• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Buyers Of Last Resort: As Dumping Accelerates, Here Is Who Is Stuck Buying Another €741 Billion In Italian Bonds

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Sun, 11/20/2011 - 14:40 | 1895986 GeneMarchbanks
GeneMarchbanks's picture

'Although it remains our key assumption that domestic insurance companies [ZH: got ASSGEN CDS yet?], will be the potential long-term buyer, the interim uncertainty and volatility certainly calls for a more urgent buyer.'

Bye-bye Intesa & UniCredit. Poor iTalians.

Sun, 11/20/2011 - 15:01 | 1896047 css1971
css1971's picture

Basel III rocks!

Sun, 11/20/2011 - 15:47 | 1896185 sabra1
sabra1's picture

thought for a second you meant Hazel rocks!


Sun, 11/20/2011 - 15:28 | 1896126 cossack55
cossack55's picture

Over the past several years I have been framing and Xmas gifting Zimbabwe, Weimar and Hangarian currency. Always well received with snickers or ever outright guffaws.  I would be more than happy to buy some BTPs, must be under $10/certificate tho.  I'll take 16 please. Contact me for mailing address.

Sun, 11/20/2011 - 15:39 | 1896161 Sudden Debt
Sudden Debt's picture

And i thought spain would take centerstage this week :)

Sun, 11/20/2011 - 15:53 | 1896203 Ghordius
Ghordius's picture

No, the banks are extending to Italy and the Netherlands.

Sun, 11/20/2011 - 20:54 | 1897090 Buck Johnson
Buck Johnson's picture

What happened is that the Italian govt. told it's banks and financial institutions to buy Italian bonds (which leads to if they started to sell it would be suicide to the economy).  Everyone's getting out because they know that Italy will go through a "controlled" default.

Mon, 11/21/2011 - 01:03 | 1897640 bigun
bigun's picture

they playing dis game called pass the hot potato

except its really a FUCKING BOMB; ECB & italian banks will be blown to smithereens; along with the rest of us innocent bystanders - well i know i wont be finding a job in 2012 when i graduate



Sun, 11/20/2011 - 14:42 | 1895990 Ahmeexnal
Ahmeexnal's picture

How about a chart indicating who is buying german reichbunds?

Sun, 11/20/2011 - 15:01 | 1896048 Eally Ucked
Eally Ucked's picture

We only know who's sellling but we want to know who's buying that's really good question

Sun, 11/20/2011 - 15:36 | 1896151 reload
reload's picture

ECB Proxies: with 0% ECB loans funded via fed swap lines. Also helps the Euro keep a bid.

OK - I am guessing, but who would be remotely suprised?

Sun, 11/20/2011 - 15:52 | 1896196 Ghordius
Ghordius's picture

Late Seventies again
Then the banks involved were national and stuffed with it

Nah, this will be a LONG game, methinks...

Sun, 11/20/2011 - 14:43 | 1895993 High Plains Drifter
High Plains Drifter's picture

i have heard it said that one in six amerikans work for the government. how many italians work for the government as a percentage of the workforce?

Sun, 11/20/2011 - 15:03 | 1896052 Ahmeexnal
Ahmeexnal's picture

More like...how many iTalians watch Internazionale vs. Juventus during worktimes in government offices?

Sun, 11/20/2011 - 15:26 | 1896122 High Plains Drifter
High Plains Drifter's picture

that's what i mean. with this adjustment coming down the pike, the world in italy will be turned upside down. perhaps we should watch it and remember that this movie is coming here.

Sun, 11/20/2011 - 16:26 | 1896296 earleflorida
earleflorida's picture

just like the clint eastwood spaghetti westerns

Sun, 11/20/2011 - 15:30 | 1896135 Neidhammel
Neidhammel's picture

Percentage of nogoodniks in

Dolce Vita: 2.3

Fakelaki: 25 (!)

Sieg Heil: 14

Sun, 11/20/2011 - 15:40 | 1896162 reload
reload's picture

Good question - here in the UK just over 1 in 4 work directly for Her majestys government. Many more are reliant, as they work for firms who`s only client is the government. Defence contractors, refuse collectors, all manner of consultants etc etc.

Sun, 11/20/2011 - 15:51 | 1896193 sabra1
sabra1's picture

it's time the queen bitch wipes her own ass!

Sun, 11/20/2011 - 15:55 | 1896215 Ghordius
Ghordius's picture

Why do you wipe yours here?
Oh, sorry, it's your...what?

Sun, 11/20/2011 - 14:44 | 1895995 Gloomy
Gloomy's picture



Lawmakers Concede Budget Talks Are Close to Failure


Sun, 11/20/2011 - 15:10 | 1896075 Dick Darlington
Dick Darlington's picture

Waiting for Dick Bove report saying "the budget's fine".

Sun, 11/20/2011 - 16:59 | 1896365 earleflorida
earleflorida's picture

 just like it was, 'designed to fail', eh, and both party's declare vicory,... all the while obama's  backdoor-cuts for the entitlement programs that no republican could have ever accomplished, or even imagined [touching-the-3rd-rail] if they were in office -

think about it for awhile,...

when implemented in 2013[?] the automatic cuts will begin, 'but', with a 'war clause' that exempts military expeditures,... thus you have just a cut on the poor, period!

and, as far as i'm on the subject,... the bush tax cuts should be dropped across the board, with everyone paying their fair share


btw,... great post tyler

Sun, 11/20/2011 - 14:44 | 1895996 Cdad
Cdad's picture

Witheveryone else dumping Italian bonds in the open market, there are only two parties on the bid side: the ECB, and Italian banks.

Wait...make that three.  You forgot Larry Fink at BlackRock.  Of course, it is hard to tell whether he is a buyer or a seller, based on the discontinuity of the firm's comments from week to week.  So either it is three, including Fink, or everyone at BLK is a euro debt day trader now.


Sun, 11/20/2011 - 14:47 | 1896008 Hulk
Hulk's picture

Blackrock = the new MFG. Get the fuck out of Blackrock while you can...

Sun, 11/20/2011 - 15:18 | 1896101 GeneMarchbanks
GeneMarchbanks's picture

Ummmm... AUM= 3T. Good luck to all those 'nimble' Canadian pension funds.

Sun, 11/20/2011 - 14:45 | 1896000 westboundnup
westboundnup's picture

Does anyone believe that there will ever be no buyers.  More specifically, does anyone believe they will allow there to be no buyers?

Even on judgment day, there will be buyers of bonds.


Sun, 11/20/2011 - 15:25 | 1896115 Amish Hacker
Amish Hacker's picture

The question is, At what price? The wages of sin are not adjusted for inflation.

Sun, 11/20/2011 - 17:29 | 1896453 DeadFred
DeadFred's picture

IMHO everyone is greatly underestimating what the Fed will do. This selloff is mostly due to a liquidity squeeze and the Fed does have the ability to create liquidity. I think they are waiting for the crisis to get to the 'proper' level. That means bad enough to have everyone screaming for help but not so bad that Ron Paul gets elected. My questions are 1) when will that be? 2) will they be able to keep inflation at the BAD level instead of the ZIMBABWE level? When is the next FOMC meeting?

Sun, 11/20/2011 - 14:55 | 1896002 Shadowsil
Shadowsil's picture

I just read something yesterday and am currently trying to find it again on Italians buying their own bonds..

The Italian citizens were buying their own debt..



Sun, 11/20/2011 - 14:56 | 1896035 Tao 4 the Show
Tao 4 the Show's picture

Italians hold much of the country's debt. Although the country is full of problems, the Italians themselves tend to have houses in the family and are conservative in other financial respects. The politicians are mostly criminals, though, and the unfortunate populace is likely to be badly robbed through all this.

New form of the Sword of Damocles. The politician kings can break the hair with any number of wrong moves, but the sword then falls on the people.

Sun, 11/20/2011 - 14:48 | 1896011 Gloomy
Gloomy's picture

If you don't know the name of the mark at the table, the mark is you.

Sun, 11/20/2011 - 14:48 | 1896013 bank guy in Brussels
bank guy in Brussels's picture

Italian banks buying Italian bonds, rather fits in with the proposal of Richard Koo of Nomura, that the national debt of EU countries should be sold primarily, and perhaps even exclusively, to persons and entities from that country.

Sun, 11/20/2011 - 15:58 | 1896221 Ghordius
Ghordius's picture

Well, it is much more stable this way
Less exposed to hot money

Sun, 11/20/2011 - 14:49 | 1896014 RobotTrader
RobotTrader's picture

So what's next for AA rated Uncle Gorilla Notes?


More dumping of Europe Bonds + Supercommittee Failure = U.S. Treasuries exploding to new highs on Monday?

Would not surprise me.

Sun, 11/20/2011 - 15:40 | 1896165 Nate H
Nate H's picture

supercommittee didnt fail. they just didnt agree - now across the board cuts - bullish for us bonds as we are recession bound for certain (plus euro situation is bullish USD and UST)

Mon, 11/21/2011 - 12:04 | 1896494 earleflorida
earleflorida's picture

not so fast - "I Want it Now!" - ref: http://www.fhfa.gov/webfiles/22775/TSYSupport11092011%20(2.).pdf     [problems :-( ]




http://www.research.stlouisfed.org/conference/gse/Jaffee.pdf      [follow redirect]                                      

,... so who ya gonna call?

Sun, 11/20/2011 - 14:50 | 1896018 midgetrannyporn
midgetrannyporn's picture

Italian banks lever up, buy Italian bonds to infinity. Problem solved.

Sun, 11/20/2011 - 14:53 | 1896027 Zola
Zola's picture


Sun, 11/20/2011 - 14:55 | 1896032 rufusbird
rufusbird's picture

Kyle Bass gets to say more in this 6 minute interview than he did in the 24 minute interview in the BBC broadcast. Effective interviewer asks questions and lets him answer. Good insight on the Euro debt.


Sun, 11/20/2011 - 15:50 | 1896190 Stumpy
Stumpy's picture

That video was so "understandable", even for a foreign language speaker. No hesitation. Short sentences. Clear ideas.

Sun, 11/20/2011 - 15:00 | 1896045 Joebloinvestor
Joebloinvestor's picture

Get the Vatican to buy them. They deserve it.

Sun, 11/20/2011 - 16:58 | 1896373 junkyardjack
junkyardjack's picture

Good luck getting a dollar out of their collection plate

Sun, 11/20/2011 - 15:04 | 1896050 Dismal Scientist
Dismal Scientist's picture



Reality break: ZH readers are too parochial...

"There is a clear disconnect between what fund managers think / believe, and what is happening on German streets.

The real world (German voters) has, in general, not the slightest concern when it comes down to the "Euro". Nice theme on TV, but does not exist in your daily life.

"Take the city state of Berlin. The city has more debt than Argentina (over EUR 60bn). But the new SPD-CDU Berlin coalition government has just agreed to employ another 11.000 civil servants, and has come up with all sorts of welfare state goodies for voters... No sign of "austerity"... There are only 12 companies in Berlin that employ more than 500 employees... Unlike Argentina, Berlin has no underlying business model, except tourism (exactly like Greece)...

"A tiny portion of Germans try to copycat the "occupy"-movement, but these guys are organized by the usual left-wing suspects (Greenpeace, Green Party, attack movement, etc.) which do know how to exploit anti-market, anti-capitalistic sentiment in Germany (certainly prevailing for a long period of time). "Lehman" 2008 simply re-confirmed their views.

"However, one aspect of the drama has become very apparent: the politicians have successfully managed to blame the "banks" in total for all the ongoing trouble. "Bad governance" by German / European governments regarding fiscal policies is not discussed. The "banks" have caused all of these problems... No one discusses the excessive, debt-driven welfare states (organized by generations of politicians) in Europe that have reached the limits of refinancing while their respective demographics are deteriorating.

"So, while a huge part of the Germans may not like the "Euro" (see many polls), the same huge part is not at all concerned about the stability of the currency and/or places like Italy. Debt de-leveraging can take many years. Therefore the name of the game in Europe / the Eurozone is and can only be "muddling through", given the number of countries and political decision-makers involved. There is no quick fix and everybody understands this.

"Also, all lip-service apart, when push comes to shove German politicians expect the ECB to jump in and buy sovereign bonds directly. The "options" are: temporarily higher inflation (good to reduce government debt and to expropriate savers) or a defunct financial system. Politicians, Bundesbank and the ECB will of course go for the former. Buying sovereign bonds directly, truly, will only happen in the very last "second", i.e. when the "virtual" crisis has become a "real" crisis (from a German perspective, since the country is booming economically & mentally).

When pain is felt, action will happen. Not before. Good luck.


Sun, 11/20/2011 - 15:12 | 1896080 JW n FL
JW n FL's picture



How dare YOU! Sir!! How dare You! speak against the History being written and recorded every day!

The People are Sheep! and the Sheep must be led and fed! for they can NOT! care for themselves!

History is being presented by those would seek to help the Sheep!

This is not just another greedy exercise.. wealth grabs are for the benefit of those charged with the responsibilities of the World!

They Deserve Your Hard Earned Work! You are not smart enough to know what to do with it in the first place!

Give unto them what is surely for your own good! think not of yourself but of the well being of your children! They only wish to protect you from your ignorant selves!

You Sir are living proof that no good deed goes un-punished!

You should bow and Thank them for what you have rendered to them!


Sun, 11/20/2011 - 15:20 | 1896107 Dismal Scientist
Dismal Scientist's picture

Hhmm. The sheep are being herded towards to the tax and inflation pens. They are happy and complicit, the bleating idiots. I know you understand.

Sun, 11/20/2011 - 15:25 | 1896118 magpie
magpie's picture

Slight fraying at the edges. Insurance Cos bleating about the low interest rates and then being able to tear up the contracts.  And discussion of the "Riester" subsidized pension scheme.

Sun, 11/20/2011 - 15:31 | 1896139 Manthong
Manthong's picture

Geez.. the next thing you know someone is going to say everything is not wonderful in China.

Sun, 11/20/2011 - 15:18 | 1896100 topcallingtroll
topcallingtroll's picture

I suspect the pain is coming in the next few months.
Expect a slow grind down for gold until I decide to sell.

Aint selling yet.

Sun, 11/20/2011 - 15:26 | 1896120 Dismal Scientist
Dismal Scientist's picture

Pain is here for those in the front line. Sheeple are going to be shorn. Again, and again, and again. When you hear taxi drivers say 'what u fink about gold', then double up. The pain has not started yet.

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