First it was Carl Icahn, then Larry Fink, and now it is Fed "bellwether" Bullard who take the ECB's NIRP and doubles down with a "Taper"... and NIRP
- BULLARD SAYS THINGS ARE LOOKING BETTER
- BULLARD SAYS JOBS PICTURE LOOKING BETTER
- BULLARD SAYS QUESTION IS WHETHER JOBS PICKUP SUSTAINABLE
- BULLARD SAYS A STRONG JOBS REPORT FOR NOVEMBER WOULD INCREASE PROSPECT TO TAPER IN BOND BUYING IN DECEMBER
Yeah, everyone is falling for that one again. Sure. For now however, EURUSD is buying it, and is down 100 pips on the combined action of the NIRP rumor and the possibilty of a December Taper.
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But the punchline in the aftermath of the ECB rumor on just this is that the Fed just doubled down on the ECB's ownc currency war gambit:
- BULLARD WOULD LIKE STUDY OF NEGATIVE RATE FOR EXCESS RESERVES
In other words, it will soon cost everyone to keep money with the bank. As for NIRP on reserves: will banks consider lending out reserves if they have to pay a whopping 25 bps on amounts when they can use the same reserves as deposit-based collateral to buy ES and generate 20% annual returns via the S&P? Why no. They would not.
Finally, we would like to clarify that we were only joking when last night we tweeted that ...
Issuance of new $100 bill delayed as Fed decided to add "use by" expiration date on each one
— zerohedge (@zerohedge) October 5, 2010 [6]