Comments on: Notes From Underground: Mario Draghi, The Most Powerful Man In Europe Since???

By: Dustin L.

Dustin L. — Fri, 05 Oct 2012 17:17:57 +0000

Agreed!!

By: Dustin L.

Dustin L. — Fri, 05 Oct 2012 17:15:26 +0000

Oh the arrogance is laughable of these policy makers claiming to know the true value of everything at all times. I’d like to see them put their own money on the line in taking a position against the supposed mis-priced markets instead of hiding in the world of academia and risking OPM, or rather, in essence stealing it via their inflationary policies. All central bank balance sheets are getting loaded up with junk and confidence is well on its way to being completely lost in these institutions and with it the value of their promissory notes. Did someone say gold?

By: yra

yra — Fri, 05 Oct 2012 15:52:56 +0000

bmcc–yes but also it was interesting to hear Draghi say he watches the EURO go higher as the sovereign bond market satbilizes as the market anticipates that the EURO will not fall apart.It is the exact opposite of countries like spain needs–they need a lower Euro so it is a dilemma

By: bmcc

bmcc — Fri, 05 Oct 2012 15:34:59 +0000

yra, thanks for all of the postings, very helpful in trying to sort through this endless mess. I’m a bit confused by the recent strength of the euro vs. the dollar. Is it just as simple as capital flows back into europe + bernake winning in the competitive devaluation race. doesn’t draghi ultimately want/benefit from a weaker euro?

By: yra

yra — Fri, 05 Oct 2012 14:22:15 +0000

Kevin–right on target.Conditionality was certainly a bow to the Germans—but now the Monetary Transmission Channel checks Weidmann

By: Kevin

Kevin — Fri, 05 Oct 2012 08:06:22 +0000

Hi Yra what struck me during Draghi’s conference was the “Conditionality Illusion”. When you consider a scenario where Spain requests a bail-out per the programme. If Spain then misses its deficit targets, what now? (as is probable given the negative feedback loops from austerity attempts during a private sector deleveraging). Would the ECB really stop buying and then start selling Spanish bonds? In that market environment? Of course they wouldn’t – that would be forcing Spain out the Euro. Eureka – “Conditionality” was created to comfort the Germans like Aslan comforts children.