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Is The ECB Losing Its Appetite For PIIGS Bonds Again?

Tyler Durden's picture




 

The ECB just announced its bond purchases in the prior week, which came at €9.793 billion, a notable drop to the €13-14 billion purchased in the past two weeks. And while the cumulative total has now hit €154 billion (and we wish the ECB all the best as it seeks to sterilize an ever greater amount of bond purchases without a major operational failure), it appears that the ECB may be losing its appetite for transactions of this kind, which as is now known was the reason for Stark's departure from the ECB, and an indication of the growing chasm between Trichet and Merkel.The EURUSD, which just took out session lows, and is down 200 pips since the Friday close as it prepares to break 1.36 sure seems to think so.

As an indication of the disagreement within the ECB itself on the topic of open market debt purchases was the statement by ECB Executive Board member Jose Manuel Gonzalez-Paramo who today said that the bank’s purchases of government bonds are an “exceptional” measure and could have been avoided with a stricter fiscal framework. Cited by Bloomberg, Paramo said that "These types of unconventional interventions can only be seen as exceptional measures which would not have been necessary in the presence of appropriate institutional arrangements and credible rules for fiscal authorities," Gonzalez-Paramo said in a speech in Frankfurt today. “In light of the current crisis, the next major challenge for the European Union will be to design rules that are at the same time credible, effective and enforceable.”

Is the ECB preparing to halt the SMP program as it did earlier this year, and hanging Italy and Spain out to dry? If so, what does that mean about Greece (and its eventual/imminent bankruptcy)?

 

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Mon, 09/19/2011 - 09:54 | 1684282 SheepDog-One
SheepDog-One's picture

Finish it off with just ONE wafer thin mint sir? 

Mr. Creosote Blows Up - YouTube

Mon, 09/19/2011 - 10:01 | 1684313 ww2vet
ww2vet's picture

keep up the gold buying, zh asshole!

Mon, 09/19/2011 - 10:12 | 1684347 fuu
fuu's picture

It is on sale this morning.

BTFD!

Mon, 09/19/2011 - 10:24 | 1684401 SheepDog-One
SheepDog-One's picture

No worries about any of it here ww2pet, since most of my gold I bought at $500 avg.

Mon, 09/19/2011 - 09:53 | 1684283 Dick Darlington
Dick Darlington's picture

When can i do my eurozone break up dance?

Mon, 09/19/2011 - 09:55 | 1684294 Sir Real
Sir Real's picture

When life gives you PIIGS, make sausage and the Germans love their sausage.  Its all about presentation and some PMs as collateral wouldn't hurt.

Mon, 09/19/2011 - 10:01 | 1684310 RobotTrader
RobotTrader's picture

Wow, commodity massacre across the board as everyone seeks the safety and security of AA-rated Uncle Gorilla notes and the mighty, mighty, U.S. Dollar

Mon, 09/19/2011 - 10:08 | 1684338 Snidley Whipsnae
Snidley Whipsnae's picture

LOL...

In this case 'everyone' = Fed

Mon, 09/19/2011 - 10:37 | 1684469 SheepDog-One
SheepDog-One's picture

MomoChasers purpose is to keep the notion going that 'everone' is out there buying bonds....no one I know owns a Treasury note, its all banksters flipping to each other. And he knows it.

Mon, 09/19/2011 - 10:47 | 1684526 CapitalistRock
CapitalistRock's picture

Heck, MOST people I know own defacto treasuries by sitting in cash thinking they are on the sidelines. The banks simply buy the treasuries with their cash.

Sell your fiat paper and save gold. Now.

Mon, 09/19/2011 - 10:20 | 1684386 snowball777
snowball777's picture

More like the one guy with a functioning arm in a gym full of paraplegics.

Mon, 09/19/2011 - 10:26 | 1684410 SheepDog-One
SheepDog-One's picture

The Dollar is worthless paper, no matter how much that turd may bob up to the surface against other worthless fiat, and Treasuries have no treasure in them at all.

'Safety'? Only for the fully retarded.

Mon, 09/19/2011 - 10:02 | 1684319 treemagnet
treemagnet's picture

My Dad was tell me the other day about a time when they had a real stock market and even countries kept their houses in order - of course, I also think he's got dementia, but what a thought!

Mon, 09/19/2011 - 10:03 | 1684320 bania
bania's picture

looks like gold decided to go cliff jumping just now

Mon, 09/19/2011 - 10:19 | 1684383 Snidley Whipsnae
Snidley Whipsnae's picture

US equities are off the cliff ... dj down 225

trade some more of your labor for paper...

got gold?

Mon, 09/19/2011 - 10:27 | 1684415 SheepDog-One
SheepDog-One's picture

Commodities down, certainly not making the case that QE3 unicorns are on the horizon.

Mon, 09/19/2011 - 11:00 | 1684583 pazmaker
pazmaker's picture

looks like everything is jumping off the cliff today in commodities and equities

Mon, 09/19/2011 - 10:03 | 1684322 fdisk
fdisk's picture

Gold just collapsing going up 1 week and losing everything in 2 hours.

Mon, 09/19/2011 - 10:28 | 1684424 SheepDog-One
SheepDog-One's picture

Thats the sign the banksters know the printing press has been unplugged.

However, we have not therefore printed any LESS at all.

Mon, 09/19/2011 - 10:04 | 1684327 aleph0
aleph0's picture

Tyler , I love your talent with words, but I just wish you would NOT keep saying "imminent" !

;-)

Mon, 09/19/2011 - 11:23 | 1684724 Ghordius
Ghordius's picture

lol, had the same thought a few times

here "imminent" probably means "next weeks" or "this month"

Mon, 09/19/2011 - 10:05 | 1684331 oogs66
oogs66's picture

when will the ecb be really questioned about its solvency?

Mon, 09/19/2011 - 10:17 | 1684368 Marco
Marco's picture

Central banks with liabilities in their own fiat currency are _always_ solvent.

Mon, 09/19/2011 - 10:05 | 1684333 Dapper Dan
Dapper Dan's picture

Tyler this should have been super double bold font!

would not have been necessary in the presence of appropriate institutional arrangements and credible rules for fiscal authorities

 

Mon, 09/19/2011 - 10:10 | 1684344 DirtMerchant
DirtMerchant's picture

So the same guys that got them into this mess with less than credible rules and policies are now going to buckle down and write credible ones?

So they now openly admit they didn't know what they were doing when the current rule set was written, but now their smarter and going to fix it?

Brilliant! (in my olde English voice)

Mon, 09/19/2011 - 10:16 | 1684365 Snidley Whipsnae
Snidley Whipsnae's picture

Looks like another major gold sell off by central banks/bullion banks is underway... Not surprising with Bennys 2 day meeting coming up in a couple of days.

The Asians say 'Thanks Benny'! lol

Keep selling gold to supress it's price Benny... Sooner or later you will destroy the dollar and the central banks that are helping with gold supression will achieve the same thing... fiat collapse.

Got gold?

Mon, 09/19/2011 - 10:29 | 1684428 SheepDog-One
SheepDog-One's picture

Banks dumping their paper gold, biggest sign I can think of to foretell Wednesdays FOMC train derailment.

Mon, 09/19/2011 - 10:36 | 1684464 carpman
carpman's picture

Exactly, and just in time for Diwali.

Mon, 09/19/2011 - 10:28 | 1684421 dasein211
dasein211's picture

Hmmmmm seems like maybe some got a little inside info on no QE3. Or perhaps they gotta knock it down as far as possible before the announcement. I cant help but think that if there is no QE3 announcement the collapse down will be epic. But if i were benny and I knew greece was going down would i blow my wad BEFORE the inevitable? No... Perhaps he has to wait until after greece blows up. No sense in bringing a knife to a chain reaction. So gold might blow up big here- im a buyer of more for sure if that happens!- but you cant risk bringing out your hugh move only to have it wiped out by greece news.

Mon, 09/19/2011 - 10:35 | 1684452 SheepDog-One
SheepDog-One's picture

Bernank has cried wolf and carrot and sticked everything so much he can only disappoint, best case. Watch on Wednesday as everyone is trying to figure out 'What did Ben really say?' reading the 'keywrord jumble' reading the tea leaves....theres no diamond encrusted Tiffany trunk full of bottomless dollars for all delivered by Bernank. 

Mon, 09/19/2011 - 12:40 | 1685093 GittyUP
GittyUP's picture

I dont know when the gold crash will happen and it might be 3-5 years until it does but its going to be one hell of a crash.  Cant wait....

Mon, 09/19/2011 - 10:39 | 1684488 lizzy36
lizzy36's picture

ECB setting a sweet pace for $540 bln a yr.

Mon, 09/19/2011 - 10:49 | 1684533 msmith
msmith's picture

EURUSD big downside ahead. http://bit.ly/o36OSf

USDCAD looks very bullish http://bit.ly/ncvFDL

Mon, 09/19/2011 - 10:52 | 1684555 CapitalistRock
CapitalistRock's picture

The fed can actually surpress the price of gold easily. For a while. The gold market is small enough that a small currency debasement is the only price paid for massive gold shorts that can be settled in cash. This doesn't work forever, of course, but it is clearly in play.

Sell your fiat paper and save gold. Ben is holding the price down for you.

GLD trading at a 2% discount. There's a damn good reason. Own physical gold and get a shovel and lots of concrete.

Mon, 09/19/2011 - 13:12 | 1685220 Curtis LeMay
Curtis LeMay's picture

The ECB's Gonzalez-Paramo said: “In light of the current crisis, the next major challenge for the European Union will be to design rules that are at the same time credible, effective and enforceable.”

Or in other words, we have no idea how we got into this mess, there is no way 17 countries will ever agree to one policy to solve this mess (after someone does in fact come up with a policy we could try), but maybe someday in the future there we'll figure something out...and when we do it'll be "credible, effective and enforceable".

Yeah, right.

The euro will by that time long be a thing of the past - thank God!

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