Guardian Report That Europe Has Agreed On EFSF-As-Insurance-Policy Sends EURUSD Surging

Tyler Durden's picture

And here we go again. Wondering what caused the surge in the market? Nothing short of this latest rehash of all the previous rumors, this time focusing on the EFSF as an insurance policy, only this time with the added twist that Europe has agreed on implementation (of something which as analyzed previously just does not work). From the Guardian, (and please note the bolded word in the middle): "France and Germany have reached agreement to boost the eurozone's rescue fund to €2tn as part of a "comprehensive plan" to resolve the sovereign debt crisis that the eurozone summit should endorse this weekend, EU diplomats said. The growing confidence that a deal can be struck at this Sunday's crisis summit came amid signs of market pressure on France following the warning by ratings agency Moody's that it might review the country's coveted AAA rating because of the cost of bailing out its banks and other members of the eurozone. The leaders of France and Germany hope to agree a deal that will assuage market uncertainties or, worse, volatility in the run-up to the G20 summit in Cannes early next month. France would now have to pay more than a full percentage point – some 114 basis points – more than the price paid by Germany to borrow for 10 years as the gap between the two country's bond yields widened to their highest level since 1992." Said otherwise - this is simply the last ditch "plan" proposed by PIMCO parent Allianz to use the EFSF as a 20%-first loss insurance policy, which as we already demonstrated using arcane concepts such as mathematics, DOES NOT WORK. But hey, it is Groundhog Day all over again.

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Temporalist's picture

Mo money, mo problems.

dwdollar's picture

Bulls are so fucking stupid. They stampede to their own slaughter.

GenX Investor's picture

Half-life 16 minutes.  The law of diminishing re-turds.

hedgeless_horseman's picture



France and Germany have reached agreement to boost the eurozone's rescue fund to €2tn as part of a "comprehensive plan" to resolve the sovereign debt crisis that the eurozone summit should endorse this weekend, EU diplomats said.

So, the banks' solution to the current European debt problem is €2,000,000,000,000 of more European debt. 

Europeans need to discover the answers to these two very simple questions: 

  1. Who will RECEIVE the €2,000,000,000,000?  (hint: rhymes with skanks)
  2. Who will OWE the €2,000,000,000,000? (hint: look in a mirror)

Once they learn the answers, they must each decide, essentially, between these two responses:

A) Lie down and take it (see U.S.A. and Ireland)

B) Stand up and fight (see Iceland)

fuu's picture

This pop brought to you by the letters D, X, and Y and the number 76.90.

max2205's picture

If they can keep recycling these BS rumors till Xmas we will be back at all time highs... IWM up now 20+ % in two weeks. TNA gold mine 27 to 43 today. My golly Molly

DormRoom's picture

looks like they kicked the can down the road again.  It doens't solve the imbalances between the North-South.  It sets up a financial ticking timebomb, since the South will take decades before they are as competitive as the North. Incurring debts, or falling into frequent recession along the way.  The ECB interest rate policy cannot find an equilibria for long run growth for  the South-North duality.


  And now the cds wolfpack will likely head to Japan.

lemonobrien's picture

the south will never be competitive like the north.

Ghordius's picture

Talking about China? The UK? Canada?
Protestant work ethics? Or just Bullocks?

Stoploss's picture

Dow Jones just tweeted the report is... Wait for it... Wait for it....                    W R O N G !!

HelluvaEngineer's picture

This is beyond rediculous.  ES just ramped to yesterday's high and then backed off.

TheFourthStooge-ing's picture

They're all a bunch of hope smokers.


NumberNone's picture

They announced too early.  Still time to give back much of the short squeeze. 

Mike2756's picture

So, they low balled it to get everyone to agree. How does Slovakia feel about it now?

CClarity's picture

Don't worry.  They will not be inagreement by Sunday.  From 440B to 2 Tr Euros just like that.  

And that money is coming from where?  IMF? US? China, Germany?   Or have Norway, Singapore and AbuDhabi investment funds decided to bail out the world (just before the Martians and Venusians).

wang's picture
wang (not verified) Oct 18, 2011 2:18 PM


RobotTrader's picture

Bears destroyed again.

Never underestimate the power of Infinite Fiat

LawsofPhysics's picture

New puts in, yes. personally I think they tipped their hat a bit early on this one robo.  Can't wait to see the response from the taxpayers.  Lots of fireworks in the future as these saviors return to their people and ask to inspect their wallets.

jdelano's picture

yup--made my last put grab.  Got that tingling feeling in my perenium.  Either gonna be one hell of a payday or my biggest fuckup ever.  Either way, feeling pretty adrenal-junkie ALIVE for the moment...

fuu's picture

Keep feeding that beast. For a better rush put all your assets on the floor and light them on fire.

jdelano's picture

If I wiped these out completely, I'd still be up 23% for the year.  Thanks for the advice though!

LawsofPhysics's picture

Likewise, 75% of the portfolio was taken off the table in May. Just having fun now, and still in some dividend-returning equities for the year-end payout.  When we get within those ranges, then I'll worry about making changes.  But I don't do this for a living.

kito's picture

keep buying the simple man shorts DOG SH. buy em everytime another 1 pct gain is posted. unlike robotard, this is acutally a forward looking call, not a "brilliant" hindsight one......

sabra1's picture

better your perenium, than janet napolitanos'!

kito's picture


i root for that fat jersey governor's picture

many of us (and many bears on this board) knew this rally has more legs. If you have a very long horizon, getting into shorts early is manageable. but dude! if someone uses margin on bet on market coming down... not good.

it's hard to play counter trend rally in the meantime, so I am sitting this one out until the buying are exhausted.

walküre's picture

Another plan. Where are the $2T coming from? Greece is running out of options to rob from Peter to pay Paul. Germany is NOT making a payment from German taxpayers to support the Greeks.

Let markets rally on hyperbole and more bullshit. The real economy and the real state of the nations is displayed in the comment sections here and through OWS.

All the 1% are doing is amplifying the anger and the frustration of the 99%.

knight99's picture

This is the real market manipulation. If this were a negative unfounded story everyone would want to know who was shorting this pair.

sabra1's picture

is like,  2tn euros, like, equal to 53tn US dollars?

Instant Wealth's picture

2 billion EUR = 2.76 trillion USD

nobusiness's picture

This will work.  Assholes will run stocks up to new highs based on the hope the crisis is over.  Banks can then issue shares and recapitalize.  Suckers born every minute.  I'm the sucker because I think once just once gov will do the right thing, but they never do.  Bail out Bail out bail out fuck

NotApplicable's picture

Replace the word government with mafia, and you'll notice your beliefs will instantly align with reality.

Why? Because they always "do the right thing." For their own benefit, that is.

vote_libertarian_party's picture

Damn, I didn't get my TBT calls last week.


Oh well what's a few trillion more in bills among a few friends...

CvlDobd's picture

That reminds me,

Did I tell everyone about the new credit card I got to pay off my old card?

I'm now trouble free.

Ghordius's picture

Dance, Euro, dance!
Good boy! Up! Down! Up! Down!

kaiserhoff's picture

Well Tyler, it works if your goal is to piss away the first 400 billion as fast as possible, and then go back for more, more, more...

NotApplicable's picture

Their goal is to survive yet another day. The means to this end is the pissing away act.

BORT's picture

Aren't trading stops fun

Quantum Nucleonics's picture

How many times is the market going to buy into this BS?

Sabibaby's picture

I'm thinking %100 of the time or until bread cost $50 a loaf.

vote_libertarian_party's picture

So does this need to be approved thru 17 parliments again?


I'm guessing 1 will finally say no.

theMAXILOPEZpsycho's picture

my white shiny stuff is now up 50 cents on the day after being over a buck down too

Newsbounce's picture

Europeon investment bank shooting down article fwiw . source ransquawk

Irish66's picture

Must deny after 4 p.m. not before

hedgeless_horseman's picture

Ladies and gentlemen, we have a winner!

Congratulations, Irish!  They shoot horses, don't they?

MFL8240's picture

Just sickening to watch.

PY-129-20's picture

Yes, this is a nightmare...

Instant Wealth's picture

Dankeschön - Ihre Allianz-Versicherung

lizzy36's picture

This is awesome.

Plan has about $30b in fees for rating agencies and banks. It doesn't get better than a plan where the math doesn't work and everyone gets paid billions in fees.

To bad for the taxpayers, but really who cares about them anyone. THE BANKS WILL SURVIVE. Booyah!!!!!