Like Pavlov's dog, the market is conditioned to rise whenever
investors see the possibility of central bank moves toward ease. This
is true whether we are talking about the Fed or the ECB. The problem is
that we have been gradually moving to a point where central banks can
promise, but can no longer deliver.
Take, for instance, ECB President Draghi's statement last week that the ECB will "do whatever it takes" to save the Euro and get the EU's economy growing again. That bold statement was so clear and emphatic that most observers took it as a sign that that a really definitive announcement was coming this week. Instead we got the same old vague pronouncements that we have now been hearing from top European government and financial officials for the last two and a half years.
Following are some samples we picked up from some of the articles reporting on Draghi's announcement today: May soon step in..consider other measures..only under strict conditions..provided Spain and Italy issue a request..will come up with a plan..could include..may undertake..will now examine..will decide..tied to strict conditions. For anybody who has been following this story since early 2010, it sounds like the same old vague "kick the can down the road" rhetoric we have been hearing all along.
Read more: http://www.businessinsider.com/the-fed-and-the-ecb-can-promise-but-they-cant-deliver-2012-8#ixzz22Ta2D96d
Take, for instance, ECB President Draghi's statement last week that the ECB will "do whatever it takes" to save the Euro and get the EU's economy growing again. That bold statement was so clear and emphatic that most observers took it as a sign that that a really definitive announcement was coming this week. Instead we got the same old vague pronouncements that we have now been hearing from top European government and financial officials for the last two and a half years.
Following are some samples we picked up from some of the articles reporting on Draghi's announcement today: May soon step in..consider other measures..only under strict conditions..provided Spain and Italy issue a request..will come up with a plan..could include..may undertake..will now examine..will decide..tied to strict conditions. For anybody who has been following this story since early 2010, it sounds like the same old vague "kick the can down the road" rhetoric we have been hearing all along.
Read more: http://www.businessinsider.com/the-fed-and-the-ecb-can-promise-but-they-cant-deliver-2012-8#ixzz22Ta2D96d
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