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

Tyler Durden's picture

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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.

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...

EscapeKey's picture

Well, I was being facetious. Rising interest rates obviously will become an issue down the road.

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.


Popo's picture

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

ipud's picture

One must speak out against these vile and corrupt institutions.

squexx's picture

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

cossack55's picture

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

russki standart's picture

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

gordengeko's picture

The head vampire council.

malusDiaz's picture

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

gordengeko's picture

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

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.



EscapeKey's picture

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...

r101958's picture

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

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.

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...

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.



scratch_and_sniff's picture

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

Cash_is_Trash's picture

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

Not the nominalzzz

Sudden Debt's picture

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

Harlequin001's picture

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

well said.

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?

Sudden Debt's picture

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



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...

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.

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...

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)



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!

anonnn's picture

Ahh. That word  again. Privilege!

DavidC's picture

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



Harlequin001's picture

and gold's now plunged to $1459.80.

that's my retirement just blown apart...

SheepDog-One's picture

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

Harlequin001's picture

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

falak pema's picture

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

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...

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! ...

tek77blu's picture

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

lsbumblebee's picture

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

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).

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!

SheepDog-One's picture

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

bob_dabolina's picture

Would you look at that

Update #3:

Disregard update#2

tmosley's picture

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

"There, I fixed it!"

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. 

AboutAverage's picture

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

Cdad's picture

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