Peak Desperation: ECB "May" Set "Secret" Bond Caps, Bild Says Without Citing Anyone

Tyler Durden's picture

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.