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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SheepDog-One's picture

Finish it off with just ONE wafer thin mint sir? 

Mr. Creosote Blows Up - YouTube

ww2vet's picture

keep up the gold buying, zh asshole!

fuu's picture

It is on sale this morning.


SheepDog-One's picture

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

Dick Darlington's picture

When can i do my eurozone break up dance?

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.

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

Snidley Whipsnae's picture


In this case 'everyone' = Fed

SheepDog-One's picture

MomoChasers purpose is to keep the notion going that 'everone' is out there buying one I know owns a Treasury note, its all banksters flipping to each other. And he knows it.

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.

snowball777's picture

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

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.

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!

bania's picture

looks like gold decided to go cliff jumping just now

Snidley Whipsnae's picture

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

trade some more of your labor for paper...

got gold?

SheepDog-One's picture

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

pazmaker's picture

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

fdisk's picture

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

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.

aleph0's picture

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


Ghordius's picture

lol, had the same thought a few times

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

oogs66's picture

when will the ecb be really questioned about its solvency?

Marco's picture

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

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


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)

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?

SheepDog-One's picture

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

carpman's picture

Exactly, and just in time for Diwali.

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.

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. 

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....

lizzy36's picture

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

msmith's picture

EURUSD big downside ahead.

USDCAD looks very bullish

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.

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!