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Analysts Respond To ECB's Toned Down Plan: "Priced In" And Details Still Lacking

Tyler Durden's picture




 

The first responses by the Wall Street sellside brigade to the ECB's "unlimited" yet somehow "sterilized", no longer rate capping thus unsterilized plan emerge and they are, in a word and as expected, unimpressed. Via Bloomberg:

ING

  • “Already priced in the short end of Italy and Spain,” says rates strategist Alessandro Giansanti in an interview.
  • Says mkt is waiting for further details regarding:
    • Explicit maturities of purchases
    • When the bond purchase program will begin
    • Which country will ask for support
    • How the EFSF/ESM will be financed

Rabobank

  • The absence of key details “will likely limit the mkt response,” writes rates strategist Richard McGuire in a client note
  • Says key details regarding conditionality are missing; these will determine whether Spain requests an aid program or is forced into one by the markets

Monument

  • This is broadly what markets were expecting, even if some in equity markets were hoping for unsterilized, Marc Ostwald says in email.
  • Unsterilized buying not an option given would be outright financing of state debt
  • Also some caution as story gives the outline of Draghi’s plan, doesn’t tell us what the various ECB committees have advised and how the rest of the council will react

* * *

Naturally, the only thing that matters, which is whether the ECB's actions will do anything to restore Spanish depositors confidence and halt the insiduous and accelerating Spanish bank run, is untouched - if the Spanish bank outflows persist, all of the above will be for naught.

 

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Wed, 09/05/2012 - 09:24 | 2764134 Jim in MN
Jim in MN's picture

Beige response, bitchez!

Wed, 09/05/2012 - 09:26 | 2764142 GetZeeGold
GetZeeGold's picture

 

 

Tone it down hell.......crank that crap up!!!

 

Wed, 09/05/2012 - 10:01 | 2764249 Popo
Popo's picture

This whole "Sterilized" thing is clearly a scam.   The value of assets purchased and sold will absolutely not be equal.   And if they were, there would be no point. 

This announcement is either worthless or it is an admission that the plan is to commit large scale financial fraud at the highest levels of the financial system.    

It doesn't even make sense.   Planning to shuffle around assets and hoping to somehow arrive at a scenario in which Europe is not insolvent is either idiocy or fraud.  Pick one.

Wed, 09/05/2012 - 09:29 | 2764148 slaughterer
slaughterer's picture

This new program is worse than the old SMP because it has conditionality attached.  Sorry, this is not a "whatever it takes"  "you can believe me" type response.   Expect CTRL + VOL.

Wed, 09/05/2012 - 09:25 | 2764135 ebworthen
ebworthen's picture

"Priced in" my ass.

Wed, 09/05/2012 - 09:32 | 2764159 GetZeeGold
GetZeeGold's picture

 

 

You can't believe the crap they can pull out of their ass.

 

Wed, 09/05/2012 - 09:35 | 2764168 EscapeKey
EscapeKey's picture

All negative news are always priced in.

Wed, 09/05/2012 - 09:28 | 2764138 Cognitive Dissonance
Cognitive Dissonance's picture

At this point it is no longer about keeping the helium market balloon rising. Rather it is all about plugging the new holes to keep it from plunging.

Going down?

To be fair, it seems the market has been able to work off its overbought condition by moving sideways for the last three weeks. Of course overbought is a relative condition. It all depends upon the ECB and FED over the next 7 business days.

Wed, 09/05/2012 - 09:29 | 2764149 Cdad
Cdad's picture

To the question of "going down?", all it will take is one big bank selling a few decent sized blocks of a popular stock...and your question then will be forthrightly answered.

Wed, 09/05/2012 - 09:35 | 2764171 Cognitive Dissonance
Cognitive Dissonance's picture

Brother Cdad. Nice (new) avatar.

My older eyes are having trouble discerning what it is that I'm seeing other than blotches of bright color. Care to expand?

<Lie to me if you have to. The powers-that-wanna-be seem to do so with impunity so I'm used to it. :)  >

Wed, 09/05/2012 - 09:39 | 2764185 Dr. Engali
Dr. Engali's picture

Looks to me like it's a rather colorful meteor.

Wed, 09/05/2012 - 09:41 | 2764193 Cdad
Cdad's picture

Indeed...it is Old Cdad gripping tightly to the meteor...of truth.  Impact is a foregone conclusion.  The only question is as to when and where...

Wed, 09/05/2012 - 09:43 | 2764196 Cognitive Dissonance
Cognitive Dissonance's picture

That's what I thought. But one must always ask the artist for his/her interpretation......if only to be polite. :>)

Wed, 09/05/2012 - 09:52 | 2764225 Cdad
Cdad's picture

It seems to me that Truth has touched down in several places on the Earth recently.  The revelation on Apple yesterday, as provided by Tyler, was a very significant instance of the Truth impacting.  Just how many people will rush to buy the iPhone 5 with the knowledge that the FBI has their unique device identifier plugged in to their systems?  Nice fascism.  

In China, the Truth has made impact, and there is a gaping hole in the ground where Global Growth once resided.

Last night, FedEx lit up the sky with it.

This morning, Truth impacted 8 weeks worth of hope and prayers in Europe.

One might say...there is a regular meteor shower now in progress...with only the dumbest and last algorithm yet unaware. 

Wed, 09/05/2012 - 10:16 | 2764290 fuu
fuu's picture

The Veritasiads.

Wed, 09/05/2012 - 09:48 | 2764212 SheepDog-One
SheepDog-One's picture

I can feel em out there Cdad, nervously petting the 'sell all' button to be the first that bails and runs for a lifeboat spot.

Wed, 09/05/2012 - 09:53 | 2764236 Cdad
Cdad's picture

Indeed brother SheepDog...and all it will take is, like I said, a few nice block dumps...and the algo's will take it from there.  That is all we are waiting for now.

Wed, 09/05/2012 - 10:33 | 2764340 Cognitive Dissonance
Cognitive Dissonance's picture

Sort of like..........if you live by the sword algo you die by the sword algo.

Wed, 09/05/2012 - 10:59 | 2764410 Cdad
Cdad's picture

Eggssssssssactly!  And there are A LOT of very dumb algo's in the market today [GPOR, SBUX, AAPL, SPY, VXX...to name but a few that I have observed this morning].

The short busses are lined up in front of the school, and the greater fools are climbing onboard.  And Cdad is hurtling towards Earth firmly clutching TRUTH!

Wed, 09/05/2012 - 09:57 | 2764246 Rip van Wrinkle
Rip van Wrinkle's picture

Don't panic.

 

Panic first.

Wed, 09/05/2012 - 09:32 | 2764158 LawsofPhysics
LawsofPhysics's picture

Correct, welcome to the post-growth world.  Now go be productive, because the fucking paper-pushers (who have all that free money) certainly won't be creating anything of real value, they don't know how and as long as those paper-promises remain stacked on their desks, inflation will remain in check for a little while longer...   ...maybe january.

Wed, 09/05/2012 - 09:34 | 2764164 LongSoupLine
LongSoupLine's picture

"Flow baby...flow!" - Ben

Wed, 09/05/2012 - 09:47 | 2764208 Winston Churchill
Winston Churchill's picture

I went way out on a limb three weeks ago calling the top.

Here I go again,NASDAPPLE will start the fall in September after no QE3 announced.

If the Israeli's do not strike Iran in the next two weeks causing it,that is.

Wed, 09/05/2012 - 09:28 | 2764146 centerline
centerline's picture

Of course the details are lacking.  Is about confidence.  Actual details would destroy confidence.

Sad state of affairs, isn't it?

Wed, 09/05/2012 - 09:31 | 2764157 Dr. Engali
Dr. Engali's picture

Priced in my ass. These market can't price aything in with this much manipulation.

Wed, 09/05/2012 - 09:33 | 2764162 LawsofPhysics
LawsofPhysics's picture

Correct.  since moving away from a monetary system that had some level of real consequences for bad behavior  built-in, there has been no "market" and no real mechanism for true price discovery.

Wed, 09/05/2012 - 10:41 | 2764190 Cognitive Dissonance
Cognitive Dissonance's picture

The same thinking can apply to PMs as well. Since there is so much manipulation in the PM market the assumption is that a rise is inevitable. However, how much upward pressure is there simply because of the downward pressure.

Meaning that each (manipulated negative) action creates an equal and opposite reaction. How much pent up PM buying is there simply because people see and fell the negative pressure?

BTW as a disclosure I have been buying PMs since 2002 so I am on the long side of the debate. But we always need to see all sides, not just the other side.

Wed, 09/05/2012 - 09:32 | 2764160 fonzannoon
fonzannoon's picture

I am actually going to purposefully watch cnbc this morning to see that british twit Simon something who was screaming that Draghi saved the world see if he can remove his foot from his mouth.

Wed, 09/05/2012 - 09:35 | 2764166 Meesohaawnee
Meesohaawnee's picture

and fex ex guides lower. BULLISH!

Wed, 09/05/2012 - 10:04 | 2764172 gjp
gjp's picture

Weak economic reports.  Fedex bellweather major neagative signal.  Lots of central bank jawboning but no action and more friction in the monetary greasing process.

But AMZN, APPL, teflon Nasdaq, and the insane healthy food bubble at 40x earnings just get crazier.  The more obvious the rot, the deeper the denial.

Wed, 09/05/2012 - 09:36 | 2764173 Orly
Orly's picture

In typical bankster style, they have drawn forward their demand that was due on Thursday.  They leaked the report to get one last ramp out of the Euro.

Now, we have to wait for the US NFP report on Thursday, which is going to be horrible...erm, I mean slightly good.  As Bruce Krasting predicts, any number above 100,00 jobs added will burst the bubble of the free-money mo-mos.  I would say that puts the market on extreme defense as one wouldn't expect the Fed to inject without global stock markets dropping at least twelve percent.

Sensing the desperation at play here and the fact that they're out of cards, it looks like it is on like Donkey Kong.  The days of reckoning are nigh and in force.  Finally.

:D

Wed, 09/05/2012 - 09:51 | 2764224 SheepDog-One
SheepDog-One's picture

Theyve painted themselves into quite a corner here, got to keep the 'free money carrot' on a stick out there for Hope, while producing 'good news' as well. Cant have any stock market drop, yet desperately need fear and panic and everyones so trained numb thats basically impossible to accomplish. Well I dont envy any of em here.

Wed, 09/05/2012 - 09:45 | 2764201 RougeUnderwriter
RougeUnderwriter's picture

Question: So where do you park money now?

 

If the banks are interconnected, Money Markets could be one of the first to take a hit. Am I being forced into equities?

Wed, 09/05/2012 - 09:47 | 2764211 Life of Illusion
Life of Illusion's picture

 

What conditions,,gold

http://www.bloomberg.com/news/2012-09-05/merkel-ally-fuchs-says-germany-backs-draghi-with-conditions.html

 “We don’t want to have the ECB just buy on the market, either in the primary or secondary market,” he said. “The ECB can do it only if there are certain conditionalities, if the countries are really doing their homework.”

The remarks are further evidence that Germany will support ECB President Mario Draghi’s plan to buy sovereign debt as a way to ease bond yields in countries such as Italy and Spain so long as governments sign up to strict conditions

Wed, 09/05/2012 - 09:50 | 2764214 machineh
machineh's picture

So if the hand-over-fist buying of PIIGS bonds is to be sterilized, what does the ECB sell to keep its total assets unchanged?

Is Draghi going to dump German, French and Dutch paper to drive UP their yields?

That should go over well in northern Europe! 

 

I am he as you are he as you are me
And we are all together
See how they run like PIIGS from a gun see how they fly
I'm crying

Wed, 09/05/2012 - 09:50 | 2764222 adr
adr's picture

The world economy is now completely dependent on paper pushing. More "wealth" is generated through the trading of paper than actual production and labor. Unearned income dwarfs earned income over the last four years.

To me that looks like a system that can no longer carry its own weight. The upside down pyramid adding even more weight to the top.

Builder: Um sir, your foundation has cracked we can't build a fifth level to your house. In fact yourhouse wll probably crumble within a few days.

Wealthy idiot: You build it and you build it now. My neighbor has four stories and I won't be undone. I'm paying you to build so build.

Wed, 09/05/2012 - 10:07 | 2764272 vertexa
vertexa's picture

Buy something and sell something else? HELL YES! 

European Union considers defunding Food Bank Programs
Wed, 09/05/2012 - 10:19 | 2764298 SheepDog-One
SheepDog-One's picture

Damn peasants and all their whining about food and shelter....fuk em! We've got multi billionaire banksters to worry about here!

Thu, 09/06/2012 - 01:34 | 2767098 agagshoes
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