The Big Taper starts one central bank at a time. But you gotta keep the markets from swooning with a bit of welcome delusion.
Housing craziness is front and center.
“Makes you wonder if there’s a potential mid-QE-life crisis taking shape in Ottawa”: strategists at the National Bank of Canada in a note that would be hilarious if it weren’t so serious.
“Once crisis tools have served their purpose, central banks should scale them back.”
This is not your grandmother’s “yield curve control.” There is only one thing that could force this ECB absurdity to end: a big bout of inflation.
The “second wave,” if prolonged, could cause bad loans to almost triple, to €1.4 trillion, says the ECB.
“Companies from outside the euro zone are setting up vehicles to issue debt in euros and thereby qualify for the ECB’s purchase programs.”
Central-Bank Forked-Tongue Syndrome.
But the ECB went into high gear to soothe the pain of the banks.
Fed leads in trimming its balance sheet; Now Bank of England governor publishes the reasoning for central banks to shed assets – before raising interest rates. A big shift!