Central banks have acted in a globally unified move to reduce central bank to commercial bank lending rates by 0.5%. Even more than on the rumour of the IMF boning up a cool 600bn euros for Italy, the markets are climaxing over this. There's coke and jism all over the shop. Adam's Invisible Hand is hard at work, pumping those boys good and proper. And it isn't even Friday yet! Here are some choice quotes from a Guardian article I just perused:
The Bank of England joined the Federal Reserve, the Bank of Japan, the ECB, the Bank of Canada and the Swiss National Bank in taking the measures. Stock markets around the world surged after the central banks said they would cut the price of emergency dollar loans to cash-strapped banks by 0.5 percentage points, and extend the scheme until February 2013.
"Clearly the world's central bankers have had enough of all the political mud-slinging and intransigence and they've decided to take the situation by the scruff of the neck."
How nice to have had enough of politicians who can’t seem to cure the worst debt crisis in history by forcing their underlings to pony up their futures, without rioting, for generations to come, as tribute to the system that serves only two functions; growth and enslavement. How meek and incompetent of them. How indecisive. How immature. Not that I’m a fan of politicians, but doesn’t that financial-expert view of things sum it up nicely.
It’s the money, stupid. No money; no planet. No credit; no planet. No debt; catastrophe, mayhem, disaster, raining fire, earthquakes, boiling seas, kraken devouring lambs and babies. You name it, we’ll do it.
The central bankers fear that if financial institutions rein in credit, it will hit ordinary consumers and businesses, and threaten a double-dip recession in the world economy.
"The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity," they said in a joint statement.
Scary, huh? The very last thing we want is a double dip recession. Just think, wages might stagnate. People might lose their jobs. Standards of living might fall. Crime might rise. Any one of those would be, quite frankly, unacceptable. Nobody in their right minds would want all of them at once. So thank the central bankers that the markets are rising again. Because if there is one thing that is crystal clear by now, it’s that we all benefit, people and planet, when the markets are surging upwards.
Trot out the bonuses! Those ‘hard working’ folk in finance can buy their wives and Class Act Escorts another Porsche Cayenne or Audi Q1.
The Audi Bonus. “One in each colour, sir?”
But this is boring, isn’t it? This is like the twentieth time this month a ‘fresh injection of liquidity’ has revived the fetid rot this system clearly is. Squeezed some noxious activity out of it. I mean, apart from it being historic and everything, this is getting just a tad repetitive. Let’s try and spice it up a little, remind ourselves what we’re dealing with here:
"This may have been a signal that the money markets were a short shove away from complete collapse."Complete collapse? Ooh! I think I can ... yep, there’s a butterfly in my stomach. Thanks, Jeremy Cook, for bringing a little excitement back into my old body. The Cinema of the Media sure knows how to knock us out, eh? Wham, bam, boom, up and down like jet fueled yoyo. It don’t get much better than this. And the only way to fly in this beast is passively. Lie back, let the Masters take care of business, and hope you don't belong to one of the billions about to get squished under the juggernaut's weight. Like a bug.
[ADDENDUM, 18:51 CET: This point should have made it into the article, but them's the breaks. Lowering interest rates worked like a charm so far, got banks lending again, right? It says in the text books that low interest rates = cheap money = lending and then Even More economic growth. It's in the text books, clear as day. With charts and everything. So let's do that again, because last time people didn't notice enough. There wasn't a sufficient Attention Quotient (AQ) operating at that moment in time (2008, 2009, and 2010 or so, roughly). It didn't really bite, you know? Didn't quite find purchase as we'd hoped. This time, now that the problem has been taken "by the scruff of the neck", those eye-wateringly low interest rates will have the effect the text books promise. Everybody knows that!]