Monday, August 8, 2011
ECB Buying Italy and Spain Debt
What is lost in the scary headlines about the S&P downgrade is the very significant change in attitude of the ECB. They are now willing to monetize Italian and Spanish bonds to stabilize the Eurozone. This will stop the speculative attacks and put a floor under these bonds. Unlike PiG (Port, Irel, Greece) ,Italy and Spain aren't insolvent, just lacking the liquidity due to the fear in the market place. The ECB is now providing that liquidity. This good news is being overshadowed by mass media fear mongering over the S&P downgrade. I agree with S&P, US is in a long term mess, but it is a problem that isn't imminent. Europe is and for at least a few weeks, the Europe crisis will be abated.
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6 comments:
We will crash today
We will have QE3 tomorrow and it will go beyond bonds direct equity and real estate purchases
keep dreaming. the socialists who set up this destruction are having a party right now
1064
what did i tell you.
this is where we were last year before the market was artificially inflated with qe2.
I wish i had hoards of cash.
It's times like these that make the rich even richer.
Buffet is drooling.
Should we be hoarding spam and water?
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