Jitters this week as fears that central banks may ease off on the helium blast of QE which has pumped the stock markets to post-crash highs. Gyrations on a Friday can presage big falls once sentiment shifts over a weekend. June 3rd another Black Monday anyone?
Here are some signs that sanity has completely disappeared – share prices go up at the same time as unemployment soars; credit spreads narrow as company debt climbs; credit spreads fall whilst indices of uncertainty stay high. The only explanation can be the £7tn in QE being funneled into markets that have nowhere to put it. The extra money is being used to douse the crisis, but is fanning the flames of the next.