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ECB - ZIRP til 2020 ....


spygirl

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https://www.ft.com/content/90fc7bfa-8838-11e9-97ea-05ac2431f453

blah blah blah. Do what it takes.

He rebuffed suggestions that negative rates were damaging the health of the eurozone’s banks, saying “so far we see no effect”.

eurozone.jpg

 

DB

_101725196_deutschebank-nc.png

Picked cos its the biggest.

Idiots.

ECB cannot buy anymore bonds - its hit the limit on German ones.

Whatever problem the eurozone has - and its got lots - high IRs is not one of them,

 

 

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It will keep this policy until forced to change by external forces.  I'd imagine that those external forces will come along (for the Eurozone) in the next year or so.

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They system is dead. They can either voluntarily accept this death and rebuild, or they can await the total collapse and destruction of the entire system involved.

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sancho panza
On 06/06/2019 at 14:25, spygirl said:

https://www.ft.com/content/90fc7bfa-8838-11e9-97ea-05ac2431f453

blah blah blah. Do what it takes.

Picked cos its the biggest.

Idiots.

ECB cannot buy anymore bonds - its hit the limit on German ones.

Whatever problem the eurozone has - and its got lots - high IRs is not one of them,

 

 

This post is nothing but cheap scaremongering trying to frighten the dip buyers so you can keep all the goodies for yourself 

image.png.43b458867e53ff4063c76d9808f279ce.png

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It would not be so bad but European business gets most of its funding from banks rater than equity.

So 'doing what it takes' Mario is strangling the banks, which rein in funding for business ,which stop investing, so the ECB then has to look for elaborate insane means of funding business, which was a a job the banks in the first place.

And of course the ECB wil now start dishing out cash on a political basis rather than a risk/return, will only fund German or French business, no matter how shit, so the rest of the Europe will get business banking curtailed, so slip further into decline.

And all the while, Italy's working pop shrinks by bout 4% a year.

 

 

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maynardgravy
On 07/06/2019 at 11:48, Errol said:

They system is dead. They can either voluntarily accept this death and rebuild, or they can await the total collapse and destruction of the entire system involved.

Hmmm. Thing is, if your aim was the complete financial slavery of your subjects, rather than doing the right thing by them, which would you choose?

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WireRunner 10 hours ago If a prolonged period of negative rates and quantitative easing can't bring Europe out of its funk, then is it not madness to think that even more negative rates and quantitative easing will?

Reply Robo63 7 hours ago Isn't it astounding that the FT writes an article, where the premise is a slowing economy, and fails to mention, after glowingly touting the success of the ECB and Mr Draghi in particular, that the actions taken by the  Draghi and the ECB, never gave rise to an economy strong enough to shake off, what was at the time considered emergency policy before additional emergency polices are required again? In most worlds a policy that does not achieve its goal would be considered a failure. While the polices may have stopped the rot for now or  back when first implemented, they have not solved the problem and in all likely hood have only exacerbated it. 

Reply Ras Putin 7 hours ago Greetings from Provence. I think it will take 'helicopter' money to stimulate GDP growth here.  The only problem is  that -  strikes in French Air Traffic Control will possibly disrupt deliveries of the money. 

Reply Ponzi 6 hours ago Draghi said numerous times that the monetary policy alone will not resolve all the EU problems. He is signalling that zero rates won't last forever and politicians in EU must wake up as soon as possible to adress the stagnating economy. Nobody is listening..... 

Reply AD 5 hours ago @Ponzi Since his monetary policy is taking the pressure off, politicians do not feel the need to act ... 

Reply Narcissus 5 hours ago @Ponzi If he knew that it wasn't going to work, why did he create the mother of all asset bubbles? 

 

Sound of the Suburbs 8 hours ago “Last week, Mr Draghi dropped a big hint that he was prepared to fire one final monetary bazooka if the climate of global economic and political uncertainty continues to drag on growth and inflation.” No one understood private money creation during globalisation and economies round the world started blowing themselves up.

The UK economy set off on the road to 2008 back in 1979.

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.53.09.png

The sequence of events:

1) Debt fuelled boom (1980 – 2008)

2) Minsky moment - 2008

3) Balance sheet recession Before 1980 – banks lending into the right places that result in GDP growth (business and industry, creating new products and services in the economy) After 1980 – banks lending into the wrong places that don’t result in GDP growth (real estate and financial speculation) What happened in 1979? The UK eliminated corset controls on banking in 1979 and the banks invaded the mortgage market and this is where the problem starts.

At 25.30 mins you can see the super imposed private debt-to-GDP ratios.

After 2008 we saved the banks but left the debt in place. The banks are ready to lend but there aren’t enough borrowers so QE can’t enter the real economy. Richard Koo shows the ridiculous levels of bank reserves built up by the FED, BoE, ECB and BoJ that can’t get into the real economy due to a lack of borrowers. https://www.youtube.com/watch?v=8YTyJzmiHGk We are going nowhere.

6 minutes ago, One percent said:

Paywall. 9_9

Oh, blah blah blah blah.

Mario not very good.

 

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  • 2 months later...

Deutsche Bank chief warns on damage from likely ECB rate cut

https://www.ft.com/content/5c9cf430-cef0-11e9-99a4-b5ded7a7fe3f

 



“This fits in with what we get from listening to our customers,” he added. “Medium-sized companies tell me clearly: they will not invest more just because the loan will be 10 basis points cheaper.”

He also warned of a “split in society” because negative interest rates favoured those who own assets and have access to cheap loans by pushing up the price of houses and market securities, while penalising Germany’s many savers.

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1 hour ago, spygirl said:

Deutsche Bank chief warns on damage from likely ECB rate cut

https://www.ft.com/content/5c9cf430-cef0-11e9-99a4-b5ded7a7fe3f

 



“This fits in with what we get from listening to our customers,” he added. “Medium-sized companies tell me clearly: they will not invest more just because the loan will be 10 basis points cheaper.”

He also warned of a “split in society” because negative interest rates favoured those who own assets and have access to cheap loans by pushing up the price of houses and market securities, while penalising Germany’s many savers.

Words like that from DB chief, wow..! He must be reading our forum or wolfstreet.com...

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Investment banking revenues plunge to 13-year low

https://www.ft.com/content/3074d05c-cf28-11e9-99a4-b5ded7a7fe3f

Combination of low interest spreads, rules stopping IB leveraging like loons and software hammering workers.

Anyone who thinks that FinSec is a good bet and, by connection, that London/South can continue with high house prices is an idiot.

 

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https://www.ft.com/content/9b2c29c0-d53d-11e9-a0bd-ab8ec6435630

And .. Mario cuts and restarts QE ....

So, the young who drive the economy cannot buy houses, so theres no demand,

Whilst the older, whove have everything, see their assets go up - but theres no one to buy them.

And, being mainly cash savers, see their income fall.

And Trumps kicking off about this, so the German exporteres will be shitting themselves.

To cunter negative yields for the banks, ECB ha a special scheme - so, a totally controlled economy.

Only a matter of time before ECB start targeting tractor production and corn yields ...

If the ECB wants to increase demand then they need to half income tax for people under 60.

Then increase taxes on property.

And shoot all economists.

Highest rated comment:



Nothingimportant1 hour ago I can imagine my grandchildren reading about monetary policy over the last 5-10 years and asking “what?!? Their monetary policy didn’t get the economy going, and just created the mother of all asset bubbles, and yet they kept repeating it in the hope it would work the next time?” To which I will answer, “yes, that’s why grandad’s house costs twenty-billion Euros...”

 

 

 

 

 

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  • 3 weeks later...

Central banks push for action on Europe’s rising house prices

Frustration at governments’ reluctance to introduce mortgage safeguards

https://www.ft.com/content/6d5ee188-e292-11e9-9743-db5a370481bc

blah blah blah bollox.

Comments are best

esja3 hours ago

Dear governments, please press the brakes while we keep the accelerator flat to the floor forever.

Love, ECB



Rational Contrarian 3 hours ago

Step one. Artificially lower interest rates by printing money in an attempt to stimulate over-regulated economies, relative to non-European economies. Step two. Observe as lower rates, following basic economic rules, generate higher home prices. Step three. Introduce more legislative maneuvers to control home prices. Step four. Who knows? One thing’s for sure. This is going to end well.



B 1 hour ago

Let us create a new Consumer Price Index that also includes Home Prices, and we may magically discover that the "there is no inflation" meme that is parroted ad-nauseum by Draghi and his cohorts is a falsehood. There may be little inflation in goods and services included in the current traditional Consumer Price indices, but people do need houses to live in, and the toxic impact of QE and negative interest rates is corroding the living standards of the prudent savers, those on fixed incomes and retirees, as well as destroying any chances that an entire generation of young people have of ever becoming homeowners, as home prices climb to many times annual salary levels. Asset Price Inflation is hiding in plain sight across many countries and economies, but Central Banks still continue with their mad monetary policy experiemts, which favour the few who are asset-rich and rent-takers while harming the many. Draghi should perhaps take some time to ponder on what he has actually created, once he has finished blowing his own trumpet in front of his audience of fawning admirers.

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28 minutes ago, spygirl said:

Let us create a new Consumer Price Index that also includes Home Prices, and we may magically discover that the "there is no inflation" meme that is parroted ad-nauseum by Draghi and his cohorts is a falsehood. There may be little inflation in goods and services included in the current traditional Consumer Price indices, but people do need houses to live in, and the toxic impact of QE and negative interest rates is corroding the living standards of the prudent savers, those on fixed incomes and retirees, as well as destroying any chances that an entire generation of young people have of ever becoming homeowners, as home prices climb to many times annual salary levels. Asset Price Inflation is hiding in plain sight across many countries and economies, but Central Banks still continue with their mad monetary policy experiemts, which favour the few who are asset-rich and rent-takers while harming the many. Draghi should perhaps take some time to ponder on what he has actually created, once he has finished blowing his own trumpet in front of his audience of fawning admirers.

This comment resonated with me. What is the point of an inflation index if it doesn't accurately reflect the most essential cost of living - shelter?

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Followed by:

Eurozone inflation slides further below ECB target

Slowdown highlights why ECB felt it needed to inject more cheap money into the economy

https://www.ft.com/content/01001456-e42e-11e9-9743-db5a370481bc

SO, when they remove stuff that is going up - housing and tax.

And include stuff thats going down - everything else.

They find low inflation ....

And they wonder why theres no demand and people are not buying stuff because all their meagre earnings are going on the basics.

 

 

 

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Former central bankers attack ECB’s monetary policy

Sharp criticism of Draghi’s measures underlines challenge for his successor Lagarde
 
blah blah insane ....
 
From comments


Sunny London 18 hours ago The ECB's experiment in financial alchemy has lasted far longer than anyone expected. Headline justifications for negative rates are largely nonsense, I suspect. The unspoken imperative is to allow overleveraged entities to remain afloat. Rising real rates could create a debt crisis as in 2009. Back to the future.
 

Taxpayer 16 hours ago 12 years since the crisis and the Central Banks still continue to subsidise asset owners! While young people/ tenants and savers are punished so we can have super rich asset holders... Inflation on basic items is rising much above 2% and the housing ponzi scheme is still rising but Central Bankers prefer to look the other way and allow our society to be split into poor tenants/youth and rich asset owners... Raise rates now and stop HPI before its too late.


Bman 17 hours ago Excessively loose monetary policy which is out of step with economic reality, definitely benefits asset owners. The rich get richer. There is a trickle-down effect but it is minor. Young people looking to save for a house deposit and people looking to save money to fund their retirement, especially if they don't own their own home, are the big losers. The entire financial sector - banks, pension funds and insurance companies - is also adversely effected. It's crazy that this has been allowed to happen. It will be even crazier if Christine Lagarde allows it to continue.

 


Taxpayer 16 hours ago @Bman 12 years now.. 12 years with HPI shooting through the roof... And yet Central Bankers want more easing.. Unbelievable. What they want is to go back to feudalism where we will have few super rich asset owners and the remaining will be poor tenants...
 
Demand, in the main comes from younger people.
All QE and esp, ECB have done is to remove all demand by turning people under 50 into some sort of feudal system where their taxes support the older, asset rich.
An then the ECB wonders about no demand.
 
 
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Greece joins club of negative-yielding debt issuers

Short-term bill sale is latest sign of former bailout country’s rehabilitation

https://www.ft.com/content/5dde46c4-ea83-11e9-a240-3b065ef5fc55

Other former crisis spots like Italy and Spain have already joined the negative-yield club, with Madrid being paid to borrow to maturities of up to nearly a decade.

And that, dear reader, is why the ECB/ERUO/Europe is fucked.

Massive destruction of wealth in place.

 

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Mario has fucked up. Massively.

https://www.ft.com/content/f8706bac-f0bb-11e9-ad1e-4367d8281195

Rather than 'doing what it takes' (whcih would be sort out job regulation and scrap social payments,  hes just pissed money inflating EU bonds.



The heads of the German, French, Dutch and Austrian central banks have all spoken out this week to call for a change of strategy when Ms Lagarde takes charge at the central bank next month. They hope she will move on from the ambitious monetary easing strategy Mr Draghi has pursued over the past eight years.

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  • 3 months later...
2 minutes ago, spygirl said:

Success!

Greek 10-year bond yield falls below 1% for first time

Country’s borrowing costs hit record low as economic recovery takes hold
 
Of course, theyve destroyed the European banks and Southern Europeans economies to get the result.

sacrifice worth paying to keep Angela in a job.

They're gonna catch a serious cold whoever's buying at 1%

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