More big promises out of the EU central bank this morning have the risk trade soaring once again. Bullshit so far continuing to baffle brains and ignore math. It reminds us of how poor present plans are, when so many hang moment to moment on the calculated comments of politicians and central bankers. All show and no go–nothing they are thinking or doing can fix the insolvency of global budgets and present imbalances. I am reminded of the scene in Forrest Gump where Forrest spends a few years blindly running picking up followers everywhere who assume that he is a messiah because he runs with conviction.
There is something productive in this next wave of monetary promises: the juice effects are likely to be the most short-lived yet, as the incoming recessions bears down on global revenues. The disappointment that next follows is likely to be a valuable cyclical capitulation in risk markets. That will be progress indeed.
Bloomberg Manus Cranny breaks down comments from ECB president Mario Draghi stating the ECB will do whatever it takes to preserve to euro. Here is a direct link.