Sunday, December 17, 2017

We Are Approaching The Brick Wall

"As we come to the end of 2017, we are approaching a brick wall.
December 15 (King World News) – Here is a portion of today’s note from legend Art Cashin:  Of Reflective Central Bankers – My good friend, Peter Boockvar, over at the Lindsey Group, penned a note this morning on some recent commentary from ECB members.  Here’s a bit:
A day after the ECB held everything constant in terms of both policy and their rhetoric, Governing Council member Ewald Nowotny spoke today and explained why on the latter as the former was of course expected. “Central banks are generally well advised to keep a certain continuity in their announcements and maintain a steady hand. It was clear that we wouldn’t make any changes in our communication now after we already made significant changes last time.” He acknowledged that they don’t want to fall behind the monetary curve because “it’s clear that the economy is developing” but at the same time “it also mustn’t act too quickly though.” Also of note in his comments is that he is not a fan of corporate bond purchases. “I am somewhat skeptical about this program, because it is concentrated on very large companies…Of course it leads to cheaper refinancing for those companies, but whether that is passed on to small and medium sized companies is something I am not so sure about. That’s why I don’t think it’s something we should necessarily expand.”

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