ECB Seeks to Avert What Has Already Happened; Raspberries and Gold

I cannot help but laugh out loud at some of the headlines this evening. By any rational measure, confidence has collapsed, yet G-7 Seeks to Avert Collapse in Confidence

Group of Seven nations sought to head off a collapse in global investor confidence after the U.S. sovereign-rating downgrade and a sell-off in Italian and Spanish debt intensified threats to the world economic recovery.

The G-7 will take “all necessary measures to support financial stability and growth,” the nation’s finance ministers and central bankers said in a statement today. Members agreed to inject liquidity and act against disorderly currency moves if necessary.

The European Central Bank indicated separately that it will buy Italian and Spanish bonds and Japan signaled further dollar purchases in a sign of concern that prices are becoming unhooked from fundamentals. Stocks extended last week’s decline, the biggest since 2008, adding to risks for a global rebound already burdened by European fiscal cuts and elevated U.S. unemployment.

That the ECB needs to take these actions is a 100% sure-fire sign that investors have lost confidence.

Raspberries and Gold

“The G-7 just gave a raspberry to S&P and basically said its analysis is irrelevant,” said Diane Swonk, chief economist at Mesirow Financial Inc. in Chicago.

I can top that. The futures so far have given the raspberry to the ECB and the G-7. Moreover, gold has given the raspberry to nearly everything else. Grain, energy, and equity futures are all trading lower. However Gold is up $34 to $1684 and silver is up $1.18 to $39.39.

Addendum:

The feed on Zero Hedge has been messed up all evening. It has been both duplicated and not working. I am not sure if this is universal or not. However, links are now working (at least for me) but some of them may still be duplicated.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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