While the afterglow of exuberance remains in stocks, BofAML's Michael Hartnett is less than impressed by what comes next...
As Fed hikes rates for the first time in 3,460 days, officially ending the era of extreme, abnormal monetary policy in the form of QE and zero rates, what do we see?
Risk assets were very oversold going into the Fed hike...they now bounce.
But the Fed hike follows significant tightening of liquidity; negative blowback is more and more visible, e.g. credit crunch causing less stock buybacks.
And global banks being at all-time relative lows indicate Fed tightening into deflationary expansion, as does the narrow breadth of economic growth, wealth and asset price gains.
Rising rates and falling profits are not a good combination for asset prices, so we will turn sellers of risk in early 2016.
http://www.zerohedge.com/news/2015-12-17/how-fed-just-launched-next-bear-market-bofas-unexpected-conclusion-8-charts
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
| 
