Bill Gross Insinuates The ECB's Upcoming LTRO Is Merely A Shell Game

Tyler Durden's picture

It is one thing for irreverent blogs to call a spade a spade an accuse the ECB of engaging in ponzi operations, such as Wednesday's LTRO where the European central bank will give local banks money and hope and pray the use of proceeds is to purchase sovereign debt (something we said previously is very unlikely to happen). It is something totally different when the world's biggest bond fund manager makes the same tacit accusation by saying that all the ECB does is take from one hand and give to the other - a very efficient shell game. Such as what Bill Gross has just done in a tweet from mintues ago. So how are investors, we wonder, supposed to have any faith in bonds (forget equities - they have long given up on those), when even the members of the status quo systematically undermine confidence in the global pyramid scheme (not that we are complaining).

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dereksatkinson's picture

Tyler...  If banks fall in line and participate in this carry trade, wouldn't this be QE?

vast-dom's picture

At what point will this all be called what it actually is: ILLEGAL?!

NotApplicable's picture

Ha! They'll redefine the law long before that day arrives.

vast-dom's picture

And pls dont forget that in a proper shell game more bills aren't printed nor is there pea creation and a fixed 3 shells.

He_Who Carried The Sun's picture


It will be XLBSN. ;-)

gmrpeabody's picture

Have we met..., you look vaguely familiar?

Dealer's picture

Somebody help, what does TLGP stand for?

falak pema's picture

its like having a rich au pair girl. Who works and bails you out as well. Nice system funded by IMF. Now I didn't say the rest.

Fortunately both Berlu and DSK have left the Euro scene so the au pair is safer, but not safe! She has three year contract. But the house might cave in inspite of that. The walls are weak. The lift don't work. 

DSK was in China today and he bad balled the Euro, said there was no firewall and that Merkozy danced very badly together out of step; wouldn't end well, which isn't news; could just be DSK sour grapes griping. Maybe he wants a job with China as financial Oligarch as his days in France are over. If it happens the population of Peking will get a bonus. 

ghengis86's picture

I believe the acronym is closer to BNDOVR

TooBearish's picture

1yr BAC paper trading behind 5%....put that in your LTRO and smoke it...

f16hoser's picture

"Shell Game?" Say it isn't so....

European Leaders: Monkeys fucking a football

GeneMarchbanks's picture

Are you an European Leader then?

ebworthen's picture

"Shell game"


Bill sure bets a lot on the shell game; is he getting pissed off or trying to jigger outcomes?

Sardonicus's picture

Whole market is getting that feeling quick

Reminds me of this

Bulls have been offered lots of chances to exit but have over stayed their welcome.

Quickly approaching "now Yous can't leave"

ghengis86's picture

A shell game?!?! Heavens no! The leverage available on shell games is much too small.

Global Hunter's picture

There comes a point when establishment professionals whether they be in finance or the media have to jump ship to save their own integrity.  Every man for himself weee

scatterbrains's picture

someone print some money and buy GM.. she looking fugly lately

ghengis86's picture

Like Aztec fugly or Volt fugly?

AndreiC's picture

Depends on where the interests of these members of the status quo currently lie. Maybe this goes against some of their bets in this "bad year" for them.

San Diego Gold Bug's picture

Things are getting so bad it is sad.  Some Christmas cheer from Turd's site.  Christmas Silver

csmith's picture

Watch what Mr. Gross does rather than what he says. He has no choice but to buy.

Mr Lennon Hendrix's picture

Gross has twatted more than Kimmy K lately. 

Hey Bill, when the Treasury issues get bought by PDs, and flipped the next day to the Fed, what's that?

InconvenientCounterParty's picture

You know it's hard times for magicians when they start outing each other's tricks. There's only one way that game plays out.

hambone's picture

Anyone want to comment on obvious BAC "buyer" at $5 today??? fucking obvious they are utterly nationalized....except on the upside for recent buyers of BAC shares (hmm Warren) and for bonus emp's in the organization.

Now having bounced on $5 at least 20 times today and not once seeing the underside...simply in your face.

GeneMarchbanks's picture

That doesn't mean they won't see the 4s errr 3s after the holiday break. Enjoy it while you can, BoAtchez!

NumberNone's picture

Gross bitter about wrong predictions and underperformance for 2011.  Trying to prove he's still relevant. 

earleflorida's picture

grossly irrelevant - it's different this time not having an anus

monopoly's picture

Right, and it also reduces the chances of destroying the entire system again. Asshole! Moynihan

slaughterer's picture

The 3-year limit on this LTRO is the exact time-span for bank refinancing cycle.  The banks could buy their own debt with the money from the ECB, as well as sovereign debt (sov less likely though).   

slaughterer's picture

Thanksgiving wrecked by EU-related market plunge.

Christmas wrecked by EU-related market plunge.

New Years wrecked by EU-related market plunge.

See a pattern here?

oklaboy's picture

hey hey hey, stop that, your are giving the word shell game a bad wrap

Winston Smith 2009's picture

Kyle Bass detailed this stupid shell game some time ago and has called it a "sophomoric" tactic that shouldn't be able to fool institutional investors, but may very well fool unsophisticated retail investors.

Humor - The EU's Circular Sovereign Debt Bailout Farce

knukles's picture

A faux Thermadorian capitulation at the Ozymandic moment.  

onebir's picture


SocGen and others are also sceptical:

(no FT subscription required for the blogs)

falak pema's picture

shell game : with or without the oyster pearl?

WhiteNight123129's picture

Who likes anagrams? LTRO ==> TROL (missing an L sorry, ....blame it on non native english).

EZYJET PILOT's picture

So the banks borrow the money off the ECB to buy the bonds and then the ECB buys those bonds off the banks. This would sound crazy if I hadnt already been desensitised to this modern day black magic. The question is how much profit do the banks make off this transaction, does anyone know?Tyler?

virgilcaine's picture

or A bank loss will never be tolerated under the bernank. They postponed the Greek haircuts ( first 30%, 50% then 70%) and CDS non-payout has been swept under the rug.  Bernank is an amazing magician.