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‘2018’s Experiment Failed Monumentally’: Detox Is Hard

You can kill the patient if you're not careful. 

There's no point crying over spilled milk, and all's well that ends in 92% of global assets posting a gain in 2019, but central banks likely won't forget the overarching lesson they learned last year. That lesson: Weaning drug addicts off opioids is hard. You can kill the patient if you're not careful. We can all argue the "what ifs", but by December of 2018, many of the folks who, just nine months previous, were still extolling the virtues of "plain-spoken" Jerome Powell and his non-academic approach to Fed communications, weren't so sure anymore. As stocks crumbled, credit spreads widened and the leveraged loan bubble showed signs of bursting, "plain English" fans were suddenly pining away for some of grandma Janet's home cookin'. As BofA's Ioannis Angelakis puts it in the bank's 2020 credit derivatives outlook, "last year’s experiment failed monumentally". "In late 2018, central banks turned too hawkish too fast", he writes, adding that the combination of a "deteriorating macro backdrop... and a hawkish turn across a number of central banks" was too much for markets which, for the better part of a decade, had been pacified by policymakers' implicit vol. selling. The "b
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2 comments on “‘2018’s Experiment Failed Monumentally’: Detox Is Hard

  1. RStantz says:

    But are the narcotics being administered for palliative care or a meaningful therapeutic purpose?

    • xeger says:

      Oh, it’s been palliative care since the beginning. When the doctor’s dual mandate is to control body temp (inflation) and prevent headache (unemployment) at all costs, the diagnosis and indicated treatment are unimportant.

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