Bill Blain: "It's Tough Being A Central Banker"

By Bill Blain of Mint Partners

Blain’s Morning Porridge

“Sometimes I’ve believed as many as six impossible things before breakfast.. ”

* * *

It’s tough being a Central Banker. The expectation they are doing the right thing lies heavy upon them. We’d like to believe Central Bankers are omnificent celestial beings (because we like the idea of an ordered universe), but the truth is they are as much hostage to the fickle winds of economic destiny as the rest of us. Just when they are guiding us to believe the economy is about to explode, it contracts. Just as they sort out the banks, the economy then votes for collective economic suicide. Just as they think they’ve licked inflation, commodity prices go chaotic.

The official line on Wednesday’s Federal Reserve meeting is: more hawkish than expected – 3rd hike in 6 months and talking about they will normalise the balance sheet by rolling off assets and capping reinvestment. They expect unemployment to continue improving and remain robust. They are happy with the outlook for consumption and capex.

However… Both the US and UK were poster boys for Global Growth last year. This year, they are at the bottom of the table. Estimates are tumbling... What changed? Well…. that’s worthy of a whole book – and will take in everything you’ve read in the press about confidence and politics.

One of my favourite jokes is about the Physicist, the Mathematician, and the Economist. They are stranded on the proverbial desert island and starving. A tin of beans washes up. They stare at it.

The Physicist ponders and announces: “If we light a fire beneath it, the tin will explode.”

The Mathematician jumps in: “Of course, in which case I can work out the trajectory of each bean so we can collect them..”

They both turn to the Economist and ask what he thinks..

He ponders a while, and replies: “Well, assume we had a tin-opener..”

(I have a whole book of Economist jokes… at least 3 of them are funny..)

* * *

On Wednesday, the Federal Reserve hiked rates 25 bp and told us a further hike is coming. We have to take their analysis seriously. They have the intellectual firepower and analytical base to tell us the economy is going to truckle on in a similar way. But listen how they say it. Its very much “assume” we had a tin-opener moment. Even the discussion on how the Fed is going to normalise the balance sheet was couched in terms of: “we shall normalise, provided the economy evolves broadly as anticipated.”

What does it mean for markets? Well you can buy into what the Fed is saying – which is steady growth. Or you could listen to what the macro economists are telling us about how strong the economic fundamentals are in terms of still mega-low rates and declining negative drag. Or you could listen to the political noise, and conclude (with the obvious exception of the UK) there are no political problems, therefore upside potential.

The macro outlook and the political situation are powerful arguments. Although the Fed is talking about normalising the balance sheet, no other Central banks are. Therefore cheap money continues to justify the continuing strength of the stock markets, while low rates keep bonds interesting. If there is one obvious trend at work it’s a massive re-allocation of investment capital from bonds into equities – which makes perfect sense as you can’t survive on negative real interest!

But, but and but again.

What do low rates actually mean and what have they actually achieved these last 8 years? Have ultra low rates stimulated real economic growth and capital investment? I’m not convinced. They have created massive inflation in financial assets:  bonds and stocks.

How many people seriously believe the strength of the stock market is due to fundamentals of coming explosive growth? Or is the market really focused on the continuing QE cheap money fuelling the equity boom? (Any guesses on how much of the cash raised by corporates in the ultra-cheap money age has been spent building factories or infrastructure? Clue: it’s a fraction of the money they spent buying back their own stock.)

It’s at times like this when I remind readers to look at their portfolio’s and how non-correlated your assets are from the current massive financial asset bubble. For instance, if you class yourself a  measured risk taker and are holding hi-yield debt (currently at close to ultimate highs) at 3% ish, why not own aircraft bonds at 7% instead? That’s just one example..


jmack Gohigher Fri, 06/16/2017 - 11:41 Permalink

lol,  you would literally shit your pants if you heard incoming rounds, but you are a real tough guy on the keyboard, just like this moron trying to incite some one to grenade a group of people. easy words from behind a keyboard,  but he is too nutless to do it himself, he just hopes to build the atmosphere so some nutbag thinks that kind of action is acceptable and does it for him.   Pathetic.   I am proud to be thought poorly of by you lot. 

In reply to by Gohigher

jmack nailgunner44 Sat, 06/17/2017 - 02:18 Permalink

indeed, go for it. but you are quite pathetic indeed to incite that action on a comments thread with no intestinal fortitude to actually carry it out, and merely hope that some "nutjob" does it haphazardly for your pathetic ass.   Which you would readily comprehend from my prior comments had you an IQ over 60...

In reply to by nailgunner44

Endgame Napoleon jmack Fri, 06/16/2017 - 09:04 Permalink

I am for freedom of speech, but there is a ton of blaming of Jews on the internet in general. Whether it is just trolling, an attempt to gauge public opinion via anonymous upvoting/downvoting or the real thing is the question. There are not even enough Jews in America to blame for this crap economy that most Americans face.

What to do with all your excess money is the problem of the 1% and the top 20% of two high-earner couples. In earlier eras, when women were not so bored with their children and raised them themselves, rather than taking a job, you could about double the percentage of middle-class Americans, spreading the 20% of good-paying, salaried jobs over about 40% of households, subtracting a small percentage of women who had to be breadwinners due to the lack of a male breadwinner in the household. Those were the women who did not marry and have children, a few indisputably brilliant women who truly advanced their fields and women whose husbands were absusive, left them or died.

Now, we have a society where the wealth from good, salaried jobs is concentrated in fewer households, with the government accommodating working mothers through a barrage of mandated absenteeism privileges, and the top 20% has more money to bet on low-cost, global labor than ever before.

At the bottom, we have the government propping up tons (millions) of "independent" households for single, working mothers, providing everything from free housing, to free food, to $6,269 Child Tax Credits and driving wages down for workers who need the wages alone to cover things like rent and food. Because, Uncle Sam is not paying their major bills for them due to the result of sexual intercourse. Employers know that many of the 62% of single moms (and the immigrants with children in one-earner households) "have somethin' comin' in" from Uncle Sam, making the low, sporadic wages from temp and part-time churn jobs bearable.

Consumer spending is down due to that rigged system. It is down compliments of womb-based feminism, in addition to mass immigration that is also taxpayer-subsidized and mass offshoring of jobs.

It is likely to get worse on the consumer-spending side if companies do not invest in new factories and other places for humans to work.

Because, we CAN'T ask moms to take a REAL interest in their children, raising them rather than just showing them off in the baby-mommy-look-alike-bulletin-board-decorating contests and the Halloween Dress-Up days in financial services jobs that pay beans, anyway, and are increasingly automated, explaining why SO MANY moms in these mom-dominated workplace social cliques are allowed to take whole mornings, whole afternoons, whole days, whole weeks and even whole months off with no consequences.

They are not needed at work, but are in the bully-momma backscratching cliques and are retained by employers more than other workers due to the crony back-watching of the mom cliques, but also due to the fact that unearned income from spouses, exes and welfare/taxfare really pays their major bills, not the low wages from the churn job.

Not even 15 years ago, many of these jobs required a lot of hand calculations, like in the insurance industry, where premiums were often computed by hand. They needed more permanent employees and more employees with honed skills. Then they went to old DOS systems, which were much harder to work on, finding all that underwriting, policy and claims information, quickly, while doing many other things, including meeting sales quotas.

Now, they have user-friendly systems that enable them to train people in no time. They just churn temps, keeping a few amazingly absentee moms who squeal and coo with delight in the Adult Cubicle Easter Egg Hunt, with a combo of candy prizes and prizes with a baby-mom theme.

Despite all the constant chatter and the new buzzword "skills," except for a few high-level, technical positions, the truth is that, due to automation, companies need FEWER skilled workers.

But all the mommies have to work, nonetheless, even in this full-time, quality-job shortage. It finances a few more luxuries for "working families," like tattoos or the $96 million in out-of-town hotels and casino gambling that single, working moms financed with welfare money in CA. The money from their low-wage jobs is just icing. Monthly welfare and $6,269 Child Tax Credits pay their major bills. They could get married and let the babies' father support the household instead of taxpayers, like 90% of women did for eons, but we can't have that. This would free up jobs for people with no husbands and no children to quality them for welfare/taxfare.

If their wombs have been productive, women must be INCENTIVIZED with multi-layers of cash from Uncle Sam and the U.S. Treasury Department to take jobs. Meanwhile, the prisons have never, ever been so full of people raised in the era of "working families," and America has more mass murderers than ever before, too.

Even though they are the biggest work bullies around, it is not all their fault. Moms are expected to work in this society and critiqued for it when they don't, even though raising children is work. That is the ONLY thing they are ever criticized for anymore: for not working, for not being a so-called career woman. It is 100% illogical and getting more illogical all the time as automation proceeds.

In reply to by jmack

Gordon_Gekko Fri, 06/16/2017 - 06:24 Permalink

This author makes it seem as if the central bankers are just a bunch of clueless government bureaucrats, when in fact they are a bunch of CRIMINALS - agents of a MAFIA organization. Really, there is no other word to describe these assholes.If you just try to find out and read about how BLATANTLY and FEROCIOUSLY all markets, especially the PM markets are rigged by them, you will lose ALL faith in the current system - government, democarcy, republic, courts, regulators - really its all a bunch of BULLSHIT fed to keep us IN LINE and slaving away for them.

Give Me Some Truth Gordon_Gekko Fri, 06/16/2017 - 10:33 Permalink

No one (who matters) is actually trying to find out how "blatantly and ferociously all markets are rigged." This is the great puzzler to me. If some news organization did launch such an investigation they would almost certainly uncover the "story of the century." Indeed, such an investigation would also need to focus on the question "why has the Fourth Estate NOT made any effort to investigate this?"The corporate press's complete abdication of its "watchdog role" is the most distressing element of a corrupt and rigged system. Everything we complain about and worry about could have been prevented if the press simply did its job. 

In reply to by Gordon_Gekko

yogibear Fri, 06/16/2017 - 06:34 Permalink

Central bankers are criminal leeches on society. To extract wealth  from the middle and lower classes. To enrich the few.  The US avoided it for over 100 years. The central banks were supposed to create stability, but it was a lie so they could get control of a country's money. They were in charge during the Great depression and last great recession. They created bubbles to enrich the few.      

shutterbug Fri, 06/16/2017 - 06:34 Permalink

Being a central banker is THOUGH??????It must be the most plush cozy job on this world where you can be wrong 24/7 and still get your multi million bonus (or is it billion these days) ...Bankers and central bankers should be investigated - each year - for the extremely high possibility they financially raped the country... or world.

Give Me Some Truth shutterbug Fri, 06/16/2017 - 10:26 Permalink

The Fed COULD be audited. The biggest "tell" about how many entities are involved in perpetuating the corrupt status quo is the number  of Establishment players calling for such an audit. This number is zero. This number of course includes all of the major newspapers and news-gathering organizations.Yesterday, I read a story in the NYT critical of the fact the "repeal and replace" draft-process taking place in the Senate is being done in complete "secrecy." The article was highly critical of this, noting that health care is one-sixth of the economy. Of course such an important debate needs to be conducted in an open setting. I do note, however, that the NYT has NEVER criticized the secret nature of the Fed's activities. These policies and activities probably affect a whole lot more people and involve a whole lot more money than "OBamaCare." But the NYT's editors completely trust these 9 unelected people working in complet secrecy to always do right by the people.Adding to this point, government involvement in healthcare would not even be possible absent all the shenanigans of the Fed/Treasury, which fund every government initiative.Again, it's quite revealing that the corporate media endorse and defend the Fed's ability to conduct its myriad operations in almost total secrecy. Audit the Fed -a legit, comprehensive audit - and one would learn how precious metal markets are rigged and how stock and bond markets are propped up, and how "money" is created and then moved/dispersed from here to there and back again to advance corrupt policies A, B, C, D, E. 

In reply to by shutterbug

overmedicatedu… Fri, 06/16/2017 - 06:41 Permalink

Trump might learn a thing or two from china..bezos & media execs would be on my list..From LA times.."In recent years, dozens of senior executives have mysteriously vanished. Most are believed to have been caught up in an aggressive anti-corruption campaign that has targeted financial industry executives, government officials and the heads of state-owned companies.In many cases, the disappeared have returned. In others, they have turned up in custody or were found dead.Here are some cases:Xiao Jianhua    This April 2016 photo provided by the Chinese University of Hong Kong shows Chinese billionaire Xiao Jianhua, founder of Beijing-based Tomorrow Group. A Chinese-born Canadian citizen, Xiao Jianhua vanished from his residence at the Four Seasons Hotel in Hong Kong in the early hours of Jan. 27. The Times reported that his disappearance fueled speculation that Chinese security agents illegally nabbed him from the former British colony and whisked him to the mainland, possibly as part of a crackdown on the financial industry and an investigation into whether he was involved in financial crimes. Xiao’s reported $6-billion fortune made him China’s 32nd richest person in 2016. His conglomerate, the Tomorrow Group, includes investments in real estate, insurance, banking, coal, cement and rare earth minerals. Zhou Chengjian    Zhou Chengjian, chairman and president of Metersbonwe Group, speaks during a forum in Shanghai in December 2009. (dycj / Imaginechina) The billionaire chairman of Metersbonwe, one of China's leading clothing companies, Zhou Chengjian was reported missing on Jan. 7. According to CNBC, Zhou’s company issued a statement saying it was looking into reports that police had detained the business executive. The Financial Times reported that Zhou, whose fortune was estimated at $4 billion in 2015, returned to work a week later together with Tu Ke, the company's board secretary, who had also temporarily vanished.Guo Guangchang    This March 2004 photo shows Guo Guangchang, chairman of Fosun International Ltd. (Associated Press) Guo Guangchang, the chairman of the private-sector conglomerate Fosun, which owns the resort company Club Med and Cirque du Soleil, disappeared in December 2015. Company officials said in a statement that Guo had been "assisting in certain investigations carried out by judicial authorities," according to CNBC. The executive, who reportedly has a personal fortune of close to $10 billion, subsequently reappeared at a company meeting in Shanghai. No further explanation was given for his temporary absence.Lei Jie   Lei Jie, former chairman of Founder Securities Co., Ltd., during an interview in Beijing in December 2009. (Liang Zi / Imaginechina) Lei Jie, the former chairman of Founder Securities Company Ltd., a joint venture partner of Swiss bank Credit Suisse, went missing in 2015. The Wall Street Journal reported that company officials initially said Lei had requested a week’s leave through relatives on Jan. 12, 2015, but then fell out of contact a week later. On Jan. 22, the company announced that it had appointed an interim chairman, Reuters reported. Lei was released from police custody a few months later after assisting authorities with an inquiry, according to media reports.Mao Xiaofeng   Mao Xiaofeng, then president of China Minsheng Banking Corp., gives a speech in Beijing on July 28, 2009. (Song Zhaoqing / Imaginechina) Mao Xiaofeng, the president of China Minsheng Banking Corp. — who at 43 was reportedly the youngest president of a listed Chinese bank (one whose shares are traded on an official stock exchange) — also disappeared in January 2015. Quartz reported that Mao was taken away by the Communist Party’s anti-graft agency to help with an investigation into Ling Jihua, a onetime senior aide to former President Hu Jintao, and that officials at Minsheng, the world’s 49th largest bank, said Mao had resigned for “personal reasons.”Mike Poon Ho Man   Mike Poon Ho Man, former chief executive of China Aircraft Leasing Group Holdings, at a news conference in December 2014. (Gcmt / Imaginechina) Mike Poon Ho Man, the former chief executive of China Aircraft Leasing Group, mysteriously resurfaced in Hong Kong in November 2015, six months after he submitted a letter of resignation and his company said he could no longer be contacted. According to the South China Morning Post, Poon had been in detention as part of an inquiry into graft in China’s booming aviation sector.Yang ZezhuIn January 2016, Yang Zezhu, a prominent banker and former chairman of the Chinese brokerage Changjiang Securities, fell to his death from the 12th floor of a building in China’s Wuhan city. According to Human Rights Watch, it is unclear whether Yang, who had been under investigation for corruption, was free at the time of his death, or had been detained by the authorities. Reuters reported that Yang had left a suicide  

learnofjesuits Fri, 06/16/2017 - 06:46 Permalink

Vatican masonic order of jesuits Illuminati rule the world for centuries, they are building theirs New World Order - one government, one religion, global socialism-technocracy, depopulation(because overpopulation destroying biosphere) - check Georgia Guidestones also who has funded it, "order out of chaos"- they create a crisis and than they resolve it towards NWO.Important people in a society works for them, they are giving careers for obedience, we are living in a social pyramid system managed by jesuit masonic order.Just learn why jesuits were suppressed for 200 years in western countries and were allowed to return only a few decades ago - also in USA (there is a pattern easy to recognize). They escaped to Russia and Columbia and created in an underground Illuminati masonic sect.Society of Jesus was the most powerful intelligence agency - of Vatican - and they still are, all national intelligence agencies are controlled by jesuits, rest is a theater and actors.First Rothschild Nathan was rescued by jesuits from a camp and they made him theirs banker, he was not a smart Jew that become extremely rich, but he was just working for most powerful intelligence agency, also Soros is Christian Knight of Malta same as Rothschilds, Rockefeller, Brzezinski..., and Bush and Clinton are Skull and Bones - it is also an jesuit organisation and jesuit symbol, deceased Rockefeller read Bible every day.Templars were bankers and later jesuits took that buisness, it is that simple.Jesuit masonic order works by an undercover organisatios in order to hide.

learnofjesuits learnofjesuits Fri, 06/16/2017 - 06:46 Permalink

Bill Hughes, "The Secret Terrorists and The Enemy Unmasked"The Rothschilds were Jesuits who used their Jewish background as cover their sinister activities.The Jesuits, hands Rothschilds and financier Nicholas Biddle, sought to take control over the banking system of the United States. " Napoleon Bonaparte; 1769-1821; emperor of the Frence“The Jesuits are a MILITARY organization, not a religious order. Their chief is a general of an army, not the mere father abbot of a monastery. And the aim of this organization is power – power in its most despotic exercise – absolute power, universal power, power to control the world by the volition of a single man [i.e., the Black Pope, the Superior General of the Jesuits]. Jesuitism is the most absolute of despotisms [sic] – and at the same time the greatest and most enormous of abuses…” Abraham Lincoln (1809-1865; 16th President of the United States“The war [i.e., the American Civil War of 1861-1865] would never have been possible without the sinister influence of the Jesuits.” Marquis de LaFayette (1757-1834; French statesman and general. He served in the American Continental Army under the command of General George Washington during the American Revolutionary War.)“It is my opinion that if the liberties of this country – the United States of America – are destroyed, it will be by the subtlety of the Roman Catholic Jesuit priests, for they are the most crafty, dangerous enemies to civil and religious liberty. They have instigated MOST of the wars of Europe.” Edmond Paris (Author of the book The Secret History of the Jesuits)“The public is practically unaware of the overwhelming responsibility carried by the Vatican and its Jesuits in the starting of the two world wars – a situation which may be explained in part by the gigantic finances at the disposition of the Vatican and its Jesuits, giving them power in so many spheres, especially since the last conflict.” R. W. Thompson (Ex-Secretary, American Navy)“[The Jesuits] are the deadly enemies of civil and religious liberty. Fyodor Dostoyevsky (1821-1881; famous Russian novelist)“The Jesuits…are simply the Romish army for the earthly sovereignty of the world in the future, with the Pontiff of Rome for emperor…that’s their ideal. …It is simple lust of power, of filthy earthly gain, of domination – something like a universal serfdom with them [i.e., the Jesuits] as masters – that’s all they stand for. They don’t even believe in God perhaps.” "The Jesuit Order, therefore, stands before us as the embodiment of a system which aims at temporal political domination through temporal political means, embellished by religion, which assigns to the head of the Catholic religion - the Roman Pope - the role of a temporal overlord, and under shelter of the Pope-King, and using him as an instrument, desires itself to attain the dominion over the whole world."Count von Hoensbroech, 1911, German Noble and ex-Jesuit Pope Clement XIV (Who had “forever” abolished the Jesuit Order in 1773)“Alas, I knew they [i.e., the Jesuits] would poison me; but I did not expect to die in so slow and cruel a manner.” (1774) “Above all I have learned from the Jesuits. And so did Lenin too, as far as I recall. The world has never known anything quite so splendid as the hierarchical structure of the [Roman] Catholic Church. There were quite a few things I simply appropriated from the Jesuits for the use of the [Nazi] Party.Adolph Hitler (1889-1945; Nazi leader and chancellor of Germany from 1933-1945) "The Fuhrer had come to power, thanks to the votes of the Catholic Zentrum, only five years before, but most of the objectives cynically revealed in 'Mein Kampf were already realized; this book, an insolent challenge to the western democracies, was written by the Jesuit Father Staempfle and signed by Hitler. For—as so many ignore the fact—it was the Society of Jesus which perfected the famous Pan-German programme as laid out in this book, and the Fuhrer endorsed it."Edmond Paris, 1965 French Historian The Secret History of the Jesuits. Page 138 “The Jesuits wrote the first 25 rites of Scottish Freemasonry in then College de Clermont in Paris in 1754”The True origin of Scottish Rite Freemasonry According to the Masonic Quiz Book: Ask Me Another, Brother by William PetersonásObedience to RomeAfter receiving a message from Pope Benedict asking the Society of Jesus to affirm its fidelity to the magisterium and the Holy See, the Congregation presided over by Nicolás responded, "The Society of Jesus was born within the Church, we live in the Church, we were approved by the Church and we serve the Church. This is our vocation... [Unity with the pope] is the symbol of our union with Christ. It also is the guarantee that our mission will not be a 'small mission,' a project just of the Jesuits, but that our mission is the mission of the Church."

In reply to by learnofjesuits

learnofjesuits Fri, 06/16/2017 - 06:47 Permalink

google "Vatican Nervi hall interior photo" and see Pope sitting in a mouth of a big serpentgoogle "putin hand sign horns" and see gallery of all those politicians (Bush, Obama, Clinton, Putin, Ahmadinejad, Sarkozy, Hollande, Ron Paul, Trump...), famous people, "Alex Jones" - they all work for jesuit Illuminati masonic order

vegas Fri, 06/16/2017 - 06:48 Permalink

Sorry Bill, you're way off base here; forget all that shit about growth, the FED as brilliant policy makers, and it's tough to be a central banker [wait ... what?]; fact is, the whole enchilada from anything to everything traded is manipulated by the central banks. They simply move money from one crisis to another and put out fires while hoping for the best. Fact is they are clueless ... more clueless than you even. Everything has a cap or a floor cuz it promotes "stability". bond prices, stock indices, and crude oil have floors; gold, silver, and other commodities have caps ... no matter what you think or how much financial chart porn you want to look at stock indices aren't going down significantly, bond yields won't rise, crude oil has their very own "Plunge Protection Team", and gold & FX are capped. It's a new paradigm Bill, forget the old way of thinking cuz it will lead to losses.

gcjohns1971 Fri, 06/16/2017 - 07:24 Permalink

"We’d like to believe Central Bankers are omnificent celestial beings (because we like the idea of an ordered universe), but the truth is they are as much hostage to the fickle winds of economic destiny as the rest of us."Except the CENTRAL PREMISE to have Central Banks is their ability to be omniscient celestial beings.Otherwise, why have them at all???

equity_momo Fri, 06/16/2017 - 07:28 Permalink

It’s tough being a Central Banker. Stopped right there. I know its not sarcasm either from this City stooge.Tyler , whatever Bill and Mint are paying you its not enough.   This filler is ruining your website. Why do you need 5 new stories every 2 hours on the front page anyway? Start being more selective please.

Nunyadambizness Fri, 06/16/2017 - 07:40 Permalink

How about those central bankers that have it so tough, go and fuck themselves?  How about we ELIMINATE central banks in general, and the FED specifically, and go back to a free market and a gold standard??I know, I'm dreaming.  The central banksters that have it so tough will continue their fleecing of the rest of us so they can live in their palacial estates behind locked gates and ponder about how much smarter they are than the rest of us.  Here's hoping that the 2nd level of Hell is awaiting new central banksters.

JailBanksters Fri, 06/16/2017 - 07:45 Permalink

Yeah real toughI need a New Car, I'll just go down to Computer Terminal in the Basement guarded by Face Recognition, Fingerprint Recognition and Voice Recognition, Lasers and just add a few zeros into my Account.

Batman11 Fri, 06/16/2017 - 08:07 Permalink

How to lose confidence in the Central Banker.Observe them doing different things after 2008.FED buys bad assets off US banks and restores them to health.UK Government has to sort out UK banks and as all the money has gone to the bankers the UK needs to implement austerity.ECB forces Governments to take on bank debts and creates sovereign debt crises, banking crises ongoing as ECB won’t buy up bad assets.Was the FED forced to step in as banker bonuses were suspended until the Government bailout was paid back?Plan - remove entitlement programs like that little shit Greenspan is always wittering on about.