ML-Implode News - Satyajit Das: Poker bluffs & the European crisis

In reality, the ECB programme is a further tactical bluff in the long European poker game to buy time, in the hope that growth, inflation and some structural reforms restore the euro zone's fortunes. Draghi's July 2012 statement that the ECB would "do whatever it takes" helped stabilise money markets and reduced sovereign borrowing costs without requiring any actual intervention. Draghi has continued to follow the strategy.
In October 2013, he was ready to consider all available instruments. In November 2013, there were a whole range of instruments that he could activate, if needed. For absence of doubt, in December 2013, he reiterated that he was ready to consider all available instruments. In January 2014, he would take further decisive action if required. In February and March 2014, he vowed to take further decisive action if required. In April 2014, the ECB president undertook to act swiftly, if required. In May 2014, he repeated that he will act swiftly, if required.

Announcing the June 5, 2014 initiatives, Draghi told reporters: "Are we finished? The answer is no." It will be reasonable, based on established practice, to expect the ECB president to repeat this formulation in the coming months, until circumstances dictate a new message. But the utterances are increasingly reminiscent of the Wizard of Oz: "Make no mistake, I have powers, powers beyond your understanding! Powers to make you quake!"''

Put powerfully and succinctly. Thank you Mr. Das.

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Satyajit Das: Poker bluffs & the European crisis