Tuesday, September 27, 2011

Markets are nuthouses

Marek Belka, governor of the National Bank of Poland, is seriously pissed off at markets. He's just not going to take it anymore, no, he ain't going to take it, he's not going to take it anymore.

Markets, as everyone knows, have being going nuts for some time now. But what really has Belka, the former member of the ex-communist Democratic Left Alliance, fuming are the recent so-called speculative attacks on the zloty aimed at driving the Polish currency down in value. Poland, in Belka's opinion, has strong fundamentals and the zloty should not be weakening.

"The financial market is a nuthouse," Belka was cited saying by Reuters in Harvard on Monday.

This could be just an off-the-cuff response but he went on in the same vein in a weekend interview with the Polish state-owned news agency PAP. When asked whether the market was acting rationally, he said: "Acting rationally? Does anyone still believe markets act rationally?"

Indeed no, Marek, indeed no.

The NBP put its money where its mouth is (pun intended) and waded into the market this past Friday buying up Polish zloty and thereby helping strengthen the zloty in a counter-attack against the 'speculators.' Belka relished the blitz.

"The guys who were in the business of speculating against the zloty probably lost a lot of money," Belka told Reuters, likely rubbing his hands together and madly laughing.

The NBP governor said 'speculators' previously had one-way bets in which they could almost not lose money [ed. - where have we heard this before], but would have to learn this was no longer the case.

"[I]t's a two-way street. If you choose to overtake on a two-way street, at the last moment you might notice there is a big truck coming," Belka said, adding I'm sure, 'boom.'

You can take the man out of the leftist party, but I guess the question is whether you can take the leftism out of the man.

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