The ECB goes for the nuclear option and provides a package as good as I could have hoped for -- save addressing CDS reform which I've seen talked about much more in the last 3-4 days in various Bloomberg stories.
I guess what it boils down to is this is the ECB finally acting like the FED, for better or worse. That is what the markets have missed through the whole crisis.
The package is huge (in size) but it's more huge in that the actions by the ECB are designed to finally get ahead of the curve versus being perennially behind the curve.
I noted on Friday that we could loan out Big Ben for the weekend to solve this issue. I'm wondering if Ben indeed was on the phone for much of the weekend.
I'm wondering if this may lead to a bigger rally than many expect over the coming weeks as we have had a very muted reaction to incredible EPS results for 3 straight quarters now. The muted reactions have been especially magnified during 2010. We mainly had "sell the news" during Q1 even on massive beats. During Q2 we didn't experience the blanket "sell the news" reactions as some stocks spiked higher on good reports. However, those positive reactions were still in the minority. At this point there are multitudes of stocks poised to catapult off these good/great reports while their stocks have fallen 10-30% or more in many cases.
After last week, I'm much less worried about the impact of the FASB making another big mistake; and if they did, I feel it would be repealed. I'm also inclined to think we may get an adjustment to the modified uptick rule, to make it more closely aligned with the original uptick rule. Bottom line, I'm aggressively looking at my favorite financials again.
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