Italy Calls ECB's Bluff As Mario Draghi Is Forced To Double Italian Bond Purchases, Take Total To €110 Billion

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Mon, 11/07/2011 - 10:56 | 1852933 rumblefish
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why is the market up? oh ya, all the posive economic news......

Mon, 11/07/2011 - 10:57 | 1852937 Roland99
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yeah...I was like...wtf?  futures were down modestly and now it's about a 100pt turnaround?

I guess a yak farted in Tibet.

Mon, 11/07/2011 - 11:49 | 1853199 Roland99
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Guess someone gave that yak some Beano...markets down now.

 

Mon, 11/07/2011 - 11:02 | 1852963 bnbdnb
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Its just a pump, nothing new.

Mon, 11/07/2011 - 11:12 | 1853007 GeneMarchbanks
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PPT.

Mon, 11/07/2011 - 11:19 | 1853040 JohnG
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:)

Mon, 11/07/2011 - 11:21 | 1853046 GeneMarchbanks
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What?!

You started it.

Mon, 11/07/2011 - 11:30 | 1853088 JohnG
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Only because it's true.  "Stable" ES since open???  Pfffft.

Mon, 11/07/2011 - 11:12 | 1853010 pmcgoohan
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Cash rich fund managers have decided they want to be up for Christmas and are prepared to ignore any negative news, rally on positive news, rally on the denial of positive news, and rally on the denial of negative news until they get there.

Mon, 11/07/2011 - 11:18 | 1853031 Cdad
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If so...then why is everyone on the Street this morning shorting the crap out of the Russell?

If so...why did Jim Paulsen, a criminal syndicate Wall Street money manager, just do 3 minutes on "Self-Stimulation?"  Is that what the ECB is engaged in per Italian bonds?  And if so, and everyone knows and is dumping into it [ala Jeffries], how is this bullish?

Yours sounds like a status Quo call...and that, I think, is very dangerous right now...as in today.

Mon, 11/07/2011 - 11:33 | 1853104 pmcgoohan
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Its not bullish. None if it is bullish. There has been barely a single bullish headline in weeks, and the status quo is terminal. Im just sick to the core of watching the market continually shrug it all off and rally on.

Ive been short for over a month and Im not getting out now. Im just exasperated. Genuinely thinking about taking some time off somewhere remote without a laptop. Watching the paint doesnt seem to be helping to dry it out

Mon, 11/07/2011 - 11:41 | 1853152 Cdad
Cdad's picture

I hear ya.  Maybe put some long RIMM against those priced for stupid consumer discretionary stocks...that might cure what ailes you.

The Russell SHOULD go down in flames today, as well.

Shorting is a tough game...but since the game is almost up, the wait time on this is very short, I suspect.  The paint will be dry soon.

Mon, 11/07/2011 - 14:23 | 1853976 Vaiman
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By the looks of things the markets are going to need a sledge hammer across the head before reality sets in and things start heading south.  What will that sledge hammer be???  

Mon, 11/07/2011 - 10:57 | 1852936 Lady Heather...UNCLE
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...he is only doing God's work, give Draghi a break <sarc off>

Mon, 11/07/2011 - 11:16 | 1853021 Mr Lennon Hendrix
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The states of Europe are havng a field day calling the ECB's bluff.  FIrst G Pap took them to the bank, now Silvio.  Pretty soon the ECB will look like the Fed-

Coming out of the bathroom with it's dick in its hand.

Mon, 11/07/2011 - 10:57 | 1852938 Cassandra Syndrome
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See Brent Crude today?

Mon, 11/07/2011 - 11:15 | 1852990 CrashisOptimistic
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$114, dragging WTI up with it.

And people don't understand, or don't notice, or imagine it doesn't matter.  Sooo many people are going to die so very soon and it's so very much off the radar screen.

Greece burns 400,000 barrels of it a day at these prices.  Do a X365 and you have a number that is 5% of GDP.  How can they possibly grow sending 5% of GDP elsewhere every year?  They have no crude oil production at all.

Italy burns about 1.6 million barrels per day.  X365 is 584 million barrels per year and at $114 that is 66 billion dollars, sent elsewhere because they have no oil production.  That's about 4% of GDP.

Mon, 11/07/2011 - 11:18 | 1853032 GeneMarchbanks
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See the latest article on ZH?

Mon, 11/07/2011 - 10:58 | 1852940 Unprepared
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Haa! I called bullshit last week bitchez

Mon, 11/07/2011 - 10:58 | 1852941 Oquities
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the head of the chinese sovereign wealth fund just said european labor laws induce sloth and indolence.  does that make him a communist capitalist denouncing socialism?

Mon, 11/07/2011 - 11:01 | 1852958 agent default
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Yes.

Mon, 11/07/2011 - 11:19 | 1853033 High Plains Drifter
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chinks talking about labor laws?  man that is a real gas........

Mon, 11/07/2011 - 10:58 | 1852942 Lady Heather...UNCLE
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MillionDollarBonus should head a Central Bank.

Mon, 11/07/2011 - 11:00 | 1852953 homersimpson
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with JD Subprime and Robotrader as Primary Dealers..

Mon, 11/07/2011 - 10:59 | 1852943 prophet
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High stakes for headless states.

Mon, 11/07/2011 - 10:59 | 1852945 Iam Rich
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L...O...L...

Mon, 11/07/2011 - 10:59 | 1852948 EZT
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I just asked my self the same question.. Is the short squize still on?

Mon, 11/07/2011 - 10:59 | 1852949 homersimpson
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What can you say? Socialism is expensive..

Mon, 11/07/2011 - 11:00 | 1852954 pendragon
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doesn't the efsf only have leverage on what is left in pot which ain't gonna be very much at this rate? bullish for euro?!

Mon, 11/07/2011 - 11:00 | 1852955 Everybodys All ...
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Mario Draghi, Hank Paulson, Tim Geithner, Ben Bernanke, etc. Is there any real difference in monetary policy amongst them?

Mon, 11/07/2011 - 11:00 | 1852956 RiskAverseAlertBlog
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Endgame. I gotta go check the tire pressure on my wheelbarrow.

Mon, 11/07/2011 - 11:01 | 1852959 slaughterer
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Super Mario's shopping spree is the solution to EUs problems.  /sarc

Mon, 11/07/2011 - 11:02 | 1852960 LawsofPhysics
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All western governments are now monetizing (printing) like crazy.  Why are the BRICs remaining silent?  They are monetizing as well.  Apparently the "bottom is further away than everyone thought.  Regardless, the race to find the bottom continues.  Boring world indeed.

Mon, 11/07/2011 - 11:14 | 1853018 Cthonic
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Zeno's paradox, compounded: the faster they all race, the further the bottom recedes.

Mon, 11/07/2011 - 11:02 | 1852965 agent default
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So Berlusconi is in a position to blow up the ECB now?  Good.

Mon, 11/07/2011 - 11:40 | 1853106 slewie the pi-rat
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hey, Ag_default!

this a graphic of clown car memories!

europeon politician edition of "fight club" link: Europe’s Insult Diplomacy

Mon, 11/07/2011 - 11:03 | 1852966 Zero Debt
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Gold flow from Hong Kong to mainland China in September jumped sixfold on the year to 56,896 kilograms, boosting the total amount of gold flow in the first nine months to 20
1,068 kilograms, more than double the quantity a year earlier, said Hong Kong Census and Statistics Department.

http://af.reuters.com/article/metalsNews/idAFL4E7M70CP20111107

Bulk of MF Global positions in Europe still open. .."Nothing has happened yet. We are waiting for it every hour. Therefore customers are reluctant to put on any more new trades before they know what has happened with the old ones," a metals trader said...

http://af.reuters.com/article/metalsNews/idAFL4E7M70B120111107

Mon, 11/07/2011 - 11:03 | 1852971 gojam
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Is it right that the money they are using to buy PIIGS bonds is the same money they've set aside for the 400billion Euro bailout fund ?

Sorry for being a dumbass, I'm losing track.

Are they spending money from the EFSF pot which they hope to leverage up to 1 trillion euros on these interventions in the bond market ?

Mon, 11/07/2011 - 11:05 | 1852977 pendragon
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yes!

Mon, 11/07/2011 - 11:09 | 1852993 qussl3
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Dont think so.

The ECB buys sov via its SMP prog, and it subsequently sterilizes purchases.

The EFSF is a separate entity with borrowing authority, before anything can be disbursed from it, it must first borrow the money. Its credibility is via the guarantees behind it from the 17 countries.

Someone with better knowledge please correct if wrong.

TIA.

Mon, 11/07/2011 - 11:11 | 1853004 pendragon
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aren't the ecb's existing holdings going to be transferred to the EFSF at make whole as ecb can't take losses?

Mon, 11/07/2011 - 11:15 | 1853020 qussl3
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That's the assumption, but until it happens its always fluid.

If it does happen the EFSF is spent already lol.

This is before next year's refunding, what a clownshow.

Mon, 11/07/2011 - 11:18 | 1853030 pendragon
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i guess that's why they kep it open whether it was 4 or 5 times leverage. at this rate they're gonna need some MF leverage

Mon, 11/07/2011 - 11:19 | 1853034 gojam
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Thanks qussl3 and Pendragon.

That's what I was trying to get at.

They're frittering away the capital (real or imagined) that their entire plan depends on.

Mon, 11/07/2011 - 11:04 | 1852975 qussl3
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JEF <3 ECB

Mon, 11/07/2011 - 11:06 | 1852980 Dr. Engali
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Whew...The Dax is above 6000 again and the dow is above 12,000 I was getting worried. I better go out and spend my new found wealth effect. Can't decide on buying more  guns or swapping my paper for real money...gold.

Mon, 11/07/2011 - 11:07 | 1852987 Hansel
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Are we still supposed to be pretending that these purchases are "sterilized" somehow, that this is not pure money-printing debt monetization?

Mon, 11/07/2011 - 11:11 | 1853003 kaiserhoff
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The "market" loves throwing good money after bad.

Mon, 11/07/2011 - 11:26 | 1853060 JohnG
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Yes, yes, of course.  Pay no attention to the men behind the curtains.

Mon, 11/07/2011 - 11:07 | 1852988 Tic tock
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Tyler et.al., why is Spain considered safer? Aren't the Housing, Personal Debt and Employment situation, like as dire as might be considered possible, short of catastrophe?

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