With just one day left to “save the euro” (as policymakers put it early last week), it appears that Lucy is about the pull the ball out from under Charlie Brown’s swinging foot one last time and, perhaps after this big miss, Charlie will wind up flat on his back and stay there.
Hopes were never very high for officials to accomplish much at tomorrow’s European Union summit (a meeting dubbed the most important gathering of this group in two years), but markets were instead placing their faith in the ECB (European Central Bank) to finally taking some sort of action to bolster credit markets.
But, after ECB President Mario Draghi spoke earlier today following the announcement that the bank had lowered short-term interest rates (a move that was widely expected) and offered banks long-term loans (a move that won’t make any difference over the near-term), markets appear to be quickly coming to the conclusion that Europe just doesn’t seem to care that they’re about to enter the abyss.
Word earlier today that the International Monetary Fund was riding to the rescue had raised the hopes of many and Bloomberg reports that European central banks are considering sending $200 billion to this group, which they’ll presumably “leverage up” somehow to a much higher amount before buying sovereign debt of spendthrift European governments.
We’ll see how that works out – it would appear to be the only hope at this point.
They’re starting to call tomorrow’s meeting the “No Second Chance Summit” after French President Nicolas Sarkozy warned that policymakers had better get it right this time, despite the fact that they’ve failed to get it right regularly over the last two years.
Something tells me that Lucy’s going to do what she always does…