The obvious example of coordinated central bank action is the long-term refinancing operation, or LTRO, which is essentially the ECB's own version of quantitative easing by flooding banks with unlimited money for three years in exchange for collateral. The first LTRO in December sparked a big rally in stocks, and investors are expecting the same when a second and potentially much larger LTRO is rolled out Feb. 29.
"As long as you have central banks willing to keep the spigots open, it ends up in the financial markets," Nolte says. "But that's not in our pockets, which is where it ultimately needs to be. That's why investors aren't getting too excited about this yet."
The effective use of QE in Europe, as well as other measures by central banks around the globe from the U.S. to China, has resulted in a big rotation in equities. Emerging markets, punished mightily in 2011, have rebounded sharply. Small- and mid-cap stocks have outperformed their larger, supposedly safer counterparts that were safe havens during choppy waters last year.
However, even the more defensive areas have remained expensive after surging through much of last year. Nolte says that leaves few other places for worried investors to move unless they want to rotate into short-term bonds or cash.
"It really sucks," Nolte says. "If you look at the QE-influenced markets, it's been hard to buy dips because there haven't been any except some intraday. The markets are truly manic-depressive. It's more of a trading market, which I don't do very well in."
Others have turned more positive on the market. Andrew Garthwaite, managing director for global equity strategy Credit Suisse, on Tuesday said that for the first time in almost two years, he was less negative on Contental Europe, even if several problems remain.
"We think that the ECB is increasingly dovish (and we would not rule out another three-year LTRO after the one on February 29), which should help weaken the euro," Garthwaite writes. "And we now only expect a 1% decline in European credit (down from our previous estimate of a 5% decline)."