Draghi Loads Bazooka, Bundesbank Doesn't Like Idea

European Central Bank plans bond buying program but German Bundesbank protests In a chess game that will have significant repercussions for the future of Europe and the rest of the financial world, ECB President Mario Draghi is working on a bond buying program for Spain and Italy which the Euro bloc's largest member bank, the Bundesbank doesn't seem to like. In a report the bank sees significant risks to the program and maintains its positions that sovereign bailouts should be conducted by European governments and not central banks. The ECB wants to buy bonds and set yield caps on Spanish and Italian bonds which has already resulted in declining interest rates for the two countries. Mario Draghi is planning to buy bonds of countries that formally ask for help from Europe's bailout fund. This week sees more talks in Europe with Greek Prime Minister Antonis Samaras in Germany and Paris and Francois Hollande and Angela Merkel are scheduled to get together on August 23rd in Berlin. Greece also remains under pressure to further cut its deficits and is planning to ask for an extension of up to two years to meet its austerity goals. So the news flow continues to be conflicted in Europe with swings between positive and negative outcomes and markets react accordingly. European ETFs today started the week lower with iShares MSCI Germany Index EWG declining 0.3% in early trade, iShares MSCI Italy ETF EWI off 1.6% and iShares Spain ETF EWP falling 1.4%. The Eurodollar FXE was mostly flat, up 0.04%. The S&P 500 SPY started the week lower in light volume trading. Bottom line: The European crisis lurches along and takes global financial markets with it. The European Central Bank holds the key to final resolution with its proposed bond buying program. If such a program is installed, expect a powerful global financial rally. If it falters, we can expect more volatility and the likelihood of lower prices ahead. Click here to receive a special offer from Wall Street Sector Selector! LINK: http://zfer.us/DKAuF Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.