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Draghi Sees Substantial Downside Risks

Tyler Durden's picture




 

UPDATE: EURUSD at highs of day now 1.2790, sovereigns and corps/fins tightening back modestly

The ECB press conference has begun and immediately the headlines are flying and driving EUR weaker (ironically not helped by the dismal US macro data that just printed). European sovereign spreads are leaking wider, stocks are underperforming, treasuries outperforming bunds, and corporate and financial spreads are widening rapidly on his comments, via Bloomberg:

  • *DRAGHI SAYS ECONOMIC OUTLOOK FACING SUBSTANTIAL DOWNSIDE RISKS
  • *DRAGHI SAYS FISCAL COMPACT MUST HAVE UNAMBIGUOUS WORDING
  • *DRAGHI SAYS FISCAL CONSOLIDATIONS ARE UNAVOIDABLE
  • *DRAGHI SAYS ECB WILL ACT AS AGENT FOR EFSF
  • *DRAGHI SAYS HARD DATA DON'T YET SHOW STABILIZATION
  • *DRAGHI SAYS HILDEBRAND WAS `VERY, VERY GOOD' GOVERNOR
  • *DRAGHI SAYS ECB DIDN'T DISCUSS CUTTING DEPOSIT, MARGINAL RATES
  • *DRAGHI SAYS ONGOING TENSIONS KEEP DAMPING ECONOMIC ACTIVITY
  • *DRAGHI SAYS ECB `VERY CONCERNED' ON HUNGARY
  • *DRAGHI SAYS ANY WAY TO INCREASE THE 'FIREWALL' FIREPOWER WELCOME
  • *DRAGHI: NATIONS SHOULD HAVE HAD CAPITAL READY ON STRESS TESTS
  • *DRAGHI SAYS NEW COLLATERAL RULES EXPANDED POTENTIAL RISK
  • *DRAGHI SAYS PSI WAS RESPONSE TO `SELFISH' BEHAVIOR
  • *DRAGHI SAYS ECB EXPECTS SUBSTANTIAL DEMAND FOR SECOND LTRO
  • *DRAGHI SAYS GREEK CASE IS `UNIQUE'

 And some of the less critical though still interesting headlines...

 

  • *DRAGHI SAYS FINANCIAL MARKET TENSIONS HURTING GROWTH
  • *DRAGHI SAYS INFLATION MAY STAY ABOVE 2% FOR SEVERAL MONTHS
  • *DRAGHI SAYS GOVERNMENTS MUST CORRECT EXCESSIVE DEFICITS
  • *DRAGHI SAYS CASH DOESN'T `SIMPLY STAY IN THE DEPOSIT' FACILITY
  • *DRAGHI SAYS BANKS THAT BORROWED FROM ECB AREN'T REDEPOSITING
  • *DRAGHI SAYS FISCAL COMPACT SHOULD BE SIGNED AT END OF JANUARY
  • *DRAGHI SAYS ECB NOT PART OF GREEK TALKS
  • *DRAGHI SAYS `WE ALL REGRET' DEVELOPMENTS ON HILDEBRAND QUITTING
  • *DRAGHI: COMFORTING TO SEE SOME OPENING IN UNSECURED BOND MARKTS
  • *DRAGHI SAYS FIREWALL MUST BE OPERATIONAL, FULLY EQUIPPED
  • *DRAGHI SAYS EURO-REGION UNEMPLOYMENT CREEPING TOWARD 10%
 

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Thu, 01/12/2012 - 09:50 | 2057939 Irish66
Irish66's picture

The banks that borrowed from ECB are not banks depositing into ECB....huh

Thu, 01/12/2012 - 09:52 | 2057948 kurzdump
kurzdump's picture

That was indeed a very enlightening comment.

Thu, 01/12/2012 - 11:56 | 2058443 metastar
metastar's picture

This is the very same line that caused me to blow coffee out my nose.

Thu, 01/12/2012 - 09:53 | 2057950 youngman
youngman's picture

Non Standard my ass.......its standard now and then some...until it finally colapses....what a joke...

Thu, 01/12/2012 - 09:53 | 2057955 LiquidityandLunacy
LiquidityandLunacy's picture

But does Draghi see rioting, bankruns, and contagion spreading aka reality?

Thu, 01/12/2012 - 09:56 | 2057965 AC_Doctor
AC_Doctor's picture

Draghi says "I have no phucking clue what to do now and I am out of options except for lying"

Thu, 01/12/2012 - 09:58 | 2057970 Life of Illusion
Life of Illusion's picture

 

 

*DRAGHI SAYS ECB WILL ACT AS AGENT FOR EFSF

 

He designed it at FSB,,,all by design!

 

Thu, 01/12/2012 - 10:01 | 2057977 EscapeKey
EscapeKey's picture

U.S. unemployment claims rise sharply to 399,000

Bullish for equities. Futures up 16 pts.

Thu, 01/12/2012 - 10:02 | 2057979 bankonzhongguo
bankonzhongguo's picture

There is no market anymore. There is no price discovery.

Now its all hand-wringing waiting for news from the Politburo.

"A raven from King's Landing!  Sell! Buy! Wait. They promise US it will all be OK after the music stops. Promise."

The system is now so murky and complex that the only "solution" is failure.

The only method to exist in this state is "inside" information, which only accelerates and enforces our contempt.

 

 

 

Thu, 01/12/2012 - 10:02 | 2057981 Stoploss
Stoploss's picture

*DRAGHI SAYS EUROZONE PRETTY MUCH FUCKED.

Thu, 01/12/2012 - 10:42 | 2058149 anonum
anonum's picture

Meanwhile in a small northern-european EU-country, economy news outlets push pro-euro propaganda headlines in cat-sized letters, "ECB's Draghi sees signs of eurozone stabilizing".

Thu, 01/12/2012 - 10:04 | 2057987 Quintus
Quintus's picture

*DRAGHI SAYS EVERYTHING IN THE EUROZONE IS WONDERFUL.  CHALLENGES OBSERVERS TO BELIEVE HIM RATHER THAN THEIR LYING EYES

Thu, 01/12/2012 - 10:06 | 2057990 scatterbrains
scatterbrains's picture

OT: 

"Simon (SPG)  has Sears as a tenant in 137 of its 190 malls, while competitor General Growth Properties Inc. has Sears in 110 of its 167 malls, said Andrew Johns, an analyst at Green Street Advisors Inc. in Newport Beach, Calif."

Will this Sears news have any impact on SPG or GGP ?

 

I'm thinking this is bullish news in a reverso world kinda way.

Thu, 01/12/2012 - 10:05 | 2057993 LongSoupLine
LongSoupLine's picture

 

 

Hmmm, CNBS headline is "DRAGHI SEEING TENTATIVE SIGNS OF STABILIZATION IN EUROZONE."

 

More fresh steaming Horseshit!

Thu, 01/12/2012 - 10:09 | 2058010 LeBalance
LeBalance's picture

*DRAGHI SAYS CASH DOESN'T `SIMPLY STAY IN THE DEPOSIT' FACILITY

every single interaction of "assets" into "banks" results in fractional reserve license being invoked and said "asset" being infinitely multiplied.

the concept that QE is not taking place is /funny/ as QE takes place in such a system by its very nature.

i remember when i learned about fractional reserve banking and the fraction was supposedly 10%.

then i figured out that if you daisy chain (and rehypothecate, even) the "asset" the confetti paper of the system is meaningless.  by its very definition it has no value.

i think you find that acknowledged in Modern Money Mechanics: "In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries."

/lol/

Thu, 01/12/2012 - 10:12 | 2058022 PaperBear
PaperBear's picture

DRAGHI SAYS HILDEBRAND WAS `VERY, VERY GOOD' GOVERNOR

I had to laugh at this opinion because it did not mention that he departed under the cloud of an insider trading scandal.

Thu, 01/12/2012 - 10:13 | 2058026 LongSoupLine
LongSoupLine's picture

Meanwhile, back at the ranch...

 

Jobless claims: Horrible

Dec retail sales: Disaster

Dec retail sales (ex-autos): Disaster (cubed)

Debt ceiling: Breached (again)

 

Market Futures: Green and climbing.  Party on Garth...

Thu, 01/12/2012 - 10:27 | 2058085 GMadScientist
GMadScientist's picture

Awww man....I'm all out of them little hopium rocks again. How'd that happen?

Thu, 01/12/2012 - 10:40 | 2058140 1fortheroad
1fortheroad's picture

Take some zanax, thorazine and chase it down with a half rack of Bud ice and all is well.

Thu, 01/12/2012 - 10:21 | 2058064 Commander Cody
Commander Cody's picture

Draghi Says These Are Not The Droids We're Looking For.

Thu, 01/12/2012 - 10:27 | 2058084 firstdivision
firstdivision's picture

Apparently this "substantial downside risk" was for people invested in the Lollar.  EUR to the moon!

Thu, 01/12/2012 - 10:31 | 2058103 1fortheroad
1fortheroad's picture

Draghi Says, untill moral improves no watered down soup for you.

Thu, 01/12/2012 - 10:37 | 2058126 apberusdisvet
apberusdisvet's picture

Easy solution to the Euromess:  make Greece the Euro version of a big FEMA camp for all those protesting austerity or the NWO.  All such "dissidents" can then be trained to service the tourist trade in every way imaginable.

Thu, 01/12/2012 - 10:55 | 2058208 vote_libertaria...
vote_libertarian_party's picture

So the guy with the inside scoop says there is 'substantial downside risk'....AND he wants us to buy the bonds?

 

oooooooo-kay

Thu, 01/12/2012 - 11:24 | 2058320 pazmaker
pazmaker's picture

and the EUR/USD back up over 1.28!

 

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