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Japan’s wild hedge fund ride

Asia Times – I posited that Mario Draghi this past summer “singlehandedly” altered the global financial landscape. This miraculous feat was made possible with his bold guarantee of unlimited ECB bond purchases to backstop troubled euro-zone bond markets and system liquidity more generally. As soon as the marketplace became comfortable that his backstop was credible, the “Draghi Plan” fundamentally altered the risk versus reward calculus for holding and shorting European periphery debt.

This abrupt change in debt market perceptions then worked to reverse the crisis of confidence imperiling the soundness of Europe’s banking conglomerates, the region’s economic prospects and the euro currency.

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