This page has been archived and commenting is disabled.

As Europe Desperately Attempts To Talk Down Bond Yields Further, Bundesbank Finally Says "Nein"

Tyler Durden's picture





 

Following two days of desperate attempts by the ECB to talk down record peripheral bond yields without any actual action, it is only logical that while Merkel is on holiday, we get a third day of talking to buy some time purely thanks to rhetoric and jawboning, before the Chancellor comes back and spoils the party. Sure enough, here it comes via French Le Monde, whose host nation knows very well that after Spain and Italy, France is next:

  • ECB PREPARING TO BUY SPANISH, ITALIAN DEBT, LE MONDE SAYS

More from Reuters:

Euro zone governments and the European Central Bank are preparing to intervene on financial markets to help bring down Spanish and Italian borrowing costs, French afternoon daily Le Monde reported on Friday.

 

The newspaper, which cited unnamed sources, said the ECB was willing to take part in the action on condition that governments agreed to tap the bloc's bailout funds, the European Financial Stability Facility and the European Stability Mechanism.

 

Under the plan, the EFSF could be activated first to purchase Spanish and Italian debt on the primary market, followed by the ESM in September, after it becomes operational.

 

The ECB would at the same time buy Spanish and Italian government bonds itself on the secondary market.

 

The newspaper said the plan was days or possibly weeks away from being finalised and that officials were holding consultations on Friday about it.

Ah, the good old unnamed sources which always appear in times of need... and of Merkel summer vacations. But while the cat may be away, the Bundesbank has decided to take at least some matters into its own hands:

  • BUNDESBANK SAYS IT HASN’T CHANGED STANCE ON ECB BOND BUYING, REMAINS OPPOSED TO FURTHER BOND BUYING BY THE ECB

More from the WSJ:

"Germany's central bank remains opposed to further government bond purchases by the European Central Bank, but isn't against using the euro-zone's temporary rescue fund (European Financial Stability Facility) doing so to drive down soaring sovereign borrowing costs, a Bundesbank spokesman said Friday.

 

Germany's central bank regards further bond buys by the ECB as "problematic" and "not the most sensible" instrument for overcoming the debt crisis, in particular because they create false incentives for governments, the spokesman said."

And then, just to confirm that nobody in Europe has any clue what is going on and its politicians are once again simply making things up on the fly, we get this:

  • HOLLANDE-MERKEL TO SPEAK BY PHONE AT 1 PM ON HELP: LE MONDE

And the logical response:

  • STREITER SAYS `DOESN'T KNOW' ABOUT MERKEL-HOLLANDE CALL

Sigh - when one sees such relentless lies and confusion what else can one say but... "Europe."

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 07/27/2012 - 06:50 | Link to Comment LULZBank
LULZBank's picture

NEIN NEIN NEIN Bitchezz!!!

Fri, 07/27/2012 - 07:02 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Heh heh......if you want my money.....you're seriously gonna have to pay me. No......I'm not kidding.

 

Fri, 07/27/2012 - 07:11 | Link to Comment Sudden Debt
Sudden Debt's picture

I'll give you all the money I have if you give me 1 ounce of silver for every 23 euro I give you. deal?

Fri, 07/27/2012 - 07:13 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

You want real money? Crap........that changes everything.

 

Fri, 07/27/2012 - 07:14 | Link to Comment malikai
malikai's picture

All this week's bullshit has only brought the EURUSD cross back to last thursday as of yet. If it weren't for the friday IMF/WB pump-job I'd be short and hard.

Fri, 07/27/2012 - 07:07 | Link to Comment Dr Benway
Dr Benway's picture

C'mon you gotta see the humour in all this.

 

The global easing cocktease is approaching climactic apex!

Fri, 07/27/2012 - 07:12 | Link to Comment Sudden Debt
Sudden Debt's picture

it's monkey see monkey says and Schwein beats monkey for doing so.

GOLD BEATS AIR EVERY TIME!

Fri, 07/27/2012 - 07:18 | Link to Comment EscapeKey
EscapeKey's picture

Yes, I particularly like that all bad earnings news are just casually discarded.

Apple missed? Doesn't matter.

Facebook is a shambles? Doesn't matter.

...

Another EU bureaucrat lies through his teeth? RALLY!

Fri, 07/27/2012 - 08:10 | Link to Comment gatorengineer
gatorengineer's picture

My favorite is the 200 to 1 PE on Amazon......

Fri, 07/27/2012 - 07:08 | Link to Comment 1000pips
1000pips's picture

Not do fast. It appears the EU is presenting a unified front to restore confidence just in time for-the Olympics! Just like I have said for months!

U think the Euro if finished, u gotta be crazy. Euro/USD to $1.30 by the end of this quarter. You have been warned.

Fri, 07/27/2012 - 07:12 | Link to Comment slaughterer
slaughterer's picture

First off,

(1) ECB does not precommmit, notwithstanding requests for us to "believe" in its commitment to protect the €

(2) "Le Monde" is clearly making it up on the fly--their lies are extraordinary.

(3) What about the 2Q earnings disappointments and the overall macro deterioration?  Does that go away now magically?

 

Fri, 07/27/2012 - 09:29 | Link to Comment Galactic Superwave
Galactic Superwave's picture

This is a sloppy game of chess played by the leaders of Europe. Instead of chess pieces, they use words to try and entice the opposition to make a bad move.

Fri, 07/27/2012 - 07:14 | Link to Comment slaughterer
slaughterer's picture

All JUST IN TIME to keep Goldman from stopping out of its latest long Span/Ital sovereign bonds trade recommendation. 

Fri, 07/27/2012 - 07:23 | Link to Comment fonzannoon
fonzannoon's picture

GS and MS just reiterated their awesomeness reccomendation on facebook. MS was extremely optomistic.

Fri, 07/27/2012 - 07:17 | Link to Comment battle axe
battle axe's picture

Why does anyone listen to anyone but Merkel? If Germans say Nein then that is all she wrote. Blind leading the blind, leading the blind. 

Fri, 07/27/2012 - 07:40 | Link to Comment 1000pips
1000pips's picture

Not true at all. U forget that China is the one who decides what Germany will and will not do. Because of this the Euro will be fine. Forget what you think you know. In fact, trade against what you think.

Fri, 07/27/2012 - 08:21 | Link to Comment battle axe
battle axe's picture

Have you seen the numbers from China lately? Even though they lie thru their teeth and are inflated, they still are on a trajectory one way, down. 

Fri, 07/27/2012 - 06:52 | Link to Comment put_peter
put_peter's picture

Coordinated chaos made in Europe.

Fri, 07/27/2012 - 06:52 | Link to Comment LULZBank
LULZBank's picture

If we can do one with Merkel... for fitting LULZ

http://www.youtube.com/watch?v=QjyiAyo_3vw&bpctr=1343388111&skipcontrinter=1

Fri, 07/27/2012 - 06:54 | Link to Comment DavidC
DavidC's picture

Sigh - I don't swear very often but this is just getting fucking ridiculous.

DavidC

Fri, 07/27/2012 - 07:00 | Link to Comment EscapeKey
EscapeKey's picture

The fact that our "glorious leaders" never do anything but lie, or that the market ALWAYS responds positive to said lies?

Fri, 07/27/2012 - 07:13 | Link to Comment Ghordius
Ghordius's picture

+1 may I note that calling them "glorious leaders", even in sarcasm, is a bad habit? Most of them are elected representatives of the people. The proper title is public servants.

Having said that, markets take a Central Banker seriously because - until disproven - they have the "street cred" of actions behind their threats. So Draghi is indeed putting something on the balance scales.

Fri, 07/27/2012 - 07:20 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Sigh - I don't swear very often but this is just getting fucking ridiculous.

 

Oh just wait......we'll show you full tilt retard. This is nothing.

 

Fri, 07/27/2012 - 07:15 | Link to Comment Sudden Debt
Sudden Debt's picture

if you see the approach is good enough to fool to lemmings, why not?
It's summer and I don't think people will be all to happy when they come back and massive layoffs await them when the economy explodes.
Let's give the people time untill august to adjust for the beatings that await them.

Fri, 07/27/2012 - 07:25 | Link to Comment LULZBank
LULZBank's picture

You mean its gonna get THAT serious in 4 days???!!!

Fri, 07/27/2012 - 07:37 | Link to Comment Sudden Debt
Sudden Debt's picture

the number of big companies that are laying off 5000, 10000, 15000 is quite big actually, It's like every day on the econo sites there are 2 to 3 big once starting to cut.
and when the big once cut, the small onces just go belly up.
the number off businesses going out of business is at a record ALL TIME record high right now here in europe.
I'm going back to work on monday, and I also got the memo to start with the MT meeting first to talk numbers. Before the holliday, we had to give our short lists of disposable people. I didn't give any and so did a lot of other managers. we'll see.

Fri, 07/27/2012 - 07:55 | Link to Comment LULZBank
LULZBank's picture

Thank you.

You are quite smart and well informed. I could have never guessed! :D

Fri, 07/27/2012 - 08:09 | Link to Comment Ghordius
Ghordius's picture

and he has a heart - pardon, a core - of delicious nougat. I remember the times when he was hoping for low prices of silver for Christmas...

BUT he is Belgian, so let's put some Farage at work http://youtu.be/F3e6IWsJA9U

Fri, 07/27/2012 - 08:42 | Link to Comment LULZBank
LULZBank's picture

Jeez.. some people are so tense today! 2 down arrows for wtf??

Im a peaceful sort of guy. I got nothing against Belgians.

Fri, 07/27/2012 - 06:54 | Link to Comment Yen Cross
Yen Cross's picture

 This crap is such a farce! The EFSF/ESM is only funded to the tune of 150-200 b euros. The ECB can't do shit until Germany votes on it. So what if Hollande wants to gab with Merkel? The dip shit algos are just trading tape bombs now.

Fri, 07/27/2012 - 06:55 | Link to Comment GS-DickinDaMuppets
GS-DickinDaMuppets's picture

WTF!  SOS (Same Old Sh!t)

 

...Doing GOD's work...GS-DickinDaMuppets

Fri, 07/27/2012 - 06:55 | Link to Comment Doubleguns
Doubleguns's picture

It would certainly make a great comedy movie. Unless your living through it. Maybe return to a monarchy would be better for Europe. Decisions could then be made.

Fri, 07/27/2012 - 06:57 | Link to Comment Haager
Haager's picture

Merkel ruling ... Dictatorship is not that different from monarchy.

Fri, 07/27/2012 - 07:12 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Hey....if you don't want Merkel's money I'm pretty sure you just have to say so.

 

Bunch of European pussies........wow..........did I just actually say that out loud?

 

Forget I said anything......my delete button doesn't seem to be working this morning......yeah......need to get that fixed.

 

 

Fri, 07/27/2012 - 07:16 | Link to Comment Sudden Debt
Sudden Debt's picture

at least in a monarchy, you only need to hand 1 family when the shit falls apart.
Now it will resemble a bankers genocide if they want the hang all the elite!

Fri, 07/27/2012 - 07:05 | Link to Comment LULZBank
LULZBank's picture

Lies and broken promises are always favoured by the Feudal classes.

"Baffle with bullshit" and legal complications & loopholes for the Technocrats.

Expecting anything else makes YOU a moron.

Fri, 07/27/2012 - 06:57 | Link to Comment mark7
mark7's picture

NEIN means Yes unless measured and measurements are not allowed. This is typical Merkel quantum talk.

Fri, 07/27/2012 - 07:18 | Link to Comment Sudden Debt
Sudden Debt's picture

NO MEANS NO!!

http://www.youtube.com/watch?v=saMNVS6lkX0&sns=em

it's a super clip :)

Fri, 07/27/2012 - 06:57 | Link to Comment Neethgie
Neethgie's picture

they are at the final point of the game now, talking the markets into doing it for them, we of course know that this wont work.

but as long as it does for a day or so the eurocrats can drink bollinger in the sun

Fri, 07/27/2012 - 07:19 | Link to Comment youngman
youngman's picture

I think they know THEY are in the final moments of the game...and are GAMING it....It would not suprise me that these so called leaders are playing the stocks..the FX...the bond markets as they spew the lies to feather their nest....they know in two years they will not have a job nor a reputation...but they also know that if they play the markets here..there is a lot of money to be made and fast...

Fri, 07/27/2012 - 06:59 | Link to Comment LULZBank
LULZBank's picture

Nein means Yes unless she crosses her legs.

Even then its debatable...

Fri, 07/27/2012 - 06:59 | Link to Comment mark7
mark7's picture

I don't see any hot babe photos in the article like in the article saying something about Argentina. This is bullshit! 

Fri, 07/27/2012 - 07:08 | Link to Comment LULZBank
LULZBank's picture

+100

We need more than just the pop corn now. This end game is playing out like some soap or sitcom where even the dead characters somehow come back to life.

Fri, 07/27/2012 - 07:39 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

The nanny state is late on my popcorn delivery. I'll just have to sit here and tittle my thumbs until they get here.

 

I don't see any hot babe photos in the article like in the article saying something about Argentina. This is bullshit!

 

The hot Argentinean babes are in the process of renegotiating their contracts.......stick tight......maybe tomorrow.

 

Fri, 07/27/2012 - 07:11 | Link to Comment Bobbyrib
Bobbyrib's picture

Go to Google and type "Angela Merkel."

Fri, 07/27/2012 - 07:02 | Link to Comment I should be working
I should be working's picture

HALTEN SIE SICH BITCHEZ...

Coordinated political bullshit.

Fri, 07/27/2012 - 07:04 | Link to Comment milanitaly
milanitaly's picture

Is bundesbank buying italian btp right now?

Fri, 07/27/2012 - 07:07 | Link to Comment mark7
mark7's picture

In the end ECB will print money and as a deal sweetener, sell UK to some American hedge fund. There are some troublesome natives in the island but should not be a big problem in the long run.

Fri, 07/27/2012 - 07:25 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

This says it all... "In the end ECB will print money"... their are no mkts that are free.

Currency wars typically last 10 years or longer. This one started in ~ 2010 and will go back and forth for many more years.

Anyone expecting a quick and dramatic end to the Euro Currency will be disappointed.

Anyone that believes that gold will not be reintroduced as a partial backing for all fiat currencies will be disappointed.

Any bots that drive up equities because some technocrat tells another whopper will be rewarded for their preannouncement puts. How much did Mario make on the 26th after his comments?

Equity mkts are notorious for running hither and yon with their hair on fire... This is human nature via bots on display and human nature has not changed.

IOW... Why get caught up in the day to day bs of a worldwide currency war that will rage for a decade or more?

Better to establish a safe position and hold it... Unless, like Mario, you are capable of moving mkts with bs 'announcements'... and trading to your own advantage because you are creating mkt moves.

Fri, 07/27/2012 - 07:54 | Link to Comment Ghordius
Ghordius's picture

+1 for remembering that currency wars usually last 10+ years. And the expectation for a quick and dramatic end of the EUR is just the fruit of endless propaganda that started even before the EUR was born. Ideally, one or two countries should exit and reenter later - just to prove this point - but boy, the human misery this would cause is just sickening.

Gold reintroduced as partial backing? Well, you are talking my book, so +1, but is there not the spectre of this Chinese demand for an uber-SDR? A gold scenario would put China in a different position than a Grand SDR Solution.

Nevertheless, gold reintroduced as partial backing could kill the EUR. The whole point of the currency union is "to find something that is similar to gold backing". With a partial or full gold backing, there is no need for a currency grid, an exchange mechanism or any similar deals. But this is in the hands of the masters of the global reserve currency. The Reign of King Dollar is not over.

And just judging Draghi from an historic perspective, what he has done up to now is quite "orthodox", for a Central Banker. Yes, he is a former squid, so he is suspect until proven innocent, but until now he is managing it in the "approved way".

But should "the markets" call on his cards, and should he be proven to have wielded an empty bluff, then it gets interesting.

Fri, 07/27/2012 - 08:29 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

At minimum two factors are stopping a return to a hard gold standard:

1) Continuing faith by all sectors of the public in fiat currencies because these currencies are mandatory for socialist, first world govs that are totally reliant on rubber fiat. A take-away of the rubber fiat would cause civilization as we know it to disappear... Not saying this is a bad thing but definitely worth serious thought before proceeding.

2) We will have 'two tiered' money systems... Gold for some settlements (probably international), paper for others (probably local)... and even trade for some others; ie, physical commodity swaps. BTW, as long as no real audits of  soverigns gold holdings are allowed what is to stop soverigns from making outrageous claims regarding it's 'gold holdings'? By reintroducing gold in this manner soverigns can claim that their fiats are 'backed by gold' and they hope that this will engender faith in their paper. They are terrified that faith will be lost.

Of course the new system will fail but it will allow a few more years of 'civilization as we know it'.... Mr Market has been beaten to a pulp but he is still there... waiting.

"With a partial or full gold backing, there is no need for a currency grid, an exchange mechanism or any similar deals."

Fri, 07/27/2012 - 07:08 | Link to Comment magpie
magpie's picture

Long tickets out of London...

Fri, 07/27/2012 - 07:10 | Link to Comment Yen Cross
Yen Cross's picture

 Italian and Spanish bonds are trading in lockstep! Both off 20.5 bps . What a joke!

Fri, 07/27/2012 - 07:14 | Link to Comment mark7
mark7's picture

So how much you lost this time? :)

Fri, 07/27/2012 - 07:18 | Link to Comment Yen Cross
Yen Cross's picture

Flat since Tuesday.

Fri, 07/27/2012 - 07:10 | Link to Comment firstdivision
firstdivision's picture

ahhh the "unnamed" source route.  here we go again with all the rumors and vol going haywire.  buy the dips, sell the rips.

Fri, 07/27/2012 - 07:12 | Link to Comment Wakanda
Wakanda's picture

Sigh - when one sees such relentless lies and confusion what else can one say but... "Europe."

I might hope that when it is our (US) turn to face insolvency and dissolution we will do so with courage and a sense of adventure as we reinstate liberty, honest money, and individualism that once made this the greatest nation on Earth.

From my heart I hope...

Fri, 07/27/2012 - 07:17 | Link to Comment malikai
malikai's picture

I'll have some of what you are smoking.

Fri, 07/27/2012 - 07:25 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

quick look over here, mitt said naughty things about the olympics, which we all must watch you MUST WATCH, while the gov's solve all our problems out of sight out of mind.

Fri, 07/27/2012 - 10:34 | Link to Comment TPTB_r_TBTF
TPTB_r_TBTF's picture

if you still have some "hope", then you know who to vote for.  That way you wonT have to rebuild it; someone else will.

Fri, 07/27/2012 - 07:12 | Link to Comment nmewn
nmewn's picture

Lets see...they have a debt problem, right?

"Euro zone governments and the European Central Bank are preparing to intervene on financial markets to help bring down Spanish and Italian >>>borrowing<<< costs, French afternoon daily Le Monde reported on Friday."

Perfect!!!

Fri, 07/27/2012 - 07:21 | Link to Comment Voltaire
Voltaire's picture

*cough cough*  "German finance minister Schaubble welcome ECB's Draghis comment made yesterday saying the ECB is to do what is needed"

 

Fri, 07/27/2012 - 07:21 | Link to Comment hugovanderbubble
hugovanderbubble's picture

NO QE3

Fri, 07/27/2012 - 07:26 | Link to Comment GetZeeGold
GetZeeGold's picture

 

It would be crazy to call it that.

 

Fri, 07/27/2012 - 07:29 | Link to Comment elwu
elwu's picture

It is irrelevant what the Bundesbank says about bond buying or not by the ECB.

Because the majority in the ECB is held by the spendthrift GIPSIFs.

So they can (and regularly do) overvote whatever the German representatives say.

As it was the case since the start of the EMU.

Fri, 07/27/2012 - 07:49 | Link to Comment fpajak
fpajak's picture

Bonjour, ici Paris, France.

Having different European voices (France, Germany, Italy, etc ...) conflicting about what to do in Europe is POSITIVE:
- it allows Europeans not to make bad decision for the futur of the eurozone,
- it allows a contradictory debate from which can emerge good decisions,
- the method is : meeting, talking, thinking => take time to make good decisions for everybody.

Fri, 07/27/2012 - 08:01 | Link to Comment silverdragon
silverdragon's picture

Silver is on the up

Fri, 07/27/2012 - 08:13 | Link to Comment gatorengineer
gatorengineer's picture

Tell me again what is stopping Benny from Buying Italian and Spanish bonds? in the name of Price stability, he can buy them from US banks...............  All in the name of price stability.......

Fri, 07/27/2012 - 08:36 | Link to Comment shovelhead
shovelhead's picture

Bath salts= eating faces.

Unicorn farts= buying Euro debt.

Use with caution.

Fri, 07/27/2012 - 09:12 | Link to Comment Winston of Oceania
Winston of Oceania's picture

-Deutschland Says No to Further War Reparations-  Sorry Frogs it's no longer 1918

Fri, 07/27/2012 - 09:18 | Link to Comment mick_richfield
mick_richfield's picture

OK, I finally get it.

The efficient market hypothesis is as old and wrong as phlogiston chemistry.

We could learn a lot more about the way markets really work by reading Thomas Kuhn's The Structure of Scientific Revolutions.

It's obvious that the bond markets want to believe.  Whether that desire is implemented as herd thinking in a free market, or implemented as central control by semi-governmental criminals with derivatives doesn't really matter.

Just like Kuhn showed that real scientific progress does not happen in aa nice linear orderly fashion, but rather in the manner of paradigm establishment, growth, and eventual failure and replacement -- it's exactly the same way with markets.

This is not a license to print money -- because we still have the fact that the market can cling to the old paradigm longer than you can stay solvent.  It's not "irrational" -- it's just stuck in the old paradigm.

So the way you position yourself is to not place time-limited bets against it -- but to do what you can afford that is not time-limited but does go toward the next paradigm.  

i.e. buy physical Aurum and Argentum, and sit on it.

I know everybody here already knows this -- except the usual shills, imbeciles, and trolls -- but I feel like the idea of the structure of paradigm failure and replacement might give us a more powerful way of thinking about what is happening.

Do NOT follow this link or you will be banned from the site!