ECB Purchases Of Sovereign Bonds Surge Tenfold Compared To Prior Week, Hit €1.4 Billion, On Continuing Ireland, Portugal Fears

Tyler Durden's picture

After dropping to a modest €134 million last week, ECB purchases of sovereign debt exploded tenfold in the last ended week to €1.384 billion, confirming that the ECB continues to bid up all Portuguese and Irish bonds available for sale, so the market does not crash. As Reuters notes, this is the highest weekly amount purchase since early July. Once again it is up to the European Fed-equivalent to be the buyer of only resort. And Europe's continued central bank facilitated life support comes on the heels of the latest joke in recession timing: per Dow Jones, the Center for Economic Policy Research Monday said its Euro Area Business Cycle Dating Committee had determined that the currency area's recession began in January 2008 and ended in April 2009, lasting a total of 15 months and reducing gross domestic product by 5.5%. Some recovery there, when half the PIIGS have no access to capital markets, have their Prime Ministers mocked during conference calls, and are fighting with an exchange rate last seen long before Greece, Portugal, Spain and Ireland had to be rescued. We wonder what the CEPR's timing on the end of the European depression will end up being?

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SheepDog-One's picture

I must say the Belgian rioters are the nicest dressed around. Burn baby burn. 

carbonmutant's picture

Wait 'til the Italians take to the streets...

truont's picture

Quantitative Easing...looks like the USA found something new to export after all!  Maybe it will improve our trade deficit...

TraderTimm's picture

What blows my mind is how circular the logic is that {insert sovereign nation here} will 'save' everyone. Snake eating its tail, about to chomp into its own skull. Real question is, when does this sucker finally cave in?

plocequ1's picture

When will it cave in. That is a question I've been asking that noone can answer. I need an answer so I have some idea when to sell my stocks. Please, can some answer the question? I have money that needs spending.

traderjoe's picture

By the end of the year the unravel will begin. I will be an 12-24 month process, with a couple false dawns/moves by TPTB along the way. Just my not-so-humble-opinion...

plocequ1's picture

That's good and bad. Good that Goog will reach 2,000 a share by then ( I'm a little conservative ). Bad, because at this rate, The dollar will be toast by then.

DarkMath's picture

"When will it cave"

Oh boy, 5 to 10 years. Think of the momentum. It's like trying to bring down and elephant with a bow and arrow. Europe and America will plod along with arrows in their hide for years to come.

Wyndtunnel's picture

Why not 5 to 10 days?  It is October after all.  I'm just observing from the sidelines and from a spectator's point of view, with the ever-increasing amounts of bad news and obvious market and currency manipulations going on by the usual suspects the suspense is killing me.  Either that or the world economy will get stuck with a 4 year erection from all the economic Viagra being pumped into the system and will have to check in to emergency.

doolittlegeorge's picture

Couldn't describe it any better than Donald Fagan:  "Pretzel Logic, actually."  It makes no sense, but maybe you can eat it.

SheepDog-One's picture

Easy, it will cave when they have it planned. I say its in the present month of October, mid east set to blow sky hi, and look at the Messiahs sad approval numbers. Game is about to be turned on its ear and I hope you all have protected yourselves from these demons in charge.

goldmiddelfinger's picture

Nice trading in RIFIN today. Apparently now halted

Id fight Gandhi's picture

Euro is up 14% since June. Banking still getting worse too.

TheGreatPonzi's picture

How long can the central banks postpone the Ponzi downfall?

DarkMath's picture

Much much longer than you think. It will go on for years and years. The ECB can stay irrational longer than you can stay solvent. Move along.

SheepDog-One's picture

That assumes they have no plan for collapse into 1 world govt, and the UN last week says theyre pissed that theyre so far behind schedule for it. I wouldnt count on years and years of continued perpetuation of the collapsed system at all, rather a very near term event horizon.

Spalding_Smailes's picture

AAPL' just rolled over ... Dropped about $3 in 20 minutes choppy waters dead ahead.

TheGreatPonzi's picture

That's what I'm afraid of. The central banks could simply pass the crisis on the inflation rate, without drawing attention.

Spalding_Smailes's picture

The IMF report – "Will It Hurt? Macroeconomic Effects of Fiscal Consolidation" – implicitly argues that austerity will do more damage than so far admitted.

Normally, tightening of 1pc of GDP in one country leads to a 0.5pc loss of growth after two years. It is another story when half the globe is in trouble and tightening in lockstep. Lost growth would be double if interest rates are already zero, and if everybody cuts spending at once.

Not all countries can reduce the value of their currency and increase net exports at the same time," it said. Nobel economist Joe Stiglitz goes further, warning that damn may break altogether in parts of Europe, setting off a "death spiral".

The Fund said damage also doubles for states that cannot cut rates or devalue – think Spain, Portugal, Ireland, Greece, and Italy, all trapped in EMU at overvalued exchange rates.

"A fall in the value of the currency plays a key role in softening the impact. The result is consistent with standard Mundell-Fleming theory that fiscal multipliers are larger in economies with fixed exchange rate regimes." Exactly.

The lesson of the 1930s is that politics can turn ugly as slumps drag into a third year, and voters lose faith in the promised recovery. Unemployment is already 20pc in Spain. If Mrs Salgado is wrong, Spanish society will face a stress test.

We are seeing a pattern – first in Ireland, now in Greece and Portugal – where cuts are failing to close the deficit as fast as hoped. Austerity itself is eroding tax revenues. Countries are chasing their own tail.

HedgeFun's picture

Does this classify as Consumer Spending!?  Veeerrry bullish!

DarkMath's picture

The ECB will continue to buy Sovereign Bonds until the Euro is a shadow of its former self. There will be no defaults. Move along, there's nothing to see here.


99er's picture

(Reuters) - The Federal Reserve must not launch a new round of asset purchases without setting out what it wants to achieve through the policy, the Financial Times quoted Philadelphia Fed President Charles Plosser as saying.

doolittlegeorge's picture

And is that Ben Bernanke i forsee streaking naked across the New Yankee Stadium as Derek Jeter hits a walk off three run shot to win the Pennant?  Ahhh, the 70's.  Now if only the Orioles could win a hundred games and still not make the playoffs.  What a ball club that was.

bingaling's picture

with the Euro so strong and dollar so weak that is a strong indicator that ALOT of capital flow is aware that the dollar is on its way out . The market is supposedly pricing in QE2 but I think it may be pricing in armageddon for the dollar - \

You have 3-4 countries in the EU on the verge of default and the dollar isn't trading par ???? That speaks a lot of truth in my opinion

SheepDog-One's picture

Right, bottom line is Q/E2 does nothing except set torch to the dollar and turn it into ashes. Thats whats being priced in, world rolling into 1 world govt, 1 world currency. 

Robslob's picture

When the goal is Oneworld Government and Oneworld Currency all else is irrelevant to the topic of conversation. The only way to get there is make the "Whole World" insolvent.

SheepDog-One's picture

Right on Robslob! The big picture is the race to 1 world govt, UN last week announced this will be quickly moved to since theyre a year behind where they thought theyd be. And really at this point they can do that whenever they decide. Everythings already bankrupt. Realize what that means with the UN's Banke Moon saying 1 world govt and 1 world currency will be moved to rapidly now, big picture folks! 

sweet ebony diamond's picture

Nico and Carla will fly in style come Hell or High Water.

End of story.

SgtShaftoe's picture

airboooornnnnne, banksterrrrrrrrrrss

I hear the choppers coming,
They're hoverin' overhead.
They've come to dump the money,
They're coming from the FED.


My buddy's in a foxhole,
Tbills in his bank,
Geithner says they're AAA,
But I know they'll tank


I ran to tell the Senator
About my buddy's cash bleed

But when I went to get him,

He told me to give QE!


And now the printing's over,
hyperinflation from the QEs.
We wanted just to stop it,
But now we're in World War III.


merehuman's picture

And we have no say in our present or future. At the mercy of the rich and powerful. Outsourced even our freedom .

Will no one and nothing stop this calamity? Will the chinese be our saviours or masters, perhaps both. Saving us from our present masters or just ownership changing hands. Aargh

IvZyl's picture

Hi Tyler

Where do you get these stats from the ECB?