Central Banks buying equities

[vinoveri]

It's official.
Is this a well timed leak to prep congress for amending the Fed charter allowing for the buying of equities, or maybe to give them cover when they admit they are doing it , or maybe to get everyone, including retail, to go all in on equities, knowing the Fed and other CBs have their backs.
I don't know about everyone else, but as predictable as this was, it is still rather .... well ....uh ... what's the right word?

http://www.ft.com/intl/cms/s/0/d9dfa...#axzz34m25B9uA

[don]

Re: Central Banks buying equities

it is still rather .... well ....uh ... what's the right word?

all-in?

[lektrode]

Re: Central Banks buying equities

don't know about everyone else, but as predictable as this was, it is still rather .... well ....uh ...

all-in?

'unexpected'
at least for the rest of the herd... or those not watching round here.

[Milton Kuo]

Re: Central Banks buying equities

'unexpected'
at least for the rest of the herd... or those not watching round here.

It has been stated elsewhere on this site that the Federal Reserve might purchase equities and other things not allowed by its charter and after all the stupid and dishonest actions they took in the wake of the 2008 crash, the idea that they would buy equities shouldn't surprise anyone. We just don't know when they'll start buying equities or if they've already started buying equities.

If the Fed has started buying equities, what else is left? The major assets classes that people can invest in are all owned or unduly influenced in some way by the Fed: bonds, real estate, short-term cash instruments, and finally equities. What next? Venture capital investments?

The only asset that can crash if the Fed owns everything is the dollar itself.

[gwynedd1]

Re: Central Banks buying equities

I guess the Fed wants in on the targeted subsidy business.

[Slimprofits]

Re: Central Banks buying equities

The source of the report: http://omfif.createsend1.com/t/ViewE...679A12EEB1FB26

http://www.omfif.org/about/

It is going to be released tomorrow according to the website.

It's not just about Central Banks: 157 central banks, 156 public pension funds and 87 sovereign funds

The assets of the overall survey of 400 GPIs comprise $13.2tn (including gold) at central banks, $9.4tn at public pension funds and $6.5tn at sovereign wealth funds.

The publication outlines investment by organisations as diverse as the People’s Bank of China and State Administration of Foreign Exchange (SAFE), Japan’s Government Pension Investment Fund (GPIF), Swiss National Bank, Norges Bank Investment Management (NBIM), China Investment Corporation (CIC) and Californian Public Employees Retirement System (CalPERS).

It includes, too, Bank of Korea, Malaysia’s Khazanah Nasional, Public Investment Corporation (PIC) of South Africa, Temasek of Singapore, Australian Government Future Fund, New Zealand Superannuation Fund, Canadian Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan (OTPP).

[Slimprofits]

Re: Central Banks buying equities

It's official.
Is this a well timed leak to prep congress for amending the Fed charter allowing for the buying of equities, or maybe to give them cover when they admit they are doing it , or maybe to get everyone, including retail, to go all in on equities, knowing the Fed and other CBs have their backs.
I don't know about everyone else, but as predictable as this was, it is still rather .... well ....uh ... what's the right word?

http://www.ft.com/intl/cms/s/0/d9dfa...#axzz34m25B9uA

This is an article about a report that is going to be released tomorrow. It appears to be a friendly leak in that regard. Now as to what you implied, that it's a leak of a deeper kind, the report is about what Central Banks, SWFs, and Pension Funds have been accumulating. Has this been going on in secrecy?

[don]

3 month treasuries go negative

US Treasury Bonds (13:56 ET June 18, 14)

3 Month	-0.01	0.00	0.00	0.00	-0.01
6 Month	0.03	0.03	0.02	0.03	0.00
2 Year	0.44	0.45	0.29	0.32	0.02
5 Year	1.68	1.73	1.68	1.53	-0.01
10 Year	2.60	2.63	2.62	2.52	-0.01
30 Year	3.40	3.42	3.45	3.36	-0.01

[vinoveri]

Re: Central Banks buying equities

This is an article about a report that is going to be released tomorrow. It appears to be a friendly leak in that regard. Now as to what you implied, that it's a leak of a deeper kind, the report is about what Central Banks, SWFs, and Pension Funds have been accumulating. Has this been going on in secrecy?

SWF and pension funds buying equities has been in the news for a while; not sure about Central Banks, although to me CBs with the printing presses buying assets is different and as pretty close to a Ponzi scheme one can get; on 2nd thought, Ponzi is not the term .... uh dilution, fraud, theft maybe are closer to the mark. In any case, what we have now is full bore State run "capitalism" and the relative involvement of the state although perhaps fluid, can ramp of to full blown control with ease at any time it suits the authorities. There is no way to predict anymore as fundamentals don't matter with a printing press. Insider information is the only way to profit; next is trend following and hanging on to the coattails of the trend setters. Golly gee whiz.

[Fox]

Re: 3 month treasuries go negative

I thought the drop in interest rates with the rise of the stock market was very interesting today.

Not only that, but the FED shifted towards the hawk direction (despite some headline say their statement was dovish). Yellen actually lowered growth targets but raised the projected interests rates for 2015/2016 (0.25% higher this statement over last statement).

So stock market cheers while the bond vigilantes take cover? Sounds like smart money sell to dumb money to me. Or are the invisible hands in Belgium pulling some strings?

In the meantime VIX touched cloth on 10 today. The Bull trade is getting REALLY crowded. The last time the VIX was this low was end of 06 beginning of 07.

[Slimprofits]

Re: Central Banks buying equities

The top 10 public entity holders of equities, ranked by total assets, according to OMFIF:

Rank	Country	Type	Assets ($ billion) *
1	China	Central bank	3,880.4
2	Japan	Central bank	1,266.9
3	Japan	Public pension fund	1,253.5
4	Norway	Wealth fund	841.2
5	Saudi Arabia	Wealth fund	757.1
6	Saudi Arabia	Central bank	676.3
7	UAE	Wealth fund	627.0
8	China	Wealth fund	575.2
9	Russia	Central bank	509.7
10	Switzerland	Central bank	480.0

Source: OMFIF Global Public Investor 2014 * End 2013 or latest

http://www.economist.com/blogs/freee...blic-investors



The story is getting very little play in the media, I really can't find too many interesting links on it. The full report must be purchased.

[Slimprofits]

Re: 3 month treasuries go negative

I thought the drop in interest rates with the rise of the stock market was very interesting today.

Not only that, but the FED shifted towards the hawk direction (despite some headline say their statement was dovish). Yellen actually lowered growth targets but raised the projected interests rates for 2015/2016 (0.25% higher this statement over last statement).

And lowered its forecast for “longer run” interest rates to 3.75% from closer to 4%.

[Slimprofits]

Re: Central Banks buying equities

Constancio Says ECB Would Buy Assets Should Inflation Worsen

“How would the ECB react, should the risks of a protracted period of low inflation materialize?” European Central Bank Vice President Constancio asked in a speech in Athens today. “The ECB stands ready to deploy additional unconventional instruments, should the likelihood of this scenario increase. The policy response would involve a broad-based asset-purchase program.”

“The ECB has left no doubts about its resolve to avoid any downward turn in the euro area inflation developments, because such developments would be extremely harmful,” Constancio said in the speech that was interrupted by protesting Greek bond holders who suffered losses in the country’s debt restructuring in 2012.

http://www.bloomberg.com/news/2014-06-19/constancio-says-ecb-would-buy-assets-should-inflation-worsen.html

[Fox]

Re: 3 month treasuries go negative

And lowered its forecast for “longer run” interest rates to 3.75% from closer to 4%.

You know it's one thing for the FED to forecast something for which it is 100% in control of. It's another thing to see them forecast something they have no control of, especially two years out.

I don't know who to laugh at more, the FED for their hubris or the Talking heads for their foolishness in believing them.
XD

In either case, despite a lower growth / higher interest rate projection, people are seeing inflation and party times ahead.

Vix is heading lower again today.
^Vix history
Trade of the century gang. It doesn't get easier than this.

[vinoveri]

Re: Central Banks buying equities

Constancio Says ECB Would Buy Assets Should Inflation Worsen

“How would the ECB react, should the risks of a protracted period of low inflation materialize?” Constancio asked in a speech in Athens today. “The ECB stands ready to deploy additional unconventional instruments, should the likelihood of this scenario increase. The policy response would involve a broad-based asset-purchase program.”

“The ECB has left no doubts about its resolve to avoid any downward turn in the euro area inflation developments, because such developments would be extremely harmful,” Constancio said in the speech that was interrupted by protesting Greek bond holders who suffered losses in the country’s debt restructuring in 2012.

http://www.bloomberg.com/news/2014-0...on-worsen.html

“How would the ECB react, should the risks of a protracted period of low inflation materialize?” “The ECB stands ready to deploy additional unconventional instruments, should the likelihood of this scenario increase. The policy response would involve a broad-based asset-purchase program.”

a protracted period of low inflation - OMG - the end of the world!!!
Note the phrase "should the likelihood of the scenario increase" - translation "whenever we decide to"


This is what we call a "telegraph" - time to go all in to equities (if you haven't already) b/c not only are the CBs buying equities, but they will be there to stabilize the collapse in stock prices long enough for most of the herd to exit - and then the CB's own all the stocks - boy I don't even understand what that means ....