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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (84293)	12/9/2011 6:08:48 PM
From: TobagoJack	Read Replies (2) \| Respond to of 217574

still enveloping, but good news acting man update: The ECB Decision - A Detailed Analysis We take a closer look at the extraordinary measures announced by the ECB yesterday and bring them into context with the freezing up of bank funding markets and the recent revelations regarding the rehypothecation chain in the repo markets and the continuing shortage of collateral. The assets pledged and re-pledged by the 'shadow banking system' in the unregulated London repo markets represent what Mises referred to as 'secondary media of exchange'. While shadow banks can not create money per se, their activities in this fractionally reserved market for secondary media of exchange still account for the creation of an enormous amount of systemic leverage and liquidity. It appears to us that the markets have been wrong to focus solely on Mario Draghi's continued refusal to countenance direct financing of government deficits by the ECB. In reality, the measures announced by the ECB yesterday amount to an enormous inflationary push that promises to reverse the decline in the euro area's money supply growth rate significantly. One aspect that seems to have been overlooked by many observers is that the ECB not only announced longer term refinancing operations and a lowering of collateral eligibility requirements for asset backed securities (which opens the door for pawning off toxic assets on a grand scale), but that the lowering of reserve requirements to a mere 1% by itself could easily free up more than € 100 billion in additional liquidity. Moreover, almost no-one has as of yet commented on the decision to discontinue the weekly 'fine tuning operations'. It seems that the ECB has just announced full-blown 'QE'. acting-man.com