A while ago I posted this, explaining how I thought that OMTs were an almighty - if so far successful - bluff. The reasoning being that the promise is to buy whatever quantity it takes to eliminate a gap between actual and 'fundamental' prices (whatever that means) of troubled sovereign bonds. That promise exposes the ECB to unlimited capital losses for which there was and is no political support, and possibly no legal support either.
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More on Draghi's almighty OMT bluff
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A while ago I posted this, explaining how I thought that OMTs were an almighty - if so far successful - bluff. The reasoning being that the promise is to buy whatever quantity it takes to eliminate a gap between actual and 'fundamental' prices (whatever that means) of troubled sovereign bonds. That promise exposes the ECB to unlimited capital losses for which there was and is no political support, and possibly no legal support either.