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Mission Intractable: ECB Bond-Buying Plan-For-A-Plan Will Self-Destruct In 24 Hours

Tyler Durden's picture




 

Have no fear; Europe closed and equities leaked so a quick series of European comments are more than required... Bankia, check! Bank backstops, check! ECB Bond-Buying Plan...

  • *ECB SAID TO PLAN TO GIVE GOVERNORS BOND PROPOSALS ON SEPT. 4
  • *ECB SAID TO HAVE NO PREFERRED OPTION FOR BOND PURCHASE PLAN YET

So no real idea what they are actually going to do. However!

  • *ECB SAID TO GIVE CENTRAL BANKS 24 HOURS TO DIGEST BOND PLAN

Nothing new here - and that is why the market is entirely unimpressed...

Bear in mind Morgan Stanley's view of the ECB's meeting next week:

We don’t believe that the conditions for the ECB to start buying government bonds are likely to be met already at the upcoming Governing Council meeting on September 6.

 

Clearly, the ECB will aim to decide on the parameters of the bond purchase programme at the meeting – even though we doubt that the ECB would start buying on the day or that it will be sharing the full details of the programme with us and the markets at the press conference. Instead, we would expect Mario Draghi to stay vague on the exact shape of the purchase programme for several reasons:

  • First, the ECB tends to never pre-commit to any specific policy action and will like to keep its discretion.
  • Second, the nature of the programme itself is likely to be controversial on the Council where there is likely to be a significant minority of sceptical members.
  • Third, the technical difficulties in determining the exact dose of what is likely to be a powerful, albeit also highly addictive, drug are a serious obstacle to speedy action.

Hence, Eurosystem staff might need more time to prepare and Council members more time to seek a compromise that ideally all (or at least almost all) Council members can support. At the same time, we would expect ECB President Draghi to stress the ECB’s determination “to do all it takes”. Any indication that the purchase programme is capped in size from the start would likely be viewed negatively by markets, we think.

 

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Fri, 08/31/2012 - 13:10 | 2753190 YesWeKahn
YesWeKahn's picture

Is drugie still alive?

Fri, 08/31/2012 - 13:24 | 2753233 knukles
knukles's picture

Here guys, we want you to consider this plan.  It's incomplete but intangible enough to fulfill some sort of reasonably vague proposal that we think somebody should come up with in order to show that we're planning.  Now, we know it's Labor Day weekend in America which means we should be able to digest this non-invasive bland series of introductory comments and incomplete proposals braced by inane thoughts and contradictory statements which nobody gives much of a rats ass about without too much shit from the folks who don't agree with our pal, Paul Krugman. So we look forward to your evasive and hollow replies shortly.  Or whenever you can get back to us. 

Fri, 08/31/2012 - 17:10 | 2753861 SAT 800
SAT 800's picture

They're going to give Central Banks 24 hours to digest the Bond Plan; it's going to take a lot longer than that, and the result when it gets digested is not going to be pretty.

Fri, 08/31/2012 - 13:24 | 2753234 Mark Carney
Mark Carney's picture

OT: anyone have any ideas on how can I get a silver tea set (given by in laws) melted down into coins? much rather try and carry coins around in my canoe then the tea set, hopefully this time ill make it across the lake.

Fri, 08/31/2012 - 13:36 | 2753278 knukles
knukles's picture

Solid silver?
I can take care of that for ya'
                -Jon Corzine

Fri, 08/31/2012 - 13:47 | 2753317 Brazillionaire
Brazillionaire's picture

Sell tea set, buy silver coins with proceeds. While you're at it, sell everything else you don't need, buy silver coins. The only exception to this is "sell X, buy gold coins".

Fri, 08/31/2012 - 15:53 | 2753672 TPTB_r_TBTF
TPTB_r_TBTF's picture

when life gives you a silver tea set ...

then boil some water!

Fri, 08/31/2012 - 13:10 | 2753193 no life
no life's picture

They will probably announce a plan to allow used condoms as eligible collateral.

Fri, 08/31/2012 - 13:12 | 2753200 ZeroIQ
ZeroIQ's picture

Hah, too tangible!

Fri, 08/31/2012 - 13:21 | 2753222 john39
john39's picture

more like unborn children...

Fri, 08/31/2012 - 13:21 | 2753224 HD
HD's picture

"They will probably announce a plan to allow used condoms as eligible collateral."

 Makes sense. Think of all the injected liquidity...

Fri, 08/31/2012 - 13:45 | 2753313 ThunderingTurd
ThunderingTurd's picture

Boom!  +1

Fri, 08/31/2012 - 13:26 | 2753241 CPL
CPL's picture

I'm offering Hindenburg derivative option chain and Iran-Contra Underwriting.

 

Swear to christ...nothing shitty could possibly happen.

Fri, 08/31/2012 - 13:50 | 2753325 Overflow-admin
Overflow-admin's picture

I'd like to exchange yours with some Heisenberg (is it a put or a call?) packaged options but only in dark pools of course.

Fri, 08/31/2012 - 13:11 | 2753197 Cognitive Dissonance
Cognitive Dissonance's picture

*ECB SAID TO GIVE CENTRAL BANKS 24 HOURS TO DIGEST BOND BOMB PLAN

Fixed it for ya.

Fri, 08/31/2012 - 13:31 | 2753255 CrashisOptimistic
CrashisOptimistic's picture

THIS IS NOT THE KEY.

SUBORDINATION IS THE KEY.  The ECB has to get past the issue of doing it or not, against German opposition, but even if they did get past the Germans, they have to create wording that DOES NOT SUB-PRIORITIZE PRESENT SPANISH BOND HOLDERS.

If they subordinate present owners of those bonds, those holders will smell Greek PSI coming and flee, undoing the whole process.

If the ECB tries to subordinate its own purchases to bonds already held, then that is placing taxpayer money behind private money and no parliament will allow that.

 

Fri, 08/31/2012 - 14:01 | 2753355 Cognitive Dissonance
Cognitive Dissonance's picture

There is only one way out of this maze.....and this ain't it.

Fri, 08/31/2012 - 13:12 | 2753201 surf0766
surf0766's picture

Does the dog ever catch its' tail ?

Fri, 08/31/2012 - 13:14 | 2753203 DoChenRollingBearing
DoChenRollingBearing's picture

Just keep it together a few more weeks Euro guys!  Draghi, Merkel and Monti:  just a few weeks...  Until we come back from Italy.  Then do whatever it is you are going to do to ruin a beautiful continent...  Sad really.

Fri, 08/31/2012 - 13:30 | 2753253 knukles
knukles's picture

Hi Angie?
Who's this?
Me
Me who
You know who
Oh, yeah, you
Yeah listen
He's got you scared, doesn't he
Who?  You mean Willard?
Yep
Nah, not me, listen...
Bullshit, or else you wouldn't be calling me, schvartzer
Listen, Angie, can you all just hold this thing together till after November?
Hold this...

Hi
Who's this
You know
No I don't
Oh Jesus, not again
Why'd you reference Jesus?  You people don't believe in him.
Listen
Wait, can I ask you not to attack anybody until past November?  As a favor?
Attack this...

Honey?
WHAT?
I wanna go to St. Petersburg
Aaaaaaaaraghhhhhhhhhhhhh

Fri, 08/31/2012 - 13:15 | 2753205 American34
American34's picture

Dear Mr. Durden,

 

It would be nice to have either a spot in the forum or somewhere at least on this site where readers questions could be posed in a structured manner that wouldn't be made obsolete in 2 hours by hundreds of comments.

I understand the difficulty as you would like receive hundreds of questions but maybe a small fee could be paid to limit the amount of questions asked.

Either way, I believe many readers here would enjoy the priviledge of being able to ask you and your collegues intelligent questions regarding the future of the economic world we live in.

Fri, 08/31/2012 - 13:20 | 2753220 ParkAveFlasher
ParkAveFlasher's picture

GOLD, BITCHEZ!!!!

Fri, 08/31/2012 - 13:26 | 2753242 DoChenRollingBearing
DoChenRollingBearing's picture

Right answer!

Fri, 08/31/2012 - 13:33 | 2753269 Ahmeexnal
Ahmeexnal's picture

I thought the answer was 42!

Fri, 08/31/2012 - 14:24 | 2753396 Ghordius
Ghordius's picture

The question to your answer is "how many times could gold be more worth than the usual portfolio in some years?".

Fri, 08/31/2012 - 13:30 | 2753252 surf0766
surf0766's picture

Funny as all hell. I was waiting for it.

 

Dude, try reading the articles.

 

$16 trillion + $6 trillion = $22 trillion. Debt

 

46 million on foodstamps.

 

98% moron population.

 

Obommunist  ( not  my idea but another dearers) sympathizers all over the country.

50% of the population pays no taxes.

The dollar is crap.

What part of f'd up don't you get?

 

Now ask your question and one of the more well-informed folks around here will answer your question.

 

As I was told when I first came on the zh. "This is the fight club"

 

Peace !

 

Fri, 08/31/2012 - 13:33 | 2753266 Dr. Engali
Dr. Engali's picture

WTF were you thinking? You gave him the answer for free. He was willing to pay for it.

Fri, 08/31/2012 - 13:34 | 2753273 surf0766
surf0766's picture

Well I never had the opportunity to do it to a newbie and I was bored so I figured I would. Come on I was just sharing your wealth !

Fri, 08/31/2012 - 13:46 | 2753315 American34
American34's picture

Watch it buddy! I have been on this forum for a long time. I just would like to see a more serious forum rather than the standurd "BULLISH!" or "GOLD!" that never seems to end and without all the BS that is rhetorically spouted over and over. I would much rather come out of this better off than worse and I am sure there are more ways than buying gold! The world isn't going to end and we will come out the other side at some point. I would like to position myself to be better off then not just where I am now.

But apparently intelligent discussion isn't a primary topic here. Everyone would rather whine piss and moan about hyperinflation and how it sucks rather than what to actually do about it in the real world!

Fri, 08/31/2012 - 13:50 | 2753319 ParkAveFlasher
ParkAveFlasher's picture

1) GOLD, BITCHEZ!!!

2) refer to #1

Fri, 08/31/2012 - 14:01 | 2753357 surf0766
surf0766's picture

Because everything has been talked, chatted and discussed. The only thing left is to watch the shitter flush. Sorry but most know the reset is coming. How it trades no one knows. Black swan this black swan that.

So I buy staples and stay the hell out of the market.

 

You want to fix the u.s problem. Cut gov't spending 20% every 6 months until we spend what we take in.

Flat tax everyone at every income level. Fair is fair. No deductions.

Eliminate all corporate taxes. We need companies to want to be here and stop chasing them overseas or giving them tax credits to push jobs everseas which both parties do.

 

This has all been said time and time again.

 

Grab a beer or scotch. Sit back. Stick to your common sense.

 

 

 

 

 

 

Fri, 08/31/2012 - 14:17 | 2753406 Ghordius
Ghordius's picture

+1, though I find strange that your generation taxes corporations that little compared to the Great Generation and a few before.

Fri, 08/31/2012 - 14:34 | 2753423 Dr. Engali
Dr. Engali's picture

Corporations are only a conduit to collect taxes on the serfs. If people could grasp that  they would understand the fact the wool is being pulled over their eyes.

Fri, 08/31/2012 - 14:42 | 2753360 Dr. Engali
Dr. Engali's picture

There are a lot of intelligent people on this site who are more than willing to  engage in serious financial and economic topics. That is one of the great things about the Hedge. Sure you get a lot of silliness but that is just people letting of steam. Plus much of it just has to do with the fact that every day seems like ground hog day, and many of these topics have been discussed into the ground. But silliness aside,you also get a place where you can learn not just from the Tyler's but also from the participants.

 

Edit..If you want to trully understand why gold you must include FOFOA in your readings.

 

http://fofoa.blogspot.com/

Fri, 08/31/2012 - 14:28 | 2753432 debtor of last ...
debtor of last resort's picture

I read it for about a year now. Never asked a question, maybe a funny one or so. Are you just looking or are you also seeing? When you understand things you will wake up every morning with a loud GOLD BITCHEZ!!!

These guys are right, there's nothing to say anymore. And, please don't tell anyone, when i'm flushing the toilet i whisper: fuck you Bernanke....  My wife must not hear that, she already hates me losing our savings in pm's in a boating accident.

Fri, 08/31/2012 - 13:47 | 2753318 American34
American34's picture

NOW THATS THE IDEA! Your smart!

Fri, 08/31/2012 - 13:44 | 2753308 Overflow-admin
Overflow-admin's picture

Shut up and take my money!

Fri, 08/31/2012 - 13:21 | 2753221 Agent P
Agent P's picture

I can't even digest a corn dog in 24 hours.

Fri, 08/31/2012 - 13:34 | 2753271 Brazillionaire
Brazillionaire's picture

I am afraid to ask how you know this....

Fri, 08/31/2012 - 13:42 | 2753301 knukles
knukles's picture

Mrs. P:  Agent!  WTF are you doing poking your poops with that stick?  Are you fucking sick or something?  Jesus!

Agent P:  Aw honey, just looking for those, uh  you know... the ah.. ah.. ah...   diamonds.  Yeah, the diamonds I swallowed.  Yeah, the diamonds I swallowed that I found under the couch cushions.

Mrs P:  Well thank the Lord for that!  I thought you were playing with your corn-dog poop again.

Fri, 08/31/2012 - 13:25 | 2753236 LongSoupLine
LongSoupLine's picture

 

 

Is it me, or are the propaganda media releases now shitting out faster than I can post threads to them here at ZH?  Un-fucking-real.

Fri, 08/31/2012 - 13:36 | 2753286 surf0766
surf0766's picture

For the 2% non-morons nothing is believable. But for the 98% morons everything that the news media says is golden.

 

 

Fri, 08/31/2012 - 13:25 | 2753237 SheepDog-One
SheepDog-One's picture

24 hours to digest plan, stand by for explosive sharts.

Fri, 08/31/2012 - 13:39 | 2753290 Overflow-admin
Overflow-admin's picture

Internetz suggest an appropriate toilet seat XD

And if you're a young Bankia client, you can even use their official towel

Bankia - it's time for some hard shit right now!

Fri, 08/31/2012 - 13:33 | 2753243 Zero Govt
Zero Govt's picture

"ECB Bond-Buying Plan-For-A-Plan Will Self-Destruct In 24 Hours"

That's twice the lifespan of most ECB financial plans ..don't throw away the rose tinted shades just yet Mario, not everything you do falls apart by lunchtime

 

Fri, 08/31/2012 - 13:26 | 2753244 adr
adr's picture

nobody wants to go into labor day weekend broke.  Watch out for the tuesday hangover.

Fri, 08/31/2012 - 13:27 | 2753246 Dr. Engali
Dr. Engali's picture

It's a good thing we have a long weekend for them to think of some other bullshit to dazzle us with. Hmmmm what rumor hasn't been tossed around lately?......alien invasion?

Fri, 08/31/2012 - 13:28 | 2753249 john39
john39's picture

the war option seems primed and ready to go... together with the fascist police state roll out in all so called democracies, including the USSA.

Fri, 08/31/2012 - 13:35 | 2753277 Brazillionaire
Brazillionaire's picture

That's funny, earthling.

Fri, 08/31/2012 - 13:30 | 2753248 LouisDega
LouisDega's picture

Does this mean no Jerry Lewis? 

Fri, 08/31/2012 - 13:31 | 2753256 knukles
knukles's picture

Now that is truly profound.
But shouldn't the French decide after all they....

Fri, 08/31/2012 - 13:33 | 2753270 LouisDega
LouisDega's picture

I watch him every year. Tradition ya know. Just like The yule log 

Fri, 08/31/2012 - 17:22 | 2753899 SAT 800
SAT 800's picture

Discard your Television Set quickly! There's no time to lose. You're showing signs of acute TV Brain; which is indistinguishable from the effect of advanced brain tumor.

Fri, 08/31/2012 - 13:36 | 2753282 SheepDog-One
SheepDog-One's picture

Cant 'cap' the bond buying, that would be all frowny-face....have to buy ALL the bonds! YAY!

Fri, 08/31/2012 - 13:38 | 2753288 TonyCoitus
TonyCoitus's picture

Fuck this shit, I'm going golfing!

Fri, 08/31/2012 - 13:42 | 2753302 Brazillionaire
Brazillionaire's picture

Is that you, Mr. President?

Fri, 08/31/2012 - 13:52 | 2753333 Vincent Vega
Vincent Vega's picture

Bwahaaaaaaaaaaaaaa!!! +100 Brazillionaire

Fri, 08/31/2012 - 13:40 | 2753295 youngman
youngman's picture

I think Spain has already chosen its path........they are just going to default.....no ECB...no IMF....just default

Fri, 08/31/2012 - 13:52 | 2753334 CrashisOptimistic
CrashisOptimistic's picture

No such thing.  That doesn't escape the debt.  Bondholders will just ignore their declaration and continue sending bills, and continue compounding.  Eventually they have to pay if they want imports.

Fri, 08/31/2012 - 14:04 | 2753362 LawsofPhysics
LawsofPhysics's picture

...and the spaniards will keep ignoring them.  Are you saying Spain can't become self-sufficient?

Sounds like a plan.  America tells everyone to fuck off and let them wait for us to "request some imports".

FAIL.

Fri, 08/31/2012 - 14:06 | 2753370 Dad Was Right
Dad Was Right's picture

I confess this whole ECB bond buying proposal has me confused. Merkel went on vacation and Draghi, et al, are like kids raiding the cookie jar while mother is away with talk of bond buying which has already been nixed by Merkel numerous times. Didn't she say "over my dead body" or something like that? I expected these bad boys to get a serious but whipping when she returned but her response has been very muted. Meanwhile all kinds of proposals, plans, discussions and press leaks continue. Where are Merkel's usual firm denials this time around?

Fri, 08/31/2012 - 14:20 | 2753414 Ghordius
Ghordius's picture

It's a different gov/CB tradition, here. The talk and the walk are different.

Fri, 08/31/2012 - 14:07 | 2753372 Ineverslice
Ineverslice's picture

And with true MI tradition, all u d-bags of the EU please remove your faces and reveal to us who u really are so we can have our market back (for Christ sake)....Dr. Evil anyone?

Fri, 08/31/2012 - 14:07 | 2753373 RiskAverseAlertBlog
RiskAverseAlertBlog's picture

However, if it's not capped, then what are bond markets to think? Draghi is begging a run on the entire continent.

Fri, 08/31/2012 - 17:25 | 2753904 SAT 800
SAT 800's picture

"---a run on the entire continent"; it's in progress. The Eurozone is in cash outflow; it's just a slow motion train wreck.

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