The Draghi Put
We promise this will be the last time we write about Draghi’s “famous” speech from yesterday. Here is Biderman’s take on the subject.
The Draghi Put? Maybe it will work for another day or so. But longer term? Nah. Mario Draghi in a prepared speech in London said. “Within our mandate, the European Central Bank is ready to do whatever it takes to preserve the euro, and believe me, it will be enough.”
Wow! I am impressed. Let us all run out and buy stocks. But wait a second? Why should anyone believe him? What has Draghi or any other European central banker said that has actually happened? NATO. No Action Talk Only.
The Biderman Market Theory says that every market has a house and players. In the Euro market, the house is the ECB. The Euro is down 5% so far this year and was plunging en route to parity before Draghi’s speech. Obviously the house in the Euro market has a vested interest in saving the Euro! After all if no Euro no need European central bankers? What is more, apparently it is not a crime if central bankers lie! So in other words, Mr. Draghi is talking his book. Talking your book is Wall Street jargon for automatically touting your holdings. Captain Renault, I am shocked, shocked that touting is going on in the Euro back room!