Mario Draghi, unfortunately the President of the ECB, tried to get Germany on his side as he visited the Bundestag, the German parliament. Germany, viewed as the Eurozone’s paymaster, is not exactly happy about Super Mario’s unlimited bond buying idiocy he vowed in order to what he thinks save the Eurozone debt contagion.
Germany’s deputy finance minister Kampeter said in an interview that the primary concern for Germans is inflation. It is sad that someone like Kampeter is employed in the finance ministry as he clearly no idea what Germans are really concerned over. Inflation may not even make it into the Top Five. Germany, the Eurozone’s biggest economy, has not yet felt the impact of the debt contagion as investors have flocked to German Bunds as a safe haven investment. Dumb money even pays Germany on shorter maturities just to be allowed to have them or with one word: pathetic.
Economic data out of the Eurozone as well as Germany today rung alarm bells as both the PMI manufacturing report as well the IFO business sentiment index came in well below expectations. The Eurozone PMI index dropped to 45.8, a 40-month low. A figure below 50.0 translates into contraction. Germany’s IFO clocked it at 100.0 and was also short of expectations.
The ECB has been caught in crossfire of fiscal as well as monetary policy and have not yet proved their credibility as crisis management institution. Socialist pesticides who scream for more government are throwing a hissy fit because more and more of the crisis management is being shifted away from national governments to institutions controlled outside of democracy.
One crucial step which needs to be enforced is to move away from democracy, move away from having dozens of individuals from different countries as well as economies trying to reach consensus as the Eurozone does not have the luxury of time for foolish diplomatic as well as political gridlocks. Action needs to be taken by one unified smart money institution in order to act and react in timely manner to the crisis. The bad news is that such an institution does not exist.
Another side of the socialist disease calls for greater transparency by the Troika which is comprised of the ECB, IMF as well as European Commission, in order for those moronic individuals who do not understand the economy, the global financial systems as well as international interactions to be able to view and review decision made. Sources suggest that the Troika will actually give in and extend the timeline for Greece which will not please Germany and the rest of Northern Europe.
Dumb money believes that the markets have calmed down and that there is an increase in confidence amongst market participants which will slowly translate into more bullishness. Other dumb money sources point to the fact that many missed out on this bear market rally and need to boost their returns before the year is up which will force them to buy into equity markets regardless if they feel comfortable or not. A classical dumb money move practiced by their prime investment vehicles, mutual funds.