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Mario Draghi Reveals Biggest. Hockeystick. Ever!
Back in December when Mario Draghi revealed the latest ECB staff inflation forecast, when oil was already plunging, the ECB slashed its 2015 inflation forecast from 1.1% to 0.7%, while reducing the 2016 HICP inflation estimate modestly from 1.4% to 1.3%. Moments ago, during the ECB press conference, Draghi revealed the latest set of staff forecasts. They were, to put it mildly, bullish.
First, here is the GDP forecast:
- 2015 GDP is now seen at 1.5%, vs 1.0% previously
- 2016 GDP is now seen at 1.9% vs 1.5% previously
- 2017 GDP - a new data point - is now seen at 2.1%
Good luck with all that, especially in a world in which China - the Eurozone's most important trading partner - is now openly warning that 2015 will be worse than 2014, and with a Grexit now lurking just around every corner, an outcome which would send Europe right back into a depression, there is zero chance the ECB hits these latest revised forecasts.
But where the fun really begins with the ECB projections is when it comes to inflation. Not surprisingly, the trend of short-term deflation expectations continues to accelerate, and that already slashed 2015 inflation forecast which was 0.7% in December has been bombed into the stone age as of March, down to precisely 0.0% (a number which will with 100% assurance end up negative by year end). The reason for the collapse? Plunging Oil - the same plunging oil that was perfectly obvious to the ECB back in December when it revised its forecasts lower once again.
And the punchline: the ECB's 2016 forecast. Because while the ECB slashed its 2015 inflation projection to 1 decimal point away from outright deflation, it boosted its 2016 inflation forecast from 1.3% to 1.5%. Why? Because Draghi hopes that oil prices will finally rebound. In other words, the head of the ECB is betting the farm, and QE, on Saudi Arabia succeeding to crash the US shale industry over the next 9 months, which is ironic, because the same shale industry can continue to keep itself funded despite its record negative cash flow, and avoid default and liquidation, precisely due to Draghi's QE, and scramble for yield... even if it means buying 3rd lien bonds offered by Ca/CC rated shale drillers who won't be able to make even one payment!
Call it the biggest circle jerk in history.
But before that, here also, thanks to Draghi, is the biggest inflationary hockeystick in history, as European inflation, magically, is now expected to soar from 0.0% to 1.5%!
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Yup. Straight up from here.
So, should we laugh or cry now?
Just more nonsense from the "perception is reality" crowd. So, cry.
Ok circle jerk.
Sounds more like a threat than a forecast.
Buy Ca/CC rated shale drillers with both hands and feet. Maximum leverage.
Got it.
You see that all the time actually, forecasters and prognosticators of all types regularly predict a cusp in their curve at exactly TODAY with a new trendline emerging miraculously from this day forward. It's hilarious how often this happens. From oil consumption, to jobless numbers to crime rates.
"Tomorrow, tomorrow, I luv ya, tomorrow, you're only a day away"
- Annie
It's even more hilarious that anyone pays attention to these economic 'gurus'.
Laugh if you are holding physical pm's. Cry if you aren't.
Not arguing against holding some precious metals, but laughing implies having some physical will somehow completely insulate you from this madness. I don't care how high your gold/silver pile stacks, no one is safe from the damage of Central Bank fiat wars. As for the ECB, I'm sure they'll get that inflation up. But it'll just be confined to food and energy...
no one is safe from the damage of Central Bank fiat wars.
Correct sir. Looting and destroying are all they know how to do. And the destroying is about to get ramped up, all over the world, to cover their asses.
Crown Royal. Then let the booze decide.
Thinking the Global Warming stick was more impressive. But this one is also a colossal crock of simmer'n cow crap.
Fiat Lux! I mean, Fiat Inflation!
rainbow stew with a uranium spoon bitchez
For fuck's sake...
Sorry, but that's what it makes me feel.
Davidc
I wish they would hire John Cleese to make their anouncements. Then I might believe it.
Baghdad Bob should be made official spokesman for all the central banks.
Seriously have you considered a career in comedy - you are very good at it!
Oh, it would make it so much more entertaining, too...
It's just all a fantasy now
When I was a kid we called it Shell Oil .... now, it's called Shale ? Damned Ebonix is ruining our language !
Mario looked a bit beaten up in his press conference. Normally he's Mr Smooth/Cool.
Looks like it's all getting to him, he knows all the CBs are effecticly caught in a trap but nobody knows when the jaws will clamp shut. Could be tomorrow, could be this time next year, whatever the case the trap is there and it's very real.
Agreed. Even way up in the ivory tower they have to be hearing the footsteps coming up behind them.
Nah,TPTB just think it's room service coming with the champagne and strawberries. They are all fucking clueless.
The Euro is dropping so all those Chinese imports are more expensive..equals inflation baby...
the only reason there is not negative GDP (contraction) is central banks keep bidding markets and government data keeps pumping fraud
#FUCKYOUYELLEN
Euro just dropped to US$1.1013 from 1.39 a year ago.
Great those snobs have been way too expensive for a long time.
Doesn't Gold-Man (sic) Sachs own the trademark on the hockey stick graph, were royalties paid ? /sarc.
Hooray for adults and rational thinking.
When, and I mean WHEN (as it is inevitable), this bullshit is over: these CB motherfuckers better be building their secure compounds on the fucking moon. 'Cos there's nowhere on earth they'll be able to call safe once the secret about what they've really done is out.
If there's no food left in the world, I'll start by eating the fucking bankers.
What moron doesn't get it. ZERO rates cause deflation....not prevent it!
Yup, bcs economic deflation and monetary inflation are both occurring at the same time.
There are also other Components:
-
Wages are Deflating,
Labor Force is Inflating,
Monetary Policy is Inflating,
Fiscal Policy is Inflating,
Welfare both Corporate & Social are Inflating,
Median Household Wealth is deflating,
Median Retirement Savings are Deflating,
MIC Spending is Inflating after adjusting for the end of Iraqi War,
Federal Police Powers are Inflating,
State & County Powers are deflating,
and looks like Local funding ability is Deflating as mixed financing becomes the norm and VICHY DC & VICHY Wall Street assume greater Roles in Financing.
Draghi is the biggest "regulatory capture" (don't you love it when they create cute names to describe criminal activity..."high frequency trading", "algorithm trading", "quantitative easing"...) in the history of banksters...or at least since, Dudley (and certainly king Paulson before him).
oh to be goldman in the sachs
Yep. I admire the Americans, nobody is better than them in creating cute words and phrases with the English language to camoflage the truth.
Obvioulsy the big one recently is torture so it become enhanced interrigation techniques. They'll then camogflage that to become EIT.
We didn't invent the English language, but we perfected it's use in mendacious, deceitful, perfidious obfuscation. No, wait, we didn't invent those words either.
We misremembered some stuff and then, naturally, misreported it. We regret any confusion (which is not to be confused with being sorry).
You're damded right the Americans perfected the perversion of some old queen's inglish.
Clinton even told you people that is means just whatever the hell we say it does on any given day we decide to say so.
Quit acting like you don't understand what we say when we say so.
Don't make me make my government come over there and help you...
you want growth...CRUSH THE CROOKED BANKS. Let bankers doing banking. Let people do spending. Giving Blackstone unlimited free money to become the countries biggest slum lord isn't going to cure the countries ills!
They are going to need a goalie to make the biggest stick save ever.
am i the only one who is having a hard time looking at market data and seeing manipulation everywhere...like the DAX miraculously recovering and exploding to highs of days based on some knife catching activity from whoever is not concerned about risk or losses...who could that be?
Are you honestly expecting the criminals (eager to get each and every cent of it's customers) to provide a honest environment?
LMAO.
Fact is they have almost no losing days in a year - they define the rules (this way and that way) - while 90-95% of traders over the long run (!!!) are losing money.
And as in the meantime almost every CB of this world is also in the trading business - of course with plenty of inside knowledge - what do you expect????
Only dumb sheeple continue to play in a pool where they are just food and fucked 24 x 5 x 52 anymore.
To stop trading is just a loss for trading junkies on trading viagra - for whatever or plenty of reasons.
For the rest (sane poeple) it is a step back - and two or more steps forward.
Start trading with real things - and/or start producing something useful.
And let those parasites destroying and fucking themselfs.
No cent anymore for those criminals!
Instead all cents for a honest life with a honest cash flow.
LOL, banksters. The unlimited QE will just make it tougher for citizens to eek out a living.
Eventually you get riots and a toppling of the governments.
As PartysOver says, paraphrasing, that the Draghi smoke we see ain't fire, it's a steaming pile of cow shit.
It's said that the cream comes to the top, but in Draghi's case, shit floats too.
"Gold is like Red Vines .... no significant food value .... but, somehow, strangely satisfying ?" Monedas 1929 Comedy Jihad World Tour
Can´t wait for my Dragi bux to come in the mail so I can go out, do my part, and buy buy buy! What was that? No, I´m not an EU government. No, I´m not a bank! Fuck no, I´m not a club member! Waddaya mean I´m not getting any of the loot? Your going to devalue my hard earned euros with this BS plan and I´m getting nothing?!? But I´m a socialist! Give me more socialism!!
Interesting Deflation Play...Fairfax Financial has $100 Billion in Deflation Puts, approx. 50% US (CPURNSA strike price 232) and 50% Euro Area (CPXTEMU strike 111).
I used to 'expect" a lot of things.
Thank God that delusion has been lifted.
But Draghi can I get my 7 year motor loan to buy moar stokkkks????? sure thats sure to bring inflation right up
Derivatives cause the opposite of what you expect to occur to happen.. until they blow up.
I think people on ZH keep forgetting that when they say WTF is going on... c/h/l
Roger that. No matter how good the set-up, fundamentals, and technicals, once everybody and their cousin is long or short, the market is forced the other way and they get creamed... These "markets" have become a complete joke... trade against a CB that can ALWAYS double down their bet, and along with them the TBTFs that know their every move...
So.......QE is the new VIAGRA? Gonna get me some!
orange: penis size by own estimation
blue: actual penis size