Swiss National Bank

Phoenix Capital Research's picture

Why Is the Financial World So Messed Up?


Why is the financial world so messed up? Because it’s run by Central Bankers. And those folks view money very differently than the businesspeople who create businesses, jobs, and wealth.


Tyler Durden's picture

Guest Post: The Post-2009 Northern & Western European Housing Bubble

Could Sweden or Finland be the scene of the next European financial crisis? It is actually far likelier than most people realize. While the world has been laser-focused on the woes of the heavily-indebted PIIGS nations for the last couple of years, property markets in Northern and Western European countries have been bubbling up to dizzying new heights in a repeat performance of the very property bubbles that caused the global financial crisis in the first place. Nordic and Western European countries such as Norway and Switzerland have attracted strong investment inflows due to their perceived economic safe-haven statuses, serving to further inflate these countries’ preexisting property bubbles that had expanded from the mid-1990s until 2008. With their overheated economies and ballooning property bubbles, today’s safe-haven European countries may very well be tomorrow’s Greeces and Italys.

Tyler Durden's picture

Eric Sprott On Unintended Consequences

2012 is proving to be the 'Year of the Central Bank'. It is an exciting celebration of all the wonderful maneuvers central banks can employ to keep the system from falling apart. Western central banks have gone into complete overdrive since last November, convening, colluding and printing their way out of the mess that is the Eurozone. The scale and frequency of their maneuvering seems to increase with every passing week, and speaks to the desperate fragility that continues to define much of the financial system today.... All of this pervasive intervention most likely explains more than 90 percent of the market's positive performance this past January. Had the G6 NOT convened on swaps, had the ECB NOT launched the LTRO programs, and had Bernanke NOT expressed a continuation of zero interest rates, one wonders where the equity indices would trade today. One also wonders if the European banking system would have made it through December. Thank goodness for "coordinated action". It does work in the short-term.... But what about the long-term? What are the unintended consequences of repeatedly juicing the system? What are the repercussions of all this money printing? We can think of a few.

Tyler Durden's picture

Guest Post: Beware The Ides Of March

In the past week we have seen the Banks of Japan and China join the queue for printing ink along with the Fed, the Bank of England, the ECB and the Swiss National Bank; many other minor central backs have either cut rates or are about to. Admittedly the Chinese have not actually cranked up the Hewlett Packards but PBOC Governor Zhou said that “China will continue to invest in EU countries’ government bonds, and will continue, via possible channels, including the IMF, the EFSF and the ESM, to be involved in resolving the euro-zone crisis”. He added that he hopes Europe can offer “more attractive investment products”. I wonder what he has in mind. With the support he can muster Greek 2 year bonds on a 200% yield should do the trick surely…

Bruce Krasting's picture

On Banknotes

This is the weirdest “bubble” I have seen. 

Tyler Durden's picture

Money, Money, Everywhere

FX Concepts' John Taylor is out with today's slam dunk de-noisification of all that is irrelevant with the following summary of what is really going on as the world's central banks embark on the latest and hopefully final attempt to reliquify everything. All we can add to Taylor's analysis, especially in light of today's incremental easing in ECB collateral requirements, is that the biggest beneficiary by far of what in a few months will be another multi-trillion balance sheet expansion, is and continues to be hard, non-dilutable, i.e., real, money. Because as fiat currency loses all relevance in a world in which it is printed on a daily basis by the central banks, whether or not we end up with a Weimar scenario, the cash thrown out by the even profitable companies will be increasingly more meaningless. Yet the take home message is that banks will never, ever stop diluting existing money. They simply can't as the past few months have so vividly demonstrated.

Tyler Durden's picture

Frontrunning: January 12

  • Hedge Funds Try to Profit From Greece as Banks Face Losses (Bloomberg)
  • Spain Doubles Target in Debt Auction, Yields Down (Reuters)
  • Italy 1-Year Debt Costs More Than Halve at Auction (Reuters)
  • Obama to Propose Tax Breaks to Get Jobs (WSJ)
  • GOP Seeks to Pass Keystone Pipeline Without Obama (Reuters)
  • Debt Downgrades to Rise ‘Substantially’ in 2012, Moody’s Says (Bloomberg)
  • Petroplus wins last-minute reprieve (FT)
  • Geithner gets China snub on Iranian oil as Japan plans cut (Bloomberg)
  • Fed officials split over easing as they prepare interest rate forecasts (Bloomberg)
  • Draft eurozone treaty pleases UK (FT)
  • Premier Wen looks at the big picture (China Daily)
  • US Foreclosure Filings Hit 4-Year Low in 2011 (Reuters)
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