Upset About the Sudden Rise in Volatility? Blame Central Banks - News Today in World

Upset About the Sudden Rise in Volatility? Blame Central Banks

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Title : Upset About the Sudden Rise in Volatility? Blame Central Banks
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news-today.world | The big questions being tossed around Wall Street today are: why are markets such a mess? Why are we getting these wild swings?

The reality is that the markets are NOT a mess. These are actually normal healthy markets. Healthy markets move, sometimes a lot in a small span of time.

The real issue is that from '09 until recently, the market was completely artificial because Central Banks cornered ALL risk by cornering the sovereign bond market.
Remember we are in a debt-based financial system today. Sovereign bonds are the bedrock of that system. They define the "risk free rate of return" against which ALL risk is priced. They're also the senior most collateral owned by the banks to backstop their trading/ derivatives portfolios.

When Fed and other Central Banks cornered sovereign bonds via ZIRP (front end of bond market) and QE (long end of bond market) they forced EVERYTHING to reprice to ridiculously low levels of risk. This is why I coined the term the Everything Bubble in 2014.

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