Brown Swan Events: Expect the 'Unexpected'

Front-Running: Wall Street's Favourite Game

ZH: Jan. 23, 2015

Speculators have already front-run Eur 800 billion of the expected Eur 1 trillion (which was supposed to be deployed over 16 months) 

The Euro has been front-running Draghi for a year now:

Shorting the Euro: The most crowded (carry) trade in human history...

Sept. 16, 2014:
'Euro Carry Trade the New Bernanke Put'
"European traders wanting to buy emerging market (EM) currencies will feel emboldened to pay with their home currency, where they might previously have used dollars or yen." 

"The strongest argument for funding with euros, other than for diversification, is the belief the currency will decline more than the alternatives, whether because of a future ECB quantitative-easing programme"

Therefore, we should expect the Euro to begin a highly "unexpected" risk-off rally from around current levels.

We should also expect European bond yields - which have been falling since Draghi announced, "We will do whatever it takes" way back in July 2012 - to begin rising. For some reason, everyone forgets that EVERY time the Fed bought U.S. bonds via QE, yields rose, since Wall Street had already front-run the Fed and was merely cashing in on their prior "acquisition".

U.S. Bond yields rising during QE, visualized:

http://ponziworld.blogspot.com/2013/08/deflation-and-great-bond-bubble-long.html

We should also expect U.S. long-term treasuries to sell off temporarily from current levels, since they have been a net beneficiary of Euro flows. We should expect U.S. short-term treasuries to continue rallying (yields fall) since the net effect of European exported deflation, combined with commodity collapse, combined with Emerging Markets currency collapse, combined with falling U.S. inflation expectations - means that the likelihood of a rate increase here in the U.S. is now the limit approaching zero. In other words short-term interest rates will "catch-down" to long-term interest rates in the U.S.

And yes, U.S. stocks should fall, since that's where the majority of the Euro money has been flowing: 

MW: Jan. 9, 2015

Foreign Ownership of U.S. Stocks At 69 Year High

The Bottom Line: Draghi finally did "whatever it takes", but unfortunately, Wall Street has been front-running him since 2012, so the money's spent. The whole point of this ECB charade was to give Wall Street an exit strategy for their speculative bets. As usual. 

Jan. 28, 2002:

This was never about the European "Economy"