The European Central Bank first action to stave off the European Debt Crisis is one for the records, as the Frankfurt-based bank promised to lend €489 billion ($645 billion), the most ever in a single operation and more than economists had predicted. Bloomberg had surveyed analysts and came up with a median estimate of 293 billion euros. A currency strategist at Bank of New York Mellon told Bloomberg, "What the ECB is doing is providing ultra-cheap money to banks, which in turn are going to be in there buying the sovereign debt up ... That’s good news in the sense that it’s clearly going to help sovereigns in the near future, but it’s also printing more money. That’s going to start to weigh on the euro over time."  That sentiment was echoed by analysts interviewed in The Wall Street Journal, one of whom added that the loans "should be a significant step to relieve European banks of funding pressures." But there's also the underlying fact that this was a record move which speaks to the severity of the situation (not unlike a "Hail Mary" in football). The strong demand is "a sign that markets are still very weak and one of the last sources of funding comes from the ECB," Patrick Jacq, a strategist at BNP Paribas in Paris told The Wall Street Journal. "That means there could be some limited stress in the very near term."  Which perhaps explains why the euro barely moved today. "More important than the size of the operation is what banks do with this cash," Simon Smith, chief economist at foreign-exchange broker FXPro Group Ltd. told Bloomberg. "The dichotomy between size and use explains why the euro struggled to maintain its initial positive reaction to the news."

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Alexander Abad-Santos