Further reading - Two views:Merril's bullish, JP Morgan's...

Further reading -

Two views:

Merril's bullish, JP Morgan's bearish.

JP Morgan's excerpts echo my own thoughts - that the Eurozone has NO choice in the matter unless they want to risk total anarchy.

http://ftalphaville.ft.com/blog/2011/09/12/674861/a-tale-of-two-strategists/

Basically, in short - the ECB HAS to embark on a monster QE program designed print liquidity of these bonds to safeguard the banks liquidity measures it has imposed on them.

Which basically means the ECB has to make a bid on the very assets it is telling the banks NOT to value on their balance sheet.

In effect, its saying - "We are ready to make a bid price for ALL the available pieces of used toilet paper coming from Italy and Spain, and you (banks) can do the same. However, we will NOT recognise your purchases of said toilet paper as worth anything more than that - used toilet paper. We will print enough money to create liquidity in toilet paper - doesn't mean we actually think its worth anything. Its just that, if we don't, then we will end up using other hard assets (unlike the Euro dollar) as toilet paper, which we do not want to."


Does it make sense to you? It doesn't to me. Eurozone Economics 101 = Used toilet paper > Eurodollar.