UBS Chairman Warns Central Bank Intervention Is Forcing Investors "To Make Bad Choices With Their Money"

Tyler Durden's picture

With the endless jawboning from officialdom that 'everything is awesome' (or about to be) in a desperate attempt to keep the status quo fumbling along, it is once again refreshing when an ex-insider 'fesses up that, in fact, nothing is awesome and it's a total shitshow below the surface.

UBS Chairman Axel Weber is a former policymaker at The ECB and was the president of Germany's Bundesbank.

Speaking on the sidelines of ther annual meetings of the IMF and World Bank this weekend, CNBC reports Weber warning...that monetary intervention is causing international spillovers and major disturbances in global markets.

"They (central banks) have taken on massive interventions in the market, you could almost say that central banks are now the central counterparties in many markets. They are the ultimate buyer,"

 

"Investors have been driven into investments where they have very little capability for dealing with what is on their plate and I think that is a sure reminder of where we were in a different asset class in 2007," he said.

 

"So I think the central bankers need to be very careful that they do not continue to produce disturbances in the markets, which they acknowledge - it's a known side effect - but the perception that the underlying impact of monetary policy outweighs the potential side effect in my view is starting to be wrong," he added.

 

Since the global financial crash of 2008, central bank policy has focused on buying up bonds in large quantities and cutting interest rates to record lows. The Federal Reserve has since looked to unwind its own policy which focused on the Treasury market and the yield curve, but the Bank of Japan and the ECB's large-scale bond-buying programs continue.

 

"I don't think a single trader can tell you what the appropriate price of an asset he buys is, if you take out all this central bank intervention," Weber warned, adding that it often meant investors were making bad choices with where to put their money.

Still we are sure this is probably nothing to worry about...

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kliguy38's picture

Sitdown and STFU before we send you a nailgun

reader2010's picture
UBS Chairman Warns Central Bank Intervention Is Forcing Investors "To Make Bad Choices With Their Money"

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Make Bad Choices With the Free Money that they receive from the printers? I don't think so. This is precisely a financial war against everyone who is not an elite.
847328_3527's picture

Some of the little people not in the loop are losing their shirts on poor investments like rental properties as insurance rises, prop taxes go thru the roof and a bad tenant or two will draw out eviction forever or may threaten your life if you evict him/her.

 

The CBs have really screwed up the 99%'ers while handing free money to 1% bankers and covering all their losses.

rmopf2010's picture

Penny Stocks Index => S&P

King Tut's picture
King Tut (not verified) Oct 10, 2016 10:09 AM

thanks, Captain Obvious 

BandGap's picture

He's just trying to avoid the gallows by telling us he told us so. Nice try.

Paul Morphy's picture

This guy was head of the German Bundesbank. 

If he's concerned, we ought to be very concerned.

medium giraffe's picture

Indeed, UBS also one of the biggest foreign exchange players.

RaceToTheBottom's picture

He was not concerned as his pockets were getting lined.

He is now only concerned that his head become disconnected from the rest of his body.  He should have had that same concern before.  I say, disconnect away.

Mountainview's picture

His pockets still get lined. Nevertheless, his successors from the Bundesbank should pressure Draghi a bit more to come back to reason.

TheRideNeverEnds's picture

Considering BTFD has literally never failed, by bad choices I assume he means people fading central banks.

Don't worry Axel, any regular people who took a contrary position and shorted these markets went broke years ago.

mary mary's picture

Basically, that is exactly what I think.  You have to make 8% just to keep up with inflation, so you can't stay in bonds.  And then the same Central Bankers who are creating inflation also screw around with stocks, via "derivatives".  Central Bankers are anti-capitalists.  Or, maybe, Central Bankers are just Communists.

bigkahuna's picture

Yeah - nice of you to point all this out, but these criminals at the central banks are not going to stop until the "peasants" roll up with guillotines and separate them from their heads. If you said something like that - it may actually spare your head.

jdow's picture

Gee, what an admission of guilt?  I think we've already figured out that our Markets are manipulated.  You'd have to be blind, deaf, and dumb not to know that.

roadhazard's picture

Sooo stop investing.

jdow's picture

So, what wonderful news or fundamentels moved the markets +150 this morning?

Herdee's picture

The Keynesian philosophy bankers will tell you that the only problem is that they are not printing big enough each time they run into trouble. Sooner or later though IF they print enough, they'll get what they want on a grand scale called hyperinflation. Once that genie is out of the bottle they have the misconception that they can control it. I guarantee that whoever wins the American election will take it from 4.6 trillion to 10 trillion. Their corrupt backs are against the wall so the only solution is to try what old Weimar Germany did.It fits with the philosophy because the national deficit spending and entitlement programs are impossible goals to control under falling tax revenues.

https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic

0xAA4214C's picture

it's called "controlled demolition" of the economy.
But what if Trump gets elected? Not so controlled anymore - scary isn't it?

GoldHermit's picture

Central bankers are either idiots or liars, I'll let them pick.

Manipulism's picture

Everyone is playing his role.

Batman11's picture

The answers are so obvious only an international elite serving the interests of the 1% could miss it.

Why is there no growth?

The money is in all the wrong places.

The world is full of pent up demand, a majority of consumers would like to have the money to be able to consume more.

Western consumers have maxed. out on credit cards, mortgages, Payday loans, student loans and are over-whelmed with the repayments.

Those silly economists treat repayments on debt as savings and get totally confused by the apparent savings glut.

A better terminology might help economists.

Have you thought of splitting debt repayments and real savings into two totally separate groups to get a clearer picture of what is going on?

I doubt it personally.

There are investors who can’t find anywhere to invest.

Yields are at record lows due to the glut of investment capital with many investments now having negative yields.

You have to pay people to get investment capital off your hands, no one wants it.

2016 -“Richest 62 people as wealthy as half of world’s population”

Just imagine if the poorer people had some of that wealth.

They would be able to consume more and there would be investment opportunities in new production facilities.

The detached elites don’t want to point a finger at inequality as they love hoarding.

Warren Buffett has 73 billion already but he wants more, like his buddy George Soros.

I suppose everything will have to crash first because the rich are so greedy.

The Central Banks have maintained asset prices since 2008 and the rich haven’t lost much.

As soon as they start losing their will be a “New Deal”, the bankers will go to prison, Glass-Steagall will be re-instated and most types of derivatives will be banned.

To initiate real change the wealthy have to lose, but they are so greedy they have to drive everything over the cliff first and lose really big.

Batman11's picture

“I better buy gold with no good investment opportunities and everything about to crash.” today’s US billionaire and Jacob Rothschild.

"Letting the poor have more money through better wages, no way!"

"I didn't get where I am today through high wages" 

“Henry Ford! What’s he got to do with anything, I’ve never even heard of him”

 

Henry Ford paid high enough wages so that his workers could buy his cars.

He would be seen as a lunatic today.

From Wikipedia:

“As the owner of the Ford Motor Company, he became one of the richest and best-known people in the world. He is credited with "Fordism": mass production of inexpensive goods coupled with high wages for workers. Ford had a global vision, with consumerism as the key to peace.” 

Milton Freidman then changed the world with his idea of maximising profit and paying workers as little as possible.

When debt. based consumption maxed out and people could not afford to take on any more debt, the whole thing crashed and burned.

 

Batman11's picture

“The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction”

Those at the top are always blind to who the consumers are that buy their products and services.

Hint:

All employees = all consumers (approx)

 

Manipulism's picture

"They" own the CBs and as the CBs are buying everything with their worthless paper "They" will soon own the whole world.

Feudalism is the end goal.

Batman11's picture

IF they are all owned by the Central Banks or George Soros and Warren Buffett, what's the difference?

 

Mises Sense's picture

Global financial institutions Goldman Sachs, UBS, JP Morgan, Lazard, Tickmill, Credit Suisse, HSBC and Standard Chartered are monitoring the situation very closely :)

larz's picture

No shit Sherlock