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AXA Investment Managaer Explains Why The ECB's QE Has Already Failed Using "Widget Makers"

Tyler Durden's picture




 

According to a recent ranking, French AXA is the largest insurance company in Europe ranked by Assets, and one of the top ten global financial services firms by revenues. Whether or not it is, is irrelevant. What matters is what Nick Hayes, U.K. head of fixed income active management, at AXA Investment Managers said in interview earlier today, in which he explained, quice succinctly, why Q€ will be a total failure.

As quoted by Bloomberg, he said that "AXA Investment Managers doesn’t plan on selling much of its assets to ECB under QE, given its investment mandates for specific holdings and a lack of opportunities to put cash received to work."

"People say, 'Sell government bonds and lend money to widget manufacturers.’ It doesn’t really work like that." Hayes says, adding that "Low yields don’t necessarily mean more lending to the real economy; time and confidence are key elements and last 6 years have shown QE can’t control those."

Hayes went on: "AXA IM might lighten up on some holdings "at the margin," such as peripheral or core govt bonds. It has already pared an overweight position in peripheral govt bonds in recent month."The reason being that "yield levels don’t justify the position as much as before, as bonds are nearly fully valued, even as economics are still improving."

His conclusion: "It’s difficult to see a huge amount of money being made out of the peripherals trade from here on.” Or, as many are discovering, a huge amount of money is now being lost on peripherals, starting with Greece and soon all the other ones, and mean reversion finally kicks in with a vengeance.

In short: it hasn't even started and QE is already a complete failure.

And now, back to the Danish central bank threatening with castration anyone who dares to save money inside the mattress.

 

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Thu, 01/29/2015 - 11:57 | 5720106 buzzsaw99
buzzsaw99's picture

lulz. teaching econ 101 to central bankers like they were a bunch of retards. oh wait.

 

let me explain to hayes how central bankers think. qe = asset bubble, which means that bill gates can afford a new flat screen, which in turn helps the economy. or something like that.

Thu, 01/29/2015 - 11:57 | 5720112 nuubee
nuubee's picture

Flat screen? He can afford to make himself a new set of eyes.

Thu, 01/29/2015 - 11:58 | 5720121 buzzsaw99
buzzsaw99's picture

/sarc

Thu, 01/29/2015 - 12:05 | 5720149 Beam Me Up Scotty
Beam Me Up Scotty's picture

To many takers, not enough makers.

Thu, 01/29/2015 - 13:13 | 5720532 NotApplicable
NotApplicable's picture

Can a brother spare a widget?

Thu, 01/29/2015 - 12:08 | 5720159 TeethVillage88s
TeethVillage88s's picture

" It doesn’t really work like that." Hayes says, adding that "Low yields don’t necessarily mean more lending to the real economy; time and confidence are key elements and last 6 years have shown QE can’t control those."

- I think he means, I'd rather have a bottle in front of me than a Frontal Lobotomy.

Thu, 01/29/2015 - 12:07 | 5720161 Oldballplayer
Oldballplayer's picture

That is both funny and scary at the same time. 

I uptick you twice in reality, once online because I am limited.

Thu, 01/29/2015 - 11:58 | 5720120 Newsboy
Newsboy's picture

Yeah, it doesn't work as advertised, but it saves the banks from what's coming, so all that's needed is a new sales pitch, one that can't be decisively disproven before the next crash.

Thu, 01/29/2015 - 12:04 | 5720143 TeethVillage88s
TeethVillage88s's picture

For 6 Years these bastards have been slapping my wife & kids calling them "Whores" and trying to butt F**K me in the Ass.

- How much more of this do we have to put up with
- Financial Rape is no Longer Permissible
- US Executive now might be a Derogative Term
- US Public Officials are Executives of some Royal Class
- US Wall Street Bankers are Baby Killers

Hey, I guess the other end of the Pitch Fork can be lubed up can't it.

Please send your $5 check or money order donation marked as "Donation" to:

Himlers Catalog Inc
33 Masonic Circle
Hollywood, CA 60609

Thu, 01/29/2015 - 13:16 | 5720544 NotApplicable
NotApplicable's picture

Luckily for them, there's nothing to prove or disprove in the land of politicized finance, as it's all appeal to emotion.

Thu, 01/29/2015 - 11:57 | 5720108 NoWayJose
NoWayJose's picture

The biggest mistake QE people make is to assume that a bank wants to make a loan to a company at 2% interest.  The banks do not want to do that -- it is too risky for them, and they were bashed in 2007-2009 for having too many risky loans.  If rates rise, that 2% loan will be undewater for the bank!

Thu, 01/29/2015 - 12:01 | 5720126 Cangaroo.TNT
Cangaroo.TNT's picture

No kidding.  At 8% a bank can "afford" more NPL's than they can at 1%.

Thu, 01/29/2015 - 12:07 | 5720157 kowalli
kowalli's picture

LOL, You are really believe that central banks care about real economy. Central banks care about only stake holders. They don't thinking about loans at 2% interest and common people. PERIOD

Thu, 01/29/2015 - 11:57 | 5720111 Cangaroo.TNT
Cangaroo.TNT's picture

From now on I think Tyler need to use "In shart" in lieu of "In short".  I think that was one of his most memorable typos.  Right up there with "shitgum."

Thu, 01/29/2015 - 13:01 | 5720457 NotApplicable
NotApplicable's picture

I think that sharting is how you load the shitgum.

Thu, 01/29/2015 - 11:57 | 5720115 Cognitive Dissonance
Cognitive Dissonance's picture

I'm sensing a growing loss of confidence by the big boys in central banker magic.

Thu, 01/29/2015 - 11:59 | 5720125 BandGap
BandGap's picture

They know the emporer is naked, but some of them still want a cut.

Is it me or are some of these people now coming forward to state the obvious?

Thu, 01/29/2015 - 13:03 | 5720391 RaceToTheBottom
RaceToTheBottom's picture

Not only is the emperor naked, but in serious need of some Beano.

 

Thu, 01/29/2015 - 13:07 | 5720488 NotApplicable
NotApplicable's picture

Oh, some of them most definitely are. Like any 'good' politician, they change their tune as the times change, so they can later claim to have seen it coming, rather than admitting they're just the latest to hop aboard the bandwagon.

Look at Greenspan, and yesterday, Mervyn King, who are now talking about how central banking is failing. All without mentioning their own part in it, of course.

You'll know that the final chapter has arrived when even Liesman and Krugman rearrange their lies as well.

Thu, 01/29/2015 - 12:00 | 5720136 Bill of Rights
Bill of Rights's picture

My lots of truths coming out today....someone is scared shitless.

Thu, 01/29/2015 - 13:09 | 5720496 NotApplicable
NotApplicable's picture

At some point the charade/facade becomes too expensive to maintain, so it is discarded, being of no further value. Whether that's due to fear or inside knowledge? Only time will tell.

It sure seems a lot like Sept. 10th lately, though.

Thu, 01/29/2015 - 12:02 | 5720145 Dr. Engali
Dr. Engali's picture

He who prints first prints best. Mario has been dragging his feet so long that everybody front ran him in the proccess of talking about it. Now he doesn't get to see the benefit of rising asset prices. 

Thu, 01/29/2015 - 12:06 | 5720160 Bill of Rights
Bill of Rights's picture

Bottom line all these Global trillions created out of thin air, and only the chosen few are or have reaped the benefits. It doesn't take much to make the plebs happy, but when all they do is continue to take from the plebs in the form of higher taxes or what have you and give nothing back well its time to burn the fucker to the ground.

 

Thu, 01/29/2015 - 12:10 | 5720172 williambanzai7
williambanzai7's picture

Stay away from nail guns

Thu, 01/29/2015 - 12:13 | 5720200 Sanity Bear
Sanity Bear's picture

frontrunning is dangerous sport

Thu, 01/29/2015 - 12:32 | 5720308 TeethVillage88s
TeethVillage88s's picture

And in the news today:

- 'Unexplained' banker deaths continue...
http://www.americanthinker.com/blog/2015/01/who_is_killing_the_great_ban...

- EU plans tracking computers for every car...
- Swiss bank on 'safe haven' label to become world's data vault...
- Snowden files show Canada spy agency tracks millions of downloads daily...
- Japan, 90% of hotel run by robots... Droids provide porter service, room cleaning, front desk help...

- Iran Targets Netanyahu Children for Assassination...
- Left Field? MSNBC Reporter: 'Racist' Chris Kyle Went on 'Killing Sprees' in Iraq...

- California, Water company tells town black, smelly water fine to drink...

- Up to 30 million exempted from Obamcare penalty tax...

- Rand Paul: I'd shoot a drone out of the sky...
- Re-introduces 'Audit the Fed' bill...

Thu, 01/29/2015 - 13:09 | 5720513 NotApplicable
NotApplicable's picture

Those Californicates oughta be drinking Brawndo anyways.

Thu, 01/29/2015 - 12:11 | 5720182 WezTheJuic
WezTheJuic's picture

QE. Created and designed to only help those who created QE.  (And many other forms)

 

Well, is Finland is going to do anything.  Maybe they should truly factor the people of Finland into that equation.  The results would just be better.

 

Pens,

Thu, 01/29/2015 - 12:14 | 5720194 all-priced-in
all-priced-in's picture

So when QE does officially fail then what?

 

What is the next step?

 

Confiscation is my guess -

 

Call it a one time wealth tax - or all your 401K savings must be invested in government bonds -

 

The result will be what is yours is now mine(government).

 

 

Thu, 01/29/2015 - 12:47 | 5720385 dearth vader
dearth vader's picture

Of course. Remember Obama's MyRA? What was (supposed to be) yours will be mine.

Thu, 01/29/2015 - 13:11 | 5720523 NotApplicable
NotApplicable's picture

Next step is war. Which leads to the confiscations as it is "your patriotic duty."

They just need a YouTube vid of Vlad eating some babies while setting kittens on fire.

Thu, 01/29/2015 - 12:19 | 5720225 capltd
capltd's picture

It's like lowering corporate taxes creates jobs.  What CEO in their right mind would hire new workers he doesn't need using the tax cut instead of giving themself a big bonus?  Yet the corporate media controlled by the CEOs keep telling us tax cuts create jobs.  Humm I wonder why?

Thu, 01/29/2015 - 12:19 | 5720229 SpanishInquisition
SpanishInquisition's picture

Wait until the eurocrats do what the UScrats did to S&P for daring to speak out of turn.

Thu, 01/29/2015 - 13:55 | 5720826 Jack Burton
Jack Burton's picture

At this point, lending more money to manufactuers and other service business, aimed at the consumer in Europe, is pushing on a string. Business borrowing to expand creates jobs, it also creates bankrupt business  if there is not an employed consumer base making a middle class income.  Subtract these middle class income consumers via job loss, pay cuts, out sourcing, race to the bottom wage contracts, downward wage pressure via mass immigration, loss of employee bargaining power, death of the labor union, etc. etc.

How does QE bring about an economic recovery without a well paid, large consumer base. As base business has sought to destroy at every trun by it's race to the bottom, and all income to the top business models.

No sane business person in Italy, France or Greece will lever up to expand into a high unempoyment, dropping wage environment.

QE is another bank resuce, and another wealth transfer mechanism from bottom to the top. Just look at the USA's QE outcome.

Thu, 01/29/2015 - 15:00 | 5721206 monad
monad's picture

It hasn't failed. Its an enormous theft dressed up as a social welfare. So far its executing perfectly. Except for you meddling kids... 

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