Five Times Is Not The Charm For ECB BTP Intervention Today

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Mon, 11/07/2011 - 12:13 | 1853329 agent default
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The end game is near.

Mon, 11/07/2011 - 12:17 | 1853343 Hard1
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If you think PIIGS was polictically incorrect, wait for the Fucking Pigs











Greece *again* and we hope this place is not Germany


Mon, 11/07/2011 - 12:37 | 1853430 Hard1
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Some people junking my previous comment as an impulse reaction to their Minksy moment, presumably from the first two countries in the list, as the rest have mosty realized that they are in deep "trouble" by now.  That's why my favourite quote from American Beauty is "You'll be amazed by the power of denial"

Mon, 11/07/2011 - 12:38 | 1853447 Arius
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"we hope this place is not for Germany"

excuse my ignorance by WHY NOT? are they better than the rest of us???


Mon, 11/07/2011 - 12:43 | 1853474 nonclaim
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They are in a far better position than most. They still have a constitutional court, ffs.

Mon, 11/07/2011 - 12:16 | 1853344 Bodhi
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The waiting is the hardest part...

Mon, 11/07/2011 - 12:26 | 1853393 FMR Bankster
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And can take a hell of a long time. The debt bomb created by World War one was kicked down the road for 10 years before it all collapsed in 1929-1933. Very similar situation. Too much debt, interlocking relationships of the debt, and an attempt to believe it can all work out in the long run.

Mon, 11/07/2011 - 12:29 | 1853405 Ghordius
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good way to see it - I would say half of the WWI US debt bomb blew up in 1929-1933, the rest petered down until 1941

Mon, 11/07/2011 - 13:24 | 1853671 Leopold B. Scotch
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Intervention postponed and prolonged the purge that should have resolved all the inital (intervention made) problems, but for the Hoover intervention to short circuit the natural normalization. 

Hoover = FDR Lite.  Certainly no liquidationist, never mind the wisdom advised by Andrew Mellon.  And so began the first prolonged depression in the USA, courtesy of interventionista class finally having enough consolidated power to really mess things up badly.

Mon, 11/07/2011 - 12:31 | 1853410 SheepDog-One
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Yea in the 1930's all trades were still placed over a teletype, stock quotes were listed in a newspaper page once a day, and news took 1-2 days to reach the things dont take as long.

Mon, 11/07/2011 - 12:33 | 1853424 WonderDawg
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And this debt bomb has already been ticking since 2000.

Mon, 11/07/2011 - 12:41 | 1853459 SheepDog-One
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Yep, we're not just starting the countdown timer right now, its been ticking for a decade at least.

Mon, 11/07/2011 - 13:47 | 1853811 agent default
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1929-1933: US largest employers: GM, Ford etc

2011: US largest employer: Wallmart

What me worry?

Mon, 11/07/2011 - 12:16 | 1853348 Fips_OnTheSpot
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we are in the middle of it - and the outcome is not "a perfect world for goldbugs" - I fear.

Mon, 11/07/2011 - 12:14 | 1853333 qussl3
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Cant hedge, sell the crap.

Unintended consequences.

Mon, 11/07/2011 - 12:14 | 1853335 Dick Darlington
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Zee price stabeeletee!!!

Mon, 11/07/2011 - 12:15 | 1853338 Eireann go Brach
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Bunga CowaBunga!

Mon, 11/07/2011 - 13:35 | 1853763 Leopold B. Scotch
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Unga... Unga Galunga.  So i figure I got that going for me.

Mon, 11/07/2011 - 12:15 | 1853340 GeneMarchbanks
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Sucks to be Draghi...

Mon, 11/07/2011 - 12:16 | 1853349 YesWeKahn
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I don't see any problem, the market is trying to rally off low. It's still 20% higher than the Oct low.People clearly filtered out all bad stuff and only focus on hope.

Mon, 11/07/2011 - 12:18 | 1853359 SheepDog-One
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LOL, ok thanks for droppin by ZH Steve Liesman.

Mon, 11/07/2011 - 12:20 | 1853365 qussl3
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The problem with hope is that you eventually have to face reality.

Hangovers are a bitch.

Mon, 11/07/2011 - 12:25 | 1853388 SheepDog-One
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Yep, this 3 year long crack, meth, and screw top fortfied wine bender hangover is going to be a real skull splitter.

Mon, 11/07/2011 - 12:29 | 1853406 qussl3
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They could just snort more tho.

This bitch has legs yet.

Mon, 11/07/2011 - 12:28 | 1853402 JimRogers
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Hope in one hand, shit in the other. Which hand fills up faster?


Mon, 11/07/2011 - 12:16 | 1853350 SheepDog-One
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I dare you to cross THIS line! Oh yea? Well now I dare you to step across THIS line! Hmmm...OK well now I DOUBLE dare ya to step across THIS line!

Mon, 11/07/2011 - 12:23 | 1853379 Global Hunter
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Sounds like my mother in law trying to keep her dogs in line

Mon, 11/07/2011 - 12:26 | 1853351 DormRoom
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Once Italy falls it's pretty much over.  The ECB, like the Fed, has been preoccupied with propping up the speculative economy, and now its real economy is collapsing. 


shut it down.




Also, traders selling bonds can hedge (currency arbitrage).  ECB can only buy bonds, and can't hedge.  Thus it will always be in a losing position. shut it down.

Mon, 11/07/2011 - 12:17 | 1853354 LawsofPhysics
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Just like watching the previews at the theater "Coming soon to a debtor bond market near you".

Mon, 11/07/2011 - 12:17 | 1853355 pendragon
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stupidity knows no bounds

Mon, 11/07/2011 - 12:19 | 1853357 Ethics Gradient
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26bps and accelerating.

Make that 27.

Edit: sorry, that's just the increase in yield. Now 27 and a bit

Mon, 11/07/2011 - 12:21 | 1853373 qussl3
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How soon before ECB capital is wiped?

Lucky for them gold is up.


Mon, 11/07/2011 - 12:31 | 1853411 Ghordius
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duh, for a Central Bank capital is (sadly? regretfully?) irrelevant

only reserves matter for a CB and they are not needed often

Mon, 11/07/2011 - 12:40 | 1853450 qussl3
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If all else fails.

Well you know the drill.

On a more serious note, you seem pretty in the know about the eur, does there even exist a trigger where the ECB would be forced to mark that PIIGS crap to reality?

If there isnt one, then well capital really doesnt matter i suppose.


Mon, 11/07/2011 - 13:13 | 1853673 Ghordius
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well, yes, there is a "trigger" for all banks, and I call it "the regulator's patience"

Mr. King of the Bank of England, for example, is preparing the Commons on a new principle I call "the CB does not like your way of banking"

but guess who is the ECB's regulator? The European Central Bank. I'm not really sure they even really have to publish something, by the way

Mon, 11/07/2011 - 12:20 | 1853366 Dr. Engali
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Dollar cost averaging.

Mon, 11/07/2011 - 12:20 | 1853369 transition
transition's picture

Typical boring ZH stuff : oh loooook the market moved down !!!!

Two days later, oh look the market moved up (this must be a conspiracy) !!!!!


rinse & repeat.

Mon, 11/07/2011 - 12:24 | 1853383 Tyler Durden
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Or, if you were here two years ago, instead of confirming we really need to step up our admission screening process, you may have read this post from April 2010: "Italy is next" which confirms that if you get the big picture right (you are surely long gold?), intraday moves are completely irrelevant but they do add to the dramatic appeal.

Mon, 11/07/2011 - 12:46 | 1853489 SheepDog-One
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He didnt stand on the porch long enough.

In Project Mayhem, you do not ask questions. 

Mon, 11/07/2011 - 13:05 | 1853521 Ghordius
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Tyler, I, for example, am "surely long gold"

I, on the other side, sometimes would wish you, as the publisher of my beloved ZH, would make a differentiation between

- rumors that are going to be relevant for today's markets (important but not for me)


- facts that are going to be relevant for the future (very important for me)


The ECB is going to support the BTP until... the bazooka-that-isn't is going to take over.

The ECB is going to use "the handbook" on this, and "the handbook" is one of the differences between the FED and the ECB.

It says that any CB intervention has to be as intransparent as possible and has to take the market by surprise, for maximum effect.

Following this, Draghi might or might not "test" how deep he needs to let the BTP fall until real appetite grows and then have a massive intervention. Which, translated in the current context, might even be a "floor" à la CHF. Should you shout "impossible" or "this would be a well without bottom" please note two facts:

- the SNB floor is working - i.e. other floors can work, too, if the CB uses it's strenghts and not it's weaknesses

- the Germans are the first and foremost of all EMU countries that enforce the "BundesBank Principle" on the ECB, i.e. they will endorse what you would call "Monetary Dictatorship". Even if they get sick just contemplating the bet.

How do you price in a Draghi Surprise? One that "slaps the speculators hands"? How robust is the CDS market? How leveraged are the CDS "à la baisse" players? How much pain can they endure?

Your knowledge of Central Banks seems to be quite extensive when it comes to the FED but you have very often misunderstood (well, you and me are both not the Almighty) how the other CBs work and talk.

Mon, 11/07/2011 - 13:44 | 1853799 slewie the pi-rat
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i think we're all trying to separate the wheat from the chaff, factually

the SNB peg appears to be working. for now.  to you.

but is that a fact?  or a rumor?



Mon, 11/07/2011 - 15:06 | 1854121 Ghordius
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slewie, you rat! you are perfectly right

my god-daughter thinks yes, she has a pet theory I can't prove or disprove

her recipy: buy EUR with CHF, buy USD with EUR, buy CHF with USD

a perpetuum mobile of devaluation (to zero?) - but she thinks with the "Dollar Strenght" theme doable

Mon, 11/07/2011 - 15:34 | 1854293 slewie the pi-rat
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5X is not the charm...

...she is!

hmmm...maybe she'd like the slewie perpetual fiat fade:

  • buy gold & silver w/ CHF
  • buy gold & silver w/ EUR
  • buy gold & silver w/ USD

where ounces = wealth + insurance



Mon, 11/07/2011 - 12:58 | 1853580 Mr Lennon Hendrix
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Mon, 11/07/2011 - 12:26 | 1853392 LawsofPhysics
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Pretty broad statement there, I hope that isn't how you trade.  Italian bonds are going bidless, that is what this is about.  Are you saying you are buying Italian debt?  If you are, then I have some Greek debt to sell you.


This is trading site and the song remains the same, buy low sell high.  If you don't have some real useful information to contribute, please fuck off.

Mon, 11/07/2011 - 12:56 | 1853567 Ghordius
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I have a few friends who made a pile on Greek Bonds!

Nothing for me, I'd be sick just even thinking about.

Mon, 11/07/2011 - 12:58 | 1853589 LawsofPhysics
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Timing is everything.  I'd say this site is ahead of the curve on realeasing a lot of information, how you trade it is your business.

Mon, 11/07/2011 - 13:03 | 1853620 Ghordius
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Well, yes, ok. But the site understandably focuses on the "rumor that shakes the market" more than on all the rest.

Nevertheless, I maintain that there is a lot of misinformation and misunderstandings here in ZH about the principles of Central Banking.

Hate them or love them - understanding them is fundamental in this age.

Mon, 11/07/2011 - 13:28 | 1853729 LawsofPhysics
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Understanding "them" is only useful for frontrunning the idiocy of the central planners/bankers.  Sorry, I run a real business in the Agriculture sector and know what my margins look like (China buying our pecans now- so that is good).  Central bankers are paper-pushing fucknuts that still believe in infinite growth on a planet with finite resources, ALL their models depend on growth.   Moreover, innovation in a healthy economy uses capital from savings not debt.  When people invest their savings they make damn sure to do the proper due diligence.

Look, either way you slice it the laws of physics and Nature win, period.  From my perspective, my business requires a fairly high input of energy, this is what is crushing my margins.  The fact is that worldwide energy production has been flat for several years now.  This is what the real papering over is all about and even ZH seems to avoid the topic altogether.  More and more energy and capital are being sacaficed to isolate, extract, refine, and deliver less energy.  All paper going to zero.

Trading is a hobby to extract more paper to trun into more physical assets, I am investing a lot more locally to keep my employees and neighbors secure, I suggest you do the same.

Mon, 11/07/2011 - 13:29 | 1853741 Ghordius
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I'm with you, I agree with you and I'm in a similar situation

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