Power of Story
Send a Tweet        
- Advertisement -

Share on Google Plus Share on Twitter 2 Share on Facebook 1 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend (3 Shares)  

Printer Friendly Page Save As Favorite View Favorites (# of views)   3 comments
OpEdNews Op Eds

Irrational Draghi Exuberance

By       Message Stephen Lendman     Permalink
      (Page 3 of 6 pages) Become a premium member to see this article and all articles as one long page.
Related Topic(s): ; ; ; ; , Add Tags Add to My Group(s)

Must Read 1   Supported 1   Valuable 1  
View Ratings | Rate It

opednews.com Headlined to H3 9/8/12

Author 194
Become a Fan
  (191 fans)
- Advertisement -

The ECB's earlier Securities Market Program (SMP) failed. Citibank strategist Jamie Seale believes OMT won't fare better. He called it dangerous. Will it do anything more than buy short-term relief? It's no solution, he stressed. "The economic backdrop remains dire."

SMP initially sent peripheral nations' sovereign yields lower. Doing so didn't last long. Moreover, Draghi may intend to let rhetoric more than policy do most heavy lifting. Unfulfilled promises only work for so long.

- Advertisement -

Goldman Sachs also dissed him. It called OMT SMP 2.0. It said no easy way out of crisis conditions exists. An ECB declaration about being pari passu leaves unanswered questions relating to voluntary debt restructuring. It also provides no assurance about sound policy measures following promises. Why now when not earlier.

Bank of America economist Laurence Boone doubts OMT's success. Draghi's plan is more negative than positive. Conditionality was tougher than expected. 

- Advertisement -

The IMF's role as monitor means Big Brother is watching. These factors lessen the likelihood that troubled countries will seek help or as much as they might have otherwise.

Draghi announced no yield targets, no bond purchases ex-ante transparency, and no technical details on how OMT differs from SMP.

Ireland and Portugal won't qualify for help until they regain market access. Greece is too far gone to help.

- Advertisement -

Peripheral banks aren't provided relief. Other reservations were raised. JPMorgan Asset Management 's Michael Cembalest said Draghi may have to engineer a massive debt restructuring and take huge losses. In a note to clients, he explained:

Next Page  1  |  2  |  3  |  4  |  5  |  6

 

- Advertisement -

Must Read 1   Supported 1   Valuable 1  
View Ratings | Rate It

I was born in 1934, am a retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon



Go To Commenting
/* The Petition Site */
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

The McCain-Lieberman Police State Act

Daniel Estulin's "True Story of the Bilderberg Group" and What They May Be Planning Now

Continuity of Government: Coup d'Etat Authority in America

America Facing Depression and Bankruptcy

Lies, Damn Lies and the Murdoch Empire

Mandatory Swine Flu Vaccine Alert