Home > Uncategorized > 2012/09/26: Quick Post: Courtesy Brief Update: QE disdain and Spain create equities pain

2012/09/26: Quick Post: Courtesy Brief Update: QE disdain and Spain create equities pain

© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet again on the specific market comments in this post, because today’s TrendView Brief Update is a pointed discussion of the most important trend implications of the recent sharp criticism of quantitative easing efforts. Along with the tumultuous situation in Spain yesterday, the equities were no longer trusting that the central bank QE-phoria was enough to bolster the markets all on its own.

From a technical trend perspective there is the very sharp downward acceleration of the previously limited correction in the December S&P 500 future after the explosive, QE-driven rally earlier this month. In light of the positive balance in the economic data this week (especially out of the US), it is surely the loss of confidence in the effectiveness of quantitative easing efforts that explains the sudden reversal of the previously firm equities trend activity.

This gets back to the question we have posed on many occasions over the past two years

 

…regarding whether extensive liquidity provision to stem the near-term crises actually amounts to anything that will reinvigorate global economic growth? As our regular readers know, we have been skeptical of that from the outset, and increasingly so of late.

What we know for certain is that the central banks are “all in” on major quantitative easing efforts. As we and quite a few others have questioned even prior to recent expressions by the heads of the regional Federal Reserve Banks and other financial luminaries, what if all this QE cannot really do much to solve problems that are far removed from the lack of liquidity? And along with other factors, that would seem to be something that is now being reflected in the markets.

Enjoy the read, and as always…

Thanks for your interest.

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