The Deformations Of QE: Bank Trading Desks Fattened; Failing Business Models Extended

The primary problem with cyclicality is that by keeping money losers afloat it only congregates the eventual defaults and retrenchments together into one big event rather than spread out over many months, even years. There is no doubt that ZIRP and the perpetuation of “emergency” QE force some “reach for yield” into exactly this kind of procyclical behavior....
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