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Politicians take over

| Posted by: Paul Donovan | Tags: Paul Donovan

  • There is no economic data to speak of, which sadly means we are beholden to policy makers for new information.
  • The European finance ministers meet. The normal pattern in Europe is for ministers to promise reform, Draghi to proffer ever more unconventional policy, ministers to sit back and rely on central bank policy change. The result is cyclical not structural growth.
  • The economists of the BIS (who, like all economists, deserve to be revered) have published a paper warning of the problems of negative interest rates. We view negative rates more as a tax on banks and large depositors than as a monetary stimulus..
  • The US saw more primary votes in the Presidential candidate race. Perhaps the main impact of these events right now is to divert media attention from other news - good or ill.