Friday, October 31, 2008

We No Likey Da Gubment Lackeys

After hours on Thursday Prime Minister Asō Tarō outlined a mishmash of programs, promising to increase government spending by 5 trillion yen in an emergency effort to prop up the diving economy.

The Market this morning for the most part shrugs, not disappointed...but not heartened either.

In the midafternoon today, the Bank of Japan, eager to reclaim the title of "That Silly Place Where They Make All Kinds Of Really Dumb But Also Really Timid Moves" pulled out all the stops, lashed itself to the mast, took a chill pill...and announced it will be lowering the target rate of interest by 0.2%

The Market throws an absolute tantrum in response, knocking another 5.01% off the Nikkei 225.

So much for Economic Recovery Plan B. Got killed it did by Plan C.

What was Plan D again?

Of course, Adam Richards' post raises the possibility that the BOJ's risible action today is in response to the government's vile attempts (via leaks to the Nihon Keizai Shimbun) to bullrush the central bank into cutting rates.

A pretty costly way (what's the difference between 0.2% and a full quarter point?) to assert one's authority and autonomy, if that is what the nation's central bankers wanted to do.

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