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AutomaticEarth<>Debt Rattle September 22 2017

Posted by Raúl Ilargi Meijer at 9:15 am

• Albert Edwards: The Bank Of England’s ‘Monetary Schizophrenia’ (CW)

• 4-Warnings For The Bull Market (Roberts)

• QT1 Will Lead to QE4 Rickards)

• S&P Strips Hong Kong of AAA Rating A Day After China Downgrade (BBG)

• China Hits Back At S&P’s ‘Mistaken’ Credit Downgrade (AFP)

• Jamie Dimon Faces Market Abuse Claim Over Bitcoin Comments (ZH)

• Spain’s Attack On Catalonia Spills Over To 100,000 Domain Names (IN)

• Spain Hires Cruise Liner to House Police in Rebel Catalonia (BBG)

• Greece Will Remain Under Strict Supervision For Years, EWG Chief Says (K.)

• Life Unlikely Beyond 115 Year Mark Despite Medical Advances (DT)

“At the same time it is warning of a consumer credit bubble, the BoE has just increased its programme of lending to banks at preferential rates to increase bank lending in things like, yes you’ve guessed it, consumer credit!”

Albert Edwards: The Bank Of England’s ‘Monetary Schizophrenia’ (CW)

After last month admitting he was becoming tired of central bank bashing – a feeling many of his readers may relate to – Albert Edwards has launched another scathing attack. The Bank of England (BoE) was in the line of fire this time, with the SocGen strategist claiming Mark Carney’s team was leading the way when it comes to ‘monetary schizophrenia’. Edwards finds it remarkable how similar the US and UK macro situations often are. ‘This was most evident in the run-up to the 2008 global financial crisis with both the Federal Reserve and Bank of England (BoE) asleep at the wheel, building a most precarious pyramid of prosperity upon the shifting sands of rampant credit growth and illusory housing wealth,’ he said. ‘These of all the major central banks were the most culpable in their incompetence and most prepared with disingenuous excuses. And 10 years on, not much has changed.

‘The Fed and BoE are once again presiding over a credit bubble, with the BoE in particular suffering a painful episode of cognitive dissonance in an effort to shift the blame elsewhere. The credit bubble is everyone’s fault but theirs.’ Edwards sees unsecured credit at the heart of the problem, where growth has shot up by more than 10% in both the UK and US. Edwards accepts the debt time-bomb is specific to the UK. ‘We are in a QE, zero interest rate world, where central banks are effectively force-feeding debt down borrowers’ throats. They did it in 2003-2007 and they are doing it again,’ he highlights. ‘Most of the liquidity merely swirls around financial markets, but there is certainly compelling evidence now of a consumer credit bubble in both the UK and US (as well as a corporate credit bubble in the US).’

However, he finds the reaction of the BoE most ‘bizarre’, with Carney darkly warning banks of lessons of the past while recently increasing bank capital requirements on consumer loans. The perplexed Edwards points out: ‘At the same time it is warning of a consumer credit bubble, the BoE has just increased its programme of lending to banks at preferential rates to increase bank lending in things like, yes you’ve guessed it, consumer credit!

Read more … Briefs or link out for full articles @
https://www.theautomaticearth.com/2017/09/debt-rattle-september-22-2017/