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Tag Archives: monetary policy
Innovation BIS 2025: A Stepping Stone Towards an Economic ‘New World Order’
Innovation BIS 2025: A Stepping Stone Towards an Economic ‘New World Order’ The IMF’s annual meetings held in Washington DC last week demonstrated that when the institution issues new economic projections or warnings of a downturn, the mainstream press are not averse to giving them prominent coverage. After the Fund was founded in 1944 (off the […]
Pondering the Collapse of the Entire Shadow Banking System
Pondering the Collapse of the Entire Shadow Banking System What’s behind the ever-increasing need for emergency repos? A couple of correspondents have an eye on shadow banking. Shadow Banking The shadow banking system consists of lenders, brokers, and other credit intermediaries who fall outside the realm of traditional regulated banking. It is generally unregulated and […]
Central Banks Trapped by Their Theories
Central Banks Trapped by Their Theories QUESTION: Hi Martin, I can understand how JP and EU backed themselves into a corner with negative rates. Happy to give them the benefit of the doubt when this all started 3-4 years ago even though it was obvious this was not going to end well.However, what I don’t understand […]
“Money’s Not Worth Anything Anymore” – Ex-Credit Suisse CEO Blasts “Crazy” Negative Rates
“Money’s Not Worth Anything Anymore” – Ex-Credit Suisse CEO Blasts “Crazy” Negative Rates Oswald Gruebel, who served as Credit Suisse CEO from 2004 to 2007 and as UBS Group AG’s top executive from 2009 to 2011, has slammed ECB policy in an interview with Swiss newspaper NZZ am Sonntag. “Negative interest rates are crazy. That means […]
Negative Interest Rates are the Price We Pay for De-Civilization
Negative Interest Rates are the Price We Pay for De-Civilization Do central bankers really think negative interest rates are rational? “Calculation Error,” which Bloomberg terminals sometimes display1, is an apt metaphor for the current state of central bank policy. Both Europe and Asia are now awash in $13 trillion worth of negative-yielding sovereign and corporate […]
More Money Pumping Won’t Make Us Richer
More Money Pumping Won’t Make Us Richer Whenever a central bank introduces easy monetary policy, as a rule this leads to an economic boom — or economic prosperity. At least this is what most commentators hold. If this is however the case then it means that an easy monetary policy can grow an economy. But […]
Turkey Exposes Central Bank Incompetence
Turkey Exposes Central Bank Incompetence Last year I asked whether Turkey would be “City Zero in Global Contagion.” That question was based on the crisis unfolding in the Turkish lira which materially threatened a number of major European banks, especially those in Italy. This week highlighted something really interesting for me that, I think, sets […]
Draghi Goes All Out: ECB Cuts Rates, Restarts Open-Ended QE, Changes Forward Guidance, Eases TLTRO, Introduces Tiering
Draghi Goes All Out: ECB Cuts Rates, Restarts Open-Ended QE, Changes Forward Guidance, Eases TLTRO, Introduces Tiering With the market worried that Mario Draghi could surprise hawkishly in his parting announcement… … that is how the market initially interpreted today’s ECB press release, which cut already negative deposit rates for the first time since 2016 to […]
More on the puzzle of negative interest rates
More on the puzzle of negative interest rates Interest rates on many bonds have plunged into negative territory. But why on earth would anyone be willing to save $1000 only to get $999 in the future? Saving up for a rainy day has always gone hand in hand with a positive interest rate, not a […]
Powell Doesn’t Change His Tune… And Rabobank Sees Fed Cutting To Zero
Powell Doesn’t Change His Tune… And Rabobank Sees Fed Cutting To Zero The tone of Fed Chairman Powell’s remarks in Zurich was similar to that of his speech in Jackson Hole. Powell repeated the statement that the Fed will ‘act as appropriate to sustain the expansion,’ which indicates that he is leaning toward a September […]
Blackrock CIO: The Endgame Is Coming And Central Banks Will Debase Everything To Spark Inflation
Blackrock CIO: The Endgame Is Coming And Central Banks Will Debase Everything To Spark Inflation Blackrock’s Chief Investment Officer, Rick Rieder, best known perhaps for recently suggesting that the ECB should monetize stocks, writes in the Blackrock blog today and highlights the economic policy state-of-play today, and where it may lead to should economic growth falter, productivity not materialize, and […]
The Ugly Truth About The Trade War
The Ugly Truth About The Trade War This past week was an interesting exercise in false expectations and assumptions. Once again, trade war theatrics were used to stall a stock market plunge as insinuations of a possible “deal” were made by Donald Trump, followed by China’s claim that maybe, just maybe, they would not immediately […]
Blain’s Morning Porridge – Sept 5th 2019
Blain’s Morning Porridge – Sept 5th 2019 “Slipping down Raki and reading Maynard Keynes…” We really should focus on the signals emanating from bond markets. Forget the current political madness – yesterday saw a number of key moments for bond markets: UK Chancellor Sajid Javid hitting the spend button in the UK (whether it actually […]
EU Bank Bosses Warn Of “Grave Consequences” If ECB Keeps Cutting Rates
EU Bank Bosses Warn Of “Grave Consequences” If ECB Keeps Cutting Rates The ECB’s imposition of negative interest rates have created an “absurd situation” in which banks don’t want to hold deposits, rages UBS CEO Sergio Ermotti, arguing that this policy is hurting social systems and savings rates. Ermotti is not alone. As European bank bosses […]
Negative Interest Rates Threaten the Financial System
Negative Interest Rates Threaten the Financial System Markets may need to be rebuilt on a new set of assumptions, but we don’t know what those should be or how they would work. Jim Bianco is the President and founder of Bianco Research, a provider of data-driven insights into the global economy and financial markets. He may have […]
