Thanks to Mohamed El -Erian (Allianz Chief Economic Advisor)(highlights by me)
<<From Davos, Switzerland, where all the almighty Central Bankers and Government are meeting a scary decision
Jon Hilsenrath (WSJ correspondent in Davos
in the Wall Street Journal: “An epoch of exceptional monetary stimulus is drawing to a close. Central banks have exhausted themselves in their efforts to spur economic growth with low—even negative—short-term interest rates and bond-purchase programs meant to drive financial-asset prices higher.”>>
Which mean that the Guardian Angel that oversaw the last 9 years of rally and made the SP500 grow over 240%…just went AWOL.
In a study Deutsche Bank said that the Central bankers intervention was responsible for 40% of this rally (the paper was from last year…which mean that by their calculations SP500 minus Fed would be somewhere around 1,600…).
Reserve Bank intervention usually hits the top 20/top 50 company for each index (due to the volume needed) which means…INDEXING IS FINISHED.
By the way all the large financial planning companies and Private Banks are mostly doing…indexing
investorpolitico 