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Are the Fed and ECB in a Snit?
So Mario Draghi thinks that the worst times for the Eurozone are behind it?
Does he really?
Just yesterday Fed Chairman Ben Bernanke was admonishing Europe to put its financial house in order.
Is Draghi thumbing his nose at Bernanke?
I can think of little that is worse than having Draghi and Bernanke at odds personally or in disagreement over policy risks. But then, there it is... out in the open.
Europe is still benefiting from dollar swaps extended to it by the Federal Reserve. Just today the MFG and Services PMI's for the e-Zone were issued and proved to be very weak.
Draghi seems to be sticking his neck out under very uncertain times. Not only is the MFG PMI in Europe showing contraction for eight straight months but the service sector PMI has had its own run of bad news as well. Many European economies already are contracting and laboring under the weight of austerity plans that are not adjustable. One size fits none...
Europe would seem to be very fragile, very at risk and so the Draghi statement seems rather ill-timed and frankly wrong. I fact almost nothing has been done to fix the real European problems.
The ECB's run of LTRO lending has only been like a mega drop of 'helicopter band aids'. Banks are ever more exposed to sovereign debt where those sovereigns' circumstance are not improved but whose bond auctions have been 'band aided' ('band aided' can be used a verb, can't it?)to look like normal.
Europe seems deeply at risk and these two very important central bank heads seem to be at odds.
This is a bad development with the German firm Taunus having found a crack in the US regulatory wall. Well, if an entity that big can squeeze through a crack to evade stronger capital requirements there is no wall. And this is the unit that was the holding company for Deutschebank operations in the US. Crack kills. A crack this big will kill a lot.
We need the monetary policymakers on both sides of the Atlantic on the same page and not at war. Especially when large regulatory issues emerge. I assume the large Deutschebank holding company Taunus is one such issue or will become one.
On a slightly different note, the ongoing weakness in the PMIs in Europe will raise some eyebrows here. I know without talking to them that the folk at ECRI (the guys with the US recession call still in place) are happy to see this weakness in EMU and Chinese MFG PMIs since it helps to validate their case. They point to the coincident nature of global MFG. We will now put that view to the test.
The US regional MFG surveys so far are not on board with that view but its one to stay tuned to.
Lots to keep an eye on and all too many policymakers talking to believe them all..or even any of them.
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Taunus restructured from a bank holding company, which means they (and Barclays ops in the US) cannot borrow from the Fed's discount window.
They can avoid some capitalization rules but the need for liquidity will do them in just like it almost did in Goldman and American Express which became bank holding companies in 2008 to access Fed funds.
Peeps have too short memories.
"We need the monetary policymakers on both sides of the Atlantic on the same page and not at war." Can we speak in plain Anglo-Saxon; what kind of dildo is this guy? Regulators hate competition, because competition between different regulatory regimes exposes the costs of regulation. So regulators are naturally buddy-buddy (or any other position you wish to envision).
Actually not a dildo at at all but an economist... so no wonder you were confused. Any thinking individual understands that differences in regulations open up seams for market imperfections to fester; for regulatory arbitrage. Regulators need to coordinate
Oops sorry I said "any thinking person would know that".
Sorry, no wonder you were left out there in a world permeated with sex toy imagery.
seriously...pashley
If you have something interesting to say offer it up, but please leave the 7th-grade insults to the 7th-graders.
Credit Default Swaps will end up preventing or postponing the one solution for the world's debt problems....massive default. Since CDS are not backed up by any capital, they can easily bankrupt the whole system if we see a lot of defaults. The solution is to make CDS illegal or to force banks that sell CDS to back $1 of CDS with $1 of capital. Only then will we be able to recover from the odious debt these people have put us in.
This article is garbage. I expect this crap from Yahoo! News.
Seriously, was this written by MDB?
to give YOUR opinion some veracity why not tell me why it is garbage?
is it based on falsities?
is it illogical?
do you disagree with it?
do you fail to understand it?
teach me...
Ok, I think the article is not really an accurate perception of the way things are. Draghi was installed and Bernanke was installed. They weren't elected or voted in. Somebody commands them both. That "somebody" is a threat to freedom and peace. (Ron Paul said that it is no coincidence that the 20th century was a century of total war and central banking.) Draghi and Bernanke are evidence of that threat. They are having a feud? Who cares? They will continue to work together to dismantle civilization, freedom and peace.
Now that's a problem.
Remember the Lord of the Rings movie? Imagine two of the Uruk-hai sergeants are having a disagreement. Do you really care?
Bernank and Draghi in snit-pillow fight?
lol
Their bosses will pimp slap both of them.
They are the bosses!
The guys at ECRI seem very professional to me. I don't think they will be "happy" to see economic weakness. They just try to keep things real for us.
Yesterday Ben tesitifed that a sustainable level of debt was 75% GDP and then, we should try to improve from there.
There was silence and no follow ups on that from the muppet representative gallery because they were looking for a $ figure and were, I can only imagine, bamboozled by the % GDP comparison, which is, if they were informed, on a declared-debt-only-basis just exceeded 100% GDP!
:@
Oh no...
I think they got it but were too dumbstruck to reply.
If you ignore it, it does not exist. Ostrich strategy.
They there is the deer strategy where you just don't move and pretend no one can see you. Ride on I-80 in PA to see how well that works.
yes those are our boys and girls up there wondering how they can get re-elected if they can't spend more of our money.
Ok Bobby...so your Housing rant has been proven to be complete BS. Now you want ZH readers to watch your other puppet hand as you try to create a non existant rift between the Fed and the ECB.
Draghi is cut from the same cloth as Helicopter Ben. You do remember the FX swaps don't you? How much in FX swaps were done? Maybe you should be investigating this or just make a call to your puppet masters.
They both will CTRL P, its just the sleight of hand tricks that they will use.
Nice try though. You can report back to your puppet masters that this one didn't fly on ZH either. You need a new story. I am sure that they have plenty ready for you.
Thank you clown
Actually I have gotten some interesting feed back from more serious and thoughtful people.
By the way the housing market does seem to be doing better and even the FHFA price report shows that the second derivative of prices is moving up smartly!
I am curious as to how just a few days after writing that article YOU KNOW I am wrong.
As for this having our two central bank heads at odds it is not a good thing. I don't get your smarminess.
Don't you get it?
Or do you just have a bladder problem?
I suppose to you ZH is place for only nonconforming thought of the variety that is acceptable you alone will rule over?
What I worry about is that you permanently pessimistic munchkins are so steeped in your own view that appears to take no samples from incoming reality that you will be as wrong about the rebound in housing as others were wrong about the bubble.
Thanks clown. When you are utterly disposed to disagree with me I know I'm on the right track
B
STFU shill pumper ex-Fed PHD economist douchebag.
"Robert Brusca Ph.D. has been an economist on Wall Street since 1977. He has been a Division Chief at the NY Fed, a Fed-watcher at a major NY commercial bank and Chief Economist at major international securities firm. He is now an independent voice on the economy global trends and the political scene, operating a consulting firm in New York City."
As I started reading this article, I was wondering, Kool-Aid drinker, or Kool-Aid mixer?
This article is every bit as believable as the story lines in "professional" wrestling.
Looking at Brusca's post I'll bet that professional wrestlers just might spell better, or at least use the spell check function.
THANKS BRUKAS FOR ALL YOU DO :)
The EU will come begging when the time comes, and the US will dutifully spread its legs and give up what Europe needs, catching god-knows-what in the process.
TPTB on both sides of the pond view us all as inextricably intertwined at this point, reality and the sentiments of their respective populaces be damned.
maybe.
for one I'd like to see the US policymakers not just roller and be dead.
That's how the whole financial crisis got rolling.
its really too bad i cant find the track button any more.....i wanted to have a mid day laugh by reading your yesterday post......
You still can, just not as conveniently:
Click on "My Account";
under "History/Member for" - click " Follow this user's comments", then enter a name...
Didn't you post yesterday that house prices were on the rise ?
Where you getting your data from the BLS ?
http://www.zerohedge.com/news/home-prices-miss-large-9th-consecutive-dow...
But won't the recovery in US housing fix this?
True. The US Housing recovery and Construction Industry will lead us into a new golden Global Age.
I am deafened by the sound of your one hand clapping.
C'mon that is nowhere near anything I ever implied in my wildest dreams.
Housing
IS
Improving.
period.
.
nothing to see here, move along...
HUH? of course we want them at war - i wanna see a bernank - draghi cage match, both dying simultaneously on the floor in a bloody pulp, and central banking going down with them.
but that's just me...
"nothing to see here, move along"
They have the same boss, so if they are in a snit it will be put to rest quickly.