Markets today were like a huffy kid who stomps off because Santa only brought him two out of the three of the gifts on his list.
Santa is the European Central Bank. Ahead of the latest crisis summit tomorrow, the ECB offered two nice presents: a quarter-percent cut in interest rates and an offer to lend cheaply to the banking system for as long as three years. But what investors really, really wanted was a commitment from the ECB to buy government bonds from troubled nations, a move that would stabilize the shaky region.
In his statement, ECB president Mario Draghi essentially said he can't and won't do more than the current EU treaty allows. Draghi can step in to help the banks, but not to help the sovereign nations. Draghi says it'll take a "fiscal compact" from Europe's leaders to do more.
Stefan Astheimer is a strategist at the investment company Howe and Rusling in Rochester. Markets were disappointed by Draghi's announcement, but Ashteimer says investors keep looking for a silver bullet from the ECB that's just not coming. Fixing what's wrong in Europe is going to be a long process with a lot of missteps.
Sound familiar? Even in Rochester, Astheimer is hanging on every move in Europe. He fears a domino effect where a bank failure in Europe would cause U.S banks to be more reluctant to take risks. That in turn could hurt small businesses and individuals who need to borrow money.
All eyes turn to Europe as leaders as they gather in Brussels tonight. Sure, it's the 15th crisis summit in 23 months, but who's counting? Maybe this time will actually be different.