Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Central Banks Delay of Game. Five (point eight) Yards

Interest-Rates / Eurozone Debt Crisis Apr 02, 2013 - 11:00 AM GMT

By: John_Mauldin

Interest-Rates

Grant Williams : Section 6 of the NFL official rulebook contains five articles, all of which deal with infringements that result in a 'delay of game' penalty.

It appears as though the powers that be frown upon the idea of players wasting time in the hope that they can hasten the sound of the whistle whilst holding an advantage.


Based upon the seemingly petty nature of many of the designated infractions, it would appear that not only has this been going on for quite some time, but that the players and officials are locked in a never-ending battle to identify new ways to delay the game — the players to delay the game and the officials to punish their ingenuity.

The list of 'Other Delay Of Game Fouls' (which is contained in Article 5, for those of you keeping score at home) reads as follows:

Article 5

Other examples of action or inaction that are to be construed as delay of the game include, but are not limited to, the following:

(a) a player unnecessarily remains on a dead ball or on a runner who has been downed;

(b) the snapper repeatedly snaps the ball after the neutral zone is established and before the Referee can assume his position (see 7-6-3-c);

(c) undue delay by either team in assembling after a timeout;

(d) a defensive player aligned in a stationary position within one yard of the line of scrimmage makes quick and abrupt actions that are not a part of normal defensive player movement and are an obvious attempt to cause an offensive player(s) to foul (false start). (The Referee shall blow his whistle immediately.);

(e) spiking or throwing the ball in the field of play after a down has ended, except after a score;

The penalty for delay of game is the loss of five yards to the offending team.

In the arena of international finance, the tables have been turned spectacularly, and it is the officials who are desperately trying to find ingenious new ways to delay the game whilst clinging to the most slender of advantages, as all around them players are penalized indiscriminately.

From the onset of the financial crisis that still besets us (since whenever that may have been — it's all getting very hazy), the first response of policymakers and central bankers has been the same: guarantee deposits to stop capital flight leading to bank runs. Case in point, Ireland:

(FT, September 2008): Ireland’s government on Tuesday unveiled a wide-ranging guarantee arrangement to safeguard the deposits and debts at six financial institutions in response to turmoil in the financial markets.

The scheme, which guarantees an estimated €400bn (£315bn, $567bn) of liabilities, covers retail, commercial and inter-bank deposits as well as covered bonds, senior debt and dated subordinated debt.

Most depositors were already covered by an existing deposit insurance scheme for up to €100,000. But Tuesday’s initiative was primarily aimed at easing the banks’ short-term funding, which had seized up in recent days.

Ireland's deposit guarantee, it was announced, would expire in September 2010, at which point all would be well and the panic would be over. Of course, the strong rally in Irish banks on the day the plan to guarantee deposits was announced faded quickly when somebody bothered to do some rudimentary arithmetic, and the guarantee had to be extended. Fast-forward to last Thursday:

(Irish Independent, March 28, 2013): The government guarantee on bank deposits above €100,000 finally comes to an end today, despite the nervousness over the Cyprus crisis....

The guarantee failed in its fundamental objective of restoring stability to the banking system. After an initial positive response, investors and lenders quickly realised that the Irish State could not cover the total €440bn liability.

Deposits flooded out of the system and the European Central Bank insisted on a bailout to allay fears of imminent bankruptcy, while it pumped in emergency loans to the banks.

Those loans have also declined sharply in recent years but remain at around €50bn. AIB at least is still unable to fully finance its operations in the market and the confusion over Cyprus will not help the restoration of normality.

Yes folks, Ireland bankrupted itself overnight with one stupid decision. They clearly thought that a proclamation from the government that all would be well was going to be more than enough to calm things down and that people would go about their business safe in the knowledge that the Taioseach and the geniuses in the Oireachtas had everything under control.

Funnily enough, things didn't work out that way, and the reason for that was something that one would have thought would be fairly obvious to all concerned: the maths didn't add up.

To continue reading this article from Things That Make You Go Hmmm… – a free weekly newsletter by Grant Williams, a highly respected financial expert and current portfolio and strategy advisor at Vulpes Investment Management in Singapore – please click here.

John Mauldin

subscribers@MauldinEconomics.com

Outside the Box is a free weekly economic e-letter by best-selling author and renowned financial expert, John Mauldin. You can learn more and get your free subscription by visiting www.JohnMauldin.com.

Please write to johnmauldin@2000wave.com to inform us of any reproductions, including when and where copy will be reproduced. You must keep the letter intact, from introduction to disclaimers. If you would like to quote brief portions only, please reference www.JohnMauldin.com.

John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/

To subscribe to John Mauldin's E-Letter please click here:http://www.frontlinethoughts.com/subscribe.asp

Copyright 2013 John Mauldin. All Rights Reserved
Note: John Mauldin is the President of Millennium Wave Advisors, LLC (MWA), which is an investment advisory firm registered with multiple states. John Mauldin is a registered representative of Millennium Wave Securities, LLC, (MWS), an FINRA registered broker-dealer. MWS is also a Commodity Pool Operator (CPO) and a Commodity Trading Advisor (CTA) registered with the CFTC, as well as an Introducing Broker (IB). Millennium Wave Investments is a dba of MWA LLC and MWS LLC. Millennium Wave Investments cooperates in the consulting on and marketing of private investment offerings with other independent firms such as Altegris Investments; Absolute Return Partners, LLP; Plexus Asset Management; Fynn Capital; and Nicola Wealth Management. Funds recommended by Mauldin may pay a portion of their fees to these independent firms, who will share 1/3 of those fees with MWS and thus with Mauldin. Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest with any CTA, fund, or program mentioned here or elsewhere. Before seeking any advisor's services or making an investment in a fund, investors must read and examine thoroughly the respective disclosure document or offering memorandum. Since these firms and Mauldin receive fees from the funds they recommend/market, they only recommend/market products with which they have been able to negotiate fee arrangements.

Opinions expressed in these reports may change without prior notice. John Mauldin and/or the staffs at Millennium Wave Advisors, LLC and InvestorsInsight Publishing, Inc. ("InvestorsInsight") may or may not have investments in any funds cited above.

Disclaimer PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in