Viva Central Planning
In this week's missive, Jefferies' strategist David Zervos decries the doomsayers, panders to the printers, and colors this colossal nominal rally (and its expected infinite horizon) through green toner-colored glasses. All we can say here is "Viva Jefferies' David Zervos, and Viva Sarcasm"... it is Sarcasm right? Because if serious, this letter seems like it could have been penned by anyone fighting tooth and nail to become 3rd undersecretary of central planning in Stalinist Russia. We leave it to readers' judgment on which side of the fence Mr. Zervos sits.
Viva la fiesta, viva la noche, viva los "central bankers"..
Yes, another line from that song I cannot get out of my head - "Loca People". But I replaced "los DJs" with "los central bankers". It seemed appropriate as they are the ones keeping the beat and making this party lively. If it wasn't for DJ Benny B we would have the masses listening to Bing Crosby sing "Pennies from Heaven" or "Brother, Can you Spare a Dime" as they stand in line for a cup of soup (flashback to the 30s)!
Thanks Ben. And there is more good news, DJ Mario and DJ Shirakawa have finally came to the party to help DJ Benny B and DJ Merv keep the strobe lights flashing - "all day, all night...." - that global CB balance sheet beat just keeps expanding - "viva los central bankers"!! DJ Hildebrand did enter the club late last year to help out, but he had a few problems with the "rules". Thanks for stopping by Philippe, we know you meant well! Nevertheless, his replacement, DJ Jordan looks to be ready to spin some reflationary verses! It's all good in the club. So keep those party hats on and take some risk......this party is just going to get stronger by the day!
Of course there are still plenty of party poopers who want to shutter the club and remove the DJs. They seem to be quite content for large swaths of the population to get back in soup kitchen lines while cranking up the Bing Crosby. Thankfully most of these folks have been relegated to selling their doom on vitriolic blog sites where only the bitter and twisted, who missed the first few sets of the party, hang out! There are however a few of these poopers who populate the policy circles - mostly they reside at Wilhelm-Epstein-Strasse 14. All of these folks love to yap on and on about the evil DJs who destroy currencies, the global economy and capitalism. Thankfully the music from the club is loud enough to overwhelm this pooper cacophony.
That said, we all know that partying at the club is not without its risks. Too much fun, too much reflation and too much punch can have some long term negative effects - the inflation hangover is surely coming. But the point is our DJs have thankfully decided to take those risks over the alternative risk of the 1930s - there is no free recovery, we have to take some risk! As we have agrued many times, this is right risk tradeoff! So with the club growing stronger by the day, and DJs now firmly in control of the party, the doom crowd has slowly shifted from depression and deflation warnings to hyperinflation scares - pathetic. In all honesty I love the fact that this doom crowd exists - we will need a bunch of folks to get forced into buying spoos up at 2000 as a successful global recovery takes hold down the road. Viva los doomsayers as well!