BOB JANJUAH: 'Markets Are So Rigged By Policymakers That I Have No Meaningful Insights To Offer'

TBI ^ | 2-20-2012 | Gus Lubin

[blam]

BOB JANJUAH: 'Markets Are So Rigged By Policymakers That I Have No Meaningful Insights To Offer'

Gus Lubin
Febuary 20, 2012

Nomura's Bob Janjuah describes his frustration with today's market in a note, posted at Zerohedge.

The notorious bear says we're in a bubble, but the markets are too manipulated to make sense. His only recommendations are gold, non-financial high quality corporate credit and blue-chip big cap non-financial global equities.

Bob's World: Monetary Anarchy

Since my last note from early January I have spent the last few weeks assessing data and price action, as well as spending a lot of time talking to clients and trying to analyse the words and deeds of policymakers. In no particular order, my takeaways are as follows:

1 – Greece (and the whole eurozone story) continues to lurch about, seemingly perpetually, from Farce to Tragedy. Policy seems to be focused on protecting and preserving vested interests, with little consideration given to the dreadful conditions the people of Greece and other "peripherals? are being forced to live with. However, it seems that eurozone leaders may be about to pour even more taxpayer money down into the black hole that is Greece, primarily to help the banks in Europe, at the expense of perhaps a decade of suffering by the Greek populace. For my part, I am now consigning the Greece/Peripherals/Eurozone story to the box marked "self-serving political debacle? and from here on in I will simplify Europe as follows: Until, and unless, Germany signs up to full fiscal union, a eurozone breakup is likely. And depending on how long we can continue to "kick the can? down the road in order to protect the eurozone banks, the eurozone will be consigned to an extended period

(snip)

[Larry Lucido]

I Have No Meaningful Insights To Offer'

The first honest blogger. :-)

[NativeNewYorker]

He's not a blogger...he's a highly regarded professional capital markets observer.

I've been playing that game for a few decades myself, and what we're seeing now is without precedent.

It's as if FDR and his brain-trust/central planners rose from the dead to seize control of a bureaucratic machine they couldn't have imagined in their wildest dreams.

Investors and traders have no idea - none - what insane scheme will befall the markets next. MF Global? The sudden subordination of all European sovereign debt? A super-tax on US investment income?

As investing requires an assessment of forward risks, and it is now impossible to calculate those risks, capital remains frozen, benefiting neither its owners nor the wider public.

Of course, this result suits Obama, because he can play the "bad capitalist" card, demanding more power and loot as he expands the welfare state to absurdity.

[Paine in the Neck]

It's as if FDR and his brain-trust/central planners rose from the dead to seize control of a bureaucratic machine they couldn't have imagined in their wildest dreams.

Investors and traders have no idea - none - what insane scheme will befall the markets next.

You are absolutely right. And this is the essence of Regime Uncertainty which Robert Higgs explains as the root cause of FDR's Lost Decade, the Great Depression. Doing the same thing will reap the same rewards.

[SueRae]

“Investors and traders have no idea - none - what insane scheme will befall the markets next.”

You can say that again. And why is the Dow at 13K and as of this moment, futures are up?? With all that is going on, it makes no sense. Certainly not your father’s stock market anymore. There’s no such thing as longterm investing anymore.

[ZX12R]

You can say that again. And why is the Dow at 13K and as of this moment, futures are up?? With all that is going on, it makes no sense. Certainly not your father’s stock market anymore. There’s no such thing as longterm investing anymore.

What you posted is what I've been thinking as well. No real long term money in the market anymore. Just traders exchanging shares based on small fluctuations. No one can really think at this point, that our country's economic future is rosy. Between the traders and the FED, this market behaves in a way that reflects nothing about our economy. The low volume, due to a lack of widespread participation, makes the current stock market a one legged chair with the remaining leg to be kicked out from under it at any time. It's all smoke and mirrors. I don't think anyone knows for sure where it should be, but 13,000 isn't it. More like 4,000 maybe.

[Buckeye McFrog]

Actually he is correct. Anymore businesses will typically go to D.C. looking for a special break or a subsidy before making any other type of decision on business criteria.

[NativeNewYorker]

this is the essence of Regime Uncertainty which Robert Higgs explains as the root cause of FDR's Lost Decade, the Great Depression. Doing the same thing will reap the same rewards.

So, Soetero is either stupid, not realizing this, or clever, intending this result.

[vanilla swirl]

” So,Soetero is either stupid,not realizing this,or clever,intending this result.”

Nah....
Obama is a pure leftist ideologue, as long as his posse benefits it’s all good.
(His “posse” is NOT the poor urban blacks he claims to represent)

[Timocrat]

Not only are markets rigged almost all of the statistics issued by the Feds have become meaningless. Unemployment, CPI and monthly retail sales are the most egregious of the fiction emanating from the regime.