ECB Hikes Rates By 25 bps As Expected - Follow The Press Conference Live

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Thu, 04/07/2011 - 07:29 | 1144580 EscapeKey
EscapeKey's picture

Jobless reports, consumer spending figures, public debts, deficits, inflation figures... none of these seemingly have an impact on the markets, so why would interest rates?

Increasing interest rates => WAHEY booming economy => market rallies.

Stable interest rates => WAHEY cheap money => market rallies.

Thu, 04/07/2011 - 07:40 | 1144597 Drag Racer
Drag Racer's picture

so why would interest rates?

How much of the market is fueled by debt? Have ya heard fuel prices are rising?

"The biggest paradox, as discussed yesterday, is that Europe is tightening at a time when more and more peripheral countries are in dire need of cheap capital."

Funny how the issue which got them into trouble becomes the achillies heal...

Thu, 04/07/2011 - 08:04 | 1144630 EscapeKey
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Well, I was being facetious. Rising interest rates obviously will become an issue down the road.

Thu, 04/07/2011 - 08:14 | 1144646 Harlequin001
Harlequin001's picture

Either Trichet does it voluntarily or the markets do it for him.

After higher prices comes higher rates. He will have to lower but will be unable.

The markets will do it for him, and he knows it.


Thu, 04/07/2011 - 08:55 | 1144745 Popo
Popo's picture

The ECB  has to raise rates to save the Euro, because they're about to bail out Portugal.

Thu, 04/07/2011 - 09:00 | 1144765 ipud
ipud's picture

One must speak out against these vile and corrupt institutions.

Thu, 04/07/2011 - 07:31 | 1144583 squexx
squexx's picture

Nothing but a dog and pony show. Just like with ones with ChairSatan Bernank and the puppet Obama.

Thu, 04/07/2011 - 08:03 | 1144632 cossack55
cossack55's picture

Roger that. Wake me when they raise 500 basis pts.

Thu, 04/07/2011 - 07:38 | 1144591 russki standart
russki standart's picture

Window dressing. Europe is already so fucked by inflation, excess taxes and debt.

Thu, 04/07/2011 - 07:38 | 1144593 gordengeko
gordengeko's picture

The head vampire council.

Thu, 04/07/2011 - 08:46 | 1144720 malusDiaz
malusDiaz's picture

That cracks me up, they kinda do look like it!

Thu, 04/07/2011 - 08:52 | 1144741 gordengeko
gordengeko's picture

For some reason the movie daybreakers popped in my head when I saw these assclowns.  Silver to the heart bitchez!

Thu, 04/07/2011 - 07:38 | 1144594 Sudden Debt
Sudden Debt's picture

England hasn't changed it's rates so neither will Europe.

Markets will keep going up following inflation.

The 3.5% prognoses will go to 6/7% and nobody will really care.

And in 2012, the same will happen but by then inflation will be such a big issue that a simple rate change won't do shit.

Growth will need to pick up to 8/9% before there can be a rate change, minus inflation that's a meager 2% growth but for a inflation economy who needs to keep up that's just plain massive.

Let's not forget that minus inflation, there hasn't been a single western country that has any positive growth numbers.



Thu, 04/07/2011 - 08:27 | 1144680 EscapeKey
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Let's not forget that minus inflation, there hasn't been a single western country that has any positive growth numbers.

I don't know if I agree with this. Growth has been higher than inflation, due to a massive increase in public sector spending. That it's completely unsustainable, and that it frankly just shows the shortcomings of the broken-windows-counting GDP calculations is a topic for another day...

Thu, 04/07/2011 - 09:10 | 1144797 r101958
r101958's picture

True. And we shouldn't forget that the public sector produces nothing.

Thu, 04/07/2011 - 07:42 | 1144599 tomster0126
tomster0126's picture

inflation, inflation, inflation.  none of these policies are really going to make a huge difference in the areas Europe really needs help.

Thu, 04/07/2011 - 07:43 | 1144601 youngman
youngman's picture

A guy on the news today....a business channel..... said that 90% of Spains mortgages are tied to the short term rate and are will tank them even faster if they raise the rates...

Thu, 04/07/2011 - 08:02 | 1144624 Sudden Debt
Sudden Debt's picture

You can't imagine how many people I know who have adjustable morgage rates and are already downpaying 50% of their combined (M/W) income.

Any rate hike will drown them and risk them to foreclose which could really start to destroy the housing markets who haven't been really afftected here in Europe.

And if the housing doesn't take the beating, retail will.

A or B, the money has to come from somewhere and it ain't going to come from extra visa cards.



Thu, 04/07/2011 - 07:43 | 1144602 scratch_and_sniff
scratch_and_sniff's picture

Get a load of the calming muzak...cue carnage.

Thu, 04/07/2011 - 07:48 | 1144610 scratch_and_sniff
scratch_and_sniff's picture


Thu, 04/07/2011 - 08:00 | 1144620 Cash_is_Trash
Cash_is_Trash's picture

If you want to nail-down inflation, raise real interest rates.

Not the nominalzzz

Thu, 04/07/2011 - 08:06 | 1144634 Sudden Debt
Sudden Debt's picture

If you want to nail-down inflation, STOP PRINTING MONEY!!

Thu, 04/07/2011 - 08:28 | 1144651 Harlequin001
Harlequin001's picture

how very well said my flailing ... furry....wide mouthed... thing...

well said.

Thu, 04/07/2011 - 08:25 | 1144677 EscapeKey
EscapeKey's picture

Look, they already told you - they only print money to make up for all the purchasing power lost as the money loses its value. The tail is chasing the dog, don't you know?

Thu, 04/07/2011 - 09:04 | 1144783 Sudden Debt
Sudden Debt's picture

I like to chase tail, what's wrong with that?



Thu, 04/07/2011 - 09:21 | 1144841 EscapeKey
EscapeKey's picture


Thu, 04/07/2011 - 09:35 | 1144861 fredquimby
fredquimby's picture

I have a plan so sneaky you could pin a tail on it and call it a weasel....

H/T Blackadder of course...

Thu, 04/07/2011 - 09:30 | 1144854 Ethics Gradient
Ethics Gradient's picture

Nothing, unless you chase tail in the style depicted by your avatar. In which case you'll likely wind up arrested.

Thu, 04/07/2011 - 08:02 | 1144621 falak pema
falak pema's picture

PIIGS in despair, but so is France as trade deficits explode. High Euro means less exports. Only Germany reassured as this boosts its monetary clout for doing M&A abroad, and hedges against carry-trade euro attack. As its economy is less Euro sensitive, 60% intra euro zone trade and the rest hi-value, hi-tech abroad. "So come on you US HF come and attack our last resort Euro money haven as USD dives and Yen trembles"... Is their current EU mantra...For PM, the strong Euro is haven competition. Will Benocide hide or take retaliatory interest hike in USA? ....QE-3 is looking like being put WS assets sky rocket to thinning ozone layer...

Thu, 04/07/2011 - 09:20 | 1144831 THE DORK OF CORK
THE DORK OF CORK's picture

If high trade surpluses were the road to prosperity then Ireland would not have any problems - however the bits of paper that London , Paris and Frankfurt produce give them a extraordinary privilege to live beyond their means and benefit from their paper Empires.

World trade is deeply distorted by overvalued debt based currencies - such distorted financial creatures need to be put back into their cage.


External Trade Dec 2010 (Prov) jan 2011 (Prel)



Thu, 04/07/2011 - 09:29 | 1144856 falak pema
falak pema's picture

pity the dumbass UK banks and their RE shenanigans have brought the country to these dire straights, with the complicity of Eu banks!

Thu, 04/07/2011 - 10:34 | 1145066 anonnn
anonnn's picture

Ahh. That word  again. Privilege!

Thu, 04/07/2011 - 08:03 | 1144628 DavidC
DavidC's picture

Yup, and as expected the Dow is starting to climb in pre market...



Thu, 04/07/2011 - 08:32 | 1144686 Harlequin001
Harlequin001's picture

and gold's now plunged to $1459.80.

that's my retirement just blown apart...

Thu, 04/07/2011 - 08:57 | 1144757 SheepDog-One
SheepDog-One's picture

Gold 'plunge' to 1459.80, my God the horror!

Thu, 04/07/2011 - 08:59 | 1144767 Harlequin001
Harlequin001's picture

Yep, I'm still looking for a tall building...

Thu, 04/07/2011 - 09:31 | 1144858 falak pema
falak pema's picture

how about know the Dubai sail that guy climbed the other day...good place for a swan dive!

Thu, 04/07/2011 - 09:52 | 1144895 Harlequin001
Harlequin001's picture

Yes but by the time I get to the top it will have gone back up again, I'll be loaded AGAIN and there'll be no point.

Look $1464.5 already, and I haven't even got out of the foyer.

maybe I'll just have to try the front step...

no more time I'm afraid...

Thu, 04/07/2011 - 08:19 | 1144658 the not so migh...
the not so mighty maximiza's picture

groovy euro trance

Thu, 04/07/2011 - 08:21 | 1144668 John Wilmot
John Wilmot's picture

Well, I'm surprised. I thought Portugal would trump this rate hike. Guess not. O well, the dollar weakens against the euro and the melt-up continues in U.S. markets. Horray! ...

Thu, 04/07/2011 - 08:22 | 1144670 tek77blu
tek77blu's picture

bob chapman interview on why a rate hike means higher gold and silver prices:

Thu, 04/07/2011 - 08:26 | 1144675 lsbumblebee
lsbumblebee's picture

Gold traders are "digesting" this until AP or Reuters can come up with another rumor.

Thu, 04/07/2011 - 08:37 | 1144701 Spigot
Spigot's picture

Either its a "token" increase with no real meaning in the financial or economic realms


they feel confident that they have ignited enough inflation that they can chase inflation higher by increasing rates (as the US Fed did in the 1970's).

Thu, 04/07/2011 - 08:51 | 1144737 Anonymouse
Anonymouse's picture

The ECB raising rates? You know what this means? It's all over! They wouldn't raise rates in a weak economy.

We made it through the recession!

Let the joyous news be spread!
The wicked old recession 'last is dead!

Thu, 04/07/2011 - 09:00 | 1144763 SheepDog-One
SheepDog-One's picture

Yes .25 rate increase, my God its HUGE!  <sarc off>

Thu, 04/07/2011 - 08:55 | 1144751 bob_dabolina
bob_dabolina's picture

Would you look at that

Update #3:

Disregard update#2

Thu, 04/07/2011 - 09:02 | 1144771 tmosley
tmosley's picture

lol, raising rates to 0.25% when inflation is 4+%

"There, I fixed it!"

Thu, 04/07/2011 - 09:01 | 1144774 Cdad
Cdad's picture

Update 2: EURUSD now rising gradually as JC Trichet language in conference more hawkish than expected.

Not seeing this on my chart.  Declining now from 1.4270. 

Thu, 04/07/2011 - 09:04 | 1144780 AboutAverage
AboutAverage's picture

I just keep wondering when these commodity ETFs are gonna fall apart.

Thu, 04/07/2011 - 09:15 | 1144821 Cdad
Cdad's picture

Today or tomorrow...I suspect.  I think everything is about to get hit...less oil.  

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