Albert Edwards mentions BoE Chair Mark Carney in less than flattering terms:

With Dylan Grice’s departure I found myself reading his collected works 2009-2012, which we have published in hard copy. I didn’t feel sad. It wasn’t like the time I split up with my girlfriend and was getting maudlin listening to Dido albums. I was getting tearful though reading ‘Cred and Credulity’ – the best of Dylan.

I shed tears of despair as I was reminded of the blundering incompetence of our overconfident policymakers, whose interventions, despite their best intentions, seem to bring about financial crises with increasing rather than decreasing regularity (see chart below). I felt the same rising anger I felt in the run-up to the 2008 crisis at what central bankers, and Alan Greenspan specifically, were doing.

We’ve had some classic examples of Central Bank ‘bull’ recently. First comments from the incoming Bank of England Governor, Mark Carney, and second an interview in the Financial Times from the outgoing chair of the UK’s Financial Services Authority, Adair Turner (I include him as a central banker as he was in charge of banking regulation). Both confirmed my view that the most dangerous thing about the current conjuncture is the absolute conviction among our central bankers that they can cont7rol events.

Edwards advice is “Don’t do something, just stand there!”

So much for a honeymoon period . . .

 

 

Source:
Is Mark Carney the next Alan Greenspan…?
Albert Edwards
Société Générale, 8 February 2013

Category: Federal Reserve

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Is Mark Carney the next Alan Greenspan…?”

  1. kcowan says:

    Carney had a pretty good record of doing nothing as BoC President.

    Was just standing there the right thing to do? Don’t know yet…

  2. Braden says:

    Axis not labelled – S&P 500?
    It’ll be interesting to see how Carney does in England. In Canada, it’s pretty easy to just stand there and do well. There are only 5 charter banks, and he was regulating the central bank of a booming resource economy for most of the time. In the UK, banking IS the major economic force. Furthermore, he’s smack in the middle of the borrowing clusterf_ck in Europe. It’s easy to imagine it’ll be a bit more complicated.

  3. AHodge says:

    canada avoided US style problems by limiting housing finance last decade
    and keeping actual banking, meaning banks, even big ones doing lending,
    and much better accounting
    - but creditiing Carney personally? probably not

    its likely Mervyn King was pushed out, my personal guess
    Because He was pushing reform, esp narrow banking,
    and Carney is expected to be more pliant to the bloated behemoth former banks
    and hands off

  4. JEHR says:

    The funny thing about Mark Carney and his governorship of the Bank of Canada, is that hardly anyone recognizes that “liquidity” to the tune of $114 billion was injected into the top Canadian banks after 2008. At first the PM denied this fact but now admits it but doesn’t call the money a bailout. The Canadian banks also borrowed from the Fed discount window, in one case up to $10 billion. Interesting, I say. Mark Carney is a Goldman Sachs guy and that is the most interesting fact of all. We’ll see what happens.

  5. gkm says:

    Unrelated to the headline topic, I think my first take away from this chart would be the remarkable impact of gold devaluations over the history of the FTSE. I believe England started really devaluing in 1931 after rejoining the gold standard in 1925 and then the Bretton Woods dissolution in 1973(?).

    It’s also interesting that the return to the gold standard in 1822 (after its suspension in 1797) coincided in a boom in the FTSE followed by a bust. Antithetical? Really neat graphical chart here:

    http://www.bankofengland.co.uk/education/Pages/inflation/timeline/chart.aspx

  6. Concerned Neighbour says:

    Well, whoever is controlling the market is doing a bang-up job, what with the endless intraday reversals, afternoon ramps, almost illegal losses, etc. Truly excellent programming on display for all to see (but almost no one in the media willing to report on).

    If it’s the central bankers that are responsible, as I very much suspect, no wonder they’re overconfident. As long as they can continue pumping ever increasing amounts of money into the market in perpetuity, without withdrawing one red cent, everything should turn out just great.

  7. Cooter says:

    A lot of commenters here seem to really hate central bankers and their means of maintaining social order.

    It is funny to me because anyone with enough money to even think about stocks and bonds also has enough money to contribute meaningfully to social and economic change that would make central bankers less powerful.

    It is a puzzle to me why people still have money in big banks, when credit unions serve the same function but with true democratic control at the local level.

    Since I am not seeing a lot of grassroots change out there, I hope Carney is another Greenspan.

  8. Richard W. Kline says:

    “Don’t just do something, stand there!” is the original quote, from Clint Eastwood IIRC from Don Seigal (might have been another director). Advice Clint took which made him ultimately famous and rich above his (not inconsequential) talent level.

    —And with regard to central bankers, their actions have been so actually pernicious that I think the point is well taken. If Central bankers did NOTHING, we’d be better off. It’s not that central bankers and finance ministers have no useful tools, in my view, it is that their goals are such a grotesque mixture of irrational cant and servility to the financial cravings of the plutocracy that central bank actions are broadly hostile to the stability and vitality of the real economy.

    The most useful thing a central financial administrator can do is to say “No” more or less, through various levers and brakes. So what do such actors usually say? “YES!” That is, at least, a disconnect. Now, it is a downer to turn down the fun at the party, but stability _is_ something central bankers can and should influence. ‘More’ can turn into many of things, but what it usually entails is more velocity, and that can go lots of directions other then where intended, and usually does; that’s the rub. Of course human nature being what it is, we could reliably count on central bankers to say No at the most inopportune times should they choose to say that instead.

  9. marcopolo says:

    I was suprised by the appointment of Mark Carney, as the conspiracy theorists had predicted the Goldman Sach Bankers takeover of the worlds finances and this has virtually been proved correct.

    Mark Carney an ex long standing employee of Goldman Sach makes the bankers takeover of Central Banks almost complete. Most of the central banks of the world now have ex Goldman Sachs employees in place, even Monti in Italy is an ex Goldmen Sach employee.

    Spending is what these guys want as it benefits the banks. Many people do not realise that the The Federal Reserve and the Bank of England are a private banking system, that loans money to the Goverment at interest, just like RBS or Barclays would want interest on loans made to us.

    The use of the words Federal and Bank of England have been used to make it sound like they are part of Goverment, but if you look at the Federal Reserve Fraud on Youtube, this explains how and why the Fed was set up and who is behind it.

    It even benefits the Fed if there are wars, especially if the wars are long and sustained as the Fed (Private Bank) Prints Trillions of Dollars which it loans at interests to the Goverments.

    There appears to be a huge conspiracy going on. People should go on youtube and type in The Federal Reserve Fraud (5 Videos)

    Also look at videos by Info Wars and speeches made by Ron Paul who has a large following in America.

    You can also type into Google “Goldman Sachs takes over world” and read the first 5 entries.

    It is truly amazing what appears to be happening and they are getting away with it, it is totally evil and is destroying the average persons wealth.

    You may also want to type into google the “Bilderberg Group”, which is a secretive group of bankers and the wealthiest people in the world who are trying to take over everything whilst making themselves even richer and making the average person much poorer.

    I truly do not believe that they can get away with this it is evil, people must look at these videos to find the truth and we all need to tell as many people as we can to also make themselves aware of what is going on so that people are informed and can understand why their standards of living seem to be being destroyed.

    As for the European parliament look at what Nigel Farage has to say – please spread the word for your childrens futures – these groups are manipulating even what are kids learn at school they are trying to make them into conformist who do not question authority.

    All the rules and regulations they are forcing upon us are designed so we conform and don’t question what is being done, so that we all become sheep unable to think for ourselves etc. Giving them the opportunity to carry on without anyone questioning what is happening.

    If people make themselves aware and spread the word there is still some hope for the future.

    Finally, is it any suprise that Carney says that he will start being more active and spending money – who does this benefit?

  10. Cooter says:

    REALITY CHECK:

    Bank of England was nationalized in 1946 according to Wikipedia.
    Bank of Canada is a crown corporation (ie owned by the government)

    A lot of this central bank hate is because a lot people who knew the crash of 2008/09 was coming didn’t get a chance to buy the market at extremely depressed levels. But, if the central banks of the world had done nothing, how many of us would still have had savings accounts to invest? Could we have got cash to a solvent broker to buy the market? Would the market even have traded? It is highly doubtful. A lot of us would be living in our parents basements now raising chickens in the backyard. It would be pretty tough to have maintained global trade in any good, let alone stocks, without a financial system in place.

    Do you people realize that during the Depression international trade dropped 50% (Wikipedia). For god sakes people, food was rotting in the ports while people went hungry across North America? The reason was because there was no credit to get the food to consumers.

    In Canada, Carney’s birthplace, unemployed men rode atop trains to Ottawa to protest conditions in federal relief camps where they forced to work to receive aid.
    http://en.wikipedia.org/wiki/On-to-Ottawa_Trek

    I may be alone on this site, but I for one am damn happy that our overlords learned a lesson from the depression and figured out a way to preserve the system! I was unemployed, but was able to upgrade my skills during the lay off and am better off for it. After the crisis, I still have a savings to invest and a credit union owned broker through which I can trade the markets.

  11. marcopolo says:

    Hi Cooter yes you could say that the BOE is a goverment bank, but the reality is that 97% of it is controlled by private banks.

    The Bank of England Nominees company accounts are not exempt from any laws regarding companies and they must print their accounts as every company must do which can then be accessed through the Company House website. It is interesting to note however that the latest Bank of England Nominees LTD accounts say that:

    “There has been no income or expenditure on the part of the Company since its incorporation and accordingly no profit and loss account is submitted.”

    It still also has total net assets of £2 (the £2 shares).

    However even though the Bank of England is now state owned its important to note that up to 97% of the UK’s money supply is privately controlled being in the form of interest bearing loans created by the big commercial banks.

    The bank holds very little government stock and the Bank’s profits primarily come from the issuing of coins and notes for use by high street banks. Therefore it seems the Bank of England has reduced in size and importance over the years and is now mainly a regulatory body that oversees the existing banking system and since the 1997 Labour government it’s main role is to control inflation and the base interest rate used by the country.

    Referred to as “the lender of last resort” one of it’s other main functions as “the bankers bank” is to support banks that get into difficulty such as during the financial melt down of 2008.

    On the surface at least it seems that the Bank of England has returned to state control however in America the Federal Reserve is still a privately controlled bank. This comes as a surprise to many people who don’t know the history of the preceding US central banks that went before it but were closed down due to worries that the bankers had too much power.

    The history of the US banking system has been one in which control of the money supply has alternated between Congress and privately owned banks.

    The founding fathers and early presidents of the USA were very much aware of the dangers concerning central banks and they realised that whoever controlled the nations money supply wielded enormous amounts of power.