The logic on ECB bond buying deserves to be called out

The final question at the ECB press conference was about the central bank buying bonds of corporate giants. The purchases have driven down the costs of large-cap corporate borrowing to ultra-low levels.

That cheap money can be used to buy up small businesses and it's a competitive advantage.

"I don't have to justify anything," Draghi said in response.

Here is what I said on this before:

The ECB is buying the bonds of the largest companies in Europe. The problem is that this looks like monetary financing of mega-cap companies while leaving small businesses unaided.

In response, he said that by using ECB money to buy corporate bonds, it frees up bank balance sheets so they are able to lend to small firms.

That's some kind of trickle-down QE logic that makes them awfully exposed in the court of public opinion. It's like giving the wealthy ultra-cheap mortgages and saying that frees up banks to lend to the middle class.

It might take awhile but the ECB is going to be chased out of corporate bond buying and they would be wise to be proactive about it.