Mario Draghi says he “will act if the current turmoil threatens the outlook”. Determined then – albeit somewhat vague. The declaration, one might suggest, of a central banker holding 9 high in his poker hand.
For myself, I want to know more on the what and how dimensions. I mean, it could be he might act silly, up or (less likely) his age. He could act now, in due course, or for the party of the second part. He could act natural, or badly – the role of Richard III in the manner of a club singer, for example.
But before asking what form of action might be involved, I suspect we need to find out what outlook he thinks is threatened. I think a huge threat from the dying months of mad monetarism is hyperinflation. If that’s threatened, I’d rather he auditioned, but failed to get the part.
The reason why I could never be a central banker is that the temptation to say something daft at the key moment would be irresistible. Imagine what a charge it would be to have the eurozone, London and Wall Street stock indexes on screens in front of you, and then watch the bourse equivalent of a triple by-pass operation taking place – without anaesthetic – as one spoke. No sex could ever be that good.
“Having carefully considered all the monetary stimulus and geopolitically diplomatic options open to us, my cat Sophia and I have decided that the best – indeed only – course of action available to the Board is that of suspending the activities of mainstream global media magnates. As from one am tomorrow morning, Mr Rupert Murdoch will be suspended from Jerry Hall’s nose by his goolies with piano wire, the Barclay twins will be suspended above but within easy reach of the nearest Channel shark, Mark Zuckerberg will be suspended by his own patarde, and Jack Dorsey will be suspended by his own followers.”
Now those of us who think bourses are not the only way to run a railroad might even be converted to the idea by such a clear statement of intent; but we all know it ain’t gonna happen.
So the only thing left for right-minded free thinkers to do is accept that Signor Draghi has nothing whatever to contribute. Lest it slip our collective mind, this is the man who played Cisco Zappata the Mexican Macho two years ago with his “whatever it takes” promise. It turned out to be an empty promise….and so we can safely assume that – like Yellen of the Fed last week – nothing he either says or does is going to make any difference.
If no amount of Marios, Janets, Georges, Marks and Abes will stop the inevitable unravelling of monetarist globalism, then why has there been a bounce in the markets today (see earlier post re Japan)? Today has seen an uninspiring mixture of no news, equivocal news, and bad news: good news has not been seen other than in the self-created news that banks have recovered their stock valuations (somewhat) and the, um, consequent rise of overall indexes on the back of that.
We in the West are fond – few more than I – of pointing an accusing finger at the Chinese People’s Bank when it comes to the obvious propping up of the Shanghai composite. But I posit something contrarian now in the shape of not one but two distinct possibilities about whatTF is really going down (or up) on Western Exchanges:
- Big private money SOL trading is directionalising sap money upwards before pulling the plug in order to reap a fast buck…just one last milk of the Old Cow, guys; and
- Sovereign printed money is diving in under an assumed name in order to postpone the storming of the Bastille.
A third sub-possibility – that there is a degree of cooperation between the two – I would not dismiss out of hand. After all, Russian export income, the Iranian currency, the Libor rate, the Gold tracker sector and banking idiocy have all been either overtly or covertly massaged by such marriages based on mutual interests.
I suppose the simple question I ask is this: are stock markets just stupid? Or is there – like trending commercialism on Twitter – method in the malevolence from time to time?
I’m tending – listing even – towards the latter possibility, but I’m willing to be listen to the reason of threaders.
And please bear in mind that the usual Slog mantra applies: I am far more interested in hearing the cogent opinions of those who know something, rather than those who claim to know everything.