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Kenny Polcari... Now to be fair - in my view - Draghi did not fail at all…….and in time it will be seen as a cautious and prudent move Let’s be clear - Draghi did 3 things….He cut the penalty rates to -0.3% on bank reserves (expected), he extended the QE program out until March of 2017 (expected) and he broadened the pool of eligible bonds (expected) - all events that are sure to balloon the ECB balance sheet for longer than previously expected….so what else do these pigs want? Well, they WANTED him to increase the monthly rate of purchases - (currently 60 bil Euros/month) to something north of 70 bil Euros/month and they wanted him to cut the penalty rate on reserves to -0.4% vs. the -0.3%…. in fact what THEY want is for the ECB to support their RISK - something that every central bank around the world has been doing for more than 7 yrs now - so on the one hand you can’t really blame them because they have been conditioned to get what they want - until they don’t………..and because they did not get what THEY wanted - they decided to stamp their feet and create chaos…… Now to be fair - in my view - Draghi did not fail at all…….and in time it will be seen as a cautious and prudent move. We are in unchartered territory my friends and so the fact is that no one really knows what the right thing to do is (and that is not any clearer than here in the US..) We are flying by the seat of our pants and in the end - the mkts will price in the risk and find equilibrium - it may not be pretty getting there, but it will get there. Look - just like the FED - He faces a split among his members…..with some of them clearly voicing concern that the ECB has already done way to much - while others suggest that they can do more……in the end - what we have learned is that monetary policy alone can’t fix the problem…..and until elected officials fix fiscal policy - we may be in this purgatory for yrs more….. http://kennypolcari.tumblr.com/post/134523722625/interpretation-is-in-the-ear-of-the-beholder
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Now to be fair - in my view - Draghi did not fail at all…….and in time it will be seen as a cautious and prudent move
Let’s be clear - Draghi did 3 things….He cut the penalty rates to -0.3% on bank reserves (expected), he extended the QE program out until March of 2017 (expected) and he broadened the pool of eligible bonds (expected) - all events that are sure to balloon the ECB balance sheet for longer than previously expected….so what else do these pigs want?
Well, they WANTED him to increase the monthly rate of purchases - (currently 60 bil Euros/month) to something north of 70 bil Euros/month and they wanted him to cut the penalty rate on reserves to -0.4% vs. the -0.3%…. in fact what THEY want is for the ECB to support their RISK - something that every central bank around the world has been doing for more than 7 yrs now - so on the one hand you can’t really blame them because they have been conditioned to get what they want - until they don’t………..and because they did not get what THEY wanted - they decided to stamp their feet and create chaos……
Now to be fair - in my view - Draghi did not fail at all…….and in time it will be seen as a cautious and prudent move. We are in unchartered territory my friends and so the fact is that no one really knows what the right thing to do is (and that is not any clearer than here in the US..) We are flying by the seat of our pants and in the end - the mkts will price in the risk and find equilibrium - it may not be pretty getting there, but it will get there. Look - just like the FED - He faces a split among his members…..with some of them clearly voicing concern that the ECB has already done way to much - while others suggest that they can do more……in the end - what we have learned is that monetary policy alone can’t fix the problem…..and until elected officials fix fiscal policy - we may be in this purgatory for yrs more…..
http://kennypolcari.tumblr.com/post/134523722625/interpretation-is-in-the-ear-of-the-beholder