Bernanke and Germany Wake Up to a Merda Storm

ilene's picture

If you don't know the meaning of merda, just let your mind wander.

Bernanke and Germany Wake Up to a Merda Storm

Courtesy of Russ Winter of Winter Watch at Wall Street Examiner

The realization has been shockingly slow, but the lamestream media, such as Bloomberg, is picking up on how toxic the LTRO program has been to the merda-storm countries' banks. Today, they ran a clip on how Spanish banks borrowed LTRO funds to speculate on Spanish sovereigns at prices that are now well underwater. That's what happens when the artificial buying frenzy has come and gone. The fact that the Spanish 5-year CDS hit 500 basis points for first time, up 23 basis points, and Italy CDS rose 15 basis points on the day to 433 basis points, signals that those countries will not be able to absorb the blow of all their bankster guarantees, let alone their normal sovereign obligations.

Italian banks took €354 billion in LTRO cash and Spanish banks took around €300 billion. Portuguese bank dependence on ECB borrowing rose to a record €56 billion. So in total, these countries’ insolvent banks have now placed over €710 billion in merda collateral with the ECB. The fact that these infected banks are halting trading about every other day should also be transmitting in spades the signal that the ECB literally owns said banks and inherits their losses and their merda collateral, which has been pawned off.

There are really only four European countries that backstop all of the ECB, EFSF, etc., etc., schemes. Unfortunately, two of them are the merda-storm countries of Spain and Italy. That means all of the losses that would normally be distributed across a number of larger nations will now fall on the remaining two: Germany and France. I've been writing that key European countries are about to toss out bankster agents and proponents of even more austerity in soon-to-be-held elections. May 6 is the key date in Greece and Germany. France's first round of elections begins on April 22.

Tying all the loose ends together is Wizard of Oz Ben Bernanke's sudden attention to words like "shadow banking," "collateral" and "vulnerabilities" in his speeches. For those with an elementary ability to connect the dots, this suggests that collateral in general -- including the merda-storm variety -- has been the subject of some late-night calls during Weekend at Benny's.

And then there's Ben, the master of obfuscation and butt covering. When this crisis soon hits, Ben will attempt to disassociate the bad collateral as a European problem and nothing with which he would ever be involved. He will argue that owning several trillion in 1-2%-yielding long-duration sovereigns in a country (the US) with a 105% debt to GDP is nothing like what the ECB has done. A few years ago, a trillion-dollar portfolio of housing mortgages would've been considered a big deal. Ben should call this European ploy "nossa merda nao fede," which is Portuguese for "our shit doesn't stink." Like chickens with their bungholes ripped out, money will go into a frenzy. From the annals of history, here are some of Brilliant Ben's priceless insights. Only in the most corrupt systems would someone like this be treated like a demi-god, let alone still have a job.

There are other smoking guns. For instance, the Ministry of Truth apparatchik, Moodys, postponed its European bank ratings announcement until early May. For the Sherlocks among you, Italy was scheduled for April 16 and Spain for April 23. Additionally, rumors floated that the ECB will engage in more can kicking by buying even more Spanish and Italian bonds. Spain will sell two-year and 10-year bonds on April 19, which will verify the rumor. The shelf life of the ECB as bond buyer may be very short lived, however, because of the aforementioned German elections.

Merkel's opposition is staunchly anti-bailout, and the Germans know full well that this merda storm of debt buying just gets added to their tab at the end of a ruckus night. Spanish and Italian bondholders, which are a much larger group, will be totally aware of how the game is played, having seen how Greek private debt holders were subordinated to the ECB in the restructuring.

Other clues: the increasing sound and fury from money managers who went along for the ride and now realize this constant central bank exposure doesn't work. First, Barton Biggs washed his hands of it this week, then Michael Steinhardt and Pimco's El-Erian. The chorus on this script keeps building because these guys are the dot connectors, and their lawyers are advising candor now, before the pitchforks arrive. It reminds me of Angelo Mozillo's after-the-fact warnings on housing just before that merda storm blew. This hurricane is even worse: The Central Banker Demi-God Bubble. Don't get too cute on the timing either, as Herb Stein’s Law is in full alert: "If it isn’t sustainable, it will end." In this case, we're talking about the system itself.

For additional analysis on many topics, including trading ideas, subscribe to Russ Winter’s Actionable – risk free for 30 days.  Click here for more information.  

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
dasein211's picture

Come mi mierda Pinche banco cabrones!!!!

spanish inquisition's picture

If you have a bank that is underwater, unable to meet its obligations and you give it alot of money to provide "liquidity". It will

A) Refuse the money, because they will realize they will never last by investing in traditional 2-4% vehicles.

B) Take the money, invest in the 2-4% goverment stuff and pray for a miracle of the economy turning around in time before they blow through the cash.

C) Take the cash knowing they are dead and that there are no miracles. Pay out big bonuses and double down on the rest... Not to save the bank, to see if they can fund the next bonus cycle. If it goes bust, buy some toxic shit and threaten to blow up the market if they dont give you more cash.

russwinter's picture

One of the better explanations of central bank funded banking I've read here. 

blindchicken's picture

Introducing a notion without explaining it and suggesting  "If you don't know the meaning of merda, just let your mind wander" let me conclude the authors product to be 'mierda' as the Spanish would say and stop reading.


russwinter's picture

I know Americans in particular have zero foreign langauge skills, but mierda or merda or merde, come on, that is pretty elemenatary Spanish, Italian, or French  101. Maybe that should be the admission requirement to even read the article, just saying. 

Setarcos's picture

No shit Sherlock ... you should have kept reading.  Try again.  It's spelled out for you and I've given you a hint.

blindchicken's picture

Thanks for the hint Setarcos.

I just have not been in the mood for guessing this morning ...  :-)

Nachdenken's picture

The Eurocracy, including the central bank employees - extremely high paid, low taxed, multi-perk group of hidden elite are preserving their jobs and privileges, like civil servants everywhere.  They are the system relevant criterion for all this public misery. 

WAMO556's picture

Like the guy said, before the pitchforks arrive. We got to see what is in store with the Arab Spring (REVOLUTION) and it is comeing to Europe and then the US. The Arab Spring was not about democracy like some of these idiots would tell you, it was about people starving to death, and the people decided to take the people responsible for their troubles DOWN!

DeadFred's picture

I am a bit confused by all this. What has changed in the last few weeks? Not a lot that I can see is structurally different now than what Tyler has been telling us for months. As far as I can see the reason we there is great angst wafting through the halls of Europe is because Someone(s) decided it was to to exploit the weakness that has been there all along instead of pumping the the handle on the all-clear siren. Nothing has changed but the propaganda. It was merda before and is merda now. I don't trust a downturn based on synthesized news any more than I believed that obscene ramp-job they foisted on us these past few months. We all know what the end result of this debt fiasco is but beware that this sudden realization that we are doomed we are doomed may be just another short-term ploy.

mendigo's picture

My impression of the situation is that its like you are at a rave in a dilapitadated fire-trap building in a bad area (any town in Conneticut) and a rock group of fomer stars including ben, timmay, barack, angela (in spandex and leather) are the entertainment and goldman is working the doors and the toilets are over-flowing. But your drunk and having a good time partying like a member of the presidents security force. But in spite of your condition you sense that this will not end well and you are keeping one on the other key people to see if they moving toward the exit - because some people will receive advance warning and if the music stops or fight breaks-out and the general audiences wants out it will be game-over for those who are not near the exit.

So really just like any day in high finance- makes clockwork orange seem normal.

Also I think maybe its not the position its the vector.

russwinter's picture

I think what's changed is the rapid realization that LTRO was a trap, with a lit fuse. Before it was considered a solution, big difference. 

Snakeeyes's picture

Greqt story! And here is the ex-Nazi Soros MORE government solution.

YesWeKahn's picture

"Only in the most corrupt systems would someone like this be treated like a demi-god, let alone still have a job."


priceless, you haven't mentioned how our elected elites call him "job well done", you save the u.s. and a", "up is good, down is bad, up is right, down is wrong", "you saved us all", and other junks ...

Aquarius's picture

Oh, the system is about to collapse, yes?

Now, let me see, for the past ~3,000 years or so we have strong tendencies to embrace a rapacious Usury system for our economic wet dream; a system that has been repeatedly condemned, outlawed and banned as criminal and barbaric by hundreds of nation states over the same length of time.

But we - or at least of "leadership" which comprise of political midgets, theieving bankers, diseased bureaucrats and now the mercenaries and or priests of money, the corporate executives - have allowed this usurous system to be finnessed to a corrupted fractional reserve banking with its manipulators the Central Banks and asset stripping through the cousins of those bankers in an incestuous dance or productivity capture and recursive scamming. Never mind all the other games they play when the lights are out.

Mathematics tells me that when the system collapses, which it will and very soon, we are not left with a zero sum game at all but with the same over-ruling Unholy Alliance of "leadership" which consider themselves "elite" which expect to have Mr. Bernanke to just change the record.

AldousHuxley's picture

central banks are here to stay. even north korea has them for whatever reason.


small 2% inflation is required to tax the billionares and their idiot kids to invest rather than sit on US Treasury bonds for generations.


the problem is all that other shit like wall st. bailouts that is corrupting the mission of such institutions. Greenspan was arrogant to not to listen to others and to think that US skilled labor was too expensive and waged war against middle class and sided with capital and its manager banksters. Turns out Greenspan was wrong and Bernanke is took over the titanic. but a ship must have her captain.



WAMO556's picture

Go now. Run along and tell your godking banksters that they face free men here...not slaves. Go NOW...Before we make our wall a little higher!!

denny69's picture

Europe has many new words for its common language merda=merci=mangia=morte

AldousHuxley's picture

Europe was recovering from world war infighting until they liberalized USSR and allowed know how and capital to escape to ex-communist slave labor factory towns.


Just like US and Asian manufacturing.



StychoKiller's picture

The EU is busy playing "Russian" roulette, only someone keeps adding more bullets...

foxmuldar's picture

Like playing Musical chairs on the Titanic. Eventually all of europe will go under. Now if only we could put Helicopter Ben on one of those chairs. 

ebworthen's picture

Must be part of the reason the financials got "monkey hammered" on Friday (hat tip Tyler).

Contagion guaranteed since U.S. banks and the FED have so much exposure to Europe (shhhhhh, don't tell Bob Pisani or Timmy).

M.B. Drapier's picture

Merkel's opposition is staunchly anti-bailout

Really? I thought the SDP was notably more pro-bailout than the Christian Democrats?

Jack Sheet's picture

@ MB Drapier: Agreed. I really don't know where all the anglo-saxon bloggers get this fiction from. It is a collective delusion. All German politicians irrespective of their party want to stay in the EU polibureau-run cartel of lucrative positions and sinecures at the expense of the taxpayers, whom they don't give two merdas about. The other error perpetrated by the bloggers is to give credence to election propaganda spewed by the same politicians - as if they (the bloggers) hadn't learned the lessons from O'bumma. It's telling that the most vociferous predictions of the breakup of the EUR are propagated by the Anglo-saxons. Everyone actually living in the EUR zone knows that the system is a political and banking power cartel that will be upheld at any cost, including the destruction of the middle class as in the US.

AnAnonymous's picture

If it dated back to Obama, one could understand the lesson is not learnt...

The observation here: Journalists are just US citizens who happen to be journalists.

Bloggers reproduce the same pattern as main stream journalists.

Not because of journalism, but because of US citizenism.

Treason Season's picture

 On a walkabout with close German friends in Frankfurt recently we came across an old Jewish cemetery and right inside the locked gate stood an obvious  Illuminati monument. Upon commenting on it my friends gave me a blank quizical look.

 "Illuminati." I repeat. More stupified looks.

 "Rothschilds." I try. Again no recognition.

 "Mayer Herschel Bauer." Zilch. Zip. Nada. Nichts.

Though I truly care for them I could only shake my head in disbelief how utterly ignorant they and the vast majority of Germans are of their monetary history and what's worse is they don't want to know. Give them their pensions and they will stay ignorant until those pensions go up in hyperinflationary flames. 

Having said all that there is the Pirate Party and their growing support. Der Spiegel recently wrote,

"...the political newcomers currently enjoy 13 percent of voter support and are now the third most popular party in the country ahead of the environmentalist Greens, which lagged behind at 11 percent.",1518,druck-826540,00.html

Non Passaran's picture

Totally incoherent, but thanks anyway

Jack Sheet's picture

Don't pin any hopes on the "pirates". Should they gain any significant representation, they too will also be offered powerful "incentives" to toe the EU politbureau line.

Treason Season's picture

Hey Mr Sheet could I ask you something? Is history totaly irrelevant? Granted life seems to move glacially but to say there is no hope of change for the better belies German history. Call me a hopeless romantic, you wouldn't be the first but something in the Tuetonic character gives me reason to believe. Not to sound condescending but have you read this?

 Martin Luther ( (10 November 1483 – 18 February 1546) was a German monk, priest, professor of theology and iconic figure of the Protestant Reformation.[1] He strongly disputed the claim that freedom from God's punishment for sin could be purchased with money. He confronted indulgence salesman Johann Tetzel with his Ninety-Five Theses in 1517. His refusal to retract all of his writings at the demand of Pope Leo X in 1520 and the Holy Roman Emperor Charles V at the Diet of Worms in 1521 resulted in his excommunication by the pope and condemnation as an outlaw by the Emperor.

Luther taught that salvation is not earned by good deeds but received only as a free gift of God's grace through faith in Jesus Christ as redeemer from sin. His theology challenged the authority of the Pope of the Roman Catholic Church by teaching that the Bible is the only source of divinely revealed knowledge[2] and opposed sacerdotalism by considering all baptized Christians to be a holy priesthood.[3] Those who identify with Luther's teachings are called Lutherans.

His translation of the Bible into the vernacular (instead of Latin) made it more accessible, causing a tremendous impact on the church and on German culture. It fostered the development of a standard version of the German language, added several principles to the art of translation,[4] and influenced the translation into English of the King James Bible.[5] His hymns influenced the development of singing in churches.[6] His marriage to Katharina von Bora set a model for the practice of clerical marriage, allowing Protestant priests to marry.[7]

In his later years, while suffering from several illnesses and deteriorating health, Luther became increasingly hostile towards to Jews writing that Jewish homes should be destroyed, their synagogues burned, money confiscated and liberty curtailed. These statements have contributed to his controversial status.[8]

GeneMarchbanks's picture

What exactly are you implying? Perhaps less hodge-podge and more direct speech might clarify your position here.

Luther's revolt found its conclusion in the Teutonic pageantry of the Nazis. Nazism carried a message of racial superiority which makes it a completely separate in the analysis of collectivist movements of recent history.

If you're implying Germans have somehow resurrected a vicious streak, I suggest you put down Grass' poem and reach for the red pill before it's too late.

Treason Season's picture

Oy vey! Slandering Martin Luther! It's you in need of medication. Are you Marla Singer in drag? Don't be ashamed.

GeneMarchbanks's picture

Slandering? Truth is not your concern, I see now, but blind self righteousness.

Jack Sheet's picture

Mr Treason Season: I hope you are right, but it is probably better to be prepared for the worst. Luther never arrived in a position of significant political power and was therefore not in danger of being corrupted by it.

ISEEIT's picture

Real is good.

This article is real good.


Hulk's picture

You Bitchez better got Gold...

Goldtoothchimp09's picture

maybe i'm just dense...what is Merda? 

the first time it is used in an article it should be spelled out -- merda(means xxx)

onarga74's picture

Mierda in Spanish...merda in Portuguese

rwe2late's picture

 Try reading the article.

"Merda" is translated half-way through the article.

xela2200's picture

Merda means shit. Google has a translator.

Hulk's picture

Merda, is what your girlfriend does on your chest, after she has decided to leave yo cheatin ass...

lasvegaspersona's picture

Things will go on until they simply can't. Even the Chinese, perhaps the biggest victims moneywise do not want to have to admit they have a trillion of crap on their books. If they do round up a bunch of gold to expand their balance sheets as the dollar tanks, they might find it easier to stomach but still it will be painful enough so that everyone who can keep the music playing will.

Peter Pan's picture

Europe is hanging by its finger tips on the edge of a very steep cliff and if it weren't for the German boot stepping on their fingers, the show would be over. Sooner or later the Germans will tire and walk away. In fact it is only the consideration of political survival and face saving that will keep this situation going longer than it should. That plus the fear of the mess that will ensue after the breakdown.

gina distrusts gov's picture

As the dollar is backed by the "full faith and credit of the US government" said government having lost the trust of the citizens of  the US implies the dollar is now with out any value!

but the sheep will eat the lies until they get gob smacked with a 2x4

xela2200's picture

Full faith and credit of the US --> They took that out of the dollar bill a while back. Now it only says Federal Reserve Note as in IOU until I go bankrupt.

Herdee's picture

My prediction on what will bring down the banking system along with their shadow friends is based on U.S. Court Cases that are proceeding through the legal system and when they hit the crooks at full force they better watch out.The biggest template used to bring them down in the future will be the Court Case by Patrick Byrne and will expose naked short selling for real.It is the electronic production of counterfeit electronic shares.It is responsible for the destruction of tens of thousands of U.S. Companies.You can watch the videos on's all part of the big PONZI that will soon end for the banks and their crooked political buddies that are destroying America.

lasvegaspersona's picture

Patrick has been preaching for a couple of years now. I guess I'm too cynical to believe that working in the system will help save the system by bringing the system down. I see financial collapse through know...the old fashioned way.

WAMO556's picture

A short time ago, I was in Central Asia. My friends and I were working wtih the local government. They were trying to buy the loyalty of local tribal leaders by bribing them. But the CLP's were being raided in the deserts by a bandit. So we set out to find this group of AQI thugs and kill or capture, preferably kill. But in six months, we never met anybody who traded with him.

One day, I saw a child playing with a brick of money. The insurgents had been throwing them away.
Well, because they thought it was good sport. Because some men aren't looking for anything logical, like money. They can't be bought, bullied, reasoned, or negotiated with. Some men just want to watch the world burn.

Who do you think that this describes???

Sudden Debt's picture

It will take a bit longer than we think but in the end it will happen.
If we think 6 months, it will be 3 years.
BUT! Time flies....