A multiple choice question

So the ECB's recent revelation that they will frontload QE purchases ahead of the illiquid summer period represents:

a) A sensible precaution  given the European proclivity to head to the beach en masse in August;

b) A push-back against recent weakness in European govvies;

c) A sign of concern that the euro has recouped a fair slug of this year's losses

d) An easy windfall for anyone fortunate enough to have been present when Benoit Coeure let the cat out of the bag to a private audience on Monday night;

e) An opportunity for regulators to demonstrate that concepts like "privileged information" and "market manipulation" apply equally to policy-makers as they do private participants
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CV
admin
May 20, 2015 at 9:16 AM ×

A with a touch of D

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theta
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May 20, 2015 at 10:13 AM ×

F: all of the above

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Anonymous
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May 20, 2015 at 10:34 AM ×

FT:

B with an unrealistic hope for a touch of E

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Polemic
admin
May 20, 2015 at 11:00 AM ×

Blamed on an admin error within the ECB not publishing the speech at the time it was being given.

I am sure that due punishment has been meted out upon the junior probationary assistant data releaser in the bowels of the ECB by having his lunch break cut to only 2 hours. Move along nothing to see.

With NotWorthy saying that the dangers of deflation are now past I m wondering if ECB will try and do the full 1.1trl by end of June as after that they may well be fighting the data and looking like chumps in pressing on, but they have promised to do it in full, so there's one way of doing so.

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Anonymous
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May 20, 2015 at 2:33 PM ×

Gee, and I here I thought all along that MM always had a seat in the room.

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JGW
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May 20, 2015 at 7:31 PM × This comment has been removed by the author.
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Mr. T
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May 20, 2015 at 7:50 PM ×

Another minutes release, another rally where people scratch their heads at just how dovish the fed really is. Reading the notes (not so much the headlines) the tenor of the conversation seems to be more about "should we do another round of QE" than "should we raise rates".

a few of these participants questioned whether the Committee was providing sufficient accommodation at the present time and cautioned against initiating policy firming in the near future

This is, to me, shocking. Forget stocks and bonds, real markets like real estate are white hot in parts of the country - every bit as hot as during 2006. I would hope that if nothing else an overheating real estate market would raise some eyebrows.


Nonetheless, estimates of the share of mortgages in a negative equity position were little changed in recent quarters, and they remained elevated when judged against levels prevailing prior to the crisis.


I think the data here is probably quite stale, but even it isn't, what is this saying - that they keep their foot on the gas until all homeowners are in positive-equity positions on the homes they overpaid for during the last bubble?

Then there is this chestnut:

Equity prices in most advanced foreign econo-mies moved higher, buoyed in part by ongoing monetary policy accommodation.


Yes, yes they are. And lets keep it going that way until everyone, like the underwater homeowners, are all in the black on everything they have bought. After all, isn't that the goal of all this?



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Anonymous
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May 21, 2015 at 1:00 AM ×

Michael Hartnett BAML...
"Investors remain trapped in “The Twilight Zone”, the transition period between the end of QE and the first rate hike by the Fed, the start of policy normalization...until (a) the US economy is unambiguously robust enough to allow the Fed to hike and (b) the Fed’s exit from zero rates is seen not to cause either a market or macro shock (as it infamously did in 1936-7), the investment backdrop will likely continue to be cursed by mediocre returns, volatile trading rotation, correlation breakdowns and flash crashes. For this reason we continue to advocate higher than normal levels of cash, adding gold and owning volatility in mid 2015. Given extremities of liquidity, profits, technological disruption, regulation, income inequality…potential for a cleansing drop in asset prices cannot be dismissed. Most likely catalysts: Consumer, Rates, A-shares, Speculation, High Yield."

So, all is well.

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Anonymous
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May 21, 2015 at 1:04 AM ×



“In light of their low estimates, (of the neutral rate)a few of these participants questioned whether the Committee was providing sufficient accommodation at the present time and cautioned against initiating policy firming in the near future,”

Funny Money and Mr. T have it right...these guys are not taking away the punchbowl, In fact given their druthers they would refill it to overflowing. Why fight the Fed, and the ECB, and the PBOC, and the BOJ... just go with the flow and BTFD.

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