Wednesday's press conference with ECB President Jean-Claude Trichet turned out to be a real jaw-dropper. While Trichet didn't commit himself to massive bond purchases (Quantitative Easing) as many had hoped, he did impress the gathering with his magical skills. The Financial Times recounts Trichet's what happened like this:
"...as Trichet started to speak, his ECB troops stepp ed into the market to buy as many peripheral bonds as they could, particularly Portugal and Ireland. Started evidently in bidding for 10 -25 mln € clips and then moved onto 100 mln € clips … which is very rare indeed."
Nice trick, eh? So while Trichet was somberly reading from the ECB's cue cards, his central bank elves were beating down bond yields to convince investors that the contagion had been contained. Not bad for a 70-something bankster with no background in the paranormal.'
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