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In The Meantime, ECB QE Is On In Full Force With About $100 Billion In Open Market Bond Repruchases In Past Month

Tyler Durden's picture


And so the ECB's balance sheet, once upon a time clean of any monetization interventions, continues to deteriorate, and has now grown to a record €143 billion, after the bank disclosed €13.96 billion in PIIGS debt purchases in the prior week. This is an additional €70 billion since the SMP was expanded to purchase Italian and Spanish debt in early August (predicated by Italy complying with an Austerity prgoram that it has since made a complete mockery of). So for those complaining about the ECB pursuing Quantitative Easing, we wonder what one would call nearly $100 billion in bond repurchases in the open market in the past month: this is about as much as the Fed would purchase in its most active monetization month during either QE1 or QE2!

Alas, this is not enough for Morgan Stanley, which like the faitful copycat it is, has now joined Goldman in officially demanding more QE from Jean Claude Trichet.

Morgan Stanley's summary:

Bottom Line: As DM economies reach the end of their debt supercycle it really is different this time. Consequently, equities are unlikely to trough until long lasting solutions are found. We think this requires QE from the ECB, a new approach to fiscal policy and more debt write-downs.


This time it’s different


There has been a structural deterioration in the outlook for stocks given the relapse in growth and further escalation in the euro-zone debt crisis. We believe DM economies are now at the end of their debt supercycle. 


Equity valuations have further to fall


Market sentiment and valuation are low in a historical context, but are not yet at extreme levels of bearishness – for example, there is still 10% downside to a single-digit Shiller PE for Europe. Furthermore, equities are unlikely to bottom until we get evidence of fundamental improvement. 


What we want to see to turn more constructive


Given the size of problems facing DM economies we believe equity investors are increasingly looking for long lasting structural solutions. In our opinion, stocks are unlikely to trough until we see all of the following: #1 Large-scale QE from the ECB; #2 New fiscal policy to provide short-term boost and longer-term sustainability; #3 Debt write-downs for over-levered entities.

Full report:



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Mon, 09/12/2011 - 10:00 | 1659353 achmachat
achmachat's picture

why is that not showing in precious metals?

what happened to precious metals these days.. I mean... where is all the money going? cash??

Mon, 09/12/2011 - 10:06 | 1659370 swissaustrian
swissaustrian's picture

Looks like manipulation. Everytime London wakes up (4-6 am ET), pm´s take a hit. In 2008 this was done during CRIMEX trading (10 am ET. Statistical evidence: Just btfd

Mon, 09/12/2011 - 10:09 | 1659387 MillionDollarBonus_
MillionDollarBonus_'s picture

The smart money is going into US treasury bonds. Smart, savy investors recognise that US treasuries derive safe-haven status from the courage and innovative ability of our congress and the intellectual capacity of our economic advisors. Obama's jobs plan includes a substantial amount of fiscal stimulus, which will power our consumer economy for the near-future, whereas Europe's lack of integration has caused disputes over large fiscal programs of a simmilar nature. The supercongress initiative is yet another example of our congress' ability to come up with innovative solutions to our economic problems. This has been priced in accordingly.

Mon, 09/12/2011 - 10:12 | 1659401 MFL8240
MFL8240's picture

Love it!

Mon, 09/12/2011 - 10:16 | 1659410 Spitzer
Spitzer's picture

I greened you.  +-9

Mon, 09/12/2011 - 10:19 | 1659423 Theta_Burn
Theta_Burn's picture

^ WTF?

your making funnies right?

Mon, 09/12/2011 - 10:22 | 1659446 Theta_Burn
Theta_Burn's picture

You know, a WTF ETF sound brilliant about now

Mon, 09/12/2011 - 10:20 | 1659426 mess nonster
mess nonster's picture

That kind of sarcasm will put hair on your chest!

Mon, 09/12/2011 - 10:37 | 1659503 LowProfile
LowProfile's picture

You mean hair on his titanic balls.

Mon, 09/12/2011 - 10:21 | 1659439 WonderDawg
WonderDawg's picture

Fuck, I wish I had that kind of poker face for my Wednesday night poker game. I could bluff my way to vast fortunes.

Mon, 09/12/2011 - 10:28 | 1659470 stormsailor
stormsailor's picture

i get it, its a momma joke. right?

Mon, 09/12/2011 - 13:10 | 1660082 Sneeze
Sneeze's picture

You are either the most sarcastic person I have ever read or the biggest moron outside of public service.  (If your in public service I can understand).  Tresuries do not "derive safe-haven status from the courage and innovative ability of our congress and the intellectual capactiy of our economic advisors"

Tresuries get safe-haven status because there are Americans left that still want wake up in the morning and go to work.

Mon, 09/12/2011 - 13:25 | 1660135 CosmicBuddha
CosmicBuddha's picture


Judging by all the negative votes and comments you get I guess there are large number of zerohedgers who just don't understand irony.

I like the way you never explain yourself.

You make me laugh anyway!

Mon, 09/12/2011 - 14:53 | 1660560 Instant Wealth
Instant Wealth's picture

The MillionDollar Bonus opened my eyes. Tomorrow, I will convert from the heretic short side to BTFD.

Mon, 09/12/2011 - 10:11 | 1659396 MFL8240
MFL8240's picture

Because the finacial markets in the US are the most courrpt markets on the planet. When I saw the stock market turn positive, I laughed my ass off, this is just an all out effort to decieve.  Nothing new!!

Mon, 09/12/2011 - 10:12 | 1659403 Founders Keeper
Founders Keeper's picture


When markets are down and gold is up, that's a bad day.

When markets are down and gold is down, that's a REALLY bad day.  (Equals panic developing.)

Eventually, that will change.  For the worse.  As will life for all of us.



Mon, 09/12/2011 - 10:17 | 1659413 Spitzer
Spitzer's picture

Like when gold was up $25 on May 6 2010 ? (flash crash)

Mon, 09/12/2011 - 10:22 | 1659443 mess nonster
mess nonster's picture

Can't wait for PAGE to open, and see what happens to PM's then.

Mon, 09/12/2011 - 10:22 | 1659444 mess nonster
mess nonster's picture

Can't wait for PAGE to open, and see what happens to PM's then.

Mon, 09/12/2011 - 10:20 | 1659424 Overflow-admin
Overflow-admin's picture

Just look at Gold / Silver priced in CHF...

Mon, 09/12/2011 - 10:21 | 1659436 spondoolix
spondoolix's picture

PMs are down because the dollar is up against the Euro.  Read Gold Core's analysis posted on ZH earlier this AM.


good luck,


Mon, 09/12/2011 - 10:26 | 1659457 Spitzer
Spitzer's picture

Gold always makes a new high in Euros before it makes a new high in dollars. Check it out.

Mon, 09/12/2011 - 14:21 | 1660311 ZeroPower
ZeroPower's picture

Yes - to fulfill margin calls on other shitty 'investment' choices.

Mon, 09/12/2011 - 10:01 | 1659356 Zap Brannigan
Zap Brannigan's picture

NASDAQ, S&P are green, must be the trans-Atlantic wealth effect

Mon, 09/12/2011 - 10:13 | 1659406 DormRoom
DormRoom's picture

front running QE3 announcement on Sept 21.  If the Fed doesn't help now, it'll cost ALOT more in 4-6 months.

Mon, 09/12/2011 - 10:01 | 1659357 swissaustrian
swissaustrian's picture

Price stabeeleetee through debt monetzation, bitchez!

Mon, 09/12/2011 - 12:11 | 1659888 agent default
agent default's picture

You mean the printing will continue until morale improves?

Mon, 09/12/2011 - 10:01 | 1659358 max2205
max2205's picture

Nice reversal in the market...PPT?

Mon, 09/12/2011 - 10:05 | 1659364 hedgeless_horseman
hedgeless_horseman's picture
09-09 12:38: Merkel says "Jah, zee German proles are goote whit zee money printing"
Mon, 09/12/2011 - 14:49 | 1660520 Instant Wealth
Instant Wealth's picture

Agreed. ZH should have an eye on him. Fits perfectly in the scheme "The Dark Lord of the Markets".

Mon, 09/12/2011 - 10:03 | 1659365 jdelano
jdelano's picture

china buying euro, dollar down, market up

Mon, 09/12/2011 - 10:06 | 1659367 GeneMarchbanks
GeneMarchbanks's picture

FIAT is as FIAT does... Now truly, was the response of central bankers ever in doubt?


Mon, 09/12/2011 - 10:03 | 1659368 Founders Keeper
Founders Keeper's picture

They always print.  That's all you need to know.

Prepare accordingly.



Mon, 09/12/2011 - 10:10 | 1659390 Spitzer
Spitzer's picture

What do you think would happen if the ECB bid for gold with their US dollars ?Bretton Woods 2 would be dead the next day.

That is the ECB nuclear option and  I expect it in days.

Mon, 09/12/2011 - 10:40 | 1659514 Founders Keeper
Founders Keeper's picture

Only a fool would trade in this environment.

I cashed in my chips some time ago.  My only "trades" these days are in time.  Time to prepare for the worst while hoping for the best.

Mon, 09/12/2011 - 10:04 | 1659369 Theta_Burn
Theta_Burn's picture

HA and everyone was worried.

Even the Shit & Pee index is green now @ 9.59 EST (must have drank the purple coolaid)

Mon, 09/12/2011 - 10:11 | 1659399 hedgeless_horseman
hedgeless_horseman's picture

Did you see the Shuttle launch this morning?  Impressive display of American power.

Tue, 09/13/2011 - 03:21 | 1662780 LudwigVon
LudwigVon's picture


Mon, 09/12/2011 - 10:04 | 1659371 Maybe-Not
Maybe-Not's picture

Aannnnddd........Were Green! All better now.

Mon, 09/12/2011 - 10:19 | 1659419 maxmad
maxmad's picture

Looks like the manipulated rally FAILED, bitchez!

Mon, 09/12/2011 - 10:06 | 1659378 somethingelse
somethingelse's picture

meanwhile a theme-song for this morning's US market momo melt up:



Mon, 09/12/2011 - 10:08 | 1659383 Belarus
Belarus's picture

it's official: other than pure recreational entertainment, there is no need to follow these non-markets anymore. Sprott was right: JUST BUY PHYSICALL GOLD AND SILVER AND NOTHING ELSE, no stocks, funds, etfs, bonds, currencies, anything. Just physical. That will outperform EVERYTHING while preserve and protect. 

Fuck, last post of the day for me. I'll be too busy.

Mon, 09/12/2011 - 10:09 | 1659385 Dr. Engali
Dr. Engali's picture

Nice gap fill on the markets.

Mon, 09/12/2011 - 10:10 | 1659389 snowball777
snowball777's picture

QE, Haircuts, and Riots...Oh My!

Mon, 09/12/2011 - 10:10 | 1659394 Everybodys All ...
Everybodys All American's picture

Dow below 11,000 must set off Defcon 1 alert for Brian Sach


Mon, 09/12/2011 - 10:11 | 1659398 Gandalf6900
Gandalf6900's picture

sick green that is!

Mon, 09/12/2011 - 10:12 | 1659400 Eugend66
Eugend66's picture

"And so the ECB's balance sheet, once upon a time clean of any monetization interventions, continues to deteriorate, and has now grown to a record €143 billion, after the bank disclosed €13.96 billion in PIIGS debt purchases in the prior week. "

The Bernank is picking his nose, you think ?

Mon, 09/12/2011 - 10:12 | 1659404 Gandalf6900
Gandalf6900's picture

how easy is it to carry physical across borders?

Mon, 09/12/2011 - 10:37 | 1659502 thunderchief
thunderchief's picture

Metal confiscation will occur in many ways and is already.

Taxing yearly gains as winfall profits

not allowing export of metals

registering any purchases

mining taxes


Mon, 09/12/2011 - 10:17 | 1659411 dasein211
dasein211's picture

Like i said. No huge moves until after 9/20 fed meeting. No one wants to sell in front of the qe train and no one wants to buy in front of the greece default train. Until then we trade sideways... Except for the dax and ftse of course.

Mon, 09/12/2011 - 10:21 | 1659442 maxmad
maxmad's picture

OOps looks like your rally failed!  Bennie needs dow 8-9k just to sell QE3!  Otherwise he doesn't get a big enough Viagra...

Mon, 09/12/2011 - 10:19 | 1659422 catladdy
catladdy's picture

US equity shorts! Keep an eye on the margin drawdown

Mon, 09/12/2011 - 10:26 | 1659455 catladdy
catladdy's picture

ES opinion. Hourly close above dec 1143 is bullish for several more hrs. Shorts who have a longer term perspective should have margin to go to 1200-1230

Mon, 09/12/2011 - 10:44 | 1659526 maxmad
maxmad's picture

Hows that BS rally going now?  Oh wait, your going the wrong way!

Mon, 09/12/2011 - 10:28 | 1659467 mess nonster
mess nonster's picture

This  QE is for pussies. I say, make a new dollar, and give 1000, or 10,000 ND's for one old dollar. (Or the euro, as the case may be) That should loosen things up.

Mon, 09/12/2011 - 10:34 | 1659487 thunderchief
thunderchief's picture

Stealth mini QE's. 

Get used to em folks.

They're here to stay.

The Bernanke did not appreciate the bad PR from QE I&II



Mon, 09/12/2011 - 10:35 | 1659490 stormsailor
stormsailor's picture

my short 20 at 1147 is now liquidated at 1141 at the ascending trendline.  hope for a bounce and play again.

Mon, 09/12/2011 - 10:51 | 1659543 M.B. Drapier
M.B. Drapier's picture

I see Wolfgang Münchau has come to the conclusion that, contrary to news reports, the German supreme court decision effectively puts the kibosh on Eurobonds and any other kind of standing mechanism of EU fiscal federalism. (Title: "Stop rejoicing. This was no victory for the eurozone") If true, that would mean that the ECB has lost the chicken-match, and money-printing is the only remaining way to save the bank bondholders (sorry, save the Euro of course!) In fact Münchau doesn't think that's going to happen either, but we have to wait until next week to find out why.

Tue, 09/13/2011 - 22:00 | 1665984 moxia19
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