DOW PLUNGES ANOTHER 1,000 And One Of The Greats Warns “The Central Bank Put Is Now Worthless”

Friday, February 28, 2020
By Paul Martin
February 28, 2020

With the Dow plunging another 1,000 points and gold pulling back after a monster surge off the 2019 lows, one of the greats just said, “The central bank put is now worthless.”

Michael Oliver audio interview will be released later
today. Until then…

Central Bank Put Now Worthless
February 28 (King World News) – Peter Boockvar: While the discussions and debates had already started, it was yesterday’s WSJ editorial from Kevin Warsh on top of another puke in the market that has brought front and center what we all think the Fed and other central banks should do in light of the economic headwinds we all face.

Warsh by the way will be interviewed on CNBC at 7am pushing his point of view. I’d ask him this: While rational people can argue whether the Fed should cut or not, what do you possibly think the ECB and BoJ can do with monetary policy with rates already negative (which has damaged bank profitability) and QE already ongoing?

My viewpoint stated here again is that there is nothing that will be ‘stimulated’ monetarily from a rate cut or two that isn’t already being ‘stimulated’ by the very low rate environment. And rate cuts aren’t a vaccine and won’t bring factories back and people traveling again. If the purpose is to respond to the ‘tightening of financial conditions’, aka try to lift the S&P 500 and narrow credit spreads, I ask this question:

What would be worse, a Fed that tells us that they will do nothing right now and wait to see how this virus plays out or they ‘do something’, the markets rally for a few days or weeks and then goes right back down again in response to the underlying economic fundamentals like they did in response to the last two rate cutting cycles in 2000-2002 and 2007-2008?

The Rest…HERE

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