Next European Leg Down? First Failed ECB Monetization Sterilization, As Central Bank Has E13 Billion Shortfall In Bond Bids

Tyler Durden's picture

Today, to little fanfare, the ECB managed to obtain just E60.8 billion in tender interest for its most recent 7 Day SMP "peripheral bond monetization" operation, whereby it needed at least E73.5 billion to be able to offload all of its cumulative acquired sovereign bonds to other financial institutions: a de facto sterilization, which is why the ECB has so far been claiming it is not monetizing debt (as it constantly rolls the held balance on other bank balance sheets). That is no more: following today, the ECB is left with just under E13 billion in sovereign holdings and thus are not sterilized. This development follows Monday's announcement, which was reported first on Zero Hedge, that the ECB acquired 100% more in peripheral bonds in the prior week compared to two weeks ago. Another notable development: the number of bidding banks participating in the tender operation dropped to just 41- the lowest since the inception of the program in May when Greece went tits up and all of Europe was supposed to bail each other out in perpetuity. And what is most disturbing is that this complete lack of interest (or telegraphed lack of bank liquidity) happened even as the marginal rate jumped by over 50%, from 0.6% to 1%- the same as the maximum rate allowed on an auction. Should banks not come back with tender takedown interest next week, this could very well be the catalyst for the next leg down in the European crisis. Because despite what ING economist Martin Van Vliet told Reuters, "It has happened before but I wouldn't make too much of a big deal out of it", we would make a big deal out of it, as this has actually not happened before. For confirmation that ING economists may want to take an Excel 101 chart, below is the buffer shortfall in every auction since the program's inception. As is all too obvious, this was the first one that missed by a mile.

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hugovanderbubble's picture

SELL Spanish bonds

Sell spanish banks

Short spain


All our key clients accounts flows from Spain to Switzerland and Luxembourg,

if this is not a Captain America.


Remember if spanish 10yrs bond above > 7%- IMF massive intervention Rescue Package

I need more cowbell's picture

Is this old news and/or no big deal?

Cafferty Faucher LLP Files Class Action Lawsuit against JPMorgan and HSBC Alleging Manipulation of Silver Bar Financial Products

CHICAGO--(BUSINESS WIRE)--Cafferty Faucher LLP ( filed a lawsuit on behalf of a class that includes purchasers and sellers of the iShares Silver Trust (NYSE-Arca “SLV”) and the ETF Securities Ltd. Silver Trust (NYSE-Arca “SIVR”) during the period March 1, 2008 through the present.

The lawsuit alleges that JPMorgan, the custodian of silver backing SLV securities and the sub-custodian of silver backing SIVR securities, and HSBC, the custodian of silver backing the SIVR securities, manipulated and suppressed the price of silver bar financial products, including SLV and SIVR, in violation of Section 9 of the Securities Exchange Act.

If you purchased or sold the iShares Silver Trust ETF (NYSE-Arca “SLV”) or the ETF Securities Silver Trust (NYSE-Arca “SIVR”) securities during the period March 1, 2008 through the present, you may move the Court to serve as lead plaintiff within 60 days. The lawsuit, Case No. 1:10-cv-07768, was filed in the Northern District of Illinois on December 7, 2010 and is currently assigned to the Honorable Charles R. Norgle, Sr.

The case is also brought on behalf of investors who purchased or sold CME Group Inc’s “COMEX” silver futures or options contracts which are traded electronically through the Chicago-based “GLOBEX” platform and through COMEX. On behalf of these investors, the lawsuit alleges violations of the anti-manipulation provisions of the Commodity Exchange Act.

In addition to the claims under the anti-manipulation provisions of the Securities Exchange Act and the Commodity Exchange Act, the lawsuit also alleges that defendants violated federal antitrust law.

Cafferty Faucher LLP (, with offices in Chicago, Philadelphia and Ann Arbor, Michigan, is a national litigation firm that represents investors, businesses and consumers who have been injured by illegal marketplace practices. Firm contact information is available at the above website. The firm has recovered tens of billions of dollars for its clients in cases targeting illegal acts and practices in a variety of industries including securities, commodities, insurance, pharmaceuticals, banking services, medical, high-tech, food and beverage, construction materials, and many others. Combined, the firm’s attorneys have hundreds of years of experience working to recover losses on behalf of clients.


mberry8870's picture

Interesting method of advertising. Not smart.

sunny's picture

"Remember if spanish 10yrs bond above > 7%- IMF massive intervention Rescue Package"

Where on line can we watch Spanish (or Greek or Portuguese) bond rates?


johngaltfla's picture

Some idiot on Bubblevision this morning was calling for a 1.36 Euro. Apparently he doesn't read ZH or watch the ECB. I think we'll see 120 again before we see 1.36.

And I think we'll see Deutschemarks re-introduced before we see Germany bail out Spain and Italy.

snowball777's picture

There's an amazing amount of euro-denominated debt on German books...DM won't help that situation at all.

Germany will grumble, then she will pony up. Watch.

RobotTrader's picture

Bank stocks are still pretty much shaking all bad news off.

STI is now higher for 2 days, beyond the point where I sold it on Thursday.

Arius's picture

yes banks stocks and bank experts like the ING genius wonder how these people get these jobs and what do they F... do all day long?  no wonder we are here.

i hate my tax money going to bail out these bozos...

CrashisOptimistic's picture

Was SunTrust one of the bidding banks at the ECB's failed auciton?

If not, what is mention of it doing in this thread?

TheProphet's picture

When the market finally does go south, do you think Robot Trader will post charts of the double-inverse ETFs going up? Do you think he'll write something like, "The EUO is shaking off the bad news in Europe and making new highs..."

VeloSpade's picture

I don't know about all this euro mumbo jumbo default and what not...

What I do know is USD rising has completeley unhinged from the metals and agriculture... as they are now off on their own dance. 

My best trades this year have been silver, gold, rare earths, uranium, sugar and cotton.

REE on FIRE today! Wheee!!!

RobotTrader's picture

I also sold NUE on Thursday, the thing absolutely refuses to sell off.

This stock should have cratered on the China news.

Robot Traders Mom's picture

Son, come upstairs. The social services people are here.

Byte Me's picture

Don't the rag-and-bone men deal with robo recycling?

(Yep terrific avatar RTM!)

Internet Tough Guy's picture

When will you interview the CEO of Exxon? Average LA gas price now $3.28. Just 72 more cents and robo is history.

CrashisOptimistic's picture

Was Nucor involved in the ECB auction?  If not, what is mention of it doing in this thread?

e_u_r_o's picture


gold priced in euros at new all time high!


The Count's picture

hey, all you PM-less european bitchez, last chance to get some gold and silver! 

doggings's picture

gold and silver to new highs, in both Euros and GBP in fact.

Cognitive Dissonance's picture

Next European Leg Down? First Failed ECB Monetization Sterilization, As Central Bank Has E13 Billion Shortfall In Bond Bids.

Shit, just send Bernanke the bill. He pays anything you invoice him, sometimes twice.

Go ahead, what have you to lose?

VeloSpade's picture

That guy yesterday wanting to sue the BErnank and Fed... why doesn't he just reposition himself instead of trying to put the blame for his bad trades on someone else?

TheProphet's picture

IF (perhaps a big IF) the Fed put money into those institutions and those funds were not disclosed, the Fed officers who did this and the bank officers who received the money are both in violation of Securities laws, as a 13D should have been filed.

You can dislike what he is doing, but from a legal standpoint, he has a legitimate case should he choose to pursue it in a legitimate way (not what he is doing).

thepigman's picture

He'll take friggin microcaps as collateral,

too. Hell of a nice guy, the bernank.

Cognitive Dissonance's picture


What's next, used condoms?

Wait, strike my last remarks. I don't want to give him any ideas.

The Count's picture

The Emporer (Trichet) has no clothes!

carbonmutant's picture

Europe Does Not Need More Stress Tests: SocGen CEO

The European banking sector does not need another round of stress tests because the exposure of large banks to sovereign debt is already public, Société Générale Chairman and CEO Frédéric Oudéa told CNBC Tuesday.

Caviar Emptor's picture

A new normal of chronic decay punctuated by acute crises. Gold is the only thing that will float in that cesspool.

oh_bama's picture

This information only makes the european markets, either fixed income or stock, more risky since there is no free puts. no "buying the fucking dip"

so I am staying here in US, side by side with the Fed.

Thank you Ben for the puts.

thepigman's picture

Don't look now, but you're correlated

1:1 with China and Europe. Hope that

works for ya.

Caviar Emptor's picture

Fed policy will kill the value of any dollar 'profits' you might get. When it comes time to cash in the chips the cost structure of living and doing business will eat your profit before lunch. And gold will soar in that environment, preserving people's wealth, savings, and anything they can scrape together. 

Bananamerican's picture

i will junk anything that contains the words "thank" and "Ben" in the same sentence 

thepigman's picture

I figure by the weekend the average

Irishman will have figured things out,

and then..........

MeTarzanUjane's picture

You guys just don't get it.

There is real demand coming, and I mean real big demand.

The real debt sponges are flying in from above. They value debt from the planet Earth and will pay a premium for it. The FED has know this for years and have been huge sellers to them but they will not announce it because they do not want panic from Main St.

MeTarzanUjane's picture

John Urwin Desribes how in 1957 he was recruited into an elite hit squad in the British Military, called The Sixteen. He describes how this group fought the evils of the Illuminati, and he now makes a call for others to speak out as he is convinced we are in serious trouble, and major False Flag operations are soon to hit us.
On his final mission in 1959 he desribes how he saw two football field sized Flying saucers, of German design take off from the Jordanian desert near Jaraba, and how they recovered a secret box containing ET or holographic glass, ancient high technology, to thwart the Illuminati's plans of trying to get the Aliens to buy US Debt.

bonddude's picture

Hey can someone bake a cake with a file in it and send it to Walstreetpro2 in prison.

We need him back right now !

chinaguy's picture

FTSE & swaps don't seem to give a rat's ass, EUR not too happy.

RobotTrader's picture

For all the wailing about bad economic reports, China markets collapsing, European bank auction failures, yada, yada, yada......

Stocks are pretty much unfazed and remain pinned at the highs.

The Count's picture

Ha haaa, so what? Just proves Big Ben has the money spigot open full blast. But alas, the well will run dry eventually.

Bananamerican's picture

Robo, i'm not a hater but don't the P/E's give you any pause??

You really believe Ben can pull this all off...or are you partying hard by the door?

Caviar Emptor's picture

There's huge areas of vulnerability to global security, all ready to blow. They don't give warning. 

RobotTrader's picture

Another new high in the SPY in Europe.

Which has performed better in Europe?  SPY or gold?

Tough call.

I need more cowbell's picture

Which has the most risk, built on a house of cards, and could implode any second?

Easy call


And my avatar is so much prettier than yours, nah nah nah nah