{"id":11001,"date":"2015-08-14T07:49:39","date_gmt":"2015-08-14T12:49:39","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11001"},"modified":"2015-08-14T07:49:39","modified_gmt":"2015-08-14T12:49:39","slug":"deleveraging-as-a-biblical-plague","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11001","title":{"rendered":"Deleveraging as a Biblical Plague"},"content":{"rendered":"

Deleveraging as a Biblical Plague<\/a><\/h3>\n

Eventful days in the middle of summer. Just as the Greek Pandora\u2019s box appears to be closing for the holidays (but we know what happens once it\u2019s open), and Europe\u2019s ultra-slim remnants of democracy erode into the sunset, China moves in with a one-off but then super-cubed renminbi devaluation. And 100,000 divergent opinions get published, by experts, pundits and just about everyone else under the illusion they still know what is going on.<\/p>\n

We\u2019ve been watching from the sidelines for a few days, letting the first storm subside. But here\u2019s what we think is happening. It helps to understand, and repeat, a few things:<\/p>\n

\u2022 There have been no functioning financial markets in the richer parts of the world for 7 years (at the very least). Various stimulus measures, in particular QE, have made sure of that.<\/p>\n

A market cannot be said to function if and when central banks buy up stocks and bonds with impunity. One main reason is that this makes price discovery impossible, and without price discovery there is, per definition, no market. There may be something that looks like it, but that\u2019s not the same. If you want to go full-frontal philosophical, you may even ponder whether a country like the US still has a functioning economy, for that matter.<\/p>\n

\u2022 There are therefore no investors anymore either (they would need functioning markets). There are people who insist on calling themselves investors, but that\u2019s not the same either. Definitions matter, lest we confuse them.<\/p>\n

Today\u2019s so-called \u2018investors\u2019 put to shame both the definition and the profession; I\u2019ve called them grifters before, and we could go with gamblers, but that\u2019s not really it: they\u2019re sucking central bank\u2019s udders. WHatever we would settle on, investors they\u2019re not.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Deleveraging as a Biblical Plague Eventful days in the middle of summer. Just as the Greek Pandora\u2019s box appears to be closing for the holidays (but we know what happens once it\u2019s open), and Europe\u2019s ultra-slim remnants of democracy erode into the sunset, China moves in with a one-off but then super-cubed renminbi devaluation. And […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[122,130,202,2027,2590,281,452,7738,5177,834],"class_list":["post-11001","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-bank","tag-china","tag-deflation","tag-deleveraging","tag-devaluation","tag-europe","tag-japan","tag-raul-meijer","tag-the-automatic-earth","tag-us"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11001","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11001"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11001\/revisions"}],"predecessor-version":[{"id":11002,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11001\/revisions\/11002"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}