The impressive stock market rally is “artificial,” being driven by central banks’ super-low interest rates, says Mohamed El-Erian, CEO and co-CIO of Pimco.
Going forward, the market will need more “genuine growth” in the form of strong corporate balance sheets and robust economic activity and less “assisted growth” from central banks, El-Erian writes in a blog for CNBC. That transition will probably occur in the United States, but not in Europe any time soon.
While the Dow Jones Industrial Average had its best first-quarter performance since 1987 and the Standard & Poor’s 500 surged 10 percent, “Investors,” he says, “need only look at where some other benchmarks ended the quarter to get a feel for the unprecedented and artificial nature of today’s capital markets.”
U.S. Stock Market Distortion Is Very Dangerous. By Gregory Mannarino
On Behaving Badly…”There is no Law, no fences and no limits. First Greece and now Cyprus and Pandora has raised the lid on her Box.”
When governments begin doing things that are extreme and outside of the normal patterns of behavior then it is not a stretch to say that they are in trouble. They are responding this way because they are in a critical and perhaps life threatening situation. They do not tell the truth about sovereign finances and cover up everything at the ECB but they must be looking at the real numbers and experiencing some sort of epileptic fit. I would say that you can now speculate in Europe. I would say that you can bet in a manner no different than a casino. Actually no; I would say it is worse. You can put your money down and then the dealer can say, “New Rules, Game Change; all the money on the table is required for the House and it is now mine.” If you had suspicions before; they have been confirmed. Anything, everything can and might be done and then justified by the unwillingness of the nations in Europe to pay for any more of a troubled country’s difficulties. Whatever boundaries that existed have been breached. There is no Law, no fences and no limits. First Greece and now Cyprus and Pandora has raised the lid on her Box.
Bank of Cyprus savers with more than 100,000 euros now face 60 PER CENT losses as officials scramble to prevent collapse
- Bank insider and government technocrat anonymously reveal latest plan
- Deposits over 100,000 euros will lose 37.5% of their value
- Savers then stand to lose a further 22.5% depending on an assessment
- Cypriot banks refusing to release UK pension payments to expat Britons
- President of Cyprus says there is ‘no intention’ of leaving the eurozone
Savers with over 100,000 euros deposited in the Bank of Cyprus could now be hit for losses of up to 60 per cent, according to a central bank official and a senior finance ministry technocrat.
The officials, who spoke on condition of anonymity because they’re not authorized to publicly discuss details of the issue, said deposits over 100,000 euros at the country’s largest lender will lose 37.5 percent of their value after being converted into bank shares.
They said that savers could then lose up to 22.5 per cent more, depending on an assessment by officials who will determine the exact figure aimed at restoring the troubled bank back to health.
Biderman’s Daily Edge: Cyprus is a Milestone to Economic Disaster