ECB just ended the cycle of low subsidized capital ==> Cost of capital will rise .....

http://www.bloomberg.com/apps/quote?ticker=GDBR10:IND

http://www.bloomberg.com/news/2011-03-03/ecb-holds-benchmark-rate-at-1-as-trichet-grapples-with-surging-oil-price.html

ECB have just increased the odds of Europe going into a tail-spin by indicating they will raise rates at next meeting.

Trivia: When did ECB raise the rates last time: Answer: June 2008 - they NEVER LEARN - this is a dangerous world, as the ECB now has opened the bottle of ever higher rates, impact?

1. Much higher financing costs for already hard hit P.I.I.G.S - already big.
2. Stocks WILL GET HURT from this - cost-of-capital / the cycle of excessive low interest money has ended!
3. EUR should have a couple of days of rally, but watch Non-farm tomorrow in the US (I expect higher than expected print approx. 500K)....
4. DO NOT be long banks from here ......

It's so comforting that policy makers NEVER LEARN from history and keep repeating their mistakes.