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Again, Europe's Banks and Ponzi Scheme Networked Solutions Looked Primed to Simply Implode Under Economic Reality
CNBC reports: Conflict at Europe Central Bank Over Stimulus Rattles Markets
ECB Executive Board Member Juergen Stark resigned on Friday, apparently because of opposition over the central bank's bond-buying program. "That makes ECB policymaking more difficult," said one analyst.
The euro extended losses against the dollar [EUR=X 1.3732 
-0.0149 (-1.07%)] following the news.
"It's a sign that ECB policymaking is controversial even within the board. Clearly the German representatives have a position that differs from other central bankers. That makes ECB policymaking more difficult," Lothar Hessler, analyst at HSBC Trinkaus told Reuters.
A former finance ministry official and Bundesbank vice-president, Stark, known for his tough, no-frills style, has been a member of the ECB executive board since June 2006. His eight year term was due to run until May 31, 2014.
Manfred Neumann, economics professor at the Bonn University said: "This is remarkable. Stark held the same view of the bond-buying as Axel Weber and the current Bundesbank president. It is a position that all the Germans have. This is a sign of huge problems within the central bank. The Germans clearly have a problem with the direction of the ECB."
From Eurocalypse, one of the resident BoomBustBlog traders:
In the trading tips on the 6th [
Eurocalypse Trading Update 9-6-2011 (Global Macro, Trades & Strategy)], I wrote this may be the long awaited drop in EUR following the weekly reversal and worsening technicals.
The ECB is expected to make a UTURN and cut rates, that will add fuel to the fire. At the time of writing EURUSD was 1.41 and oversold, we sold even more to 1.40 then sawbriefly 1.42 on the EURCHF unwinding. That bounce proved the opportunity to sell as the oversold condition was removed... and now were down to 1.38. This move can go much further, EURUSD is headed for 1.20 rather quickly I think.
Only the technicals (which one should always respect) kept it bid, the fundamental story is horrible.
It's a total mess in Europe...beware though of massive govt intervention at some stage which could/will squeeze this markets fiercely...even if in the long (or not so long) run Euro is doomed.
For those of you who have not had the opportunity, register for and download the BoomBustBlog Currency Trend Model, along with the accompanying instructional video.
I have made an FX trend model available for all to download. Its 10 mb, containing a lot of data, but you'll definitely get your money's worth. The model is available here: BoomBustBlog Complimentary FX Index model
And on that note, the French banks who're so at risk due to Italian contagion are dropping like flies - 4% to 7% in a matter of minutes after NY opening. The US banks on the hook for all of that French exposure look set to follow suit as well, with puts starting to fatten on higher IV. For those who just don't know...
- The Mechanics Behind Setting Up A Potential European Bank Run Trade and European Bank Run Trading Supplement
- What Happens When That Juggler Gets Clumsy?
- Let's Walk The Path Of A Potential Pan-European Bank Run, Then Construct Trades To Profit From Such
- The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs!
- The Fuel Behind Institutional “Runs on the Bank” Burns Through Europe, Lehman-Style!
- Multiple Botched and Mismanaged Stress Test Have Created The Makings Of A Pan-European Bank Run
- France, As Most Susceptble To Contagion, Will See Its Banks Suffer
- Observations Of French Markets From A Trader's Perspective
- On Your Mark, Get Set, (Bank) Run! The D…
- ECB As European Lender Of Last Resort = Institutional Purveryor Of A Pan-European Ponzi Scheme
Relevant material for capturing maximum alpha duing this European banking meltdown:
French Bank Run Forensic Thoughts - pubic preview for Blog - A freebie, to illustrate what all of you non-subscribers are missing!
- French Bank Run Forensic Thoughts - Retail Valuation Note - For retail subscribers
- Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers
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the game of 'live grenade' will soon end and blow up in all their faces simultaneously.
IBD
Improvised banking device bombs us back into the Dark Ages.
elephant in room
TBTHide.
But! BUT!! BUT!!!
Just yesterday you said Europe was a buy!! LOL!!!
Thanks Reggie!!
Keep up the great work!
Who knew out sourcing your back office to India would bare so much fruit!
Right on Reggie- look for bank short ban extensions, more kabuki theatre. Liquidity is drying up and maybe the hellacious margin call begins on all that dollar carry trade. Look for Fed QE to also include bazooka swaplines which will hose shorts for 1 week before it all goes tits up
Yeah, It is getting real close now. I doubt we make it to November before the Western World Finally has to face the reality that is it bankrupt!
Sparks resignation makes me think a Green Swan event is about to unfold - Germany's surprise exit from the Euro. (Would be hilarious if it's announced right before a Greek default)
Reggie hits the ball out of the park again ..if only Goldman Sucks, JP Morgan and the Fed were full of Reggies and not elite educated peanut brained morons... Ho Hum!
right on the money
timberrrrrrrrrr.............