How does QE work? That’s actually a trick question given how all the evidence produced in examination of the various programs undertaken across the world under that label uniformly indicates that it doesn’t. On the contrary, the most studied and tested government efforts in history have yielded consistent results up and down the board.It's just that the public has never [...]
Talking with my colleague Joe Calhoun yesterday, he was eager to share with me something he found in the (virtual) pages of the Wall Street Journal, a perfect sign of the times. In a story about a group of nuns in Germany taking their financial future into their own hands, Joe couldn’t help but shake his head at what surely [...]
The Bank of Japan had previously “disappointed” last December when it failed to announced more “stimulus.” Setting aside who might actually have been frustrated by the lack of renewed distortions, the Japanese central bank did make some minor alterations to its QQE regime at that time. They expanded the list of eligible collateral and extended the average remaining maturity range [...]
Just a few weeks ago the Swedish central bank, Riksbank, was being lauded for its courage and action in finally embracing QE as the ECB had done. The deflation problem in Sweden had been, so it is asserted, seemingly intractable and thus forcing the monetary hand once more. Riksbank has never been shy about fine-tuning here and there, so it [...]
There are “portfolio effects” for individual investors, bank balance sheets and even interbank tendencies, or at least that is according to central bankers. The rather tame ECB announcement this week did highlight and clarify what Mario Draghi and his euro monetarists wish to accomplish. The new measures will support specific market segments that play a key role in the financing [...]
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