by Dan Norcini
Call it the “Save the Footsie; Squash the Pensions” move.
Here we go again – once more, as we have been saying over and over and over again, we are not trading anything remotely resembling fundamentals – if anyone out there can actually tell us what those might be in this Central Bank La-La Land – but instead, we are trading Central Bank actions or inactions.
In this case, we are trading an action by the Bank of England, which slashed its benchmark rate from 0.5% to 0.25%, the lowest in history. It also happens to be its first rate cut in seven years.
Not only that, the Bank is taking another foray into the Quantitative Easing morass; they plan on buying government and corporate bonds to make sure longer term rates stay low.