Europe News Sets Easy Money Whores on Fire
Man, all it takes is a trillion dollar threat to get the easy money whores jerking off furiously over the action, eh? When in doubt, pull out the bazooka.
The ECB is sticking with the "vague and shady" method, pledging full support to stave off a total Eurozone meltdown but keeping light on the specifics. Let's guess lotsa funny money factors in somewhere in the equation.
The European Central Bank said it will buy government and private bonds as part of an historic bid to stave off a sovereign-debt crisis that threatens to destroy the euro.
The ECB wants “to address severe tensions in certain market segments which are hampering the monetary policy transmission mechanism and thereby the effective conduct of monetary policy,” the central bank said in a statement at 3:15 a.m. in Frankfurt. The announcement came less than an hour after European finance ministers unveiled a loan package worth almost $1 trillion to staunch the market turmoil.
Meanwhile across the pond, our own easy money whores are delighted by the news, madly jerking themselves off over the idea of a trillion dollar slush fund sloshing around capital markets. Obviously in their excitement they have forgotten A) last week's bloodbath and B) that this is a total bluff on the part of the EU and at some point if it is to be sustained, payment will be due.
Here it comes and Christ, careful not to get any in your eye:
U.S. stocks rallied, with benchmark indexes poised for their biggest advance in more than a year, after European policy makers announced a loan package of almost $1 trillion to contain the sovereign-debt crisis.
General Electric Co., Caterpillar Inc. and Walt Disney Co. rose at least 5.4 percent, leading gains in the Dow Jones Industrial Average. Gauges of energy and raw-materials producers in the Standard & Poor’s 500 Index jumped more than 3.1 percent as oil climbed above $76 a barrel and copper rose the most in six weeks.
The Standard & Poor’s 500 Index gained 3.6 percent to 1,150.82 at 3:16 p.m. in New York after rising 4.8 percent earlier. The Dow Jones Industrial Average surged 332.38 points, or 3.2 percent, to 10,712.81. The VIX, the benchmark for U.S. stock options, tumbled 26 percent to 30.35 and lost as much as 37 percent, the biggest intraday drop in its two-decade history.
“This takes the panic out of the market,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. “We expect investors to hopefully focus on U.S. economic fundamentals, which have been pretty good. Our forecast is for somewhere between 1,250 and 1,300 on the S&P 500 by year-end.”
Are we really supposed to believe that investors don't know that was a total bluff? Or worse, do they not buy it and the invisible hand decided to go on one hell of an equity shopping spree at market open?
Best. Recovery. EVAR!!