With the Fed now buying HY, there's only one step left - to buy equity ETFs at the next downturn - perhaps if we retest March lows. I'm not sure what the endgame of this looks like, but it can't be any less than complete price discovery destruction.
BOJ has been a step ahead by several years. Price discovery might suffer in the short term but its probably hard to argue that ETFs, stocks, and bonds in Japan are severely mispriced or hard to value, not before this current crisis and probably not even right now.
and if you are wrong? Love to hear trading advice from anyone who looks like a good old professor or doctor ;-)
Maybe not. The BOJ (owning 80% of the entire ETF market in Japan)... doesn't have to worry about being correct or losing money. How does that factor into the marketplace for those on the other side? After all, the Nikkei made its high 30 years ago and is currently trading at ~50% of that high after all these years... in spite of all the BOJ's "buying and backstopping the markets". (Makes a fella wonder whether having the Central Bank as the "buyer of last resort"... or even effectively "the ONLY buyer that matters"... being a good thing.)
All points that are completely unrelated. We talked about price discovery. ETFs are quite accurately priced in Japan. Simply compare the ETF prices and NAVs for yourself. On average, over a longer period of time and over a range of instruments they are priced very close to their NAVs in Japan. And yes, if you have a market player with limitlessly deep pockets then both ETF prices and NAVs (basically the ETF price, in this case, is driving the prices of underlying assets) are well bid. Then it comes down to an estimate of book value for the ETF via their underlying securities. Compare that with historical price to book values and you get a clearer picture of the quality of price discovery.
price discovery is BS... what does it even mean... if you read my posts in the past few weeks, my boyz been doing price discovery all this time! it means discovering where the weak hands are and making them give up. look, end game or whatever, nothing matters.... as I posted before the goals of the masters and the slaves are aligned, at the end of the day, the economy needs goods and services, and the only way to produce them is to have enough liquid lube in the economy so the machine can turn.... simple as that. if you are empty handed and have no assets and are butt hurt, stop complaining and join the game! isn't that fcking obvious... why are people complaining, what's the fcking point.
You do realize this is a thread with a point though, right? And that your diverging point is not really relevant in this thread with a clearly stated point...just saying...
Where have you been? The "point"... Fed Only Game In Town? How's having the BOJ being the only game in town working out for Japan? Anything we might learn from that? Might we expect similar here? (You're not going to make points with me if you argue like my wife!)