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Irish Bond Auction Completed Courtesy Of ECB Backstops, As Europe Now Lives Paycheck To Paycheck And Auction To Auction

Tyler Durden's picture




 

Today's market ripping false strawman (as if the ECB would let the Irish bond auction fail) was the issuance of €1.5 billion in 3.5 and 8 year bonds out of Dublin. And with yields a full percentage point higher than before, ECB backstopped banks using the newly purchased Irish bonds as collateral with the ECB, and/or the ECB picking up who knows how much itself, today's auction was a smashing success, if one can calls paying 6% for 8 year bonds success. But the market apparently loves ECB interventions so much it has tightened Irish CDS by 15 points on the day. Full results are as follows.

  • €0.5BN, 4% 15-Jan-14, bid/cover 5.1 vs. Prev.
    5.4 (yield 4.767% vs. Prev. 3.627%)
  • €1.0BN, 4.5% 18-Oct-18, bid/cover 2.9 vs. Prev.
    2.9 (yield 6.023% vs. Prev. 5.088%)

And now that that is over, the Irish NTMA says it plans to hold its next bond auction on October 19, when ECB backstopped banks and the ECB itself will make sure to set a low expectation hurdle, and let the market rip when they once again save the day. After all what is €1.5 billion for the ECB - the last time we checked the bank had directly and indirectly bought or backstopped just over €1 trillion worth of falling dominoes. What is amusing is that Europe is now literally living paycheck to paycheck, or auction to auction.

In the meantime, Anglo Irish default discussions are continuing, with creditors hoping to get just the same full ECB backstop treatment as the country itself.

 

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Tue, 09/21/2010 - 07:58 | 594315 Mongo
Mongo's picture

How long can this continue?.. SERIOUSLY!?

Tue, 09/21/2010 - 08:14 | 594336 Sudden Debt
Sudden Debt's picture

My wife said the very same thing last nigh when I was doing her doggy style!

As it turned out: 9 minutes and 43 seconds

Tue, 09/21/2010 - 08:18 | 594339 Uncle Sugar
Uncle Sugar's picture

I can beat that time...with your wife.

Tue, 09/21/2010 - 12:42 | 594853 shortus cynicus
shortus cynicus's picture

This ponzi monster mey be killed only with silver bullet.

Tue, 09/21/2010 - 08:00 | 594319 pachanguero
pachanguero's picture

Tick tock went the clock.  Soon the hour of the awaking will come.

Tue, 09/21/2010 - 08:05 | 594323 jbc77
jbc77's picture

What a sucess, according to Yahoo! Finance it was a well received auction and has eased fears. Another day in retard world and wouldn't you know the Yahoo! pump piece doesn't metion the ECB backstop and we all know without the ECB these auctions would have been a swirly in the toilet. The lies and games continue.

Sucess my ass.

Tue, 09/21/2010 - 08:39 | 594365 cnbcsucks
cnbcsucks's picture

Exactly...the MSM propaganda spin machine is billing this as a success, but not a one of them has mentioned that their borrowing costs have increased by 18% and 31% for the series auctioned off. 

 

Tue, 09/21/2010 - 08:06 | 594324 T Rex
T Rex's picture

HUGE PRINTER

Tue, 09/21/2010 - 08:10 | 594329 Paper CRUSHer
Paper CRUSHer's picture

 From'Paycheck To PayCheck',Then 'Ashes To Ashes' And Finally 'Bust To Bust'.

 

Tue, 09/21/2010 - 08:13 | 594332 jbc77
jbc77's picture

One just has to wonder how much of the auction was purchased by the ECB. Could be 90%. I just can't imagine investors rubbing their hands together in anticipation of snapping up some swell Irish soverign debt. What a joke the world has become.

Tue, 09/21/2010 - 08:13 | 594335 SDRII
SDRII's picture

Yeah and 72% of the greek auction went to foreigners

Tue, 09/21/2010 - 08:22 | 594345 keepmydollar
keepmydollar's picture

This is getting ridiculous.  I mean really how worthless can paper currency get?  How long before someone jams these central bank printing presses.  Unfortunately it almost makes sense to buy the short terms since they will try to carry this mess to infinity.  I mean it doesn't seem like anyone but the ECB is buying them now so as long as they can buy their own debt, and no one is driving the Euro down this can go on forever.

Tue, 09/21/2010 - 08:51 | 594380 MarketTruth
MarketTruth's picture

The FIAT currency game can go on forever provided sheeple still accept it as a form of payment for goods and services. The trick is in how many of these FIAT notes it cost for _XYZ_ services/goods. Is it $500 or $5,000,000,000,000 Zimbabwe dollars?

As a point of refeence:
A million seconds is about 11.5 days
A billion seconds is about 32 years.
A trillion seconds, 32,000 years ago, our ancestors were fighting over caves, without domesticated plants or animals. We'd mastered fire, but bugger all else.

Tue, 09/21/2010 - 08:51 | 594381 sweet ebony diamond
sweet ebony diamond's picture

ECB creating money out thin air without conditions.

F**king ridiculous.

Tue, 09/21/2010 - 09:14 | 594422 friburgensis
friburgensis's picture

i like

Tue, 09/21/2010 - 09:39 | 594470 Terra-Firma
Terra-Firma's picture

The ECB is emulating the Fed and bond purchases are nothing but state sponsored welfare. Now all western democracies have succumbed to the democratic paradox of spending ourselves into oblivion. All the while the Japanese the uber super savers have run their country on their population's savings and now that that is not working, facing the prospect of its arch enemy becoming a lender. The uber strategic Chinese are probing US strategic weaknesses for that one time they need to strike. And when they do, we won't know what hit us and it will be over before we even know it started. The more we support the democratic paradox the more our enemies love us.

Tue, 09/21/2010 - 13:28 | 594949 Dr. Acula
Dr. Acula's picture

>The uber strategic Chinese

Economic calculation depends on participants acting in a free market. I guess I don't see why it's "strategic" to interfere with people's private property rights, profit and loss signals, price structure, and structure of production.

I guess if you're a socailist/mercantilist/fascist whose goal is to abuse and impoverish your countrymen, then it would be "uber strategic".

>The more we support the democratic paradox the more our enemies love us.

Yeah, but the Chinese people aren't your enemy. They are your allies in increasing prosperity through the increased division of labor. Maybe you were refering only to psycopath politicans?

 

Tue, 09/21/2010 - 09:41 | 594479 Josephine29
Josephine29's picture

Its a great idea borrow at 6.02% and call it a success as it is a bigger number than borrowing at 5% from the EFSF or 3% from the IMF and bigger is better right?

Tue, 09/21/2010 - 09:45 | 594488 M.B. Drapier
M.B. Drapier's picture

Ireland supposedly has a few months of funding in its pocket, so a failed auction wouldn't bring down the curtain immediately anyway.

Tue, 09/21/2010 - 11:42 | 594761 RockyRacoon
RockyRacoon's picture

It will last as long as I can use my credit card to buy food and shelter. 

Not that I do, but that is the same concept on a national-level scale.

Most larger apartment complexes accept credit cards for rent payments.

Pretty soon the credit limit will be reached -- "Declined"

Tue, 09/21/2010 - 11:34 | 594737 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

As long as people believe in the great delusion, it will continue. How long that may be is anyone's guess. There is only so much believable money that can be printed before loss in repectability comes. That will be the date of failure.

Tue, 09/21/2010 - 12:40 | 594851 wafflehead
wafflehead's picture

welcome to the american way of living 'ptp' paycheck to paycheck

Mon, 10/04/2010 - 04:05 | 623459 Herry12
Herry12's picture

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