ECB Could Send Major Message to World Markets Tomorrow

Discussion in 'Wall St. News' started by S2007S, Dec 1, 2010.

  1. S2007S


    Nothing new here, just the same old news about how quick europes crisis will end. Here today and forgotten tomorrow, that's the best way to take care of these major world problems. Since this news has been the trouble for europe what will happen once the weight is lifted off, does that mean non stop "risk free" gains for every market around the world until the next global crisis comes in the next year or so. I mean if the crisis of this magnitude cant really bring down stocks what can, nothing if you really think about it. Right?

    ECB Could Send Major Message to World Markets Tomorrow | December 01, 2010 | 11:22 AM EST

    The next 24 hours could prove a major turning point in Europe’s crisis, one that substantially reduces the risk for all investors on world markets.

    Ireland proved for the first time that banks could take down a sovereign government in the Euro Zone. It called in to question the veracity of its banking system and last summer’s stress tests.

    More fundamentally, a debate also rages over what the end game will be for the Euro Zone, in particular how it can accommodate small, uncompetitive countries that are overwhelmed with debt.

    Inevitably, many investors have simply been too nervous to take on additional peripheral government debt. With a lack of buyers, those deciding to get out have done so at almost any price, causing spreads to blow out.

    But two ‘tough love’ dynamics aimed at creating a better Euro Zone in the future have also exacerbated the situation in the present.

    One is the desire of the German government to create a new mechanism to enable defaults after 2013 that extract pain from the private sector. It’s killed the ‘no default’ mantra that accompanied the creation of Europe’s trillion-dollar safety net—and the fragile confidence it sought to create after Greece blew up.

    The second dynamic is the hawkishness of the ECB: President Jean Claude Trichet’s desire to exit the emergency support it’s giving banks as soon as possible. Earlier in the week, one London trader told me markets would ‘totally freak out’ if Trichet didn’t use his monthly news conference on Thursday to soften his stance on clawing-back that ultra-cheap liquidity in the New Year.

    But now something more dramatic may be about to happen. Could the fact that Trichet is warning markets not to underestimate the ECB’s determination to resolve the crisis indicate a major U-turn will be unveiled tomorrow?

    If the ECB is to become more Fed-like, the obvious first step would be massive buying of Euro Zone government debt to provide liquidity amid the buyers' strike. Others talk of not only joint bonds being issued by the 16 nations of the Euro Zone but that the ECB might broker their sale to China.

    None of this will solve Europe’s problems. But no one else in Europe can move at the speed of the ECB or importantly with such deep pockets. Tomorrow’s news conference at 8:30am ET could buy us all enough time until either growth or inflation to show up in Europe.

    Watch for CNBC's live coverage of Trichet's new conference, on-air and online, Thursday, December 2 at 8:30am ET.
  2. i would not get your hopes up.

    since this crisis began in 2007 the ecb is the king of never delivering.

    they never step up to the plate.

    this is the same organisation that hiked rates back in 08 only to

    reverse it the following month.

  3. I agree with E-BEAKER,

    ECB is nearing the point of zero credibility.

    Yes they had an impact after the first crisis but now we know what to expect and there are many episodes left to the crisis in the pipeline.

    Betting on markets going up on the back of ECB action is a sucker's trade.

    The trade to put on is actually to short as soon as the news comes out. Markets will be disappointed
  4. benwm


    less credible than the Fed?

    I prefer Trichet to Bernanke. You're never going to get hyperinflation with Trichet, Bernanke I'm not so sure that's even on his radar.
  5. The Sharing Of Marriage (humor)

    The old man placed an order for one hamburger,
    French fries and a drink.

    He unwrapped the plain hamburger and
    carefully cut it in half, placing one half in front of his wife.

    He then carefully counted out the French fries, dividing them into two piles and neatly placed one pile in front of his wife.

    He took a sip of the drink, his wife took a sip and then set the cup down between them
    .... As he began to eat his few bites of hamburger, the people around them were looking over and whispering.

    Obviously they were thinking, 'That poor old couple - all they can afford is one meal for the two of them.'

    As the man began to eat his fries a young man came to the table and politely offered to buy another meal for the old couple. The old man said, they were just fine - they were used to sharing everything

    People closer to the table noticed the little old lady hadn't eaten a bite. She sat there watching her husband eat and occasionally taking turns sipping the drink.

    Again, the young man came over and begged them to let him buy another meal for them.
    This time the old woman said 'No, thank you, we are used to sharing everything..'

    Finally, as the old man finished and was wiping his face neatly with the napkin, the young man again came over to the little old lady who had yet to eat a single bite of food and asked 'What is it you are waiting for?'

    She answered

    get paid to
  6. Visaria


    you rather oddly missed posting the punchline:

    Finally, as the old man finished and was wiping his face neatly with the napkin, the young man again came over to the little old lady who had yet to eat a single bite of food and asked 'What is it you are waiting for?'
    She answered --'THE TEETH.'