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Is ECB's Non-Intervention Sending A Message To Belgium?

Tyler Durden's picture




 

Presented with little comment (Belgium spreads +26bps) - but with Fitch worrying over France and Dexia becoming more of an anchor, perhaps the ECB is applying its own special type of pressure to get the deal done - by not intervening.

Perhaps it is Olli Rehn's comments on fiscal austerity?

Greece is the standout as 2Y yields jump over 8% to a record 121.5% yield.

Chart: Bloomberg

 

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Wed, 11/23/2011 - 09:57 | 1906386 LawsofPhysics
LawsofPhysics's picture

Where is sudden debt?  We need some "on the ground" intel.

Wed, 11/23/2011 - 20:28 | 1908949 Buck Johnson
Buck Johnson's picture

Everything is coming apart and I bet alot of craziness will be happening these two days before the weekend.  There isn't enough money to bail them out.

Wed, 11/23/2011 - 09:58 | 1906391 SheepDog-One
SheepDog-One's picture

But...isn't the ECB surely going to 'intervene' at any second now? I've got my hopium pipe all ready here and everything!

Wed, 11/23/2011 - 10:00 | 1906411 Mike2756
Mike2756's picture

With what? More rumors? Given the carnage in equities, the u.s. 30yr is barely moving. Is it the next target for the vigilantes?

Wed, 11/23/2011 - 09:58 | 1906393 The 100 Trillio...
The 100 Trillion Dollar Man's picture

They need a leader who will do God's work.

Wed, 11/23/2011 - 10:18 | 1906498 Ethics Gradient
Ethics Gradient's picture

Just like Italy. Who incidentally are back to 6.982% on 10 year bonds. Spain are at 6.69.

When the sellers realise the ECB isn't buying quickly enough and it looks like they might lose more than they bargained for, I wonder what will happen.

Wed, 11/23/2011 - 11:23 | 1906759 swiss chick
swiss chick's picture

The ECB has Draghi, no...

Wed, 11/23/2011 - 09:59 | 1906394 LawsofPhysics
LawsofPhysics's picture

Hey Belgium, "Who runs Bartertown?"

Wed, 11/23/2011 - 09:59 | 1906396 Everybodys All ...
Everybodys All American's picture

Dexia ...

Wed, 11/23/2011 - 09:59 | 1906398 Fips_OnTheSpot
Fips_OnTheSpot's picture

Who from the non-existing Gobberment should care?

Wed, 11/23/2011 - 10:01 | 1906414 stop.snitching
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Anyone know what happened about 5 minutes ago to make futures fall from -70, to around -100?

Wed, 11/23/2011 - 10:08 | 1906453 slaughterer
slaughterer's picture

Tyler published his bearish interpretation of this morning's data trifecta at exactly that moment.  HFT text scanners locked onto ZH: every negative article and word from Tyler is another ES point lost. 

Wed, 11/23/2011 - 10:14 | 1906486 LawsofPhysics
LawsofPhysics's picture

Yes, clearly the bloggosphere gets the blame for this one.  Especially since the information published by Tyler has helped many position their options to profit from such a move.

Wed, 11/23/2011 - 10:10 | 1906465 IAmNotMark
IAmNotMark's picture

Pelosi was on TV without makeup?

Hey...as insane as the markets are right now, my excuse is as good as anyones!

Wed, 11/23/2011 - 10:02 | 1906420 LMAO
LMAO's picture

Yeah the ECB is trying to make the Belgian government to . . . . ohhh, wait a minute, never mind.

Wed, 11/23/2011 - 10:05 | 1906433 slaughterer
slaughterer's picture

When the ECB refuses to play whack-a-mole with any EU country, the formula is: GS technocrat on the way to replace their leader.  Who is the "quiet killer" (Farage), von Rompuy or ECB at this point?    

Wed, 11/23/2011 - 10:06 | 1906436 Tommy5454
Tommy5454's picture

Is the DAX up solely on Euro weakness? Is that really what it has come to? Diluting a currency is the only thing that props stock markets? They just had horrible manufacturing numbers and they are up...

Wed, 11/23/2011 - 10:09 | 1906461 slaughterer
slaughterer's picture

Dax is dangerous: spikes going both ways.  Only computers can trade it at this point.  

Wed, 11/23/2011 - 10:11 | 1906474 Tsar Pointless
Tsar Pointless's picture

Have you been in a coma or busy watching every episode of "Gunsmoke" over the past two years or something?

The US equity markets have levitated solely on the destruction of the $.

It's what all the cool Central Bankers are doing today!

Wed, 11/23/2011 - 10:06 | 1906437 EscapeKey
EscapeKey's picture

Nice country, you've got there. Shame, if anything were to happen to it.

Wed, 11/23/2011 - 10:08 | 1906451 monkeys.pick.bottoms
monkeys.pick.bottoms's picture

Patience, it's a show coming to a country near you soon.

Wed, 11/23/2011 - 10:08 | 1906454 firstdivision
firstdivision's picture

You're up the Rhine with no paddle.

Wed, 11/23/2011 - 10:09 | 1906462 Mitch Comestein
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Leave Brugge out of the carnage.  It is a great place.  And for a laugh, watch the movie "In Brugge."

Wed, 11/23/2011 - 10:14 | 1906484 Corn1945
Corn1945's picture

The ECB interventions aren't even working. The Italian curve is inverted with the ECB buying!

Wed, 11/23/2011 - 10:17 | 1906494 youngman
youngman's picture

I do not think the ECB can do anything now....it is whack a mole..but more like rabbits and they can have a litter every three days or something...the ECB can not keep up...we are all expecting hyperinflation...but what we are getting is Bond interest rate hyperinflation.....different....

Wed, 11/23/2011 - 11:37 | 1906535 LawsofPhysics
LawsofPhysics's picture

the interest is irrelevant, ALL paper is burning as more and more folks recognize that none of this will be paid back anyway.  Give us X to spend now and we will promise you 10,000 times X in return, really we will.

Yeah whatever.

Wed, 11/23/2011 - 10:53 | 1906616 eurobug
eurobug's picture

Well in Belgium this is now all over the news. The problem is that last time I heard, Belgium has to get around 80 billion from the markets next year. With Dexia's guarantee of about 65 billion on top, this almost doubles the amount Belgium has to borrow next year in the case of a severe crisis (and hence Dexia requiring the full guaranteed amount). Since the Belgian 10 year has now passed 5.5% (compared to 3.8% a mere month ago), this becomes extremely difficult to do.

Furthermore, don't forget that Belgium STILL does not have an official government after more than 500 days after the elections. Everything that is decided around Dexia is still done by the old "caretaker" government, with supposedly limited powers, no mandate from the voters, and little political consequences for the politicians involved. On top of that, the second largest political party, the "Partie Socialiste", which now leads the creation of the new government, is extremely socialist, and want to get almost all required extra money by squeezing everyone and everything that pays taxes or owns something of value, not by cutting in the (already ridiculous) expenses of this little country (e.g. you can get unemployment of around 1100 euro a month for your whole life here, followed by a generous pension. No time limits whatsoever). The other parties do not agree, and two days ago Elio Di Rupo, who leads the formation of the new government, offered his resignment. If this gets accepted, we can start all over again. Due to this, the European commission sent a warning to Belgium yesterday, warning that the budget for next year will most probably fail to meet (any) requirements. Guess why traders no longer trust Belgium...

Last but not least, there are 10 million Belgians. 65 billion in guarantees for Dexia comes down to 6500 euro per Belgian, or around 26K euro per family, just to keep ONE bank from falling over. For me this is a year's worth of salary. And don't forget that this is not the only Belgian bank in trouble. Look at the price of the KBC stock for instance, which is similar in size to Dexia. And there are many others.

Wed, 11/23/2011 - 11:36 | 1906801 LawsofPhysics
LawsofPhysics's picture

Thank you for the information Eurobug, now back to my animal spirits.  Volitility is awesome.

Wed, 11/23/2011 - 12:12 | 1906938 M.B. Drapier
M.B. Drapier's picture

perhaps the ECB is applying its own special type of pressure to get the deal done - by not intervening

It's how they pushed Ireland into external assistance.

Wed, 11/23/2011 - 12:12 | 1906939 Snakeeyes
Snakeeyes's picture

Some message got to Belgium!

Belgium Dexia Debt Woes, Germany's Debt Issuance Debacle - Obama Spares Two Turkeys (NOT Belgium and Germany)

http://confoundedinterest.wordpress.com

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