Central bank rumors are like big boobs – some are real and some are fake, but most guys are happy to play either way.
And so you get the kind of nonsense we saw in the tape this afternoon, with traders, algos and buy programs tripping all over themselves to get to sloppy second with the “G20 coordinated action” chatter:
This was the rumor, basically a friend telling a neighbor texting a janitor who mops the floors at the Reuters bureau in Bratislava when he’s not stealing office supplies to support his 5 gram a week heroin habit:
(Reuters) – Central banks from major economies stand ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the outcome of Greek elections on Sunday causes tumultuous trading, G20 officials told Reuters.
A senior U.S. official cautioned that the Greek election will not provide “the definitive signal on what happens next” in the euro zone debt crisis.
But if severe market strains emerge after an unusual confluence of three elections this weekend – there are important polls in Egypt and France as well – central bankers are on standby to ensure enough cash is flowing through the financial system.
Is this true? It’s certainly not official (unlike the other thing that actually did get announced, a British coordinated action between the UK Treasury, the Bank of England and Hogwarts Academy, details here).
And true or not, should that have such a dramatic effect on your thinking that you make rapid and considerable moves in your portfolio or retirement account?
This is hardcore traders-only stuff as far as I’m concerned. If you’re a civilian with a longer-term time horizon, this kind of stuff should be for entertainment purposes only, there’s is nothing coming from a central bank, real or fake, that should ever force you to make blind moves just for the sake of feeling like you’re on top of things.
You are very much not on top of things, you don’t have a fucking clue, partner. So relax and watch for what turns out to be real and consider your actions before you take them.
Unless you’re a trader…in that case, unclasp the bra and do your thing. I’m not hatin’.
Her Majesty’s LTRO? (FT Alphaville)
Bank of England Pledges Huge Liquidity Facility (24/7 Wall Street)
Exclusive: Central banks ready to combat Greek market storm (Reuters)