ECB quantitative easing: Question everything

first_imgAmazingly, it has taken us more than four years to get here. Perhaps even more amazingly, the QE has arrived long after the apparent crisis point for the euro-zone has passed – the hair-raising weeks of 2012 when Greece looked to be on its way out of the single currency and peripheral bond yields were rocketing skywards. Today, Spain’s 10-year bonds barely yield 1.5%, and the euro has weakened enough to generate a healthy current account balance.The ultimate and most politically controversial of emergency monetary measures comes not in response to impending crisis but in pursuit of the central bank’s core mandate of price stability. Some have said today’s decision is the logical conclusion of current president Mario Draghi’s promise, at the height of the crisis, to do “whatever it takes” to preserve the single currency’s integrity. But, in fact, it is simply the logical and possibly the only way the ECB can pursue its core mandate as deflation takes hold and its interest rates bump up against the zero bound. (While the Swiss National Bank has recently shown a possible way forward into the strange world of deeply negative rates, it is notable the ECB kept all of its rates unchanged today).Does deflation represent a threat to the integrity of the single currency? Given the indebtedness of some members, it certainly could, if left to fester, Japan-like, for a long time. Does the market anticipate such an outcome? Looking at the way it has been pricing things over recent weeks, one would have to conclude that it does.Not only have bond yields and inflation breakevens been plummeting – while the oil price has halved, gold has been getting a bid for the first time in ages, which suggests investors have started thinking about it as a currency without a counterparty again, rather than just another commodity, and are no longer turned off by the thought of holding an asset that generates zero income.This is why the way markets responded to today’s news is so important. The central bank came out with a slightly stronger package than expected, and all of the pro-QE plays that had been selling-off over the last couple of days caught a bid: yields were back down, slightly, and the euro sold off modestly. Gold headed back through $1,300/oz. It was looking like we would get a classic case of buying the rumour and selling the news – which, by the way, is precisely what we saw around the QE decisions from the Bank of England and the US Federal Reserve. That would have been a comforting sign that a lot of the positioning taken up over the past month or so has been technically rather than fundamentally driven: speculators on the margins making sure they caught the up-draught into the increasingly inevitable ECB QE decision, rather than hunkering down for a long haul of falling consumer prices and stagnating growth.Should we revisit that thesis in the light of today’s moves? Not necessarily. The modestness of those moves suggests they are not reflective of market disappointment but rather of appreciation that the central bank really is serious this time. The open-ended nature of the programme Draghi described in the press conference was notable, for example. The response of stock markets back this interpretation up.It’s early days, but if this more optimistic take on things sticks over the next days and weeks, we could be seeing the beginnings of what could be a powerful bull market in European risk assets – but perhaps not the long-overdue and much-needed correction in safe-haven rates. IPE’s Martin Steward analyses today’s long-awaited European Central Bank announcement“We are not running money printing presses,” said the president of the ECB.That was in the early summer of 2010, the man in charge was Jean-Claude Trichet, and he was reassuring French radio listeners that the recent decision to begin sterilised secondary-market purchases of private and government bonds was not the prelude to US and UK-style QE. He needed to do so because the central bank was running desperately low on credibility. Days earlier, Trichet had insisted this big step had not even been discussed; and the ECB had previously broken its promise that “no state can expect special treatment” on collateral eligibility requirements in order to try and get on top of the worsening Greek debt crisis.In my opinion column for IPE at the time, I made the fairly unsophisticated argument that the losses of the financial crisis were in the process of being socialised through the ECB, and that this would happen either through defaults on debts that were now held at the ECB, or through the soft default of “runaway inflation” as the euro was trashed with a massive programme of all-out QE.last_img read more

Zimbabwe snatch tie after Windies collapse

first_img…Shai Hope hit 101 from 120 balls(REUTERS)- Zimbabwe seamer Donald Tiripano bowled a superb final over to help his side earn a dramatic tie in their Tri-Series one-day international against West Indies in Bulawayo yesterday.The visitors lost three wickets, including two run outs, in a desperate last five balls as Tiripano gave them nothing to hit with a succession of full deliveries that restricted the West Indies to 257 for eight.Captain Jason Holder had the chance to win the game off the final ball but could not make contact and wicketkeeper Peter Moor ran out a charging non-striker Jonathan Carter.Zimbabwe celebrated as if they had won the game and well they might after the visitors had seemed sure of victory.West Indies batsman Shai Hope hit 101 from 120 balls, his maiden ODI ton in his second match, and added 162 for the third wicket with Kraigg Brathwaite (78).When he was dismissed West Indies needed 38 runs from 32 balls with seven wickets remaining, but they could not get over the line due to tight bowling and poor shot selection.Zimbabwe won the toss and made 257 all out in exactly 50 overs.Their innings was built around the third-wicket stand of 144 between Craig Ervine (92) and Pakistan-born Sikandar Raza (77), but petered out as they managed only 67 runs from their final seven wickets in 11.2 overs.With all three sides having played two matches, West Indies head the Tri-Series table with seven points from Sri Lanka (five) and Zimbabwe (two).West Indies take on Sri Lanka in their game next Wednesday at the same venue.B Chari c Holder b C Brathwaite 15C Chibhabha run out 25C Ervine c Powell b Gabriel 92Sikandar Raza c K Brathwaite b C Brathwaite 77S Williams lbw b Nurse 2E Chigumbura c wkp Hope b Holder 8+P Moor c Powell b Holder 6*A Cremer c Gabriel b C Brathwaite 8D Tiripano b Gabriel 14T Chisoro not out 0C Mpofu b C Brathwaite 2Extras (w8) 8TOTAL (all out, 50 overs) 257Fall of wickets: 1-38 (Chibhabha, 11.1 overs), 2-46 (Chari, 13.1), 3-190 (Sikandar Raza, 38.4), 4-197 (Williams, 39.5), 5-218 (Chigumbura, 43.4), 6-228 (Moor, 45.5), 7-233 (Ervine, 46.2), 8-255 (Tiripano, 49), 9-255 (Cremer, 49.3), 10-257 (Mpofu, 50)Bowling: Gabriel 10-0-45-2 (w4), Holder 10-0-47-2 (w1), Benn 8-0-45-0 (w1), C Brathwaite 10-0-48-4, Nurse 10-0-55-1, Carter 2-0-17-0.WEST INDIESJ Charles lbw b Tiripano 19K Brathwaite c Ervine b Williams 78E Lewis c Chibhabha b Cremer 18+S Hope c wkp Moor b Mpofu 101R Powell b Williams 17C Brathwaite c Williams b Tiripano 9*J Holder not out 4A Nurse run out 0J Carter run out 1Extras (b1, lb3, w5, nb1) 10TOTAL (8 wkts, 50 overs) 257Did not bat: S Benn, S GabrielFall of wickets: 1-33 (Charles, 7.3 overs), 2-58 (Lewis, 11.1), 3-220 (Hope, 44.4), 4-234 (K Brathwaite, 47.1), 5-242 (Powell, 47.4), 6-255 (C Brathwaite, 49.2), 7-255 (Nurse, 49.3), 8-257 (Carter, 50)Bowling: Mpofu 10-0-64-1 (w2), Tiripano 6-0-26-2 (w1), Chisoro 10-1-42-0, Cremer 10-0-44-1, Williams 10-0-52-2 (nb1), Sikandar Raza 4-0-25-0.Points: Zimbabwe 2, West Indies 2.Man-of-the-Match: Shai Hope.last_img read more

‘They have to fix it’: Guardiola fumes after VAR denies City

first_img“It was incredible it wasn’t a penalty in the first half (for the foul on Rodri in the box) but VAR said it wasn’t and then at the end they did.”Tottenham manager Mauricio Pochettino shared a touchline conversation with Guardiola immediately after the goal was disallowed and after the match the Argentine joked he was “in love with VAR”.“I didn’t agree when we started to talk about VAR, but sometimes you get the benefit like today and in the Champions League (last season),” Pochettino said.“Of course it is difficult to accept because we love the football from 30 years ago where it was more the decision of the referee – sometimes unfair things happen but at the end of the season we find a good balance.“But we need to accept a different era and technology is in football now. We need to accept that today it is a benefit for us and when it is against us we have to deal with it with patience.” Premier League VAR Manchester, United Kingdom | AFP | Pep Guardiola called for VAR to be “fixed” after Manchester City were denied a last-gasp winner in their dramatic 2-2 draw against Tottenham on Saturday.Guardiola’s side failed to win for the first time in 16 Premier League games dating back to last season as a result of the latest VAR row.The champions thought they had stolen the points when Gabriel Jesus fired home in stoppage-time, only for the goal to be disallowed for handball after a replay review showed Aymeric Laporte had flicked the ball on with his arm.It was the second time City have been frustrated by VAR against Tottenham following last season’s Champions League quarter-final second leg when Fernando Llorente scored for Mauricio Pochettino’s team despite a potential handball, while Raheem Sterling had what would have been the winner ruled out for offside.“I thought we left that situation in Tottenham in the Champions League last season. But it is the same. The referee and VAR disallow it. It’s the second time it’s happened. It’s honestly tough but it’s the way it is,” Guardiola said.“It happened last week with Wolves (against Leicester) and we saw for Chelsea on Wednesday — the keeper wasn’t on his line — Adrian in the penalty shoot-out. They have to fix it.“The whistle inside matches now isn’t quite clear. But they believe it’s hands with Llorente in the Champions League and sometimes they don’t.center_img Share on: WhatsApplast_img read more

Inside Conditions…A day late a dollar short

first_imgKansas City Chiefs kicker Ryan Succop misses the possible game-winning field goal against the San Diego Chargers during the closing seconds of regulation of an NFL football game, Sunday, Dec. 29, 2013, in San Diego. The Chargers eventually won the game 27-24 in overtime. (AP Photo/Lenny Ignelzi)Last Sunday evening I watched Kansas City Chiefs kicker, Ryan “the chokester” Succup gag and flinch, kicking the Pittsburgh Steelers out of the postseason.It is not clear whether Succup developed a case of the dreaded malady, “chokitis,” or just deliberately punched the Steelers in the gut while simultaneously punching the San Diego Chargers ticket to play on the “big stage” known as the NFL playoffs.  But ya know what boys and girls, the Steelers should not have depended on the competence of a player from another NFL franchise to “pay their toll” so they could continue traveling on the “playoff highway” leading to the Lombardi Trophy.See, in the NFL there is no such thing as an “E-Z Pass lane.”Aubrey BruceLet’s hit “Rew” and do a partial review of the 2013 Steelers season (a complete review may just be a bit too painful for yinz guys and gals to bear).Succup’s botched field goal attempt was not the play that will cause the Steelers to be at home ordering sandwich rings, cases of Bud Light and hot wings while watching the first (wild card) round of the playoffs.In the Steelers opening game they could only score a measly 9 points in a 16-9 loss to the Tennessee Titans at Heinz Field. Pittsburgh drew first blood by scoring a safety on the first play of the game and was only able to muster a “garbage” touchdown with only 1:23 left to play in regulation.You say you don’t agree, okay; was it the following Monday night when the Black and Gold ventured into Paul Brown stadium to face the eventual 2013 AFC North Champion Cincinnati Bengals who had more than an adequate supply of family sized cans of “whoop ass” to send the Steelers packing back to Pittsburgh “smarting” from a 20-10 loss.  Although, Steelers reserve tight end David Paulson lost a fumble,  “Big” Ben Roethlisberger  contributed a fumble and a pick in the losing effort.On the following Sabbath Day “da Chick-a-go” Bears strolled into Heinz Field and promptly smacked the Steelers around by the score of 40-23.  Roethlisberger threw 2 picks and fumbled 3 times, losing 2. When you give any offense 5 extra possessions, game, set, match.The next week the Steelers traveled to London and lost to the Minnesota “Vikes” by the score of 34-27.  “Big Ben” had this to say about the loss; “We are in unchartered territories and the water is dangerous right now, so we have to stick together and get out of it. Right now, you could say we’re the worst team in the league, that hurts.”They may have entered the review room with glaring questions about a glorious past and a hazy future. However, just as they were stumped by that decades old mystery of a timeless and historical reception by an NFL running back they seemed to be just as perplexed by their own futures.But there was a light at the end of the tunnel or so the Steelers nation hoped. A few folk even began to nitpick and bash. When Steelers rookie running back LeVeon Bell was injured for the initial three games people, even the running back’s own quarterback, sort of expressed doubts about his “toughness” and “heart.”Mike Chiari, featured columnist from Bleacher Report in an article published  on September 25, quoted Roethlisberger saying this about Bel;  “Honestly, I have no idea with him. You can’t get a read on him. One day, he’s practicing, one day, he’s not; one day, he’s going hard, the next day, he’s not. I wish I could. If he was a guy like Heath Miller that you knew was busting his butt every day to get back there … Le’Veon is a rookie, I don’t know him quite well enough yet. But if he can come back and help us, we’ll take him.”Spoken like a true general manager or head coach, don’t you agree? Steelers tight end has been and remains one of the most consistent Steelers but who is “a guy like Heath Miller?”Injuries affect individual players, differently. Remember the Steelers/Ravens match up on November 29, 2009 in Baltimore? The Steelers lost to the Ravens after Roethlisberger took all of the reps during that weeks practice and informed the team the day before the game Saturday that “concussion symptoms” had returned, thus thrusting Steelers rookie quarterback Dennis Dixon to start placed in an almost impossible situation.At the time that Roethlisberger was forced to issue the Steelers a “rain check” in regards to him competing against Baltimore, Steelers wide receiver and future hall of famer Hines Ward had this to say. “‘Ben practiced all week. Then to find out that he’s still having some headaches and not playing and it came down to the doctors didn’t feel that they were going to clear him or not. It’s hard to say. I’ve lied to a couple of doctors saying I’m straight, I feel good when I know that I’m not really straight. I don’t think guys really worry about the future while they’re playing currently in the NFL.”Steelers Head Coach Mike Tomlin did not even reveal to the team that Roethlisberger was not starting this important game against the hated Ravens.“At the time, I was more concerned about getting Dennis ready to play,” Tomlin said, “and I proceeded with the assumption that our men understood what kind of competitor (Roethlisberger) is. If they don’t, I will tell them.”Ben Roethlisberger is by no means finished as the Steelers starting QB but the team might be better served to at least drafting, signing or grooming a replacement.  The late songstress Billie Holiday once sang; “God bless the child that has his own.”  Never depend on anyone to do your work for you.Aubrey Bruce can be reached at: abruce@newpittsburghcourier.com or 412.583.6741last_img read more