What Did You Guys Think About European QE?
“Assuming the EUR/USD settles at parity, the ECB staff projection for inflation would increase by three tenths this year and next, to 0.3%oya and 1.8% respectively, and by two tenths in 2017 to 2.0%. And so the question appears to be becoming (and yes, it’s funny/absurd how quickly it has become the question), is there any chance of the currency weakening to such an extent that the ECB starts thinking about an early tapering?” Meanwhile, “Everyone Hates U.S. Stocks” is the headline at Bloomberg: “The U.S. stock market was an island of opportunity for a number of years…It has lost its status, not because it’s negative, but because other places around the world have started becoming more attractive.” Meanwhile, the Bank for International Settlements says “deflation has been given a bad name because of the link between falling prices and the Great Depression. Besides that episode, however, the economists say the links between deflation and economic catastrophe are weak.” Furthermore, “deflation per se is not necessarily a problem — it’s what causes it that counts.” Meanwhile, LPL Financial thinks that “although the strength of the dollar has important implications, it is more of a symptom of economic and market forces rather than a cause of them. Although some sector relationships are interesting, the dollar is not very useful as a predictor of stock market performance and we do not expect it to derail this bull market.” Meanwhile, “the biggest obstacle I see standing in the way of most new stock market enthusiasts is this immense reluctance to personally accept the fact that their own mind games can kill them as investors…The brain’s natural default mechanism is to run with its intuition — that is precisely why you must understand this tendency, lasso that trading brain of yours, and pull it back to the rational-analysis corral.” Meanwhile, “the Riksbank is leading the currency war, but the losses in the krona will be short lived.”