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Are Central Bankers Losing The Plot: "The SNB Move Signals A Spectacular Loss Of Nerve"
Via ADM Investor Services' Marc Ostwald,
As we have reiterated very frequently over recent years, the biggest vulnerability in the post crisis environment was that central banks start to make policy errors, by taking activist and precipitous decisions. Thus following on from last year's error by Norges Bank (and noting that we would not call last week's SNB decision a mistake, despite the shockwaves that it caused), the Bank of Canada joins that policy error club.
What does not compute, in an eerie mirror image of the Norwegian central bank's rationale, is for the BoC to
- Slash headline CPI forecasts, while keeping core CPI forecasts around 2.0% (around target), and
- Tweak GDP forecast lower to 2.1% this year but upping the GDP forecast for 2016, and
- Still taking policy action
It signals a spectacular loss of nerve that central bankers should always try and eschew, above all when you have a country like Canada with the worst household debt levels in the developed world, and an overheated housing market.
The as expected cut in 2015 GDP forecast looks optimistic, when one considers that the energy sector accounts for 25% of business investment in GDP terms, and one might suggest that the GDP forecast should be closer to 1.0%, on the basis that there is likely to be a much broader fall-out from the energy sector "stall" (housing, transport, employment to name but a few).
As the evidence on this accumulates through the year, there appears to be considerable risk that the BoC's forecasts look foolish - primarily in GDP terms, but quite possibly in CPI terms too, if the CAD starts a slide to USD 1.30 and the BoC's disinflation problem evaporates. At which point memories of the very undistinguished period of Gordon Thiessen's stewardship of the BoC may come back to haunt it.
But in broader terms, this is symptomatic of the whole mirage of stability that developed world central banks have sort to foster in the post crisis era starting to unravel in a rather disorderly fashion... the ECB's task tomorrow looks ever more unenviable!
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Take off, eh.
No.. Central Bankers are losing their ASS now is moar like it!
I would say, lost the plot...
I smell panic
I'll be happy when they start losing their heads.
"you're my huckleberry"......or ......"the stress was more than he could bear"
Nah, they're loosing their focus and grip on reality. Years ago I'd suggested that we were going to face a global round robin beggar thy neighbor currency war akin to Europe of the 70's and here we are.
I just never thought it was going to devolve into Global Madness!
In this new world of interconnectedness, there are no winners or losers. Everybody is traveling the same fiat monetary path. There is no "fiat" escape.... until the Swiss went it alone, again.
So the Swissy (perhaps? and that's a big perhaps) and gold are the islands of refuge.
Might remind us all (nobody's spoken of it in a long time) Coinage Act of 1792, wherein the death penalty was offered as a solution for debasement of the coin of the realm. Hello, Fed, et al.
As Andrew Jackson said, "And I sincerely believe ... that banking establishments are more dangerous than standing armies"
When did central banks ever have a grip on reality?
When they realized they were just doing what they were told to do.
And then that is what they did.
If you're going to panic, panic first.
SNB FTW!
We have an election coming up in Canada therefore the economy MUST NOT stall. So the Bank rate was lowered. Not that it will matter. Mr. Harper is going suffer a world of hurt for promoting the oil thingy too much.
Its like one of those bad 60's movies where all the script writers were on acid....
"I got you now, you son of a bitch."
"You're a daisy if ya do."
"Your greatest strength eventually becomes your greatest weakness."
The things they owned ended up owning them.
Freedom's just another word for nothing left to lose.
when this ends......no-one wins......some survive
"Your greatest strength eventually becomes your greatest weakness."
The ability to sling bullshit at very high velocity?
>>> "... lost the plot ..."
... could this be the plot ? ...
... quick, Alladin, grab the lamp ...
... from the land beyond, beyond ... from the world past hope and fear ... I bid you Genie now appear ... :)
Yeah, I think that about covers it.
Living in Canada, I can tell you it's far worse than the media is telling us. Friends in oil and gas, as well as retail tell me there's massive layoffs occurring quietly.
The Harper govt is extremely controlling and will do anything to keep bad news from the public, especially in this, an election year.
Short Canada eh..
The housing market here is totally overpriced. As for the rest, haven't watch any Canadian news in at least 5 years, so don't know. What does annoy me is as soon as silver and gold started to go down, the exchange rate went to hell and the prices didn't change one bit.
It's a blessing and a curse all at the same time.......
I enjoy watching the news up here and not hearing all the time about the latest car jacking/kidnapping/murder/etc but when our tax dollars go to secret bank bailouts, now that I would have liked to know about.
I sure as funk hope the CBs are losing control of the broader economy. This shit train has been rolling for way tooooooo long.
https://www.youtube.com/watch?x-yt-ts=1421782837&x-yt-cl=84359240&featur...
My fault for the double post this time..
You sir, are an optimist. Bankers can still access hundreds of billions at near zero interest rates.
You know, because their "work" adds so much "value" to the real economy.
/s
"You know, because their "work" adds so much "value" to the real economy.
/s"
Bankstas arrogant self perception - 'we're doing god's work.'
Yes, and I, for one, think we need to send them on their way to God sooner, rather than later. Do the right thing, give them what they want.
The real role of the Bitcoin revolution.
Funding of Bankster "passage" vehicles.
time and time again - another fiat bitch slap to put us back in our place to "subserviance to fiat and faith". ecb is a printer of faith, welcome aboard and "whatever it takes", you goldman cockbit... in about 5 years just add 3 0's to all cb's fiat releases. 50 bilion/month,chump change you piker, same game as bankers siphone off millions and the rest filter to gov bonds to keep the plebs from revolt.
I like how ZH exposes the mainstream media & political propaganda, but FFS stop shouting "wolf!" all the time.
More scaremongering and you're losing credibility fast.
Can one really expect a rational policy from any central bank? Their #1 concern will always be maintaining the credit based money/fractional reserve banking scam no matter the cost to society at large.
pretty much sums it up right there.
But ~
- now that any semblance of 'sustainable debt levels' are well past the point of saturation.
- In addition to the fact that the cat seems to be out of the bag with regards to public knowledge of 'hockey stick' deficits.
- & that fraud & manipulation [which were formerly only in the realm of 'conspiracy theory'], have now become 'conspiracy fact'
Nothithstanding the ability to create another WAR [which appears to be more difficult than it has in the past, despite intense efforts to get something going]:
I believe we may have reached the point that the only thing left [for them] to do is to simply print up as much counterfeit money as possible & manipulate prices in a way for bankers to call in loans on infrastructure assets.
- It already happened with housing [but that was really a small thing]
- PM's may have already run the full course
- Now it's crude oil's turn
The great 'culling', it appears, has commenced. So the real question is how many 'parlor tricks' can they come up with in the process to distract the people long enough to loot the entire system?
Distracting the 'sheep' is the low hanging fruit at this stage in the game.
"simply print up as much counterfeit money as possible & manipulate prices in a way for bankers to call in loans on infrastructure assets"
Seems like that was the plan from the very beginning.
Unfortunately I was a product of the public school system, [so I had to incrementally learn this shit on my own, & the hard way].
Swim rats, swim!
€200billion/month or riot
the canadian banks are facing dropped revenues from the oil clients and ancillary service sector.
They are also facing a RE liquidity/credit crunch; as the average Joe in deflation times will have a problem renting or buying at current prices.
When the biggest rentier sector and the biggest 'spend to have a roof over your head' sector both end up like Thelma and Louise, you'll hear a lot of banks saying to CB : print, print please and at negative rates. Our clients have no liquidity.
I think Krugman will first be hailed as the universal Savior and then be Crucified for it.
We have seen that film before ! (Obama brigade to the rescue; we turn a page; what a page turner this is!)
Krugman got his Nobel...can we just get on with the crucifying part?
Let me be as clear as possible.
What central bankers don't want is for any other productive business to actually get the same deal that they get for all their "work".
Specifically, they do not want anyone else to be able to "create money out of thin air or have access to hundreds of billions at near zero interest rates.
Ask yourself; is/has the financial sector of the economy really been worth this privilege or the compensation that has been going there?
Seems to me that the world's bankers have forced everyone into a "let the majority eat cake" monetary experiment.
Get long guillotines motherfuckers, because I don't see how this gets "fixed" without retribution being paid.
There's a plot!? Ho Lee Fuk. I thought it was the herding cats fuster cluck.
The author of this article has made the mistake of believing that he has the same information that the BOC, SNB, ECB, and FED have.
Most ZHers are smart enough to assess that when an action seems to depart from the known numbers, that it is more likely that the known numbers are incorrect and not the action.
Then lose already. They just keep printing, driving economies down.
Yea we keep hearing how the Central Banksters are about to lose this or that....but all I see is them gaining hand over fist daily though....swimming in huge piles of wealth to make Donald Ducks uncle feel like a pauper.
All along the joke has been that printing money doesn't actually add value. People making and doing things adds value. The medicine was wrong for the disease. If anything, monetary policy stimulus has inflated asset prices and REDUCED inflation by starving people of spendable income and creating deflationary oversupply (witness oil, fiber optic cable in the 90s, real estate...).
value derives from utility, so saying something is worth x amonut more of fancy printed paper begs the question of value....or value derives from the effort made to produce a product where money invested is just another part of the inputs.
But it's good for stawks tho! And when you've got stawks up, clearly nothing else matters!
They's gonna git them pensions no matter what it takes. Might as well get ready to just let it all go.
http://www.nakedcapitalism.com/2015/01/michael-hudson-war-pensions-us-bu...
It signals a spectacular loss of nerve that central bankers should always try and eschew,
What an idiotic statement.
The SNB already had 500 billion Euros and they would have to buy a lot more on ECB QE. 500 billion Euros was already more than 75% of Swiss GDP. When the Euro crashed, it fell 39% at one point and the SNB had lost more than 25% of Swiss GDP in an hour. It was an idiotic risk to take. All those who think that the Swiss bank should have continued to buy Euros are insane gamblers. If the SNB had 1 trillion Euros and such a crash had occurred, the losses would have been much greater and the Swiss economy may have been permanently damaged. The Central Banksters are gambling that they can control markets. That is a very poor gamble in the long run. So it is best to limit your risk and losses as the SNB has wisely done.
Spot on, JO, spot on. 1 green up arrow for you, but wish I could give you a hundred.....
(and noting that we would not call last week's SNB decision a mistake, despite the shockwaves that it caused) He said that.
It is called doing their job and not looking after banksters.
The SNB didn't want to bankrupt the Swiss.
Canada's situation has deteriorated with low crude prices and interest rates have been lowered.
cartels have a 100% failure rate even if they are successful for awhile. cbs are included. snb was just the first(if you don't count japan's experiment with the yellowback yen) to break ranks. they have created desperation amonst the other cbs, the fed specifically. this mornings announcement of semi-massive euro qe may the last thing the eurozone agrees upon collectively as they are the other cartel in this mix.
It signals a spectacular loss of nerve that central bankers should always try and eschew,
NO, it shows that they had the sense to walk away from this "Emperor's New Clothes" madness before "the whole Shithouse goes up in flames" Jim Morrison
Yeah, and they'll live to regret it. Or they'll regret it, when the big boys no longer allow them to live.
It would be pretty fkd up if the SNB repegged at a different rate a little while after the QE announcement.
Uh,Gold?
This is turning into a one big Looney Tunes® cartoon.
What traders are currently observing is exactly what happens when you put unelected pedofile autocrats at the helm of global financial policy. The very uncertainty and lack of transparency that C/B's are exhibiting is creating the very conditions that they're supposedly tasked to avoid.
We have a bunch of juvenile delinquents running the show.
That reminds me of a joke...
An elderly woman walked into the Royal Bank of Canada one morning with a purse full of money. She wanted to open a savings account and insisted on talking to the president of the Bank because, she said, she had a lot of money.
After many lengthy discussions (after all, the client is always right) an employee took the elderly woman to the president's office.
The president of the Bank asked her how much she wanted to deposit. She placed her purse on his desk and replied, '$165,000'. The president was curious and asked her how she had been able to save so much money . The elderly woman replied that she made bets.
The president was surprised and asked, 'What kind of bets?'
The elderly woman replied, 'Well, I bet you
$25,000 that your testicles are square.'
The president started to laugh and told the woman that it was impossible to win a bet like that.
The woman never batted an eye. She just looked at the president and said, 'Would you like to take my bet?'
'Certainly', replied the president. 'I bet you $25,000 that my testicles are not square.'
'Done', the elderly woman answered. 'But given the amount of money involved, if you don't mind I would like to come back at 10 ' clock tomorrow morning with my lawyer as a witness.' 'No problem', said the president of the Bank confidently.
That night, the president became very nervous about the bet and spent a long time in front of the mirror examining his testicles, turning them this way and that, checking them over again and again until he was positive that no one could consider his testicles as square and reassuring himself that
There was no way he could lose the bet.
The next morning at exactly 10 o'clock the elderly woman arrived at the president's office with her lawyer and acknowledged the $25,000 bet made the day before that the president's testicles were square.
The president confirmed that the bet was the same as the one made the day before. Then the elderly woman asked him to drop his pants etc. So that she and her lawyer could see clearly.
The president was happy to oblige.
The elderly woman came closer so she could see better and asked the president if she could touch them.. 'Of course', said the president. 'Given the amount of money involved, you should be 100% sure.'
The elderly woman did so with a little smile. Suddenly the president noticed that the lawyer was banging his head against the wall. He asked the elderly woman why he was doing that and she replied, 'Oh, it's probably because I bet him $100,000 that around 10 o'clock in the morning I would be holding the balls of the President of the Royal Bank of Canada !'
Its not only a joke it's dire reality in the derivatives market.
my vote is for las vegas dave for fed governor
No Fed = No IRS
No Fed Governor.
Central banks should not lose their nerve? Sure, I agree, becuase central banks shouldn't fucking exist in the first place. If there is no central bank, there is no nerve to be lost.
Poloz and Oliver both lost their nerve over the last few days because they both left their balls in a Wall Street hooker's purse over the holiday season.
Let's call them what they are ' Central Banks are a Mafioso CARTEL that hold a GUN, no sorry a DRONE to the WORLD's HEAD '
It's a small club , getting smaller by the day and youz ain't in it. We'll punk izz you in or izz you ain't?
With Halliburton, Baker Hughes and assorted riff raff pulling resources from emerging countries in response to fluctuating oil prices, maybe demand to a lesser extent IT creates opportunities for NEW RELATIONSHIPS ( a good thing in the healing process of capitalism in it's purest form ) for a nation.
NO investor ( financial or technical ) will invest in a country when the Captured Government is at the MERCY of the CARTEL's CHEQUE BOOK ( World Bank etc etc ).
The puppet government of say Nigeria who came about with the blessing of Vichy DC on guaranteeing a NO FLY ZONE OVER LIBYA is a GOOD EXAMPLE of a DRONE to YOUR HEAD MY FRIENDS.
Something big is clearly going on.
BoC lowering overnight lending rate by 25 basis points is a major move that will further weaken the Canadian dollar. The BoC appears to be joining other countries (plus Euro) in depeciating its currency against the US$.
The yield on US treasuries is dropping, which forced the BoC to drop its key rate or face a rising currency as global investors chase yield. Lending credence to the idea that the BoC wants a weaker currency.
The other major currency event that ocurred is the SNB move last week. Canada must have briefed the Fed and other central banks of its plans, and probably got the go-ahead. I think the SNB acted unilaterally.
Is this the prelude to a much more significant event related to the US$? Perhaps the dropping yeild on US treasuries (and rising price) is blowing up interest rate derivatives, which have all been betting on rising rates. Oil and energy derivatives have already gone nuclear. The carnage from oil/energy, currencies and now interest rates has got to be huge. Maybe the bubble has actually burst.
Find a safe haven.
“exactly what happens when you put unelected pedophile autocrats at the helm of global financial policy.”
Do you realize the absolute truth of this arrangement?
Twenty-five years ago, I served as a trustee for a legal defense fund for a man and wife who had been sheltering a mother and four children (ages 3-11) from a molesting father, uncles, and many other strangers.
While serving in this capacity, I collected evidence from government sources that fairly-well documented that governments at all levels (in SE US) had been captured by a ring of pedophiles; you know, the kind that engage in snuff films and ritual murder. Agencies that had been so captured included the IRS, FBI, local police, state prosecutorial offices, federal and state courts, local media and probably more.
So, if you want government-sourced proof that the system is run by pedophiles – and I do mean REAL pedophiles – look no further.
This was one of several reasons why the government (IRS and Department of Justice) took measures to silence me.
Now, what do you get when real pedophiles capture control of the Federal Reserve?
I would say you get utter destruction of the dollar, the American economy and, since the dollar is the reserve currency of 90% of the world’s banking systems (by volume), you also get destruction on a planet-wide scale.
Actually, it’s already happened; they just haven’t issued well-phrased press releases yet; but rather, press releases that only hint at barely disguised panic.
Pedophiles are sick people . THat said, is it ok to be a dirty old man?
Probably, old men are famous for having about 2%-5% of the sexual hormones they had as teenagers.
Becoming increasingly clear that there are closely organized pedophile rings at the very pinnacle of power in the Western world.
Canada is on the hook for 600 billion in mortgage insurance, not our banks.
It is in their interest to prevent a housing crash that results in jingle mail.
Delay is all they have, and hope of better days.
Going from 1% to .75% will not provide much delay for Canada. All the arrows are spent, and the levers are pulled, nothing left now but to take cover before the implosion.
Let me see, the BoC drops interest rates .25% and
the CAD$ drops 3 cents... OK... so why did gold
drop(!?!) ... along with virtually every other tradeable
currency???
Why do I smell a margin call on an over inflated US$ ???
"so why did gold drop(!?!)"
Simple. The market is rigged.
Here in Canada we have been hearing for years that we should be worried about rising interest rates. That the central bank was going to start raising rates so lock in your mortgage. Well if you live in Vancouver, Toronto, Calgary etc you know for sure that if interest rates go up it will not be because our central bank is tightening. Why? because normal interest rates would ensure about a 50% homeless rate in these cities. Nobody with a mortgage could afford the payments.
Canada is in the same boat as every other western country in the world (and most of the eastern ones as well) We are there maybe for different reasons but still there. We cannot afford higher rates. We cannot stop printing. So we won't see higher rates and we won't stop printing. The sooner that people realize that and buy silver, gold, real estate, farm land, etc etc the better off we will be.
SNB knows that he who panics first, panics best. What look like large losses now, will look like tiny losses in comparison to what is to come.
there goes the CB franchaise system if the Swiss won't take one for the team; so I'm a little surprised the Swiss haven't had a terrorists attack.... yet. The Canucks have a federal election this October, and TPTB in CB Cartel land like the current CDN Nazi loving group they have so the word gets passed to the BoC to do something for the cause. Either that or Canada has a "September Surprise" if the economy and polling doesn't look good for the current proto fascists forming CDN govt
The only stability the central banksters promote is... a stable flow of wealth from everyone else to themselves and their cronies.
This is currency war. No CB is losing its nerves. Only muppets still stand in the battle fields listening to Spins from thie fab Currency Advisors.