Swiss National Bank Admits Directly Buying Small-Cap Stocks
While we have noted previously that "a cluster of central banking investors has become major players on world equity markets," and the BoJ has recently tripled its direct manipulative buying of stocks (after buying a record amount in August)... the conspiracy-theorist-dismissers will have to close their eyes and ears as the Swiss National Bank admits in its 2013 annual report that it greatly expanded its share of foreign stocks purchased... most notably small-cap companies.
Maybe it is time to reign in the SNB with the Gold Initiative?
h/t @Gloeschi
Previously: Jan. 3, 2013
Unconventional Measures: "Japan plans 'nationalisation' of factories to save industry"
Remember when, in my naïveté, I would write about, gasp, Central Banks buying equities?
Here's an example from Feb. 2008 (i.e. pre-LEH et al):
Doom and Gloom: What Can the Federal Reserve Do?
...I was reminded of a Financial Times story from March 25, 2002:
Fed Considered Emergency Measures To Save Economy
Minutes which summarized the meeting were released last week. A full transcript will not be available for five years but a senior Fed official who attended the meeting said the reference to "unconventional means" was "commonly understood by academics."...The question arises "Can the fed intervene in the Equities Markets?"
The official, who asked not to be named, would not elaborate but mentioned "buying US equities" as an example of such possible measures, and later said the Fed "could theoretically buy anything to pump money into the system" including "state and local debt, real estate and gold mines – any asset"....
Again, two answers. 1) It's definitely something Central Bankers have thought about. 2) The Fed may need some enabling legislation which they would probably get if they requested it.
The FT reported February 21, 2002 "Japan Suspected of Stock Market Intervention".
A Google search finds 700 references to the "Stock Buying Body".
Here's a pungent one:
"We must halt this fall in shares. It's like diarrhea, we must stop it. The stock-buying body was set up precisely to absorb such selling (offloading of cross-shareholdings by banks). If February is such a month, there is no excuse for not functioning at that crucial time."
.....................................................................................................................................................................Finance Minister Masajuro Shiokaw – Feb 7More relevant to the American markets are a couple Fed papers, the first of which is astounding for its frankness:
Monetary Policy When the Nominal Short-Term Interest Rate is Zero.
That was back when I cared what Central Banks did. Since the recent unpleasantness there has been no nuance and no reason for me to comment on what's up in Banker-land as it would have been the same story every post for the last 205 weeks.
Here however, here is a new wrinkle....MORE
