And For Today's Market Ramp Rumor Du Jour We Have...

Tyler Durden's picture

It has been a while since the Guardian came up with a European "bailout" rumor. Time to change that.

Angela Merkel is poised to allow the eurozone's €750bn bailout fund to buy up the bonds of crisis-hit governments in a desperate effort to drive down borrowing costs for Spain and Italy and prevent the single currency from imploding.


Germany has long opposed allowing the eurozone's rescue fund, the European Financial Stability Facility, to lend directly to troubled eurozone countries, fearing that Berlin would end up paying the bill, and the beneficiaries would escape the strict conditions imposed on Greece, Portugal and Ireland.


But Merkel has come under intense pressure as financial markets have pushed up borrowing costs for Spain to levels that many analysts see as unsustainable.


Analysts are likely to see the decision as the first step towards sharing the burden of troubled countries' debts across the single currency's 17-members; though it falls short of the "eurobonds" proposed by European commission president Jose Manuel Barroso.


The proposal was discussed on the margins of the two day G20 summit in Los Cobos, Mexico that has been dominated by the depressing impact of the eurozone crisis on the world economy.


It would be the first time that the EU bailout funds have been used directly to purchase Spanish debt. It is understood the money would come from both the €500m European Stability Mechanism and its predecessor, the €250m European Financial Stability Facility.

In a nutshell: Germany will somehow allow a fund, the ESM, which does not yet even exist, overturn the primary principle of the Eurozone, the no sovereign bailout clause, and use money which has not been funded, to subordinate bondholders across the entire continent (because ESM is priming) and serve as an additional secured lender in addition to the ECB...

In other words, the ESM will take place of the ECB's SMP. With the only difference that the ECB can print money, while the unfunded ESM will at best rely on the murky details of repo lending. Same subordination either way, of course.

Also, the whole no-bailout-clause thing embedded in the Lisbon Treaty... they were just kidding about that. 85 million Germans will understand:

Article 125


1. The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.

Finally ignore that the joint ESM-EFSF barely has enough money for Spain, let alone Italy. Courtesy of Ray Dalio and Bridgewater:


At this rate of idiocy hitting the tape, Ben better deliver tomorrow...

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vast-dom's picture

Ben and the Fed please DIE DIE DIE DIE DIE DIE DIE DIE before you impose anymore ruin on these markets and hence the planet. And the EU too.....

Ahmeexnal's picture

Yet the sheeple in Deutschneyland (and the rest of the eurozone) keep glued to their TV sets and cheer a bunch of monkeys chasing a ball.


Who opened the door for the democrator? And how come he let in the market-conquistadors? Why is he acting as if he has something to hide? The privilege of the stupid is to be taken for a ride Gloomy working days Bright TV-nights There's a world ahead We can also see it's lights And the road there starts On the other side Of the screen, where life's Endless mercedes-rides Who opened the door... So we smashed the screen But it all went black We tore down that wall And we all sacked The fruits of KDW We were small to reach The only thin g we got Was freedom of speech Who opened the door... Happy ever after in Deutschneyland Happy ever after in Deutschneyland Happy ever after in Deutschneyland
gojam's picture

Poll- "Which one of these unelected leeches is the ugliest face of the EU?" 

Vote early to avoid disappointment -

magpie's picture

Can't be bothered to watch anymore. The Polish and the Russian games were probably rigged anyway. 

TruthInSunshine's picture

In reality, it is the two financial capitals of cancerous fractional reserve central bank dependant 'member banks,' who are stuffed to the gills with the 'sovereign bonds' of the PIIGS, and consequently need another multi-trillion dollar bailout (the biggest to date).

So, it's New York & London (represented by Cameron and Obama, both funded, backed and, consequently, carrying water for Goldman, JP Morgan, Barclays, etc) vs German taxpayers.

The U.S. President and British Prime Minister, both bought and paid for puppets of Wall Street & London Lords of Finance, need to vacuum up the northern europeans' savings and pledge their future wealth, so as to allow Wall Street & London institutions to extend and pretend as they continue to bleed capital.


magpie's picture

Ah, if it only were so simple...

TruthInSunshine's picture

It's not?

What's so complicated about letting diseased-ridden banks fail due to the incompetence of their management, rather than turning them into perpetual wards of the state and sources of perpetual parasitic drain upon the taxpayers and the real and productive components of industry and commerce?

Kill the drag that is TBTF banks. It threatens the very notion of genuine capitalism.

See Iceland.

vast-dom's picture

ATTENTION: all concerned parties please write to The Federal Reserve consumer complaint email and report the Federal Reserve bank for FRAUD at the following email:


This is their very own service for fraud and econ misuse for the banking sector that they themselves are bestowing fraud and misuse upon. Report them for the subversion of interest rates as determined by marketplace: ZIRP. For QE. For Hopium. For any and every valid FRAUD that The Fed has egregiously engaged in. Remember your complain is predicated upon the concept of FREE MARKETS and the very constitutionality, more at lack thereof, of The Fed.


PS remember, inflation targeting is illegal according to the Federal Reserve’s mandate.

Bansters-in-my- feces's picture


Ahmeexnal,stop insulting monkeys....!!!

Even monkeys are not that stupid.

evolutionx's picture

No Eurobonds – no euro


According to the EU monetary chief, the eurozone may only have a few days left to find a way out of the crisis. But economic analyst Michael Mross believes that Germany would rather let the euro die than support the idea of Eurobonds.

magpie's picture

Might explain Roesler missing his ride today.

greensnacks's picture

"Germany would rather let the euro die" or pillage the EU for every last cent before its partners decide Germany must go to save the euro.

CrashisOptimistic's picture

So many people just do not understand that Angela "I cave often" Merkel is FAR more reluctant to do these things than her domestic opposition.

Before you applaud her election losses, keep that in mind.

If her opposition takes power in Germany, they will print the Eurobonds themselves.  They would love to print money at German expense and give it away.

She is the only thing slowing it down, and she can't do too much of that or she loses power.

Eurodollar's picture

They are definitely more in line with the french, that is for sure. All they need to do now is wait for Merkel to lose her elections. After the eurobonds are in the market the EU is heading for a fully integrated UNION no matter what the people say. Too bad it also is going to implode the whole thing too. Is Europe becoming the new Egypt? Hope not.

Cognitive Dissonance's picture

"No pain, all gain."

Propaganda poster in the "New World Order" Gym & Spa.

HD's picture

 I really wish I was stupid. I mean drool in a bucket oblivious to logic moron. Because this market endlessly rewards the long and strong just BTFD idiots and eviscerates anyone willing to ask questions.

I keep asking myself why do I bother...

derek_vineyard's picture

money making strategy number 1 = go broke spending on luxuries and get bailed out

win, win

money making strategy number 2 = go against all common sense and buy leveraged stock index ETF's

HD's picture

What I like about your comment is that you can read it with or without sarcasm and it's still true.

HarryM's picture

Ramp up 500 on rumor so if the Fed disappoints you can drop 500 and scream -

"See what you did ??  - now the DOW dropped 500!!! - we need QE!!!!"

noses's picture

The German Verfassungsgericht again ruled that the government (i. e. Merkel and her funny dwarves) did not involve the parliament in due process for many decisions around EU financing. I guess she can't get to a fast solution without lots and lots of further talk in the Bundestag. Hopefully the common currency will implode before they even start talking and "informing" – might be cheaper for all of us.

SeverinSlade's picture

With all of these rumors and GS pushing the new QE flow model, I'm 100% convinced that Bernanke does one of the following:

1. Allows Operation Twist to end June 30th with NO replacement program installed (as the maturity age of its bonds has exceeded the 100 month target already)
2. Extends Operation Twist by a few months (either continuing the current program or changing the maturity length of bonds it sells)

Either way the markets are primed to drop.  The bond market has been signalling disappointment for a while.  GS and others are likely selling their equity exposure into this rally.

As ZH noted earlier via Twitter, GS has been calling for imminent QE3 for a long time now.  So far they've been wrong each and every time.  With the markets barely off 4% from 2012 highs and Greece possibly forming a government, why exactly must Bernanke print? 

Comay Mierda's picture

if you dont expect mkt ramp rumors then you are the fool

Cognitive Dissonance's picture

"At this rate of idiocy hitting the tape, Ben better delivery tomorrow..."

We ain't seen nuttin' yet Tyler. Wait until the idiocy goes exponential.

CPL's picture

What have we been experiencing so far?  Salvadore Dali got off the bus a year ago with the endless bond rejiging that should  have been considered criminal, but seemed like business as usual.


It's all so loopy...

lizzy36's picture

It is insane fucking insane.

ESM is paid in over 5 years. Third and Fourth largest contributors are Italy and Spain respectively. 

Imagine how well TARP would have gone over if it was funded by the same fucking banks it was giving capital to, over a FIVE YEAR PERIOD.

sdmjake's picture

"I'll take 'Asset that is no central banks liability' for $1,600, Alex..."

SeverinSlade's picture

Didn't you know though that's precisely why gold is a risky asset because unlike US treasuries, it isn't backed by the full faith and credit of the US government.  Gold is backed by (gasp) NOTHING!

Sell it.  [/sarc]

Uber Vandal's picture

You must have seen this "reporter" I believe.

Start at :20.

"Some investors aren't confident by what gold is backed by, or if its backed by anything at all as compared to something like the US dollar. Investors are comfortable that the US dollar is backed by the American government so no matter what is happening to the American economy, something like the US dollar is backed by the Federal Reserve and that will be around a year from now. That's a much more comfortable investment for them."

Marginal Call's picture

Hilarious.  But the funniest part is she's quoting some guy named Tod Hirsch (the real idiot, or hustler) and is merely having a Ron Burgundy moment.  She's doing her job of looking pretty and relaying information, while there's some guy out there in the financial world who passed this off as analysis. 

Abraxas's picture

@sdmjake, I can never understand what you're writing. It's because of that damn picture. Too distracting.

sdmjake's picture

"We stood before it and began to freeze inside from the exertion. We questioned the painting, berated it, made love to it, prayed to it: We called it mother, called it whore and slut, called it our beloved, called it Abraxas...." 

-Herman Hesse, Demian

SeverinSlade's picture

Regular joes have no fucking idea the insane level of ponzi circle jerking that's going on (not only in Europe, but all over the world).

And the CNBS "experts" either are incompetent, stupid, lying, or all of the above.

CrashisOptimistic's picture

Regular joes come home from work, hear a radio station's headlines (or not, maybe music), catch a moment of 6 o'clock news, and THEN THEY TUNE OUT.

The wheels are still turning only because it has become a subject of such profound fatigue that no one is aware of what is happening anymore.

Abraxas's picture

I am regular Joe and I take exception to that.

Dr. Richard Head's picture

I am aware of what is happening and my anus is sore.  Thanks Ben. 

CrashisOptimistic's picture

liz, you make legit posts, but I gotta tell ya, from the perspective of one who understands just how shallow the male of the species is  . . . . .

if your name was lizzy56, you would not be upticked, or even read.

John_Coltrane's picture

Well put.  Its like you write yourself a $1M check and try to deposit it and then are surprised when it doesn't clear!

surf0766's picture

Nice protest in Egypt. I thought it was all democratic and stuff. 

HaroldWang's picture

This ramp is all about our FED in US and the hope that something will be announced tomorrow. It will sell off rather promptly when the Fed doesn't deliver the best case scenario for the hopesters.

slaughterer's picture

With ESM as a secured lender, nobody needs to own gold and silver anymore. 

Dick Darlington's picture

Hahahahahahahahahahahaa!!! Aaahahahahahahahahahaa! (breathe) Aaahahahahahahahahahaa!!! Euro utopia turns into twilightzone! Italy, Spain, France, hell, all the insolvent countries ARE efsf and esm. Fuck i can't type coz my eyes are watering like Niagara. Uuuuuuuhhuhuhuhuhuhuhhuhhhhuuuuu! Aaaahahahahahahahaa! Ponzi circle jerk raised to the power of infinity! I wanna see how Spain, who has no money, gives ESM it's share so that ESM can buy spanish debt. Or efsf, the empty shell that has to borrow from the markets and is guaranteed by the member states, borrows from the market and buys spanish debt and spain guarantees that. And i thought i had seen it all but no.

Howdan's picture

You just hit the nail on the head Sir! A perfect summary of what a total and utter farce / s**tstorm this PIIGS fiasco is and how f****ing stoooooooooopid our benevolent dictators are.

How on earth are the massively indebted Spain, Italy etc. supposed to contribute money they don't have to a fund that might or might not even exist which then might or might not be used to funnel that money straight back to them in the form of a loan????


Oh and another thing - why do the banks keep getting billions upon billions while the ordinary pensioner/worker/taxpayer gets NOTHING?!! It's a bloody disgrace - why can't they just split the 450 Billion ESM and give every single European taxpayer say 1000 EUR each to spend (based on 450m EU taxpayers)??

RiverRoad's picture

They are far too scared of inflation to ever let people get jobs or money in their hands.

eclectic syncretist's picture

It's because there isn't any REAL money anymore.  The shit's all make-believe, created and destroyed at the whim of central banks for banks.  Too unfathomable and immoral for the average person to consider possible.  Truth is stranger than fiction and all that.

asteroids's picture

Dear Fed. You have done enough. Please please please do nothing.

roadhazard's picture

Well that's mind bending enough for 2 spliff's.

adr's picture

You have entered The Full Retard Zone.


This is beyond insanity. Europe saying they are going to drop the rating agencies and would rather have countries rate themselves. Facebook up $5 in three days on absolutely nothing, momo stocks trading like eleventy trillion in QE has already been announced, home permits exploding while actual homes being finished has plunged, job openings dropping to the lowest levels everywhere, and social welfare shortcomings hitting trillions.

Why exactly is the market rallying in a way that makes 1999 and 2007 look tame?