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EUR Tumbles To Lows On Report Merkel Rejects Raising Upper Limit On ESM Bailout Mechanism

Tyler Durden's picture


Having surged on earlier speculation that the Fed may hint at QE3, and follow up reports from RanSquawk that the Straits of Hormuz are either closed or in process of doing so, it is now time for the roundtrip, after Reuters just reported that hopes of EFSF-like expansion for the ESM have been dashed.


Summary: Risk On -> Risk Off


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Tue, 12/13/2011 - 11:33 | 1974027 ZDRuX
ZDRuX's picture

Deflation bitchez!

Tue, 12/13/2011 - 11:42 | 1974072 HedgeAccordingly
HedgeAccordingly's picture

risk OFF etn trading well -

Tue, 12/13/2011 - 13:26 | 1974617 Ahmeexnal
Ahmeexnal's picture

someone send Swinegela Merdekel to Saudi Arabia:

Tue, 12/13/2011 - 11:33 | 1974028 SheepDog-One
SheepDog-One's picture

Risk on = risk off!

Excuse me while I go find more velcro straps to secure my hockey helmet on tighter!

Tue, 12/13/2011 - 11:34 | 1974034 AngryGerman
AngryGerman's picture

haha, da germanz are doing it again! no mo dough for piigs! apparently need it for their own banks (more and more suspicion of commerzbank getting euro injection, as they do not seem to be able to raise required capital anywhere)

Tue, 12/13/2011 - 11:42 | 1974065 Captain Kink
Captain Kink's picture

Would you inject capital into a German bank?  Frau Merkel knows this, and she is rightly concerned.  There will not be any ECB printing, and nothing resembling Euro Bonds, either.  She is one tough broad.  I think she believes they can all muddle through together, without a serious implosion, and work toward the tighter EZ that she is building. 


Or, She is secretly planning the German exit as she recognizes that there is no saving the EZ.

Tue, 12/13/2011 - 11:47 | 1974094 AngryGerman
AngryGerman's picture

no exit by germany from eu. they cannot do it. german businesses won't allow it, especially allianz. 


it'll be muddling through, and tighter integration, what has been the plan all along since the inception of the whole thing.

Tue, 12/13/2011 - 12:08 | 1974217 CrashisOptimistic
CrashisOptimistic's picture


She believes Germany can muddle through without serious implosion while she talks them into a configuration where Germany dictates other nation's budgets.  Eventually the budgets will have a line item that says "Money Sent To Berlin".

At first, the EU's well being was on her agenda, along with Germany's.  Now, it's just Germany.  And so it should be for each of those countries' leaders.

Tue, 12/13/2011 - 12:14 | 1974251 AngryGerman
AngryGerman's picture

agreed. german controlled eu. it's a dick contest, and merckel appears to have the longest. other european budgets do not have the line in it yet, but other european economies are already have sending shitloads to germany in the last decade. just look at german gdp compared to other european countries in 2008/09/10. notice a trend there?

Tue, 12/13/2011 - 13:21 | 1974600 WhiteNight123129
WhiteNight123129's picture

Well, how about some DM printing?

Tue, 12/13/2011 - 11:35 | 1974039 transaccountin
transaccountin's picture

/es in another world. bad retail sales, inventory numbers, negative euro, oil rocketing, yet we are green.. right.

Tue, 12/13/2011 - 13:06 | 1974528 Ghordius
Ghordius's picture

yes! we are nearly there 

EURUSD has to touchdown the 1.3000 line or else

Princess EUR to kiss King Dollar's feet and then fly, fly towards 1.425 in spring

Tue, 12/13/2011 - 11:36 | 1974045 Lord Welligton
Lord Welligton's picture

My brain just shutdown.

Can take it any more.

Like Japanese water torture.

Tue, 12/13/2011 - 11:40 | 1974060 AngryGerman
AngryGerman's picture

more like US waterbording torture

Tue, 12/13/2011 - 11:49 | 1974099 Lord Welligton
Lord Welligton's picture

OK OK Stop.

I'll give all my money to John Corzine.

Tue, 12/13/2011 - 11:51 | 1974111 AngryGerman
AngryGerman's picture

he already had it, but forgot where he put it.

Tue, 12/13/2011 - 11:53 | 1974124 SheepDog-One
SheepDog-One's picture

More like waterboarding with the addition of a 2 foot long wooden dildo.

Tue, 12/13/2011 - 11:57 | 1974155 AngryGerman
AngryGerman's picture

sorry, corzine also had dildo and fogot where he put it.

Tue, 12/13/2011 - 12:56 | 1974470 Cast Iron Skillet
Cast Iron Skillet's picture

Water boarding isn't torture. It's nice. Rumsfeld said so - it's just a way of asking questions that gets valuable answers for the intelligence community.


Tue, 12/13/2011 - 11:38 | 1974051 No One
No One's picture


And Barack Obama once again proving he is the exact same puppet as GW, just with a darker material.

Tue, 12/13/2011 - 11:38 | 1974054 Tsar Pointless
Tsar Pointless's picture

Notice this comes out at 10:30 am ET here in "the States". Every day, that particular time rings important.

Oh, and try this on for size, from RanSquawk:

MP Parviz Sorouri of the Majlis National Security and Foreign Policy Committee has said that Iran plans to practice its ability to close the Strait of Hormuz, one of the world’s most strategically important chokepoints, which accounts for about 30% of the world’s seaborne oil shipments.

“Currently, the Middle East region supplies 70 percent of the world’s energy needs, (most of) which are transported through the Strait of Hormuz. We will hold an exercise to close the Strait of Hormuz in the near future. If the world wants to make the region insecure, we will make the world insecure,” ISNA quoted Sorouri as saying on Tuesday.

The complete article can be found at:

Tue, 12/13/2011 - 12:26 | 1974332 dcb
dcb's picture

is the time issue in the article, and I don't see what that has to do wit6h iran

Tue, 12/13/2011 - 12:29 | 1974353 Tsar Pointless
Tsar Pointless's picture

No. The time comment was referring to the Merkel announcement, which came out around 10:30 am ET here in the States.

I just threw in the Iran thingy for a pleasurable diversion for my fellow ZH-ers. I thought it would be much appreciated.

Tue, 12/13/2011 - 11:39 | 1974055 transaccountin
transaccountin's picture

hint of QE3 with improving con market data? UE is 8.6 and all the other crap data is up, how is there a hint of qe3

Tue, 12/13/2011 - 12:00 | 1974141 SheepDog-One
SheepDog-One's picture

Hint of QE3 with 'improving consumer market data'? What hint of QE3, and what improving data? Retail sales just did a faceplant...and who is hinting of QE3? For the 1,000th time I might add.

Tue, 12/13/2011 - 11:40 | 1974063 firstdivision
firstdivision's picture

Due to Mr. Market's reaction, I'd say expect nothing about QE3 and that current operations will resume as executed.  2:20 pm EST (fashionably late of course) will be interesting.

Tue, 12/13/2011 - 11:42 | 1974069 clones2
clones2's picture

FXE looks like it could really crack and waterfall starting today.  New 11 month low today...

USD is pushing new highs as well.

Somehow the market is up...

Tue, 12/13/2011 - 11:53 | 1974121 CvlDobd
CvlDobd's picture

Don't forget the outside chance of some bernanke bucks and a big intraday reversal. I hope not but it's always possible. Fuck, anything is possible these days.

Tue, 12/13/2011 - 11:57 | 1974154 SheepDog-One
SheepDog-One's picture

No one believes it anymore...the boy has cried wolf way too many times, and the last thing the puppet masters want is Obamas basement dwelling approval rating to go even lower by doing the most unpopular thing in america, 'handing free money to the rich'.

Tue, 12/13/2011 - 12:01 | 1974171 CvlDobd
CvlDobd's picture

I hope you're right!

May I borrow your hockey helmet?

Tue, 12/13/2011 - 12:03 | 1974181 Spastica Rex
Spastica Rex's picture

But there are no "rich" in America, only the "middle class." Denying support to beleageured job creators hurts everyone.

Tue, 12/13/2011 - 12:08 | 1974215 SheepDog-One
SheepDog-One's picture

OH theres rich, for sure, not much 'middle class' left though....Wall St banksters have never done better than today! All time record profits and bonuses...sure, it was all just handed to them by the US least thats ONE thing americans DO get is 'unfairness'. Just turn on any CNBC or other news media and there is a parade of UBER WEALTHY being paraded on the screen.....and when 'QE' is mentioned, americans know that is handing free money directly to them.

Tue, 12/13/2011 - 11:43 | 1974076 MFL8240
MFL8240's picture

Unbelievebale, where does it end?


Tue, 12/13/2011 - 11:44 | 1974080 SHEEPFUKKER

There's a rumor about a rumor to have a plan about a plan. 

Tue, 12/13/2011 - 11:46 | 1974088 Quintus
Quintus's picture

Now I get it. 

Cameron stands up for British taxpayers interests by refusing to agree to massive additional taxes on the Financial Services industry (Taxes to be spent anywhere except in Britain) = Catastrophic isolationism that will pauperise the UK as the other EU states gang up against them.

Merkel stands up for German taxpayers interests by refusing to put them on the line for additional ESM debt = No problem.  Just a politician doing her job defending national interests.

That's how the EU 'Works'.

Tue, 12/13/2011 - 11:50 | 1974108 AngryGerman
AngryGerman's picture

no you don't.

cameron stand up for UK banks being able to continue extracting trillions from markets by fradulent activities.

merckel stand up for German big business (i.e. Allianz) to keep on exporting as euro keeps german economy artificially undervalued.

both criminal. this is how eu works.

Tue, 12/13/2011 - 11:58 | 1974161 Quintus
Quintus's picture

Both are, as you say, morally dubious positions.

All I'm asking is when Barosso and his band of merry fools will stand up in public and claim that Merkel has isolated Germany, endangered the Euro, and will suffer 'Consequences'?

My guess - never.

Tue, 12/13/2011 - 12:02 | 1974178 AngryGerman
AngryGerman's picture

"hide your wife, hide your kids"....from the truth!!


of course Merckel has isolated Germany from the rest: isolated and well in charge.

german plan was always for greater integration and supranational institutions, following the examples of germany regarding fiscal policies and buba monetary austerity.

europe is slave to germany, but you cannot tell the slaves, because otherwise they would not like to be slaves anymore.

Tue, 12/13/2011 - 12:07 | 1974207 EscapeKey
EscapeKey's picture

"Fiscal union" = transfer in secrecy to South Europe. Merkel won't be popular getting through another proposal which will cost German taxpayers.

The way I see it, either Merkel is voted out, and the Euro collapses, in which case the Germans are blamed.

Alternatively, Cameron is painted as the scapegoat, the Euro collapses, and the Germans escape from blame.

It's a high stake game of poker.

Tue, 12/13/2011 - 12:17 | 1974269 AngryGerman
AngryGerman's picture

no: a fiscal union is the open transfer to Germany.

merckel won't be popular, but she doesn't need. game plan now is to force other countries to make themselves subject to pilicies that serve germany.

cameron already fell for the trap: only country that could have spoken out loudly against integrated fiscal union, and now there is a convenient way to silence uk once and for all.

Tue, 12/13/2011 - 12:29 | 1974351 EscapeKey
EscapeKey's picture

Fiscal union would, unless you wish to see mass defaults etc, entail transferring wealth to the south to keep them humming along for the foreseeable future. It is not simply "money goes to Germany".

Tue, 12/13/2011 - 13:11 | 1974548 Ahmeexnal
Ahmeexnal's picture

Eventually the sheeple awake.
When they do and realize that ONCE AGAIN those genocidal fucktards have lied to them, there won't be a germany to speak of.

Tue, 12/13/2011 - 12:07 | 1974204 Greater Fool
Greater Fool's picture

You're looking at pretexts and are right as far as they go.

The truth is that no government in England will stand for anything that even hints to the slightest degree that they ever may have to take the smallest marching order from Germany. And continental Europe is a good illustration of why they feel that way.

Tue, 12/13/2011 - 11:46 | 1974089 My Taint
My Taint's picture

But Goldman said the Euro was going to 1.42?

Tue, 12/13/2011 - 11:46 | 1974090 SLOMO66
SLOMO66's picture

The Markets are angry!!! D:

Tue, 12/13/2011 - 11:47 | 1974091 Aductor
Aductor's picture

So with FXE under 131, will Cramer call DEFCON 2 now?

Tue, 12/13/2011 - 11:49 | 1974097 Comay Mierda
Comay Mierda's picture

no QE3 today. spx will end up red

Tue, 12/13/2011 - 11:49 | 1974098 Cdad
Cdad's picture

Funny...just sad, on the BlowHorn [CNBC], they just cannot say being the truth.

In repsone to the Euro tumbling and the market full on reversing, Simon Hobbs of CNBC describes this as "taking the edge off of the market."  Couldn't say "causing a sell off" or " murderous reversal" or "panic enducing currency collapse."  Nope..."taking the edge off."  

Kind of like how that first shot of bourbon feels...or that drag on the first cigarette after work.  Aaaaah.

The death of ANY CREDIBILITY in this network is almost gruesome to watch.

Tue, 12/13/2011 - 11:59 | 1974164 SheepDog-One
SheepDog-One's picture

Fruitty Hobbs 'takes the edge off' with some Prep H on his wrecked bunghole.

Tue, 12/13/2011 - 11:50 | 1974104 slaughterer
slaughterer's picture

Merkel needs to be replaced by Abby Joseph Cohen.  

Tue, 12/13/2011 - 11:50 | 1974106 transaccountin
transaccountin's picture

/ES should be at 1075 already. What a con job

Tue, 12/13/2011 - 11:50 | 1974107 oogs66
oogs66's picture

i'm not even sure what this headline means, but this market is so screwed up it moves on anything

Tue, 12/13/2011 - 11:53 | 1974119 AngryGerman
AngryGerman's picture

lol, this is called "price formulation". ha! /sarc off

Tue, 12/13/2011 - 11:54 | 1974125 lizzy36
lizzy36's picture

Of course she rejected it.

They can't afford a larger Ponzi Scheme.

There is a MERE EUR40B of paid in capital.And the#2,3,4 contributors are france,italy and spain.The largest bailout candidates are the #3 and 4 contributors.

Pass the pot, for injections, then pass again for withdrawls, each according to their need. 

The funny thing it she should have gone for broke and said "we going to lever EUR40B 100x" market would have gone up 1000 points. Even though the ESFS is now a pay-day lender and ESM will not be much better, costanza market would have rocketed on christmkah hopium.

Tue, 12/13/2011 - 11:54 | 1974127 Village Smithy
Village Smithy's picture

Merkel has made the call. Amputate the problem, because gangrene is well established and the antibiotics are not working.

Tue, 12/13/2011 - 11:55 | 1974139 Quinvarius
Quinvarius's picture

I think the Euro is a technical buy here.  I think itis retesting the top of the downtrend it broke earlier this year when it crossed over 1.45.  This is the second time tapping it.  I'd wait to see if the defend the trading band that I know they have agreed to.  If nothere, it will have another shot around 1.25.  The true reality is that we are pring far more dollars than they are printing Euros.  And if a banking crisis in the US makes the dollar strong, a banking crisis in Europe should do the same for the Euro.

Tue, 12/13/2011 - 11:55 | 1974140 firstdivision
firstdivision's picture

Nice bounce off todays pivot point.  Good to see NYFRB algos are working as planned.  Wouldn't want anything to be priced correctly.

Tue, 12/13/2011 - 11:55 | 1974142 Squishi
Squishi's picture

these politicians should all be put in prison! 

Tue, 12/13/2011 - 11:58 | 1974157 YesWeKahn
YesWeKahn's picture

Tyler, please make a new ZH T-shirt available:

front: risk-on

back: rish-off

Tue, 12/13/2011 - 12:03 | 1974175 agent default
agent default's picture

QE3 may happen but the way things are going in the EU I am not sure the Euro will go anywhere.  PMs are a much safer way to play QE3 or expectations/hints of QE3.  Even with the present trend and prices, they are still a much better hideout from Dollar weakness/debasement than the Euro, or any other currency.  I am talking fully allocated or physical positions.  There are plenty of MF Globals out there.

Tue, 12/13/2011 - 12:04 | 1974193 SheepDog-One
SheepDog-One's picture

Wont happen during the next 12 months, its the most unpopular action with the american people by far, which they correctly identify as 'Handing piles of free money to the ultra rich'.

Unless its a clandestine under the table operation, no 'QE' will be announced.

Tue, 12/13/2011 - 12:10 | 1974222 AngryGerman
AngryGerman's picture

agree. QE can only occur on a global basis anymore, and with europe not being able to agree to anything, there won't be QE.

until proposal in march 2012 for eu crisis, nothing significant will come out of central banks. just some more miniscule adjustment to avoid the whole system coming down.

and then of course, nothing will be resolved in march, and the next summit in june is promised to bring definite answers. etc

it will be a slow death...

2008/09 was the last chance to save it. noone acted, so now the chance is gone.

Tue, 12/13/2011 - 12:21 | 1974295 agent default
agent default's picture

No QE will mean a violent resolution of the debt crisis.  Lets face it no politician has the balls for that.  In the end they will all decide to "save us", and the latter they decide to "save us" the more they will have to print.  I don't really understand what Europe is trying to do here.  Historically, debt crises of much smaller extent and magnitude have ended either with an outright default of devaluation/inflation.  They should default, but being the spineless, useless, clueless morons they are, they will print globally and print big.

Tue, 12/13/2011 - 12:14 | 1974245 agent default
agent default's picture

You  assume that QE3 will be anounced the same way as QE2 was.  Look at the facts: Interest rates are at all time lows, the M2 is on the rise, and despite the mess in Europe, the Euro is still at 1.32.  Bernanke is in the market, he is buying he is printing he is already in more QE mode, it's just that as long as he doesn't come out in the open and say so nobody realizes he is in QE mode.  And on more thing:  Banks have been hoarding cash lately ot only from Ben's QE crap but also from mass asset liquidations.   At some point in the future these cash  reserves will be brought back to the markets, and then everything will explode.  We are already in QE3, but we have a delay effect.  If he formally anounces QE3 it will in fact be QE4 or QE5.

Tue, 12/13/2011 - 12:04 | 1974190 GoldenGal
GoldenGal's picture

When does gold andsilver go back up?

Tue, 12/13/2011 - 12:04 | 1974197 My Taint
My Taint's picture

I can finally get that bargain basement BMW soon.

Tue, 12/13/2011 - 12:07 | 1974206 pmcgoohan
pmcgoohan's picture

Can someone explain why VXX is still down 2% today?

Tue, 12/13/2011 - 12:08 | 1974212 My Taint
My Taint's picture

B/c QE is coming. Today.

Tue, 12/13/2011 - 12:11 | 1974228 SheepDog-One
SheepDog-One's picture

Dream on.

Now, if we were to get a few days in a row where markets plunge down -10% or so, then there might be a possibility of it. But today, markets are only 15% from ALL TIME highs, so dont bank on some magical QE announcement from Santa, not gonna happen.

Tue, 12/13/2011 - 12:11 | 1974232 AngryGerman
AngryGerman's picture

nope. unless you mean quality expert named corzine

Tue, 12/13/2011 - 12:20 | 1974293 warezdog
warezdog's picture

Time to top off the tank and fill up all the empty 5 gal cans I can round up. Sorry to those that rely on heating oil for the winter, I suggest filling that tank TODAY!

Tue, 12/13/2011 - 12:37 | 1974393 Georgesblog
Georgesblog's picture

This is one more example of a fork being stuck in the "global recovery" nonsense. We are seeing the inability of government to skew public opinion. For their efforts over the past century, governments will take a whipping for perpetuating the fiat currency lie. The public gets that brunt of reality, and is quick to express dissatisfaction. Banks will fail and governments topple. This madness degenerates into a corporate slave state, which the banks wanted, all along. They now have the culture of dependency that will agree to anything to keep subsidized consumerism.

Tue, 12/13/2011 - 12:39 | 1974403 onarga74
onarga74's picture


Too big to fix

Tue, 12/13/2011 - 12:42 | 1974415 robertocarlos
robertocarlos's picture

If they print to save us and it ruins us instead then the printers will get the full blame. They might not print.

Tue, 12/13/2011 - 12:42 | 1974420 Georgesblog
Georgesblog's picture

The influences driving the market are simple. One day, the rumors of fresh milk at the Nanny State teat energizes activity. The next, after finding a dried up old cow, the market drops out, nursing on the knot in it's gut.

Tue, 12/13/2011 - 12:47 | 1974433 vote_libertaria...
vote_libertarian_party's picture

So trillions in gvt bond losses around the world is....bullish.


That is the conclusion with stocks up????


buy buy buy

Tue, 12/13/2011 - 14:31 | 1974919 warezdog
warezdog's picture

There is no sanity left in the market, the only thing left is a loud sucking sound which is directly related to liquidity leaving pensions and retirement hedge funds, once that is gone someone push the reset switch please.

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