Mario Draghi

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A Hard Rain's a-Gonna Fall

The prospects for the rest of the year are awful
Friday, June 15, 2018, 6:55 PM

As the Federal Reserve kicked off its second round of quantitative easing in aftermath of the Great Financial Crisis, hedge fund manager David Tepper predicted that nearly all assets would rise tremendously in response. 

History proved Tepper right: financial and other risk assets have shot the moon. Equities have long since rocketed past their pre-crisis highs, bonds continued rising as interest rates stayed at historic lows, and many real estate markets are now back in bubble territory. 

And everyone learned to love the 'Fed put' and stop worrying.

But as King Louis XV and Bob Dylan both warned us, what's coming next will change everything. » Read more

Blog

acting-man.com

How Many More “Saves” Are Left in the Central Bank Bazookas?

Very few, it seems
Wednesday, February 18, 2015, 10:45 PM

The remarkable success of grandiose pronouncements, money-printing programs and serial expansions of credit raises a key question: how many more “saves” can the central bank bazookas fire that will have the desired effects of maintaining perceptions of central bank omnipotence and pushing global markets ever higher? » Read more

Podcast

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Axel Merk: Why Asset Prices Must Return To Lower Levels

It's the price you pay for forcing capital to speculate
Saturday, January 24, 2015, 4:59 PM

Saying it's been a busy week and half on the central bank front is perhaps a sizeable understatement. 

First, the Swiss National Bank stunned the world (and its brethren central banks) by removing its peg to the Euro. This was quickly followed by Mario Draghi finally making good on his longtime threat of firing QE bazooka, announcing that the ECB will pursue a 60 billion Euro per month easing program for the next 16 months. And amidst all the smoke, the Canadian central bank snuck in a surprise rate cut to its interest rate.

To make sense of both the "Why?" behind these extreme moves, as well as the "What?" in terms of their implications, Axel Merk, founder and Chief Investment Officer of Merk Funds joins us this week. » Read more

Podcast

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Alasdair Macleod: All You Need To Know About Negative Interest Rates

The implications of the ECB's radical decision
Sunday, June 8, 2014, 10:14 PM

On Thursday, the European Central Bank (ECB) took the historically unprecedented step of lowering certain of its interest rates below 0%. In a report to our premium subscribers immediately following the announcement, Chris likened the move to the policy equivalent of dropping a neutron bomb.

In the days following, despite the ECB attempting to clarify its stance further, many questions still linger; most notably: What exactly will the implications of this negative interest rate (NIRP) policy be? » Read more

Insider

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The European Neutron Bomb Has Dropped

Central banks have gone insane!
Thursday, June 5, 2014, 11:25 AM

For anybody drinking the economic recovery Kool-Aid, today's historically unprecedented experiment by the European Central Bank (ECB) to impose negative bank interest rates should be like a bitter squeeze of fresh lemon on the tongue.

If things are so rosy then why exactly are such desperate measures necessary? » Read more

Podcast

Alasdair Macleod: Europe is a Hot Mess

Its banks are the weak point in the global financial system
Sunday, July 28, 2013, 10:42 AM

It's almost August, the month everyone in Europe takes off on holiday to forget their troubles. This year may be different, though, as not only can many not afford a vacation, but Europe's troubles loom so large that forgetting them won't be easy... » Read more

Insider

Off the Cuff: The Plot Thickens

Developments are happening faster now
Thursday, September 13, 2012, 1:11 AM

In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris tackle

  • The German Constitutional Court decision
    • What importance does it have? Any?
  • America is back in recession
    • More hard-to-refute data
  • Whither the Fed?
    • Why markets will be disappointed by Bernanke

Surprising to those who don't read this site, a number of notable announcements are happening this week besides Apple's unveiling of the iPhone 5...

Today, the German Constitutional Court made its ruling on the legality of Mario Drahgi's plans to flood European banks with liquidity. The court has the power to block the ECB's profligacy; but it seems that once again, politics trumps justice. Draghi will be allowed to proceed with some tissue-thin restraints. 

Meanwhile, new data show North America's economies are slowing down. Indeed, more and more analysts are coming to the conclusion that the US has slipped back into recession (even though to many it feels as if America had never left it). Jabbering of 'recovery' and slight declines in the official employment rate – which is a complete farce, as those unable to find work after a time are removed from the lists of those counted as 'unemployed' – are fooling no one at this point.

Which leads all eyes to the Fed. What will it do (or better asked, what can it do) to combat this dismal data? » Read more