Relevant:
- Mario Draghi: ECB prepared to cut interest rates and expand QE (AKA "DO WHATEVER IT TAKES 2.0"...)
- Doug Noland - Reminiscing about 2012 (EVALUATING "DO WHATEVER IT TAKES")
- Draghi's Groundhog Day Heralds Seven Weeks of ECB Market Dialog (AKA "DO WHATEVER IT TAKES 4.0"??)
- A Stress Test for Mario Draghi, Europe's Top Banker
- Nightmare of Mario Draghi's crowded trade
2016-03-10 — blondemoney.co.uk
Lower rates for longer were supposed to be a Good Thing. When it came to the ECB specifically, it worked like a charm: everyone jumped onto the ECB QE trade a year ago, buying risky European assets, and then hedging the currency, delivering SuperMario's dream of higher stock markets but a lower currency. Yet another dream now turns to a nightmare. The ECB now have to square the circle of delivering more stimulus, but not damaging the banking sector while they do it. Instead of "whatever it takes" to save the Euro, the focus now is on "However it takes".
...
We could discuss what's priced, and what's expected, but the truth is, after these past 3 meetings, no-one knows what to expect, nor how much risk to take to avoid losses or stand any chance of making money.
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