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Mario Draghi Reprises Hank Paulson: Demands Full Monetization Authority Or Else Threatens With End Of Euro

Tyler Durden's picture




 

Yesterday's "leak" of Draghi's comments that it is not monetization if just the tip only bonds with a maturity of 3 years or less are monetized, aka, legitimate monetization does not cause inflation was so horribly handled that the ECB huffed and puffed in a desperate attempt to appear angry, even though it was absolutely delighted that it had even more ammo in its war against Germany. Today, the leakage continues only this time nobody cares that Draghi's desperation is hitting the headlines left and right. As a result, Draghi literally pulled a carbon copy of Hank Paulson, and while he did not have a three page term sheet in hand, threatened that the Euro would end unless he was allowed to monetize short-term bonds. Here's looking at your Germany. From Bloomberg: "European Central Bank President Mario Draghi said the bank’s primary mandate compels it to intervene in bond markets to wrest back control of interest rates and ensure the euro’s survival. Mounting his strongest case yet for ECB bond purchases, Draghi told lawmakers in a closed-door session at the European Parliament in Brussels yesterday that the bank has lost control of borrowing costs in the 17-nation monetary union."

Bloomberg continues: "We cannot pursue price stability now with a fragmented euro area because changes in interest rates affect only one country, or two countries at most,” Draghi said. “They have no importance whatsoever in the rest of the euro area.” ECB bond purchases are therefore “a way to comply with our primary mandate,” he said, adding: “Frankly, all this also has to do very much with the continuing existence of the euro.” The reason he added the last part is because as Asmussen has hinted, the ECB believes it is in its mandate to do everything, including monetize whatever it needs, to prevent the market from dumping bonds and selling the EUR (ironically a weak currency is precisely what an economically impliding Europe needs). Of course, the reality is that Draghi has cause and effect completely reversed, and the only reason the EUR is plunging, as are peripheral bonds is because the local governments are doing nothing to fix their miserable fiscal reality, and will continue to do so as long as the ECB continues to intervene and give the impression that things are better than they really are.

But the worst news, is that the European Central Jawboner no longer seems to have any impact, and while the EURUSD did spike yesterday on these news, only  to retrace all gains, today's rehash of the same comments resulted in a brief 30 pips spike in the EURUSD, only for the entire move to be undone in under 10 minutes.

Which means only one thing: the market, as well as everyone else, is getting sick and tired of mere talking, promises and jawboninb, and now demands action. Which, however, is the worst possible thing for the central planners, as once again, their faulty theory will be exposed for everyone in pracitse: one can promise the moon, but when it comes time to deliver, not even the world's greatest central planners can do much if anything.

More from Bloomberg:

Draghi’s plan involves the ECB buying bonds on the secondary market of countries that ask Europe’s bailout fund to purchase their debt on the primary market, which would require them to sign up to conditions. Neither Spain nor Italy has made such a request yet.

 

The ECB sent proposals for the plan to national central banks today ahead of the Sept. 6 policy meeting. Germany’s Bundesbank opposes the ECB purchasing government bonds, saying it is too close to state financing for its comfort.

 

Draghi said the ECB’s interventions will not amount to monetary state financing as long as it purchases short-dated bonds.

 

“If we are to buy long-term bonds we are in a very delicate situation,” he told the lawmakers. “But if we go on the short-term part of the market where bonds have a length of time, a maturity of up to one year, two years or even three years, these bonds will easily expire, so there is very little monetary financing if anything at all that we are doing.”

 

Conditionality

While many countries have made “substantial progress” recently, “we can’t exclude that at some point in time this progress can easily stop because of adjustment fatigue,” Draghi said. “So that’s why we are asking for conditionality combined with these interventions by the ECB. I think this could stand against the charges that we are doing monetary financing, because we are not doing it.”

 

Draghi started his testimony yesterday with an overview of the economic outlook.

 

He said financial-market sentiment “has somewhat calmed down over the past few weeks.” Still, the situation “remains fragile and it’s surrounded by heightened uncertainty,” he said. “Looking ahead we continue to expect only a gradual recovery with subdued momentum and risks on the downside.”

 

Draghi said risks to the inflation outlook “are still broadly balanced, but certainly further intensification of financial-market tensions has the potential to affect the balance of risks for both growth and inflation towards the downside.”

 

Lending to households and private sector companies is “still very, very sluggish,” he said.

 

Asset Classes

 

Draghi said the debt crisis has distorted yields across a range of asset classes.

 

“Markets have perceptions of a certain country in a crisis,” he said. “Therefore they ask for higher interest rates in order to buy the bonds issued by the country. And when I say bonds I don’t only mean government bonds. Bank bonds, corporate bonds. Markets are asking for higher and higher interest rates, which in return reinforce the situation of the perception of the crisis. That’s where the main justification to step in is for the ECB and start buying bonds.”

 

The fact that the ECB’s monetary policy is only being transmitted in one or two euro nations compels the ECB to intervene, Draghi said.

 

“We have to rebuild the euro area,” he said. “We have to overcome this fragmentation exactly for pursuing price stability through changes in interest rates.”

 

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Tue, 09/04/2012 - 11:23 | 2760432 Jlmadyson
Jlmadyson's picture

One last gulp of air.

Tue, 09/04/2012 - 11:27 | 2760459 ghengis86
ghengis86's picture

Before going down on the Bernanke Bux?

Tue, 09/04/2012 - 11:30 | 2760478 Dalago
Dalago's picture

End that shit.

Tue, 09/04/2012 - 11:34 | 2760504 GetZeeGold
GetZeeGold's picture

 

 

Maybe it's just me, but it seems like a hell of a lot of people are demanding a hell of a lot of crap these days.

 

Tue, 09/04/2012 - 11:39 | 2760528 EscapeKey
EscapeKey's picture

Yes, and these same people will claim it's "undemocratic" if they don't get what they want.

Tue, 09/04/2012 - 11:56 | 2760600 Harlequin001
Harlequin001's picture

'that the bank has lost control of borrowing costs in the 17-nation monetary union."'

No shit, really...

Now who would have thought that could happen...

Tue, 09/04/2012 - 12:03 | 2760622 flacon
flacon's picture

It was just a couple weeks ago that Draghi stated emphatically that the Euro was "IRREVERSABLE!". What changed, Mr. Draghi? Or how about a great big FUCK YOU to you too!

Tue, 09/04/2012 - 12:05 | 2760650 Zero Debt
Zero Debt's picture

It's totally against their charters and provisions to let the ECB directly finance governments in this way.

Today Draghi is talking about the "short end". This is just the beginning, they will go "all in" and buy the whole curve sooner or later.

Can't the sheeple see what is going on? Why are they still sleeping?

Tue, 09/04/2012 - 12:25 | 2760738 NotApplicable
NotApplicable's picture

The only question that matters; does he have a gun?

Tue, 09/04/2012 - 13:53 | 2761120 banksterhater
banksterhater's picture

Draghiqueen- put the gun in your fking mouth!

Tue, 09/04/2012 - 13:53 | 2761121 Ghordius
Ghordius's picture

and does this gun have 17 bullets in the magazine?

Tue, 09/04/2012 - 12:45 | 2760836 chart_gazer
chart_gazer's picture

is it the feds charter to "prop up the stock market"? no, but they are. charters, rules, constitutions, laws will all be ignored. they will jawbone, print, and say they're not until pigs fly.  they have no other choice and there is no one that will get in their way. if someone tries they will be eliminated.  there will be global inflation, the only question that remains is 'how much?"

Tue, 09/04/2012 - 12:52 | 2760868 AbelCatalyst
AbelCatalyst's picture

They will sleep until something wakes them up. This is all noise until something happens. Hence, the can kicking as far as possible. You can only do nothing for so long. The sheeple can only sleep for so long. The debt can only grow for so long...

Patience grasshopper, the end will come... It's a house built on sand waiting for a storm... The sheeple may not be able to articulate what is wrong and may not understand all the nuances shared on ZH, but the people I talk to just feel like something ain't quite right...

And then their debit card stops working and the cable goes off! Then things get real (hahaha - its when the cable goes out that people take notice. So true. So sad. And absolutely hilarious!!)

Tue, 09/04/2012 - 11:34 | 2760511 spastic_colon
spastic_colon's picture

Meanwhile the silly defense of 13000 and 1400 continues

Tue, 09/04/2012 - 12:21 | 2760714 Nobody For President
Nobody For President's picture

Ooops - that line got crossed and tossed this morning - still under at 1220, but the PPT is still having their morning coffee.

Tue, 09/04/2012 - 11:27 | 2760462 Stackers
Stackers's picture

Damn those evil "speculators" for driving up interest rates

Tue, 09/04/2012 - 11:48 | 2760565 Sofa King Confused
Sofa King Confused's picture

EURO trash

 

Tue, 09/04/2012 - 12:02 | 2760633 Harlequin001
Harlequin001's picture

“Markets have perceptions of a certain country in a crisis,” he said. “Therefore they ask for higher interest rates in order to buy the bonds issued by the country... Markets are asking for higher and higher interest rates, which in return reinforce the situation of the perception of the crisis. That’s where the main justification to step in is for the ECB and start buying bonds.

Classic. I do believe the man actually thinks he IS the market...

and that the economy is wrong.

Why doesn't he just switch the columns of his balance sheet? Problem solved and there's bound to be a big fat bonus in there as well somewhere... you just need a wheel barrow to carry it home.

Tue, 09/04/2012 - 11:41 | 2760535 maxmad
maxmad's picture

we are going to take our ball and going home!

Tue, 09/04/2012 - 12:16 | 2760694 slaughterer
slaughterer's picture

Draghi is stealing a page from the 2008 Paulson playbook, this time funding TBTF countries rather than TBTF banks.  When do we get to the point where CBs are bailing out entire planets and solar systems?   

Tue, 09/04/2012 - 12:29 | 2760749 NotApplicable
NotApplicable's picture

Yes.

Tue, 09/04/2012 - 19:45 | 2762553 Poor Grogman
Poor Grogman's picture

Quite true, for maximum gravity the call for more central bank power (or Paulson putsch) must be made at a "closed session of parliament" Oooh. Ahhh so scary....

Tue, 09/04/2012 - 11:24 | 2760434 Cognitive Dissonance
Cognitive Dissonance's picture

Mario Draghi to Hank Paulson - "My bazooka is bigger than yours."

Tue, 09/04/2012 - 11:59 | 2760617 machineh
machineh's picture

"We cannot pursue price stability now with a fragmented euro area because changes in interest rates affect only one country, or two countries at most,” Draghi said. “They have no importance whatsoever in the rest of the euro area.” 

Translation: I AM RELEVANT! (or soon will be, when I can 'print like Ben')

Mario Magnifico, central planner extraordinaire.

Tue, 09/04/2012 - 12:04 | 2760645 Harlequin001
Harlequin001's picture

The man is without doubt a total fucking nut.

Does he really believe this shit?

Tue, 09/04/2012 - 12:32 | 2760776 NotApplicable
NotApplicable's picture

Why not? It pays well.

Tue, 09/04/2012 - 13:48 | 2761086 Terp
Terp's picture

No, but he works for Goldman...thats all you need to know really...

Tue, 09/04/2012 - 12:03 | 2760637 Ned Zeppelin
Ned Zeppelin's picture

And speaking of other relevant wisdom to be gleaned from the Hank Paulson Thievery For Dummies handbook on this, there will be mild push back, then the granting of Mario's wish in toto - they have no other answers. 

Tue, 09/04/2012 - 12:38 | 2760805 LMAOLORI
Tue, 09/04/2012 - 11:23 | 2760437 Trichy
Trichy's picture

First lesson at GS,

GS goes MAD to get what GS wants.

Tue, 09/04/2012 - 12:34 | 2760784 NotApplicable
NotApplicable's picture

It's the only play in any real banker's book.

One can only lie so long once things get serious, and all that...

Tue, 09/04/2012 - 11:24 | 2760441 WALLST8MY8BALL
WALLST8MY8BALL's picture

White courtesy for Mr. Blankfien

Tue, 09/04/2012 - 11:26 | 2760451 Abraxas
Abraxas's picture

End the freaking thing!!! Disassemble the union and kill the currency. Enough already!

Tue, 09/04/2012 - 11:45 | 2760552 Ben Burnyankme
Ben Burnyankme's picture

Yes, it will be nice to go back to 50 un-united states.  Oh, and Europe too.

Tue, 09/04/2012 - 11:26 | 2760454 Meremortal
Meremortal's picture

Meanwhile Bulgaria says, "Finalize joining the EU and convert to the euro currency?"

Not on your life, do you think we are crazy?

 

Tue, 09/04/2012 - 11:26 | 2760455 SheepDog-One
SheepDog-One's picture

RESPECT MAH AUTHORITAH!!

Tue, 09/04/2012 - 11:27 | 2760456 eaglefalcon
eaglefalcon's picture

I luv bond vigilanteS!

Tue, 09/04/2012 - 11:28 | 2760457 Boilermaker
Boilermaker's picture

Was it more than 3 pages this time?

I love the 'no questions and no audits and no accountability and no tracking' part of Hank-the-skank's proposal.  That was just dandy.

For those that don't recall:  http://money.cnn.com/galleries/2008/fortune/0812/gallery.dumbest_moments_2009.fortune/3.html

Tue, 09/04/2012 - 11:27 | 2760458 poldark
poldark's picture

Twice the French tried getting out of fonancial trouble and twice it got them into serious trouble.

Ben and Draghi should read this.

 

http://mises.org/daily/1504

Tue, 09/04/2012 - 11:43 | 2760524 falak pema
falak pema's picture

Ben thinks he understood 1929, so 1789 is childs play. Central banking is based on trust. Ben has the trust of the Oligarchs of the World. He is right there with Edmund Burke. Who cares about democracy when you have "THE INSTITUTIONS AND TRADITION BEHIND YOU"....Burke's very words, now being applied by Helicopter Ben from his great institution the FED! 

Tue, 09/04/2012 - 12:14 | 2760686 Harlequin001
Harlequin001's picture

I think Ben does understand 1929. I think he understands that the main cause of it was a mania first in Germany in 1923 and then with the fallout of the movement of that money to the US and the panic withdrawal which followed. I think he understands that the one thing we have now that we didn't in 1929 is the telly, and that the telly can convince people not to sell and stampede for the exits.

I think he knows that as long as talking heads stand up on TV and tell all's well and that they're 'working for you' that he can do anything he wants in the name of preserving our way of life, and that he can and will destroy anyone who gets in his way whether it's a little guy or an entire country.

I think he knows he's got it licked, until he hasn't. but he like all the others will have all their gold stashed long before then.

Such is life. Me, I'm buying facebook, looks like a snip at these prices... not.

Tue, 09/04/2012 - 11:27 | 2760464 falak pema
falak pema's picture

When you can print for three years why be so short sighted, print for five then for ten...etc. 

Draghi has method in his madness.

Will she buy it? Has she a choice? 

Hellicopter Ben must show his acumen if she sings 999!

Tue, 09/04/2012 - 11:27 | 2760465 Too Big 2
Too Big 2's picture

"Give me back my bubble!" 

Tue, 09/04/2012 - 11:28 | 2760468 Haager
Haager's picture

It's so sinister - bullish...

Tue, 09/04/2012 - 11:29 | 2760469 dcb
dcb's picture

Ahh, yes you mean the standard goldman tactic of saying the wporld will end if we don't give them and their friends unlimited money. stadard in the financial industry. I beleive it's taught in the goldman orientation

Tue, 09/04/2012 - 11:28 | 2760470 pamriallc
pamriallc's picture

The only countries with borrowing difficulty are those who cannot pay....just like getting credit from any bank. If you don't need it they come running to finance you. If you need it they double the rates and triple the downpayment or collateral pledge. Spain cannot pledge Germany. Already rehypothecated.

Tue, 09/04/2012 - 11:29 | 2760471 nmewn
nmewn's picture

Gimme My Debt Binky: Eur All Peons Edition 

Tue, 09/04/2012 - 11:28 | 2760473 magpie
magpie's picture

...and UK PMI leaked as well

Tue, 09/04/2012 - 11:30 | 2760483 saturn
saturn's picture

Draghi leaking while he sleeping.

Tue, 09/04/2012 - 11:33 | 2760502 magpie
magpie's picture

by now liquidity isnt the problem, but solvency

Tue, 09/04/2012 - 11:29 | 2760474 MoreNails
MoreNails's picture

Hummm... Bonds don't "expire". They "mature", and then you have to "repay" them with "money".

Tue, 09/04/2012 - 11:32 | 2760496 Cognitive Dissonance
Cognitive Dissonance's picture

Hummm... Bonds don't "expire". They "mature", and then you have to "repay" them with greatly devalued "money".

Fixed it for ya. :>)

Tue, 09/04/2012 - 11:41 | 2760533 catacl1sm
catacl1sm's picture

Of course, that's why "deficets don't matter." Someone forgot to tell them that the faster the debt grows, the faster the money has to depreciate. -duh

Tue, 09/04/2012 - 12:05 | 2760651 LawsofPhysics
LawsofPhysics's picture

yes, exponentially increasing inflation. "winning" (well, for those who are close to the "free money" tap and can spend it before inflation kicks in.)

Tue, 09/04/2012 - 11:29 | 2760476 lolmao500
lolmao500's picture

Call his bluff.

Tue, 09/04/2012 - 11:30 | 2760477 Boilermaker
Boilermaker's picture

Evidently, this is insanely bullish for REITs and the IYR.

Right at their normal 10:30am mark, they've been ramped way up again.  Alas.

Tue, 09/04/2012 - 11:32 | 2760498 pamriallc
pamriallc's picture

Because commercial is on a 5 year cycle and financed with 5 year debt.

Tue, 09/04/2012 - 11:48 | 2760567 Boilermaker
Boilermaker's picture

Phew, for a moment there I was thinking it was being pumped up by the FED so that all the CBMS didn't fall in value and force the banks to revalue them.  I was suspecting it was fraudulent manipulation.

Thanks for clearing it up.  I guess the triple digit valuations are OK afterall.

Tue, 09/04/2012 - 11:30 | 2760482 Nachdenken
Nachdenken's picture

Mortons Fork, folks plus Draghis job is on the fine line. 

Tue, 09/04/2012 - 11:31 | 2760484 the not so migh...
the not so mighty maximiza's picture

You are nothing without your money printing machine

Tue, 09/04/2012 - 11:31 | 2760485 rubearish10
rubearish10's picture

Umm, EURUSD125 and no confidence = DXY 81? Then we "should have" DXY 56 when looking west? Eventually......

Tue, 09/04/2012 - 11:31 | 2760486 reader2010
reader2010's picture

WARZ! 

Tue, 09/04/2012 - 11:32 | 2760491 mrktwtch2
mrktwtch2's picture

but nobody will believe the threat..who cares if the euro dissapears? our banks only have 150 billion in exposure..

Tue, 09/04/2012 - 11:31 | 2760492 asteroids
asteroids's picture

Fool me once, shame on you. Fool me twice, shame on me. Mario, (et al) you can't fool us anymore.

Tue, 09/04/2012 - 11:32 | 2760497 Xibalba
Xibalba's picture

Samson slayed a minion with the jawbone of an ass.  Is Draghi the jawbone or the ass? 

Tue, 09/04/2012 - 11:32 | 2760499 caimen garou
caimen garou's picture

go ahead little man, make my day!

Tue, 09/04/2012 - 11:34 | 2760501 dingoj
dingoj's picture

"this could stand against the charges that we are doing monetary financing, because we are not doing it.”

We can do it because, actually, we ain't doin' it.

Well done, Mario - shag 'em some more while they ain't watching, you greasy central banker you!

Tue, 09/04/2012 - 11:34 | 2760510 Dr. Engali
Dr. Engali's picture

If you don't give me unbridled power to push these bad bonds onto the tax payer it's going to be the end of the world as we know it. We will have marshall law in the land to prevent the chaos.....   Sorry I was having a flashback.

Tue, 09/04/2012 - 11:36 | 2760513 Kokulakai
Kokulakai's picture

@ Hummm... Bonds don't "expire". They "mature", and then you have to "repay" them with "money".

Shhhh.

Tue, 09/04/2012 - 11:37 | 2760514 muppet_master
muppet_master's picture

 

ISM report sends casino market down….= muppet masters looking for an excuse to sell on the muppets

 

http://www.marketwatch.com/story/us-stocks-start-september-off-cautiously-2012-09-04?dist=lcountdown

 

http://www.zerohedge.com/news/china-manufacturing-pmi-lowest-march-2009-market-response-bad-good-so-far#comment-2757012

 

just riding my shorts…spx avg price = 1415…..shorted heavily over the last few weeks and rode up to 1427= yawn!!

Tue, 09/04/2012 - 11:37 | 2760516 SafelyGraze
SafelyGraze's picture

here's a cool magic trick -- asset price deflation right before your eyes

http://www.youtube.com/watch?v=86WEutE1RCE

it starts out priced at 30, but ends up priced at 1

who says metal is a store of value

Tue, 09/04/2012 - 11:59 | 2760619 LawsofPhysics
LawsofPhysics's picture

"who says metal is a store of value"

The person(s) physically holding the gold, silver, copper and lead.  Especially if they also have the capability to send the latter right back at you with tremendous velocity and accuracy.

Tue, 09/04/2012 - 11:38 | 2760521 Winston Churchill
Winston Churchill's picture

Whatever it take to support the euro=a temper tantrum.

Well, he is an Italian,a race that makes the French appear to be warriors.

Tue, 09/04/2012 - 11:38 | 2760522 youngman
youngman's picture

BIG DEAL....so the ECB buys all the bonds in the world....it still means the countries cannot pay them back.....ever......so what is the next step...the ECB had 50 trillion in purchased debt......then what....???  Do they just let it go by by....and how do you equalize the countries...if Spain borrows 1 million Euros per capita....does Germany get the right to do the same thing...even if they do not need it..but you have to keep up with the Jones....so to speak...Economics is out the window...this is all new territory.....and it scares the hell out of me.....because it can´t stop...it just builds on itself....faster and faster.....and what do other countries do? Do you take Euros for payment?

Tue, 09/04/2012 - 11:44 | 2760539 Abraxas
Abraxas's picture

That's why the sovereign debt is the ultimate bubble...

Tue, 09/04/2012 - 13:38 | 2761036 viahj
viahj's picture

you think that's bad, wait until after the coming global war and post-war centralization of global ponzinomics.  when they hit their bubble limit....that'll be a show.

Tue, 09/04/2012 - 11:45 | 2760551 adr
adr's picture

Kick the can for three years and then float the idea of the ECB once again buying more three year bonds to kick the can another three years.

Amazingly this seems to appease the stock market. Nobody ever has to be paid in the end. Everything will be bought because there will always be a guaranteed buyer at a higher price, so inflation is guaranteed.

Is that really the game? I guess that is how Krugman makes sense to himself. By always creating a new buyer, there is never a true final payment, up up and away forever.

It is so stupid in its simplicity, how can it ever go wrong.

God, just trying to figure this crap out is making me stupid.

Tue, 09/04/2012 - 11:47 | 2760562 JR
JR's picture

All I can say, it just becomes more and more clear that the banking cartel is trying to force a political union in Europe. The international bankers thought they had an economic union and the economic union is failing because it doesn’t work. So they’ve decided to go for broke with a political union that they can control from a central location. Why? Because you can’t very well ask the Greeks to give you more money, backed up by the Germans, unless you can make it mandatory, i.e., either you can order them to give you more money or they won’t do it; they won’t give up their incomes and their country voluntarily.

But, you can order them, at gun point. And that’s what this is, it’s under threat by Draghi: You think things are bad now, pal, wait till you refuse to give me what I want; you don’t and it’s going to get a lot worse...

In other words, why in this whole world have the Greeks and other European citizens been put in a place where they’re dealing with these loan sharks - the If you don’t pay me I’m going to send Nicky around to break you knee caps kind –  the There’s nothing that upsets Big Al more when you don’t make payments on your account kind?

In short, here is pre-banker-union Europe going along building, growing, prospering, and along come the bankers and now we have destruction. What happened in the interim to Greek citizens and others working five days a week building up their businesses and now it’s destruction and the bankers are in the middle of it?  Banker loans? Who got those loans? What happened to the money?  Did the citizens take those billions? No? Then what the devil happened to that money? Where is it now?

 

Tue, 09/04/2012 - 11:49 | 2760572 LawsofPhysics
LawsofPhysics's picture

Cue the sheriff "hostage" scene from blazing saddles.  fuck the paper-pushers.  They stink of fear.

Tue, 09/04/2012 - 11:49 | 2760573 Liquid Courage
Liquid Courage's picture

The good ol' National Lampoon marketing ploy rears its ugly head yet again:

 

http://www.davemark.com/?tag=well-shoot-this-dog

If you don't buy this desperate economic nostrum, we'll kill this dog!

So? What're ya waiting for? Go ahead and shoot the flea-bitten mutt and put it out of its misery, already. Well, it worked for Hank P and the boyz ... at least it bought them a mighty 700 billion dollar kick of the can that sent it so far down the road it was out of sight for a good while. Yeee haw! Six more months of hookers and blow!

Tue, 09/04/2012 - 11:49 | 2760575 savagegoose
savagegoose's picture

well if he wants to control borrowing costs, just print what he wants and loan it any what ever rate he likes. im sure the worlds " real " money suppliers will figure out their own costs for you to  have some real money. i mean hes not talking real money is he? hes talking fiat?  print away. you can name your price as much as you want on that fake stuff.

Tue, 09/04/2012 - 11:51 | 2760582 CrashisOptimistic
CrashisOptimistic's picture

Germany: The Euro need not fall. Just balance your budgets immediately and you need not borrow at these high interest rates because you need not borrow at all.

Draghi: There will be riots and killing.

Germany: Maybe you should go out into the streets and calm those people with your speeches. We will allow that in your mandate, but we will allow no bond buying. Have a nice day.

Tue, 09/04/2012 - 11:55 | 2760602 YesWeKahn
YesWeKahn's picture

I am Drughied

Tue, 09/04/2012 - 11:57 | 2760612 Freddie
Freddie's picture

Draghi and Monti - two more Goldman Sachs rats.  

Tue, 09/04/2012 - 13:44 | 2761064 viahj
viahj's picture

GS...the Brown Shirts of the global NWO. 

Tue, 09/04/2012 - 12:09 | 2760669 CustomersMan
CustomersMan's picture

 

Re: Mr. Drag ....

I thought his "mandate" was to "Lie" when things are "Critical" in which case we assume the opposite of what he says.

Tue, 09/04/2012 - 12:12 | 2760681 yogibear
yogibear's picture

Draghi, a Goldman Sachs officer, threatened to take down the whole Euro system if he can't make the boys at Goldman more money.

Tue, 09/04/2012 - 12:14 | 2760685 ekm
ekm's picture

Finally people are understanding what I've been saying it's been few months already.

The ECB has zero authority, it's all up to the politicians. ECB is an advisor, is an influencial advisor, but that's it.

If politicians (basically Merkel) give no permission to go ahead, that's about it.

Same as with the Fed. No authority, zero, nada, eventually they must have permission to go ahead with anything they propose. That's why Hank and Benny had to go to congress to beg for money in 2008.

Tue, 09/04/2012 - 12:16 | 2760698 Toolshed
Toolshed's picture

Ya know, If I were a powerful? public servant like Dragboy and presented such blatant falsehoods to the public such as these I would expect one of two immediate outcomes:

1 - I would burst into flame, as in liar, liar pants on fire!!

or

2 - I would be promptly "retired".

Either event would be greatly welcomed by the general public.

 

Tue, 09/04/2012 - 12:23 | 2760722 Pareto
Pareto's picture

+1 for the Cartman reference.

Tue, 09/04/2012 - 12:30 | 2760765 Nobody For President
Nobody For President's picture

European Central Bank President Mario Draghi said the bank’s primary mandate compels it to intervene in bond markets to wrest back control of interest rates and ensure the euro’s survival. 

 

Right. God forbid the markets should actually have any influence on interest rates.

Tue, 09/04/2012 - 12:31 | 2760773 hourglass86
hourglass86's picture

Its funny how Zero Hedge and many people want a free market economy.

 

I suggest you to come and live in Bulgaria or other Balkan countries where everything is privatised and salaries are 300$

 

These countries have real capitalism. No one else.

Tue, 09/04/2012 - 12:37 | 2760798 eddiebe
eddiebe's picture

Germany can't get their gold back from the U.S., so they will get it from the PIGS.

Tue, 09/04/2012 - 12:39 | 2760809 g3h
g3h's picture

The fact that no opposition exists in the EU parliament means Draghi's is a done deal.

No one said a word.  All cronies and dummies.

Tue, 09/04/2012 - 12:48 | 2760817 RiskAverseAlertBlog
RiskAverseAlertBlog's picture

Yes, "a weak currency is precisely what an economically imploding Europe needs," yet this is likely to come at the expense of a strengthening dollar, which is precisely what Europe's ultimate backstop does not need.

Tue, 09/04/2012 - 12:50 | 2760841 RiskAverseAlertBlog
RiskAverseAlertBlog's picture

The only workable "fix" is significant debt write down of banking system "assets" whose insolvency in the first place necessitated massive sovereign interevention to paper over this reality. Supposing the sovereign's now entirely compromised fiscal situation is at the root of the problem is disingenuous to say the least, particularly as this sort of view only acts to cover for those whose zero due diligence caused trans-Atlantic banks to be stuffed to the gills with worthless "assets" in the first place, and whose insane defense simply has created an impossible situation only doomed to grow more so.

Tue, 09/04/2012 - 12:54 | 2760872 robertocarlos
robertocarlos's picture

He will have the same ending as Hank. 700 million in his personal bank account.

Tue, 09/04/2012 - 12:59 | 2760892 Father Lucifer
Father Lucifer's picture

Fucking delusional bastards.

Tue, 09/04/2012 - 13:16 | 2760951 Bansters-in-my-...
Bansters-in-my- feces's picture

Fuck YOU Draghi.

The way I see it YOU use to much oxygen.

 

Tue, 09/04/2012 - 13:21 | 2760962 TonyCoitus
TonyCoitus's picture

Fuck this shit, I'm going golfing............again

Tue, 09/04/2012 - 14:15 | 2761217 Byte Me
Byte Me's picture

You just have to love the bullshit newspeak economics:

these bonds will easily expire, so there is very little monetary financing if anything at all that we are doing.”

Options expire.

These bonds - of whatever duration - come due and the issuer has to redeem them. They don't just evaporate or turn into beach towels after 1, 2, or 3 years, so the question that should be asked is:

"Will the issuers find it easier to refi in the future or not?"

(Please send any answers to the Draghi-Queen in Frankfurt)

Tue, 09/04/2012 - 14:29 | 2761284 sandhillexit
sandhillexit's picture

Elaborate bluff. (less convincing really that Paulson's 'big bazooka' speech). Without the EURO there is no excuse for the institution that is the ECB. The staff like their jobs, hence threat is not credible in the least. 

Every national CB in Europe has more employees now that it did in 1999.  Each of them as a mandate to sever financial responsibility for the worthless LTRO investment portfolio sitting at the ECB.  In theory all that gets repo'ed back to the commercial banks across the zone. They could keep the cash.  Since the cash to the banks was in Dollars the ECB will then have a ccy mismatch on its books.  It borrowed from the FED in something it can't print.  Like Greece actually.  

So I would say the EURO persists until the common ccy can be farmed onto the FED balance sheet.  Would like to see guesses about what the US has if the EURO crumbles at that point.  A portfolio of ccy's on depo at the Buba and BdeF?  wallpaper? would the FED have the balls to demand gold?

Tue, 09/04/2012 - 14:51 | 2761369 Manipulism
Manipulism's picture

talkin about Hank Paulson,

I always  ask me : Why te hell nobody who is ruined from this Goldman et all scum grab his gun and take one of these fine guys with him out of the world before he kills himself.

And I bet there are a LOT of them out there which commit suicide.

But you will not hear about them.

Tue, 09/04/2012 - 16:33 | 2761734 negative rates
negative rates's picture

Ringalalaling. Last call for alcohol, cool aid, and dry powder for all. The doctor provides the chocolate and B-12 shots but this currency going to pizzas, gets yours at the ECB.

Wed, 09/05/2012 - 02:04 | 2763470 slewie the pi-rat
slewie the pi-rat's picture

well the "disjointed incrementalism" or muddling thru has no end

AND the "economy" isn't going anywhere to help at ALL!

therefore, the "disjointed" can-kicking is being "challenged" because the people doing the financing are up-against-the-wall, themselves

so down go the pigs!  these is no use continuing, here on the near-eve of the pastyChefCourt ruling?

marioECB is simply playing his hand :>  if they want the EU to survive, they MUST do this or something just as fuking styooopid and pretend the long-run will be better if they "adjust the boilerplate for him" to allow "reasonable monetization" so that borrowing rates can be kept low for sow's ears pretending to be silk purses

but wait!  this is a real dilemma, i would say!  so maybe it has two horns :>  the other being BBQ'd pigs and a continent dropping X and deciding wtf to do next as it kicks in

as in every single one of these "cases" including ours under hankyPanky, the basic choice seems to be either :> for thePeople and their long-term better-interests OR :> for the elites and their pols

and the pols decide

this is why the goobermint in greece was taken down when gPap broached the plebiscite;  and why germany "threatens" with ditto depending on theCourt; 

iceland went to thePeople;  ireland did not, if i recall correctly;  they had an election and the new guys'n'dolls [like the tParty in the US]  became pols and voted against thePeople

if that is incorrect, it is not due to complexity and bullPUCKY, but simply to over-simplification...

a german referendum [if worded properly] might stop this, but even that is not assured

i think the elites would like the QE but i can't do the math to prove it at this point;  the status quo is so goose-is-cooked that even the status quo itself may be ready for the change soon

let's start by making gold and silver coinage legal tender!

[i've already explained why about 3 dozen times so fuk you if you don't know it by now]

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