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Bernanke Koolaid Steals Draghi Punch - Spanish Bonds Slide

Tyler Durden's picture


As the Eurogroup meets today and tomorrow, a funny thing is happening to Spanish bonds; they are selling off. Today is the worst day for the no sacrasanct 2Y Spanish bond yields in over 5 weeks and 10Y yields are not pretty at all. The 'sync' between risk-on around the world as Bernanke's bubble was re-blown yesterday seems to have drawn all that fast money flooding back to the S&P 500 leaving the forelorn Spaniards to ponder whether a bailout wouldn't be so bad. Just for one second, consider this - why did Bernanke go full retard yesterday? Data didn't exactly scream 'panic' mode. Perhaps he knows something about this weekend in Europe and wanted to get out in front of it? Certainly, the shift in Spanish bonds is idiosyncratic and extreme given all the 'Draghi-support' it has. For now though, it seems fast money is playing high-beta US equities, not high-beta European debt - but for how long?

Spanish 2Y yields pop by almost 25bps - the most in over 5 weeks...


as US equities diverge in extremis from risk-on exuberance in Europe...


and while Spain's bonds are seeing a very troubling day (really the worst day in weeks), IBEX is up over 3.5%!!!!


Charts: Bloomberg


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Fri, 09/14/2012 - 10:49 | Link to Comment gggunchi
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Fri, 09/14/2012 - 10:53 | Link to Comment Atlas_shrugging
Atlas_shrugging's picture

"Ball back in your court, ECB...we're printing to the bottom faster than you, what else you got?" 

Fri, 09/14/2012 - 10:54 | Link to Comment prains
prains's picture

there's no debt better than new debt whoooooppppppeeeeee

Fri, 09/14/2012 - 10:56 | Link to Comment gggunchi
gggunchi's picture

Draghi - "I have ordered all the other European central banks holding America paper to increase the number of credit default swaps on American soverign bonds and American bank bonds to 10x their previous level.  You will stop purchasing MBS' and start bailing out Spain with said new bills without pre-condition, or we will all default on these loans and burn this whole motherfucker to the ground.  Is there anything about what I just said you don't understand?" 

Ben Bernanke - "Fuck we're screwed."

Fri, 09/14/2012 - 11:11 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Right, cue the scene from Blazing Saddles of the sheriff with the gun to his own head.  Europe about to pull a Hank Paulson, fucking bring it.

Fri, 09/14/2012 - 10:58 | Link to Comment Raynja
Raynja's picture

i'm wondering if the 'unexpected' ctrl+p wasn't an act of war meant to force some countries that aren't our allies to do as we say throu rampant inflation that will destabilize govts.

Fri, 09/14/2012 - 11:02 | Link to Comment gggunchi
gggunchi's picture

If we can wipe out the Euro and send 1/2 of Europe back to 445 AD then the dollar will rise against said other currencies as it would be the only reserve currency left, and Ben could do QE4-42 all at one time . . . no one could keep him in check. 


Sure the Chinease would love to see their non-inflation indexed $1.4T investment go up in smoke. 

Fri, 09/14/2012 - 11:03 | Link to Comment Randall Cabot
Randall Cabot's picture

"why did Bernanke go full retard yesterday? Data didn't exactly scream 'panic' mode"

My thoughts exactly-he knows something and it ain't good!

Fri, 09/14/2012 - 11:08 | Link to Comment Dr. Engali
Dr. Engali's picture

He knows we would have a failed bond auction if he didn't buy the crap from the primary dealers.

Fri, 09/14/2012 - 11:12 | Link to Comment e-man
e-man's picture

I was wondering what data he was looking at, that we haven't seen.  In any event, it's a race to the bottom Weimar style.

Fri, 09/14/2012 - 15:10 | Link to Comment Randall Cabot
Randall Cabot's picture

Any gurus here think those rumors about Morgan Stanley might have something to do with this?

Fri, 09/14/2012 - 11:15 | Link to Comment knukles
knukles's picture


They're worried that they'll never get us out of the Liquidity/Crdibility Trap, that deflation a la the 30 years Japanese model will run rampant (to wit: 30 years of ZIRP, excess monetary and fiscal stimulus, the perfect Krugmanesque Prescription... how's that workin' eh?)

And targeting Employment?

As I'd warned years ago when Benji was appointed, he's a no-Keynesian by background, not a monetary expert, shirker of the understanding of Liquidity Traps (Keynesians dismissed as irrelevant) and he's reacting accordingly.

Have you/he any fucking idea as to the lagged and indirect effects (three hundred degrees of cause and effect so as not to even reasonably related) between monetary expansion and employment when the expansion is excessive within a Liquidity Trap?

I thought so....
(Correct answer: Fuck no, worth 10 points)

     Ben don't have a clue, Krugman don't have a clue....

Uncle Knukie has a better understanding of this shit than those Beelzebubs

We're fucked royally, folks.

Fri, 09/14/2012 - 10:50 | Link to Comment LongSoupLine
LongSoupLine's picture

and the currency debasement war just found another gear.

Welcome to the new normal.

Fri, 09/14/2012 - 11:06 | Link to Comment NewWorldOrange
NewWorldOrange's picture

So let's meet TPTB's "new normal" with a "new normal" of our own.

The criminals and traitors have taken control of America and are hellbent on destroying it, wittingly or not, and we MUST STOP THEM SOON.

On March 15, 2013, march on your city councils, state capitals, DC. Whatever you can manage. At 8am your time, just grab your family and walk into the streets. Refuse to disband or go home until the city councils oblige, the local police oblige, the state capitals oblige, the national guardsmen and armed forces oblige and follow their oaths, and TPTB in DC, including every Congressman, top administration officials, the DOJ heirarchy, have all been arrested and are awaiting trial. Been stocking up on food, water, etc? Stock up more. You'll need it in the streets. Did you think all that preparation was for survival in the woods? Really?

Let the revolution begin. Demands: TPTB are tried for treason against their Oaths to support and defend the Constitution, for cronyism, rampant bribery and corruption, lies, crimes against humanity, malfeasance, and plenty of other charges that not only makes them unfit to serve, but TRAITORS and CRIMINALS and THUGS.

America marches on the Ides of March. 8am local (your) time -- get in the streets. It's our last, best hope. Make this go viral. American Spring.

Stop! Tweet this. Email it to everyone you know. Post in on Youtube, your Facebook page, anywhere. LET'S MAKE THIS GO VIRAL. It's been done and has toppled governments in just the past few years.

IT'S OUR TURN. HELP IT GO VIRAL. If you're not doing it, you're just another Ikea Boy sheeple all talk pussy. So get busy or STFU and bend over bitch. I'm not "the One", you're not "the One", and Will Smith isn't going to come along and save us. If you want to bring on revolution in America, get to work. The pen is mightier than the sword. Get busy using it. All day. Every day. Spread the world.

American marches on the Ides of March.

(update: I've posted this on dozens of sites, emailed it to a long list of people many of whom will repost it wherever they can; I've tweeted it to a few hundred foll'ers; I've sent emails to dozens of freedom loving people who are serve as a "nexus" in the social networks -- and I'm just barely getting started. It will be everything I do for the next six months. I'm determined to make it go viral, and to translate to reality. I may fail...but less likely to if YOU commit, and help. So what are you waiting for? Are you an American or an American't?)

Fri, 09/14/2012 - 10:51 | Link to Comment Hedgetard55
Hedgetard55's picture

Man, give it until Monday and the market will be demanding more crack from Uncle Pusherman Ben.

Fri, 09/14/2012 - 10:51 | Link to Comment ZDRuX
ZDRuX's picture

What's that thing where central bank policy causes misallocation of capital?... I had the chapter here somewhere..


It's like the massess are just running back and forth sloshing the water around in the boat, right before it capsizes. Everybody trying to front-run everybody else on the other side of the boat while the whole fucking thing sinks.

Fri, 09/14/2012 - 10:52 | Link to Comment gggunchi
gggunchi's picture

I for one would love to see an all out war between the ECB and the Fed, just for the Chinease to step in there at the end and shit all over everything.



Fri, 09/14/2012 - 10:55 | Link to Comment larz
larz's picture

I think I hear a fat lady singing

Fri, 09/14/2012 - 15:53 | Link to Comment Zero Govt
Zero Govt's picture

yesterday it was poison dwarf spinning

Fri, 09/14/2012 - 10:55 | Link to Comment mktsrmanipulated
mktsrmanipulated's picture

the only way out of debt is to inflate your way out----but you need wage inflation for that....we r all fd

Fri, 09/14/2012 - 10:57 | Link to Comment pebblewriter
pebblewriter's picture

SPX just hit its Bat Pattern target of 1472.43.  This is the .886 retracement of the 1576-666 crash.  Could be really interesting...


Fri, 09/14/2012 - 10:57 | Link to Comment WALLST8MY8BALL
WALLST8MY8BALL's picture


Fri, 09/14/2012 - 11:02 | Link to Comment yogibear
yogibear's picture

On CNBC former Fed governor said Bernanke will not seek another term. He will go back to Princeton because he's had enough.

The main money printer, Bernanke, is finding out his PhD thesis isn't worth the paper it's written on.

Sun, 09/16/2012 - 04:25 | Link to Comment Colonel Klink
Colonel Klink's picture

I think you meant to say "printed on", just like all of the paper Ben prints on.  Eventually we'll all find it's not worth shit.

His paper should have been called a feces, not a thesis.

Fri, 09/14/2012 - 10:57 | Link to Comment Dr. Engali
Dr. Engali's picture

The central banks are trying to kill their currencies and people aren't getting the hint. It is simply amazing to me.

Fri, 09/14/2012 - 11:16 | Link to Comment Vince Clortho
Vince Clortho's picture

Sick to watch.


Guess who will offer a "solution" once inflation wreaks havoc on peoples lives and destroys their currency?

Fri, 09/14/2012 - 12:42 | Link to Comment JamesBond
JamesBond's picture

does that solution include drones?

Fri, 09/14/2012 - 10:57 | Link to Comment Jason T
Jason T's picture

as the great Walstreetpro2 once said "when you're borrowing money just to pay the interest, you are fu@$ed"

Fri, 09/14/2012 - 10:58 | Link to Comment luckylongshot
luckylongshot's picture

Rather than going down with the ship the rats are now trying to save it by pumping hot air into it.

Fri, 09/14/2012 - 11:17 | Link to Comment falak pema
falak pema's picture

And so the battle of the ostensible buddies of CB collusion, in reality thieves falling out, hottens up. Both blowing hot air into their respective baloons for illusory asset pumping, which inevitably deflates the real economy in the ongoing race to bottom; knowing deep down that fiat farts do not mean real darts on the economic board of real wealth accumulation, more the contrary.

One thing never changes, you can huff and you can puff the fiat fires all over the globe, but you can't put TRUE collateral to balance the books. And each CB points to the other as he that farts loudest, while the bewildered market looks on, running all the time from pillar to post; like a lost moth flittering around the gleaming bulb of its imminent demise.

The roller coaster gets crazier all the time...You can be sure that Euro zone will cry out for true infrastrucuture type mega projects to fuel the state side project sheets to use up the CB liquidity pump made available; knowing full well that private sector will never invest in first world projects in the uncertain real world; keeping their assets firmly in the banks.

More state side delusion will be added to fiat illusion. Merkel is getting goose pimples as the Draghi train feeds the bonfire of club-med state side spending dreams, by inciting the banks to finance their infrastructure filled new frontier policies of alternative energy tautological hardonista mantra. "We save your ugly, sad-sack mugs if your scratch our alt-energy nuts!"...

Hollande affiche ses ambitions écologiques

Fri, 09/14/2012 - 11:02 | Link to Comment DaveyJones
DaveyJones's picture

CNBC: "IPhone does more for economy than Fed"

compliment to either or insult to both?

a shoplifter does more for the economy than the Fed

Fri, 09/14/2012 - 11:02 | Link to Comment Dr Paul Krugman
Dr Paul Krugman's picture

Although the tone from both Draghi and Bernanke is needed, the targets are lacking. 

It's good to see the Fed moving, finally, and the Fed seems to be trying to “credibly promise to be irresponsible”, which is what I advocated awhile back, so that even after the recovery takes hold, there will be policy measures in place to strengthen the economy.

Yet both the Fed and ECB have left economics wanting.  Hard targets should be implemented so that the economists know exactly what to expect.  If you have no expectations, how can you achieve your goals? 

Hard targets and a more stronger policy is what is needed from both Central Banks.  These targets should be corely focused on GDP, UE, or both.  Once we saw these come in line with expectations then the consideration to exit would be in play.  Until the markets are at the whim of vague policy.

Fri, 09/14/2012 - 11:07 | Link to Comment Bay of Pigs
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LMAO. Move over MDB. 

Fri, 09/14/2012 - 14:04 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

"Hard targets should be implemented so that the economists know exactly what to expect.  If you have no expectations, how can you achieve your goals?"

Whaaattt?!? "Economists" don't have "goals" - they just suckle at the teat of government and the milk they are drinking can only have been stolen out of the mouths of babes, you unutterable retard! 

Fri, 09/14/2012 - 11:06 | Link to Comment Monedas
Monedas's picture

If you were already fully hoarded .... you'd be enjoying this circus more .... and you might even join Monedas 1929 .... in the ranks of the apocalyptic humourists !

Fri, 09/14/2012 - 11:04 | Link to Comment geewhiz190
geewhiz190's picture

forget spanish debt -the US 30 year t-bond is getting slammed !!!  right now down over 3 points. long rates are shooting up-this won't help mortgage rates-it will hurt them.  not to mention the FED is loaded to the gills with long dated paper so one can assume they are getting killed today

Fri, 09/14/2012 - 11:05 | Link to Comment Squid Vicious
Squid Vicious's picture

think I better go fill up the Pontiac, at this rate 89 unleaded will be $4.75 by monday morning...

Fri, 09/14/2012 - 11:07 | Link to Comment Unbezahlbar
Unbezahlbar's picture

China will be forced to print to hold their Yuan down in order to continue to assit their sinking exports. At least that's what they have been doing the last several years.

Fri, 09/14/2012 - 16:03 | Link to Comment smiler03
smiler03's picture

China can completely relax now. The Fed has given them a stimulus for free.

Fri, 09/14/2012 - 11:07 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Beginning stages of Hyperinflation?

Fri, 09/14/2012 - 11:12 | Link to Comment LawsofPhysics
LawsofPhysics's picture


Fri, 09/14/2012 - 11:14 | Link to Comment Floodmaster
Floodmaster's picture

Amazone AMZN Zimbabwe P/E = 318.88 !!!

Fri, 09/14/2012 - 11:14 | Link to Comment common_sense
common_sense's picture

May be Greece is out this week end? At any moment...

Fri, 09/14/2012 - 11:17 | Link to Comment Vince Clortho
Vince Clortho's picture

Remember, whoever prints the most money the fastest wins!

Fri, 09/14/2012 - 11:22 | Link to Comment Floodmaster
Floodmaster's picture

Gold is is supposed to be the winner, not the euro.

Fri, 09/14/2012 - 12:15 | Link to Comment Urban Redneck
Urban Redneck's picture

The SNB is already at Ludricrous Speed (as a % of GDP or the $50K fiat per person in a tiny 8M population). 

To match it Bernake would have to blow up the Fed's balance sheet to something like $17T

As worthless as all those fiat Euros & dollars are,  at least the SNB isn't "investing" in long-term US Treasuries and MBS...

Fri, 09/14/2012 - 11:23 | Link to Comment yogibear
yogibear's picture

GDP & UE...

Notice the in-state college costs now? A 4 year will run way over $100K/year. It's a shock.

Most people don't make the salary of a NY university professor. This cannot and will not continue.

The young people are already saturated with debt.

Also I notice so many loans with only 3.5% down. The banks are doing it again to attract more loans and debt. Saturate every corner with debt.

Fix the unemployment with lower paying jobs while boosting asset prices. Oh, that will work out well.

Noticed in Washington, over the last decade, it's  been a practice to boost GDP (artificially) to justify more debt. Once you drill down into the numbers with adjustments you find out what BS it really is.

Fri, 09/14/2012 - 13:43 | Link to Comment sbenard
sbenard's picture

It's no longer QE3! It's QE-INFINITY!

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