ECB lends out to Banks, Banks let out to ....well, mostly States!

Banks are reluctant to provide liquidity to those in need

Well, this news reminds me to another afternoon discussion with my dutch friend, Mr. S.

Mr. S: "ECB has to do what they do, the liquidity is needed, and the market is more calm now."
Me: "Yes, and, no. By the way, are liquidity really goes to those in need?"

If I recalled the package right, ECB provided Banks what they requested. And the capital shortage are mainly attributed to the bad government bond positions. These banks are provided liquidity, roll-over to new bonds, and the yields drop into a "reasonable" level. However, are those in the main street really feeling relieved?

Probably not.

With consumers cutting back their spending, there must be a few more problems on the road.

Bumpy!