If “investors” have notoriously short attention spans, then surely those in and of Europe are making a case to be classified as something entirely new, different, and worse. It is now just one day shy of six months ago that the latest central bank schematic was unleashed to the universal cheer of “markets” and economists alike. The ECB wasn’t fooling around anymore, as Mario Draghi had overcome “the Germans” and pushed the deposit rate negative.

While the world’s first instance of a major negative nominal interest rate was intended as shock to expectations and even sensibilities, it was accompanied by other methodologies intended upon coupling that negative rate with the wildly sought balance sheet expansion. Using the LTRO acronym, but pinning upon a qualifying “T”, the ECB would also end the sterilization of its seemingly ages-old SMP program (2010 while numerically not far away is actually two crisis cycles in the past). The message was unmistakable that “stimulus” was back in a big way.

And that was exactly how it was received.

European stocks surged to a fresh 6½-year high, led by a steep rise for banking stocks, before giving up part of their gains. The Stoxx Europe 600 closed 0.4% higher. The banking subindex added 0.6% having traded nearly 2% higher earlier in the session.

Germany’s DAX index closed 0.2% higher at 9,947.83, having earlier broken the 10,000 mark for the first time. Italy’s FTSE MIB ended 1.5% higher, though it was up more than 2% during the day.

Euro-zone bonds in former crisis spots rallied. Spanish and Italian 10-year yields fell to 2.82% and 2.93% respectively, short of recent record lows. Yields fall as prices rise.

By September, Draghi was announcing details of the previously unspecified “promises”, which was likely an uncomfortable position for him after using such lack of specificity (“do whatever it takes”) to his “advantage” for years. The world had changed, drastically, between June 5 and September 4. Liquidity had “unexpectedly” disappeared and what looked like just a possibility of economic retrenchment in early June had become almost foregone in its dreadful conclusion throughout August as yield curves (and currencies like the Swiss franc and Danish krone) across Europe reflected nothing but 2011-type worry.

The descriptions of his details about “T”-LTRO’s and especially covered-bond buying were impressive to all the “right” people, again flaying about expectations; from the Wall Street Journal:

Well they are really not messing about here. The ECB is going to buy ABS and covered bonds. No further downside in the euro at this point, but clearly, this is a big press conference.

(Draghi’s tie, if you’re wondering, is purple.)

As if that last note about his tie color isn’t sufficient, you can at least surmise the deference these central bankers are afforded not due to actual results but a system of self-referential credentials. In other words, pedigree plus rising in a bureaucracy is taken as a sign of success and competence in economic management when it is simply a signal of the far more narrow ability to be a politician.

Two months further on, now, and does anybody even mention covered bonds anymore? The degree of excitement over what is nothing but a bastardization of all sense of propriety under capitalism lasted less than a blink of an eye in financial crisis time. What was such a big deal on September 4 isn’t even mentioned by December 4? ABS anyone?

Nope, the past is not prologue, as it has never been in central banking. Instead, all there is is QE. The “markets” care for nothing but, as if ABS and “T”-LTRO’s never much existed, because in truth they never did. There has been but a trickle of ABS simply because that is all there is, a tautology about the real economy as totally (and incomprehensibly from the orthodox perspective) beyond the capability of the ECB to directly inspire.

The magician’s act has grown tired and stale, as even the “best” tricks are easily discerned now as bland and unimaginative illusions. The ECB has “bought” covered bonds now for the third time dating back to 2009, and the degree to which any attention is paid to them individually decreases parabolically with every “dosage.” It is not difficult to see why, as they, in the most simple terms, don’t work.

Cry out for QE, because that is all that is left. Aside from dangerous operational difficulties in actually carrying it out (and how it may be worse to liquidity than any other monetary dream), the ECB has reached the inevitable end of its “market” conquest. Without the threat of “all that is left” there would be nothing left to inspire, even momentarily, when specificity drills apart those imaginings as it always does. The most powerful bit of ECB “magic” these past few years of artificial calm has been in the very “fact” of imagination. Once out of the dreamworld, “it” collapses and condenses to the same old ineffective state that has plagued economic mankind these past decades.

Better to be thought a nonspecific and impotent monetary agent than to open up QE and remove all doubt.