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Peak Desperation: ECB "May" Set "Secret" Bond Caps, Bild Says Without Citing Anyone
Just when we thought we had seen and heard it (and by it we mean lies, innuendo and desperation) all, here comes the one thing that confirms where the ECB, and Europe, is concerned, we ain't ever seen nuthin' yet. According to Bloomberg, the ECB may set secret ceilings on the yields of govt bonds from countries requiring bailout aid, Welt reports, without citing anyone. Note the words "secret" and "without citing anyone" because they really are key. Because it is unclear whether Bild is truly stupid enough to assume that what amounts to a limitless bond purchase operation could remain a secret and not show up on the ECB balance sheet. What it really is, is merely a last step desperation attempt by Mario to keep on talking down bond yields, since a month into his "believe me" speech, the ECB has yet to do anything, let alone secret or not so secret yield caps, let alone Spain demanding a bailout, let alone the ECB even reaching a consensus with Germany and Bundesbank both opposing any incremental money printing. Welt says that the ECB could also set a range for yields, merely another absolutely idiotic "detail" in the ECB's "secret" plan. Supposedly the advantage of a range is that the ECB wouldn’t need to defend a set price at any cost, could tolerate S/T deviations. The (lack of) logic for this measure is that central bankers no longer believe that announcing a ceiling and making it public would be enough to calm markets. But nothing, nothing, can prepare one for what comes next: Secret yield ceilings would only work if they aren’t leaked says Welt. Yup. They said that. This is where blood shoot be shooting out of your nose at escape velocity.
Some additional minor details from Welt:
- May be difficult to ensure secrecy as ECB bond purchase plan is controversial, not all council members in total agreement on best course of action
- No decision has been made yet on how ECB can best act in markets
We can only hope this is a desperate attempt at media disinformation to get the German public against further bail outs, or better yet, outright humor to challenge the Spiegel's just as desperate recent leak on not so secret yield caps, because if this is truly an "indication" of the ECB's remaining ammunition, then Europe has at most days left.
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Secret yield ceilings would only work if they aren't leaked
Is this for real!?!
No, we can't have secret yield ceilings and no one can leak info. We must have double secret yield ceilings!
Somebody hand me a bottle of jack to slam to complete this Animal House reference
Well, it was good for a little pop on the eurusd. Not sure about the effect on sovereign debt though.
I see a bright future for 'bullshit idea specialists' at the ECB.
Any caps still equal €Bonds. (With considerably high yield) = Germany burns extra money for utilizing caps.
I have this secret tiger-repelling object which I can't tell you what it is. All I can tell you is that wherever it is, there are never any tigers around. Also I never take it with me to any places were there might be tigers, which is why no one ever sees the tigers acting strange when I'm around.
All true, trust me!
Perhaps this is because I'm so old that I could be called a dinosaur, but the ECB "talk and walk" has, IMHO, reverted to the old way all (european) central banks talked and acted. Nowadays the younger generations are used to CB superstar glamour from FED's "Maestro" Greenspan and "Helicopter" Bernanke, but the "old interventionist school" of the european central banks (which are in many cases way older, btw) is perhaps still alive.
My two cents: Draghi has convinced the ECB Council - or more likely the other way round - to at least try to do it the "old (european) way": The market rules, long term. The market obeys the states's needs, short term.
Ergo IF some banks and/or hedgefunds organize a nice little churn-fees-and-bonuses-generating bear raid on a country, THEN they will get trounced by unlimited EUR firepower. IF the market behaves "rationally according to the political speed" by adjusting slowly, THEN it will be let in peace, because this ceases to be a monetary matter and the hot potato can be passed to politics.
Just remember that politically, europe wants to have the key rates back to the "sane" level between 4% and 8%. It's all that damn hot dollar money sloshing around looking for revenue to leverage ad nauseam that makes it impossible.
blood in the water
For sure....look at silver this morning. The blood is beginning to boil over.
Wonder how long it would take HFT (or whatever) algos to figure out the 'secret' limits should they ever be put into place.
I think the meaning behind secret is that they would claim to be supporting but would only act when they saw fit. In some cultures this talking with nothing to back it up is frowned upon. Apparently it works in the genteel world of eurocrat.
It wlll end with the same result as attempting guile on a hungry wolf.
problem is that algos are more easily manipulated than people and it seems the algos are what moves the markets. algos are more easily manipulated because they behave predictably and rapidly so there is feedback
secret index / aapl caps
Wait til they make them Special Secret ceilings. That will work. They are leaders. They know the key words to say.
Double secret probation! Europe is more messed up than the Delta Chi house. My solution...Toga! Toga! Toga !
Mario's latest plan:
http://www.youtube.com/watch?v=Y0cF2piwjYQ
Looks like demented minds think alike.
too funny!
For us to get on with new growth, someone must go broke. This doesn't help. Notice another bullshit rumor Thurs./Fri. to levitate the market through the weekend? I bet this rumor gets shot down Monday.
Will the PD monopoly Bots be in on the secrets...is the question that comes to mind.
Squid run bots and squid run CBs have to talk SECRETS to each other or it won't work!
Wow, secrets like CIA, NSA, Bin LAden secrets?
We should name a KGB or CIA guy to head the very SECRET ECB!
Now we know, SuperMario is not only ex-GS he is also ex-CIA/KGB!
Don't worry, maybe Assange will leak them ?
viva Ecuador!
Europe has become one of those kind of hypothetical cyber villiages in that game the kids play - is it sims I don't know.
The crazy thing is that its working for the cyber market.
I just need a little more virtual cash myself and I won't give a virtual shit.
I think ECB is just trying to negotiate with Germany with a way to reduce cost of yield capping. things definitely not finalized yet.
This is beyond insane.
Merkel is baaaaaaack!!!!
And she is working on behalf of Euro "status quo"
Politics is just a little bit more complicate than a comment about a financial chart.
.
http://www.youtube.com/watch?v=JK1BjMBbJdQ
sshhhh . . . be vewwy, vewwy, kwiet . . .
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=105&topic_id=9819977&mesg_id=9820465
Euro still rallying. Incredible. Thats like the fed saying they may secretely do QE through repo's....
wait....
not anymore in Europe...Cours des indices boursiers internationaux
Oh My God! nothing is jucier or better than a secret...gimme more...
you're confusing secret with secrete...the one is hidden potent word the other is hidden juicy flesh!
Yesterday Greek Prime Minister Samaras in an interview for the Sueddeutsche Zeitung personally guaranteed the 100 Billion Euro debt of Greece.
Draghi can guarantee ECB balances personally, and who cares about interest rates ?
There is however only one higher level of escalation left: The teleprompter makes Obama say "It's time to buy Spanish bonds'
“Whether Greece stays in or stays out,” she concluded, “It will be costly for Europe.”
"I never intended to break any rules."
- John Corzine
"I never intended to break every bone in Mr Corzine's body"
Nigel Farage: Europe is headed for a debt-based economy (slavery) with an unelected autocracy and a possible return to National Socialism
did he mention which europe? the UK or the eurozone?
Someone important said that the EZ was saved already, but they're trying to keep it a secret.
You misspelled impotent.
Just knowing that these so-called options "may" or "may not" (instead of just "not") exist or even just the fact that things are so whacked-out that a rumor like this could be floated out there (likely just to see if it has any wings) should be enough to tank the markets.
But why doesn't it? Could it be the "guarantee" of QE?
It actually inspires to dump until the secret is not revealed.
I would just like to know, when does it ALL come crashing down worldwide? I mean the whole shebang. Any predictions?
No no wait.
Let slip that there could be a secret ceiling that will only work if it is secret.
Then poo poo such a ridiculous idea, then (and this is the cunning part) ... have a secret ceiling.
Yes, double bluff. They'll never know!!!
Losers.
They ought to just STFU and do it - or something.
it'll then be sport to discover it and call them on it.
What's the problem? Just run two sets of books.
the ecb will act get over it and stop whining because your shorts are getting hurt
In my misinformed and very humble opinion, this Mexican standoff between the National pols and the Euro-annointed-bureauros re the 'debt austerity vs spending debt' debacle simmers down (like the frogs in the pot)- rumours aside as in open secrets- that the redline is simply: comply with the reforms to spending or no more dosh. Greece does the hard but realistic reforms or out they go. Message received by the other comrades in arms. Now, if independence and national self-determination is primis inter pares go for it. Get the best deal available from your erstwhile neighbors and get real with the reforms necessary to help your nation that is your people.
They cant make it to secret because the market might think that some idiot like John Corzine is buying istead of the ECB. Does that make sense?
sounds like helicopter ben euro style!!!!!!
Angela Merkel was in tiny Moldova (the poorest country in Europe) yesterday for about 4 hours. For the life of me, I cannot conceive of why that would be. The country is split into a pro-Russia piece, and a pro-Romania/EU piece. Its only two claims to fame are its wines (which are not in a whole lot of demand in the EU, now that you can get French stuff so cheaply), and that it is invariably trampled by whatever Army happens to be going through during an invasion. It beggars belief to think that little Moldova has anything to offer the EU, except perhaps the control of its people to Brussels.
Fuck the EU! Fuck the Eurotard bureaucrats who cling to power like a tick on a dog! And most of all, FUCK THE (T)euro!
"FUCK THE (T)euro!" ... LOL!
FYI, the EUrocrats want every little country from the Volga to the Sahara to join the EU/EZ. No matter how poor or insignificant you are, those selfless guys in Brussels just want to help you. They really, really care!
"We're from the EU, and we're here to help".
My Tin Hat Conspiracy Theory alert! -
Something is afoot. I read something a year or so ago that I cannot locate to confirm. It was believe it was that (Nat?) Rothschild had a compound built or purchased in Moldova. If Merkel was "summoned", then something is coming soon. Lets say that she is having her "Ghadaffi" career choice moment?
That was My Tin Hat Conspiracy Theory Alert for August 23rd,2012.
Wow, resorting to Fairy tales...Little Elves coming into the econmy and repairing it in secret overnight. The Elves and the Shoemaker http://www.rickwalton.com/folktale/bryant30.htm
Of course this one ends differently. The material in his shop is gone, which he still owes the bank for and the next day a banker is wearing new shoes.
He complains to the Gov'ner that he nad the people have been foaming the runway for 5 years now and the people are paying the price of incompetent and criminal financial types. Under the NDAA he is held indefinitely under psychiatric watch and deemed a domestic terrorist under the Patriot Act. They now charge him for the time in custody and attach all his assets, because it's hard to house 10% of the population indefinitely.
Interestingly, the Government does not see a penny of his money, the banks have derivitives attached to the whole country and are first in line for any money.
From Alphaville:
It's all coming out of German publications so it must be credible. Where are they going to print this stuff when no one believes the German press?
"When it becomes serious... you have to lie."
When it becomes super-serious... you have to make it into a secret so you can leak disinformation and game the systemically important.
When it becomes double-super-serious and beyond the point of no return... you have to replace SIFI with a game and turn it into a sport like Jumangi where you hunt down the answer... "Not good enough Sonny Jim!"
www.tradewithdave.com
It wouldn't even take a leak. Once the bond vigilantes figure out where that ceiling is, all hell would break loose!
Print and lie is the new plan. Same as the old plan.
Y'all apparently don't understand that secret means "doubleplus super top secret," which is very different than your average secret.
So now it comes to this. After two years of bloviating techno-conomists injecting make believe capital into a known black hole, and then talking and promissing the E.U. will by necessty return to normal. Even they are now to embarrassed to put their own name to this rediculous lie. "without citing anyone" really. As noted by other ZH'ers posts, even this nonsense will cause a move in the market. Since all who have been given "the glimpes behind the curtain" know the final outcome of this farce we call a market, a great deal of money will be made. (like betting on the end of a bad movie when you have already suffered through the book) But to look beyond, is a truly frightening experiance. We stare into the abyss.
Only Bureaucratic Idiots can actually think they can get away with fooling market forces forever.
How is it a secret that the ECB does "whatever it takes" to keep Spanish interest rates below 7%?
Next rumor? Double Secret.
Currently, there is coordinated action between the Fed and the ECB. The action is jawboning. August is a tough month for the markets due to low liquidity. In order to get through this sensitive time, the ECB and the Fed have been leaking information so that we could get through the month without a market panic. So far, it is working.
This month, whenever markets begin to soften, we get "leaks" from the ECB, Fed muckety-mucks dropping hints in speeches and interviews and an occasional Hilsenrath article.
Nothing has changed. The economy still has a huge labor problem, Europe is still insolvent and China is not growing as quickly as we would like. The only thing keeping risk assets up is the promise of the next fix of cheap money whether it be in the form of QE from the Fed or bond buying from the ECB.
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