Expectations were high heading into today's ECB meeting that the Central Bank would issue some news detailing the start of another round of stimulus for the lagging Eurozone economy.
'Twas not to be.
Draghi TALKED doing more stimulus at some point as he went through the same litany of things that he has been saying seemingly forever at this point:
"Economic risks remain to the downside"
"our projections suggest lower inflation"
"we now see GDP growth at 1.0% versus 1.6% in September"
BLAH, BLAH, and more BLAH. The problem is, as far as the market is concerned, they did NOTHING! Just talk.
That is NOT what the market wanted to hear so guess what? Time to cover all those short Euro positions were loaded in this week in anticipation that they would do SOMETHING. Up went the Euro, now over 100 points and once again, the currency markets are roiled by another yapping Central Banker.
Ah yes, another moment in the "CALMING" affect of Central Bankers on the financial markets. Thank heaven for these people - without them, chaos, instability and turmoil would be the norm in our lives!
Note the words dripping with sarcasm.
This is an example of how these monetary lords mislead markets. Draghi has been sounding like the uber dove for quite some time now and hinting about further measures, then - This - a big, fat egg.
It was amusing to see his excuse for the ECB's inaction - OIL PRICE CHANGES! Personally I think the ECB is scared to death to follow in the footsteps of the US Fed and the Bank of Japan/ Abe government and get aggressive on the QE type front. I wonder what the Eurozone exporting related industries are going to think of their latest "plan" seeing that the Euro is going the other way than from what they were hoping?
Perhaps, some time during his current press conference, Mr. Draghi will look at this cell phone to check and see how the Euro is responding to all this, and then make some statement promising more definitive action next time around. Who knows?
I wonder what it must be like to have financial markets responding to every syllable that proceeds forth from one's mouth?
By the way, while this circus show was going on, Saudi Arabia cut all January oil prices to the US and to Asia! Crude oil went "thump" as a result.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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