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Sven Henrich: Ugly truth is that Fed is propping up the stock market
By Sven Henrich
MarketWatch, New York
Monday, January 7, 2019
For years critics of U.S. central-bank policy have been dismissed as Negative Nellies, but the ugly truth is staring us in the face: Stock-market advances remain a game of artificial liquidity and central-bank jawboning, not organic growth. And now the jig is up.
As I've been saying for a long time: There is zero evidence that markets can make or sustain new highs without some sort of intervention on the side of central banks. None. Zero. Zilch.
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And don't think this is hyperbole on my part. I will, of course, present evidence.
In March 2009 markets bottomed on the expansion of QE1 (Wuantitative Easing, Part 1), which was introduced following the initial announcement in November 2008. Every major correction since then has been met with major central-bank interventions: QE2, Twist, QE3, and so on.
When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history. The sum: More than $5 trillion between 2016 and 2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal Reserve, the European Central Bank, and the Bank of Japan. ...
... For the remainder of the commentary:
https://www.marketwatch.com/story/stock-market-investors-its-time-to-hea...
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