Beating dead horses has become a hobby of ours.
Although “posthumous equine abuse” isn’t something we’d list under “interests” if we were say, signing up for a dating site, we don’t mind engaging in it if we think doing so might drive home a particularly important point.
That’s one of our favorite quotes from one of our favorite market commentators: us.
And when it comes to beating dead horses, nothing has been posthumously abused more than the idea that central bank liquidity is driving risk assets into the stratosphere.
But as obvious as it is, some folks are still having a hard time coming to terms with the fact that what they’re seeing in stocks has everything to do with $20 trillion+ in central bank liquidity and almost nothing to do with anything else.
The most hilarious thing about this particular “conspiracy theory” is that every DM central bank goes out of their way to tell you exactly what it is they’re doing (that’s what forward guidance is) and yet some people steadfastly refuse to believe it.
Well, in our latest effort to disabuse you of any delusions with regard to what’s going on, consider the following charts out this evening from BofAML which speak for themselves:
Indeed, as BofAML goes on to note, the Big 4 central banks have expanded their balance sheets by 11% YTD (so much for any “tapering”):
Is it any wonder then, that the bank’s “Global Risk Love” indicator is registering “euphoria”?…