COLLUSION BY ANY OTHER NAME

 Who says there's no such thing as collusion?

The weekend edition of the Financial Times carried this sub headline: "Hints that US and UK monetary policy tightening could be delayed help temper turbulent week."

After what turned out to be a more turbulent week with volatility once again grabbing the cynosure than many expected, some monetary officials suddenly stepped out of the shadows to issue what many believe, we among them, were coordinated soothing statements to calm investor nerves.

The ferocity of market moves appears to have alarmed policy makers, with Andy Haldane, the Bank of England's chief economist, saying yesterday (Friday) that he favored delayed interest rate rises. He said evidence of a weaker global economy, lower inflation pressures and low wage growth had forced him to reassess the UK economic outlook.

Haldane's comments, as pointed out by the Times, followed those of St. Louis Federal Reserve Bank Chief James Bullard from a day earlier when Bullard suggested that the Fed should continue with its asset purchases instead of ending them.

Collusion by any other name is still collusion. And as one money manager put these central banker commentaries, given their timing, "....smell of a coordinated attack to help boost declining sentiment," something central bankers everywhere can ill afford.

Losing investor confidence, especially in view of an upcoming  election, would spell further disaster for the Fed's friends in Washington and on Wall Street. 

"Markets need to check into the Betty Ford Center and go into rehab, to wean themselves off this addiction to central bank support. If that means more volatility and lower prices in some assets, so be it," he said.

And there my thirsty friends you have the crux of the matter.  Central bankers and regulators are control freaks with a severe permanent case of OCD.  And that's the big problem with these screw-ups.

People with OCD generally recognize their obsessions and compulsions as irrational and may become further distressed by this realization.

That would be fine if it applied to bureaucrats, central bankers and regulators. Unfortunately it doesn't.

The more this hand-wringing goes on, the more one should be thinking behind the curve.
t. man hatter