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Draghi Is "Desperate To Avoid A Japan-Style Lost Decade"

Tyler Durden's picture




 

As we noted previously, it is likely that whatever Draghi does this week "will not deliver a significant impulse to the real economy" in Europe but while negative rates are almost guaranteed (based on the consensus), reviving the ABS market (via focused QE) is being heralded by many as a positive swing factor. Unfortunately, as SocGen explains, even if the ECB began purchasing ABS in H2 2014, the size and reach of the market is not enough to move the scale as Europe acts desperately to avoid a Japanese-style lost decade.

 

Via SocGen,

ABS for dummies or what the ECB could do...

ECB to act to help peripheral SMEs

“What we need to be particularly watchful for at the moment is the potential for a negative spiral to take hold between low inflation, falling inflation expectations and credit, in particular in stressed countries” warned ECB president last week. Real rates remain too high compared to GDP in peripheral countries and the strength of the euro is reinforcing disinflationary pressures.

With ongoing concern on SME financing in the periphery, we expect the ECB to take unconventional measures at the 5 June meeting to boost SME lending. Action could take the form of a targeted LTRO (similar to the Bank of England’s Funding for Lending  cheme) and/or an ABS* repurchase programme. *ABS: A financial instrument collateralised by one or more types of assets, including real estate, mortgages, receivables etc.

Reviving the ABS market

ABS issuance has been subdued in recent years for economic reasons (weak demand) but also due to technical obstacles, (including the deemed unfavourable regulatory treatment applicable to the ABS market).

For now, we expect that the ECB could start purchasing ABS in H2 14 (either in the market or directly from banks) to revive the ABS market. As the size of the ABS market linked to SME loans is small (c. €120bn in Europe) any asset purchase programme is likely to include other types of ABS to have more impact on the economy. But, according to SG ABS & Covered bonds analysts, ECB-eligible ABS outstandings amount to just €760bn (Q1 14). Therefore purchases could be further extended to other assets, such as supranational agency bonds, or corporate paper.

ECB is acting to avoid a Japanese-style lost decade
 
Successful reform of the ABS market could help improve credit conditions in the periphery and break the vicious circle between banks and sovereigns. Initiatives from different European institutions are under investigation (the EIB, the European Commission, the ECB, etc.) but reforming the securitisation market will take several years. Banking Union will also help reduce fragmentation in the future. But, for now, deflation risks are increasing, and the ECB could well fall ‘behind the curve’ if it does not take sufficient action. Any significant downward revision of inflation expectations would require a broader based QE programme (over €1 trillion in asset purchases, including sovereign assets).

The goal is clearly to avoid a Japanese style lost decade... because QE worked out so well for Japan?!

 

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Mon, 06/02/2014 - 22:39 | 4818947 donpaulo
donpaulo's picture

There is always prayer

Mon, 06/02/2014 - 22:48 | 4818976 Catflappo
Catflappo's picture

When I went to school "decade" meant ten years, but we seem to be bandying around a new definition now?

Either that or my calculator has sprung a fault as it would no longer seem to be able to figure out an accurate answer to "2014 - 1995"

Mon, 06/02/2014 - 22:58 | 4818994 Dr. Engali
Dr. Engali's picture

Common core math. It's the new math, you just say what feels right.

Mon, 06/02/2014 - 23:08 | 4819023 infinity8
infinity8's picture

Yeah, 'cause maath is just boring, Yo. BOoooooooo-ring!

 

 

Mon, 06/02/2014 - 23:09 | 4819031 infinity8
infinity8's picture

And Haardd! Really fucking boring and hard! Fuckoff, I'm gonna cheat!

Tue, 06/03/2014 - 08:42 | 4819702 RaceToTheBottom
RaceToTheBottom's picture

No downside to cheating when everyone gets a ribbon.

Actually, perfect training for a CEO position

Tue, 06/03/2014 - 04:31 | 4819471 RadioactiveRant
RadioactiveRant's picture

Try rounding down, not up. Then you get the "right" answer.

Tue, 06/03/2014 - 07:47 | 4819609 DeadFred
DeadFred's picture

You're forgetting the all-important seasonal adjustments.

Mon, 06/02/2014 - 23:03 | 4819013 Stuck on Zero
Stuck on Zero's picture

Draghi is not desperate to avoid a lost decade.  Japan's lost decade meant trillions of dollars in the pockets of the Japanese bankers.  Same in Europe.  "Lost decade" is only lost to the middle class it is a boon to the illuminati.

 

Tue, 06/03/2014 - 04:17 | 4819457 DavidC
DavidC's picture

Stuck on Zero,
Exactly.

"Europe acts desperately to avoid a Japanese-style lost decade" - with the DAX at least at all time highs. Forgive my language, but Draghi et al are fucking pathetic.

DavidC

Tue, 06/03/2014 - 00:47 | 4819250 SAT 800
SAT 800's picture

"---purchasing ABS,---but market not large enough---"; Well, I dunno, but there's an awful huge pile of Atrophied Bull Shit in Europe. Seems like enough to me.

Tue, 06/03/2014 - 06:38 | 4819544 doctor10
doctor10's picture

If the world's bankers continue to expect the world's people to serve them, as opposed to providing a service to enable business and trade, get used to the concept of "lost centuries" -as in the Dark Ages.

Its pretty clear the world oligarchy intends to use finacialization of existence as a form of "neo-feudalism"

Tue, 06/03/2014 - 06:43 | 4819548 SunRise
SunRise's picture

Prayer - Error prevention when offered first - Coupe De Grace when offered last.

Mon, 06/02/2014 - 22:40 | 4818953 kliguy38
kliguy38's picture

More like 3 lost decades now

Mon, 06/02/2014 - 23:29 | 4819083 babylon15
babylon15's picture

Japan's population in 100 years will be the same as Japan's population in 1872.

 

https://en.wikipedia.org/wiki/File:Population_of_Japan_since_1872.svg

 

More like a lost century.

Mon, 06/02/2014 - 23:53 | 4819133 Flakmeister
Flakmeister's picture

More like ahead of the curve all of humanity is going to follow this century...

Overshoot is a bitch, the economic stuff at the beginning is the easy part...

Mon, 06/02/2014 - 22:44 | 4818970 NoDebt
NoDebt's picture

People who don't have any money and don't have income don't borrow, no matter how low the interest rate.  People who DO have money stop spending it when interest rates get down 'round zero.  

Mon, 06/02/2014 - 22:49 | 4818981 Dr. Engali
Dr. Engali's picture

I can not be convinced that they are trying to avoid Japan 3.0 ( the U.S. Is 2.0) rather than just protect the status quo. If they wanted to "fix" things they would liquidate the debt and allow some institutions to die. Instead they are choosing to do moar of the same while impoverishing millions of people.

Mon, 06/02/2014 - 22:58 | 4819002 NoDebt
NoDebt's picture

That's been my premise for a long time, as I know you already know.  A Japan scenario is the only one that avoids immediate, intense pain for many sacred-cow constituencies.  It's the only path that is tenable in the current political environment that exists to a greater or lesser extent basically everywhere in the developed world.

Japan pulled it off for DECADES, running up a debt/GDP ratio of 250% (increasing almost 1% per month!) without even having the "world's reserve currency".  How long do you think the US can pull it off?  Probably at least that long, if not longer.

We keep thinking that someday the world will turn away from central bank dependency, but it won't.  It's welfare for the well-to-do.  Everyone hates it just a little less than the alternative.

Mon, 06/02/2014 - 23:09 | 4819019 Dr. Engali
Dr. Engali's picture

Being the world's reserve currency is exactly the reason I don't believe we can keep it up for as long as Japan. Whereas Japan's major impact is on it's own citizens our policies impact the world. Sooner or later the world is going to say enough.in my opinion we are in the latter stages of our currency rejection.

Mon, 06/02/2014 - 23:11 | 4819037 NoDebt
NoDebt's picture

We suck, everyone else sucks worse.  2 decades, minimum.  

Mon, 06/02/2014 - 23:46 | 4819120 Anusocracy
Anusocracy's picture

We suck period.

At virtually every level the US is doing the wrong thing and the future is not going to smile on us.

Tue, 06/03/2014 - 07:36 | 4819590 Greenskeeper_Carl
Greenskeeper_Carl's picture

"Two decades minimum" holy shit, never figured you for an optimist ....
But in all seriousness, I agree with your premise. I think two decades is a but long, but who the hell knows. I agree it will be a slow, steady decline. The key to keeping the frogs in the pot is slowly turning up the heat. Can't just throw them into a boil

Mon, 06/02/2014 - 23:13 | 4819046 disabledvet
disabledvet's picture

See below and "cue Mario Draghi desperate face" instead of charts and graphs.

These clowns could care less about "Europe."

Just "cut the friggin check."

Ironic because Ukraine really does want to be part of Europe. "Worth plunging the entire world into a World War over?"

Stay tuned...

Mon, 06/02/2014 - 23:42 | 4819108 Anusocracy
Anusocracy's picture

Part of Ukraine wants to be part of Europe. Good luck with that.

Let Eastern Ukraine be free to go its own way - like what happened in Czechoslovakia.

Mon, 06/02/2014 - 23:56 | 4819139 disabledvet
disabledvet's picture

2500 years of history tells me "it's never worked that way ever." We can hope "it's different this time."

We saw how that worked with Wall Street though.

Tue, 06/03/2014 - 00:47 | 4819253 hairball48
hairball48's picture

I'm in your camp. One day the world will finally lose faith in the U$D and they'll say, "Fuck Amerika."

The U$D will crash and all hell will break loose in society.

Stackin'....

Tue, 06/03/2014 - 02:01 | 4819355 disabledvet
disabledvet's picture

America got gas piped. The irony of course is that the USA still has the cheapest natural gas in the Western and developing world by far.

How that gold price is still falling is beyond me tho. "It's not for lack of earnings and cash flow."

Again...this sounds crazy..."but we've enslaved these Martian dudes...and they..."

Oh, wait...that is crazy.

Tue, 06/03/2014 - 06:12 | 4819525 El_Duderino
El_Duderino's picture

The ONLY reason the US can get away with the current debt burden is due to the $ being THE reserve currency. When it ends, and it wil sooner rather than later, the $ is toast and banckruptcy becons.

Mon, 06/02/2014 - 23:12 | 4819041 Crawdaddy
Crawdaddy's picture

If there were ever a real group of independent people called "bond vigilantes" as I was raised to beleive, then Japan(and the US/EU/ the world) would be buried in insolvencey. The visible insolvency of US/EU is just another news story manipulated by people who own the news guys.. House of freaking cards propppd up by a bunch of corrupt munchkin mofos

Mon, 06/02/2014 - 23:16 | 4819056 Caviar Emptor
Caviar Emptor's picture

Yes.  It's been my premise as well, only Japan (comapred with the US) is a nirvana of political harmony and indolence compared with US. 

Mon, 06/02/2014 - 22:56 | 4818992 dirtyfiles
dirtyfiles's picture

remember Draghi is part of the Goldman system why bother ..

 

 

still after 6 yrs nobody goes to jail yet

nothing is fix

more of the same

Mon, 06/02/2014 - 23:00 | 4819006 Caviar Emptor
Caviar Emptor's picture

I cringe everytime I hear that a bank may get fined or a golfer gets investigated for insider trading. Aren't all rich, connected people "insiders"? Is it insider trading if Rockefellers swap wives and polo ponies with Fords? What's left of the privilege of class, the gentleman's C? 

Mon, 06/02/2014 - 22:56 | 4818993 Caviar Emptor
Caviar Emptor's picture

Hehe lost decade :) We are in the 2nd inning of the lost decade

Mon, 06/02/2014 - 22:58 | 4818998 SofaPapa
SofaPapa's picture

There is a choice to be made.  EITHER the current power structure can maintain their power and influence OR the system can be reset to allow for even rule application and responsiveness to a broader cross-section of society.

Only by following the second course can TPTB avoid the lost decade or more ahead.

TPTB will follow the first course, because their arrogance and hubris will not allow them to believe the world could function without their "leadership".

So we face one of two most likely futures at this point: growth of crushing authoritarian mechanisms while they try to figure out how to "manage" growth (which is an oxymoron) or violence as people throw off this claim to control over their lives.  Neither is pretty, and to repeat, both are the direct cause of the inability of the "elite" to realize that the world will grow and function best with the least control.  The more they try to control it, the worse it will get.  So simple, but they are inherently incapable of seeing this because of their ingrained push-to-power mindset.

Sad, really.

Mon, 06/02/2014 - 23:16 | 4819053 NoDebt
NoDebt's picture

Decision's already been made.  Authoritarianism, central planning and endless money printing won by a landslide.  

There will be no revolt.  Too much government cheese for that to happen in any developed nation.  Like LBJ said "just enough to quiet them down, not enough to make a difference."

Tue, 06/03/2014 - 04:04 | 4819450 franciscopendergrass
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With 70% obesity and distracting television, sports and celebrity gossip to consume who physically can or have the correct mindset to revolt.  Revolution.  Aint got time for that.  when is Americas got talent?  When is the next super hero movie coming out

Mon, 06/02/2014 - 22:58 | 4818999 babylon15
babylon15's picture

Hey, that's good news, because there's a solution.  Default on all the debt.  Presto, no lost decade.

Mon, 06/02/2014 - 23:19 | 4819063 disabledvet
disabledvet's picture

That's what the inflation is dude.

"Your Government defaulting on trillions in debt."
Cue "Spock saves Enterprise scene."

Mon, 06/02/2014 - 23:06 | 4819020 sbenard
sbenard's picture

Draghi is so "desperate to avoid a Japan-style lost decade", that he will do the SAME thing as Japan to avoid it!

Mon, 06/02/2014 - 23:06 | 4819021 Sticky Wicket
Sticky Wicket's picture

QE works! Just look how rapidly the US economy is growing.

Mon, 06/02/2014 - 23:15 | 4819049 Bunga Bunga
Bunga Bunga's picture

Fuck you Draghi!

Mon, 06/02/2014 - 23:15 | 4819051 AccreditedEYE
AccreditedEYE's picture

I bet that whatever he decides to do stocks still move higher. Can't lose.

Mon, 06/02/2014 - 23:27 | 4819077 Spungo
Spungo's picture

If they're trying to avoid Japan style stagnation, why are the US and EU doing exactly what Japan did? Lowered interest rates, did QE, didn't jail anyone, bailed out oligarchs, etc.

These stupid fucks still haven't figured out that prosperity is the normal human condition. Humans work. Humans trade. Humans have fun when there's time. We could do all of these things if the government would fuck off and leave us alone. Lots of stoners out there could be growing and selling weed right now. They're not allowed. Lots of Americans would love to gamble. They're not allowed. Lots of women (and men) would gladly be hookers to pay the bills. They're not allowed. Why do they make it so hard to run a business? If I started breeding cats in my home and selling them, some government fuckbag would probably arrest me for not having some stupid license.

Mon, 06/02/2014 - 23:55 | 4819138 Flakmeister
Flakmeister's picture

You write as if there was a way of reversing it...

That ain't possible...

Tue, 06/03/2014 - 01:43 | 4819330 DaveA
DaveA's picture

Dude, stoners grow and sell weed *because* it's illegal. When it's legal, it'll be just another Big Agro commodity like corn, soybeans, and tobacco. The best bud will wholesale for a few dollars a pound, and all the small growers and dealers will be wiped out.

Most of our laws against prostitution, gambling, drinking, and drugs date back to the 1910s, when women started voting. Women think we should pass laws to make the world a better place, while men, who are almost entirely tasked with enforcing those laws, have more realistic ideas about what can be accomplished by coercion.

Tue, 06/03/2014 - 05:57 | 4819512 CuttingEdge
CuttingEdge's picture

Could be wrong here, but I do recall the UK drug laws were as a result of direct lobbying to the government by the breweries (around the decade you say), who saw narcotics as a competitive threat.

Tue, 06/03/2014 - 00:02 | 4819153 Radical Marijuana
Radical Marijuana's picture
"Desperate To Avoid A Lost Decade"

TOO LATE!

Tue, 06/03/2014 - 00:10 | 4819181 walküre
walküre's picture

If Draghi is serious about confiscation via negative rates then all hell might break lose when billions of cash get flushed into the system trying to buy anything of value. European and global indexes could shoot potentially much higher to avoid being penalized for holding cash. Real estate will see a big push in the periphery because the middle is already priced sky high.

Draghi's plan is to get Europeans off their couches and spend, spend, spend until they're not being penalized for hoarding cash.

Now, Europeans are a bit more sophisticated when it comes to spending. They don't necessarily go out and consume more. Gold and silver are extremely popular there. Just sayin'

Tue, 06/03/2014 - 00:10 | 4819182 malek
malek's picture

 avoid a Japanese-style lost decade

I thought they (ECB) are the ones creating the environment that almost guarantees one for Europe?

Tue, 06/03/2014 - 00:25 | 4819204 matrix2012
matrix2012's picture

ABS ABS ABS... what's the hell this ABS is ???

 

I know in plastics field ABS is acrylonitrile butadiene styrene, a kind of popular composite plastics used to make car bodies and cases for computers and other appliances

 

life is amazingly wonderful if all one has to do is just tweaking all the paper tricks or even computerized binary works to have everything runs in order...

What a God chosen people all the descendants of the almighty Abraham!!

Tue, 06/03/2014 - 00:38 | 4819236 Spungo
Spungo's picture

I hope they institute negative interest rates in Europe just to see what happens. The Keynesians are correct that it would cause a crack up boom as people with wealth flee paper assets like bonds and put all of their money into gold, real estate, stocks, and commodities (food). People would also use a lot of leverage. If there's going to be a crack up boom and paper becomes worthless, one might as well leverage up on this trade. Food inflation would be out of control because the price of food is controlled by hedge funds buying pork belly futures. There would be riots and political unrest. Extreme right wing nationlists would start popping up and gaining political power. Minorities and immigrants would be targeted. Fascism would rise again. 

Tue, 06/03/2014 - 02:07 | 4819365 disabledvet
disabledvet's picture

Fascism failed. The smart money is "you get the inflation and no one does a damn thing about it."

I'm still holding out on the "death by hanging" (recession, rates flattened) instead of "shot while trying to escape" (Inflation Eternal!) but we'll see.

Tue, 06/03/2014 - 01:18 | 4819289 JailBanksters
JailBanksters's picture

I would of thought he'd be more concerned about a European-Style Lost Decade than a Japaneese Style, but that's me.

Awe Well, what you gonna do, find another country that doesn't want a Bailout and convince them they need a Bailout.

The really sad thing: I actually think Draghi reads ZH to get Ideas.

 

Tue, 06/03/2014 - 01:23 | 4819295 luckylongshot
luckylongshot's picture

The problem is too much debt, the symptom is economies weakening under the interest bill and the solution is cancelling all the debt. However since Draghi is owned by the banksters he will not apply the solution and so we have lost decades coming our way and articles like this that pretend there is another solution somewhere waiting to be found.

Tue, 06/03/2014 - 07:58 | 4819625 AdvancingTime
AdvancingTime's picture

Modern Monetary Theory often referred to as MMT to its many believers removes much of the risk ahead and guarantees that we will always be able to muddle forward. MMT also known as neochartalism is a economic theory that details the procedures and consequences of using government-issued tokens and our current units of fiat money.  Newly acquired tools like derivatives and currency swaps  allow us to print and  manipulate away problems.

While reading an article about the growth of debt in China's non-financial sector I was forced to reflect on how debt is effected by the interest rates. In Europe the ECB had to step in to halt the economic collapse of Spain, Italy and several other countries that were on the brink. What you pay in interest on debt does matter accept in the manipulated land of MMT. Have we been lulled into complacency by the extraordinary actions taken by central banks and governments over the last six years? This is a key question we must face. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/01/have-we-been-lulled-into-complace...

 

Tue, 06/03/2014 - 01:39 | 4819327 Bunders
Bunders's picture

Rummages around under couch cushions?

Tue, 06/03/2014 - 01:57 | 4819349 Spungo
Spungo's picture

There's still room for home growing specialized weed. Lots of people make their own beer and wine, myself included, but our stupid cunt government says it's illegal to sell that wine to anyone. It's also illegal to distill your own alcohol because it counts as tax evasion. There's probably a law against growing your own tobacco. You can buy peyote at Home Depot, but you'll be arrested if you extract it. I think it's also illegal to carry alcohol across state boarders, but I'm not sure about that. The government's ultimate goal of destroying all commerce and driving business out of the country is a stunning success.

Tue, 06/03/2014 - 02:51 | 4819406 Victor999
Victor999's picture

It is not bein gfixed because they don't want it fixed, except on their terms where the rich keep getting richer.  As long as these central banks keep pusing cheap money out to the banks instead of directly into the REAL economy, there will bed no fix.  Bankers don't use that money in the real economy - they use it to finance risky investments and cause property bubbles.  Only the rich gain from this.  Stocks do great, and real businesses fail.  The ability of banks to create money through debt should be removed - only then can we begin to make sense of this mess.

Tue, 06/03/2014 - 04:04 | 4819449 supermaxedout
supermaxedout's picture

The ECB's task is to safeguard the Euro currency, to keep it stable and to maintain its buying power. Besides that the new task of the ECB is to supervise the Euroland banking sector. But this is in principle the same job, because fraudulent banks in cooperation with foreign governments (UK/US) do have the will and the potential to destroy the Euro.  And only because of this the ECB is now also supervising the Euroland banking sector.

The ECB is in principle giving a shit if a bank goes bankrupt because thats not the business of the ECB. Its the business of the shareholders of the bank and of the people having money deposit in such a bank.  The ECB is also not responsible if a government is running out of money because it has lost its creditworthiness and lacks income. Thats the problem of this country. The ECB has only to take care that it does not affect the European money system in a way which is endangering the system.

Its not good when governments do take credit from banks, thats like additional taxes on the inhabitants of this country. Credit should only be taken in consideration when there is an extraordinary situation demanding it.

But to claim to have no money to pay for government employees is not something in this category. 

Tue, 06/03/2014 - 05:08 | 4819486 Notsobadwlad
Notsobadwlad's picture

What is WORSE than a Japanese style lost decade (which was not really lost because the Japanese consumer was fine). What is worse is what we are currently experiencing is STAGFLATION. We have a Japanese style lost decade with INFLATION piled on top of it so that the consumer is being raped at the same time that the economy is in decline.

Just because the criminal central planners say that it is good, does not make it good. In fact it should be a clue, because they are liars of great renown, to know that it is false.

Inflation does not increase GDP, just because the lying economist do not count the inflation.

THIS IS STAGFLATION.... AND INTENTIONAL.

Tue, 06/03/2014 - 07:52 | 4819617 AdvancingTime
AdvancingTime's picture

Never before has mankind diverted such a large percentage of wealth into intangible products or goods.  I contend this is the primary reason that inflation has not raised its ugly head or become a major economic issue. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply.

The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas. It is important to remember that debts can go unpaid and promises be left unfilled. Is this possible and if so where would that leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years.  More in the article below.

http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....

Tue, 06/03/2014 - 10:32 | 4819969 Debugas
Debugas's picture

imagine you own all the real assets and billions of people around you own nothing (very close to the real world where 1% own most of the planet)

they need your real assets but they can not pay for it

you could hire them to do some work fr you but you do not need that many of them

i can not understand where do you see real assets going up in prices here

Tue, 06/03/2014 - 05:28 | 4819493 MATA HAIRY
MATA HAIRY's picture

the corporations will do anything to avoid deflation of the assets they own and that they have a mortgage on.

 

But people are not buying the mortgages as much as before, and one reason for that is that they are afraid of another drop in housing prices and then being underwater on the mortgage.

 

The thing is that the whole 2008-2009 debacle was an opportunity for the corporations to exploit the taxpayers through the use of good old 'disaster capitalism.' What that meant was the use of the media to disseminate economics-terror that was used to manufacture consent for TARP, QE et al.  Exploitation through spread of fear through the media. Same thing they did after WTC 911. Disaster capitalism.

 

However there are now long lasting after-effects of that scare propaganda that was used to manufacture consent for the TARP/QE bailouts etc. Those after-effects are inhibiting home buying and so therefore the price of housing is not going to go back up all the way. At least the price of ordinary houses outside of the real costly metros areas like LA and SF and NYC are not going to go back up. People are going to apartments, at least a lot of them are.

 

Disinflation of assets. Time for another crisis? Will the people buy it again?

 

 

Tue, 06/03/2014 - 06:02 | 4819517 hejss
hejss's picture

Won´t Draghi wait and see what happens in Japan first?

Tue, 06/03/2014 - 06:38 | 4819543 TNTARG
TNTARG's picture

One can see Draghi's tears actually flowing...

/sarc

Tue, 06/03/2014 - 07:46 | 4819546 hejss
hejss's picture

Yes :)

Tue, 06/03/2014 - 06:46 | 4819550 Last of the Mid...
Last of the Middle Class's picture

Lost generation or more money. What do you honestly think will happen? This is the same decision all central banks and politicians with the Fed  have been making for quite a while now.

Tue, 06/03/2014 - 07:46 | 4819605 El Hosel
El Hosel's picture

Desperate to avoid reality, Draghi will further embrace the ponzi to avoid losing power.... For Moar years

Tue, 06/03/2014 - 07:48 | 4819611 AdvancingTime
AdvancingTime's picture

Years ago before the "Bernanke has all the answers" era, many of us criticized Japan for failing to own its problems. Many people thought Japan should face up to the mess it had created and do the right thing. Broadly accepted was the concept that only by letting its zombie banks and industries fail could Japan clean out the system and move forward. Instead the Government of Japan ran huge deficits and ran up massive debt.

While they claim otherwise, in many ways Bernanke and the Fed put America on a path that mirrors the same unsuccessful path taken by Japan. A path that avoids real reform and bails out the very people that caused many of our problems. They have upped the ante by setting the bailout and money printing machines on high and flooding America and the world with QE. By selling other central bankers on this solution we have taken the lead in an experiment that is losing traction. Real momentum seems to ebb shortly after each new wave of stimulus and another fix seems to constantly be needed. More on this subjecy in the article below.

http://brucewilds.blogspot.com/2013/11/we-are-on-path-to-lost-decades.ht...

Tue, 06/03/2014 - 08:44 | 4819707 RaceToTheBottom
RaceToTheBottom's picture

From a salary point of view, it has been a lost 40 years

Tue, 06/03/2014 - 19:28 | 4821554 MrFailSauce
MrFailSauce's picture

Too little too late.

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