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ECB's Draghi Explains Why He Did Not Cut Rates - Live Press Conference

Tyler Durden's picture




 

Despite record unemployment, record loan delinquencies, and record low loan creation, Mario Draghi and his merry European men decided now was not the time to cut rates to "help" the real economy. Of course, with peripheral bond and stock markets exploding higher why would he - Europe's 'problems' are solved if the market is to be believed. Of course the ECB press conference will have its smattering of negative rate discussions, QE teases, and OMT confidence-inspiration but the multi-year highs in EUR will continue to hurt Europe's exporters means he'll have to try sometime to jawbone it down.

 

Draghi starts off on a less than cheerful, quite defaltionary, note:

  • DRAGHI: EURO AREA MAY FACE PROLONGED PERIOD OF LOW INFLATION
  • DRAGHI SAYS EURO AREA GROWTH RISKS REMAIN `ON THE DOWNSIDE
  • DRAGHI SAYS POLICY TO REMAIN ACCOMMODATIVE AS LONG AS NEEDED
  • DRAGHI SAYS UNDERLYING PRICE PRESSURES TO REMAIN SUBDUED
  • DRAGHI SAYS MONETARY, CREDIT DYNAMICS REMAIN SUBDUED
  • DRAGHI SAYS UNEMPLOYMENT REMAINS HIGH
  • DRAGHI SEES DOWNSIDE RISKS TO ECONOMIC OUTLOOK
  • DRAGHI SAYS BALANCE-SHEET ADJUSTMENTS WILL WEIGH ON ACTIVITY
  • DRAGHI: COMMODITY PRICES, SLOW REFORMS ALSO DOWNSIDE RISKS

The EURUSD, after it was sent higher before the conference by momentum ignition algos, did not like these statements:

And some more upbeat assessments:

  • DRAGHI SAYS POLICY STANCE TO SUPPORT GRADUAL ECONOMIC RECOVERY
  • DRAGHI SAYS INFLATION WILL RISE GRADUALLY THEREAFTER
  • DRAGHI SAYS HIGHER COMMODITY PRICES ARE UPSIDE INFLATION RISK
  • DRAGHI SAYS RISKS TO INFLATION BROADLY BALANCED
  • DRAGHI: INFLATION SEEN AROUND CURRENT LEVELS IN COMING MONTHS
  • DRAGHI SAYS LATEST INFLATION DATA BROADLY AS EXPECTED
  • DRAGHI SAYS REAL INCOMES BENEFIT FROM LOWER ENERGY PRICES
  • DRAGHI SAYS HIGHER COMMODITY PRICES ARE UPSIDE INFLATION RISK

Better have something good in the Q&A or else Draghi may rapidly become Trichet.

 

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Thu, 01/09/2014 - 09:27 | 4314885 Grande Tetons
Grande Tetons's picture

I wonder how many times he will say subdued today.  

Could make for a fun drinking game....if it was no so damn early. 

Thu, 01/09/2014 - 10:34 | 4314919 Anglo Hondo
Anglo Hondo's picture

Jeez, I'm so trashed after only ten minutes, you could describe me as "sublimely subdued". 

 

Who will fall first, me or the Euro?

 

UPDATE:  It's the Euro to fall first, before me!

 

Thu, 01/09/2014 - 09:51 | 4314933 Sudden Debt
Sudden Debt's picture

jeez... I pitty those "reporter" figurants... so boring...

and why does that bloomberg guy refers to him as "president draghi"?

I DIDN'T VOTE FOR HIM! I DON'T KNOW HIM!

Thu, 01/09/2014 - 09:32 | 4314903 Cognitive Dissonance
Cognitive Dissonance's picture

"Shhh.....the spirits are about to speak." - Bullwinkle

"What, again?" - Rocky

Thu, 01/09/2014 - 10:55 | 4315161 disabledvet
disabledvet's picture

Bugs was great but Rocky and Bullwinkle were the best ever. "that trick will never work!" is the greatest line ever. seriously though putting Trichet in blue Simms it up in my view. What else Draghi suppose to do...what else can be SAY???? "the forward guidance must be forever."

Thu, 01/09/2014 - 11:55 | 4315391 asteroids
asteroids's picture

Fucking weasel.

Thu, 01/09/2014 - 09:33 | 4314904 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

If everyone was settling trades in a third currency that isn't owned by any state you know like bitcoin or some iteration on it, Central Bank monetary policy would be pretty much moot as far as currency valuations go for international trade since there would be no currency imbalance when everything priced globally is all priced in some crypto-currency. Local and global become firewalled you know like what Glass Steagall did for banks.........

Thu, 01/09/2014 - 10:33 | 4315068 Debugas
Debugas's picture

go tell this to millions of people living on welfare from the state

Thu, 01/09/2014 - 09:34 | 4314907 LawsofPhysics
LawsofPhysics's picture

Rates only matter if collateral matters.  So clearly rates don't matter.  The central bankers will continue the greatest theft/fraud in history until they are physical removed from this earth.

Same as it ever was...

Thu, 01/09/2014 - 09:39 | 4314916 negative rates
negative rates's picture

Which should be just about any day now,...wait for it...............................................................................................................................................................................................................................................................................................................................................................................................................................................................

Thu, 01/09/2014 - 10:58 | 4315180 disabledvet
disabledvet's picture

"no sir...it is not the Bank of Milan but Milan itself."

Thu, 01/09/2014 - 10:03 | 4314982 eclectic syncretist
eclectic syncretist's picture

* DRAGHI SAYS QE ACTS AS ANAL EMBOLISM ON ECONOMY

* DRAGHI SAYS ECB WILL KILL THE WORLD ECONOMY AS SLOWLY AS POSSIBLE WHILST EXTRACTING EVERYTHING OF VALUE THEREFROM

* DRAGHI SAYS HE FANTASIZES ABOUT PLAYING WITH DENNIS RODMAN ON HIS CROSSDRESSING NORTH KOREAN BASKETBALL TEAM

Thu, 01/09/2014 - 10:15 | 4315017 Sudden Debt
Sudden Debt's picture

the word "effectivity" seems to be a hard word to grasp for draghi :)

Thu, 01/09/2014 - 10:19 | 4315026 jmcadg
jmcadg's picture

He talks a good book. But ultimately it's bollocks.

Thu, 01/09/2014 - 10:33 | 4315061 jmcadg
jmcadg's picture

He didn't answer the specific question. Was it a unanimous vote not to rate cut? I think the answer must then be no!

Thu, 01/09/2014 - 14:06 | 4315271 falak pema
falak pema's picture

ZH is not very convincing in its reasoning: given its belief that the Markets are all knowing.

When the Markets ass raped Greece and Italy via HF/shadow bank plays to short the 7% + bond spreads on carry trades, ZH reported : "Serves those corrupt Italians and Greeks right for trying to sell their junk bonds on the markets. MArkets are word of God's arbitration pronouncing capitalism's all creative mantra." 

Never did ZH question the massive manipulation played by WS vulture funds from behind shadow banking curtains, benefitting from ZIRP, to rape the nations of EU as they tried to do to Japan. Not saying that the EU and IMF as members of Troika were not on the same wicket; as they serve the interests of the moneyed Oligarchy, notably the banks of Germany and France; the core members of Euro-oligarchy. 

No, no, no....Market vigilantes are God's work in progress being truly done to chastise the corrupt. All the while they rape the 99% innocent as we all know but whose CAUSALITY we don't like to admit; aka the free market mantra and God's right handed dispensation of righteous justice to the "hard working".

Now that the SAME market has gone lame its tail between its legs, ZH clarions : ALL this is CB bank manipulated; Draghi the DEVIL's servant is playing the tune of global statist Communism, dictated by his Devlish technocratic masters.

Ha, ha, ha... what a load of BS logic. When the FED and the US Pds make their profits using reserve leverage and ZIRP to rape European or Japan economies its all fair game. All HAIL Kyle Bass and consorts as scions of libertarian free markets. When the Europeans and Japanese react to defend their own economies by using the same techniques as the FED its the devil's work incarnate.

Get one thing into your libertarian heads full of double standard prejudice :

1° Libertarians are the surrogate brothers of neocon logic now wearing sheep cloth. You want your cake and also you want to eat other people's cake. WHat's good for the goose is not good for the gander! You would all be floundering like unwashed fish if WS power collapses; all you traders are sons of the same creed. And nobody at the Hedge is really interested in seeing WS fall UNTIL the world has fallen even further...in order for the initiators of crony Empire to stay top dogs. You are and you stay traders of the lost arc of capitalism.

2° The asset Market as defined by Pax Americana since inception is a scam to benefit BIG BUSINESS. The only modern day president who fought this trend was FDR during the depression and he did the right things to BLOCK this neofeudal and fascist logic of top down money aristocracy (the ones you truly love as libertarians), in BALANCING it with bottom up welfare state programs by doing three things : Gl/St, Massive government infrastructure programs, and high marginal taxation of rich.

That STILL stays the winning formula in this 1929 repeat. And don't call his emulators; aka Liz Warren and consorts, Commies, 'cos they are basically in agreement with BAILING IN rich man's and rich corporates ill gotten gains.

3° When push may come to shove, you libertarians will never be prepared to save the US NATION by accepting high taxation and bail ins. As that is the ONLY way to rebuild the economy after the reset. Nope you'll all cry wolf and Communism is back in the  USA ! 

hahaha! What baloney! 

Eat your heart out you wolves in sheep's clothing. 

Fight club is now a two way street and your sham logic is naked for all to see when you treat an elected rep of people, like De Bliaso, as a Commie. That is the populist road to fascism à la Barry Goldwater and what has followed. Sarah PAlin should be very comfy at the Hedge with her drill baby drill.

The Hedge has NEVER proposed a reset after 2008 that reconciled cleaning out the Augean stables of State and WS crony corruption with the restitution of good functioning of people's elected according to due procees and true application of rule of law. Nope, COS THAT WOULD HAVE MEANT THE DE FACTO SHUT DOWN AND CLEANOUT OF MARKETS UNTIL DUE PROCESS WAS REINSTATED BY HONEST GOVERNMENT. There is no other way except revolution and/or military rule and that means return to great DICTATOR of Mussolini dictat : state and oligarchy hand in hand. The Liz Warren route is not that one; the FDR route was NEVER that one. Nope that is the BArry Goldwater and MIC cabal route; the Reaganomics route, all dressed up in Hayekian free market mantra BS.

Nope the Hedge is against all forms of true governance except anarcho-capitalism; which is so immature in the eyes of contextualised geopolitical history it needs no explanation any more. I won't insult your TD intelligence by saying you be naive. So if you aren't naive you are complicit in something more insidious. Alas, alas...

ZH has indulged in this narcissistic bend of mind called Libertarianism that has no true head nor tail and in fact is the useful idiot or Elmer Gantry platform to serve the Neocon status quo. Libertarianism has no program and no party and therefore no relevance to the political process of the USA. Its only visible practitioners are neo fascist populists like that guy from Texas;  Ted whatever. 

Thu, 01/09/2014 - 12:15 | 4315502 Spungo
Spungo's picture

Isn't this a good thing? Lowering rates tends to cause inflation. Inflation is one of those things that destroys the middle class while benefiting the upper class.

Thu, 01/09/2014 - 14:17 | 4316062 realWhiteNight123129
realWhiteNight123129's picture

First good decision Mario Draghi ever took.

Thu, 01/09/2014 - 18:01 | 4317096 giggler321
giggler321's picture

First and foremost, happy new year friends - don't trust a man with child molester glasses.

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