Daily US Opening News And Market Re-Cap: November 10

Tyler Durden's picture

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BarryG's picture

Germany is blackmailing everyone else to bail out europe, for their benefit, so they dont have to...


jdelano's picture

So if I was a bond vigilante, I guess I'd move on to France while the ECB is trying to plug the hole in Italy?  

s2man's picture

With perhaps a side helping of Spain.

Nate H's picture

There is an irony with all the OWS movements going on, what ECBs stick save is doing/will do is a direct transfer of government wealth (or perceived wealth) to the short term traders (who buy in When Issued and sell to central banks at lower yield/higher price).


ECB balance sheet looks about as bad as the French Banks. How long will it be before they need recapitalization? Or as importantly, how long before market starts to ask that question?



Mike2756's picture

Central bank balance sheet? No such animal.

chubbar's picture

A dumb question for bond traders here (or whoever can answer), what is the difference between announcing the purchase of Italian bonds in unlimited amounts and the concept of "direct monetization" by the ECB of Italys debt? Is it a distinction without a difference or is it two completely different events? Thanks in advance.

chrisina's picture

"direct monetization" is when the central bank purchases a security directly from the issuer. This is forbidden by law (Art. 123 of the Lisbon Treaty) when said security is any form of credit instrument issued by Govt. or any public authority:


Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.


(NB: similar restrictions forbidding "direct monetization" of Govt. bonds apply for all other central banks  participating in the flexible exchange system, ie FED (FEDERAL RESERVE Act section 14b) BoE, BoJ, ....)



On the other hand, the central bank purchasing Govt. bonds on the secondary markets (ie from banks or any investor who purchased such securities previously) is perfectly legal as part of the open market operations that form the central bank's monetary policy.

For the ECB, purchase of Govt bonds on the secondary market are established within the so called Securities Markets Programme  (SMP)

detailed info and outstanding amounts of purchases at this link


Peter Pan's picture

What have they fixed to date? NOTHING

Who have they put in jail? NO ONE

What have they stuffed up? EVERYTHING

Who are they trying to fool? EVERYONE

What are the chances of them succeeding? ZERO

Racer's picture

However, he also said that the ECB should only buy bonds when markets are panicking


In other words: 'markets' are only allowed to go up, any sign of a drop and they get propped

ivars's picture

One more supporting prediction chart for deflation in the USA in end of 2011-beginning of 2012 and all the scenarios that follows:

1) Economy in recession from q1 2012 ( increased cash hoarding=reduction of money velocity main reason)

2) Stocks sharply down, most commodities down

3) Gold, silver stable until more money -MUCH more is pressed in

4) USDx up

Supporting charts

This prediction is valid for up to q4 2012 (with differing details visible in other charts)

CPL's picture



The I in BRIC is slowing right down.  India as far as a financial empires go is more important in the macro scale of things than any country in europe at the moment in time.

Infrastructure break down



Retarded thing is the oil production fields are right there.  I see this news every second day.  This in turn effects the WTI price directlym because there is no production larger on the north american continent.



Oil and Coal shortages.  More coal than oil right now.  Peak oil is always on the lips of folks.  But have you heard of peak coal?  No?  There's a reason.  Coal as a source of cheap, portable power and energy has been a human power standard in the generation of heat and electricity for 300 years.  We've been running out of the stuff for the last ten years.  Coal directly impact the cost of food as it is heavily used in power production of electricity and maintaining the cold chain.  Without the cold chain we would lose around half the civilian population in north america in a month.


Here's a good fluff article to run down the Peak Coal scenario as far as usage goes..





Remember peak-oil doesn't exist.  It is a figment of your imagination...especially when theft becomes the third position of trade proposition.




- US troops found with Israelis on the broder of Iran...nothing to see here, move along.  Just more wacked out religious, desert people with sun stroke wanting to go at it.  Both in Israel and Iran.


Piracy on the high rivers...China is getting pissed with the poverty it's created in pockets all over it's country.  Which in turn leads people to piracy.  So the best solution isn't to develop some type of industry in the area.  Better to just kill them and be done with it.


RiverRoad's picture

Ahh, the roosting chickens....home at last.  This whole Euro thing was a farce from the get go.  A wonderful way for the global oligarchies (@ GE) to keep their profits offshore in an appreciating currency while the US dollar went down the toilet as it had to for us to compete with the Third World.  NOW they want their moola back in the US (untaxed!) as the ground shakes in Europe.  Worked great for Europe too:  allowing them a phony pumped up fiat to buy their yachts with.