Thursday, September 24, 2015

"Why Has It Suddenly Stopped Working": The Chart Every Trader Is Losing Sleep Over........

"Why Has It Suddenly Stopped Working": The Chart Every Trader Is Losing Sleep Over

Citi's Matt King was, according to many, one of the catalysts for Lehman's failure simply by explaining to a largely clueless Wall Street just how broken the US financial system had become in late 2008, now he 
hits it out of the park again with just one chart from his latest presentation, the chart which every market bull is losing sleep over:  has the only thing that has worked in the past 7 years, namely the central bank QE transmission channel, broken down.

Why has it suddenly stopped working, by which he means the market's favorable reaction to central bank liquidity injections.

His question: "have central banks lost their touch?
" and points out that while in the past QE injections have always resulted in improving risk asset prices (in this case represented by junk bond returns), this time is different.

The answer to this important question 
will determine the next move in the market!


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