Richard North, 02/08/2012  

ECB 934-ffm.jpg

I watched the Draghi press conference all the way through, on the back of the formal statement. Here we had Mr "Whatever It Takes" heavily qualify his previous statement, positioning any ECB action "within the limits of its mandate", and stressing that it would only act "within its powers".

As to projected action, the leaden, bureaucratic phrasing of the official statement tells its own story:
The governing council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy, may undertake outright open market operations of a size adequate to reach its objective. Furthermore the governing council will consider further non-standard monetary policy measures according to what is required to repair monetary policy transmission.

In the coming weeks we will design the appropriate modalities for such policy measures.
This doesn't add up to a row of beans. And, as the markets begin to absorb that salient fact, they are realising that they've been had, and are reacting accordingly.

Says one trader of Draghi: "He's talking about potential measures ... the market wants action now". But if these overpaid children really expected anything other than talk, they really need to go back to nursery school. The grown-ups had already seen it coming.

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