Rosenberg Explains What (If Anything) Has Changed

Tyler Durden's picture

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james85306's picture

really?  they ran the stops and it's dead walled at 1188 where real buyers would need to show up

sqz's picture

There's a fairly huge problem with this plan.

Not only does the leverage come from the EFSF, so increasing French and German exposure. But in addition the UK is joint equal largest shareholder in the EIB (*). Which means if it were to begin issuing effectively "Eurobonds" from this SPV, its AAA-rating would come directly into question!

There's no way this plan can take off in this form, especially when the UK, which is wholly outside the Eurozone, is involved...


UK debt marsh's picture

Excellent point!

No way the UK signs up for this.


1.  Sweden and Denmark (non-Eurozone memebers are shareholders)

2.  EIB have flatly denied story.


depression's picture

In other words the shell game continues... DDSS

crazyjsmith's picture

Same game, different continent.

Just like the dirty Mortgage CDO - a basket of trash, with a tiny bit of A paper (the good trash) sitting at the top, and the rest is total crap. 

We all know how that story ended. 

Ever buy a bag of oranges from a street vendor?  The top of the bag may have one or two good oranges, the rest of the bag is rotten?  Shell games, deception, fraud, all wrapped up in one nice little package for some sucker to buy and left with "the bag" 

Fish Gone Bad's picture

The stock market is a merchandising game.  This phase of it involves not letting the little guy make any money shorting the market.  EVERYBODY knows that there is going to be a great big sovereign default and a whole bunch of CDS screaming.  The trick here is not to be so heavily leveraged that a person can survive the short squeeze(s).  The little guy always gets flushed/flushed out, then the bottom falls out.  Just wait for it.

TruthInSunshine's picture

All this ESFS and SPV talk, and almost no one is focused on this (the equivalent of a U.S. Supreme Court Ruling, essentially stating that no ESFS expansion, and certainly no leveraging of it, is possible without AN ENTIRE AMENDMENT TO THE GERMAN CONSTITUTION AS VOTED ON BY A POPULAR REFERENDUM!):

German turmoil over EU bail-outs as top judge calls for referendum


Germany's top judge has issued a blunt warning that no further fiscal powers may be surrendered to Europe without a new [German] constitution and a popular referendum, vastly complicating plans to boost the EU's rescue machinery to €2 trillion (£1.7 trillion).


The sovereignty of the German state is inviolate and anchored in perpetuity by basic law. It may not be abandoned by the legislature (even with its powers to amend the constitution). There is little leeway left for giving up core powers to the EU. If one wants to go beyond this limit — which might be politically legitimate and desirable  — then Germany must give itself a new constitution. A referendum would be necessary. This cannot be done without the people.

--Andreas Vosskuhle, Chief Justice of the German Federal Constititional Court


DonnieD's picture

Steve Liesman said it. Quit borrowing trouble.

GeneMarchbanks's picture

The ESFS has been a great distraction from the underlying issue, which, as we've been following since 2008, is insolvent banks and countries. Soon to be continents...

OrdellRobbie's picture

German parliament September 29 vote on EFSF will put this to rest.

espirit's picture

...and it remarkedly resembles 10 pounds of manue in a one pound bag. Plenty to go around, so no empty bagholders.

Good debt for bad debt?  rotflmao!

oogs66's picture

they are voting a version that isn't even what the market is pricing in...this is truly insanity

crazyjsmith's picture

That market is totally irrational.  It wants an idea, ANY idea, at ANY cost. 

As the lyric goes..."Lie to me, I promise, I'll believe.  Lie to me, just don't leave"

Pathetic isn't it?

TruthInSunshine's picture




OrdellRobbie:   German parliament September 29 vote on EFSF will put this to rest.

Again, if you read the link, article, and excerpt of the COURT OPINION of Germany's highest court that I posted above, you will find that said highest court has ruled that Parliament can NOT approve the EFSF or any variation thereof, without a referendum vote (by the public at large) to change the German Constitution.

Will the German People cast enough votes to do so? I do not know. I do know that according to Germany's higest court, nothing less would be required.

Joy on Maui's picture

Don't think so.   They may approve the current rescue package on the table but have made it quite clear they will not approve anything beyond that, which is what the CNBC story is suggesting.  It really is TARP all over again, European style.

Ned Zeppelin's picture

Problem is that this is his personal opinion, not a ruling from the court on the issue before them. while it has some persuasive authority, it is hardly enough to stop the banksters from stomping a path to this way to get the sovereign debt off their books.  Tim Geithner has already told them to socialize the losses, privatize the profits, and to do so right away.

bonddude's picture

The misunderstanding by Rosenberg of what you so correctly explain has caused him to be wrong wrong wrong about the stock market for quite a while now. He is now hoping the broken clock theory kicks in. Meanwhile he missed a historic run in stock and gold. True???

reading's picture

Not on gold, he's been a advocate of gold for a long time.

MarkTwain00's picture

Lets hope the Germans aren't too drunk from the Oktoberfest celebration to stand up for what is right! .....or stumble hunched over to nearest representative and put Das Boot in his/her Arse

Bring the Gold's picture

I hope the Germans take you literally and shove actual U-Boats right up the ass of those who vote for the globalist plan.

scatterbrains's picture

--Andreas Vosskuhle, Chief Justice of the German Federal Constititional Court--

Yea but wouldn't they just do it and worry about the ramification later ?  I mean dude above can always drown in a sauna and a preferable replacement found before it reaches back to their Constitutional Court no ?

disabledvet's picture

It better work then since it's illegal now as well. If it fails these folks might even do something to the perpetrators...or is it perpetraitors?

Bring the Gold's picture

Question: Does Germany have Diebold-esque electronic voting systems in place?

Shocker's picture

It is great to see, how everything is acting totally messed up. The Market should be down but they are up, Gold should be up but its down. Time are definitely mess, if you try to use logic.



baby_BLYTHE's picture

huh? The spot price of gold has rallied over 60 dollars today.

X.inf.capt's picture

i have no clue, blythe, what is going on with this market

last weds, i posted that i heard and saw people were dumping phyiscal at $39. you saw what hapened, 25% 2 days!

this market isnt making sense at all to me, but i still backed up the truck at a little under $30.

i thought i would feel great, but the last time i was this scared is when i had to see my C.G. as a 2 lt for minor infraction.

playing 'YOU BET YOUR BARS' is no fun....

oh well, back to lurkin'....

TruthInSunshine's picture

Unless there's some extraordinary method that Merkel or any German politician has of circumventing this massive legal obstacle (having the German People at large vote on amending their Constitution to allow the EU to grab more German sovereignty), I don't see how this is anything but a death sentence for the ESFS, even as it is now proposed in its most modest form.

redpill's picture

Never underestimate the ability of shitbag politicans to violate their respective countries' Constitutions without asking for permission.

piceridu's picture

So what kind of fear, threat of Armageddon, meteor strike, shit storm can they come up with to make Germans vote against their own sovereignty?

Ned Zeppelin's picture

This EFSF is a red herring, to juice up the markets just prior to the announcement of a Greek default. The entire plan is so Rube Goldberg as to be completely preposterous.

"Ned: think if it this way: if you know the plane is going in, but you might be able to do something drastic to halt it before crashing, but you'd need the passengers to go along with it, you make the plane climb first, the start the descent from a higher altitude, and you have a better chance of regaining control before the plane hits the ground. 

"Yes, it might work, Ben, after all that, the passengers will be screaming for you to do something, ANYTHING to get the plane under control.

"Precisely, Ned, precisely."

Kitler's picture

Absolutely top notch psy-ops work. Conditioning the Europeans in 'cause and effect' before the sacrificial lamb is to be led to the altar in a co-ordinated 'Lehman' moment designed to save all European banks.

So, will it be a French Bank to play the role of Jesus and die for the sins of the many? Or will operation "la twiste" be aimed at convincing those reluctant German savers to goosestep into abyss?

LongSoupLine's picture

but, but Bob PissOnYou on CNBS just said it's 25% rebalancing and 75% real rally.

Total Full Fuctard!

reading's picture

well, if nothing else, he definitely has his numbers flip flopped.

ZeroPower's picture

Where the hell is the 9x leverage # from? Who ever said the EIB wants to/agreed to take on bad debt?

Honestly this seems like the most rapid half-assed poor excuse of a rumor to ever be constructed. If this kind of effort was put on a tear sheet for a pitch, this person's balls would get ripped off and hed never work in finance again.

redpill's picture

The longer no one adamantly denies it, the longer financial markets will assume it is going to happen.  Which bureacrat wants to be the asshole to stand up and end the stock party?

trampstamp's picture

I thought this leak was already debunked this morning. TD?

Zero Govt's picture

Dead Cat Bounce ...back to 'Bear Business' next week, if not sooner... next

Oh regional Indian's picture

How come the UK continues to hold this peculier place in the EU? That has to be a gigantic clue towards what might be coming down the pipe shortly. Why was the GBP so damned important to keep alive as a currency?

And that is clearly the Iraq/Afghanistan/Libya troika along with Uncle "No Boots on the Ground" Sam.

And they have been some of th eheaviest buyers of US paper from the EU zone in general.

Something stinks and it' snot HtwoEssoFer.


Mauled and Gandhian Tales

maverick91919's picture

Don't forget there are 27 EU countries and only 17 use the euro currency so it is not especially peculiar to the UK. We kept the pound in the UK because at no stage was there any public opinion to change to the euro and the politicians knew that. The country was promised a referendum should the conditions be met where it could be argued in favour of joining but the polls have always shown the British people would reject it.

reload's picture

I think the UK kept the Pound Sterling for simple reasons. No political party could have won an election on a`join the euro` platform, and we have such a long & strong tradition of currency debasement, that ceding controll of that process would have been too much of a wrench.

As far as the heavy paper buying goes, its hard to tell where it ends up, but the Fed has more than one proxy to do its `bidding`.



Oh regional Indian's picture

Thanks reload and above. And that is surely the generally accepted opinion. Rather easily manufacturable opinion too.

I see something wicked. The other countries not in the Euro system don't matter as much. City of London is in the UK.

Maybe we'll know soon enough?



buzzsaw99's picture

The 2y auction was well bid. People who care about their money are still buying Ts.

buzzsaw99's picture

i prefer: no risk, no risk.


besides, some have collateral backed debts to satisfy.

Ando's picture

I remember coming to zero hedge in mid 2009 and all we read here was that nothing was getting better BLAH BLAH BLAH.  Meanwhile the market ripped in your face and then things did get better.  Now Europe is ripping higher.  You can say nothing has changed all you want but the market is rallying.  I love coming back to zero hedge to see all the angry traders that piss and moan as the market rips in their face.  THE MARKET DOESNT CARE WHAT U THINK. MUAHAHAHA

fuu's picture

<points and laughs>

"Meanwhile the market ripped in your face and then things did get better.  Now Europe is ripping higher."

mayhem_korner's picture

What'd you do with the pistol-wielding chimp, ye bludgeoned of the 3rd Reich?

fuu's picture

The chimp will be back. This was jsut a special gift for Redneck Repugnicant/Libertarians for Prosperity from yesterday.