"Super Mario" takes over as Trichet's term comes to a close

myp · Nov 5, 2011

Mario Draghi of Italy took over as ECB President on Nov 1st as Trichet's term ended. In his first meeting, he somewhat unexpectedly agreed with the central bank to reduce the main policy rate by 25 basis points to 1.25%. This came as a surprise to markets as Trichet has always preferred to announce what was planned before it was done. Draghi's actions might help the likes of Greece (although it isn't going to stop the inevitable default), but will increase inflation worries in the better-off, namely Germany.

Thoughts on the state of the ECB/EU?

DodgeFB · Nov 5, 2011

myp said:
Mario Draghi of Italy took over as ECB President on Nov 1st as Trichet's term ended. In his first meeting, he somewhat unexpectedly agreed with the central bank to reduce the main policy rate by 25 basis points to 1.25%. This came as a surprise to markets as Trichet has always preferred to announce what was planned before it was done. Draghi's actions might help the likes of Greece (although it isn't going to stop the inevitable default), but will increase inflation worries in the better-off, namely Germany.

Thoughts on the state of the ECB/EU?

I feel like some of these countries need an attitude adjustment if they are to stay in the European Union. Greece most of all. Anyone asking for a "handout" needs to be a little more "humble". I know things have changed, maybe demanding while broke on your butt works now.

myp · Nov 5, 2011

DodgeFB said:
I feel like some of these countries need an attitude adjustment if they are to stay in the European Union. Greece most of all. Anyone asking for a "handout" needs to be a little more "humble". I know things have changed, maybe demanding while broke on your butt works now.

A lot of Greece does not want further bailouts. Make no mistake about it, these bailouts aren't to help Greece so much as to keep French, German, and other European banks that hold Greek debt solvent.

DodgeFB · Nov 5, 2011

myp said:
A lot of Greece does not want further bailouts. Make no mistake about it, these bailouts aren't to help Greece so much as to keep French, German, and other European banks that hold Greek debt solvent.

Well they have all got into bed together so it had to come to this at some time. I think Germany and France would as soon kick some of them out of bed now.

myp · Nov 5, 2011

DodgeFB said:
Well they have all got into bed together so it had to come to this at some time. I think Germany and France would as soon kick some of them out of bed now.

They might want to, but they don't want to create crisis for themselves and their own banks in doing so. I think eventually they will have to bite the bullet though.

David · Nov 5, 2011

What do you think a Euro collapse will mean for us? I for 1 am pretty scared, depressions suck, especially when we didn't even cause it.

myp · Nov 5, 2011

David said:
What do you think a Euro collapse will mean for us? I for 1 am pretty scared, depressions suck, especially when we didn't even cause it.

It will strengthen the dollar, hurt those firms that hold Euro denominated assets/debt, and probably will have some sort of negative contagion on Wall St. How bad it is will really depend on exactly how things play out and how fast.

"Super Mario" takes over as Trichet's term comes to a close

myp

DodgeFB

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DodgeFB

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David

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