Photo: U.S. State Department
Yesterday we mentioned the latest rumour in Europe, that the ECB would lend money to the IMF, which would in turn lend money to beleaguered governments.It seems Rube Goldberg-ish to us, but it’s possible that this circuitous plan is more palatable than directly having the ECB monetise government debt.
Anyway, it was good for a brief lift in the early going yesterday, before the wheels fell off.
It’s back, and the markets are once again getting a bit of a lift.
The Dow is currently pointing to a gain of 60 points right now, which is well off the lows.
According to Dow Jones, the idea is “gaining traction”.
We don’t know the details, and we don’t know what it means, and unless it’s unlimited firepower, we’re sceptical that it will ultimately do more than the various bazookas Europe has tried so far. But there might be something here.
As for European spreads, things are pretty tame. Spanish yields are higher, while Italy is narrower.