Interesting twist

Got to be quick this morning.

The stories developing in the markets place is getting more and more entertaining, far more interesting than reading a thriller novel.

Whenever I see Central Bankers draw a line in the sand, they will get my attentions. The line that they drawn revealed something. It's almost like a bribe to vultures so that they can stop circling the dead bodies.

China Central Banker has been talking tough not to loosen its monetary policy but will tweak its fiscal policy. Guess what?

BEIJING -- The People's Bank of China, the country's central bank, said Wednesday it will lower banks' reserve requirement ratio (RRR) by 50 basis points for the first time in three years in order to replenish liquidity in the country's banking system as inflation eases.

The latest cut, effective on Dec 5, drops the RRR to 21 percent for large commercial banks and 17.5 percent for mid- and small-sized banks. An estimated 396 billion yuan ($62.38 billion) in capital will be released into the market.

The move signals that the government is set to stabilize economic growth after easing inflationary pressures, although it is not yet known if the change will bring about a full-on move toward a looser monetary policy, analysts said.

"The RRR cut is a signal for stabilizing growth, making the central bank's fine-tuning of the country's monetary policy more explicit," said Zhuang Jian, a senior economist with the Asia Development Bank

http://www.chinadaily.com.cn/china/2011-11/30/content_14192216.htm

Then we have Ben Bernanke announcing a coordinated efforts globally.

U.S. stocks advanced, driving the Dow Jones Industrial Average up the most since March 2009, after six central banks took action on Europe’s debt crisis by making it cheaper for lenders to borrow in dollars

http://www.bloomberg.com/news/2011-11-29/stock-futures-in-u-s-decline-after-bank-ratings-cut-by-standard-poor-s.html

Popping 490 points on the Dow does not concern me. Desperate central bankers are masking something that many of us do not want to hear --- the "bungee jump slow down", recession, liquidity crunch, unsustainable high borrowing costs, or whatever.

My best strategy is just like dealing with a kid. All you need is just sit there patiently and listen to a kid keeps on explaining himself 'till he runs out of story. He will tell you the truth eventually. Just don't punish them. The more you punish them the more they will lie.