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This Whole Recovery is Based on Lies and Deceptions...
The final and ultimate round of the Crisis that begin in 2008 will occur when faith is lost in the Central Banks.
The entire rally in stocks post-2009 has been due to Central Bank intervention of one kind or another. Whether it be by cutting interest rates, printing money, buying bonds, or promising to do more/ verbal intervention, the Fed and others have done everything they can to push stocks higher.
As a result, today, more than 90% of market price action is based on investors perceptions of what the Central Banks will do… NOT fundamentals. For instance, if bad economic data hits the tape, the market tends to rally because investors believe this will result in the Fed having to print more money.
Again, the primary driver of stocks is no longer fundamentals, but Central Bank intervention.
There are many problems with this, not the least of which is the fact that we now know that Central Bankers will openly LIE about what they’re doing. Consider the recent revelations concerning ECB President Mario Draghi’s claim that he will do “whatever it takes” to hold the EU together.
Geithner: [T]hings deteriorated again dramatically in the summer which ultimately led to him saying in August, these things I would never write, but he off-the-cuff – he was in London at a meeting with a bunch of hedge funds and bankers. He was troubled by how direct they were in Europe, because at that point all the hedge fund community thought that Europe was coming to an end. I remember him telling me [about] this afterwards, he was just, he was alarmed by that and decided to add to his remarks, and off-the-cuff basically made a bunch of statements like ‘we’ll do whatever it takes’. Ridiculous.
Interviewer: This was just impromptu?
Geithner: Totally impromptu…. I went to see Draghi and Draghi at that point, he had no plan. He had made this sort of naked statement of this stuff. But they stumbled into it.
http://blogs.ft.com/brusselsblog/2014/11/11/draghis-ecb-management-the-leaked-geithner-files/
Here is former Secretary of the Treasury, Timothy Geithner, stating openly that Mario Draghi had “no plan” and was simply bluffing when he claimed, “we’ll do whatever it takes.”
Draghi was not only being deceptive (he didn’t have a plan); he was actually lying in the sense that the ECB couldn’t “do whatever it takes.” The OMT policy he talked about creating is in fact illegal based on EU law. He couldn’t do anything then and he can’t now.
And yet, EU stocks have rallied hard, EU sovereign bond yields have fallen, and the world has proclaimed that the EU Crisis is “over”… all based on this lie.
If you think Draghi is somehow unique in this regard amongst Central Bankers, thinking again. Recently Bank of Japan Governor Haruhiko Kuroda increased the Bank of Japan’s QE program, not because it would benefit Japan’s economy, but because doing so would make his colleagues’ forecasts better match his own.
Put simply, the folks who are supposed to be holding the financial system together have been caught openly lying and spending money just to suit their own egos. The consequences of this have not yet been felt. But the seeds of the next crisis have already been sown in these revelations.
The next time stuff hits the fan, will the world be as trusting in Central Banker proclamations? Will we continue to believe these folks are omnipotent? Or will their phony promises accomplish nothing?
We’ll find out.
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And? News portion of this?
I can't believe I wasted time on this piece of crap article!! Phoenix takes a whole page to tell me that the financial elite in charge, make official statements before they have a plan..... Then Phoenix breathlessly re-quotes Timothy Geithner as his primary source.
Everyone (even sheeple) know that politicians, bankers, and their boss will say crap before they know what the hell they are talking about.....and using Geithner as a source for anything...(even the accidental truth)....never sits well.
If I have to get served up useless stuff like this.....at least offer 'clickbait' photos of lovely, semi-dressed women.
Not the central bank. The central computer. How many people have their jackets wiped so they can operate beyond the law? How many people are listed on the census, on the dole, on the ballot, who don't exist, but have complete dossiers? How did the US population grow so fast when the analysts said it was shrinking? How much news is theater staged to justify neofacist crimes? Computers lie all the time. Cybercrime is the battlefield. GIGO on a global scale. The Kevins detailed this for Leiberman and AGW in the 90s.
Its not only central banks. Entire global society is deliberately ignoring gravity law in many ways. Its becoming a "Dilbert" world everywere, what is no longer funny. But open your eyes, many people, a big part of society is choosing -in most of their everyday decisions- to maintain this unfair "Dilbert" status quo of stupidity and corruption .
David C, I have had the damned cursor pointed at the vote up arrow and when I select vote up it also adds a down arrow that I didn't even push. That happens to me a lot on this site. Like every other day! I'm not kidding and it sucks! I enjoy reading the comments as well as posting myself, but ZH has got to get that down arrow glitch fixed. It ain't fair, dammit!
You have a virus, get better software. No sarc/
What "whole recovery?"
It's not just the recovery that is based on lies and deceptions, it's the entire economy and social contract.
I up starred you. Shoot me over a copy of the ‘social contract’, please.
I need to know who signed me up for ‘Tard Carts, old lady knee replacements and intergenerational welfare for them while I get guilt trips for BKing unsecured debt all the while listening to GE brag about paying $1.00 in tax.
still looking for my copy as well.
wondering when I got signed up for the endless slaughter of short, brown skinned, desperately poor people thousands and thousands of miles away from me who are "a threat" to my freedom.
They don't want to be so far away you know, many are headed here to bring the freedumb of sharia right to you and yours. Can't wait to see Taylor Swift in a burka... I know it won't happen tomorrow but those brown skinned people have been at it since well, http://en.wikipedia.org/wiki/Battle_of_Vienna...
captain obvious
more of and less of please
Thanks for the infomercial. But I don't want you to save me.
Graham - why do you put the word recovery in your headline? There is no recovery.
I am not sure why anyone would have you manage their money. Considering the only sensible thing to do with money is to convert it to something that MIGHT have some value post collapse i.e. PM and some remote farmland with the gear required to farm it.
I have little doubt those making decisions are hanging on and hoping for the best. The markets are extended beyond beyond, all this comes at a time when the IMF is calling for more QE. It seems this might be a good time to review the reasons this is economically unsound and a bad idea. Remember markets are setting new record highs at the same time economies continue to struggle.
The policies of the last six years have yet to produce the desired and expected results promised, all this money has benefited Wall Street but not Main Street. As a consolation many economist, bankers, and those who have benefited greatly tell us we would be in far worse shape if we had not taken this course. More on the subject of how central bankers are in uncharted waters and clueless on how to proceed in the article below.
http://brucewilds.blogspot.com/2014/09/central-banks-and-imf-clueless-on-how.html
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I actually do have faith in the central banks. I think they will do what they can to prevent a global financial collapse of the current monetary system. They will allow anything that makes it look better if only for a few weeks. They will work with governments to make bad data look good. They will allow a few bankers to front run them for billions to prevent to value of trillions in paper wealth from evaporating.
I fully believe they will fail, completely.
I believe the current system is terminal and hopeless.
This event will see the loss of all paper wealth except for what can be salvaged from equities. Real property will still be there but the debt on it will vanish.
I believe someday soon I will wake up in a different world...nothin anyone can do to stop it either.
Financial FASCISM just got fashionably mainstreamed in the 20th Century; no biggy: Why US Cities Fell & New York Thrives Pt. I http://wp.me/p2kmGE-jm
R. Kelly - I Believe I Can Fly
https://www.youtube.com/watch?v=GIQn8pab8Vc
That is the best assesment of the current situation I have seen recently. The central banks have to try anything that will buy a few more weeks or months or days. That is all that they have. Because the day that the markets do not listen to, or react to, what the banks and the government say, it is Game Over. War is a major concern, but not the only one. This civilization has not seen a major collapse, certainly not since the advent of 'financialization' in the west. Between the all the exotic intruments on the market, and all the inflated egos running the markets and political entities, the outlook is decidedly bleak.
At what point will ZH followers admit this site just got it wrong? Let's say in 2020 the Dow is 40 or 50K and gold is $650 an ounce. Will ZH still be so defiant (if it even exists)?
Agreed - and Pheonix Capital is the worst offender. They have been predicting this crash for many years now...all during a once in a lifetime bull market. I admit, I was fooled for a while, but now I take a more balanced approach and my trading is much improved...
I fully agree. At some point the return on loaning money is simply not worth the risk! Why do you want to loan money if most likely you will never be repaid or repaid with something that is totally worthless? When this happens the only safe place to store wealth will be in "tangible assets" and the only lenders will be those who print the money that nobody wants.
It might soon become apparent the economic efficiency of credit is beginning to collapse and the additional money poured into the system coupled with lower rates can no longer drive the economy forward. When this happens we are at the end game. The collapse of credit can pose major problems such as what we saw when many sellers were forced to demand payment up front before shipping goods in 2008. More on this subject below.
http://brucewilds.blogspot.com/2014/06/the-economic-efficiency-of-credit-can.html
Financial Crisis "Round THREE" Survival Guide: Build a guillotine after round two.
An American, not US subject.
"Financial crisis me once, shame on you. Financial crisis me twice, shame on me."
When you have a printing press, no plan is necessary.
Do you trust a central banker?
In the UK Carney is stating that wages have outgrown the manipulated inflation fugures but the value that people feel they have to spend is crushed.
THe point is that realistic truth crushes central bankers words and repeated enough times just confirms the lie.
Lie enough times people revolt and it is a simple as that.
The game continues until people believe central bankers no more then the carnage begins.
Dude u r the last mohican
There will be a crash- but these bustards will do anything to avoid carnage
Timing is everything....
This crazy rigged market can continue its meltup for a while....
Everything is manipulated- currencies- metals - stocks- bonds
since 2009 markets have gone wild- usually after such a bull period we experience a sharp drop..
The madness continues...
I don't know how the hell ANYONE down voted you.
DavidC