The Least Conspiratorial Theory Why Draghi Bailed on Jackson Hole
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This morning investors received a puzzling snippet of news. ECB president Mario Draghi was going to skip the August 31st meeting in Jackson Hole where he was expected to give a speech. Draghi aids told reporters that he was simply too busy planning the details of the central bank's new bond buying strategy to attend the meeting, and while this may appear reasonable, traders aren't exactly buying it.
"Draghi would have been gagged by circumstances and politics. He could not afford to outshine Bernanke," said UBS floor trader Art Cashin. "You don't go to your best friend's daughter's wedding and upstage him at the event. So that left Draghi in a position to be dry, professorial even purposely boring, lest he steal the spotlight from the host."
Recently Draghi made uncharacteristically bold statements in support of the Euro, claiming he would do "whatever is necessary" to support the Euro, adding that "it will be enough."
According to Cashin, that made Draghi's Jackson Hole position untenable, since he dare not steal the spotlight, but he can't appear bland and vague either, so he withdrew.
Another reason why Draghi wouldn't want to speak at Jackson Hole is to avoid saying something that might complicate negotiations within the ECB.
Of course, these aren't the only theories why Draghi bailed out on Jackson Hole, but frankly these are the least conspiratorial, unless of course you buy the fact that he is too busy, an excuse usually reserved by insiders and those in-the-know for weekend invitations from the in-laws.
"Draghi would have been gagged by circumstances and politics. He could not afford to outshine Bernanke," said UBS floor trader Art Cashin. "You don't go to your best friend's daughter's wedding and upstage him at the event. So that left Draghi in a position to be dry, professorial even purposely boring, lest he steal the spotlight from the host."
Recently Draghi made uncharacteristically bold statements in support of the Euro, claiming he would do "whatever is necessary" to support the Euro, adding that "it will be enough."
According to Cashin, that made Draghi's Jackson Hole position untenable, since he dare not steal the spotlight, but he can't appear bland and vague either, so he withdrew.
Another reason why Draghi wouldn't want to speak at Jackson Hole is to avoid saying something that might complicate negotiations within the ECB.
Of course, these aren't the only theories why Draghi bailed out on Jackson Hole, but frankly these are the least conspiratorial, unless of course you buy the fact that he is too busy, an excuse usually reserved by insiders and those in-the-know for weekend invitations from the in-laws.
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