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Plunging German Investor Confidence Sends European Bank Risk To Record

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Tue, 08/23/2011 - 07:32 | 1589483 Ivanovich
Ivanovich's picture

No worries!  EUR/USD jumped 100 pips this morning, up to recent range highs.  It's all good.  Somehow.

Tue, 08/23/2011 - 07:34 | 1589485 markmotive
Tue, 08/23/2011 - 07:33 | 1589484 entendance
entendance's picture

<No, absolutely not. Euro bonds are not the solution. You cannot end a debt crisis by introducing a new form of debt.
Euro bonds remove every incentive for ailing countries to return to sensible fiscal and economic policies. Since they offer lower interest rates than their previous government bonds, they induce governments to run up more debt instead of saving. I call that perverse.>


Tue, 08/23/2011 - 08:03 | 1589523 Dismal Scientist
Dismal Scientist's picture

You haven't understood whats going on here. The game is about the Germans taking control over Europe, as the other countries cede fiscal sovereignty to them, in exchange for bailout in the form of Eurobonds, which can then be written down over many, many years.

Surely you don't think the Germans are going to give up now ? If they opt out of helping and go back to the Deutschmark, the country's manufacturing sector will implode and unemployment will skyrocket. That will definitely not get Frau Merkel reelected. If she guarantees the Eurozone in exchange for control, the population will have to wear it, and she will get a bigger role on the world stage. The only thing left to discuss is how best to sell it to the electorate.

Tue, 08/23/2011 - 07:35 | 1589488 scratch_and_sniff
scratch_and_sniff's picture

The ZEW is highly correlated with moves in equities, for some reason. The rally started on the PMI's, which weren't as bad as expected. Frankly I thought the German ZEW would have took the Euro down, not to be, its only sentiment after all...and can you blame them for picking up on all the doom in the air?

Tue, 08/23/2011 - 07:36 | 1589489 malikai
malikai's picture

I haven't seen RobotTrader here in a while. Where is he to push LULU et al? Did he go broke a couple weeks ago? I really miss his contraindications. I'd like to find the bridge he's now living under and give him a couple ounces of silver.

Tue, 08/23/2011 - 07:51 | 1589510 gwar5
gwar5's picture

I enjoyed him. Maybe he hurt his back finally picking up a gold delivery.



Tue, 08/23/2011 - 07:38 | 1589490 Cdad
Cdad's picture

What an amazingly stupid market...or...what a nonmarket market.  

Thank you criminals on Wall Street...for the second collapse due in hours...or maybe days.  What...maybe 100 S&P handles by the close on Friday? 

I never thought I would live to see the day that our supposed financial geniuses would betray the nation all the way to its collapse.   More pink slips in the financial services industry, please.

Sell the stupidity.  

Tue, 08/23/2011 - 07:49 | 1589507 DormRoom
DormRoom's picture

The markets are rallying in the hopes of QE3 on Friday, from Jackson Hole.  If not, they tank Friday, and we witness the next leg down next week. 

Tue, 08/23/2011 - 08:11 | 1589533 Cdad
Cdad's picture

The US market is rising on the inverse of gold [and other safe havens] effect.  I think it is algorithmic and short lived.

The Fed might put a bid to the market, but any rational person already realizes that there is nothing the Fed can do substantively to hold off the market's date with destiny.

And there is nothing the Fed can do about the fact that Europe is insolvent.

But...you can play that strategy if you like.  I suspect it has all been front run anyway. 

Tue, 08/23/2011 - 07:40 | 1589492 Snidley Whipsnae
Snidley Whipsnae's picture

Eurobonds are off the table for now according to Merkle and Sarkozy. QE3 is off the table now because QE2 was a flop and QE3 has become a political football.

Out on a limb I go, offering up 2 possibilities that Ben may present on Friday...

Operation Twist 2: Fed buys 7-10 yr Ts with maturing Ts of shorter duration... This lowers interest rates further out the curve...

Repo operations: Fed uses bank excess reserves and levers them up. This will provide funding for ongoing Treasury operations... until it doesn't...

Of course there is always the possibility that Ben will do the right thing... gold to doughnuts says he doesn't...

Tue, 08/23/2011 - 08:03 | 1589525 ZeroPower
ZeroPower's picture

lol why would they buy short duration?

My money, as well as the markets, is that the fed will attack the longer end of the curve, 10s and 30s, to put an artificial cieling on those thereby dropping yields.

Tue, 08/23/2011 - 09:58 | 1590001 Snidley Whipsnae
Snidley Whipsnae's picture

Can you read? Fed buys 7-10 year with MATURING SHORT DURATION Ts that the Fed holds now...

Tue, 08/23/2011 - 08:04 | 1589527 Dismal Scientist
Dismal Scientist's picture

QE3 will target the asset backed securities market. No point in buying Treasuries, yields have already moved.

Tue, 08/23/2011 - 07:41 | 1589493 max2205
max2205's picture

So TPTB front ran these reports on insider info. Rally ?

Tue, 08/23/2011 - 07:43 | 1589496 props2009
Tue, 08/23/2011 - 07:44 | 1589497 gwar5
gwar5's picture

I just don't see Germany having the stomach to wrangle the entire EU through the EFSF by agreeing to back stop everything. Tenuous at best, even if the other countries agreed to their terms. Germany will be hated when they tighten the screws. Their historical resume is not a plus. And maybe their economic position isn't so hot either.


Tue, 08/23/2011 - 07:47 | 1589502 Snidley Whipsnae
Snidley Whipsnae's picture

Germany isn't going to backstop the remainder of the EU for 2 reasons...

They don't want to...

It is economically impossible...

A whole lotta jawboning about bonds was simply... jawboning! Believe what they do, not what they say!

Tue, 08/23/2011 - 07:45 | 1589500 whirlybird rules
whirlybird rules's picture

China’s Peoples Daily as saying that “the black death-like spread of the euro zone’s sovereign debt crisis endangered China’s exports to the euro zone.”


Moody’s warns that euro zone states reconsider seeking collateral for aid to Greece if they had any desire for the bailout to stay on track.


just gets spookier and spookier....

Tue, 08/23/2011 - 07:46 | 1589501 hugovanderbubble
hugovanderbubble's picture


Look French,Italian,Spanish 5yr CDS



Societe Generale Kaput


Tue, 08/23/2011 - 07:49 | 1589508 DefiantSurf
DefiantSurf's picture

Hell BAC is worse than SG....

Tue, 08/23/2011 - 07:47 | 1589503 DefiantSurf
DefiantSurf's picture

Yawn.....PIIGS have been in the ditch forever, this shit will last longer than your solvency.....by design

Tue, 08/23/2011 - 07:47 | 1589505 IMA5U
IMA5U's picture

The market does not care in front of the upcoming Fed market manipulation

Europe is ripping

Futures are ripping


Clearly Uncle Ben is ready to pull some levers on "Operation Twist" or some other gimmik he has in his tool kit

Tue, 08/23/2011 - 07:54 | 1589515 Conchy Joe
Conchy Joe's picture

Mr. Buffett specifically called to raise tax rates on Americans making more than $1 million and proposed an additional increase on taxpayers whose income exceeds $10 million and all Germans.

Tue, 08/23/2011 - 07:57 | 1589516 PY-129-20
PY-129-20's picture

Did someone read this Spiegel-Interview with the Chinese foreign minister? Just steroids... Translated in German it sounds even more aggressive...

"I think the most important thing is the question of whether China and the US are enemies. Are we going to be in a war? Are we preparing for a war against each other?"


Tue, 08/23/2011 - 08:31 | 1589570 PulauHantu29
PulauHantu29's picture

China is just jealous that Barry won the Nobel Peace Prize.

Tue, 08/23/2011 - 07:59 | 1589519 mrkolice
mrkolice's picture

i urge you to notice one thing: german way of handling the crisis so far was 1. talk something 2. do the opposite. it went like this since the first greece bailout.

imo, from this perspective the only possible scenario is that 1. germany is heading towards the european fiscal union like a tank, 2. eurobonds are their final target.

the trickier part of the question is how and with what means they want to achieve this.

Tue, 08/23/2011 - 08:01 | 1589520 RobotTrader
RobotTrader's picture



I'm still here.

Still alive, but bleeding profusely from every orifice.

Getting pole-axed on my XOM, COP, VZ, T, etc., but thankfully I'm still clutching on to my gold stocks which have saved my ass.

I expected a bear market rally back up to the 200-day where I expected to get out, but the market keeps getting blowtorched day in, day out.

Gold has also been good to me, since I still have plenty of coins left, but the chart of GLD is looking more and more like FOSL before it crashed 45% in a matter of two weeks, so I'm tempted to sell some of my coins.

Hats off to the bears who resolutely held their TZA, FAZ, VXX, etc., as they are now knee deep in booze and foreign hookers.


Tue, 08/23/2011 - 08:11 | 1589534 scratch_and_sniff
scratch_and_sniff's picture

Have no fear, Bernake is here.

Tue, 08/23/2011 - 08:20 | 1589545 rubearish10
rubearish10's picture

No one gives a shit about how you're investment strategy is doing bro. Yeah, I know, it's cool to see your success displayed in front of all the onlookers....Stick with your pompous market calls and enjoy yourself.

Tue, 08/23/2011 - 12:01 | 1590523 fiddler_on_the_roof
fiddler_on_the_roof's picture

Hang on there.

play money only - I sold my Gold calls riding all the way from $1530 to $1890 making a big profit.

I am planning to re-enter on this if I can get it back for 1/2 the price for same duration.

I am also putting a very small play money in COH calls.


All my rest in in physical Gold(not even silver), silver may zoom next year spring I guess.

if Gold zooms back to $2100, I plan to buy puts  protect my physical Gold.

Tue, 08/23/2011 - 08:02 | 1589521 youngman
youngman's picture

"Clearly Uncle Ben is ready to pull some levers on "Operation Twist" or some other gimmik he has in his tool kit"

What we have found out is that the Fed has the "public" deals.....What they will announce on Friday...and then they also have the "secret" deals that I think right now are going full speed ahead....we won´t find out what they are for two years if ever....but I bet they are printing, loaning, buying as we wait for Friday...its business as usual for the Fed.....obscurity...

Tue, 08/23/2011 - 08:02 | 1589522 Gibu The Great
Gibu The Great's picture

Looks as though the floor might be falling out from under the CAC 40 (don't have RT Dax data at the moment).  If that holds and futures come off their highs in the next hour and a half it definitely looks as though Tyler is right... it takes a while for stocks to figure it out. 

Tue, 08/23/2011 - 08:18 | 1589543 PulauHantu29
PulauHantu29's picture

I guess the Euro will not replace the dollar after all. Since many analysts predict the continued fall of the dollar we need a new international currency in theh wings. Maybe....Maybe....The better idea is to have a world currency linked to gold + a basket of currencies maybe? Any thoughts?

Tue, 08/23/2011 - 08:56 | 1589694 puck
puck's picture

Second post of mine:

Austria is not so bad a place, It will just depend on weather they enforce border control before I can get thier.....

Tue, 08/23/2011 - 10:20 | 1590103 FlatEric
FlatEric's picture

So what? Now that even the last of the MBA crowd in Germany learned that everything is fucked up in the EU they shit their pants. China and Germany are only vehicles for the Big Money, no 4th Reich or whatever.

Big Money in the US decided that once that there need to be more profits in order to keep the stock investors happy. When China entered the ring it was heaven sent. They made Joe Sixpack believe it is in his best interest to go to China in order to sell US products in this huge market. Anwyay they knew that this was only a one way ticket: the idea has always been to meet the US domestic demands by shifting manufacturing to where labor is cheap and the people are subject to every capitalists wet dreams which we call a dictatorship.

Apple is the protagonist of what I call "the vacuum cleaner economic model". You basicall ruin the working class by shifting production abroad. Then you focus on the middle class and suck off their remaining wealth by selling cheaply manufactured I-Shit devices for the highest possible price. When finally the middle class realizes that without people in domestic manufaturing nobody's left to sponsor their jobs in finance or governemt it's too late. The money has been entirley sucked in a the remaining international and domestic financial clusters will not return the money in circulation unless you accept being a serf.


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