Like vast schools of minnows, investors swarm, chasing sustinence wherever they can find it in an otherwise dead-sea.
Just last week the market was on the precipice, it was actively breaking down when a rumor of OPEC potentially reducing oil production caused the market to surge higher in a rift of short-covering & panic-buying.
You see, even though traders love to cry 'Everyone is Bearish' that couldn't be further from the truth. After an eight-year multi-faceted manipulation by central bankers to prop markets, traders have been trained like Pavlovs Dogs to buy all dips with reckless abandon.
We are seeing many events in financial markets around the world that should have the prudent investor on the edge of his seat. This is not a 'Buy-the-Dip" market. This isn't even a 'Sell-the-Rip' market. This is a GTFO of this market right now at any cost market.
NIRP has been an epic failure. I personally believe that Negative Interest Rates signals that the end-game has arrived. With Central-Bankers now completely out of ammunition, their best hopes for solvency are taking the world cashless & taxing the citizens for having wealth. The Bankster Cartel will not rest until not just 99%, but ALL of the Wealth of the world is lining the coffers of the oligarchs.
European Banks are rapidly crumbling & just last-night we discover that Japan once again is contracting, printing a Negative GDP number. 4Q GDP -1.4% Q/Q.
Japan has now had 32 negative GDP quarters since 1994. Clearly hyper-accommodative monetary policy is not helping their economy.
Last night we also were enlightened that China's January Exports fell 6.6% as their Imports also fell 14.4% in Yuan Terms.
These are horrible, recessionary economic numbers.
Ironically, markets reacted to these numbers by staging massive rallies in both respective countries markets as well as US Index futures making an impressive rally seeing the Dow rise over 200pts.
Markets are Sick & Confused. The financial system is simply not equipped to handle negative interest rates. It is a mutant bastardization of capitalism.
In regards to OPEC cutting production, there has been the same rumors floating around bi-weekly for months with no data to confirm. Inventories are floating around ATH. Cushings storage is rapidly filling to the brim. What will they do once there is no more storage? Producers can & will be forced to sell their oil spot at any price!
To compound the production problems we are seeing fringe countries pump full-steam.
In a milestone, Iran recently shipped oil to Europe for the first time since it's sanctions were lifted at the beginning of the year. Pleased with this new income stream, the oil-rich nation is set to pump;
Starting in Q1, Iran will ramp crude production by 500,000 b/d and by 1,000,000 b/d by year end. The sharp increase in production is expected to help Iran quintuple its oil revenue by the end of 2016 compared to what the country was pulling in while languishing under international sanctions.
Kuwait plans to increase crude production by 150,000 barrels a day by the third quarter of the year despite the current slump in oil prices.
Sure, you have Venezuela and other crumbling nations pleading with OPEC for production cuts but Venezuela should put their money where their mouth is & be the First Nation to Actually Cut Production. Talk is cheap.
Saudi Arabia has held firm on it's stance:
Saudi Aramco chairman Khalid al-Falih said his country would not reduce output to make space for others, a thinly-veiled reference to regional rival Iran who is eager to add one million barrels per day to its production by the end of this year.
He also stated bluntly that with the lowest cost production in the world, the Kingdom could live with low oil prices "for a long, long time."
I have a cold dose of reality for these oil producing nations: The jig is up! Thank god that OPEC is all but dissolved & oil finally succumbs to the natural laws of supply/demand. Cheaper oil benefits the majority. Let these oil Barron's & Sheiks evaporate in the fumes of their destructive Earth raping commodity.
These are dangerous times folks. While the minnows may be looking up at the moment, the water is infested with hungry sharks lurking in the deep eyeing their next meal... I hope you know how to swim!