In a totally over-the-top new note, Jefferies’ David Zervos declares that the world is seeing a repeat of the famous Committee To Save The World.
You remember that, right? That was the famous 1998 Time Magazine cover featuring Alan Greenspan, Larry Summers, and Robert Rubin, trumpeting their efforts to prevent the Asian financial meltdown (and everything else that year) from turning into a global rout.
Of course, all three of the men in the Committee To Save The World are now more associated with bubbles, busts, and dangerous deregulation. But whatever, at the time, they saved the world, and markets went on to boom for another two years.
So who’s in this new C.T.S.T.W.?
Ben Bernanke, Mario Draghi, and a player to be named later.
We have to wait and see the final make up of the trio. But after last week, Mario has clearly been elevated to financial sainthood along with our current hero, St. Ben. With 2 sentences last Thursday, Mario rode Spanish and Italian 2yr yields nearly 200bps lower. It was like watching George Woolf ride Seabiscuit. Beautiful!!
So sometime in 2013 or 2014, just before Ben walks through the ivory tower gates, a Time magazine cover should appear – and the reflators success story will be told. It will be the committee to save the world – part deux (and yes, I am trying to make a veiled reference to that Charlie Sheen spoof classic – “Hot Shots, part deux”)!
We will all cheer as spoos push to 2000, borrowing spreads for corporates collapse, house prices rise, global job and GDP growth spike higher and of course incumbent politicians get reelected.
It will be years of celebration!! Markets will cheer the ECB and Fed, Ben and Mario. Politicians will see the political benefits of central bank balance sheets. And central banks will become ever more important parts of the regulatory and political processes!
We’re pretty sure that Zervos is being purposely grandiose in his statements here, though we’re not 100% sure.
Either way, the message isn’t a good one. If the world is being saved, it’s being saved by bubbles and financial chicancery, according to Zervos. Nothing that in the long term we’ll be proud of.
Find more Zervos at Markit Hub.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.