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If the ECB keeps the spread down, it is because of the "Draghi Effect" as it hasn't bought any bonds since 2011. That's why the criticism of plans for Quantitative Easing along the lines of "yields are low already, what's the point of QE?" is right (I think it may have been Weidmann to say so).

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu May 29th, 2014 at 03:58:04 PM EST
[ Parent ]
>If the ECB keeps the spread down, it is because of the "Draghi Effect" as it hasn't bought any bonds since 2011.<

A very successful bluff

by IM on Thu May 29th, 2014 at 04:52:29 PM EST
[ Parent ]
Why did the BVG's ruling have no effect?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri May 30th, 2014 at 05:43:13 AM EST
[ Parent ]
They didn't rule, they kicked it up to the ECJ.
by IM on Fri May 30th, 2014 at 09:22:04 AM EST
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I thought they ruled Germany could not cooperate with the OMT in any case, and asked the ECJ to clarify whether the rest of the EU could.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri May 30th, 2014 at 09:44:42 AM EST
[ Parent ]
I interpreted the majority decision (6:2) in the way that while they think OMT is illegal and Germany obligate to stop it, they still relegated the decision to the ECJ.
by IM on Fri May 30th, 2014 at 10:25:31 AM EST
[ Parent ]

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