I actually built a spreadsheet to count adjectives in ECB and Fed press releases but the results were boring

Every time I talk about Europe I begin by saying “Europe is all better,” because Europe these days operates on big-bang fixes followed by long slow decays, repeated indefinitely, so I guess you should sell the news and buy the quiet. Anyway, Europe is all better, since Mario Draghi announced today that the ECB will be buying unlimited quantities of European government debt, subject to a series of footnotes to which I tip my hat as a fellow connoisseur. Like me, the ECB likes its footnotes suggestive rather than exhaustive,* so the details are a little vague but will include “conditionality” in which the subject governments need to sign up for EFSF bailouts and adhere to their conditions. Without many details you can pick lots of nits; a good one is the ECB’s attitude to the seniority of its purchases, which is ably picked here.

The analyst reaction is mostly of the too-cool-for-this, everyone-expected-it variety but then there’s this:

So either “the market has gotten ahead of itself,” or “expected” comes with some variance, or I guess both why not.

Anyway, this is the internet, you can’t just be like “the ECB is buying lots of bonds,” you need a theory; two worthwhile ones are: Read more »