ECB Kills Covered Bond Market; Buyers of Only Resort; Japanization of Europe Continues

``ECB president Mario Draghi set out to stimulate bank lending by purchasing covered bonds. Yields plunged, which is precisely what Draghi wanted. Now, the average covered bond yield of 0.53% is so low that investors won't touch them. Numerous bond deals have been cancelled due to lack of demand. The buyer of only resort is the ECB.''