Thursday, August 4, 2016


It would have been a nice, quiet day today with the market absorbing some pretty lousy economic numbers and waiting for tomorrow's job numbers when out of nowhere our relocated Canadian Central Banker announced that after 9 years he was reducing the Bank of England's discount rate by a 1/4% AND, coming to a theater near you in October, would begin buying 60 billion pound in Guilts and 10 billion in corporate debt of all things.  There comes a time in everyman's life when he thinks/dreams/wishes he was Italian, but Carney=Draghi?  Do get along.

The outcome was predictable.  Sterling tanked to 1.3170 and the ten year Guilt showed 0.64% at its close.  All sorts of noise about insuring the continuation of economic growth after BREXIT; the Bank of England stands firm; blah, blah blah.  To be sure economic numbers since the referendum have not been good but I wonder whether that is because of BREXIT itself or the fact that everything stinks everywhere except for equities and the best performing group in that market has been Turkey.  Go figure.  One might also keep in mind that Our Markie was complete Doom and Gloom at the prospect of a "Leave" vote.  Every once in a while I get the distinct impression the Mark doesn't like to be wrong...even when proven so...and reacts in a manner to justify his own beliefs no matter what that may be.

That may be harsh I admit but what we received today was another unfortunate example of the world's central bankers attempting to convince themselves that mankind's future rests solely in their hands.  At this stage they might all be beginning to believe that they are immortal and you know, if our future depends solely upon them they damn well better be right.  Some how I don't think so but unlike Mark, I've been wrong from time to time.  We'll see I guess.

Tomorrow's jobs number had better be OK which, given the start of full time electioneering will probably be the case.  Fortunately, it doesn't have to be really cooked...just cooked enough if necessary.  But another howler like last month....look out below gang.  A good piece of the sky may be coming down.

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