Thursday of last week ECB chief Mario Draghi (former chief of Goldman Sachs in Italy) pulled out a pop gun when markets were expecting a bazooka for EQE and global market sold off hard.
On Friday, Draghi spoke in Lower Manhattan at the invite of NY Fed chief Bill Dudley (former Goldman director) and Bob Hormats (former Goldman Sachs Vice Chairman International and Draghi’s ex-boss).
The ECB chief’s tone changed significantly from the prior day in Frankfurt. It appears the European Central Bank will be far more accommodating in purchasing assets and proving additional easing for the European banks.
This sent US stocks soaring on Friday from its early morning futures, which were down almost 80 Dow points prior to the Friday morning speech. Asia and Europe are enjoying their first day of trading on the news last night and today Monday.
Now what could the former colleagues of Draghi have said to prompt such a turnaround in policy? Could it be that the Germans spoke to him as well.
It appears all of the above told the independent central banker that he should open his checkbook and start writing a quickly as possible.
As was said so by Hyman Roth in “Godfather II” of Moe Green, “So when he turned up dead, I let it go. And I said to myself, this is the business we’ve chosen; I didn’t ask who gave the order, because it had nothing to do with business!”