Mario Draghi at Davos

An interesting week in the euro zone crisis is over. Most of the important players made it to Davos so nothing definitive was being decided. As I wrote yesterday, Davos isn't a place where policy is made.

It's clear it has been a week where the center held and the sense that a corner has been turned continued to frame the week's activities. Even Greece and her creditors inability to reach final agreement on debt reduction hasn't ruffled feathers.

The masters of their universe (not yours or mine) assembled at the World Economic Forum heard from German Chancellor Angela Merkel and British Prime Minister David Cameron. The pair are growing further apart in their views yet that didn't seem to make much difference.

Today all ears were tuned to European Central Bank chief Mario Draghi, whose decision to make 489 billion euros ($643 billion) available to retail banks around Europe just before Christmas was a significant step in taking the heat out of the euro zone debt crisis.

Draghi's assessment of the loan program's impact so far.

"We know for sure that we have avoided a major, major credit crunch, a major funding crisis. Do we know that actually this money is going to finance the real economy? We don't have evidence of this yet. We have to wait. There is a lag. In the meantime, you have parts of the euro area where credit is more or less normal. You have areas where credit is seriously impaired."

The ECB chief had this to say about the bond markets and the price of euro zone countries debt yields. "As much as spreads underpriced government risk for many years, now they are overshooting government risk quite a lot and this may go on for quite a while."

Remember that phrase, Overshooting government risk." We'll see if the big institutions that play the sovereign bond market, listen to Draghi's words that they are "overshooting" the risk in many euro zone sovereigns.

For once it was not the euro zone crisis that shaped stock markets. It was news that the U.S. economy expanded by 2.8 percent in the last quarter of 2011. Sounds good to me, but market analysts were expecting 3 percent, hence stock markets went down.

The FTSE 100 lost 1.07 percent, the Paris CAC dropped 1.32 percent and the Frankfurt DAX was off 0.43 percent.

Looking ahead, once again, the Greek debt talks are supposed to reach a conclusion this week, just ahead of Monday's EU leaders' summit.