Swiss National Bank Intervention: A Half-Assed Job?

Astute readers may have discerned a small autobiographical element to Holmes’ latest adventure. While Macro Man knew that doing a kitchen extension was a major project, he had little notion that the task would prove more arduous than the Labours of Hercules. Alas, this particular labour was completed imperfectly, and so the kitchen men are returning to Casa Macro once again today to properly finish what they started nearly three months ago.

Mrs. Macro will no doubt hope that it brings an end to what has been a tiresomely frequent refrain from your author, whose mantra throughout the project has vowed a refusal to “accept a half-assed job.”

Sadly, the British tradesman does not have a monopoly on performing half-assed jobs. Macro Man finds himself encountering them with distressing frequency in his professional life as well.

His old friends the Swiss National Bank (SNB) are a prime example; after warning of their ability to sell “limitless” amounts of Swiss francs in the foreign exchange market, they somehow forgot to sell one franc in the market. At least until close of business on Friday, that it, when popular belief is that the SNB did a little drive-by at about quarter past five in the afternoon, local time.

Now, Macro Man cannot be entirely sure that this was in fact the SNB, but a number of reports suggest that it was. And if that’s the case….well…..man, what a half-assed job. Really, if that’s the best that they can do in a liquidity-constrained end-of-week intervention round, Macro Man cannot be terribly upbeat about the prognosis for EUR/CHF. Fortunately, he had the sense to leave the rotting carcass of that particular trade by the side of the road several weeks ago.

Another organization guilty of performing a half-assed job is the UK’s Office for National Statistics. As the recession started to grip Britain last year, the ONS reported that May retail sales growth hit a 29-year high. Macro Man said at the time that the figure was “literally unbelievable“. And so it proved to be. On Friday the ONS was forced into a red-faced admission that its retail sales figures have been utter rubbish.

Now, perhaps we’ll never know whether the egregious over-statement of economic activity was down to some sort of Stalinist manipulation of the figures, or merely wretched incompetence. But it serves as a timely reminder that if you think data seems too good to be true, it might not just be you; it could be the product of a half-assed job.

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