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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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Tue, 12/28/2010 - 12:12 | 833509 hugovanderbubble
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

Tue, 12/28/2010 - 12:15 | 833524 I need more cowbell
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.


Tue, 12/28/2010 - 16:58 | 834245 mberry8870
mberry8870's picture

Interesting method of advertising. Not smart.

Tue, 12/28/2010 - 12:36 | 833605 sunny
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?


Tue, 12/28/2010 - 12:13 | 833514 johngaltfla
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.

Tue, 12/28/2010 - 12:41 | 833624 snowball777
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.

Tue, 12/28/2010 - 12:15 | 833515 RobotTrader
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.

Tue, 12/28/2010 - 12:26 | 833565 Arius
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...

Tue, 12/28/2010 - 13:04 | 833679 CrashisOptimistic
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?

Tue, 12/28/2010 - 15:37 | 834050 TheProphet
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..."

Tue, 12/28/2010 - 12:15 | 833520 VeloSpade
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!!!

Tue, 12/28/2010 - 12:16 | 833522 RobotTrader
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.

Tue, 12/28/2010 - 12:16 | 833527 Robot Traders Mom
Robot Traders Mom's picture

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

Tue, 12/28/2010 - 13:31 | 833725 Byte Me
Byte Me's picture

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

(Yep terrific avatar RTM!)

Tue, 12/28/2010 - 12:19 | 833536 Internet Tough Guy
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.

Tue, 12/28/2010 - 13:04 | 833685 CrashisOptimistic
CrashisOptimistic's picture

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

Tue, 12/28/2010 - 12:16 | 833523 e_u_r_o
e_u_r_o's picture


gold priced in euros at new all time high!


Tue, 12/28/2010 - 12:20 | 833544 The Count
The Count's picture

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

Tue, 12/28/2010 - 12:29 | 833575 Drag Racer
Drag Racer's picture

silver 30.14

Tue, 12/28/2010 - 12:33 | 833591 The Count
The Count's picture



Tue, 12/28/2010 - 13:40 | 833739 doggings
doggings's picture

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

Tue, 12/28/2010 - 12:17 | 833526 Cognitive Dissonance
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?

Tue, 12/28/2010 - 12:18 | 833541 VeloSpade
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?

Tue, 12/28/2010 - 15:43 | 834059 TheProphet
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).

Tue, 12/28/2010 - 21:39 | 834869 Bananamerican
Bananamerican's picture


Tue, 12/28/2010 - 12:19 | 833542 thepigman
thepigman's picture

He'll take friggin microcaps as collateral,

too. Hell of a nice guy, the bernank.

Tue, 12/28/2010 - 12:32 | 833592 Cognitive Dissonance
Cognitive Dissonance's picture


What's next, used condoms?

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

Tue, 12/28/2010 - 12:19 | 833534 The Count
The Count's picture

The Emporer (Trichet) has no clothes!

Tue, 12/28/2010 - 14:45 | 833888 carbonmutant
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.

Tue, 12/28/2010 - 12:20 | 833546 Caviar Emptor
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.

Tue, 12/28/2010 - 13:35 | 833733 VeloSpade
VeloSpade's picture

What about silver?

Tue, 12/28/2010 - 21:39 | 834872 Bananamerican
Bananamerican's picture

makes great bullets

Tue, 12/28/2010 - 12:22 | 833552 oh_bama
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.

Tue, 12/28/2010 - 12:24 | 833561 thepigman
thepigman's picture

Don't look now, but you're correlated

1:1 with China and Europe. Hope that

works for ya.

Tue, 12/28/2010 - 12:31 | 833585 Caviar Emptor
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. 

Tue, 12/28/2010 - 21:42 | 834874 Bananamerican
Bananamerican's picture

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

Tue, 12/28/2010 - 12:24 | 833556 thepigman
thepigman's picture

I figure by the weekend the average

Irishman will have figured things out,

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

Tue, 12/28/2010 - 12:49 | 833638 MeTarzanUjane
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.

Tue, 12/28/2010 - 13:02 | 833674 MeTarzanUjane
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.

Tue, 12/28/2010 - 12:28 | 833573 bonddude
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 !

Tue, 12/28/2010 - 13:43 | 833744 VeloSpade
VeloSpade's picture

Why is he in prison?

Tue, 12/28/2010 - 21:45 | 834878 Bananamerican
Bananamerican's picture

noise citations

Tue, 12/28/2010 - 12:31 | 833584 chinaguy
chinaguy's picture

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

Tue, 12/28/2010 - 12:30 | 833587 RobotTrader
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.

Tue, 12/28/2010 - 12:35 | 833599 The Count
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.

Tue, 12/28/2010 - 21:48 | 834882 Bananamerican
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?

Tue, 12/28/2010 - 12:33 | 833590 Caviar Emptor
Caviar Emptor's picture

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

Tue, 12/28/2010 - 12:38 | 833611 RobotTrader
RobotTrader's picture

Another new high in the SPY in Europe.

Which has performed better in Europe?  SPY or gold?

Tough call.

Tue, 12/28/2010 - 12:42 | 833622 I need more cowbell
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

Tue, 12/28/2010 - 12:43 | 833626 Robot Traders Mom
Robot Traders Mom's picture

Son if margins on food companies keep getting squeezed, we won't be able to eat. Remember I only have disability and welfare to draw from and you haven't had a job since you got fired from Taco Bell.

Tue, 12/28/2010 - 13:01 | 833664 Cognitive Dissonance
Cognitive Dissonance's picture

Speaking of Taco Bell they just introduced the 5 Buck Box or BB as in Ben Bernanke.

As food becomes more expensive expect to find even more empty calories at rock bottom prices. I simply can't eat any of that fast food crap anymore. My stomach starts churning almost immediately after I'm done.

Tue, 12/28/2010 - 13:46 | 833749 VeloSpade
VeloSpade's picture

I permaneantly stained the inside of my toilet bowl after eating taco bell one time.

Tue, 12/28/2010 - 12:54 | 833656 Gunther
Gunther's picture

Pre-tax probably the SPX; after tax - at least in Germany - gold.

In Germany gains on physical are tax-free if the holding period is more then a year.

Tue, 12/28/2010 - 12:56 | 833662 thepigman
thepigman's picture

Yep, Robo, the PDs and the Bernanke

can kite stock to each other all day

long just as they do with Treasuries.

That doesn't give those equities any

value as if "real people" wanted them.

Tue, 12/28/2010 - 12:43 | 833629 vote_libertaria...
vote_libertarian_party's picture

Just another disaster that gets completely ignored by the quants / bots...

Tue, 12/28/2010 - 12:52 | 833651 plocequ1
plocequ1's picture

Exactly. What puzzles me is how everybody is aware that the Market is corrupt and fake and then they try to figure out why its going higher. How does one follow a chart to something that is void of Logic?

Tue, 12/28/2010 - 12:46 | 833635 RobotTrader
RobotTrader's picture

Went to Abercrombie yesterday to buy some of those jeans with a million holes in them.

The place was jam packed.

Obviously, the teenagers didn't get the memo about "The Great Disintegration".

Tue, 12/28/2010 - 12:56 | 833659 Robot Traders Mom
Robot Traders Mom's picture

Son I'm throwing out all your affliction t-shirts. i'm sick of all the neighborhood kids picking on you and calling you fat.

Tue, 12/28/2010 - 17:01 | 834266 hardcleareye
hardcleareye's picture

RT Mom,

A mother's love has no end..  what a burden you bear.  Do you ever ask yourself were you went wrong?  Where this young man with so much potential went "astray"?  What would  be your words of wisdom, to prevent some young mother from having to walk in your "footsteps"?

Tue, 12/28/2010 - 12:50 | 833648 Everyman
Everyman's picture

Dudes and dudettes, Robo is correct as much as I wish he would be wrong.  Quit "junking" him, because the "Sell signal" is now RobotTrader.  It makes as much sense an anything.  I am no fan of Robo, however I do understand what he is doing, and believe me he is doing etter than I.  This house of cards will fall...

RobotTrader is the signal.

Tue, 12/28/2010 - 13:02 | 833675 thepigman
thepigman's picture

Same line from the dotcom days...."look ma, I know it's a ripoff

and a fraud, but watch me trade it....wheeeeee"


Tue, 12/28/2010 - 16:53 | 834240 hardcleareye
hardcleareye's picture

Just can't hepmsef..  when I read his posts the mouse just goes to the junk button....  he is not offensive.. (and I usually have a good laugh when I read his stuff) but it just feels so gooooodddd to junk him, my bad........ 

Tue, 12/28/2010 - 12:57 | 833665 RobotTrader
RobotTrader's picture


All I can say is that most of the posters here are bitter and unhappy.  Because it is only once in about 10 years that stock market speculators have a chance to make huge money.

This has been, no doubt, one of the greatest stock market rallies of all time.

Thanks to The Bernank, I was able to make enough money to retire.  i'm pretty much out of most of my longs now, no need to take any additional risk after this huge run.

Tue, 12/28/2010 - 13:06 | 833678 goldmiddelfinger
goldmiddelfinger's picture

foad. never seen you even near the type of stock that gives massive returns. aapl up 50% big whoop. you showed up w nflx at 175-its 180. give it up poser

Tue, 12/28/2010 - 13:30 | 833719 SheepDog-One
SheepDog-One's picture

RainBowTrader tries his best to find a couple equity boner charts....big deal....look at the markets theyre sick and maxed out while gold pile drives his head into the pavement, then gives him a curb-stomp. The markets are sick, and the new game for Bernanke is just struggle to keep bullshit equities from crashing too much.

Youve made enough money to retire in this great Bernanke monetizing and market pumping experiment? So then...youre all cashed out? Or are you counting stock prices today as banked? Better watch that counting your chickens before theyre hatched stuff, great disasters have befallen them who count the present bid-ask as pocketed. I guarantee you one morning soon youll see it all up in smoke, and nothing you can do about it. 

Tue, 12/28/2010 - 16:04 | 834111 JimmyTheHand
JimmyTheHand's picture

Congrats RobotTrader on making enough to retire upon.  I hope you have put some of your fiat into gold and silver though.  Inflation is your worst enemy right now I guess.  If you do not mind me asking, what is your strategy moving forward? 


Tue, 12/28/2010 - 17:25 | 834352 orgonor
orgonor's picture

congrats man...but seriously what are you gonna do with all this cash? some stocks?

Tue, 12/28/2010 - 12:59 | 833667 Caviar Emptor
Caviar Emptor's picture

In this dysfunctionally brilliant forum, Robo's posts are welcome. Sign of a great discussion platform as opposed to an echo chamber. Like the US constitution: I respect your right to disagree. 


Robo seeming a tad nervous this morning

Tue, 12/28/2010 - 13:03 | 833681 thepigman
thepigman's picture

You'd be nervous too if you were

all beta and no alpha, eh Robo?

Tue, 12/28/2010 - 13:06 | 833688 Robot Traders Mom
Robot Traders Mom's picture

damnit leave my son alone! he is a special needs student and this forum is all he has.

Tue, 12/28/2010 - 13:02 | 833676 EB
EB's picture

"Cash assets" also includes reserves held at the Fed.  Looks like the end of the year play for foreign banks (with US presence) has been to draw down cash and increase trading positions with the result that the trading profits and losses offset.  Hedges maybe?

Tue, 12/28/2010 - 13:43 | 833740 scratch_and_sniff
scratch_and_sniff's picture

twas a squeeze if you ask me, filled at 1.3110 to 1.3100... probably taking advantage of the thin conditions to crush some unfortunate chaps.

Tue, 12/28/2010 - 14:09 | 833785 SheepDog-One
SheepDog-One's picture

Their problem is with 30 straight weeks of equity outflows, record hardship withdrawals from 401K/pension and a collapsing housing markets there are very few 'unfortunate chaps' left in the market to kornhole daily.

Tue, 12/28/2010 - 22:15 | 834918 Bananamerican
Bananamerican's picture


 "There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, kornhole me once, shame on......shame on... you. 
Kornhole me uh,.... you can't kornhole me again."


Tue, 12/28/2010 - 23:53 | 835044 cosmictrainwreck
cosmictrainwreck's picture

LMAO. was just scrolling thru, picking up the gems I missed.... didn't see that one comin' HA!

Tue, 12/28/2010 - 14:13 | 833794 DonutBoy
DonutBoy's picture

Wow - Great Job ZH.  I read what the ING economist said and ignored it.  Shame on me.

Tue, 12/28/2010 - 14:34 | 833828 plocequ1
plocequ1's picture

I think this news was already entered in Pumpmaster Hal 2000's software update. The Dow is green. Hal is eating our lunch and demanding seconds.

Tue, 12/28/2010 - 14:29 | 833841 carbonmutant
carbonmutant's picture

"Now we have an extra 13B EURs sloshing around the money markets until next week’s auction.

If they fail to drain the liquidity fully next week, we will have a major story on our hands." - Forexlive

Tue, 12/28/2010 - 14:42 | 833882 boeing747
boeing747's picture

As dollar weakening, 1st topic of CNBC in 1st week of 2011 will be Spain Debt crisis.

Tue, 12/28/2010 - 15:20 | 833991 omer10
omer10's picture

Why dont you post your charts/comments as a contributor, you are the most useful poster here, and it is difficult to find your posts through different pages among all the junk..

Do NOT follow this link or you will be banned from the site!