017 1:31:18 AM
From: John P	of 14995

Hi Fintas, we have a number of global central banks taking steps to normalize interest rates, which means to raise them and since we have had 8 years of global Zero interest rate policy, on short rates in the US, the ECB, the BOJ, the SNB - swiss national bank, the swedish Riskbank, the BOE was very accomodative... and so it's a brave new world of the reduction of monetary stimulus and we have already had 3 or 3 Fed Fund increases here in the US.... are we up to 4 already? We have another coming in Dec. and we have never seen the global central banks in this position, as they have never been in this position and in central banking land.... mistakes in the movement of the short term borrowing rates can occur, especially when you have multiple countries doing the same thing... It sets up uncertaintly in the Long dated FX market.... creates uncertainty for Banking, Insurance, Reinsurance companies as to how to hedge and value their long dated commitments. Endowments, pension funds , soverign wealth funds are also all impacted by this grand experiment. as Hyman Minsky famously said "stability is Destabilizing" that has always been the case and will always be the case...we have been through a long period of stability which has let lots of all of the above market participants, companies, hedge funds.... take advantage of very cheap credit by issuing a vast ocean of it.... we shall find out who is over levered..... and then their are exogenous shocks and black swan events. John