Have you been to the zoo when the monkeys start rattling their cages and screeching in unison? That about sums up the last 24 hours since the euro zone’s December CPI printed at negative 0.2% versus prior year. Within minutes of the release, brokerage house ‘economists’ were out in force caterwauling that $1 trillion of ECB bond purchases were now in the bag, meaning that gamblers who had ridden the Italian 10-year bond, among other peripheral junk , all the way down from 7.5% down to 1.72% would have another bountiful payday.
Then, just to make sure, the rather vague reference in the Fed’s 2pm meeting notes about headwinds emanating from economic weakness in Europe was spun shortly thereafter by the Fed’s PR firm, Hilsenramp & Blackstone, as an explicit instruction to Draghi et. al. to crank up the printing presses to full throttle.
But then about 8pm came the screech that ignited the robo-traders to another 300 Dow-point buy-the-dip-rip. The screecher was Charles Evans, who has spent the last 24 years in the central banking cage at the Chicago Fed – – having trained previously as assistant professor of economics at the University of South Carolina.
Never mind the upbeat picture of macroeconomic success painted in the meeting notes, said he. To actually allow money market rates to rise from the zero bound, where they have been pinned by the Fed’s big fat thumb for 73 months now, would be a ‘catastrophe’ he averred. Or as one wag noted at that moment,
SPHs are up 17.30 as we write because uber dove and Chicago Fed Prez Evans said the Fed ‘should not rush to hike rates’ and hiking rates would be a ‘catastrophe.’ Algos went berserk and bought SPHs. Ergo, Evans pulled a ‘Bullard’ last night.
A ‘Bullard’ indeed. Since Evans has a vote this year and Bullard doesn’t it is evident that the monkeys are interchangeable. But how else could you describe the babble and gibberish that emanates from the world’s central bankers and the casino economists, strategists and touts who amplify it?
This post was published at David Stockmans Contra Corner by David Stockman ‘ January 8, 2015.