We’re seeing a strong up-day all around, including in Europe, where yields are coming in on PIIGS debt.Is it because ECB chief Jean-Claude Trichet just blinked?
FT cites testimony given in front of th euro parliament suggesting that decisions regarding future bond purchases were still “on-going” and thus the decision to purchase more government debt was still clearly on the table.
The bottom line is that there doesn’t seem to be any other way out. The European Financial Stability Fund is looking more like a pop gun than a bazooka — especially since some of its big supporters may soon be tapping it — and we’re not going to get any kind of eurozone mega-merger anytime soon. So it’s on Trichet.
What’s clear though, and not surprising, given his history, is that he’s really waiting until things get towards the brink to act (and he hasn’t yet, just made the vaguest intimations that he might).
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