Thread by @gbponz

THREAD: UBERMISPRICERS.
Why the long love affair between governments and mispricing is not only likely to go on, but it could go wild, especially in the #EU. (1/13) @BaldingsWorld @Trinhnomics @DavidBCollum @amlivemon @Halsrethink @eshow1969 @nglinsman @DukeMarcude @galietti82

During this loooong #Lockdown, there are a number of wild barking dogs, but a considerable number did not bark, or didn't show up at all. Governments reasserted supremacy. Central bankers turbocharged their spigots. BUT, no consideration has been given to price discovery.(2/13)

If anything the fact that the response so far has been monetary, and through banks and stabilization of financial markets, belies that the love between governments and its chief mispricer, the Central Bank, is stronger than ever. Financial markets are more than suspect. (3/13)

Now there is a particular dog that went silent immediately after #COVID19 : Climate change. Governments love it since it gives them absolute ethical power over every aspect of life ("It's for the children!!") and it acts as a proxy taxman. (4/13)

For some sectors this will be incredibly relevant: the depression will cause a great decrease in industrial activity (governments are immune to crisis: no slimming of the bureaucracy will be implemented). (5/13)

That would make a "standstill agreement" on further limits on cars and car use a sensible idea: a "five year pact" on no further restrictions on standards like #EURO5 would immediately increase the value of a new car. (6/13)

coupled with "continued social distancing", shortened supply lines/second sourcing, that would help the western economies and possibly IMPROVE the environment by increasing returns on returning clunkers to junkyards. (7/13)

But since the main beneficiaries of the climate change impetus have been the bureaucrats and other unproductive parts, since these are on top the chances of that happening are slim to none. For one, Climate has been a big moneymaker for governments.(8/13)

Italy to the tune of 15 bn. a year. Politically, it's better to make people pay an higher electricity bill than an higher TAX bill. Heck, even the State owned TV channels is now paid through that channel. Same goes for Banks and #ESG. (9/13)

in a bear market, with a chance for more, being your Confessor clerk is a better money maker than trying to defend your savings. Hence expect an incredibly hard campaign on these line; (10/13)

"Look how nice Earth is now that we're poorer, why not give a final push and try to keep it this way? let's INCREASE regulations on #ESG!!"
Central bankers like it because it hides the fact that they destroyed the markets. (11/13)

Asset managers love it because it's a menial clerkish job that clients cannot do themselves, so it's steady money. Governments love it, more bureaucracy plus more tax.
What's not to like?
Oh, productivity of course goes south. no growth, or poor growth.(12/13)

So, shall we choose to help banks as in 2008, or the citizens?(END)
@RudyHavenstein @4Awesometweet @mtmalinen @tyillc @chigrl @DrPippaM @DiMartinoBooth