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So euro zone members want to bring down borrowing costs in Europe? Good idea. That was the one tangible idea from the G20 meeting, but unfortunately they didn't say how that would be accomplished.
Using the two European bailout funds to buy sovereign debt — the main idea discussed — is already possible, in addition to any purchases the European Central Bankmight make. But since any purchases of sovereign debt by these programs would subordinate existing bondholders, it is likely to INCREASE the anxiety of those bondholders, making private bondholders even less likely to own the debt.
Bottom line: sovereign debt risk is being transferred from private to public hands.
Elsewhere:
1) My take on the Fed today: Anything less than a clear nod to some type of easing will cause some profit taking. Some type of global easing is in the air: there is talk that the Bank of England, after Governor Mervyn King narrowly lost a 5-4 vote against more stimulus during a meeting in April, may be poised to do more stimulus as well.
2) We're great, but no one believes it: That seems to be the theme that stock exchange executives are sounding at today's hearing at the House of Representatives Financial Services Committee, which is holding hearings on market structure. Execs from Knight Capital, the NYSE, and Direct Edge will be testifying, as well as others.
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