The central bank monolith is revealed to fracturing. The most evident appearance of that was the Bank of Japan’s recent surprise, where the vote to increase QQE was 5-4. But it has been more than Japan where divergences in policymaker positions are apparent. That includes, of course, the ECB, though not due to the Germany/not-Germany divide that has been a constant presence (only in theory, not actual policy) throughout. Undoubtedly this is a disturbance in the “narrative” about how monetary policy has shaped the “recovery.”

During the past few weeks, officials at the Bank of Japan, Federal Reserveand Bank of England all fractured over just what they should be doing when managing their economies.

That suggests the emerging divergence between international central banks that has been a theme for investors this year can also be seen inside the institutions. It marks a change from the largely all-in unanimity that marked the fight against the financial crisis and the recession in 2008.

The full part of this is the ongoing failure to deliver. Each time a new monetary program is unveiled it has been met with universal optimism to economists and media alike (and “markets”). There is no critical thought or discovery about actual details in efficacy, which is especially disturbing since almost every single instance of a “new” monetarism is the exact same as has been done before. The ECB’s recent covered bond purchase was universally celebrated by media and “markets” alike despite being the third (and smallest) instance of that exact type – you would think somebody somewhere would be curious enough to ask, directly, someone at the ECB why the third time will work where it clearly did not the previous two.

As if to add weight to that unvoiced delivery, the European Commission shocked nobody but itself in downgrading Europe’s economic forecasts today.

The recovery is “not only subdued but also fragile,” it said. “With confidence indicators declining since mid-year and now back to where they were at the end of 2013, and hard data pointing to very weak activity for the rest of the year, it is becoming harder to see the dent in the recovery as the result of temporary factors only.”

That is a pretty damning indictment of the ECB’s “extraordinary” measures that have been implemented with steady regularity since late 2011, if not the initial eruption of Greece and the OMT’s back in the middle of 2010. As the Fed’s own Vice Chair Stanley Fischer noted months ago,

Year after year we have had to explain from mid-year on why the global growth rate has been lower than predicted as little as two quarters back. Indeed, research done by my colleagues at the Federal Reserve comparing previous cases of severe recessions suggests that, even conditional on the depth and duration of the Great Recession and its association with a banking and financial crisis, the recoveries in the advanced economies have been well below average.

That was always the worry, that growth would ultimately fall short of expected measurement, but it seems in Europe and Japan the situation has fallen even short of that. It’s not just that the recoveries have been “well below average” it is that they never really existed and were instead a downward trajectory unseen by economists trained only in narrow circumstances. In Europe and Japan, “well below average” no longer contains even a positive number.

That explains the fractures in central bank policy circles, as what should have worked by now has not, and the impulse to keep doing the same thing over and over again is not just tiresome but contains very real and great risks. European bond markets, as in Japan even and the US, do not seem as enamored as economists over all of this. That view includes the overactive tendency of every year forecasting the exact same “recovery” based on nothing more than non-specific “global growth.”

“Growth is set to resume gradually with the support of a robust labor market, favorable financing conditions and improving external demand,” the commission said. [emphasis added]

The best that can be offered right now is the same that has been offered since 2009 – that “global growth” will eventually bail out everyone at the same time and to the same degree. That thought refers back to the primary reality of monetary policy limitations. None of this was supposed to take place over a long period of time to begin with, as the intent was simply to “normalize” financial conditions so that nonspecific “growth” could come back and save everyone from further trouble. “Extend and pretend” was not just a bank policy; it was the primary economic directive.

Nobody really knows what happens when you get to the end of that without having “global growth” return. It is an unsettling prospect, replete with “bubbling” conundrums and collateral fate and potential, which is why they continue to deny it as a possibility until it is no longer in doubt that it is; the fate in Japan and Europe is not so different than the US, though they will continue to act as if it is until that last moment when nobody actually believes them any longer. Again, bond market uniformity extends globally, and the US economy is clearly not performing to that preferred narrative.

There is an incongruity that reveals all of this, and I think the ECB’s action in June (to go to a negative deposit rate) was far more damaging than encouraging. They had been likewise unequivocal in their recovery narrative, until they suddenly decided it needed an extra monetary “boost.” I have said this for a long time, eventually when a central bank acts “markets” are not going to cheer but instead finally ask themselves how much real trouble is there if central banks “have” to do it yet again. It may be longer before stocks arrive at that reserved location, but bond and dollar markets are at least serious looking at and pondering that direction.