Ignore Whatever Mario Draghi Says

“Within our mandate the ECB is ready to do whatever it takes to preserve the euro and believe me: it will be enough.”
--Mario Draghi, July 26, 2012

So, is the eurozone crisis over? Do Draghi’s remarks today mean that the ECB has capitulated to the South, and will now buy Spanish and Italian bonds without limit until their yields come down? Is it time to sell bonds and jump back into the equity market with both feet?

In a word, no. We need to learn to stuff cotton into our ears whenever a non-German eurozone official is speaking. Unless you hear this kind of talk from Jens Weidmann, head of the Bundesbank, it is meaningless.

So far, we have had heard, in addition to Draghi, officials from Austria, France, Italy, Spain and Belgium, statements endorsing an ECB rescue of the eurozone. We have heard no such statements from Finland, Holland or Germany.