Central banks investing in stocks?
bronco2078
Posts: 10,225 ✭✭✭✭✭
central banks have invested 29 trillion in the stock market
I knew those dirty MGLICKERS were up to no good
Sorry , just going with the flow
0
Comments
Another link on the subject from naked capitalism
This is news? That zerohedge guy and all his conspiracy theories.
Everyone knows China invests in equities and so do a lot of Western European countries with sovereign wealth funds and reserves. As does Singapore and the Middle East. Figures are a bit exaggerated because he cleverly included gold. I bet they also count the US strategic petroleum reserve as a "market investment".
Its a Financial times story that's cross posted to zerohedge. You can't read it directly without signing up or I would have linked directly to it.
How is it defensible for central banks, which have the power to create money, to invest in anything? Created money is risk-free and it is bound to be a corrupt process on some level.
<< <i>Its a Financial times story that's cross posted to zerohedge. You can't read it directly without signing up or I would have linked directly to it.
How is it defensible for central banks, which have the power to create money, to invest in anything? Created money is risk-free and it is bound to be a corrupt process on some level. >>
They will also get creamed when the market crashes. Free money has become the crack cocaine of the free world.
<< <i>Its a Financial times story that's cross posted to zerohedge. You can't read it directly without signing up or I would have linked directly to it.
How is it defensible for central banks, which have the power to create money, to invest in anything? Created money is risk-free and it is bound to be a corrupt process on some level. >>
Whoever said life is fair... Markets didn't shoot up 100% when central banks announced QE. Everyone knew about it and the markets still dropped for a while. So anyone could have invested and made money. I understand where SWFs are coming from. Why put all your eggs in one basket? Diversify and reduce your risk! A lot of them didn't just print that money. They made money supplying the world with goods and services. Norway, Germany, Singapore etc
BTW, I admire Norway's economy, their central bank (the least leveraged CB in the world) and their wealth fund. The fund provides free education, free healthcare and benefits for the elderly. It also invests heavily in infrastructure. What do we get for our taxes?
The FT article was probably a "FYI... no big deal" kind of thing and zerohedge is just twisting it.
<< <i>
<< <i>Its a Financial times story that's cross posted to zerohedge. You can't read it directly without signing up or I would have linked directly to it.
How is it defensible for central banks, which have the power to create money, to invest in anything? Created money is risk-free and it is bound to be a corrupt process on some level. >>
They will also get creamed when the market crashes. Free money has become the crack cocaine of the free world. >>
Yes like the Middle Easterners did back in 2008. They were just piling into banks, injecting billions at ridiculous valuations.
I knew it would happen.
<< <i>I'm still puzzled by the special status and lavish rescues that mismanaged large banks who should have been liquidated have been granted, when normal people who get into financial trouble have no such safety net (nor should they). >>
Geithner and Bernanke are both on their way to multimillionaire status in a year or so after their departure from government employment.
Connect the dots.
100% Positive BST transactions
Here's something eerily ominous that ZH just posted:
It's Never Different This Time - 1987 or 2014?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>If CBs aren't directly investing in stocks their provided liquidity is sure enabling others to do so.
Here's something eerily ominous that ZH just posted:
It's Never Different This Time - 1987 or 2014? >>
Why is it the same?
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>
<< <i>If CBs aren't directly investing in stocks their provided liquidity is sure enabling others to do so.
Here's something eerily ominous that ZH just posted:
It's Never Different This Time - 1987 or 2014? >>
Why is it the same? >>
Because the same mistakes are being made, yet different results are expected.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>
<< <i>If CBs aren't directly investing in stocks their provided liquidity is sure enabling others to do so.
Here's something eerily ominous that ZH just posted:
It's Never Different This Time - 1987 or 2014? >>
Why is it the same? >>
Because the same mistakes are being made, yet different results are expected. >>
What same mistakes are being made ?
And what different results are expected?
I give away money. I collect money.
I don’t love money . I do love the Lord God.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>read the link >>
I did.
The very first sentence makes it clear to me why this bull market has gone
on so long. Far more bears than those ' systemic" bulls.....
So I repeat my 2 questions to you ........??
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>
<< <i>read the link >>
I did.
The very first sentence makes it clear to me why this bull market has gone
on so long. Far more bears than those ' systemic" bulls.....
So I repeat my 2 questions to you ........?? >>
1. Flooding the system with money that can now be used by banks to gamble (result of Glass Steagal Act repeal) and encouraging debt with low interest rates. Debt was and will again be the cause of economic system failure.
2. FED continues to believe these actions will strengthen the economy when in fact they only delay the ultimate results of excess debt. They caused delay in late eighties, 2009 and, if most people are lucky, again in the very near future.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>Its a Financial times story that's cross posted to zerohedge. You can't read it directly without signing up or I would have linked directly to it.
How is it defensible for central banks, which have the power to create money, to invest in anything? Created money is risk-free and it is bound to be a corrupt process on some level. >>
They will also get creamed when the market crashes. Free money has become the crack cocaine of the free world. >>
When will the market crash? Did you predict the 08-09 crash with perfect timing?
<< <i>
<< <i>I'm still puzzled by the special status and lavish rescues that mismanaged large banks who should have been liquidated have been granted, when normal people who get into financial trouble have no such safety net (nor should they). >>
Geithner and Bernanke are both on their way to multimillionaire status in a year or so after their departure from government employment.
Connect the dots. >>
Bureaucrats don't get paid well. There is more money to be made in the private sector.
<< <i>
<< <i>
<< <i>I'm still puzzled by the special status and lavish rescues that mismanaged large banks who should have been liquidated have been granted, when normal people who get into financial trouble have no such safety net (nor should they). >>
Geithner and Bernanke are both on their way to multimillionaire status in a year or so after their departure from government employment.
Connect the dots. >>
Bureaucrats don't get paid well. There is more money to be made in the private sector. >>
It's the slow turtle that wins the race though.
Plus they are unfireable , job security is like 99%
<< <i>Bureaucrats , especially the government kind , get great benefits, halfway decent money, do no actual work , and get to retire at 50 with a full pension. >>
Actually, speaking from experience, federal retirement eligibilty was, until recently, age 55. It has since been raised to age 62. Also the term full pension does not mean a full paycheck of what you were earning; it means a percentage of that paycheck (based on years of service) without any further reduction because you retired before the qualifying age.
Other than that I agree, government employment is in most parts a scam against the taxpayers.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>read the link >>
I did.
The very first sentence makes it clear to me why this bull market has gone
on so long. Far more bears than those ' systemic" bulls.....
>>
As long as one of those bulls is the FED/Treasury-PPT/and US govt sovereign wealth funds then it doesn't matter how many bears there are. That 1 bull has been trumping everything else.
The FED has increased the money base from 850 BILL to $4 TRILL over the past 5 years. I don't think there's another 5 yr period in history where a 400% increase occurred. That is the "safety net"
for all the wild betting by the big boyz. It's Bernanke's version of the Greenspan "put." When the FED/Treasury are ready to remove the put they will inform their connected buddies and leave J6P to fend
for himself.
<< <i>
<< <i>
<< <i>read the link >>
I did.
The very first sentence makes it clear to me why this bull market has gone
on so long. Far more bears than those ' systemic" bulls.....
>>
As long as one of those bulls is the FED/Treasury-PPT/and US govt sovereign wealth funds then it doesn't matter how many bears there are. That 1 bull has been trumping everything else.
The FED has increased the money base from 850 BILL to $4 TRILL over the past 5 years. I don't think there's another 5 yr period in history where a 400% increase occurred. That is the "safety net"
for all the wild betting by the big boyz. It's Bernanke's version of the Greenspan "put." When the FED/Treasury are ready to remove the put they will inform their connected buddies and leave J6P to fend
for himself. >>
it doesn't matter! There is an old saying : Don't fight the fed!
Bears have been fighting the fed and thus have been on the wrong side of the trade!
I give away money. I collect money.
I don’t love money . I do love the Lord God.
"The optimists expect that the monetary growth, the quantitative easing, will produce economic growth at a rapid pace. Sometimes when you take a medication and it hasn’t worked for five years, you better change your medication. But that’s essentially the error with the optimists. They’ve had five years of quantitative easing, big bond purchases, quintupling of the Fed balance sheet. And we don’t have sustainable economic growth. Why not say you need a different medication? We started out with a zero interest rate in 2008 and we have evidence again and again from Robert Mandel, Milton Friedman, that monetary policy is ineffective at very low interest rate levels. The other problem is unemployment is becoming structural. That means long-term unemployment cannot be changed via monetary policy."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Bears have been fighting the fed and thus have been on the wrong side of the trade!
Some people don't feel the need to be "in" on every trade. There's another old saying: Don't churn the account!
I knew it would happen.
<< <i>it doesn't matter! There is an old saying : Don't fight the fed!
Bears have been fighting the fed and thus have been on the wrong side of the trade!
Some people don't feel the need to be "in" on every trade. There's another old saying: Don't churn the account! >>
Who said anything about being in on every trade and churning accounts........except you!? Your bearishness relative to what the fed has been doing
has suggests you have not been in the stock market at all !
That's what I mean by being on the wrong side of the trade.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>FED policy is designed to be beneficial to someone. Become one of the someones. >>
Now your getting it!
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I knew it would happen.
<< <i>I sure hope you aren't recommending that your clients buy stocks at the highs. Just sayin'. >>
I discussed that in another recent thread.
It's not about calling market highs ..... or lows......
And never has been.
It's about having an allocation that matches a person's tolerance to risk and volatility associated with investing in stocks.
Then being disciplined( ie not letting your emotions rule getting in and out ) to rebalance around that risk number.
Think about that......
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Knowledge is the enemy of fear
<< <i>Central banks investing in stocks? >>
Maybe they're hedging their massive purchases of their own nation's debt.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Why not just have the Treasury be accountable for it's own currency and debt?
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>What if the title of the thread said "Central banks investing in gold"? Would there be a different tone to the debate? >>
The tone is set by the topic. What if they were investing in bullets?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>The sales pitch for a "non-government" central bank such as the FED was to maintain independence from the influence of politicians. So much for that idea. >>
That may have been the sales pitch , but I think the plan was to extend the grift by muddying the waters , and they made it 100 years so its worked pretty well.