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Guardian Report That Europe Has Agreed On EFSF-As-Insurance-Policy Sends EURUSD Surging
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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Mo money, mo problems.
Bulls are so fucking stupid. They stampede to their own slaughter.
Half-life 16 minutes. The law of diminishing re-turds.
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:
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)
This pop brought to you by the letters D, X, and Y and the number 76.90.
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
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.
the south will never be competitive like the north.
Talking about China? The UK? Canada?
Protestant work ethics? Or just Bullocks?
Dow Jones just tweeted the report is... Wait for it... Wait for it.... W R O N G !!
This is beyond rediculous. ES just ramped to yesterday's high and then backed off.
They're all a bunch of hope smokers.
They announced too early. Still time to give back much of the short squeeze.
So, they low balled it to get everyone to agree. How does Slovakia feel about it now?
Fucking Shit!!
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).
UFB
Bears destroyed again.
Never underestimate the power of Infinite Fiat
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.
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...
Keep feeding that beast. For a better rush put all your assets on the floor and light them on fire.
If I wiped these out completely, I'd still be up 23% for the year. Thanks for the advice though!
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.
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......
better your perenium, than janet napolitanos'!
GOSH ROBO YOURE SOOOOOOOO SMART!!!!
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.
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%.
This is the real market manipulation. If this were a negative unfounded story everyone would want to know who was shorting this pair.
is like, 2tn euros, like, equal to 53tn US dollars?
2 billion EUR = 2.76 trillion USD
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
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.
Damn, I didn't get my TBT calls last week.
Oh well what's a few trillion more in bills among a few friends...
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.
Dance, Euro, dance!
Good boy! Up! Down! Up! Down!
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...
Their goal is to survive yet another day. The means to this end is the pissing away act.
Aren't trading stops fun
How many times is the market going to buy into this BS?
I'm thinking %100 of the time or until bread cost $50 a loaf.
So does this need to be approved thru 17 parliments again?
I'm guessing 1 will finally say no.
my white shiny stuff is now up 50 cents on the day after being over a buck down too
Europeon investment bank shooting down article fwiw . source ransquawk
Must deny after 4 p.m. not before
Ladies and gentlemen, we have a winner!
Congratulations, Irish! They shoot horses, don't they?
Just sickening to watch.
Yes, this is a nightmare...
Dankeschön - Ihre Allianz-Versicherung
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!!!!!
I think the fees ARE the plan. At this point they're looking at anything to generate revenue.
Rent Seeking 101.
"Insurance policy"
Forgive my ignorance, but how is pumping €2T liqidity bullish for the Euro? That means more Euro's on the market, so supply/demand comes into play, no?
Just close your eyes, click your heels together and say "There is no inflation. There is no inflation. There is no inflation."
Red boots!
FED has them
How dare you try to rationalize!
To the chalk board and write "Thinking is wrong" 500 times.
No, because most are coming back to the U.S. as dollars via corporate "profits" (buy financials) or underwritten by taxpayers as increasing CDS exposure. Hell even Bank of America is facilitating the CDS mess.
The GBP went up against the USD when the UK announced 75GBP billion more QE also...
see, back when the EUR/USD bottomed at the low, low, low price of 1.30 the market was already pricing in the total destruction of the euro. now that its death is postponed for a little while, its bullish. it doesn't matter that it's being devalued, just that it actually still exists. totally makes sense.
because the Euro now has an insurance against total collapse, see, reducing 'sovereign risk'. I mean, just in case that would happen.
It's like if your house is burning, you can feel good about getting reimbursed a major portion of it's value & move on to buy a new home.
The only minor difference here is the insurers' capital remains locked in the burning house.
So will gold/silver be leaving planet Earth for the moon ?
nah, the final plan to all of this is to incorporate the Moon and then park all the worlds bad assets in it...I know I know it sounds stupid but so does this plan....
These reports always seem to come out in the last hour of trading.
Please tell us you didn't just now notice this phenomenon. It's opex as well, should be an interesting next three days.....
Sell the news?
But what if it's just a rumor?
/sarc
It doesn't matter if it's true , it only matters that the markets believe it...
So how do they crank it up to 2 trillion?
Hey guys this plan is going to work! Ramp all asset prices up a few trillion globally, Europe banks shore up a couple trillion in liquidity as the dump all assets into the rally. Problem solved. No Recap needed. And the net worth of millions of people buying into the largest suckers rally in history then have there heads handed to them on a silver platter. And remember that BBC report that suggesegest to fix the global debt problem everyone mush take a 30% hit on their assets? Well, that will soon happen in equities and the TBTF's sell into their entire rally and end up usurping all the fucking capital.
FUCK!
2 tn, easy, hearing europe in for 400 m and Uganda together with Angola in for tha balance...cornucopia
I believe Simon Hobbs just read this post verbatim on the happy network - Bob Pisanti is pissed!
Are these comments regulated? Phew, it's ok, it didn't come from the blogosphere, so we can believe this shit.
german finimin reported esfs to be levered up to 1000 Bn as per ftd
every time they pay more i take more out , and i ask you what is wrong with that ?
`Im so glad i started drinking early today.
A rational mind just can't deal with this level of _______(freebaseing stupidity?)
It would be best if the Euro-peps just said " hey we will only bailout our campain contributors and no one else."
Just be honest and say only our friends and myself will get access to free euro cash the rest of you trash will just have to beg in the street for change.
Really. Theres a point in the argument where all logic fails and thats the point you lose the argument.
Representiives dont have unlimited powers or rights. Where is the military? Who isn't on crack?
What if the world elected only crack-heads to represent them? Could it be worse?
That's rich, an alcoholic lambasting crack heads. You crack me up!
well, if you trade this market...its like a train the runs you over on the northern track and the southern track ouch.
The only way they can be succesful with the bankruptcy problems in the Eurozone, is to print money. If they don't print money, the FED will and send it their ways by the trillions, just like in 2008. Even though the world will be in even worse shape because of this, stocks will probably go up. They usually go up during massive inflation.
If you print the money people ( in which sovernty is vested get angry that they cant buy food or fuel ( heat)).
I would never have thought that the last 11 days could be possible without QE3. Soon there won't be anyone left who is brave enough to short, except whoever it is that is pulling the strings.
this is how 401K's and pension plans are laundered offshore!
let's see this rumor denied by the eu but first us markets need to close up..btw why is it always uk papaers that are publishing these so called rumors??
Brent and wti weakening, some non-believers out there?
Sure, but are those strong shorts covering?
http://www.cnbc.com/id/44947356
I am happy to have found zero hedge as it helps me understand what is going on (for real).
Unfortunately you're better off being dumb (or in the dark) to make money in this market. It's nearly impossible to "outsmart this market", in the short term.
its easy to "outsmart this market" Its diffucult to "out stupid this market".
Its best to get out of the way. But if you want to play with stupid peopld ware a cup.
Consider a country as a dog and its currency as its tail, then, the EMU is a pack of seventeen dogs with all their tails tied together. --- Does that help to explain their monitary policies?
No this is a bunch of teens drinking and pushing over an outhouse with an old man in it.
Is the old man the nation-state and the teens the Fascists in government?
There is something wrong with the logic behind the bailouts. Germany agrees to back a 2 trillion dollar
bailout through the EFSF, but is balking on the Greek loan installment of a few billion dollars.
Didn't the German Supreme Court recently rule than any new bailout would require a referendum? Furthermore, according to an article in der Spiegal, the current concensus is that it would fail. --- Something is wrong here! Is Merkel trying to frighten the Germans into voting for it?
With the volume leveraged, they can avoid a new referendum in the Bundestag - that´s the cheap trick.
This is great news for the bears. Now the EFSF agreement/solution is priced into the market which means that the G20 has to come with one heck of a great news on the 23th of October because if they announce anything less there will be a massive sell off. I just put in my new puts. Soon market crash :)
Good luck with that.
Signed,
Broke and Exhausted Bear
Pretty much every indicator is currently showing an overbought situation and don't forget after this Guardian rumor the G20 must announce a 2 trillion EFSF otherwise the market will fall off a cliff. There might be some tiny upside but atleast I know I shorted around the top and not at the low.
Barton Biggs finally nailed it!
Rumor to be refuted in 2 mins.
New rumor expected around 12 PM ET tomorrow
Nice call!
ftd.de has this story...
Switzerland is supposed to deliver 200 billion Euros to Greece.
The money that was deposited by Greeks in Switzerland and is regarded as offshore, not taxed. Uh Oh!
Are the Swiss completely fucking nuts?
hi all,
is this the same "Guardian"???
http://www.guardian.co.uk/science/2011/aug/18/aliens-destroy-humanity-pr...
then the next bailout will definitely from Martians!
Benny will be so annoyed at blowing his load on QE1 and 2 when JCT and Merkozy are able to goose markets higher with just a few well placed journalists.
How can they release a rumour today?
Is it Wednesday already?
Financial engineering is bad when banks do it, but I guess it is ok if governments do it.
I suppose there will be a mezzanine tranche for joe blow investor.
Synthetics and synthetics cubed for the playas.
just take a look at the above chart. Man. That gives my short instinct a raging clue.
Bernanke waking up day after biggest stock market crash ever...
http://www.youtube.com/watch?v=eZbtAFq7dP8
Now it explains the banks were up right at the open - these people know a rumor will be released.
Am I to understand the ES got all excited about borrowed money to prop up the very entities that are loaning the money so they can pay back the borrowed money if someone misses a payment? And they will keep that going till they get all the banks shored up with the borrowed money so they can pay back the loans.
Perhaps because I didnt get an MBA it is just over my head.
Good old Grauniad. Guess that The FT decided they'd had enough of being the fall guys and so those "EU officials" decided to use the paper that once introduced us to the fabulous land of San Seriffe as their new patsies.
Math is not only arcane, but downright racist.
Didn't we learn that lesson during the Clinton administration, that denying people loans just cause they didn't have the ability to pay it back was ..... you guessed it..... the R word:)
Hey, hows this for a solution: Denying the Greeks their bailout just cause they can't pay it back is ...... you guessed it..... Racist.
Yep, that'll work:)